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Solteq Plc
BOARD OF DIRECTORS' REPORT AND FINANCIAL STATEMENTS
JANUARY 1 - DECEMBER 31, 2023
1
F
Table of contents
Report of the Board of Directors
2
Consolidated financial statements
20
Consolidated statement of comprehensive income
20
Consolidated statement of financial position
21
Consolidated cash flow statement
22
Consolidated statement of changes in equity
23
Notes to consolidated financial statements
24
1. GENERAL INFORMATION
24
1.1 Group information
24
1.2 Basis of preparation
24
1.3 Going concern principle
24
1.4 New and amended standards applied in financial year
25
1.5 Management judgement and use of estimates
25
2. FINANCIAL RESULT
26
2.1 Segment reporting
26
2.2 Revenue from contracts with customers
27
2.3 Employee benefit expenses
31
2.4 Other income and expenses
31
2.5 Research and development costs
32
2.6 Financial income and expenses
33
2.7 Income taxes
34
2.8 Earnings per share
36
2.9 Adjustments to cash flow from business operations
36
3. TANGIBLE AND INTANGIBLE ASSETS
36
3.1 Tangible assets
36
3.2 Right-of-use assets
38
3.3 Intangible assets
40
3.4 Depreciation, amortization, and impairment
44
4. OPERATIONAL ASSETS AND LIABILITIES
44
4.1 Trade and other receivables
44
4.2 Inventories
45
4.3 Trade and other payables
45
4.4 Provisions
46
5. CAPITAL STRUCTURE AND FINANCIAL ITEMS
47
5.1 Financial risk management and capital management
47
5.2 Financial assets and liabilities
49
5.3 Other investments
52
5.4 Cash and cash equivalents
52
5.5 Equity
53
5.6 Conditional debts and liabilities
54
6. OTHER NOTES
54
6.1 Consolidation principles and group companies
54
6.2 Related party transactions
55
6.3 Business combinations
57
6.4 Events after the balance sheet date
58
PARENT COMPANY FINANCIAL STATEMENTS
59
Parent company's statement of comprehensive income
59
Parent company's statement of financial position
60
Parent company's cash flow statement
61
Parent company's statement of changes in equity
62
Notes to Solteq Plc financial statements
63
Proposal for distribution of profits
81
Signatures to the report of the Board of directors and the financial statements
82
Auditor's report
83
2
Report of the Board of Directors
Weakened demand in Retail & Commerce and protability problems in Ulies hindered nancial performance,
beer towards the end of the year
The year 2023 was tough for Solteq. The revenue and protability development was hindered by the weakened demand
in the Retail & Commerce segment, along with the connued problems in the development and quality of products in
the Ulies segment. The Group’s comparable revenue was EUR 54.2 million (57.2), down by 5.3 percent relave to the
comparison period. The comparable EBITDA was EUR 0.7 million (4.5), and the comparable operang result was EUR -
3.9 million (-0.6).
In Retail & Commerce, the comparable revenue for the nancial year was EUR 40.5 million (42.6). The comparable
EBITDA was EUR 3.4 million (4.9), and the comparable operang result was EUR 0.7 million (1.7) for the nancial year.
The volale world economy negavely impacted demand for services and soluons oered by the segment, as well as
cost levels. In the second quarter of the year, the segment’s business based on Microso Dynamics 365 Business Central
and LS Retail was sold to Azets Group. The net debt-free purchase price of the business will be closed in the second
quarter of the ongoing nancial year, and it will be EUR 15–20 million. The transacon allowed the company to decrease
its indebtedness and focus even more on the chosen soware soluons, expert services, and business areas.
In the Ulies segment, the revenue diminished in the nancial year and was EUR 13.7 million (14.6). Problems in the
quality and development of Ulies soware products burdened the performance of the segment parcularly in the
rst half of the year. This reduced customer invoicing and increased project delivery costs. For the nancial year, the
comparable EBITDA was EUR -2.7 million (-0.5), and the comparable operang result was EUR -4.5 million (-2.3). In the
third quarter, the company iniated change negoaons for the Ulies soware business to improve protability and
operaonal eciency. The negoaons were completed in the fourth quarter. As a result of the negoaons and
implemented eciency and cost-saving measures, the company expects to achieve approximately EUR 3.8 million in
cost savings annually. These savings are expected to be fully realized during the nancial year 2024, although opmizing
cost structure during the review period has already enhanced the segment's protability.
During the fourth quarter of the review period, the company announced a change in its product development pracces.
Developing its soware products had become an integral part of connuous services and standard operaons, and the
costs related to product development no longer met the requirements for acvang them. During the fourth quarter,
the company treated the product development expenses of its exisng soware products as cost items in the income
statement, as part of normal business operaons, and ceased product development cost acvaons. Addionally, in
December 2023, the company assessed the product development investment acvaons on the balance sheet and the
expected returns. As a result of the assessment, the company made a EUR 7.5 million write-o, issued a prot warning,
and updated its prot guidance.
Nordic IT market outlook within the key industries for Solteq
Solteq aims to meet the changing needs of the energy sector, retail industry, and e-commerce through its product
development and expert services in the Nordics. The Group’s reportable business segments are Utilities and Retail &
Commerce. The Utilities segment offers software solutions and expert services for the energy sector, and the Retail &
Commerce segment for retail and e-commerce. The business areas share similar characteristics, such as the rapidly
evolving digital transformation and the need for more intelligent and efficient core functions. The company estimates
that its offering matches the industry-specific development needs where the Nordic decision-makers are focusing their
IT investments in the coming years.
3
The demand for software solutions and expert services in the Nordic energy sector is accelerated by changes in the
industry’s regulation, the transition towards renewable energy, and the potential for more streamlined business
operations created by the developing technology. The business of the Utilities segment consists of software solutions
and expert services, which comprehensively take into account the regulatory changes in the Nordics and EU. Among
these are nationally driven datahub projects for centralized information exchange and the unification of operating
models regarding measurement practices and the opening of electricity markets. The company estimates that the
segment’s industry-specific expertise and offering create a clear competitive advantage in the Nordic energy market.
The long-term market outlook for the Utilities segment is expected to remain good and provide opportunities for
profitable growth.
The volatile world economics has created significant uncertainties, such as high inflation and increased interest rates,
which negatively affect the customer organizations’ capability to invest in solutions and services represented by the
Retail & Commerce segment. The long-term market outlook for Retail and commerce is moderate, and the Nordic
markets are slowly recovering from the economic downturn. The rapidly evolving digitalization, adoption of
omnichannel and AI strategies, and the need for secure, reliable, and coherent IT ecosystems will accelerate the demand
as the economies stabilize.
Profit guidance 2024
The company expects the comparable revenue to grow and the operating result to be positive. The comparable revenue
was EUR 54,183 thousand for the financial year 2023.
Key Figures
2022
Change-%
2023-2022
2021
Revenue, TEUR
68,426
-15.7
69,055
Comparable revenue, TEUR
57,230
-5.3
56,633
EBITDA, TEUR
5,555
56.5
12,267
Comparable EBITDA, TEUR
4,469
-84.5
10,209
Operating result, TEUR
-4,406
-19.6
7,123
Comparable operating result, TEUR
-613
533.2
5,568
Result for the financial period, TEUR
-5,404
-0.4
4,100
Earnings per share, EUR
-0.28
-0.4
0.21
Operating result, %
-6.4
10.3
Comparable operating result, %
-1.1
9.8
Equity ratio, %
30.3
36.9
4
Revenue and Profit
Revenue decreased by 15.7 percent compared to the previous year and totaled EUR 57,655 thousand (68,426).
Operating result for the review period was EUR -3,541 thousand (-4,406). Comparable operating result was EUR -3,881
thousand (-613). Result before taxes was EUR -4,715 thousand (-6,574) and the result for the financial period was EUR
-5,380 thousand (-5,404).
Retail & Commerce
The segment’s comparable revenue for the review period was EUR 40,486 thousand (42,629), a decrease of 5.0 percent
relative to the comparison period. The comparable EBITDA was EUR 3,363 thousand (4,931), and the comparable
operating result was EUR 666 thousand (1,695).
On April 17, 2023, Solteq announced the selling of its business based on Microsoft BC and LS Retail ERP systems to Azets
Group. The transaction was completed on May 2, 2023.
The segment provides software solutions and expert services for the retail industry and e-commerce. Of the segment's
revenue, 60.0 percent came from e-commerce solutions and expert services, 10.0 percent from ERP systems, and 30.0
percent from solutions and expert services related to the retail industry.
Utilities
The segment’s revenue for the review period was EUR 13,697 thousand (14,601), down by 6.2 percent relative to the
comparison period. The segment’s comparable EBITDA was EUR -2,669 thousand (-462), and the comparable operating
result was EUR -4,547 thousand (-2,308).
Utilities offers software solutions and expert services for the energy sector. Software solutions accounted for 83.7
percent, and expert services for 16.3 percent of the segment's revenue.
Recurring revenue accounted for 33.2 percent of the segment's revenue and consists of software licensing,
maintenance, and support fees. In the long term, the aim is to raise recurring software-based revenue to half of the
Utilities segment's revenue.
The persistent work with product development and quality assurance continued throughout the review period. The
results are expected to materialize in the financial year 2024.
The segment has been exploring the business potential of the Salesforce-based customer information system, acquired
in November 2022. The solution has generated customer interest and is being further developed to expand the
applications from water to electricity and district heating.
On August 29, 2023, change negotiations concerning the segment’s software business were initiated to restructure the
organization and improve the business's profitability. As a result of the negotiations and the efficiency and cost savings
measures taken, the company estimates to achieve annual cost-savings of approximately EUR 3.8 million. The majority
of cost savings are expected to be realized for 2024. Following the negotiations, the number of employees working for
the Utilities software business was reduced by 39 in Finland. In addition, the company implemented cost savings and
reduction measures in other group companies.
5
Balance Sheet and Finance
Total assets amounted to EUR 57,189 thousand (74,336) at the end of the review period. Liquid assets totaled EUR 1,853
thousand (2,057). The company has a standby credit limit of EUR 5,000 thousand. At the end of the review period, EUR
1,000 thousand (5,000) of the standby credit limit was in use. The company also has a bank account credit limit of EUR
2,000 thousand. At the end of the review period, EUR 698 thousand (805) of the bank account credit limit was in use.
At the end of the review period, the company had a EUR 329 thousand (1,463) Business Finland loan for product
development. During the review period, the company received a decision from Business Finland, whereby a total of EUR
1,011 thousand will not be collected from the capital of the loans granted for research and product development
projects that ended in the previous financial period.
The Group’s interest-bearing liabilities were EUR 26,357 thousand (33,474).
Solteq Group’s equity ratio was 30.1 percent (30.3).
On October 1, 2020, Solteq issued a fixed rate senior bond with a nominal value of EUR 23.0 million. Annual interest of
6.0 percent is paid on the bond, and it will mature on October 1, 2024. The bond can be redeemed before its final
maturity date. Solteq Plc repurchased a share of the above-mentioned bond with a nominal value of EUR 0.6 million in
the financial year 2023.
The company has initiated measures to arrange refinancing during the financial year 2023. The arrangement consists of
the renewal of the existing bond and of the standby and bank account credit limits. The financial negotiations and
related measures have progressed as planned and the management believes that the negotiations will end with a
positive outcome. Based on this, the management estimates that operations will continue and that the risk of
insufficient funding is small.
The terms of the bond include financial covenants concerning the distribution of funds and incurring financial
indebtedness other than permitted under the terms of the bond (Incurrence Covenant). The covenants require that the
equity ratio exceeds 27.5 percent, the interest coverage ratio (EBITDA/net interest cost) exceeds 3.00:1, and that the
Group’s net interest-bearing debt to EBITDA ratio does not exceed 4:1. The covenants concerning the distribution of
funds and incurring financial indebtedness other than permitted under the terms of the bond are not fulfilled based on
the reporting period. The fulfillment of the covenants is always reviewed based on the last reported 12-month period.
Violations of the above-mentioned financial covenants of the bond do not, as such, lead to the right to demand
immediate repayment of the bond, but they limit the distribution of the company's funds and incurring financial
indebtedness other than permitted under the terms of the bond.
Investment, Research, and Development
The net investments during the review period were EUR 2,868 thousand (9,217). During the review period, no
investments were made in business acquisitions, but of the net investments in the comparison period, EUR 5,291
thousand were related to business acquisitions. The effect of the Microsoft BC and LS Retail business transaction in May
2023 on the goodwill at the time of sale was EUR -5,904 thousand. In the comparison period, on January 3, 2022, Solteq
Plc acquired the entire share capital of Enerity Solutions Oy and the entire share capital of S2B Energia Oy on November
7, 2022. A total of EUR 2,698 thousand (3,676) of the net investments were capitalized development costs relating to
the continued further development of the existing software products and the development of new software products.
Other investments were EUR 170 thousand (250). Other investments include the net change in rented premises and
equipment, totaling EUR 170 thousand (302). During the review period, the Company made a EUR 3,955 thousand write-
off to the development costs in the Utilities business and EUR 3,520 thousand in the Retail & Commerce business.
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Capitalized development costs included EUR 1,501 thousand (2,367) in personnel costs.
Personnel
The number of permanent employees at the end of the review period was 498 (662).
2023
2022
2021
Average number of personnel during the financial period
572
676
637
Employee benefit expenses, TEUR
33,570
37,273
33,987
Related Party Transactions
Solteq Group’s related parties include the Board of Directors, the CEO, and the Group’s Executive Team, as well as their
related parties and entities according to the IAS24 standard. The related party transactions and euro amounts are
presented in attachment 6.2.
Shares, Shareholders, and Treasury Shares
Solteq Plc’s equity on December 31, 2023, was EUR 1,009,154.17 which was represented by 19,396,501 shares. The
shares have no nominal value. All shares have an equal entitlement to dividends and company assets. Shares are
governed by a redemption clause.
Solteq Plc did not hold any treasury shares at the end of the review period.
Exchange and Rate
During the review period, the exchange of Solteq’s shares in the Nasdaq Helsinki Ltd was 4.5 million shares (13.0) and
EUR 4.9 million (36.3). The highest rate during the review period was EUR 1.80 and the lowest rate was EUR 0.68. The
weighted average rate of the share was EUR 1.08, and the end rate was EUR 0.76. The market value of the company’s
shares at the end of the review period totaled EUR 14.7 million (23.9).
Ownership
At the end of the review period, Solteq had a total of 7,060 shareholders (7,864). Solteq’s 10 largest shareholders owned
10,486 thousand shares, i.e., they owned 54.1 percent of the company’s shares and votes. Solteq Plc’s members of the
Board of Directors and CEO owned 79 thousand (26) shares on December 31, 2023.
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Distribution of Holdings and Shareholder Information
Distribution of Holdings by Sector December 31, 2023
Number of owners
Shares and votes
PCS
%
PCS
%
Private companies
212
3.00
4,225,409
21.78
Financial and insurance institutions
10
0.14
1,254,455
6.47
Public sector organizations
3
0.04
5,196,890
26.79
Households
6,807
96.42
8,412,941
43.37
Non-profit organizations
4
0.06
93,731
0.48
Foreign owners
16
0.23
213,075
1.10
Total
7,060
100.00
19,396,501
100.00
Total of nominee registered
8
0.11
231,969
1.20
Distribution of Holdings by Number of Shares December 31, 2023
Number of owners
Shares and votes
Number of shares
PCS
%
PCS
%
1 - 100
2,402
34.02
112,349
0.58
101 – 1,000
3,470
49.15
1,429,620
7.37
1,001 – 10,000
1,059
15.00
2,994,455
15.44
10,001 – 100,000
112
1.59
3,223,506
16.62
100,001 – 1,000,000
13
0.18
4,244,112
21.88
1,000,000 -
4
0.06
7,392,459
38.11
Total
7,060
100.00
19,396,501
100.00
of which nominee registered
8
0.11
231,969
1.20
Major Shareholders December 31, 2023
Shares and votes
number
%
1.
Profiz Business Solution Oy
2,195,569
11.32
2.
Elo Mutual Pension Insurance Company
2,000,000
10.31
3.
Ilmarinen Mutual Pension Insurance Company
1,651,293
8.51
4.
Varma Mutual Pension Insurance Company
1,545,597
7.97
5.
Aktia Capital Mutual Fund
770,000
3.97
6.
Aalto Seppo Tapio
625,000
3.22
7.
Saadetdin Ali Urhan
602,216
3.10
8.
Säästöpankki Small Cap Mutual Fund
500,000
2.58
9.
Incedo Oy
313,178
1.61
10.
Mandatum Life Insurance Company Ltd.
283,439
1.46
10 largest shareholders total
10,486,292
54.06
Total of nominee-registered
231,969
1.20
Others
8,678,240
44.74
Total
19,396,501
100.00
8
Annual General Meeting
Solteq’s Annual General Meeting was held on March 29, 2023. The Annual General Meeting approved the financial
statements for the period January 1–December 31, 2022, and discharged the CEO and the Board of Directors from
liability.
In accordance with the proposal of the Board of Directors, it was resolved that no dividend is distributed for the financial
year that ended on December 31, 2022.
The Annual General Meeting approved the shareholders' proposal to establish a Shareholders' Nomination Committee
for the company and its Rules of Procedure were confirmed.
The Annual General Meeting adopted the remuneration report of the company's governing bodies. The decision to
adopt the remuneration report is advisory.
The Annual General Meeting approved the proposal of the Board of Directors to amend Article 11 of the Articles of
Association to enable holding general meetings of shareholders remotely entirely without a physical meeting venue.
