Free for publication on February 7, 2007 at 8.00 am. EET
Elektrobit Group Plc.
Stock Exchange Release
ELEKTROBIT GROUP PLC.'S FINANCIAL STATEMENT BULLETIN 2006
SUMMARY
Year 2006 briefly:
Elektrobit's strategy was redefined during spring 2006. The new strategy of
Elektrobit was formulated as one which focuses on the Wireless Communications
Solutions and Automotive Software Business Segments. The former Business Segment
was defined to include R&D services, advanced mobile terminal reference designs
and mobile WiMAX radio base station business. The Network Test, System Test and
Production Solutions Business Units were defined to form the Test and Automation
Business Segment and were chosen to be developed separately. It was announced
that Elektrobit will be seeking industrial partners to further strengthen the
long-term competitiveness of the Test and Automation Business Units, with
possibly different long-term solutions for each of them individually.
Considerable investments in automotive software products, in mobile WiMAX
products, in smartphone reference design platform components as well as in
production partnering capability were made. In the fourth quarter, Elektrobit
decided to withdraw from the 3G smartphone ODPM (Original Design with Partnered
Manufacturing) business model.
The Network Test business was sold.
Elektrobit's reporting was based on the following segments from July 1, 2006:
BUSINESS SEGMENTS
Wireless Communications Automotive Test and Automation
Solutions Software
BUSINE Mobile Terminal Solutions Automotive Network Test
SS Software
UNITS
Radio Network Solutions System Test
Production Solutions
During the fourth quarter of 2006, Elektrobit sold its Network Test business to
Anite Group Plc. According to IFRS5 standard, Elektrobit reports its financial
results divided between Discontinued Operations and Continuing Operations. In
this Financial Statement Bulletin, financial figures of 2006 and 2005 are
reported based on Continuing Operations, without Network Test business figures.
Discontinued, i.e. Network Test business figures, are reported separately in
Financial Statement, after Continuing Operations' net profit.
The company's net sales for Continuing Operations for the whole-year 2006 stood
at EUR 181.5 million. Earlier, the company estimated the net sales for the year
2006 to be between EUR 180-190 million. The whole-year operating profit was
expected to be slightly negative. The Continuing Operations operating loss was
EUR -3.0 million, or -1.7% of the net sales. The net profit of the Network Test
business sale was EUR 73.2 million. The Consolidated Income Statement of
Elektrobit is presented below.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-12/2006 1-12/2005
12 months 12 months
Continuing operations
NET SALES 181.5 190.1
OPERATING PROFIT -3.0 17.3
Financial income and expenses -0.4 1.1
PROFIT BEFORE TAX -3.4 18.4
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS -3.9 13.0
Profit after tax for the year from discontinued 78.2 5.8
operations
PROFIT FOR THE YEAR 74.2 18.8
Attributable to
Equity holders of the parent 73.9 19.0
Minority interest 0.3 -0.1
Earnings per share EUR continuing operations -0.03 0.10
Earnings per share EUR discontinued operations 0.60 0.04
Earnings per share EUR continuing and discontinued 0.57 0.15
operations
Comparisons between the Continuing Operations figures for the fourth quarter of
2006 and the corresponding period in 2005 (Please note that from the fourth
quarter of 2006 onwards, the Business Segments are reported in the order of
Automotive Software, Wireless Communications Solutions and Test and Automation.):
Net sales amounted to EUR 45.6 million (EUR 50.0 million; a decrease of EUR 4.4
million or 8.8 %). The net sales of the Automotive Software Business Segment were
EUR 11.3 million (EUR 10.8 million; an increase of EUR 0.5 million or 4.6%). The
net sales of the Wireless Communications Solutions Business Segment were EUR 17.7
million (EUR 16.6 million; an increase of EUR 1.1 million or 6.6 %) and the net
sales of the Test and Automation Business Segment were EUR 16.5 million (EUR 22.5
million; a decrease of EUR 6.0 million or 26.7%).
Operating profit/loss totalled EUR -5.6 million (EUR 2.5 million) and was
distributed as follows: the Automotive Software Business Segment operating profit
was EUR 0.9 million (EUR 0.3 million), the Wireless Communications Solutions
Business Segment operating loss was EUR -5.8 million (EUR -0.3 million), the Test
and Automation Business Segment operating loss was EUR -0.6 million (EUR 2.8
million) and the other businesses posted a loss of EUR -0.0 million (EUR -0.4
million). The operating profit included non-recurring expenses of EUR 2.1 million
due the withdrawal from the 3G smartphone ODPM business model.
Net cash flow from operations amounted to EUR -1.2 million (EUR 13.7 million).
Comparisons between Continuing Operations figures in the period from January to
December 2006 and the figures for the corresponding period a year earlier:
Net sales amounted to EUR 181.5 million (EUR 190.1 million, a decrease of EUR 8.6
million or 4.5%). The net sales of the Automotive Software Business Segment were
EUR 38.9 million (EUR 27.1 million, an increase of EUR 11.8 million or 43.4%).
The net sales of Wireless Communications Solutions Business Segment were EUR 66.2
million (EUR 63.1 million, an increase of EUR 3.1 million or 4.9%) and net sales
of the Test and Automation Business Segment were EUR 76.2 million (EUR 99.6
million, a decrease of EUR 23.4 million or 23.5%).
Operating profit/loss amounted to EUR -3.0 million (EUR 17.3 million, a decrease
of EUR 20.3 million or 117.3%) and was distributed as follows: the Automotive
Software Business Segment operating profit was EUR 2.1 million (EUR 1.5 million;
an increase of EUR 0.6 million or 42,9 %). The Wireless Communications Solutions
Business Segment operating loss was EUR -9.2 million (EUR -0.6 million, a
decrease of EUR 8.7 million). The Test and Automation Business Segment operating
profit was EUR 4.0 million (EUR 16.5 million, a decrease of EUR 12.5 million or
76.0%), and profit from other businesses was EUR 0.1 million (EUR -0.1 million).
Net cash flow from operations amounted to EUR -1.4 million (EUR 26.3 million).
Equity ratio was 72.2% (64.2%).
