SysOpen Digia Plc STOCK EXCHANGE RELEASE, 8 February 2007 at 9:15am
SYSOPEN DIGIA PLC's Q4/2006 REPORT AND FINANCIAL STATEMENTS FOR 2006 (IFRS)
Key figures
- Consolidated turnover for 2006: EUR 85.0 million, up 40 per cent in comparison
to 2005
- Consolidated earnings (EBIT) for 2006: EUR 8.4 million, up 98 per cent in
comparison to 2005
- Turnover for the fourth quarter: EUR 26.6 million, up 48 per cent year on year
- Consolidated earnings (EBIT) for the fourth quarter: EUR 3.0 million, up 60 per
cent year on year
- Product-based turnover standing at EUR 11.4 million, accounting for 13.4 per
cent of turnover (2005: EUR 6.5 million, 10.8 per cent of turnover)
- Goals for 2007: organic growth and further improvement of profitability
Financial Statements 2006
- Turnover: EUR 85.0 million (EUR 60.5 million in 2005)
- EBIT: EUR 8.4 million (EUR 4.2 million in 2005)
- Profitability (EBIT percentage): 9.8 per cent (7.0 per cent in 2005)
- Earnings per share: EUR 0.25 (EUR 0.14 in 2005)
Q4/2006
- Turnover: EUR 26.6 million (Q4/2005: EUR 17.9 million)
- EBIT: EUR 3.0 million (Q4/2005: EUR 1.9 million)
- Profitability (EBIT percentage): 11.2 per cent (Q4/2005: 10.4 per cent)
- Earnings per share: EUR 0.08 (Q4/2005: EUR 0.07)
PROPOSAL FOR DIVIDEND DISTRIBUTION
The SysOpen Digia Plc Board of Directors proposes to the Annual General Meeting
that a per-share dividend of EUR 0.08 for 2006 be distributed to the shareholders
(2005: EUR 0.05).
CORPORATE COMMUNICATIONS
A briefing for analysts and the media on the interim financial report will be
held on Thursday, 8 February 2006, at 11:00 am in the Espa Room at Scandic Hotel
Simonkenttä, address: Simonkatu 9, Helsinki. All are welcome.
CEO'S REVIEW
I am highly pleased with the accomplishments of our company and personnel in
2006. Succeeding in challenging market conditions, integrating two companies into
SysOpen Digia, and being successful in developing the company during the same
year all speak to our ability to operate in heavily changing conditions. In
addition to intense growth, we managed to raise the profitability to a good
level.
During the financial period under review, the Group's turnover increased
strongly, with a growth rate of 40 per cent in comparison to the 2005 level. The
Group's turnover improved by 98 per cent in comparison to 2005. Net gearing was
72 per cent and the equity ratio 44 per cent. Diluted earnings per share for 2006
stood at EUR 0.25.
During the fourth quarter of 2006, the company's business operations developed
favourably, and, similarly to the third quarter, considerably exceeded the
company's corresponding figures year on year. Turnover for the Telecommunications
business division for 2006 was up 13 per cent from corresponding figures for the
previous year, while profitability decreased slightly, due to weak second
quarter. The Finance and Services division grew by 42 per cent, and its
profitability increased as well. The Industry and Trade division grew by 242 per
cent, and, correspondingly, its level of profitability was excellent, while the
comparatives were negative.
In 2006, SysOpen Digia has consolidated operations in its crucial business areas
in line with its strategy, and organised its operations to better meet business
and customer needs. The development of business operations and organic growth is
based on a customer-oriented combination of products and services. The further
development of customer management, the Group's unified solution portfolio,
resource and comperence management, technology partnerships, and management
systems present the most significant goals for the company in 2007 as well.
The objective of the financing strategy is to secure the Group's financial
position and its ability to execute planned investments. Accordingly, SysOpen
Digia entered in November 2006 into an EUR 80 million, three-year syndicated loan
agreement, which was used to reorganise the company's entire loan portfolio. In
the end of reporting period, the company has raised EUR 55 million from the loan
facility.