The Annual General Meeting authorized the Board of Directors to decide on a share issue carried out with or without
payment and on issuing share options and other special rights referred to in Chapter 10, Section 1 of the Finnish Limited
Liability Companies Act as follows:
The maximum total number of shares or other rights issued under the authorization is 2,000,000. The authorization
includes the right to issue new shares and special rights or convey treasury shares. The new shares and rights can be
issued, and treasury shares conveyed in a directed share issue deviating from the shareholders’ pre-emptive right of
subscription if there is a weighty financial reason for the company, e.g., to improve the capital structure, to execute
business acquisitions, and other business improvement arrangements. The authorization cannot be used to implement
the company’s incentive schemes. The authorization is proposed to include the right for the Board of Directors to decide
on all other terms concerning the share issue and granting special rights, including the subscription price and payment
of the subscription price in cash or in whole or in part by other means (subscription in kind) or by using the subscriber’s
receivable to offset the subscription price and record it in the company's balance sheet. The authorization is effective
until the next Annual General Meeting, however, no longer than April 30, 2024. This authorization cancels the
corresponding decision made by the Annual General Meeting 2022.
The Annual General Meeting authorized the Board of Directors to decide on a share issue carried out with or without
payment and on issuing share options and other special rights referred to in Chapter 10, Section 1 of the Finnish Limited
Liability Companies Act as follows:
The maximum total number of shares or other rights issued under the authorization is 1,000,000. The authorization
includes the right to issue new shares and special rights or convey treasury shares. The new shares and rights can be
issued, and treasury shares conveyed in a directed share issue deviating from the shareholders’ pre-emptive right of
subscription as part of the implementation of the company’s incentive schemes, which means there is a weighty
financial reason for the company. The purpose of such incentive schemes must be to bind the company's key personnel
for a period of 3-5 years. In addition, the purpose is that the now granted authorization’s maximum amount covers the
company's key personnel’s incentive schemes for at least 3 years. The authorization is proposed to include the right for
the Board of Directors to decide on the other terms concerning the share issue and granting special rights, including the
subscription price and payment of the subscription price in cash or by using the subscriber’s receivable to offset the
subscription price and record it in the company's balance sheet. The authorization is effective until April 30, 2026. This
authorization cancels the corresponding decision made by the Annual General Meeting 2022.
9
The Annual General Meeting authorized the Board of Directors to decide on repurchasing the company’s own shares as
follows: The number of own shares to be repurchased based on the authorization cannot exceed 500,000. Shares may
be repurchased in one or more lots. The Company may use only unrestricted equity to repurchase its own shares.
Own shares may be repurchased otherwise than in proportion to the share ownership of the shareholders (directed
repurchase). The purchase price shall be at least the lowest price paid for the company’s shares in regulated trading at
the time of purchase and at most the highest price paid for Company shares in regulated trading at the time of purchase.
Own shares can be purchased to be used to improve the capital structure of the company, to execute business
acquisitions and other business improvement arrangements, or as a part of the implementation of the company’s
incentive schemes. The authorization is effective until the next Annual General Meeting, however, no longer than April
30, 2024. This authorization cancels the corresponding decision made by the Annual General Meeting 2022.
The Annual General Meeting authorized the Board of Directors to decide on accepting the company’s own shares as
pledge as follows: The Board of Directors is authorized to decide on accepting the company’s own shares as pledge
(directed) in connection with business acquisitions or when executing other business arrangements. The pledge may
occur in one or several transactions. The number of own shares accepted as pledge cannot exceed 2,000,000. The Board
of Directors decides on other terms concerning the pledge. The authorization is effective until the next Annual General
Meeting, however, no longer than April 30, 2024. This authorization cancels the corresponding decision made by the
Annual General Meeting 2022.
Board of Directors and Auditors
The Annual General Meeting on March 29, 2023, resolved to re-elect the current members of the Board of Directors
Markku Pietilä, Panu Porkka, Anni Sarvaranta, Katarina Cantell, and Mika Sutinen, and elect Esko Mertsalmi as a new
member of the Board.
In its organizing meeting after the Annual General Meeting, the Board of Directors re-elected Markku Pietilä as its
chairman.
Mika Sutinen, Katarina Cantell, and Markku Pietilä were elected as members of the Audit Committee. Mika Sutinen acts
as the Chairman of the Audit Committee.
The Annual General Meeting resolved that KPMG Oy Ab, would continue as the company's auditor. KPMG Oy Ab has
informed that Petri Sammalisto, Authorized Public Accountant, is the auditor with principal responsibility.
10
Other Events During the Review Period
On January 16, 2023, Solteq announced having updated its long-term financial targets. Solteq Plc's Board of Directors
has approved the company's segment-specific long-term targets, which are based on the updated strategy and segment
structure.
On January 27, 2023, Solteq announced that the Board of Directors has appointed Oona Silén as VP of People and
Culture and member of the Executive Team of the company as of February 6, 2023.
On March 22, 2023, Solteq published comparable data according to the new reporting structure for the financial year
2022. Starting from the financial year 2023, the Group's reported business segments are Utilities and Retail &
Commerce. The reported business segments in the previous reporting structure were Solteq Software and Solteq Digital.
On April 17, 2023, Solteq announced having sold its ERP business based on Microsoft BC and LS Retail solutions to Azets
Group. The completion of the transaction took place on May 2, 2023. The table section of this Financial Statements
Bulletin provides more detailed information regarding the transaction.
On April 17, 2023, Solteq announced withdrawing the profit guidance, published on February 16, 2023, due to the
ongoing business transfer transaction.
On May 3, 2023, Solteq issued the new profit guidance for 2023. The company’s new profit guidance for 2023 is: Solteq’s
revenue is expected to be EUR 60–62 million and operating result to be slightly negative excluding the one-time profit
recognition of EUR 8 million on the sale of the Group’s ERP business based on Microsoft BC and LS Retail solutions. The
previous profit guidance for 2023 was: Solteq Group’s revenue is expected to remain on the same level and operating
profit to be positive.
On August 23, 2023, Solteq announced initiating change negotiations to improve operational efficiencies and
profitability in the Utilities segment.
On September 6, 2023, Solteq announced that the members of Shareholders’ Nomination Committee have been
appointed. The Shareholders’ Nomination Committee of Solteq Plc consists of representatives of the four largest
shareholders, registered on August 31, 2023.
On September 19, 2023, Solteq issued a profit warning, lowering its 2023 profit guidance for revenue and operating
result. The new profit guidance for 2023 is: Solteq’s revenue is expected to be EUR 57–59 million and operating result
to be negative, excluding the one-time profit recognition of EUR 8 million on the sale of the Group’s ERP business based
on Microsoft BC and LS Retail solutions.
On September 20, 2023, Solteq published the financial reporting schedule and planned Annual General Meeting date
for 2024.
On October 11, 2023, Solteq announced having completed the change negotiations concerning the Utilities segment.
As a result of efficiency and cost savings measures to be implemented, the company estimates to achieve annual cost
savings of approximately EUR 3.8 million in total. The majority of cost savings are expected to be realized for 2024. As a
result of the negotiations, the number of employees working for the Utilities software business will reduce by, at most,
39 due to resignations and lay-offs.
On December 20, 2023, Solteq announced having changed its product development practices during the current
financial year, having assessed the activated product development investments on the balance sheet and their expected
11
returns, and writing off product development investments made. The write-off has no cash flow impact. As a result of
the write-off, the company updated its profit guidance for 2023: Solteq’s revenue is expected to be EUR 57–59 million
and operating result to be negative, excluding the one-time profit recognition of EUR 8 million on the sale of the Group’s
ERP business based on Microsoft BC and LS Retail solutions and the one-time EUR 6.3 million product development
investment write-off.
Events After the Reporting Period
On January 25, 2024, Solteq announced the proposals of Solteq’s Shareholders’ Nomination Committee for the 2024
Annual General Meeting. Solteq Plc’s Shareholders’ Nomination Committee proposes to the Annual General Meeting,
planned to be held on March 27, 2024, that seven (7) members are elected to the Board of Directors, the current Board
members – Markku Pietilä, Katarina Cantell, Panu Porkka, Anni Sarvaranta, Mika Sutinen, and Esko Mertsalmi – are re-
elected, and Lotta Airas is elected as a new member of the Board. The Board members’ term will end at the close of the
2025 Annual General Meeting.
On February 2, 2024, Solteq announced changes in the Executive Team of Solteq Plc as of February 2, 2024. With the
change, Kari Lehtosalo, the company’s CFO and member of the Executive Team since 2019, will step down from his
position by mutual agreement. The Board of Directors of Solteq Plc has appointed LL.M. Mikko Sairanen (b. 1985) as the
company’s new CFO. He will also continue in his role as the company’s General Counsel.
The company’s management is not aware of other events of material importance after the review period that might
have affected the preparation of the Financial Statements Bulletin.
Going concern principle
The financial statements for the financial year 2023 have been drawn up under the going concern principle. In assessing
the going concern principle, the management of the company has considered the risks related to the refinancing of the
company. The key elements of Solteq Group’s debt financing are a fixed-rate bond, as well as standby and bank account
credit limits.
Solteq issued a fixed-rate unsecured senior bond with a nominal value of EUR 23.0 million on October 1, 2020. Of the
EUR 23.0 million bond outstanding at the time of the financial statements bulletin, EUR 0.6 million was held by the
company. The bond matures on October 1, 2024. The standby and bank account credit limits total EUR 7.0 million. The
related financial covenants are linked to the terms of the bond.
The terms of the bond include financial covenants concerning the distribution of funds and incurring financial
indebtedness other than permitted under the terms of the bond (Incurrence Covenant). The covenants require that the
equity ratio exceeds 27.5 percent, the interest coverage ratio (EBITDA/net interest cost) exceeds 3.00:1, and that the
Group’s net interest-bearing debt to EBITDA ratio does not exceed 4:1. The covenants concerning the distribution of
funds and incurring financial indebtedness other than permitted under the terms of the bond are not fulfilled based on
the reporting period. The fulfillment of the covenants is always reviewed based on the last reported 12-month period.
Violations of the above-mentioned financial covenants of the bond do not, as such, lead to the right to demand
immediate repayment of the bond, but they limit the distribution of the company's funds and incurring financial
indebtedness other than permitted under the terms of the bond.
The company has initiated measures to arrange refinancing of the company. The arrangement consists of the renewal
of the existing bond and of the standby and bank account credit limits.
12
In assessing the going concern, the management of the company has considered the effects of the measures taken
during the financial year 2023 on the company’s financial performance, financial forecasts and risks related to financial
negotiations. Based on these factors, management estimates that operations will continue and that the risk of
insufficient funding is small. The company believes that the planned financing arrangements will lead to a favorable
outcome. However, if the company fails to restructure the financing, this would jeopardize the continuity of the
company’s operations.
These financial statements have therefore been drawn up under the going concern principle.
Risks and Uncertainties
In the management’s view, the material uncertainties and near-term risks directed at the company’s business and
financial position in the near future are related to the general economic uncertainty caused by Russia’s invasion of
Ukraine, high inflation, and the financial market situation.
Russia's invasion of Ukraine has had no direct impact on the company’s business. However, the weakened economic
situation, inflation, rising financing costs and other indirect impacts may further weaken customer companies’
investments in Solteq’s products and services in both the short and long term. The weakening of the security situation
increases the risk of cyber attacks and other disruptions in society that may have an impact on the company’s business.
In addition, tightening financial markets and their functionality may affect the company’s financing costs or the
availability of financing. The risk to the financial position relates especially to the refinancing of a fixed-rate unsecured
senior bond issued by the company with a nominal value of EUR 23.0 million. The bond matures on October 1, 2024.
The company has initiated measures to arrange refinancing.
Other key uncertainties and risks relate to managing changes in the balance sheet structure, the timing and pricing of
transactions on which revenue is based, changes in the cost level, the development of the company’s own products and
their commercialization, and the company’s ability to manage extensive contract and delivery packages.
The most important risks and uncertainties for the company’s business are monitored regularly as part of the work of
the Board of Directors and Executive Team. In addition, the company has an Audit Committee appointed by the Board
of Directors, whose tasks include monitoring the company’s financial and financing situation.
13
Proposal of the Board of Directors on the Disposal of Profit for the Financial Year
At the end of financial year 2023, the distributable equity of the Group's parent company is 19,466,865.03 euros. Solteq
Plc's Board of Directors proposes to the Annual General Meeting that for the financial year 2023, no dividend will be
paid out.
The Board of Directors is of the opinion that there are no financial prerequisites for dividend pay-outs, or other kind of
distribution of funds. According to the terms and conditions of the company debenture stock distribution of funds would
lead to the expiration of the credit. The covenants of the bond do not permit distribution of funds based on the financial
year 2023.
No essential changes have taken place in the company's financial situation after the end of the financial year.
Corporate Governance Statement
Documentation on administration and governance structure is given as a separate report attached to the annual report.
Statement of Non-Financial Information
Statement of non-financial information is given as a separate report attached to the annual report.
14
15
Key Figures of the Group
Key figures outlining the group's financial
development
2023
2022
2021
2020
2019
Revenue, MEUR
57.7
68.4
69.1
60.5
58.3
Change in revenue, %
-15.7
-0.9
14.2
3.7
2.5
Operating result, MEUR
-3.5
-4.4
7.1
5.4
5.7
% of revenue
-6.1
-6.4
10.3
8.9
9.8
Result before taxes, MEUR
-4.7
-6.6
5.2
2.7
3.7
% of revenue
-8.2
-9.6
7.6
4.5
6.3
Return on equity, %
-27.1
-21.4
15.0
7.8
12.1
Return on investment, %
-4.1
-6.9
13.0
9.1
10.4
Equity ratio, %
30.1
30.3
36.9
35.5
32.0
Net investments in non-current assets, MEUR
2.9
9.2
7.1
5.5
4.6
% of revenue
5.0
13.5
10.3
9.0
7.9
Research and development costs, MEUR
2.4
3.7
2.8
3.0
3.9
% of revenue
4.1
5.4
4.1
5.0
6.7
Net debt, MEUR
24.5
31.4
25.9
26.5
31.5
Gearing, %
142.3
139.4
92.6
99.9
128.5
Average number of employees over the
financial period
572
676
637
593
597
Group's key figures per share
2023
2022
2021
2020
2019
Earnings per share, EUR
-0.28
-0.28
0.21
0.10
0.15
Equity per share, EUR
0.89
1.16
1.44
1.37
1.27
Dividends per share, EUR
0.00
0.00
0.00
0.15
0.00
Dividend from result, %
0.0
0.0
0.0
146.3
0.0
Effective dividend yield, %
0.0
0.0
0.0
5.4
0.0
Price–earnings ratio (P/E)
-2.7
-4.4
22.1
27.3
10.3
Highest share price, EUR
1.80
4.94
7.16
3.7
1.65
Lowest share price, EUR
0.68
1.15
2.56
0.96
1.27
Average share price, EUR
1.08
2.81
5.08
1.95
1.44
Market value of the shares, TEUR
14,741
23,858
90,776
54,058
28,767
Shares trade volume, 1,000 pcs
4,486
13,024
25,148
6,720
808
Shares trade volume, %
23.1
67.1
129.7
34.8
4.2
Weighted average of the share issue
corrected number of shares during the
financial period, 1,000 pcs
19,397
19,397
19,382
19,307
19,307
Number of shares corrected by share issue at
the end of the financial period, 1,000 pcs
19,397
19,397
19,397
19,307
19,307
16
Calculation of the Key Figures
Return on Equity (ROE), %:
Profit for the financial period (rolling 12 months)
x 100
Equity (average for the period)
Return on investment (ROI), %:
Profit before taxes + Finance expenses (rolling 12 months)
x 100
Balance sheet total - Interest free debt (average for the period)
Equity ratio, %:
Equity
x 100
Balance sheet total - Advances received
Net debt:
Interest bearing liabilities - Cash and cash equivalents
Gearing, %:
Interest bearing liabilities - Cash and cash equivalents
x 100
Equity
Earnings per share:
Profit before taxes -/+ Minority interest
Adjusted average basic number of shares
Diluted earnings per share:
Profit before taxes -/+ Minority interest
Adjusted diluted average number of shares
Equity per share:
Equity
Number of shares
Dividend per share:
Dividend for the period
Number of shares at the year-end
Dividend from result, %:
Dividend per share
x 100
Earnings per share
Effective dividend yield:
Dividend per share
x 100
Share price at the year-end
Price-earnings (P/E) ratio:
Share price at the year-end
x 100
Earnings per share
The market value of Company's shares:
The number of shares at the year-end x Share price at the year-end
17
EBITDA:
Operating result + Depreciations and impairments
Share of recurring revenue of the total revenue of Utilities segment:
Recurring revenue / SaaS
Total revenue of Utilities segment
Alternative Performance Measures to be Used by Solteq Group in Financial Reporting
Solteq uses alternative performance measures to describe the Company’s underlying financial performance and to
improve the comparability between review periods. The alternative performance measures should not be regarded as
indicators that replace the financial key figures as defined in IFRS standards.
Performance measures used by Solteq Group are EBITDA, equity ratio, gearing, return on equity, return on investment,
and net debt. The calculation principles of these financial key figures are presented above, Calculation of the key figures.
Items Affecting Comparability:
Transactions that are unrelated to the regular business operations, or valuation items that do not affect the cash flow,
but have an important impact on the income statement, are adjusted as items that affect comparability. These non-
recurring items may include the following:
• Significant restructuring arrangements and related financial items
• Impairments
• Items related to the sale or discontinuation of significant business operations
• Costs incurred by the re-organization of operations
• Costs incurred by the integration of acquired business operations
• Non-recurring severance packages
• Fee items that are not based on cash flow
• Costs incurred by changes in legislation
• Fines and similar indemnities, damages, and legal costs
18
Comparable revenue
The reconciliation of the comparable revenue to revenue is presented in the table below.