QUARTERLY COMPARISONS, CONTINUING OPERATIONS
The quarterly distribution of the company's Continuing Operations overall net
sales and profit:
MEUR 10-12/06 7-9/06 4-6/06 1-3/06 10-12/05
Net sales 45.6 44.0 49.8 42.1 50.0
Operating profit -5.6 -0.4 4.9 -1.9 2.5
Profit before taxes -5.4 -0.4 4.1 -1.9 3.2
Net profit -5.0 -0.4 3.0 -1.6 2.8
The distribution of the Continuing Operations net sales by Business Segment:
MEUR 10-12/06 7-9/06 4-6/06 1-3/06 10-12/05
Wireless Communications 17.7 13.4 17.9 17.2 16.6
Solutions
Automotive Software 11.3 10.1 8.8 8.7 10.8
Test and Automation 16.5 20.4 23.1 16.2 22.5
Group Total 45.6 44.0 49.8 42.1 50.0
The distribution of the Continuing Operations net sales by market area:
MEUR (%) 10-12/06 7-9/06 4-6/06 1-3/06 10-12/05
Asia 5.2 (11%) 8.1 (18%) 9.4 (19%) 4.8 (11%) 11.8 (24%)
Americas 5.9 (13%) 4.7 (11%) 6.1 (12%) 6.4 (15%) 3.6 (7 %)
Europe 34.6 (76%) 31.1 (71%) 34.3 (69%) 30.9 (74%) 34.5 (69%)
Net sales (external) and operating profit development by Business Segment and
Other businesses of the Continuing Operations were as follows:
MEUR 10-12/06 7-9/06 4-6/06 1-3/06 10-12/05
Wireless Communications
Solutions
Net sales 17.7 13.4 17.9 17.2 16.6
Operating profit -5.8 -3.6 0.6 -0.3 -0.3
Automotive Software
Net sales 11.3 10.1 8.8 8.7 10.8
Operating profit 0.9 0.5 0.2 0.5 0.3
Test and Automation
Net sales 16.5 20.4 23.1 16.2 22.6
Operating profit -0.6 2.8 3.5 -1.7 2.8
Other businesses
Net sales 0.1 0.0 0.0 0.0 0.1
Operating profit 0.0 -0.0 0.6 -0.4 -0.4
Eliminations
Net sales 0.0 0.0 0.0 0.0 0.0
Operating profit 0.0 0.0 0.0 0.0 0.0
Total
Net sales 45.6 44.0 49.8 42.1 50.0
Operating profit -5.6 -0.4 4.9 -1.9 2.5
WHOLE YEAR 2006 AND QUARTERLY FIGURES, DISCONTINUED OPERATIONS
Discontinued Operations (Network Test business) figures from the Year 2006
(January-November) were as follows:
MEUR 10-11/06 7-9/06 4-6/06 1-3/06 1-11/06
Operative business
Net sales 3.6 4.8 4.8 5.6 18.7
Operating profit 1.1 1.6 1.7 2.2 6.6
Profit before taxes 1.1 1.6 1.7 2.2 6.7
Income tax -0.3 -0.4 -0.4 -0.5 -1.7
Net profit 0.8 1.1 1.3 1.7 5.0
Sales profit
Profit of the Discontinued 73.7 73.7
Operations
Income tax -0.5 -0.5
Profit after tax of the 73.2 73.2
Discontinued Operations
Network Test business Net 74.0 1.1 1.3 1.7 78.2
profit
The sales price of the Network Test business was EUR 85 million. In addition to
the aforementioned sales price, an additional amount, capped at EUR 12 million,
is payable in cash upon the achievement of certain financial performance targets
for the Network Test business between January 1 and December 31, 2007. This
additional amount is not included in the figures above.
STRATEGY IN ACTION IN THE FOURTH QUARTER AND IN WHOLE 2006
The fourth quarter of 2006 was a very important one for Elektrobit in many
respects. In the Test and Automation Business Segment, Elektrobit successfully
divested the Network Test Business Unit, a major milestone in the focusing
strategy. The other focusing actions in 2006 included the sale of the Space
business and R&D sites in Kemi and Ylivieska, reduction of a number of production
sites and rationalisation of product development sites.
Within the Wireless Communications Solutions Business Segment, the Mobile
Terminal Solutions Business Unit re-tuned the project portfolio during the fourth
quarter towards less risky business models. Particularly, the R&D time schedules
involving various horizontal component providers became too tight to guarantee
successful timely introduction of an entirely new 3G Symbian S60 smartphone to
the market with an adequate feature set. Therefore, Elektrobit decided to
withdraw from the ODPM (Original Development with Partnered Manufacturing)
business model in this category. The decision was based on continuously increased
risk levels that were monitored regularly throughout the development program that
was launched in 2005 and reinforced in summer 2006. Consequently, the R&D
personnel involved in developing the 3G smartphone ODPM reference design platform
components was transferred to various other mobile terminal projects, using the
R&D services business model.
All the investments made during 2006 in building the 3G smartphone ODPM reference
design platform components have been expensed in the fourth quarter with an extra
cost at MEUR 2.1 compared to the original plan, which included a conservative
capitalisation of R&D expenses. All these costs are included in the Wireless
Communications Solutions Business Segment operational result from 2006. It has to
be noted, however, that the ODPM business model development efforts themselves,
aimed at creating the capability for using partnered manufacturing will be used
in other product segments and Business Units, notably in the forthcoming mobile
WiMAX module business within the Radio Network Solutions Business Unit.
At the whole year level, the strongly grown operations of the Automotive Software
Business Segment confirmed the potential of this market. The lower Year-on-Year
growth in the fourth quarter resulted from significantly higher than normal net
sales bookings in the fourth quarter of 2005 due to completion of several large
projects in that period. In the fourth quarter, Elektrobit continued to invest
considerably in the development of new software platform based products.
A major internal achievement during the year was the introduction of the new
organization consisting of global Business Units and, in matrix, global support
functions that serve the Business Units. This represented a major change from the
previous operational model based on a group of independent companies.
Overall, the year served well the new strategy formulated in the spring 2006 as
being one that focuses the business operations of Elektrobit and that
concentrates on clear growth businesses, without increasing dependence of the
cellular mobile terminal market, as it was defined.
RESEARCH AND DEVELOPMENT IN 2006
During 2006, Elektrobit continued to invest in the development of software
platform based products in the Automotive Software Business Unit. The company
also continued to invest in the development of 3G smartphone ODPM reference
design platform until the fourth quarter. A new important investment area in the
Radio Network Solutions Business Unit was the development of IP radio
infrastructure products spearheaded by mobile WiMAX (IEEE 802.16e) base station
modules.
Elektrobit also increased the investments in the development of the three
technical core competence areas defined in the strategy: wireless technologies,
embedded computing and system architectures.
The R&D investments in Production Solutions Business Unit focused on improving
price competitiveness and updating the product portfolio for back-end automation.
In the System Test Business Unit, the application domain was expanded by
developing the product portfolio of the Propsim radio channel emulator product
family.
Continuing Operations research and development expenses in 2006 amounted to EUR
24.9 million, which is 13.7% of the Continuing Operations net sales compared with
EUR 13.1 million (6.9%) in 2005 and with EUR 10.2 million (5.4%) in 2004.
RISKS AND UNCERTAINTIES
Elektrobit follows a risk management policy with the objective of covering risks
related to business operations, property, agreements, competence, currencies,
financing and strategy. The company has identified risks and uncertainties
related to such issues as strategy, business operations, personnel, product
development, product liability, property and financing. More information on the
risks and uncertainties affecting Elektrobit can be found on the company website
at www.elektrobit.com/aboutelektrobit.