In accordance with our revised growth strategy, SysOpen Digia aims to be the
preferred partner for its strategic customers in the delivery of information
systems guiding their core processes. The company aims to establish significant
new business activities in the area of mobile and real-time information systems
for companies during the strategy period.
Our long-term goal continues to be an average annual increase of 25 per cent in
turnover. Our goals for 2007 are organic growth and further improvement in
profitability. Organic and inorganic growth are regarded as integral parts of
strengthening the company's market position, developing a sufficient range of
products and services, and providing services throughout the life cycle of the
customer relationship.
For the 2007 financial year, the company is striving organically for a turnover
of EUR 100 to 105 million, with a profitability level (EBIT %) of 10 to 12 per
cent. For the first half of 2007, turnover is projected to be EUR 50 to 54
million, and profitability eight to 10 per cent.
SysOpen Digia Plc's 2006 financial statements (IFRS)
CONSOLIDATED KEY FIGURES
Q4/200 Q4/2005 Change 2006 2005 Change
6 , % , %
Turnover 26 621 17 927 48% 84 968 60 525 40%
EBIT before 2 985 1 778 68% 8 354 6 024 39%
restructuring costs
- relative to 11% 10% 10% 10%
turnover
EBIT 2 985 1 861 60% 8 354 4 229 98%
- relative to 11% 10% 10% 7%
turnover
Profit for the 1 625 1 208 35% 4 867 2 355 107%
period
- relative to 6% 7% 6% 4%
turnover
Return on equity (%) 10% 9% 8% 5%
Return on investment 10% 10% 9% 6%
(%)
Interest-bearing 56 664 26 055 117% 56 664 26 055 117%
liabilities
Cash and cash 11 506 12 326 -7% 11 506 12 326 -7%
equivalents
Net gearing (%) 72% 26% 72% 26%
Equity ratio (%) 44% 56% 44% 56%
Earnings per share 0.08 0.07 14% 0.25 0.14 79%
(EUR), undiluted
Earnings per share 0.08 0.07 14% 0.25 0.14 79%
(EUR), diluted
Reporting
At the beginning of 2005, SysOpen Digia Plc moved from the Finnish Accounting
Standards (FAS) to application of the International Financial Reporting Standards
(IFRS) in the Group's financial reporting.
SysOpen Digia Plc's consolidated financial statements include Financial Software
Oy (formerly Samstock Oy) as of 1 May 2006 and SysOpen Digia Industry and Trade
Ltd (formerly Sentera Plc) as of 1 June 2006.
SUMMARY FOR BUSINESS DIVISIONS
Telecommunications
SysOpen Digia has a strong position in product development of smartphones and ICT
solutions for operators. The company offers extensive product and service
packages that help its customers - mobile phone manufacturers, semiconductor
suppliers, and operators - to develop their own products and offerings.
As one of the leading software integrators in the smartphone market, SysOpen
Digia is an expert in the overall development and integration of smartphones and
their software platforms. Our customers can benefit from our contract engineering
services and products in all stages of smartphone development, as well as
throughout the product life cycle.
SysOpen Digia also offers a comprehensive solution package that helps operators
and service providers to expand their range of services and transition smoothly
to IP-based services. The company provides high-standard, cost-effective
outsourcing services.
The Telecommunications business division grew 13 per cent in 2006, compared to
2005. In the first half of the year, business operations were weighed down by the
weak second quarter, but the second half of the year saw the operational
profitability of the Telecommunications division improve markedly due to a
steadfast effort to improve the efficiency of operations, and significant new
customer relationships.
The Telecommunications business division's positive development that started in
the beginning of the third quarter continued through the last quarter. Both
existing and new customer relationships developed favourably, and profitability
remained at a solid level. The status of projects in Q4 was remarkably good
despite a slight increase in the volatility of these projects.