2023
2022
TEUR
Retail &
Commerce
Utilities
Group
Retail &
Commerce
Utilities
Group
Revenue
43,958
13,697
57,655
53,826
14,601
68,426
Items affecting comparability
BC / LS Retail business transfer agreement
-3,472
-3,472
-11,196
-11,196
Total items affecting comparability
-3,472
0
-3,472
-11,196
0
-11,196
Comparable revenue
40,486
13,697
54,183
42,629
14,601
57,230
Comparable EBITDA and Operating Profit (EBIT)
2023
2022
TEUR
Retail &
Commerce
Utilities
Group
Retail &
Commerce
Utilities
Group
Comparable EBITDA*
3,363
-2,669
694
4,931
-462
4,469
Comparable EBITDA, %
8.3
-19.5
1.3
11.6
-3.2
7.8
Operating profit (EBIT)
5,177
-8,718
-3,541
-1,842
-2,564
-4,406
Items affecting comparability
BC / LS Retail business transfer agreement
-8,379
-32
-8,410
-1,501
-1,501
Acquisition costs
0
124
124
Cost of integrating the acquired business
0
24
24
Non-recurring severance packages
262
248
509
117
47
164
Fines and similar indemnities and damages
0
2
27
29
Impairments
3,584
3,955
7,539
4,439
9
4,448
Costs incurred by the re-organization of operations
22
22
479
26
506
Total items affecting comparability
-4,512
4,171
-340
3,536
256
3,793
Comparable operating profit (EBIT)
666
-4,547
-3,881
1,695
-2,308
-613
Comparable operating profit, %
1.6
-33.2
-7.2
4.0
-15.8
-1.1
* The reconciliation of the comparable operating profit to operating profit is presented in the table. The same adjusting
items apply when reconciling the comparable EBITDA to EBITDA, excluding Impairments.
19
20
Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
TEUR
Notes
1 Jan 2023 -
31 Dec 2023
1 Jan 2022 -
31 Dec 2022
Revenue
2.1, 2.2
57,655
68,426
Other income
2.4
8,309
166
Materials and services
-7,033
-7,550
Employee benefit expenses
2.3
-39,936
-44,560
Other expenses
2.4, 2.5
-10,299
-10,928
Depreciations and impairments
3.4
-12,236
-9,960
Operating profit
-3,541
-4,406
Financial income
2.6
1,497
504
Financial expenses
2.6
-2,671
-2,672
Profit before taxes
-4,715
-6,574
Income taxes
2.7
-665
1,170
Profit for the financial period
-5,380
-5,404
Other comprehensive income to be reclassified to profit or loss in
subsequent periods
Currency translation differences
60
-61
Other comprehensive income, net of tax
60
-61
Total comprehensive income
-5,320
-5,465
Earnings per share attributable to equity holders of the parent
Earnings per share, EUR (undiluted)
-0.28
-0.28
Earnings per share, EUR (diluted)
-0.28
-0.28
Result for the financial year and total comprehensive income belong exclusively to the owners of the Parent Company.
The financial statements should be read together with the notes
21
Consolidated Statement of Financial Position
TEUR
Notes
31 Dec 2023
31 Dec 2022
Assets
Non-current assets
Tangible assets
3.1
25
64
Right-of-use assets
3.2
1,781
3,309
Intangible assets
Goodwill
3.3
40,555
46,493
Other intangible assets
3.3
1,236
9,125
Other investments
5.3
437
437
Deferred tax assets
2.7
1,222
1,380
Trade and other receivables
4.1
260
269
Non-current assets total
45,515
61,078
Current assets
Inventories
4.2
60
133
Trade and other receivables
4.1
9,762
11,068
Cash and cash equivalents
5.4
1,853
2,057
Current assets total
11,674
13,258
Total assets
57,189
74,336
Equity and liabilities
Equity attributable to equity holders of the parent company
Share capital
5.5
1,009
1,009
Share premium reserve
5.5
75
75
Distributable equity reserve
5.5
13,260
13,260
Currency translation difference
-146
-205
Retained earnings
3,021
8,400
Total equity
17,219
22,539
Non-current liabilities
Deferred tax liabilities
2.7
575
759
Financial liabilities
5.2
246
24,179
Lease liabilities
5.2
405
1,694
Non-current liabilities total
1,226
26,632
Current liabilities
Financial liabilities
5.2
24,149
5,928
Trade and other payables
4.3
12,940
17,485
Provisions
4.4
99
78
Lease liabilities
5.2
1,556
1,673
Current liabilities total
38,745
25,164
Total liabilities
39,970
51,797
Total equity and liabilities
57,189
74,336
The financial statements should be read together with the notes
22
Consolidated Cash Flow Statement
TEUR
Notes
1 Jan 2023 -
31 Dec 2023
1 Jan 2022 -
31 Dec 2022
Cash flow from operating activities
Profit for the financial period
-5,380
-5,404
Adjustments for operating profit
2.9
5,621
10,275
Changes in working capital
-3,471
852
Interests paid
-2,154
-1,854
Interests received
81
18
Net cash flow from operating activities
-5,302
3,887
Cash flow from investing activities
Business acquisitions
-20
-5,109
Divested businesses
14,137
Investments in tangible and intangible assets
-2,351
-3,454
Net cash used in investing activities
11,766
-8,563
Cash flow from financing activities
Long-term loans, decrease
5.2
-548
-8
Short-term loans, increase
5.2
4,371
6,813
Short-term loans, decrease
5.2
-8,601
-1,194
Payment of lease liabilities
5.2
-1,891
-2,465
Net cash used in financing activities
-6,668
3,145
Changes in cash and cash equivalents
-204
-1,531
Cash and cash equivalents at the beginning of period
2,057
3,588
Cash and cash equivalents at the end of period
5.4
1,853
2,057
Cash and cash equivalents presented in the cash flow statement consist of the
following items:
TEUR
2023
2022
Cash and cash equivalents
1,853
2,057
Total
1,853
2,057
The financial statements should be read together with the notes
23
Consolidated Statement of Changes in Equity
TEUR
Share
capital
Share
premium
account
Invested
unrestricted
equity
reserve
Currency
translation
difference
Retained
earnings
Total
Equity 1 Jan 2022
1,009
75
13,260
-144
13,805
28,004
Result for the financial period
-5,404
-5,404
Other items on comprehensive
income
-61
-61
Total comprehensive income
0
0
0
-61
-5,404
-5,465
Equity 31 Dec 2022
1,009
75
13,260
-205
8,400
22,539
Equity 1 Jan 2023
1,009
75
13,260
-205
8,400
22,539
Result for the financial period
-5,380
-5,380
Other items on comprehensive
income
60
60
Total comprehensive income
0
0
0
60
-5,380
-5,320
Equity 31 Dec 2023
1,009
75
13,260
-146
3,021
17,219
The financial statements should be read together with the notes
24
Notes to Consolidated Financial Statements
1. GENERAL INFORMATION
1.1 Group Information
Solteq is a Nordic provider of IT services and software solutions specializing in the digitalization of business and
industry-specific software. The key sectors in which the Company has long-term experience include retail, industry,
energy, and services. The Company operates in Finland, Sweden, Norway, Denmark, Poland, and the UK.
The Group’s Parent Company is Solteq Plc, whose business ID is 0490484-0. Solteq Plc is a Finnish public limited company
whose shares are quoted on Nasdaq Helsinki Ltd. The Company is domiciled in Vantaa, Finland, with headquarters at:
Karhumäenkuja 2, 01530 Vantaa. A copy of Solteq Plc’s consolidated financial statements is available at
www.solteq.com or from the headquarters in Vantaa.
Solteq Plc’s Board of Directors approved these financial statements for publication in its meeting on February 23, 2024.
Pursuant to the Finnish Limited Liability Companies Act, shareholders have the right to either accept or reject the
financial statements at the Annual General Meeting held after publication. The Annual General Meeting also has the
option of deciding that the financial statements be amended.
1.2 Basis of Preparation
Solteq’s consolidated financial statements have been prepared in accordance with the International Financial
Reporting Standards (IFRS) complying with the IAS and IFRS standards as well as the SIC and IFRIC
interpretations valid as at December 31, 2023. International Financial Reporting Standards mean the standards and
their interpretations that have been approved for adoption in the EU in accordance with the procedure No.
1606/2002 enacted in the Finnish Accounting Act and EU (EC) regulations laid down by the Act. The notes
to the consolidated financial statements are also in accordance with the requirements of the Finnish Accounting and
Companies legislation.
The consolidated financial statements have been prepared on the historical cost basis of accounting, except for
available-for-sale financial assets measured at fair value. The values are presented in thousand euros. As the
values have been rounded, the total of the individual values may deviate from the presented totals.
1.3 Going Concern principle
The financial statements for the financial year 2023 have been drawn up under the going concern principle. In
assessing the going concern principle, the management of the company has considered the risks related to the
refinancing of the company. The key elements of Solteq Group’s debt financing are a fixed-rate bond, as well as
standby and bank account credit limits.
Solteq issued a fixed-rate unsecured senior bond with a nominal value of EUR 23.0 million on October 1, 2020. Of the
EUR 23.0 million bond outstanding at the time of the financial statements bulletin, EUR 0.6 million was held by
the company. The bond matures on October 1, 2024. The standby and bank account credit limits total EUR 7.0 million.
The related financial covenants are linked to the terms of the bond.
The terms of the bond include financial covenants concerning the distribution of funds and incurring financial
indebtedness other than permitted under the terms of the bond (Incurrence Covenant). The covenants require that
the equity ratio exceeds 27.5 percent, the interest coverage ratio (EBITDA/net interest cost) exceeds 3.00:1, and that
the
25
Group’s net interest-bearing debt to EBITDA ratio does not exceed 4:1. The covenants concerning the distribution of
funds and incurring financial indebtedness other than permitted under the terms of the bond are not fulfilled based on
the reporting period. The fulfillment of the covenants is always reviewed based on the last reported 12-month period.
Violations of the above-mentioned financial covenants of the bond do not, as such, lead to the right to demand
immediate repayment of the bond, but they limit the distribution of the company's funds and incurring financial
indebtedness other than permitted under the terms of the bond.
The company has initiated measures to arrange refinancing of the company. The arrangement consists of the renewal
of the existing bond and of the standby and bank account credit limits.
In assessing the going concern, the management of the company has considered the effects of the measures taken
during the financial year 2023 on the company’s financial performance, financial forecasts and risks related to financial
negotiations. Based on these factors, management estimates that operations will continue and that the risk of
insufficient funding is small. The company believes that the planned financing arrangements will lead to a favorable
outcome. However, if the company fails to restructure the financing, this would jeopardize the continuity of the
company’s operations.
These financial statements have therefore been drawn up under the going concern principle.
1.4 New and Amended Standards Applied in Financial Year
New and Amended Standards Adopted in 2023
The impact from new and amended standards issued during financial year 2023 are not considered to be material to
the Group's financial reporting.
New or Amended IFRS Standards and Interpretations to be Applied in Future Financial Periods
The impact from other new and amended standards issued but not yet effective is not considered to be material to the
Group's financial reporting.
1.5 Management Judgement and Use of Estimates
The preparation of the financial statement in accordance with the IFRS standards requires the Group management to
make certain estimates and assumptions that affect the application of accounting policies.
The accounting policies and descriptions of management’s judgment-based conclusions are mainly found in the notes
to the financial statements. Only the general accounting policies are described in this section.
Accounting Policies Requiring Management Judgement and Significant Uncertainties Relating to Accounting
In preparation of the consolidated financial statements, estimates and assumptions regarding the future must be made.
The end results may deviate from these assumptions and estimates. In addition, some judgement must be exercised in
the application of the policies of the financial statements.
26
Management Judgement Regarding Selection and Application of Accounting Policies
The Group management uses judgement regarding selection and application of accounting policies. This applies
especially to those cases where the IFRS standards and interpretations in effect have recognition, measurement and
presentation alternatives.
Uncertainties Relating to Accounting Estimates
Accounting estimates in preparation of the financial statements are based on management’s best estimate at the end
of the financial period. These estimates and assumptions are based on experience and other reasonable assumptions,
which are believed to be appropriate in the circumstances that form the basis on which the consolidated financial
statements are prepared. Uncertainties are related to, inter alia, existing uncertainty in the assessment of project
outcomes, valuation of accounts receivable, the measuring and recognition of deferred tax assets and the development
of the overall financial environment. Possible changes in estimates and assumptions are recognized in accounting during
the financial year when the estimate or assumption is revised, and all the periods after that.
2. FINANCIAL RESULT
2.1 Segment Reporting
Accounting Policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating
decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified the Group CEO. Segments are defined based on Group’s
business segments.
There are no significant mutual business transactions between the segments. The performance of the segments is
estimated on the basis of EBITDA and operating profit. Group-level expenses are allocated to reportable business
segments according to predetermined principles.
Solteq has two reportable business segments: Utilities and Retail & Commerce. The Utilities segment offers software
solutions and expert services for the energy sector. The Retail & Commerce segment is focused on the software
solutions and expert services related to retail industry and e-commerce.
Since the beginning of the financial year 2023, the reportable business segments of the Group have been Utilities and
Retail & Commerce (Solteq Software and Solteq Digital in the previous financial years). The data regarding the segments
from the 2022 comparison period has been adjusted to be comparable to the current segment structure.
27
2023
2022
TEUR
Retail &
Commerce
Utilities
Group
Retail &
Commerce
Utilities
Group
Revenue
43,958
13,697
57,655
53,826
14,601
68,426
EBITDA
11,580
-2,885
8,695
6,264
-710
5,555
EBITDA, %
26.3
-21.1
15.1
11.6
-4.9
8.1
Depreciations and impairments
-6,403
-5,834
-12,236
-8,106
-1,855
-9,960
Operating profit
5,177
-8,718
-3,541
-1,842
-2,564
-4,406
Operating profit, %
11.8
-63.7
-6.1
-3.4
-17.6
-6.4
Financial income and expenses
-1,174
-2,169
Result before taxes
-4,715
-6,574
Income taxes
-665
1,170
Result for the financial period
-5,380
-5,404
Revenue by country
Accounting Policy
Solteq operates in Finland, Sweden, Norway, Denmark, Poland, and the UK. The revenues of geographical areas are
reported based on the geographical location of the seller.
TEUR
2023
2022
Finland
48,471
52,644
Other countries
9,184
15,783
Total
57,655
68,426
2.2 Revenue from Contracts with Customers
Accounting Policy
Solteq recognizes revenue based on the five-step model required by IFRS 15. The process involves defining the subject of
the contract with the customer, the performance obligation based on it, the transaction price to be allocated and the
allocation of the transaction price to the time of delivery, arising from the partial and/or complete satisfaction of the
performance obligation.
The Company recognizes the majority of its service revenue over time. Service revenue mainly consists of general
consulting based on time and materials as well as support and development services provided for the Company, for
which the customer receives benefits as the service is produced (e.g. helpdesk and media services). The Company
recognizes sales revenue evenly over time.
28
The Company is increasingly shifting towards Software as a Service (SaaS) solutions, which give customers access to
software as a service in exchange for a pre-agreed monthly fee. For these services, the customer receives the benefits as
the service is produced, and revenue is recognized evenly over time.
Solteq’s revenue recognition principles for long-term contracts are based on the contract’s measure of progress and the
management’s judgement. The Company defines the performance obligation of each delivery agreement and the
transaction price allocated to it. The current policy is to subsequently assess the satisfaction of the performance
obligation mainly by using the input method. In other words, the measure of progress towards complete satisfaction of
the performance obligation is defined by assessing the ratio between the cumulative rate of utilization and costs of the
project resources to the total resource and cost forecast for the performance obligation.
Guidelines concerning principal/agent considerations require the Company to recognize only the proportion of revenue
for which the Company is responsible for the delivered product and service, for which the Company bears the
inventory/credit risk and/or is able to freely set the market price of the product. In the event that the Company acts as a
dealer and is not subject to the aforementioned obligations, the Company only recognizes revenue corresponding to the
margin received from resale services. Revenue is always recognized based on the transfer of control, either over time or
at a point in time. The third-party license and maintenance business includes, for example, the Microsoft BC-, HCL-,
Adobe- and Informatica solutions provided by Solteq.
The primary services and products for which revenue is recognized at a point in time are related to the right to use
software, products directly related to the right to use software and equipment separately provided for customers. In
these cases, the right to use software, the functions and rights enabled by products directly related to that right and the
ownership of the separately provided equipment are transferred to the customer at the time of delivery.
Contract Assets on the Balance Sheet
Contract assets on the balance sheet primarily consist of trade receivables. When an item is presented on the balance
sheet under trade receivables, Solteq has an unconditional right to consideration for goods or services delivered to the
customer. For long-term contracts, the Company presents a contract asset in its financial statements. The contract asset
represents the right to consideration for goods and services already delivered to the customer. An assessment in
accordance with IFRS 9 standard is carried out regarding the impairment of contract assets and trade receivables.
A contract liability is an obligation to transfer goods or services to the customer for which the Company has received
consideration from the customer. If the customer pays consideration before a good or service is transferred to the
customer, the Company presents a contract liability in its financial statements when the customer has made the
payment. Contract liabilities are primarily related to long-term contracts.
Estimating Variable Consideration
Solteq’s contracts with customers may include variable consideration components, such as penalties for late project
delivery. The management’s judgement is that, as a rule, the level of uncertainty concerning the amount of consideration
to be received is low. The Company estimates variable consideration components particularly at the end of each
reporting period.
Contract Costs
Solteq does not have significant incremental costs of obtaining contracts.
29
The sales income from the Retail & Commerce segment's customer contracts are classified as services, recurring revenue
from own software/Saas, and software and hardware sales. The services consist mainly of time and material based
consulting, support and development services provided by the company, and projects. The sales income from these
services is recognized over time depending on the progress of customer projects. Recurring revenue from software is
reported for sales income related to the company’s own products. In addition, the Retail & Commerce segment
generates sales income from software and hardware sales consisting mainly of license and maintenance fees for third
party software.
The Utilities segment covers the business based on the company's own energy sector products. The revenue of the
segment is mainly based on license and maintenance fees from own products and related services, like integration and
implementation projects. The sales income from the Utilities segment's customer contracts is classified as services,
recurring revenue from own software/Saas and non-recurring license and hardware sales. The services consist mainly
of time- and material-based consulting, support and development services provided by the company, and projects. The
services will benefit the customers as the service is provided.