AUTOMOTIVE SOFTWARE BUSINESS SEGMENT FROM JANUARY TO DECEMBER 2006
The Automotive Software Business Segment consists of in-car software products and
R&D services for the automotive industry, with car equipment (Tier 1) suppliers
and leading car manufacturers as well as automotive chipset suppliers as
customers.
Automotive Software Business Unit from January to December 2006
The Automotive Software Business Unit consists of software products and R&D
services for the needs of the automotive industry. The sales of products and
associated solutions has grown steadily and accounted for approximately 50 per
cent of the Automotive Software Business Unit's net sales at the end of the
reporting period. The R&D services business covers in-car infotainment and body
control applications.
The products include the TresosTM product family of HMI (Human Machine Interface)
design tools, software components used for the development of electronic control
units (ECU) for passenger cars, and StreetDirector, which is a hybrid navigation
software for smartphones, Personal Navigation Devices (PND), Personal Digital
Assistants (PDA) and in-car navigation.
In August, it was announced that Volkswagen AG, Hella KGaA Hueck & Co., NEC
Electronics (Europe) GmbH and Elektrobit's Automotive Software Business Unit had
kicked off a project in which the four partners are working together to develop a
fully functional Body Control/Comfort ECU for a Volkswagen series-production
vehicle that will be furnished with AUTOSAR (Automotive Open System Architecture)
compatible software. Elektrobit's Automotive Software Business Unit is a leading
supplier of software products based on the AUTOSAR standard.
Elektrobit navigation software solution has been successfully deployed in
MEDION's award winning navigation device, a product shipped in high volumes to
stores throughout Europe. The small footprint, user-friendly interface with fast
and accurate speech output has been ranked number one by the Auto Motor und Sport
magazine in Germany.
Net sales during 2006 amounted to EUR 38.9 million (EUR 27.1 million), which
represents a growth of 43.4 % and the operating profit was EUR 2.1 million (EUR
1.5 million) which included considerable investments in R&D of Elektrobit's
automotive software platform products.
WIRELESS COMMUNICATIONS SOLUTIONS BUSINESS SEGMENT FROM JANUARY TO DECEMBER 2006
The Wireless Communications Solutions Business Segment consists of Mobile
Terminal Solutions Business Unit, which is responsible for mobile terminal R&D
services and design business, and Radio Network Solutions Business Unit, which is
responsible for radio network infrastructure-related R&D services and standard-
based products that are sold to telecommunications OEM vendors. Under Wireless
Communications Solutions' other businesses, Elektrobit e.g. introduced in
November a line of RFID (Radio Frequency Identification) products.
The net sales of the Wireless Communications Solutions Business Segment from
January to December 2006 amounted to EUR 66.2 million (EUR 63.1 million) and the
operating loss was EUR -9.2 million (EUR -0.6 million). The decline in the
profitability was due to the significantly higher investments in product
development and creation of manufacturing partnering capabilities, compared to
the same period in 2005. This includes EUR 2.1 million of extraordinary expenses
due to withdrawal from supplying 3G smartphones using the ODPM business model.
Mobile Terminals Solutions Business Unit from January to December 2006
The Mobile Terminal Solutions Business Unit delivers products and R&D services
for mobile terminals, security, defense, industry and other applications.
During 2006, Elektrobit continued to invest in the development of 3G smartphone
ODPM reference design platform until the fourth quarter. During the fourth
quarter, the Mobile Terminal Solutions Business Unit retuned the project
portfolio towards less risky business models. The product development time
schedules involving various horizontal component providers became too tight to
guarantee successful timely introduction of an entirely new 3G Symbian S60
smartphone to the market with an adequate feature set. Therefore, Elektrobit
decided to withdraw from a prospective customer project covered by the earlier
Memorandum of Understanding announcement and abandon the ODPM business in this
category. The decision was based on continuously increased risk levels that were
monitored regularly throughout the development program that was launched in 2005
and reinforced in summer 2006.
In September 2006, Elektrobit divested its Space Business, a part of the Mobile
Terminal Solutions Business Unit. The Space Business was sold to SF-Design Oy.
Radio Network Solutions Business Unit from January to December 2006
Radio Network Solutions Business Unit provides radio network infrastructure-
related R&D services and develops standard-based products sold to
telecommunications OEM vendors. A new important investment area for Elektrobit
under this Business Unit is the development of mobile WiMAX (IEEE 802.16e) ODPM
base station modules.
The first Memorandum of Understanding for the supply of mobile WiMAX standard-
based module products was signed in July. The actual contract based on the
Memorandum of Understanding has been signed.
Elektrobit and Oy L M Ericsson Ab signed an agreement in September to transfer
Ericsson's Product Development Center in Turku to Elektrobit on October 1, 2006.
As a result, 65 Ericsson employees, mainly software professionals, became
employees of Elektrobit. The agreement strengthens the operation of the Radio
Network Solutions Business Unit by increasing its competence base in larger-scale
telecommunications software systems.
In December, Elektrobit introduced the availability of a suite of mobile WiMAX
modules covering both radio and baseband parts. These ODPM products will shorten
the time-to-market of new mobile WiMAX base stations and products. The products
are targeted at telecommunications OEM vendors.
Elektrobit announced also the availability of CPRI (Common Public Radio
Interface) IP Design Blocks in December. The earlier introduced OBSAI (Open Base
Station Architecture Initiative) design blocks and CPRI block technologies are
aimed for telecommunications OEMs and component vendors who produce OBSAI and
CPRI compliant base stations or components. OBSAI and CPRI interfaces provide
standard interface and interoperability between units from different vendors. The
IP blocks are available for mobile WiMAX and WCDMA technologies.
In December, Elektrobit and Embio signed an agreement according to which
Elektrobit's development sites in Kemi and Ylivieska were transferred to Embio.
In this context, 42 employees were transferred to Embio with corresponding terms
of employment. The activities in Kemi and Ylivieska were a part of the Radio
Network Solutions Business Unit. After the transaction, the Business Unit is
focusing its operations on the bigger, already existing development sites.
TEST AND AUTOMATION BUSINESS SEGMENT FROM JANUARY TO DECEMBER 2006
The Test and Automation Business Segment products and solutions include products
for system testing, production testing and automation. They are sold to the
manufacturers of mobile terminals and networks, network operators, chipset
providers, electronics contract manufacturers and research organisations.
The Test and Automation Business Segment consisted of three Business Units,
Network Test, System Test and Production Solutions until the end of November.
Elektrobit decided in spring 2006 to develop each of these businesses separately
and to continue to make efforts to ensure their performance according to the
objectives. At the same time, Elektrobit announced that it is seeking for
industrial partners or arrangements to further strengthen the long-term
competitiveness of these Business Units.
In order to improve its cost performance, Elektrobit decided to transfer the
manufacturing of production automation equipment from Kuopio to China and Estonia
and to focus the product development of the System Test Business Unit on the Oulu
area. In September, as a result of personnel negotiations, a total of 30 people
were laid off from the Production Solutions and System Test Business Units.