Market conditions were good for both the operator and smartphone business during
the fourth quarter. The improved profitability of the operator customers and the
investments in new projects made by the smartphone customers have brought new
opportunities for the company. The markets are expected to remain active in 2007
as well.
The improved situation of our operator customers makes it possible to develop new
services. At the same time, the strong focus on core areas of business opens up
possibilities for outsourcing. Our offering to versatile terminals is likely to
improve with better margins and more advanced productisation. Operator-specific
customisation of devices will remain strong in 2007. In terms of usability
services, growth is expected in the smartphone market as well as others in 2007.
Finance and Services
The Finance and Services division provides its customers with comprehensive
service, product, and integration solutions that utilise the entire Group's
expertise and resources, and a delivery capacity corresponding to a new, larger
size. The solutions are based on SysOpen Digia's own duplicable software products
as well as its partners' products, and duplicable project delivery models.
Finance and Services comprises four business units: Investment and Asset
Management, Financing and Services, Public Sector and Associations, and Executive
Consulting. During the reporting period, the Senior Advisors team, concentrating
on consultation services for executive management, was established in the
Executive Consulting unit, and operations were expanded to cover the development
of business-oriented data security. Additionally, a business unit concentrating
on the development of products and services will be launched at the beginning of
2007. This unit will focus on productising the services we offer and developing
our productivity tools and methodologies.
In 2006, the reported turnover of the division grew by 42 per cent year on year.
In Q4/2006, however, the growth and profitability of Finance and Services did not
reach expected levels. Higher than expected personnel turnover, delays in the
start-up of agreed customer projects, and certain one-off costs related to those
customer projects presented us with business challenges. Personnel turnover still
is expected to remain at an above-average level in certain Finance and Services
units for the beginning of 2007, which will diminish the division's performance
temporarily. Additionally, SysOpen Digia was forced to initiate legal proceedings
against its former partner for breach of contract in the fourth quarter of 2006.
With respect to Investment and Asset Management operations, the volume of orders
is good, based on new investments by customers and the expansion of existing
systems solutions.
Financing and Services provided, for instance, Amadeus Finland Oy with an e-
payment solution that automates the payment process for trips. The Amadeus
ePayment service covers both card payments and online payments through banks.
With regard to card payments, the international Verified by Visa and MasterCard
Secure Code verification services are utilised. Area Travel Agency, Finland
Travel Bureau, and SuperSeacat - Seacontainers Finland are the first companies to
use the service.
The Executive Consulting unit was awarded a significant customer project in
consortion with Capgemini, which translated into the delivery of two segments of
the overall governmental IT architecture. Demand for the Executive Consulting
unit's services increased markedly in the last quarter.
Industry and Trade
SysOpen Digia has a strong position in the information system market with respect
to trade and industry value chains. The company's solid business sector expertise
provides an optimal foundation for co-operation, creating a user-friendly and
technically accomplished solution that supports the customer's processes. SysOpen
Digia's solutions streamline companies' business processes, bring transparency to
the order-delivery chain, and automate routine tasks.
The division's business solutions cover enterprise resource planning systems,
wireless and integration solutions, and comprehensive e-business and content
management solutions, as well as the related consulting, outsourcing, and
maintenance services. The solutions are based on SysOpen Digia's own duplicable
software products as well as packaged project delivery models and its partners'
products.
In 2006, the Industry and Trade business division grew by 242 per cent year on
year, which was attributable to the significant reorganisation of the division as
well as the considerable increase in the number of customers. Year on year, the
operative profitability was at a good level.
The business operations of Industry and Trade continued their favourable
development in the fourth quarter. The division's ERP business continued its
solid growth, and SysOpen Digia gained several new customers. Other parts of the
business division also achieved good results, especially with regard to the
further development projects relating to our current customers.