Recurring revenue from own software / SaaS in both segments includes sales related to Solteq’s own products where
the amount charged is not dependent on the amount of work performed and the charge is recurring or deferred over
the contract period. In addition, the contract needs to be valid until further notice or the contract period is minimum
12 months in order to be classified as recurring revenue/SaaS. Non-recurring license and hardware sales include license
fees related to the company’s own software and directly related products and hardware. The revenue is recognized as
point in time.
Revenue from Contracts with Customers
Retail & Commerce
TEUR
2023
2022
Services
35,440
44,095
Recurring revenue / SaaS
6,335
5,994
Software and hardware sales
2,182
3,737
Total
43,958
53,826
Utilities
TEUR
2023
2022
Services
8,686
9,325
Recurring revenue / SaaS
4,544
3,834
Non-recurring sales
468
1,442
Total
13,697
14,601
Group total
57,655
68,426
Contract balances
TEUR
2023
2022
Trade and other receivables
6,926
8,499
30
Contract assets
812
387
Contract liabilities
-461
-563
Contract assets
TEUR
2023
2022
Contract assets on Jan 1
387
500
Transfers from contract assets to receivables
-113
-433
Increases as a result of changes in the measure of progress
537
321
Contract assets on Dec 31
812
387
Contract liabilities
TEUR
2023
2022
Contract liabilities on Jan 1
-564
-527
Revenue recognized from contract liabilities
491
474
Increases due to cash received, excluding amounts recognized as revenue during
the period
-389
-512
Contract liabilities on Dec 31
-461
-564
The Group expects to meet a significant part of outstanding performance obligations during the reporting period 2024.
31
2.3 Employee Benefit Expenses
Accounting Policy
Pension arrangements are classed as defined benefit plans and defined contribution plans. The Group has only defined
contribution plans. Payments under the Finnish pension system and other contribution-based pension schemes are
recognized as expenses as incurred.
TEUR
2023
2022
Salaries and wages
33,570
37,273
Pension expenses - defined contribution plan
5,260
5,876
Other personnel expenses
1,106
1,411
Total
39,936
44,560
Average number of employees over the financial period
572
676
Information on management’s employee benefits is presented in note 6.2 Related party transactions.
2.4 Other Income and Expenses
Accounting Policy
Other operating income and expenses includes income and expenses that are not considered as being directly linked to
the group’s business operations. These items include, for instance, gains and losses on the sale of fixed assets and
business operations, expenses and allowances for credit losses as well as the corresponding cancellations.
Government Grants
Government grants that compensate for expenses incurred are recognized in the income statement when the expenses
are recognized. These grants are presented in other income. If the government grant relates to the product development
cost to be capitalized, the grant received reduces the cost to be capitalized and it is recognized in the form of lower
depreciation expense during the useful life of the asset.
Other income
TEUR
2023
2022
Government grants
3
Income resulting from the sales of assets and business operations
8,275
83
Other income
34
80
Total
8,309
166
32
Other expenses
TEUR
2023
2022
Telephone and telecommunication costs
513
711
Voluntary personnel expenses
952
870
Rental and other office related expenses
1,538
1,751
Hardware and software expenses
1,777
1,770
Car and travel expenses
686
673
External services
3,269
3,493
Bad debts
26
57
Warranty provisions
21
5
Other expenses
1,515
1,600
Total
10,299
10,928
Lease expenses
TEUR
2023
2022
Depreciation of right-of-use assets
1,887
2,288
Interest expense from lease contracts
145
212
Costs from short-term lease contracts
28
20
Costs from low-value asset lease contracts
836
847
Total
2,896
3,367
Auditor’s fees
TEUR
2023
2022
Auditing
200
148
Certificates and statements
8
7
Tax consulting
31
11
Other services
63
74
Total
301
239
The non-audit services charged by KPMG Oy Ab to Solteq Group companies in the financial year 2023 were EUR 72
thousand (85).
2.5 Research and Development Costs
Accounting Policy
Research costs are recorded as expenses in the income statement. Development cost for new or substantially improved
product or service processes are capitalized in the balance sheet as intangible assets from the date when the product is
technically and commercially feasible and it is expected to bring financial benefit. Development costs previously expensed
will not be capitalized at a later date. Assets are amortized from the date when they are ready for use. Assets that are
not yet ready for use are tested annually for impairment. Development expenses that have been capitalized have a useful
life of 3 to 5 years, during which capitalized assets are expensed on a straight-line basis.
33
The income statement includes a total of EUR 0 thousand (542) of research and development costs recognized as
expense in 2023.
2.6 Financial Income and Expenses
Accounting Policy
Interest income is recognized using the effective interest rate method and dividend income at the time when the right to
the dividend arises.
Borrowing costs are recognized as an expense in the period in which they incur. If there are certain known criteria
concerning qualifying asset, the borrowing costs are capitalized. Transaction costs directly attributable to acquisition of
loans which clearly relate to a certain loan are included in the original amortized cost of the loan and are expensed using
effective interest method.
Any exchange rate gain or loss from transactions in foreign currencies has been recognized in the financial statements
under financial income and expense.
Financial Income
TEUR
2023
2022
Interest income
80
15
Foreign currency exchange income
405
416
Other financial income*
1,011
69
Dividend income
1
3
Total
1,497
504
* For the financial year 2023, EUR 1,011 thousand in other financial income were related to the non-collection of Business Finland's
loan.
Financial Expenses
TEUR
2023
2022
Interest expenses from financial expenses in amortized costs
1,750
1,612
Interest expense on lease liabilities
145
212
Foreign currency exchange expenses
624
537
Other financial expenses*
152
312
Total
2,671
2,672
*For the financial year 2022, EUR 198 thousand in other financial expenses were related to the fees for changing the terms of the
bond.
34
2.7 Income Taxes
Accounting Policy
Tax expenses for the financial period comprise current tax based on the taxable income of the financial period and
deferred taxes. Tax calculated from the taxable income of the financial period is based on the tax rate prevailing in each
country. Taxes are adjusted with possible taxes relating to previous financial periods.
Deferred taxes are calculated from temporary differences between book value and taxable value. Deferred taxes are not
recognized on temporary differences arising from goodwill impairment losses that are not tax deductible. Deferred taxes
are neither recognized on undistributed profit from subsidiaries when the differences are unlikely to reverse in the
foreseeable future.
Deferred taxes are calculated using the tax rates enacted at the end of the financial period. Deferred tax assets are
recognized to the extent that it is probable that taxable profit will be available, against which the temporary differences
can be utilized.
The calculated tax receivables and liabilities are deducted from each other, only in the case that the Company has a
legally enforceable right to even the tax receivables and liabilities of the period, and these are related to the income
taxes of the same tax holder.
TEUR
2023
2022
Tax based on the taxable income for the period
257
141
Taxes from previous periods
-120
-45
Deferred taxes
-25
-1,266
Other taxes
553
Total
665
-1,170
TEUR
2023
2022
Result before taxes
-4,715
-6,574
Taxes based on domestic tax rate
-943
-1,315
Difference in local tax rates
-31
Non-deductible expenses *
1,199
37
Exempt from taxes
0
-1
Unrecognized deferred tax assets for unrealized losses
201
105
Utilization of unused tax losses
-223
Revaluation of deferred taxes
-11
-8
Other items
38
56
Taxes from previous periods and other taxes
436
-45
Taxes on the income statement
665
-1,170
* Consists mainly of goodwill attributable to the sale of business that is non-deductible in taxation
Deferred Tax Assets and Liabilities
35
Changes in Deferred Taxes:
TEUR
1 Jan
2022
Recognized
on the
income
statement
Acquisition
of
subsidiaries
and
businesses
31 Dec
2022
Recognized
on the
income
statement
31 Dec
2023
Deferred tax assets:
Provisions
15
1
16
4
20
Postponed depreciations
38
9
47
-2
45
From the loss of the financial period
1,244
1,244
-156
1,088
Other items
94
-51
31
74
-4
70
Netted with deferred tax liabilities
-64
0
0
Total
82
1,202
31
1,380
-158
1,222
Deferred tax liabilities:
Tax-deductible goodwill
78
94
172
94
266
Allocated intangible liabilities
378
-169
106
315
-131
184
Other items
218
54
272
-148
124
Netted with deferred tax assets
-64
0
0
Total
610
-21
106
759
-184
575
A deferred tax asset has been recognized in full on the parent company’s loss for the financial years 2023 and 2022, as
if the financial estimates prepared by the management and the going concern principle are met, it is likely that taxable
income will be generated in the future against which previous tax losses can be utilized. No deferred tax assets have
been booked for the losses of foreign subsidiaries due to the uncertainty regarding their utilization.
At the end of 2023, the Group had EUR 2,339 thousand (3,286) of deductible unused losses and tax credits for which no
deferred tax assets have been recognized because the realization of the tax benefit is not likely. These losses and tax
credits do not have an expiration period or are more than five years. Unrecognized losses and tax credits relate to the
Group's foreign subsidiaries.
36
2.8 Earnings per Share
Accounting Policy
Undiluted EPS is calculated by dividing the profit attributable to equity holders of the Parent Company by the weighted
average number of shares outstanding.
When calculating the result per share, the weighted average will also have to consider the dilutive impact of the shares
owned by the Company.
2023
2022
Profit for the financial period attributable to equity holders of the parent
company (TEUR)
-5,380
-5,404
Weighted average of the number of shares during the financial period (1 000)
19,397
19,397
Undiluted EPS (EUR/share)
-0.28
-0.28
There were no diluting factors during the financial year 2023 nor the comparison period 2022.
2.9 Adjustments to Cash Flow from Business Operations
Significant events are listed in the cash flow statement. Significant adjustments to cash flow from business operations
are due to depreciations and impairments made during the financial period, EUR
12,236 thousand (9,960) and from the profit on the sale of the business transaction EUR -8,129 thousand (0).
3. TANGIBLE AND INTANGIBLE ASSETS
3.1 Tangible Assets
Accounting Policy
Tangible assets consist mainly of machines and equipment. They are measured at historical cost less accumulated
depreciation and possible impairment losses.
Depreciation is calculated on a straight-line basis over their estimated useful life. The estimated useful lives are as
follows:
Machinery and equipment 2 - 5 years
Other tangible assets have consisted of works of art which are not depreciated.
The residual values and useful lives are reviewed at each reporting date and, when necessary, are corrected to reflect
any possible changes in expected future economic benefit.
Gains and losses from disposal and divestment of tangible assets are recognized under other income or expenses.
Tangible Assets
37
TEUR
Machinery
and
equipment
Other
tangible
assets
Prepayments
Total
Acquisition cost 1 Jan 2023
2,482
34
0
2,515
FX rate differences
4
4
Additions
0
0
Disposals
-28
-28
Acquisition cost 31 Dec 2023
2,458
34
0
2,492
Accumulated depreciation and impairment 1 Jan 2023
2,421
30
0
2,452
FX rate differences
4
4
Depreciation
36
1
38
Accumulated depreciation on disposals
-26
-26
Accumulated depreciation and impairment 31 Dec
2023
2,436
31
0
2,468
Book value 1 Jan 2023
60
4
0
64
Book value 31 Dec 2023
22
3
0
25
Acquisition cost 1 Jan 2022
2,569
55
56
2,679
FX rate differences
2
2
Additions
20
20
Disposals
-109
-21
-56
-186
Acquisition cost 31 Dec 2022
2,482
34
0
2,515
Accumulated depreciation and impairment 1 Jan 2022
2,408
27
0
2,435
FX rate defferences
1
1
Depreciation
108
3
111
Accumulated depreciation on disposals
-96
-96
Accumulated depreciation and impairment 31 Dec
2022
2,421
30
0
2,452
Book value 1 Jan 2022
161
28
56
244
Book value 31 Dec 2022
60
4
0
64
38
3.2 Right-of-Use Assets
Accounting Policy
IFRS 16 standard requires lessees to recognize the lease agreements in the balance sheet as right-of-use assets and lease
liabilities. Solteq is a lessee and mainly leases business premises. Solteq applies the exemption for short-term leases
allowed under the IFRS 16 standard as well as the exemption for low value assets on a contractual basis. Solteq is not a
lessor at the moment.
According to IFRS 16 standard, the lessee's lease period is the period during which the lease cannot be terminated. Also,
a potential extension or termination option should be considered if the use of such option is judged to be reasonably
certain. The lease agreements for premises are mainly fixed term. The lease term for ongoing contracts will be regularly
assessed by Solteq’s management, and the length of the lease term is based on management's estimate.
The lessee should value the lease agreement by discounting the future minimum lease payments to the present value at
the inception of the contract. The internal interest rate implicit in the lease is not readily available, the future minimum
lease payments are discounted using Solteq’s incremental borrowing rate. According to the standard, the incremental
borrowing rate is defined as the interest that the lessee would have to pay when borrowing for the similar term and with
s similar security to obtain an asset of an equivalent value to the right-of-use asset in a similar economic environment.
Solteq determines the incremental borrowing rate for leases based on the lease term and the financial environment of
the lease.
Solteq applies the reliefs allowed by IFRS 16 for short-term agreements and low-value commodities per agreement.
39
Right-of-Use Assets
TEUR
Premises
Machinery
and
equipment
Right-of-Use
assets total
Acquisition cost 1 Jan 2023
10,185
6,625
16,810
FX rate differences
18
0
18
Additions *
478
188
666
Disposals
-136
-201
-337
Acquisition cost 31 Dec 2023
10,545
6,611
17,157
Accumulated depreciation and impairment 1 Jan 2023
7,373
6,128
13,500
Depreciation
1,647
240
1,887
Accumulated depreciation on disposals
0
-11
Accumulated depreciation and impairment 31 Dec 2023
9,020
6,357
15,377
Book value 1 Jan 2023
2,812
497
3,309
Book value 31 Dec 2023
1,525
255
1,780
Acquisition cost 1 Jan 2022
9,768
6,613
15,958
FX rate differences
-30
-14
Additions *
873
239
694
Disposals
-427
-227
-257
Acquisition cost 31 Dec 2022
10,185
6,625
16,381
Accumulated depreciation and impairment 1 Jan 2022
5,463
5,909
9,025
Depreciation
2,068
219
2,418
Accumulated depreciation on disposals
-158
0
-72
Accumulated depreciation and impairment 31 Dec 2022
7,373
6,128
11,371
Book value 1 Jan 2022
4,305
705
5,010
Book value 31 Dec 2022
2,812
497
3,309
*Including also changes to lease contracts.
Minimum Leases Payable Based on Short-Term and Low-Value Lease Agreements
TEUR
2023
2022
Within a year
602
782
More than one year
430
747
Total
1,032
1,530
40
3.3 Intangible Assets
Accounting Policy
An intangible asset is recognized in the balance sheet only if the asset’s acquisition cost can be reliably measured and if
it is probable that future economic benefits will flow to the entity. Intangible assets with a finite useful life are recognized
in the balance sheet at historical cost and are amortized on a straight-line basis during their useful life. Estimated
amortization periods are as follows:
Development costs 3 - 5 years
Intangible rights 3 - 10 years
Other intangible assets 3 - 10 years
Government Grants
Government grants, such as grants from public institutions for acquisition of intangible assets, are deducted from the
carrying amount of the asset when it is reasonably certain that they will be received, and the Group fulfils the
requirements to receive such grants. Grants are recognized in the form of lower depreciation expense during the useful
life of the asset.
Goodwill
The goodwill deriving from merging businesses is booked to the amount with which the remuneration is exceeding the
Group’s part of the acquired net equity’s value. The remuneration includes also the portion held by the owners without
mastery rights, as well as the portion which has already previously been held by the Company.
Goodwill is not amortized but is tested annually for impairment. For this purpose, the goodwill is allocated to cash-
generating units. The goodwill is valued at the original acquisition cost less impairment losses.
Impairments of the Tangible and Intangible Assets
The Company estimates at the end of each financial period whether there is any indication of impairment on any asset.
In the event of any such indication, the recoverable amount of the asset is estimated. Recoverable amounts are also
estimated annually on the goodwill and intangible assets not yet available for use regardless of whether there is any
indication of impairment. Need for impairment is monitored at the cash-generating unit level, that is, at the level of units
that are independent from other units and whose cash flows can be separated from other cash flows.
Recoverable amount is the greater of the asset’s fair value less selling costs or its value in use. Value in use is defined as
the present value of the future cash flows expected to be derived from an asset or a cash generating unit. In the
calculation of present value, discounting percentage is pretax rate which reflects the market’s view of time value of
money and asset-specific risks.
Impairment loss is recognized when the asset’s carrying amount is higher than its recoverable amount. Impairment loss
is immediately recognized in the income statement. If the impairment loss is allocated to a cash-generating unit, it is
first allocated to decrease the carrying amount of any goodwill allocated to the cash-generating unit and then to the
other assets of the unit pro rata on the basis of the carrying amount of each asset in the unit. Impairment loss is reversed,
if circumstances change and the asset’s recoverable value has changed from the time of the recognition of the
41
impairment loss. Reversal amount cannot, however, be higher than the asset’s book value would be without the
recognition of the impairment loss. Impairment loss on goodwill is not reversed under any circumstances.
Impairment Test
The Group carries out annual tests for the possible impairment of goodwill and intangible assets not yet available for
use, and indications of impairment are evaluated in accordance with the principles described earlier. Recoverable
amount of cash-generating units is defined with calculations based on value in use. These calculations require the use of
estimates.
As described under 1.3 Going concern principle, the financial statements for the financial year 2023 are prepared
according to the going concern principle. The company’s bond matures on October 1, 2024 and the company has initiated
measures to arrange refinancing of the company. However, if the company fails to restructure the financing, it would
jeopardize the continuity of the company's operations, which would also have an impact on the valuation of goodwill in
the group and goodwill and merger losses in the parent company.