In November, the Network Test business was sold to Anite Group Plc. The sale of
the business further strengthened Elektrobit's strong balance sheet and gave a
good position from which to invest in the focus businesses.
The net sales of the Test and Automation Business Segment amounted to EUR 76.2
million (EUR 99.6 million), and its operating profit stood at EUR 4.0 million
(EUR 16.5 million). The decline was mainly due to reduced sales and profitability
of the production testing products due to low seasonal deliveries of production
automation projects in the first quarter, reduced mobile phone test equipment
sales and intensified competition resulting to strong price erosion.
System Test Business Unit from January to December 2006
The products of the System Test Business Unit mostly consist of radio channel
emulators and measurement instruments (the Propsim and Propsound products) sold
to chipset manufacturers, equipment suppliers, wireless operators and military
communications companies. The System Test Business Unit benefited from the MIMO
(Multiple Input Multiple Output) development programs of chipset and equipment
manufacturers for both cellular and non-cellular applications. The operator
market segment for the Propsim radio channel emulator products continued to
develop through new deliveries for pre-deployment tests of radio networks.
R&D investments expanding the application domain and the product portfolio of the
Propsim radio channel emulator product family continued during 2006. The OBSAI
cellular base stations tester was launched, and the first tester orders were
received. The terminal pre-conformance test software product achieved the pilot
use phase. As a result of active participation in standardisation work, the radio
channel model contributed by Elektrobit was included in the 3GPP LTE standard.
Production Solutions Business Unit from January to December 2006
The products and solutions of the Production Solutions Business Unit are mainly
sold to the mobile terminal, mobile infrastructure and electronics contract
manufacturers. The production solutions consist of production testing equipment
for the different stages of manufacturing, as well as automation equipment for
processing electronic products on production lines. The product range also covers
final assembly systems for mobile terminals.
The volume deliveries of the new high-speed printed circuit board separation
machine were launched during the second half of the year. Product development
activities were further focused on improving price competitiveness and, in part,
updating the product portfolio for back-end automation. The transfer of the
material handling equipment production to China was finalised during the third
quarter. In addition, negotiations to transfer production from Kuopio to China
and Estonia were concluded.
BALANCE SHEET AND FINANCING
The figures presented in the balance sheet of December 31, 2006, have been
compared with the balance sheet of December 31, 2005 (EUR 1,000).
12/2006 12/2005
Non-current assets 66,315 68,681
Inventories 13,878 17,452
Accounts and other receivables 57,518 46,937
Financing securities, cash and bank 125,091 60,577
deposits
Current assets total 196,487 124,966
Total assets 262,803 193,647
Share capital 12,941 12,941
Other equity 173,513 107,249
Minority interest 2,107 1,785
Total shareholders' equity 188,561 121,976
Long-term liabilities 23,728 26,480
Short-term liabilities 50,513 45,191
Total shareholders' equity and 262,803 193,647
liabilities
Net cash flow from operations during the period under review was as follows:
+ net profit +/- adjustment of accrual basis items EUR +10.2 million
- increase in net working capital EUR -7.4 million
- interest, taxes and dividends EUR -4.2 million
= cash generated from operations EUR -1.4 million
- net cash used in investment activities EUR 78.5 million
- net cash used in financing EUR -12.6 million
= net change in cash and cash equivalents EUR 64.5 million
The amount of accounts and other receivables, booked in current receivables, was
EUR 57.5 million (EUR 46.9 million on December 31, 2005), while accounts and
other payables, booked in interest-free current liabilities, were at EUR 35.3
million (EUR 33.0 million on December 31, 2005).
The amount of non-depreciated consolidation goodwill at the end of the period
under review was EUR 8.2 million (EUR 9.2 million on December 31, 2005) and
depreciation on business acquisitions during the reporting period amounted to a
total of EUR 1.9 million (EUR 1.8 million during the comparable period in 2005).
The amount of net investments in the period under review was EUR 6.5 million,
consisting entirely of replacement investments. The total amount of depreciation
during the period under review was EUR 9.2 million, including EUR 1.9 million of
depreciation owing to business acquisitions.
Elektrobit's other long-term investments include an investment portfolio with a
book value of approximately EUR 10.7 million, which mainly consists of long-term
bonds. The portfolio is valued at market value on December 31, 2006.
The amount of interest-bearing debt at the end of the reporting period was
EUR 32.4 million. The distribution of net financing expenses on the income
statement was as follows:
interest, dividend and other financial EUR +2.2 million
income
interest expenses EUR -1.7 million
foreign exchange gains and losses EUR -0.9 million
Elektrobit's equity ratio at the end of the period was 72.2% (compared with 64.2%
at the end of 2005).
The figures from the period under review do not include any of the statutory
reserves stipulated in Chapter 5, section 14 of the Accounting Act.
Elektrobit follows a currency strategy, the objective of which is to ensure the
margins of business operations in changing market circumstances by minimising the
influence of exchange rates. In accordance with the principles of the currency
strategy, the upcoming 12-month net cash flow of the currency in question is
hedged. The net cash flow is determined on the basis of sales receivables,
payables, the order book and the budgeted net currency cash flow. The hedged
foreign currency exposure at the end of the review period was equivalent to
EUR 11.9 million.
ENVIRONMENTAL FACTORS
Elektrobit's own business operations focus mostly on the design, assembly and
marketing of products. This represents only a minor part of the environmental
impacts over the entire life cycle of the products. Products manufactured by the
company have minor environmental impacts.
Elektrobit has had ISO 14001 certified management systems since 2001. The systems
were expanded in 2004 to cover also the company's production units. Elektrobit's
company level ISO14001.2004 system certification update is estimated to be
finalised by early 2007.
Elektrobit has observed and applied the requirements of the ROHS (use of
hazardous substances) and WEEE (recycling of electrical and electronic equipment)
directives in design since 2002. Certified environmental management system is
being extended to cover those design operations of the Group's subsidiaries that
must pay particular attention to the requirements of the ROHS and WEEE directives
and the upcoming EUP (energy-using products) directive where applicable.
Elektrobit is monitoring globally the environmental requirements for products and
derived national regulations to the extent that they are related to the Group's
operations. The imposed requirements will be observed in business operations on a
country-specific basis. The company has utilised a global information service
monitoring environmental requirements by industry and country since 2005.
PERSONNEL
Elektrobit employed an average of 1,847 people between January and December 2006.
At the end of December, Elektrobit had 2,005 employees (1,633 at the end of
2005). Product development engineers constitute the most significant part of
Elektrobit's personnel.
CHANGES IN GROUP STRUCTURE
During 2006, the company closed its subsidiary Elektrobit SAS in France and
divided Elektrobit Inc's business into two different companies; Elektrobit Inc
and Elektrobit Production Solutions Inc.