A slight increase is expected in the proportion of services in the turnover of
Industry and Trade. It is also expected that small and medium-sized business
projects will enjoy more rapid growth, and therefore the company intends to
invest more heavily in sales for this sector.
In the ERP market, SysOpen Digia has managed to increase its market share by
providing a large solution portfolio, and thus a growth rate exceeding standard
market growth is expected from the ERP unit. With regard to the trade value
chain, Web and integration solutions sales are expected to show positive growth.
Also, with a more extensive range of products, SysOpen Digia anticipates
continued favourable development of business operations as its current customers
develop their information system environments further.
MARKETS
According to Gartner, the consulting and systems integration market will grow
globally from $244.1 billion in 2005 to $330.3 billion in 2010. This reflects a
compound annual growth rate of 6.2% (Gartner, 2 January 2007). Gartner Dataquest
has updated its forecast for the IT services market. This market is expected to
grow from $628.8 billion in 2005 to $855.6 billion in 2010. This reflects a
compound annual growth rate of 6.4%, up slightly from its July 2006 forecast of
5.8% (Gartner, 23 October 2006). The EU's forecast for ICT market growth in 2007
is 2.9 per cent. Correspondingly, the EU's country-specific forecast for ICT
growth in the Nordic market (excluding Norway) is 2.3 per cent. The Western
European IT market is expected to grow at a rate of four per cent in 2007 (EITO
and IDC, October 2006).
There is a transition from technology projects into business-driven development
projects ongoing in the systems integration market. Focus will be on improvement
of the current systems with add-on solutions such as portals, e-shopping,
business intelligence, mobile solutions, RFID, and paycards. The sale of new
systems and licences is slowing down in the large-company sector, and the role of
integration will strengthen. The small and medium enterprise (SME) sector is
expected to grow more rapidly (Market-Visio Study, 2006). Self-care solutions and
service chain digitalisation and mobilisation are key drivers for business
development. Digital convergence and new services will take place due to
technology transformation.
The role of global industry and standard applications, development, integration,
and standardisation of the ICT solutions will grow in the supply and delivery
chains. The role of ICT in structural changes, globalisation, and consolidation
is an active one and has a greater and greater contribution. Productivity and
cost control are driving business decisions. Transition from legacy to new
technologies will continue. Customers are expecting support for the full life
cycle of their ICT solutions. The complexity of the customer deliveries is
increasing due to increasing functionality and level of integration. Mobility is
increasing in the enterprise systems, with smartphones gaining critical mass.
Smartphone volumes were up 50% in 2006. The volume of smartphone shipments is
evaluated as broken down thus: 72M in 2006 (7.5% of total shipments), 95M in 2007
(9.5% of total shipments), and 123M in 2008 (11.5% of total shipments) (Nomura,
Gartner, and SysOpen Digia, 2006). The handset industry is becoming polarised
with competing technology and software platforms. Increased complexity in phone
development drives a platform-based approach.
Symbian remains the gorilla in smartphones, representing 51% of all smart devices
shipped in 2006. Linux is a viable choice for feature phones and embedded
devices. The platform is emerging, but there is not yet an applicable set of
mobile standards. Microsoft has ready acceptance in certain market segments
through the company's presence in the US market and enterprise space with a focus
on operator devices.
PROSPECTS
Increasingly, customers are looking for a reliable strategic partner that can
deliver demanding solutions and take responsibility for services throughout the
life cycle of the customers' applications. Market consolidation, the networking
of value chains, and the development of partnerships to support customer
relationships are key business drivers for the company.
In line with existing trends, demand in the ICT market is expected to focus more
and more clearly on outsourcing, contract engineering, extensive turnkey
deliveries, and the integration of standard software products. In terms of the
development of expertise and solutions, SysOpen Digia has made significant
investments in areas of focus that match key market trends. These key elements in
the information technology projects of the near future include business
-orientation and industry know-how, usability and user interfaces, expandability,
and the life cycle of the system, as well as productivity and quality.