42
TEUR
Payments in
advance and
uncompleted
actions
Goodwill
Development
costs
Intangible
rights
Other
intangible
assets
Total
Acquisition cost 1 Jan 2023
1,393
48,692
12,555
12,992
846
76,478
FX rate differences
-1
-8
-9
Additions
2,356
5
2,361
Disposals
-819
-5,930
-11,966
82
-18,633
Transfers between items
-2,929
2,929
0
Acquisition cost 31 Dec 2023
0
42,754
3,517
13,079
846
60,197
Accumulated amortization and
impairment 1 Jan 2023
2,199
6,653
11,161
846
20,859
Amortization
1,885
888
2,773
Accumulated amortization on disposals
-5,228
-5,228
Accumulated amortization and
impairment 31 Dec 2023
2,199
3,311
12,049
846
18,405
Book value 1 Jan 2023
1,393
46,493
5,901
1,831
0
55,619
Book value 31 Dec 2023
0
40,555
207
1,030
0
41,792
Acquisition cost 1 Jan 2022
4,687
44,524
9,634
12,473
846
72,164
Merger of subsidiary
4,265
421
4,685
FX rate differences
-96
-96
Additions
3,586
401
99
4,086
Disposals
-4,360
-1
-4,361
Transfers between items
-2,520
2,520
0
Acquisition cost 31 Dec 2022
1,393
48,692
12,555
12,992
846
76,478
Accumulated amortizations and
impairment 1 Jan 2022
2,199
4,791
9,911
846
17,747
Amortization
1,863
1,250
3,113
Accumulated amortization on disposals
-1
-1
Accumulated amortization and
impairment 31 Dec 2022
2,199
6,653
11,161
846
20,859
Book value 1 Jan 2022
4,687
42,325
4,843
2,562
0
54,416
Book value 31 Dec 2022
1,393
46,493
5,901
1,831
0
55,619
In the financial year 2023, a total of EUR 179 thousand (182) of government grants related to the acquisition of intangible
assets were received.
Impairment testing
The goodwill values related to business combinations are allocated to the cash-generating units which are based on the
Group’s budgeting and reporting structure, and which are the smallest independent entities with separate cash flows.
The content of the cash-generating units is in line with the Group’s segment structure.
The book value of the goodwill in the group on December 31, 2023 was EUR 40,555 thousand (46,493). At the end of
the financial period, there were investments in progress in development projects of a value of EUR 0 thousand (1,393).
43
Impairment tests have been carried out at the cash-generating unit level. The recoverable amount has been determined
by means of the value in use. The determined anticipated cash flows are based on the operating profit budget for 2024
and operating profit forecasts for the subsequent four years.
Based on testing performed in 2023, no need was found for recognizing impairment losses: a clear margin was left for
each tested unit. The effect of the Microsoft BC and LS Retail business transaction in May 2023 on the goodwill at the
time of sale was EUR -5,904 thousand. No impairment losses were recognized in 2023 related to the goodwill of the
group. During the review period, the Company made a EUR 3,955 thousand write-off to the development costs in the
Utilities business and EUR 3,520 thousand in the Retail & Commerce business.
Goodwill of Tested Units that Generate Cash Flow
TEUR
2023
2022
Retail & Commerce
30,497
36,435
Utilities
10,058
10,058
Total
40,555
46,493
Development costs in progress have been tested with use value calculations. The expected return has been discounted
to present value. The interest rate used in the calculations is 12.25 percent after tax. The calculations generated a need
for write-off for the financial year, based on which the Company made a EUR 3,955 thousand write-off to the
development costs in the Utilities business and EUR 3,520 thousand in the Retail & Commerce business.
The key variables of impairment testing are presented in the table below.
Key variables of impairment testing
Retail & Commerce
Utilities
Revenue growth % on average *
7.0 %
8.0 %
EBITDA margin on average *
10.8 %
9.6 %
Terminal period growth
2.0 %
2.0 %
WACC after tax
12.25 %
12.25 %
WACC pre tax
15.31 %
15.31 %
* In the five-year forecast period, on average
44
Sensitivity Analysis
A summary of unit-specific sensitivities is below:
• In Utilities segment, there will be need for write-downs, if the operating profit decreases by 3.3 percentage
units or the discount rate increases by 3.4 percentage units.
• In Retail & Commerce segment, there will be need for write-downs, if the operating profit decreases by 1.6
percentage units or the discount rate increases by 1.8 percentage units.
3.4 Depreciation, Amortization, and Impairment
TEUR
2023
2022
Depreciations by asset group
Intangible assets
Development costs
1,885
1,863
Intangible rights
888
1,250
Total
2,773
3,113
Tangible assets
Machinery and equipment
38
111
Right of use asset depreciation
1,887
2,288
Total
1,924
2,399
Impairments*
7,539
4,449
Total depreciations and impairments
12,236
9,960
* For the financial year 2023 mainly related to the write-offs of the Utilities and Retail & Commerce business' development costs and
for the financial year 2022 mainly related to the write-offs of the Solteq Robotics business
4. OPERATIONAL ASSETS AND LIABILITIES
4.1 Trade and Other Receivables
TEUR
2023
2022
Trade receivables
6,926
8,499
Contract assets
812
387
Accrued income
2,032
2,188
Other receivables
251
262
Total
10,021
11,337
Contract assets are related to ongoing long-term projects which are recognized based on rate of completion. Significant
items included in prepayments and accrued income relate to normal business accruals.
The Aging of Accounts Receivable and Items Recorded as Impairment Losses:
45
TEUR
2023
Impairment
losses
Net
2023
Probability
of losses
Presumed
losses
2022
Impairment
losses
Net
2022
Probability
of losses
Presumed
losses
Not due
6,107
6,107
7,623
7,623
Due
1,658
-26
1,631
53
1,321
-57
1,265
55
Under 30 days
1,413
1,413
991
991
31-60 days
150
150
108
108
61-90 days
65
65
75.8
72
72
More than 90 days
30
-26
4
100.0
4
150
-57
93
59.0
55
Total
7,765
-26
7,739
53
8,944
-57
8,888
55
All current receivables are denominated in euros. There are no significant concentrations of risk related to receivables.
Historically there have not been significant impairment losses. The balance sheet values correspond to the maximum
amount of credit risk. Because the receivables are current their fair value is equivalent to carrying value.
4.2 Inventories
TEUR
2023
2022
Finished goods
60
133
Total
60
133
4.3 Trade and Other Payables
TEUR
2023
2022
Trade payables
3,351
3,916
Accruals and deferred income
6,629
8,613
Other liabilities
2,960
4,956
Total
12,940
17,485
Current liabilities are denominated in euros and their fair values equal their book values. Significant items included in
accruals and deferred income relate to usual accruals for business operations. Withheld taxes for paid wages and
salaries, social security payments and other social security related items to be accounted for in connection with tax
withholding, as well as VAT liability are disclosed in other payables.
46
4.4 Provisions
Accounting Policy
Provision is recognized when the Group has a present legal or constructive obligation as a result of a past event,
realization of the payment obligation is probable, and the amount of the obligation can be reliably estimated. Provisions
are valued at the present value required to cover the obligation. Present values are determined by discounting the
expected future cash flows at a pre-tax rate that reflects the market’s view of that moment’s time value and risks
associated with the obligation. If part of the obligation is possible to be covered by a third party, the obligation is
recognized as a separate asset, but only once this coverage is virtually certain.
The warranty provision is accumulated for the project business expenses while the project proceeds. The amount of the
warranty provision is an estimate of anticipated warranty work based on previous experiences. The Group recognizes a
provision for onerous contracts when the expected benefits from a contract are less than the unavoidable costs of
meeting the obligations.
TEUR
Warranty provisions
Total
31 Dec 2022
78
78
Additional provisions
21
21
31 Dec 2023
99
99
Warranty Provisions
Warranty provision is recorded for long-term projects based on anticipated warranty work. The general warranty period
is 6 – 12 months. The warranty provisions are based on the historical information on the amount of warranty obligations.
The warranty provisions are expected to be used during the next financial period.
47
5. CAPITAL STRUCTURE AND FINANCIAL ITEMS
5.1 Financial Risk Management and Capital Management
The Company is subject to a number of financial risks in its business operations. The Company’s risk management aims
to minimize the adverse effects of the finance markets to the Company’s result. The general principles of the Company’s
risk management are approved by the Board of Directors and their implementation is the responsibility of the
accounting department together with the operating segment units. The Audit Committee is responsible for monitoring
the risk management.
Credit Risk
The Company’s operating style defines the customers’ and investment transactions’ creditworthiness demands and
investment principles. The Company does not have any significant credit risk concentrations in its receivables, because
it has a wide customer base, and it gives credit only to companies who have an unblemished credit rating. During the
financial period, the effect of credit losses has not been significant. The Company’s credit risk’s maximum amount is the
carrying value of financial assets as at December 31, 2023.
Liquidity Risk
The Company monitors and estimates continuously the amount of funds needed to run the business operations, so that
the Group will, at all times, retain enough liquid assets to fund the operation and repay debts that fall due. The
availability of funding and its flexibility is ensured by unused credit limits and by using a number of different banks and
financing methods in the procurement of funding. The Company has a standby credit limit of EUR 5,000 thousand and
a bank account credit limit of EUR 2,000 thousand. At the end of the review period, EUR 1,000 thousand of the standby
credit limit and EUR 698 thousand of the bank account credit limit was in use.
On October 1, 2020, Solteq issued a fixed rate senior bond with a nominal value of EUR 23.0 million. Annual interest of
6.0 percent is paid on the bond, and it will mature on October 1, 2024. The bond can be redeemed before its final
maturity date. Solteq Plc repurchased a share of the above-mentioned bond with a nominal value of EUR 0.6 million in
the financial year 2023.
The company has initiated measures to arrange refinancing during the financial year 2023. The arrangement consists of
the renewal of the existing bond and of the standby and bank account credit limits. The financial negotiations and
related measures have progressed as planned and the management believes that the negotiations will end with a
positive outcome. Based on this, the management estimates that operations will continue and that the risk of
insufficient funding is small.
Interest Rate Risk
The Company’s income and operative cash flows are mainly free from market rate fluctuation effects. Company is able
to take out either fixed rate or fluctuating rate loans and to use interest rate swaps to achieve its objective relating to
the financial principles.
With the current financial structure, the Company is not exposed to significant interest rate risk related to the market
rate fluctuation, because only the credit limits used to control the liquidity risk are tied to market rates. The most of the
Company’s interest-bearing liabilities consists of fixed rate bond totaling to EUR 23,000 thousand, which will mature on
October 1, 2024, and of lease agreements with fixed interest rates.
48
In the end of the reporting period the Company did not have open interest rate swaps or other instruments used to
manage interest rate risks or other risks.
Currency Rate Risk
Because the most of the Company’s cash flows are in euros, the Company is exposed only to low currency rate risk. The
currency rate risks related to the business operations are mainly arising from the business practiced in Sweden and
Poland (the part that is not in euros) and in small amounts from the Group’s purchases. The most essential currencies
are Swedish krona (SEK), Polish zloty (PLN), Danish krone (DKK), Norwegian krone (NOK), Pound sterling (GBP), and the
US dollar (USD). Other currencies have only minor significance. The currency rate hedges were not used in the financial
year. The Group’s financial liabilities do not include currency rate risk.
Capital Management
The objective for the Group’s capital management is to secure the continuance of activities (going concern) and increase
in shareholder value. The capital structure can be managed among other things through decisions regarding dividend
distribution and return of equity, purchase of own shares as well as share issues.
The financial covenants concerning the Company’s bond (EUR 23,000 thousand at the end of the financial year) and the
standby and bank account credit limits (EUR 7,000 thousand at the end of the financial year) are tied to the terms of the
bond, which are monitored regularly. The bond will mature on October 1, 2024.
The terms and conditions of the Bond contain financial and other covenants as well as the prerequisites for early
maturity and repurchase. The financial covenants concerning the distribution of funds and incurring financial
indebtedness other than permitted in the terms of the Bond (Incurrence Covenant) require that the Equity Ratio exceeds
27.5 percent, the Interest Coverage Ratio (EBITDA / net interest cost) exceeds 3.00:1 and that the Group’s Net Interest
Bearing Debt to EBITDA ratio does not exceed 4:1. The covenants concerning the distribution of funds and incurring
financial indebtedness other than permitted under the terms of the bond are not fulfilled based on the financial year
2023. The fulfillment of the covenants is always reviewed based on the last reported 12-month period. Violations of the
above-mentioned financial covenants of the bond do not, as such, lead to the right to demand immediate repayment
of the bond, but they limit the distribution of the company's funds and incurring financial indebtedness other than
permitted under the terms of the bond.
In addition, the Bond Issue includes other covenants related to divestment of assets, negative pledge, changes in the
nature of business, related party dealings, use of credit limits, listing of the Bond, and to preserving and maintaining
intellectual property rights. In addition, it includes an obligation of early repayment associated with a change in the
control of the Company as well as maturity conditions related to a merger, de-merger, discontinuation of business,
failures to pay and insolvency. The terms of the bond are available as a whole at Company’s website.
5.2 Financial Assets and Liabilities
Accounting Policy
Financial assets are classified into the following categories based on the Group’s business model for the management of
financial assets and their contractual cash flow characteristics: measured at amortized cost and measured at fair value
through profit or loss. The classification is based on the objective of the business model and the contractual cash flows
of the investments, or by applying the fair value alternative at the time of initial acquisition.
49
The purchases and sales of financial assets are recognized on the transaction date, which is the date on which the Group
commits to buying or selling the financial instrument. At initial recognition, the Group measures a financial asset at fair
value and, if the item in question is an item that is not classified as measured at fair value through profit or loss, the
transaction costs that are directly attributable to the item are added to, or deducted from, the item. Transaction costs
are included in the original carrying amount of financial assets for items that are not measured at fair value through
profit or loss. Financial assets measured at fair value through profit or loss are recognized at fair value on the balance
sheet at initial recognition and the transaction costs are recognized through profit or loss.
Financial assets measured at amortized cost consist of trade receivables and other receivables. They are initially
measured at fair value and subsequently at amortized cost using the effective interest rate method.
For trade receivables, expected credit losses are estimated using the simplified approach described in IFRS 9. The
simplified approach involves assessing credit losses using a provision matrix and recognizing credit losses at an amount
corresponding to lifetime expected credit losses. Expected credit losses are estimated based on historical data on
previous actual credit losses, and the model also takes into consideration the information available at the time of
assessment regarding future economic conditions. Expected credit losses are recognized in the income statement under
other expenses.
Financial assets recognized at fair value through profit or loss consist of shares and they are included in non-current
assets, except where the intention is to hold them for a period of less than 12 months from the financial statements date,
in which case they are included in current assets. On the financial statements date, the Group’s other investments
consisted of unlisted shares.
Financial liabilities are initially recognized at fair value. Transaction costs are included in the financial liability value at
the initial measurement. Later all financial liabilities are valued at amortized cost using the effective interest method.
Financial liabilities are classified under non-current and current liabilities which can be either interest-bearing or interest-
free.
Determination of Fair Value
When the Group measures an asset item or a liability at fair value, the measurement is based on as highly observable
input in the market as possible. The fair values are categorized at various hierarchy levels, depending on the input data
used as follows:
• Level 1: The fair values are based on the quoted prices (unadjusted) of identical asset items or liabilities in a well-
functioning market.
• Level 2: The fair values of the instruments are mostly based on other inputs than the quoted prices included at
Level 1, however, on inputs that are observable for the asset item or the liability concerned either directly (i.e. as
prices) or indirectly (i.e. derived from prices).
• Level 3: The fair values of the instruments are based on such inputs for the asset item or liability that are not based
on observable market inputs (other than observable inputs) but are mainly based on the estimates of the
management and on their use in generally accepted measurement models.
TEUR
2023
Book value
2023
Fair value
2022
Book value
2022
Fair value
Financial liabilities at amortized cost
50
Non-current
Bond
22,839
22,839
Loans from financial institutions
247
247
1,340
1,340
Lease liabilities
405
405
1,694
1,694
Total
652
652
25,873
25,873
Current
Bond
22,369
22,369
Loans from financial institutions
1,780
1,780
5,928
5,928
Lease liabilities
1,556
1,556
1,673
1,673
Total
25,705
25,705
7,601
7,601
The fair value of the financial liabilities is mainly the same as the book value.
Financial liabilities, including finance lease liabilities and the interest rate swap are categorized at fair value level 2.
Cash Flow Notes: Non-Cash Flow Related Changes
TEUR
31 Dec
2022
Cash flows
Transfer
from non-
current to
current
New
financial
lease
contracts
*)Other
changes
31 Dec
2023
Non-current liabilities
24,179
-22,988
-944
247
Current liabilities
5,928
-4,773
22,988
6
24,149
Lease liabilities
3,368
-1,891
668
-185
1,960
Total financing liabilities
33,475
-6,663
0
668
-1,122
26,356
*) The cumulative effective interests during the financial period, which are valuated to the acquisition costs, and
disposals of lease liabilities.
51
Maturity of Financial Leases:
TEUR
Book
value
Contractual
cash flows
1-12
months
13-24
months
25-36
months
Later
Financial liabilities, Dec 31 2023
Bond
22,369
23,786
23,786
Loans from financial institutions
329
335
85
84
83
82
Lease liabilities
1,960
2,031
1,618
373
33
7
Trade payables
3,351
3,351
3,351
Financial liabilities total
28,009
29,504
28,840
457
117
89
Financial liabilities, Dec 31 2022
Bond
22,839
25,766
1,383
24,383
Loans from financial institutions
1,463
1,525
95
414
359
657
Lease liabilities
3,368
3,486
1,803
1,351
326
5
Trade payables
3,916
3,916
3,916
Financial liabilities total
31,585
34,693
7,197
26,148
686
663
In 2023, the average interest rate of the loans was 6.0 percent (6.0). All financial liabilities are denominated in euros.
The financial statements for the financial year 2023 have been drawn up under the going concern principle. In assessing
the going concern principle, the management of the company has considered the risks related to the refinancing of the
company. The key elements of Solteq Group’s debt financing are a fixed-rate bond, as well as standby and bank account
credit limits.