3Soft GmbH changed its name to Elektrobit Automotive GmbH. During the fourth
quarter 2006, Elektrobit Group Plc also agreed to acquire the remaining 20 per
cent of the shares from the minority shareholders of Elektrobit Automotive GmbH.
The acquisition will be closed on March 30, 2007.
Elektrobit Group Plc. and Anite Group Plc. ("Anite") signed a Share Purchase
Agreement on November 2, 2006, under the terms of which Elektrobit agreed to sell
its Network Test Business to Anite. This transaction comprised the entire issued
share capital of Elektrobit's subsidiaries Nemo Technologies Ltd and Elektrobit
Group Pte. Ltd. and certain other related assets. The Network Test Business Unit
was part of Elektrobit's Test and Automation Business Segment and employed 39
people in Finland and 22 people abroad, mainly in the USA and Asia.
The cash consideration payable to Elektrobit by Anite as a result of the sale was
EUR 85 million, subject to a post-completion adjustment based upon the level of
net assets in the Network Test business at closing. In addition to the
aforementioned purchase price, an additional amount, capped at EUR 12 million, is
payable in cash upon the achievement of certain financial performance targets for
the Network Test business between January 1st and December 31st 2007.
The sale of the Network Test business between Elektrobit Group Plc. and Anite was
closed on November 30, 2006.
OPTION RIGHTS
I. The Annual General Meeting of March 17, 2005 decided that option rights should
be granted to Elektrobit Group's management and a subsidiary fully owned by
Elektrobit Group Plc. The Board of Directors has exercised its right fully and
granted 4,500,000 option rights to Elektrobit Group's management and a subsidiary
fully owned by Elektrobit Group Plc.
Subscriptions made using the 2005 option rights may increase the share capital of
Elektrobit Group Plc. by a maximum of EUR 450,000 and the number of shares by a
maximum of 4,500,000.
II. The Annual General Meeting of March 15, 2006 decided that option rights with
a commitment to shareholding be granted to Elektrobit Group Plc.'s new directors.
The number of option rights granted totals 1,750,000, of which 750,000 were
granted to the Chairman of the Board and 1,000,000 were granted to the CEO.
Subscriptions made using said option rights might increase the share capital of
Elektrobit Group Plc. by a maximum of EUR 175,000 and the number of shares by a
maximum of 1,750,000 new shares.
INCENTIVE SCHEMES
Personnel fund
A personnel fund was established on April 27, 2005. The members of the fund
include Elektrobit's personnel working in Finland.
A profit-related pay scheme, in accordance with the Act on Personnel Funds, was
implemented within Elektrobit at the beginning of 2005, pursuant to which a
predetermined proportion of the Group's result will be paid to the personnel fund
as a profit-related payment. The Board of Directors will decide upon the grounds
for the profit-related pay scheme annually.
Stock options
The Board of Directors of Elektrobit Group Plc. decided on June 23, 2005,
authorised by the Annual General Shareholders Meeting, on the distribution of
stock options to Elektrobit's managers and to its wholly-owned subsidiary,
serving as a reserve company in the stock option scheme. The distributed stock
options commit managers to long-term shareholding in the Elektrobit Group. The
objective of the scheme is to encourage participating managers to work with a
long-term focus in order to increase shareholder value and to commit them further
to their employer.
A total of 516,000 2005A stock options and 945,000 2005B stock options were
distributed to Elektrobit's management. The rest, 384,000 stock options 2005A,
255,000 stock options 2005B, 1,200,000 stock options 2005C and 1,200,000 stock
options 2005D were granted to Elektrobit Technologies Ltd, a wholly-owned
subsidiary of Elektrobit Group Plc., to be further distributed to the present and
future managers of Elektrobit at a later date. In accordance with the terms and
conditions of the stock options, the prerequisite for receiving 2005A stock
options was that the participating managers purchase a predetermined number of
Elektrobit Group shares, as decided by the Board of Directors. 2005B stock
options are subject to preconditions relating to Elektrobit's financial targets.
In accordance with the share ownership scheme, associated with this stock option
scheme, the participating managers are committed to using a considerable portion
of the future income from the distributed stock-options for purchasing the
company's shares.
The Board of Directors of Elektrobit Group Plc. decided on May 31, 2006,
authorised by the Annual General Shareholders Meeting, on the distribution of
stock options to Elektrobit Group Plc's Chairman of the Board and CEO. The
distributed stock options commit managers to long-term shareholding in the
Elektrobit Group. Of the above, 750,000 stock options marked as 2006A were
distributed to the Chairman of the Board, while 1,000,000 stock options were
distributed to the CEO. In accordance with the terms and conditions of the stock
options, the prerequisite for receiving 2006A stock options was that the
participating managers purchase, either directly of through companies under their
control, a predetermined number of Elektrobit Group shares, as decided by the
Annual General Meeting on March 15, 2006 (a minimum of 75,000 shares for the
Chairman of the Board and a minimum of 100,000 shares for the CEO).
THE AUTHORISATIONS OF THE BOARD OF DIRECTORS AT THE END OF THE REPORTING PERIOD
The Board of Directors was authorised by the General Meeting of Shareholders held
on March 15, 2006 to decide on a new issue or to take convertible loans in one or
more instalments. In the new issue, or taking of convertible loans, the right to
subscribe a maximum of 21,332,538 shares, the accounting par value equivalent of
which is EUR 0.10 per share, can be given; from these, a maximum of 5,000,000
shares may be used to create incentives for the personnel. On the basis of the
authorisation, the share capital may be increased by a maximum of
EUR 2,133,253.80. The total proposed amount corresponds to less than 20 per cent
of the currently registered share capital and the total voting rights. The
authorisation is valid until the next Annual General Shareholders' Meeting,
although no later than March 15, 2007.
The authorisation contains the right to deviate from the shareholders' pre-
emptive right of subscription for new shares and convertible loans rights set out
in Chapter 4, section 2 of the Companies Act, as well as the right to decide on
the persons entitled to subscription, the terms of subscription and the terms of
the convertible loans. In addition, the authorisation contains the right to
decide on subscription prices. Deviation from the shareholders' pre-emptive
subscription rights requires that there be an important financial reason for
doing so, such as an arrangement connected with the development of the company's
business or capital structure or financing acquisitions, or an incentive
arrangement for the personnel. A resolution to this effect shall not, however, be
made for the benefit of a party belonging to the inner circle of the company as
defined in Chapter 1, section 4, subsection 1 of the Companies' Act. When the
share capital is increased in a way other than on the basis of a convertible
loan, the Board of Directors is authorised to decide that the shares may be
subscribed against a contribution in kind by means of set-off or otherwise with
specific terms.
The authorisation remains unutilised on the whole.
NOTIFICATIONS IN ACCORDANCE WITH CHAPTER 2, SECTION 9 OF THE SECURITIES MARKET
ACT
There were no changes in ownership during the period under review that would have
caused an obligation of disclosure in accordance with Chapter 2, section 9 of the
Securities Market Act.
BOARD OF DIRECTORS AND AUDITOR
The Annual General Shareholders Meeting held on March 15, 2006 resolved that the
Articles of Association be amended to allow the number of Board members to vary
between 3 and 7. The meeting also decided that the number of Board members should
be six in year 2006. The meeting re-elected Tapio Tammi, Matti Lainema and Juha
Sipilä to Elektrobit's Board of Directors and appointed Juha Hulkko (M.Sc.Tech.,
eMBA), J.T. Bergqvist (Dr.Tech.) and Jukka Harju (M.Sc.Tech., M.Sc.Econ.) as new
members of the Board. At its assembly meeting held on March 15, 2006 the Board of
Directors elected J.T. Bergqvist as the Chairman of the Board.
The authorized accounting firm Ernst & Young Oy was elected as the company's
auditor, with Rauno Sipilä, Authorized Public Accountant, as the primarily
responsible auditor.
DIVIDEND FROM 2005
The Annual General Shareholders Meeting of March 15, 2006 resolved that a total
of EUR 9,058,888.30 be distributed for the financial period from January 1 to
December 31, 2005 in accordance with the Board of Directors' dividend proposal of
EUR 0.07 per share.
THE CHIEF EXECUTIVE OFFICER OF THE GROUP
Pertti Korhonen, M.Sc.Tech., began as the CEO of Elektrobit Group Plc. on June 1,
2006, once the term of office of Juha Hulkko was over.
BUSINESS ENVIRONMENT
It is expected that the percentage of electronics and software in cars, as well
as the use of wireless technologies and the number of infotainment applications,
will continue to grow. For reference, the market for automotive software
solutions is estimated to have grown in 2006 by more than 15 per cent (Mercer
study 2005, The Impact of AUTOSAR on the Auto Software and Tools Market). An
additional growth factor for the Automotive Software Business Segment is the
growth in the Personal Navigation Device (PND) market, in which the number of
mobile GPS navigation solutions is expected to grow with more than 62 per cent of
CAGR during 2005-2009 (Canalys).
The delivery volume of mobile devices increased in 2006 to over one billion units
(Strategy Analytics). Deliveries of smartphones were estimated to grow over 65
per cent in 2006 when compared to 2005 (Gartner). Going forward, the share of the
smartphones is expected to continue to grow also in 2007 (Gartner), yielding a
growing market for advanced R&D services.
The growth in the wireless network equipment market was moderate in 2006.
Operators are expected to continue investing in network capacity and in new
cellular network technologies (WCDMA, HSDPA). The mobile WiMAX infrastructure
equipment market is expected to start in the end of 2007, major operators and
OEMs (Original Equipment Manufacturers) having their mobile WiMAX implementations
planned for late 2007 and 2008.
The system test market is predicted to expand moderately in 2007, as development
of new cellular technologies, enhancements to existing technologies (HSDPA,
HSUPA, 3GPP LTE, MIMO) and new non-cellular technologies (mobile WiMAX, WiBRO)
are generating demand for test system replacements and for new test systems.
The need for production automation solutions is still growing due to the high
delivery volumes of mobile devices, but this is offset by price erosion in the
market. Delivery lead times in production-related test and automation markets are
expected to shorten and cost efficiency is expected to continue to be an
essential competitive factor.
OUTLOOK FOR THE FIRST HALF OF 2007
Elektrobit expects the revenue during the first half of 2007 to grow slightly
compared to the second half of the 2006 (MEUR 89.6). The company will continue to
invest in:
- Software platform based products in the Automotive Software Business Unit.
- Development of mobile WiMAX radio infrastructure products in the Radio Network
Solutions Business Unit.
- Expanding the application domain and the product portfolio in the System Test
Business Unit.
- Improving the price competitiveness and updating the product portfolio in the
Production Solutions Business Unit.
- The technical core competence areas defined in the strategy.
Due to these continued considerable investments, Elektrobit expects the operating
profit in the first half of the 2007 to be on the same level or slightly less
than during the second half of 2006 (MEUR -5.9), with the start of the year
being significantly weaker than the latter part of the half.
BOARD OF DIRECTORS' PROPOSAL TO DISTRIBUTE PROFITS
Elektrobit Board of Directors will propose to the Annual General Shareholders
Meeting a dividend of EUR 0.11 per share for 2006, a total of EUR 14,235,395.90.
Oulunsalo, February 7, 2007
Elektrobit Group Plc.
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Elektrobit Group Plc.
Tel. +358 40 344 3889
Seppo Laine
CFO
Elektrobit Group Plc.
Tel. +358 40 344 2250
Maija-Liisa Fors
Director, Investor Relations
Elektrobit Group Plc.
Tel. +358 40 344 2875
Distribution:
The Helsinki Stock Exchange
Principal media
INVITATION TO PRESS CONFERENCE
Elektrobit will hold press conferences for media, analysts and institutional
investors concerning the Financial Statement Bulletin for 2006 on February 7,
2007 as follows:
In Oulunsalo at 9.30 - 10:15 am. (EET)
Elektrobit
Automaatiotie 1
Meeting cabinet 126
In Helsinki at 2.00 - 3:00 pm. (EET)
Restaurant Savoy
Eteläesplanadi 14
Cabinets II-III, 7th floor
The Helsinki conference will be audio webcast and published live on the Internet
on http://194.100.179.98:80/wip/directlink.do?newbrowser=1&pid=1435712. There
will be a possibility to present questions in place as well as by calling to the
conference call number +358 9 2313 9201. An on-demand version of the audio
webcast will be available after the conference on Elektrobit's website
www.elektrobit.com/investors.
The presentation material (as a pdf file) will be available from 8.00 am (EET) on
February 7, 2007, on the same address.
CONSENSUS ESTIMATE
Elektrobit consensus estimates made by the analysts who observe Elektrobit is
updated approximately two weeks before the release of the next financial report.
The recent estimate is available on the company website
www.elektrobit.com/investors
FINANCIAL REPORTING IN 2007
In 2007 the results of the first quarter will be published on May 9, second
quarter on August 2, and third quarter result on November 7.
ANNUAL GENERAL SHAREHOLDERS MEETING
Elektrobit Group Plc's Annual General Shareholders Meeting will take place on
Wednesday, 14 March 2007 at 1:00 pm in Oulunsalo-talo, at the address
Mäntypellonpolku 10, Oulunsalo, Finland.
Oulunsalo, January 31, 2007
Elektrobit Group Plc.