Solteq issued a fixed-rate unsecured senior bond with a nominal value of EUR 23.0 million on October 1, 2020. Of the
EUR 23.0 million bond outstanding at the time of the financial statements bulletin, EUR 0.6 million was held by the
company. The bond matures on October 1, 2024. The standby and bank account credit limits total EUR 7.0 million. The
related financial covenants are linked to the terms of the bond.
The terms of the bond include financial covenants concerning the distribution of funds and incurring financial
indebtedness other than permitted under the terms of the bond (Incurrence Covenant). The covenants require that the
equity ratio exceeds 27.5 percent, the interest coverage ratio (EBITDA/net interest cost) exceeds 3.00:1, and that the
Group’s net interest-bearing debt to EBITDA ratio does not exceed 4:1. The covenants concerning the distribution of
funds and incurring financial indebtedness other than permitted under the terms of the bond are not fulfilled based on
the reporting period. The fulfillment of the covenants is always reviewed based on the last reported 12-month period.
Violations of the above-mentioned financial covenants of the bond do not, as such, lead to the right to demand
immediate repayment of the bond, but they limit the distribution of the company's funds and incurring financial
indebtedness other than permitted under the terms of the bond.
The company has initiated measures to arrange refinancing of the company. The arrangement consists of the renewal
of the existing bond and of the standby and bank account credit limits.
In assessing the going concern, the management of the company has considered the effects of the measures taken
during the financial year 2023 on the company’s financial performance, financial forecasts and risks related to financial
negotiations. Based on these factors, management estimates that operations will continue and that the risk of
52
insufficient funding is small. The company believes that the planned financing arrangements will lead to a favorable
outcome. However, if the company fails to restructure the financing, this would jeopardize the continuity of the
company’s operations.
These financial statements have therefore been drawn up under the going concern principle.
5.3 Other Investments
TEUR
2023
2022
Beginning of financial period
437
438
Change
0
-1
End of financial period
437
437
The item includes unquoted shares. Fair value is estimated to correspond to book value (fair value hierarchy level 3).
5.4 Cash and Cash Equivalents
Accounting Policy
Cash and cash equivalents consist of cash and bank deposits that can be withdrawn on demand. Account with overdraft
facility is included in current financial liabilities. Unused overdraft facility has not been recognized in the balance sheet.
TEUR
2023
2022
Cash and cash equivalents
1,853
2,057
Total
1,853
2,057
53
5.5 Equity
Accounting Policy
Costs relating to the acquisition of own shares are deducted from the equity. If Solteq Plc acquires its own shares, the
acquisition costs are deducted from the equity.
Below is the reconciliation of the number of shares:
TEUR
Number of
shares
(1 000)
Share
capital
Share
premium
reserve
Invested
unrestricted
equity
reserve
Total
Beginning of financial period
19,397
1,009
75
13,260
14,344
End of financial period
19,397
1,009
75
13,260
14,344
The maximum number of shares is 28,000 thousand (28,000). The shares have no nominal value. The Group’s maximum
share capital according to the articles of association is EUR 2,400 thousand (2,400).
The reserves included in equity are as follows:
Share Premium Reserve
A reserve to be used in accordance with the old Companies Act § 12:3a.
Invested Unrestricted Equity Reserve
In accordance with the Companies Act 8:2 §, the proportion of payments received from shares that is not recognized as
share capital is recognized in this reserve.
Reserve for Own Shares
Reserve for own shares consists of acquisition cost of own shares acquired by the Group. There were no own shares in
Solteq Plc’s possession at the end of the financial year 2023 nor 2022.
Dividends
At the end of financial year 2023, the distributable equity of the Group's parent company is 19,466,865.03 euros. Solteq
Plc's Board of Directors proposes to the Annual General Meeting that for the financial year 2023, no dividend will be
paid out.
The Board of Directors is of the opinion that there are no financial prerequisites for dividend pay-outs, or other kind of
distribution of funds. According to the terms and conditions of the company debenture stock distribution of funds would
lead to the expiration of the credit. The covenants of the bond do not permit distribution of funds based on the financial
year 2023.
No essential changes have taken place in the company's financial situation after the end of the financial year.
54
5.6 Conditional Debts and Liabilities
Accounting Policy
Contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.
Also, present obligation that is not probable to cause liability to pay or the amount of obligation cannot be measured
with sufficient reliability are considered contingent liabilities. Contingent liabilities are disclosed as notes to the financial
statements.
TEUR
2023
2022
Collateral given on our own behalf
Business mortgages
10,000
10,000
Total
10,000
10,000
Until the issuance of the bond the business mortgages as well as the pledged shares are given as collateral by the Parent
Company for credit limits and long-term loans.
6. OTHER NOTES
6.1 Consolidation Principles and Group Companies
Accounting Policy
Consolidated financial statements include Solteq Plc and its subsidiaries.
Subsidiaries are companies in which the Group exercises control. Control is defined as the Group having exposure, or
rights, to variable returns from its involvement with the investee and the ability to use its power over the investee to
affect the amount of the returns.
The Group’s mutual shareholdings have been eliminated using the acquisition method. Companies acquired are included
in the consolidated financial statements from the date when the Group has acquired right of control and subsidiaries
sold until the date when the right of control seizes. All intercompany business transactions, receivables, debts, and
unrealized profits as well as internal distribution of profit are eliminated in the preparation of the consolidated financial
statements. Unrealized losses are not eliminated if they are caused by impairment.
Figures on the result and the financial position of the Group’s entities are measured in the currency of the primary
economic environment in which the entity operates (“functional currency”). The consolidated financial statements are
presented in euros, which is the Parent Company’s functional and presentation currency.
Transactions in foreign currencies have been recorded in the functional currency, using the event date’s rate of exchange
or one that is approximately the same. At the time of closing the annual accounts, receivables and debts in foreign
currencies have been converted to functional currency at the exchange rate of that date.
Group’s Parent Company and subsidiary relations December 31, 2023 are as follows:
55
Company
Domicile
Share of ownership (%)
Share of votes (%)
Solteq Oyj
S2B Energia Oy
Finland
100 %
100 %
Solteq Robotics Oy
Finland
100 %
100 %
Aponsa AB
Sweden
100 %
100 %
Solteq Sweden AB
Sweden
100 %
100 %
Solteq Poland Sp. z. o. o
Poland
100 %
100 %
Solteq Digital UK Ltd
Great Britain
100 %
100 %
Solteq Denmark A/S
Denmark
100 %
100 %
Solteq Norway AS
Norway
100 %
100 %
Theilgaard Mortensen Sverige AB
Sweden
100 %
100 %
Forsyning 360 Aps (merged January 1, 2023)
Denmark
100 %
100 %
Forsyning 360 Aps merged to Solteq Denmark A/S on January 1, 2023.
6.2 Related Party Transactions
Solteq Group’s related parties include the Board of Directors, the CEO, and the Group’s Executive Team, as well as their
related parties and entities according to the IAS24 standard.
There were no related party transactions to be reported in the review or the comparison period.
Management Employee Benefits
TEUR
2023
2022
Salaries and other short-term employment benefits
1,426
1,127
Total
1,426
1,127
The compensations of CEO, the Board of Directors and the Executive Team are included in the management employee
benefits.
56
Wages and Salaries of the Members of the Board of Directors and CEO
TEUR
2023
2022
CEO Olli Väätäinen until Jan 31, 2022
58
Interim CEO Kari Lehtosalo during Feb 1 - Jun 30, 2022
114
CEO Aarne Aktan from Jul 1, 2022
350
175
Board members
Markku Pietilä, Chairman of the Board
71
64
Aarne Aktan until Jun 30, 2022
20
Lotta Kopra until Mar 24, 2022
8
Panu Porkka
37
33
Katarina Cantell (formerly Segerståhl)
41
37
Anni Sarvaranta from Mar 24, 2022
38
26
Mika Sutinen from Mar 24, 2022
40
25
Esko Mertsalmi from Mar 29, 2023
26
The CEO’s accrual-based pension costs amount to EUR 89 thousand. The CEO’s pension plan complies with the
employment pension legislation. The CEO’s notice period is six months and the agreement does not include any separate
severance payments.
Solteq Plc’s members of the Board of Directors and CEO owned directly or through controlled companies 79 thousand
shares at the end of 2023 (26).
57
6.3 Business Combinations
There were no acquisitions during the financial year 2023.
In the comparison period of 2022, two business acquisitions were made. On January 3, 2022, Solteq Plc signed an
agreement to purchase the entire share capital of the energy software company Enerity Solutions Oy. Through the
acquisition, Solteq is expanding its software offering in the utilities sector, which is one of the company’s key growth
drivers in the Nordic market. The deal also further increases the company’s expertise in the changing operating
environment of the energy sector. Enerity Solutions specializes in software solutions for electricity trading and grid
profitability and risk management.
TEUR
1-12/2022
Consideration
Paid in cash
5,291
Total
5,291
Values of the assets and liabilities arising from the acquisition
Tangible assets
5
Intangible assets **
577
Trade and other receivables
229
Cash and cash equivalents
869
Total assets
1,680
Trade payables and other liabilities
445
Financial liabilities
115
Total liabilities
560
The goodwill value of the acquisition
4,171
Cash flow from the acquisition
Consideration paid in cash in 2022
5,291
Cash and cash equivalents of the acquired companies
869
Total cash flow from the acquisition
4,422
Goodwill consists of assets that cannot be separated like synergy benefits, competent personnel, market share and
entrance to new market.
** Depreciations of the intangible rights during the reporting period are 115 thousand euros.
Expenses related to the acquisition
Other expenses
124
Total expenses related to the acquisition
124
Impact on the Solteq Group's number of personnel
17
Impact on the Solteq Group's comprehensive income statement
1-12/2022
Revenue *
2,323
Operating profit *
802
* The amount of the revenue and the operating profit from the acquisition date to the merger. Enerity Solutions Oy
is consolidated to Solteq Group as of the beginning of the reporting period. The company has been merged to the
parent company on June 1, 2022.
58
Solteq Plc acquired on November 7, 2022, the entire share capital of energy sector system and service provider S2B
Energia Oy. As a result of the acquisition 10 employees transferred to be part of Solteq Group. The debt-free purchase
price was EUR 1 and net assets EUR 32 thousand. The revenue and operating profit of the acquired businesses is not
presented as if the consolidation would have happened in the beginning of the financial year because it has no significant
effect on Solteq Group's figures.
Sales of business based on Microsoft BC and LS Retail ERP solutions
On April 17, 2023, Solteq signed a business transfer agreement, whereby the Group’s ERP business based on Microsoft
Dynamics 365 Business Central and LS Retail solutions was sold to Azets Group.
The net debt-free purchase price of the business is a maximum of EUR 20,000 thousand. The fixed purchase price is EUR
15,000 thousand deducted by the net working capital of the business. EUR 12,000 thousand was paid upon the
completion of the Transaction. The remainder of the fixed purchase price will be paid at the latest six (6) months after
the completion of the Transaction. A possible additional purchase price is a maximum of EUR 5,000 thousand, and it
shall be determined based on the revenue of the transferring business for a period of twelve (12) months from the first
date of the month the Transaction has been completed. The purchase price is paid in cash. The company recognized a
one-time profit of EUR 8,129 thousand (before tax effects) on the fixed purchase price in the second quarter. The net
assets sold in the business transaction were EUR 5,247 thousand, consisting of the allocated goodwill of the business
(EUR 5,904 thousand) and provisions for personnel costs related to transferred persons (EUR 657 thousand). In addition,
the expenses related to the business transaction were approximately EUR 749 thousand.
The Transaction consists of expert and maintenance services as well as clientele related to Solteq’s Microsoft Dynamics
365 Business Central and LS Retail ERP solutions. Following the transfer of the business, approximately 60 experts
located in Finland, Sweden, Norway, and Denmark were transferred to Azets Group.
6.4 Events After the Balance Sheet Date
On January 25, 2024, Solteq announced the proposals of Solteq’s Shareholders’ Nomination Committee for the 2024
Annual General Meeting. Solteq Plc’s Shareholders’ Nomination Committee proposes to the Annual General Meeting,
planned to be held on March 27, 2024, that seven (7) members are elected to the Board of Directors, the current Board
members – Markku Pietilä, Katarina Cantell, Panu Porkka, Anni Sarvaranta, Mika Sutinen, and Esko Mertsalmi – are re-
elected, and Lotta Airas is elected as a new member of the Board. The Board members’ term will end at the close of the
2025 Annual General Meeting.
On February 2, 2024, Solteq announced changes in the Executive Team of Solteq Plc as of February 2, 2024. With the
change, Kari Lehtosalo, the company’s CFO and member of the Executive Team since 2019, will step down from his
position by mutual agreement. The Board of Directors of Solteq Plc has appointed LL.M. Mikko Sairanen (b. 1985) as the
company’s new CFO. He will also continue in his role as the company’s General Counsel.
The company’s management is not aware of other events of material importance after the review period that might
have affected the preparation of the Financial Statements Bulletin.
59
Parent Company Financial Statements
Parent Company’s Statement of Comprehensive Income
TEUR
Notes
1 Jan 2023 -
31 Dec 2023
1 Jan 2022 -
31 Dec 2022
Revenue
1.1
49,222
56,449
Other income
1.3
10,780
897
Materials and services
-8,636
-8,623
Employee benefit expenses
1.2
-32,073
-35,613
Other expenses
1.3, 1.4
-8,347
-8,847
Depreciations and impairments
2.4
-9,823
-9,090
Operating result
1,123
-4,827
Financial income
1.5
1,169
52
Financial expenses
1.5
-5,082
-2,046
Result before taxes
-2,790
-6,821
Income taxes
1.6
-93
1,291
Result for the financial period
-2,883
-5,529
Total comprehensive income
-2,883
-5,529
60
Parent Company’s Statement of Financial Position
TEUR
Notes
31 Dec 2023
31 Dec 2022
Assets
Non-current assets
Tangible assets
2.1
17
45
Right-of-use assets
2.2
1,127
2,097
Intangible assets
2.3
Goodwill
1,991
1,991
Other intangible assets
39,270
46,020
Other investments
4.3
453
453
Shares in subsidiaries
5.1
5,546
8,644
Deferred tax assets
1.6
1,152
1,306
Trade and other receivables
3.1
1,373
636
Non-current assets total
50,928
61,192
Current assets
Inventories
3.2
60
133
Trade and other receivables
3.1
8,522
10,750
Cash and cash equivalents
4.4
438
869
Current assets total
9,020
11,753
Total assets
59,947
72,945
Equity and liabilities
Equity attributable to equity holders of the parent company
Share capital
4.5
1,009
1,009
Share premium reserve
4.5
75
75
Distributable equity reserve
4.5
14,374
14,374
Retained earnings
5,299
8,182
Total equity
20,757
23,640
Non-current liabilities
Deferred tax liabilities
1.6
441
507
Financial liabilities
4.2
747
24,179
Lease liabilities
4.2
217
939
Non-current liabilities total
1,405
25,624
Current liabilities
Financial liabilities
4.2
24,149
5,928
Trade and other payables
3.3
12,607
16,609
Provisions
3.4
99
78
Lease liabilities
4.2
929
1,065
Current liabilities total
37,785
23,680
Total liabilities
39,190
49,304
Total equity and liabilities
59,947
72,945
61
Parent Company’s Cash Flow Statement
TEUR
Notes
1 Jan 2023 -
31 Dec 2023
1 Jan 2022 -
31 Dec 2022
Cash flow from operating activities
Result for the financial period
-2,883
-5,529
Adjustments for operating profit
1.8
3,672
9,007
Changes in working capital
-2,001
1,228
Interests paid
-2,060
-1,749
Interests received
131
48
Net cash flow from operating activities
-3,141
3,005
Cash flow from investing activities
Business acquisitions
-5,291
Divested businesses
9,959
Investments in tangible and intangible assets
-1,725
-3,116
Net cash used in investing activities
8,234
-8,407
Cash flow from financing activities
Long-term loans, increase
500
Long-term loans, decrease
4.2
-548
Short-term loans, increase
4.2
4,371
6,813
Short-term loans, decrease
4.2
-8,601
-1,008
Payment of lease liabilities
4.2
-1,246
-1,902
Net cash used in financing activities
-5,523
3,903
Changes in cash and cash equivalents
-431
-1,500
Cash and cash equivalents at the beginning of period
869
1,403
Cash and cash equivalents transferred in the merger
966
Cash and cash equivalents at the end of period
4.4
438
869
Cash and cash equivalents presented in the cash flow statement consist of the following items:
TEUR
2023
2022
Cash and cash equivalents
438
869
Total
438
869
62
Parent Company’s Statement of Changes in Equity
TEUR
Share
capital
Share
premium
account
Invested
unrestricted
equity
reserve
Retained
earnings
Total
Equity 1 Jan 2022
1,009
75
14,374
13,711
29,170
Total comprehensive income
-5,529
-5,529
Equity 31 Dec 2022
1,009
75
14,374
8,182
23,640
Equity 1 Jan 2023
1,009
75
14,374
8,182
23,640
Total comprehensive income
-2,883
-2,883
Equity 31 Dec 2023
1,009
75
14,374
5,299
20,757
63
Notes to Solteq Plc Financial Statements
Accounting policies for the parent company’s Financial Statements
Solteq Plc’s consolidated financial statements have been prepared in accordance with the International Financial
Reporting Standards (IFRS) complying with the IAS and IFRS standards as well as the SIC and IFRIC interpretations valid
as at December 31, 2023. International Financial Reporting Standards mean the standards and their interpretations that
have been approved for adoption in the EU in accordance with the procedure No. 1606/2002 enacted in the Finnish
Accounting Act and EU (EC) regulations laid down by the Act. The notes to the consolidated financial statements are
also in accordance with the requirements of the Finnish Accounting and Companies legislation.
The Group accounting policies are applied to both the Group financial statements as well as the Parent Company
financial statements, unless otherwise mentioned.