Corporate Communications
ELEKTROBIT GROUP PLC.'S FINANCIAL STATEMENT BULLETIN 2006
The consolidated financial statement has been prepared in accordance with
International Financial Reporting Standards (IFRS). The Financial Statement of
2006 has been audited and the auditing report has been dated on February 6, 2007.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-12/2006 1-12/2005
12 months 12 months
Continuing operations
NET SALES 181.5 190.1
Other operating income 3.7 2.6
Change in work in progress and finished goods 1.5 -0.2
Work performed by the undertaking for its own 0.3 0.2
purpose and capitalized
Expenses -180.8 -165.7
Depreciation -9.2 -9.7
OPERATING PROFIT -3.0 17.3
Financial income and expenses -0.4 1.1
PROFIT BEFORE TAX -3.4 18.4
Income tax -0.5 -5.4
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS -3.9 13.0
Profit after tax for the year from discontinued 78.2 5.8
operations
PROFIT FOR THE YEAR 74.2 18.8
Attributable to
Equity holders of the parent 73.9 19.0
Minority interest 0.3 -0.1
Earnings per share EUR continuing operations
Basic earnings per share -0.03 0.10
Diluted earnings per share -0.03 0.10
Earnings per share EUR discontinued operations
Basic earnings per share 0.60 0.04
Diluted earnings per share 0.60 0.04
Earnings per share EUR continuing and discontinued
operations
Basic earnings per share 0.57 0.15
Diluted earnings per share 0.57 0.15
CONSOLIDATED BALANCE SHEET (MEUR) Dec. 31, Dec. 31,
2005
2006
ASSETS
Non-current assets
Tangible assets 32.5 32.2
Intangible assets 18.8 22.5
Investments 10.8 10.8
Receivables 1.6 0.0
Deferred tax assets 2.7 3.2
Non-current assets total 66.3 68.7
Current assets
Inventories 13.9 17.5
Trade and other receivables 57.5 46.9
Other short-term deposits 18.1 18.4
Cash at banks and in hand 107.0 42.2
Current assets total 196.5 125.0
TOTAL ASSETS 262.8 193.6
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 12.9 12.9
Other equity 173.5 107.2
Minority interest 2.1 1.8
Total equity 188.6 122.0
Non-current liabilities
Interest-bearing liabilities 17.2 17.9
Other liabilities 0.3 0.0
Deferred tax liabilities 6.2 8.6
Non-current liabilities total 23.7 26.5
Current liabilities
Interest-bearing liabilities 15.2 12.2
Trade and other payables 35.3 33.0
Current liabilities total 50.5 45.2
TOTAL EQUITY AND LIABILITIES 262.8 193.6
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Net profit for the period
E = Minority interest
F = Total equity
A B C D E F
Equity on January 1, 2005 12.9 64.6 31.1 2.3 110.9
Profit for the period 3.2 3.2
Dividend distribution -7.8 -7.8
Translation difference 0.1 0.0 0.1
Equity on March 31, 2005 12.9 64.6 23.4 3.2 2.3 106.4
Profit for the period 5.2 5.2
Translation difference 0.1 -0.0 0.1
Others 0.0 0.0
Equity on June 30, 2005 12.9 64.6 23.6 8.4 2.3 111.7
Profit for the period 6.6 6.6
Share-related compensation 0.1 0.1
Translation difference 0.1 -0.3 -0.1
Others 0.1 0.1
Equity on September 30, 2005 12.9 64.6 23.9 15.0 2.0 118.4
Profit for the period 4.0 4.0
Share-related compensation 0.1 0.1
Translation difference 0.1 -0.2 -0.1
Others -0.3 -0.3
Equity on December 31, 2005 12.9 64.6 23.7 19.0 1.8 122.0
Equity on January 1, 2006 12.9 64.6 42.7 1.8 122.0
Profit for the period 0.1 0.1
Dividend distribution -9.1 -9.1
Share-related compensation 0.1 0.1
Translation difference -0.1 0.1 -0.1
Others 0.0 0.0
Equity on March 31, 2006 12.9 64.6 33.6 0.1 1.9 113.0
Profit for the period 4.3 4.3
Share-related compensation 0.2 0.2
Translation difference -0.3 0.0 -0.3
Others -0.0 -0.0
Equity on June 30, 2006 12.9 64.6 33.5 4.3 1.9 117.2
Profit for the period 0.7 0.7
Share-related compensation 0.3 0.3
Translation difference 0.1 0.1 0.1
Others -0.2 -0.2
Equity on September 30, 2006 12.9 64.6 33.7 5.0 1.9 118.1
Profit for the period 68.9 68.9
Share-related compensation 0.3 0.3
Translation difference -0.1 0.2 0.1
Others 1.2 1.2
Equity on December 31, 2006 12.9 64.6 35.1 73.9 2.1 188.6
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-12/2006 1-12/2005
12 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Net profit for the accounting period 73.9 19.0
Adjustment of accrual basis items -63.7 16.8
Cash flow before change in net working capital 10.2 35.7
Change in net working capital -7.4 -1.5
Cash flow before financial items and taxes 2.8 34.2
Interest paid on operating activities -1.9 -3.1
Interest received from operating activities 1.8 4.4
Other financial income and expenses, net received 0.0 0.0
Income taxes paid -4.1 -9.2
NET CASH FROM OPERATING ACTIVITIES -1.4 26.3
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit -0.3
Disposal of business unit, net of cash acquired 81.1
Purchase of tangible and intangible assets - -4.7 -5.4
Proceeds from sale of tangible and intangible assets + 2.9 0.5
Purchase of investments - -6.1 -3.3
Proceeds from sale of investments + 5.6 3.0
NET CASH USED IN INVESTING ACTIVITIES 78.5 -5.3
CASH FLOW FROM FINANCING ACTIVITIES
Change of loans -0.2 -4.2
Repayment of finance lease liabilities -3.4 -3.6
Dividends paid - -9.1 -7.8
NET CASH FROM FINANCING ACTIVITIES -12.6 -15.6
NET CHANGE IN CASH AND CASH EQUIVALENTS 64.5 5.5
Cash and cash equivalents at beginning of period 60.6 55.1
Cash and cash equivalents at end of period 125.1 60.6
SEGMENT INFORMATION (MEUR) 1-12/2006 1-12/2005
Continuing operations 12 months 12 months
Wireless Communication Solutions
Net sales to external customers 66.2 63.1
Net sales to other segments 4.8 10.6
Net sales total 71.0 73.7
Operating profit -9.2 -0.6
Automotive Software
Net sales to external customers 38.9 27.1
Net sales to other segments 0.0 0.1
Net sales total 38.9 27.2
Operating profit 2.1 1.5
Test and Automation *)
Net sales to external customers 76.2 99.6
Net sales to other segments 0.8 0.4
Net sales total 77.0 100.0
Operating profit 4.0 16.5
*) Segment information includes only continuing
operations
Common functions
Net sales to external customers 0.2 0.2
Net sales to other segments 9.4 5.4
Net sales total 9.6 5.7
Operating profit 0.1 -0.1
Eliminations
Net sales to external customers 0.0 0.0
Net sales to other segments -15.0 -16.5
Net sales total -15.0 -16.5
Operating profit 0.0 0.0
Group total
Net sales to external customers 181.5 190.1
Operating profit -3.0 17.3
Net sales of geographical segments (MEUR) 1-12/2006 1-12/2005
12months 12 months
Net sales
Europe 130.9 130.5
Americas 23.1 28.7
Asia 27.5 30.9
Net sales total 181.5 190.1
INCOME STATEMENT BY QUARTER 10-12/ 7-9/ 4-6/ 1-3/ 10-12/
(MEUR) 2006 2006 2006 2006 2005
3 months 3 months 3 months 3 months 3 months
NET SALES 45.6 44.0 49.8 42.1 50.0
Other operating income 2.3 0.5 0.4 0.5 1.4
Change in work in progress -0.2 0.4 1.3 -0.1 -5.6
and finished goods
Work performed by the 0.1 0.1 -0.0 0.1 0.1
undertaking for its own
purpose and capitalized
Expenses -51.0 -43.1 -44.4 -42.3 -41.1
Depreciation -2.3 -2.3 -2.3 -2.3 -2.4
OPERATING PROFIT -5.6 -0.4 4.9 -1.9 2.5
Financial income and -0.7 0.1 0.7
expenses 0.2 0.0
PROFIT BEFORE TAX -5.4 -0.4 4.1 -1.9 3.2
CONTINUING OPERATIONS
Income tax 0.4 -0.0 -1.1 0.3 -0.4
PROFIT FOR THE YEAR FROM -5.0 -0.4 3.0 -1.6 2.8
CONTINUING OPERATIONS
Profit after tax from the 74.0 1.1 1.3 1.7 1.0
year from discontinued
operations
PROFIT FOR THE YEAR 69.0 0.8 4.3 0.1 3.8
Attributable to
Equity holders of the 68.9 0.7 4.3 0.1 4.0
parent
Minority interest 0.2 0.1 0.0 0.1 -0.2
BALANCE SHEET BY QUARTER Dec. 31, Sept.30, June 30, Mar. 31, Dec. 31,
(MEUR)
2006 2006 2006 2006 2005
ASSETS
Non-current assets
Tangible assets 32.5 32.2 32.2 32.0 32.2
Intangible assets 18.8 20.5 21.2 21.7 22.5
Investments 10.8 10.6 10.3 10.7 10.8
Receivables 1.6 1.7 1.7 1.6 0.0
Deferred tax assets 2.7 2.7 3.2 4.0 3.2
Non-current assets total 66.3 67.8 68.5 70.0 68.7
Current assets
Inventories 13.9 14.8 14.5 13.9 17.5
Trade and other 57.5 57.7 58.6 48.0 46.9
receivables
Other short-term deposits 18.1 18.0 8.9 21.5 18.4
Cash at bank and in hand 107.0 27.6 37.9 30.1 42.2
Current assets total 196.5 118.1 119.8 113.4 125.0
TOTAL ASSETS 262.8 185.9 188.3 183.4 193.6
EQUITY AND LIABILITIES
Equity attributable to
equity holders of the
parent
Share capital 12.9 12.9 12.9 12.9 12.9
Other equity 173.5 103.3 102.4 98.2 107.2
Minority interest 2.1 1.9 1.9 1.9 1.8
Total equity 188.6 118.1 117.2 113.0 122.0
Non-current liabilities
Interest-bearing 17.2 17.2 17.3 17.8 17.9
liabilities
Other liabilities 0.3 0.1 0.1 0.1 0.0
Deferred tax liabilities 6.2 6.9 7.8 8.3 8.6
Non-current liabilities 23.7 24.1 25.2 26.2 26.5
total
Current liabilities
Interest-bearing 15.2 12.6 13.2 11.4 12.2
liabilities
Trade and other payables 35.3 31.0 32.7 32.9 33.0
Current liabilities total 50.5 43.6 46.0 44.2 45.2
TOTAL EQUITY AND 262.8 188.3 183.4 193.6
LIABILITIES 185.9
FINANCIAL PERFORMANCE RELATED RATIOS 1-12/2006 1-12/2005
12 months 12 months
INCOME STATEMENT (MEUR)
Net sales 181.5 190.1
Operating profit -3.0 17.3
Operating profit, % of net sales -1.7 9.1
Profit before tax -3.4 18.4
Profit before tax, % of net sales -1.9 9.7
Net profit -3.9 13.0
PROFITABILITY AND OTHER KEY FIGURES
Return on equity % (ROE) -2.5 11.2
Return on investment % (ROI) -1.2 13.1
Interest-bearing net liabilities, (MEUR) -92.7 -30.5
Net gearing, % -49.2 -25.0
Equity ratio, % 72.2 64.2
Gross investments, (MEUR) 16.4 12.5
Gross investments, % of net sales 9.0 6.6
Average personnel during the period 1 847 1 599
Personnel at the period end 2 005 1 633
AMOUNT OF SHARE ISSUE ADJUSTMENT (1,000 pcs) Dec. 31, Dec. 31,
2006 2005
At the end of period *) 129 413 129 413
Average for the period *) 129 413 129 413
Average for the period diluted with stock options 129 413 129 413
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-12/2006 1-12/2005
12 months 12 months
Basic earnings per share -0.03 0.10
Diluted earnings per share -0.03 0.10
Equity *) per share 1.44 0.93
Dividend per share **) 0.11 0.07
Dividend per earnings, % -332.2 68.79
P/E ratio -62.2 18.4
Effective dividend yield, % 5.3 3.7
*) Equity attributable to equity holders of the
parent
**) According to Board of Director's proposal,
year 2006
MARKET VALUES OF SHARES (EUR) 1-12/2006 1-12/2005
Highest 2.56 3.15
Lowest 1.82 1.82
Average 2.18 2.53
At the end of period 2.06 1.87
Market value of the stock, (MEUR) 266.6 242.0
Trading value of shares, (MEUR) 72.4 117.2
Number of shares traded, (1,000 PCS) 33 206 46 374
Related to average number of shares % 25.7 35.8
SECURITIES AND CONTINGENT LIABILITIES (MEUR) Dec. 31, Dec. 31,
2006
2005
AGAINST OWN LIABILITIES
Floating charges 28.8 28.8
Mortgages 18.0 19.7
Pledges 7.1 7.5
Mortgages are pledged for liabilities totalled 20.7 23.0
OTHER DIRECT AND CONTINGENT LIABILITIES
Rental liabilities
Falling due in the next year 4.0 3.1
Falling due after one year 4.4 4.7
Repurchase commitments 0.6 1.1
NOMINAL VALUE OF CURRENCY DERIVATIVES (MEUR) Dec. 31, Dec. 31,
2006
2005
Foreign exchange forward contracts
Market value -0.0 -0.1
Nominal value 9.5 15.3
Purchased currency options
Market value 0.0 0.1
Nominal value 2.5 6.1
Sold currency options
Market value -0.0 -0.1
Nominal value 5.0 12.2