1. FINANCIAL RESULT
1.1 Revenue from Contracts with Customers
TEUR
2023
2022
Services
37,321
43,698
Recurring revenue / SaaS
9,224
7,861
Software and hardware sales
2,677
4,889
Total
49,222
56,449
Contract Balances
TEUR
2023
2022
Trade and other receivables
5,597
8,279
Contract assets
812
387
Contract liabilities
-428
-556
Contract Assets
TEUR
2023
2022
Contract assets on Jan 1
387
500
Transfers from contract assets to receivables
-113
-433
Increases as a result of changes in the measure of progress
537
321
Contract assets on Dec 31
812
387
64
Contract Liabilities
TEUR
2023
2022
Contract liabilities on Jan 1
-556
-517
Revenue recognized from contract liabilities
485
465
Increases due to cash received, excluding amounts recognized as revenue during
the period
-357
-504
Contract liabilities on Dec 31
-428
-556
The Company expects to meet a significant part of outstanding performance obligations during the reporting period
2024.
1.2 Employee Benefit Expenses
TEUR
2023
2022
Salaries and wages
26,685
29,566
Pension expenses - defined contribution plan
4,466
5,008
Other personnel expenses
922
1,039
Total
32,073
35,613
Average number of employees over the financial period
428
508
Information on management’s employee benefits is presented in note 5.1 Related party transactions.
1.3 Other Income and Expenses
Other Income
TEUR
2023
2022
Government grants
1
Income resulting from the sales of assets and business operations
10,070
81
Other income
25
104
From Group companies, compensation for administration costs
685
711
Total
10,780
897
65
Other expenses
TEUR
2023
2022
Telephone and telecommunication costs
419
612
Voluntary personnel expenses
719
583
Rental and other office related expenses
1,279
1,427
Hardware and software expenses
1,610
1,630
Car and travel expenses
479
361
External services
2,819
3,026
Bad debts
26
55
Warranty provisions
21
5
Other expenses
975
1,149
Total
8,347
8,847
Lease Expenses
TEUR
2023
2022
Depreciation of right-of-use assets
1,320
1,725
Interest expense from lease contracts
83
126
Costs from short-term lease contracts
20
Costs from low-value asset lease contracts
770
802
Total
2,172
2,672
Auditor’s Fees
TEUR
2023
2022
Auditing
141
101
Certificates and statements
8
7
Tax consulting
9
11
Other services
63
74
Total
221
193
The non-audit services charged by KPMG Oy Ab from Solteq Plc in the financial year 2023 were EUR 72 thousand (85).
1.4 Research and Development Costs
The income statement includes a total of EUR 0 thousand (542) of research and development costs recognized as
expense in 2023.
66
1.5 Financial Income and Expenses
Financial Income
TEUR
2023
2022
Interest income
130
45
Foreign currency exchange income
27
4
Other financial income *
1,011
Dividend income
1
3
Total
1,169
52
* For the financial year 2023, EUR 1,011 thousand in other financial income were related to the non-collection of Business Finland's
loan.
Financial Expenses
TEUR
2023
2022
Interest expenses from financial expenses in amortized costs
1,749
1,610
Interest expense on lease liabilities
83
126
Foreign currency exchange expenses
25
16
Other financial expenses
126
295
Impairments on investments
3,099
Total
5,082
2,046
For the financial year 2023 the impairments on investments were related to revaluation of holdings in group companies.
For the financial year 2022, EUR 198 thousand in other financial expenses were related to the fees for changing the
terms of the bond.
67
1.6 Income Taxes
TEUR
2023
2022
Tax based on the taxable income for the period
3
3
Taxes from previous periods
2
Deferred taxes
88
-1,294
Total
93
-1,291
TEUR
2023
2022
Result before taxes
-2,790
-6,821
Taxes based on domestic tax rate
-558
-1,364
Non-deductible expenses
8
31
Exempt from taxes
0
-1
620
Revaluation of deferred taxes
-11
-8
Other items
37
50
Taxes from previous periods
-2
Taxes on the income statement
93
-1,291
Deferred Tax Assets and Liabilities
Changes in deferred taxes:
TEUR
1 Jan
2022
Recognized
on the
income
statement
Acquisition
of
subsidiaries
and
businesses
31 Dec
2022
Recognized
on the
income
statement
31 Dec
2023
Deferred tax assets:
Provisions
15
1
16
4
20
Postponed depreciations
38
9
47
-2
45
From the loss of the financial period
1,244
1,244
-156
1,088
Other items
12
-12
0
Netted with deferred tax liabilities
-64
0
Total
0
1,242
0
1,306
-154
1,152
Deferred tax liabilities:
Tax-deductible goodwill
78
94
172
94
266
Allocated intangible liabilities
317
-153
106
270
-119
151
Other items
58
7
64
-41
24
Netted with deferred tax assets
-64
0
Total
389
-53
106
507
-66
441
For the financial year 2023 and 2022, the parent company's loss has been booked in full as a deferred tax asset, as it is
likely that taxable income will be generated in the future against which it can be utilized.
68
1.7 Earnings per Share
2023
2022
Profit for the financial period attributable to equity holders of the parent company
(TEUR)
-2,883
-5,529
Weighted average of the number of shares during the financial period (1 000)
19,397
19,397
Undiluted EPS (EUR/share)
-0.15
-0.29
There were no diluting factors during the financial year 2023 nor the comparison period 2022.
1.8 Adjustments to Cash Flow from Business Operations
Significant events are listed in the cash flow statement. Significant adjustments to cash flow from business operations
are due to depreciations and impairments made during the financial period, EUR
9,823 thousand (9,090) and from the profit on the sale of the business transaction EUR -9,944 thousand (0).
69
2. TANGIBLE AND INTANGIBLE ASSETS
2.1 Tangible Assets
TEUR
Machinery
and
equipment
Other
tangible
assets
Prepayments
Total
Acquisition cost 1 Jan 2023
2,379
1
0
2,380
Additions
0
Disposals
0
Acquisition cost 31 Dec 2023
2,379
1
0
2,380
Accumulated depreciation and impairment 1 Jan 2023
2,335
0
2,335
Depreciation
28
28
Accumulated depreciation on disposals
0
Accumulated depreciation and impairment 31 Dec
2023
2,363
0
0
2,363
Book value 1 Jan 2023
44
1
0
45
Book value 31 Dec 2023
16
1
0
17
Acquisition cost 1 Jan 2022
2,473
21
56
2,550
Additions
12
12
Disposals
-106
-21
-56
-182
Acquisition cost 31 Dec 2022
2,379
1
0
2,380
Accumulated depreciation and impairment 1 Jan 2022
2,335
0
0
2,335
Depreciation
94
94
Accumulated depreciation on disposals
-94
-94
Accumulated depreciation and impairment 31 Dec
2022
2,335
0
0
2,335
Book value 1 Jan 2022
138
21
56
216
Book value 31 Dec 2022
44
1
0
45
70
2.2 Right-of-Use Assets
TEUR
Premises
Machinery
and
equipment
Right-of-Use
assets total
Acquisition cost 1 Jan 2023
7,220
6,464
13,683
Additions *
385
188
573
Disposals
-47
-177
-224
Acquisition cost 31 Dec 2023
7,558
6,475
14,033
Accumulated depreciation and impairment 1 Jan 2023
5,592
5,995
11,587
Depreciation
1,089
230
1,320
Accumulated depreciation and impairment 31 Dec 2023
6,681
6,226
12,906
Book value 1 Jan 2023
1,628
469
2,097
Book value 31 Dec 2023
877
249
1,126
Acquisition cost 1 Jan 2022
6,786
6,495
13,281
Additions *
702
196
898
Disposals
-269
-227
-496
Acquisition cost 31 Dec 2022
7,220
6,464
13,683
Accumulated depreciation and impairment 1 Jan 2022
4,072
5,790
9,862
Depreciation
1,519
205
1,725
Accumulated depreciation and impairment 31 Dec 2022
5,592
5,995
11,587
Book value 1 Jan 2022
2,714
705
3,419
Book value 31 Dec 2022
1,628
469
2,097
* Includes also changes to lease contracts
Solteq applies the reliefs allowed by IFRS 16 for short-term agreements and low-value commodities per agreement. See
the table below for the minimum leases payable based on these lease agreements:
TEUR
2023
2022
Within a year
550
737
More than one year
430
730
Total
980
1,468
71
2.3 Intangible Assets
Accounting Policy
In the balance sheet of the Parent Company, under the immaterial rights section, there are merger losses, which are not
depreciated evenly. These are instead tested as goodwill by performing impairment tests.
In the Parent Company, the transaction is handled at book value as for companies under mutual control.
TEUR
Payments in
advance and
uncompleted
actions
Goodwill
Development
costs
Intangible
rights
Other
intangible
assets
Total
Acquisition cost 1 Jan 2023
634
4,356
11,483
49,309
401
66,184
Additions
1,725
1,725
Disposals
-819
-9,827
-10,646
Transfers between items
-1,540
1,540
0
Acquisition cost 31 Dec 2023
0
4,356
3,196
49,309
401
57,263
Accumulated amortization and
impairment 1 Jan 2023
2,365
5,998
9,409
401
18,172
Amortization
1,659
837
2,496
Accumulated amortization on disposals
-4,667
-4,667
Accumulated amortization and
impairment 31 Dec 2023
2,365
2,990
10,245
401
16,001
Book value 1 Jan 2023
634
1,991
5,485
39,900
0
48,011
Book value 31 Dec 2023
0
1,991
206
39,064
0
41,262
Acquisition cost 1 Jan 2022
4,307
4,356
8,898
44,703
401
62,665
Merger of the subsidiary
4,546
4,546
Additions
3,208
65
61
3,334
Disposals
-4,360
-1
-4,361
Transfers between items
-2,520
2,520
0
Acquisition cost 31 Dec 2022
634
4,356
11,483
49,309
401
66,184
Accumulated amortizations and
impairment 1 Jan 2022
2,365
4,303
8,281
401
15,350
Amortization
1,695
1,128
2,823
Accumulated amortization on disposals
-1
-1
Accumulated amortization and
impairment 31 Dec 2022
2,365
5,998
9,409
401
18,172
Book value 1 Jan 2022
4,307
1,991
4,595
36,422
0
47,315
Book value 31 Dec 2022
634
1,991
5,485
39,900
0
48,011
In the financial year 2023, a total of EUR 179 thousand (182) government grants related to the acquisition of intangible
assets were received.
72
Impairment
The goodwill values related to business combinations are allocated to the cash-generating units which are based on the
Group’s budgeting and reporting structure, and which are the smallest independent entities with separate cash flows.
The content of the cash-generating units is in line with the Group’s segment structure.
The book value of the goodwill and merger loss in the Parent Company on December 31, 2023 was EUR 40,144 thousand
(40,144). At the end of the financial period, in the Parent Company there were investments in progress in development
projects of a value of EUR 0 thousand (634).
Impairment tests have been carried out at the cash-generating unit level. The recoverable amount has been determined
by means of the value in use. The determined anticipated cash flows are based on the operating profit budget for 2024
and operating profit forecasts for the subsequent four years.
Based on testing performed in 2023, no need was found for recognizing impairment losses: a clear margin was left for
each tested unit. No impairment losses were recognized in 2023 related to the goodwill of the group or to merger losses
of the Parent Company. During the review period, Solteq Plc made a EUR 3,684 thousand write-off to the development
costs in the Utilities business and EUR 2,295 thousand in the Retail & Commerce business.
Goodwill and Merger Losses of Tested Units that Generate Cash Flow
TEUR
2023
2022
Retail & Commerce
31,651
31,651
Utilities
8,494
8,494
Total
40,144
40,144
Development costs in progress have been tested with use value calculations. The expected return has been discounted
to present value. The interest rate used in the calculations is 12.25 percent after tax. The calculations generated a need
for write-off for the financial year, based on which Solteq Plc made a EUR 3,684 thousand write-off to the development
costs in the Utilities business and EUR 2,295 thousand in the Retail & Commerce business.
The key variables of impairment testing are presented in the table below.
Key variables of impairment testing
Retail & Commerce
Utilities
Revenue growth % on average *
6.7 %
5.9 %
EBITDA margin on average *
10.1 %
11.6 %
Terminal period growth
2.0 %
2.0 %
WACC after tax
12.25 %
12.25 %
WACC pre tax
15.31 %
15.31 %
* In the five-year forecast period, on average
Sensitivity Analysis
A summary of unit-specific sensitivities is below:
73
• In Utilities segment, there will be need for write-downs, if the operating profit decreases by 4.4 percentage units
or the discount rate increases by 4.3 percentage units.
• In Retail & Commerce segment, there will be need for write-downs, if the operating profit decreases by 0.2
percentage units or the discount rate increases by 0.2 percentage units.
2.4 Depreciation, Amortization, and Impairment
TEUR
2023
2022
Depreciations by asset group
Intangible assets
Development costs
1,659
1,695
Intangible rights
837
1,128
Total
2,496
2,823
Tangible assets
Machinery and equipment
28
94
Right of use asset depreciation
1,320
1,725
Total
1,348
1,819
Impairments*
5,979
4,449
Total depreciations and impairments
9,823
9,090
* For the financial year 2023 mainly related to the write-offs of the Utilities and Retail & Commerce business' development costs and
for the financial year 2022 mainly related to the write-offs of the Solteq Robotics business
3. OPERATIONAL ASSETS AND LIABILITIES
3.1 Trade and Other Receivables
TEUR
2023
2022
Trade receivables
5,446
6,189
Contract assets
812
387
Accrued income
1,858
2,099
Receivables from group companies
1,765
2,695
Other receivables
14
17
Total
9,894
11,386
Contract assets are related to ongoing long-term projects which are recognized based on rate of completion. Significant
items included in prepayments and accrued income relate to normal business accruals.
The Aging of Accounts Receivable and Items Recorded as Impairment Losses:
74
TEUR
2023
Impairment
losses
Net
2023
Probability
of losses
Presumed
losses
2022
Impairment
losses
Net
2022
Probability
of losses
Presumed
losses
Not due
5,303
5,303
6,448
6,448
Due
1,132
-26
1,106
53
2,274
-55
2,218
53
Under 30 days
875
875
698
698
31-60 days
149
149
361
361
61-90 days
64
64
54.7
35
316
316
More than 90 days
43
-26
18
100.0
18
899
-55
844
6.3
53
Total
6,435
-26
6,409
53
8,721
-55
8,666
53
All current receivables are denominated in euros. There are no significant concentrations of risk related to receivables.
Historically there have not been significant impairment losses. The balance sheet values correspond to the maximum
amount of credit risk. Because the receivables are current their fair value is equivalent to carrying value.
3.2 Inventories
TEUR
2023
2022
Finished goods
60
133
Total
60
133
3.3 Trade and Other Payables
TEUR
2023
2022
Trade payables
2,911
3,416
Accruals and deferred income
5,762
7,835
Other liabilities
2,350
4,371
Liabilities to Group companies
1,585
987
Total
12,607
16,609
Current liabilities are denominated in euros and their fair values equal their book values. Significant items included in
accruals and deferred income relate to usual accruals for business operations. Withheld taxes for paid wages and
salaries, social security payments and other social security related items to be accounted for in connection with tax
withholding, as well as VAT liability are disclosed in other payables.
75
3.4 Provisions
TEUR
Warranty provisions
Total
31 Dec 2022
78
78
Additional provisions
21
21
31 Dec 2023
99
99
Warranty provisions
Warranty provision is recorded for long-term projects based on anticipated warranty work. The general warranty period
is 6 – 12 months. The warranty provisions are based on the historical information on the amount of warranty obligations.
The warranty provisions are expected to be used during the next financial period.
4. CAPITAL STRUCTURE AND FINANCIAL ITEMS
4.1 Financial Risk Management and Capital Management
Solteq Plc, the Group's parent company, is responsible for managing the Group's financial risks and capital. The Group's
information is presented in note 5.1. The parent company's information is in line with the Group's.
76
4.2 Financial Assets and Liabilities
TEUR
2023
Book value
2023
Fair value
2022
Book value
2022
Fair value
Financial liabilities at amortized cost
Non-current
Bond
22,839
22,839
Loans from financial institutions
247
247
1,340
1,340
Loans from Group companies
500
500
Lease liabilities
217
217
939
939
Total
964
964
25,118
25,118
Current
Bond
22,369
22,369
Loans from financial institutions
1,780
1,780
5,928
5,928
Lease liabilities
929
929
1,065
1,065
Total
25,079
25,079
6,993
6,993
The fair value of the financial liabilities is mainly the same as the book value.
Financial liabilities, including finance lease liabilities and the interest rate swap are categorized at fair value level 2.
Cash Flow Notes: Non-Cash Flow Related Changes
TEUR
31 Dec
2022
Cash flows
Transfer
from non-
current to
current
New
financial
lease
contracts
*)Other
changes
31 Dec
2023
Non-current liabilities
24,179
500
-22,988
-944
747
Current liabilities
5,928
-4,773
22,988
6
24,149
Lease liabilities
2,004
-1,246
573
-185
1,146
Total financing liabilities
32,111
-5,519
0
573
-1,122
26,043
*) The cumulative effective interests during the financial period, which are valuated to the acquisition costs and
disposals of the lease liabilities.
77
Maturity of Financial Leases:
TEUR
Book
value
Contractual
cash flows
1-12
months
13-24
months
25-36
months
Later
Financial liabilities, Dec 31 2023
Bond
22,369
23,786
23,786
Loans from financial institutions
329
335
85
84
83
82
Lease liabilities
1,146
1,188
963
184
33
7
Trade payables
4,495
4,495
4,495
Financial liabilities total
28,340
29,804
29,330
268
117
89
Financial liabilities, Dec 31 2022
Bond
22,839
25,766
1,383
24,383
Loans from financial institutions
1,463
1,525
95
414
359
657
Lease liabilities
2,004
2,033
1,135
769
124
5
Trade payables
4,403
4,403
4,403
Financial liabilities total
30,709
33,727
7,016
25,566
483
663
In 2023, the average interest rate of the loans was 6.0 percent (6.0). All financial liabilities are denominated in euros.
The financial statements for the financial year 2023 have been drawn up under the going concern principle. In assessing
the going concern principle, the management of the company has considered the risks related to the refinancing of the
company. The key elements of Solteq Group’s debt financing are a fixed-rate bond, as well as standby and bank account
credit limits.
Solteq issued a fixed-rate unsecured senior bond with a nominal value of EUR 23.0 million on October 1, 2020. Of the
EUR 23.0 million bond outstanding at the time of the financial statements bulletin, EUR 0.6 million was held by the
company. The bond matures on October 1, 2024. The standby and bank account credit limits total EUR 7.0 million. The
related financial covenants are linked to the terms of the bond.
The terms of the bond include financial covenants concerning the distribution of funds and incurring financial
indebtedness other than permitted under the terms of the bond (Incurrence Covenant). The covenants require that the
equity ratio exceeds 27.5 percent, the interest coverage ratio (EBITDA/net interest cost) exceeds 3.00:1, and that the
Group’s net interest-bearing debt to EBITDA ratio does not exceed 4:1. The covenants concerning the distribution of
funds and incurring financial indebtedness other than permitted under the terms of the bond are not fulfilled based on
the reporting period. The fulfillment of the covenants is always reviewed based on the last reported 12-month period.
Violations of the above-mentioned financial covenants of the bond do not, as such, lead to the right to demand
immediate repayment of the bond, but they limit the distribution of the company's funds and incurring financial
indebtedness other than permitted under the terms of the bond.
The company has initiated measures to arrange refinancing of the company. The arrangement consists of the renewal
of the existing bond and of the standby and bank account credit limits.
In assessing the going concern, the management of the company has considered the effects of the measures taken
during the financial year 2023 on the company’s financial performance, financial forecasts and risks related to financial
negotiations. Based on these factors, management estimates that operations will continue and that the risk of
insufficient funding is small. The company believes that the planned financing arrangements will lead to a favorable
78
outcome. However, if the company fails to restructure the financing, this would jeopardize the continuity of the
company’s operations.
These financial statements have therefore been drawn up under the going concern principle.
4.3 Other Investments
TEUR
2023
2022
Beginning of financial period
453
453
Change
0
0
End of financial period
453
453
The item includes unquoted shares. Fair value is estimated to correspond to book value (fair value hierarchy level 3).
4.4 Cash and Cash Equivalents
TEUR
2023
2022
Cash and cash equivalents
438
869
Total
438
869
4.5 Equity
TEUR
Number of
shares
(1 000)
Share
capital
Share
premium
reserve
Invested
unrestricted
equity
reserve
Total
Beginning of financial period
19,397
1,009
75
14,374
15,458
End of financial period
19,397
1,009
75
14,374
15,458
4.6 Conditional Debts and Liabilities
TEUR
2023
2022
Collateral given on our own behalf
Business mortgages
10,000
10,000
Total
10,000
10,000
Until the issuance of the bond the business mortgages as well as the pledged shares are given as collateral by the Parent
Company for credit limits and long-term loans.
79
5. OTHER NOTES
5.1 Related Party Transactions
Solteq Group’s related parties include the Board of Directors, the CEO, and the Group’s Executive Team, as well as their
related parties and entities according to the IAS24 standard.
On December 31, 2023, Solteq Plc owned the following subsidiaries:
Company
Domicile
Share of ownership (%)
Share of votes (%)
S2B Energia Oy
Finland
100 %
100 %
Solteq Robotics Oy
Finland
100 %
100 %
Aponsa AB
Sweden
100 %
100 %
Solteq Poland Sp. z. o. o
Poland
100 %
100 %
Solteq Digital UK Ltd
Great Britain
100 %
100 %
Solteq Denmark A/S
Denmark
100 %
100 %
There were no related party transactions to be reported in the review or the comparison period.
Management Employee Benefits
TEUR
2023
2022
Salaries and other short-term employment benefits
1,426
1,127
Total
1,426
1,127
The compensations of CEO, the Board of Directors and the Executive Team are included in the management employee
benefits.
Wages and Salaries of the Members of the Board of Directors and CEO
TEUR
2023
2022
CEO Olli Väätäinen until Jan 31, 2022
58
Interim CEO Kari Lehtosalo during Feb 1 - Jun 30, 2022
114
CEO Aarne Aktan from Jul 1, 2022
350
175
Board members
Markku Pietilä, Chairman of the Board
71
64
Aarne Aktan until Jun 30, 2022
20
Lotta Kopra until Mar 24, 2022
8
Panu Porkka
37
33
Katarina Cantell (formerly Segerståhl)
41
37
Anni Sarvaranta from Mar 24, 2022
38
26
Mika Sutinen from Mar 24, 2022
40
25
Esko Mertsalmi from Mar 29, 2023
26
80
The CEO’s accrual-based pension costs amount to EUR 89 thousand. The CEO’s pension plan complies with the
employment pension legislation. The CEO’s notice period is six months, and the agreement does not include any
separate severance payments.
Solteq Plc’s members of the Board of Directors and CEO owned directly or through controlled companies 79 thousand
(26) shares at the end of 2022.
5.2 Business Combinations
There were no acquisitions during the financial year 2023.
In the comparison period of 2022, two business acquisitions were made. On January 3, 2022, Solteq Plc signed an
agreement to purchase the entire share capital of the energy software company Enerity Solutions Oy. Through the
acquisition, Solteq is expanding its software offering in the utilities sector, which is one of the company’s key growth
drivers in the Nordic market. The deal also further increases the company’s expertise in the changing operating
environment of the energy sector. Enerity Solutions specializes in software solutions for electricity trading and grid
profitability and risk management. Enerity Solutions Oy was merged into the parent company on June 1, 2022.
Solteq Plc acquired on November 7, 2022, the entire share capital of energy sector system and service provider S2B
Energia Oy. As a result of the acquisition 10 employees transferred to be part of Solteq Group. The debt-free purchase
price was EUR 1 and net assets EUR 32 thousand.
Sales of business based on Microsoft BC and LS Retail ERP solutions
On April 17, 2023, Solteq signed a business transfer agreement, whereby the Group’s ERP business based on Microsoft
Dynamics 365 Business Central and LS Retail solutions was sold to Azets Group.
The net debt-free purchase price of the business is a maximum of EUR 20,000 thousand. The fixed purchase price is EUR
15,000 thousand deducted by the net working capital of the business. EUR 12,000 thousand was paid upon the
completion of the Transaction. The remainder of the fixed purchase price will be paid at the latest six (6) months after
the completion of the Transaction. A possible additional purchase price is a maximum of EUR 5,000 thousand, and it
shall be determined based on the revenue of the transferring business for a period of twelve (12) months from the first
date of the month the Transaction has been completed. The purchase price is paid in cash. The company recognized a
one-time profit of EUR 9,944 thousand (before tax effects) on the fixed purchase price in the second quarter. The net
assets sold in the business transaction were EUR 617 thousand, consisting of the provisions for personnel costs related
to transferred persons (EUR 617 thousand). In addition, the expenses related to the business transaction were
approximately EUR 632 thousand.
The Transaction consists of expert and maintenance services as well as clientele related to Solteq’s Microsoft Dynamics
365 Business Central and LS Retail ERP solutions. Following the transfer of the business, approximately 60 experts
located in Finland, Sweden, Norway, and Denmark were transferred to Azets Group.
5.3 Events After the Balance Sheet Date
The Parent Company’s events after the balance sheet date are the same as those of the Group. The information as
regards the Group is presented in the Group note 6.4.
Proposal for Distribution of Profits
81
The distributable equity of the Parent Company Solteq Plc as at December 31, 2023 is:
The distributable equity
31 Dec 2023
31 Dec 2022
Invested unrestricted equity reserve
14,374,181.33
14,374,181.33
Result for previous financial periods
8,181,965.39
13,711,364.54
Result for the financial year
-2,882,912.52
-5,529,399.15
Total non-restricted equity
19,673,234.20
22,556,146.72
Capitalized development costs
-206,369.17
-6,119,607.80
Total distributable funds
19,466,865.03
16,436,538.92
At the end of financial year 2023, the distributable equity of the Group's parent company is 19,466,865.03 euros. Solteq
Plc's Board of Directors proposes to the Annual General Meeting that for the financial year 2023, no dividend will be
paid out.
The Board of Directors is of the opinion that there are no financial prerequisites for dividend pay-outs, or other kind of
distribution of funds. According to the terms and conditions of the company debenture stock distribution of funds would
lead to the expiration of the credit. The covenants of the bond do not permit distribution of funds based on the financial
year 2023.
No essential changes have taken place in the company's financial situation after the end of the financial year.
82
Signatures to the Report of the Board of Directors and the Financial Statements
Vantaa, February 23, 2024
Markku Pietilä Mika Sutinen
Chairman of the Board
Board Member
Anni Sarvaranta
Panu Porkka
Board Member Board Member
Katarina Cantell Esko Mertsalmi
Board Member Board Member
Aarne Aktan
CEO
Auditor’s note
Our auditors’ report has been issued today.
Helsinki, February 23, 2024
KPMG Oy Ab
Petri Sammalisto
Authorized Public Accountant
83
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
Auditor’s Report
To the Annual General Meeting of Solteq Plc
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Solteq Plc (business identity code 0490484-0) for the year ended 31
December 2023. The financial statements comprise both the consolidated and the parent company’s statement of
financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows and
notes, including material accounting policy information.
In our opinion the financial statements give a true and fair view of the group’s and parent company’s financial
performance, financial position and cash flows in accordance with IFRS Accounting Standards as adopted by the EU and
comply with statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing
practice are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our
report.
We are independent of the parent company and of the group companies in accordance with the ethical requirements
that are applicable in Finland and are relevant to our audit, and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company and
group companies are in compliance with laws and regulations applicable in Finland regarding these services, and we
have not provided any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-
audit services that we have provided have been disclosed in note 2.4 to the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the section 1.3 Going Concern principle in the Notes to Consolidated Financial statements. As it
has been described in the Notes to Consolidated Financial statements, Solteq has a fixed-rate bond with a nominal value
of EUR 23.0 million which matures on October 1, 2024 and the company has initiated measures to arrange refinancing
of the company. The arrangement consists of the renewal of the existing bond and of the standby and bank account
credit limits. In assessing the going concern, the management of the company has considered the effects of the
measures taken during the financial year 2023 on the company’s financial performance, financial forecasts and risks
related to financial negotiations. Based on these factors, management estimates that operations will continue and that
the risk of insufficient funding is small. The company believes that the planned financing arrangements will lead to a
favorable outcome. However, if the company fails to restructure the financing, this would jeopardize the continuity of
the company’s operations.
The abovementioned circumstances indicate that a material uncertainty exists that may cast significant doubt on the
Solteq Plc’s ability to continue as a going concern. In addition, we draw attention to the note 3.3 to the consolidated
financial statements which describes that if the company fails to restructure the financing, it would also have an impact
on the valuation of goodwill in the group and goodwill and merger losses in the parent company.
Our opinion is not modified in respect of this matter.
Materiality
84
The scope of our audit was influenced by our application of materiality. The materiality is determined based on our
professional judgement and is used to determine the nature, timing and extent of our audit procedures and to evaluate
the effect of identified misstatements on the financial statements as a whole. The level of materiality we set is based
on our assessment of the magnitude of misstatements that, individually or in aggregate, could reasonably be expected
to have influence on the economic decisions of the users of the financial statements. We have also taken into account
misstatements and/or possible misstatements that in our opinion are material for qualitative reasons for the users of
the financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The significant risks of material misstatement referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are
included in the description of key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of whether
there was evidence of management bias that represented a risk of material misstatement due to fraud.
In addition to the matter described in the Material uncertainty related to going concern section, we have determined
the matters described below to be the key audit matters to be communicated in our report.
THE KEY AUDIT MATTER
HOW THE MATTER WAS ADDRESSED IN THE
AUDIT
Goodwill and merger loss impairment assessment (Accounting principles, consolidated
financial statements note 3.3 and parent company’s financial statement note 2.3)
— In recent years the Group has expanded its
activities through acquisition of companies.
As a result, the consolidated statement of
financial position includes a significant
amount of goodwill. Due to merging the
acquired companies to the parent company,
there is a significant amount of merger
losses in the parent company’s other
intangible assets.
— Goodwill and merger loss in parent
company’s statement of financial position
are not amortized but are tested at least
annually for impairment.
— Determining the cash flow forecasts
underlying the impairment tests requires
management judgments and estimates
especially relating to revenue growth rate,
profitability, discount rate and long-term
growth rate.
— Due to the high level of judgement related
to the forecasts used, and the significant
— We assessed the impairment tests prepared
by the company.
— Our audit work with the involvement of
KPMG valuation specialists included testing
the integrity of the calculations and the
technical model.
— We assessed the assumptions used by
management in respect of forecasted
revenue growth rates and profitability as
well as the appropriateness of the discount
rates used. In addition, we validated the
assumptions used in relation to market and
industry information.
— We evaluated the cash flows used by
comparing them to the group’s budgets and
the understanding we gained from our audit.
— Furthermore, we have considered the
appropriateness of the disclosures related to
Group’s goodwill, parent company’s merger
loss and impairment testing.
85
carrying amounts involved, impairment
assessment of goodwill and merger loss is
considered a key audit matter.
Revenue recognition (Accounting principles and consolidated financial statements note 2.2)
— The consolidated revenue comprise
different revenue flows based on different
contract types, such as services, software
license sales and maintenance as well as
projects.
— The company has projects in which the
satisfaction of the performance obligation is
monitored throughout the project delivery.
Revenue recognition based on satisfaction
of performance obligation involves
management judgment and estimates
especially on forecasted total costs of the
project and resources needed.
— Due to the analyses of different contract
terms and conditions associated with the
choice of a revenue recognition method as
well as management judgement involved,
revenue recognition is considered a key
audit matter.
— We assessed group’s revenue recognition
principles in relation to IFRS standards.
— Our audit procedures included evaluation of
internal control environment over revenue
recognition and testing of operating
effectiveness of key internal controls. In
addition, we performed substantive testing
to assess appropriateness of revenue
recognition and recording revenue in the
correct period.
— In addition, we assessed the
appropriateness of recognition of project
revenue prepared by the company and
evaluated company’s process to identify
potential provisions related to these
projects.
— Furthermore, we considered the
appropriateness of the disclosures in
respect of revenue recognition principles
and net sales.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated financial
statements that give a true and fair view in accordance with IFRS Accounting Standards as adopted by the EU, and of
financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation
of financial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing
Director are also responsible for such internal control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors and the Managing Director are responsible for assessing
the parent company’s and the group’s ability to continue as going concern, disclosing, as applicable, matters relating to
going concern and using the going concern basis of accounting. The financial statements are prepared using the going
concern basis of accounting unless there is an intention to liquidate the parent company or the group or cease
operations, or there is no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of Financial Statements
Our objectives are to obtain reasonable assurance on whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
86
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing
practice will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of the financial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
parent company’s or the group’s internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
— Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern
basis of accounting and based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the parent company’s or the group’s ability to continue as
a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the parent company or the group to cease to continue as
a going concern.
— Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events so that the financial statements
give a true and fair view.
— Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the group to express an opinion on the consolidated financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during
our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Other Reporting Requirements
Information on our audit engagement
Solteq Plc became a public interest entity on 6 September 1999. We have been the company’s auditors since it became
a public interest entity.
87
Other Information
The Board of Directors and the Managing Director are responsible for the other information. The other information
comprises the report of the Board of Directors and the information included in the Annual Report, but does not include
the financial statements and our auditor’s report thereon. We have obtained the report of the Board of Directors prior
to the date of this auditor’s report, and the Annual Report is expected to be made available to us after that date.
Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit, or otherwise appears to be materially misstated. With respect to the report of
the Board of Directors, our responsibility also includes considering whether the report of the Board of Directors has
been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the financial
statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and
regulations.
If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Helsinki, 23 February 2024
KPMG OY AB
PETRI SAMMALISTO
Authorised Public Accountant, KHT
88
Independent Auditor’s Reasonable Assurance Report on Solteq Plc’s ESEF Financial Statements
To the Board of Directors of Solteq Plc
We have undertaken a reasonable assurance engagement in respect of whether the consolidated financial statements
for the year ended 31 December, 2023 included in the digital financial statements 743700HXWTM31ZHBXW13-2023-
12-31-en.zip of Solteq Plc (Business ID 0490484-0) have been marked up with iXBRL markups in accordance with the
requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and Managing Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors and
financial statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This responsibility
includes:
— preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
— marking up the primary statements and the notes to the consolidated financial statements, and the company
identification data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the
ESEF RTS; and
— ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem necessary
to prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply to
the engagement we have performed, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design,
implement and operate a system of quality management including policies or procedures regarding compliance with
ethical requirements, professional standards and applicable legal and regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking up of the
consolidated financial statements included in the ESEF financial statements comply in all material respects with the
Article 4 of the ESEF RTS. We conducted our reasonable assurance engagement in accordance with International
Standard on Assurance Engagements 3000.
The engagement involves procedures to obtain evidence whether;
— the primary statements of the consolidated financial statements included in the ESEF financial statements are,
in all material respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
— whether the notes to the consolidated financial statements and the company identification data included in
the ESEF financial statements data, have been marked up, in all material respects, with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
— whether the ESEF financial statements and the audited financial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes
the assessment of the risks of material departures from the requirements set out in the ESEF RTS, whether
due to fraud or error.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
89
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated
financial statements and the company identification data included in the ESEF financial statements of Solteq
Plc identified as 743700HXWTM31ZHBXW13-2023-12-31-en.zip for the year ended 31 December, 2023 are,
in all material respects, marked up in compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Solteq Plc for the year ended 31
December, 2023 is set out in our Auditor’s Report dated 23 February, 2024. In this report, we do not express
any audit opinion or other assurance conclusion on the consolidated financial statements.
Helsinki 23 February, 2024
KPMG OY AB
Petri Sammalisto
Authorised Public Accountant, KHT
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