An increasing number of customers' strategic development projects also include
mobile technologies in their architecture. The rapid increase in the use of
smartphones and wireless technologies as part of the IT infrastructure of
companies is creating new business opportunities constantly. The product
development market for smartphones will also develop through consolidation,
operating models based on assuming total responsibility, and alliances. SysOpen
Digia is a pioneer in the development and integration of wireless solutions as
seamless parts of its customers' core business-related information systems.
The company aims to attain a significantly better position by 2010 as a supplier
of ICT systems and an outsourcing partner in Finland, and to expand its domestic
market to cover Northern Europe. SysOpen Digia operates on a worldwide basis in
selected business areas. For this timeframe, the company aims to establish
significant new business activities in the area of mobile and real-time
information systems for companies.
Our goals for 2007 are organic growth and further improvement of profitability.
For the entire year, the company is striving organically for a turnover of EUR
100 to 105 million, with a profitability (EBIT %) of 10 to 12 per cent. For the
first half of 2007, turnover is expected to be EUR 50 to 54 million, with
profitability at eight to 10 per cent.
TURNOVER
SysOpen Digia's consolidated turnover for 2006 was EUR 85.0 million, up 40 per
cent (2005: EUR 60.5 million). The 2006 turnover includes a total of EUR 20.7
million of the turnover of the acquired SysOpen Digia Financial Software Ltd
(former Samstock Oy) and SysOpen Digia Industry and Trade Ltd (former Sentera
Plc). SysOpen Digia Plc's consolidated financial statements have included
Financial Software Ltd (formerly Samstock Oy) as of 1 May 2006 and SysOpen Digia
Industry and Trade Ltd (formerly Sentera Plc) as of 1 June 2006.
The turnover for 2006 of the Telecommunications division was EUR 43.6 million, up
13 per cent (2005: EUR 38.7 million). The 2006 turnover for the Finance and
Services division was EUR 23.6 million, up 42 per cent (2005: EUR 16.6 million).
The turnover for 2006 of the Industry and Trade division was EUR 17.7 million, up
242 per cent (2005: EUR 5.2 million).
Group's product business turnover for 2006 reached EUR 11.4 million (2005: EUR
6.5 million), 13.4 per cent of the Group's turnover (2005: 10.8 per cent).
SysOpen Digia's turnover for the fourth quarter was EUR 26.6 million,
representing an increase of 48 per cent (Q4/2005: 17.9 EUR million).
The turnover for the Telecommunications division decreased by 4.0 per cent in the
fourth quarter, to EUR 11.9 million (2005: 12.4 EUR million). The turnover for
the Finance and Services division increased by 75 per cent in the fourth quarter,
reaching EUR 7.4 million (2005: EUR 4.2 million). The Industry and Trade division
saw a 463 per cent increase in turnover in the fourth quarter, to EUR 7.3 million
(2005: EUR 1.3 million).
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Pro forma turnover for 2006 was EUR 98.9 million, down 1.4 per cent from 2005.
The pro forma turnover for the Telecommunications division was EUR 43.6 million,
the pro forma turnover for Finance and Services EUR 28.0 million, and the pro
forma turnover for Industry and Trade EUR 27.3 million.
The share of product business in the Group's 2006 pro forma turnover was 15.0 per
cent (2005: 15.7 per cent).
International operations accounted for 7.0 per cent of turnover in 2006 (2005:
7.5 per cent).
DEVELOPMENT OF EARNINGS AND PROFITABILITY
SysOpen Digia's EBIT for 2006 was EUR 8.4 million, representing an increase of 98
per cent (2005: EUR 4.2 million). The EBIT for the Telecommunications division
came to EUR 4.0 million, representing a fall of seven per cent (2005: EUR 4.3
million). The allocated goodwill amortisation generated in connection with the
merger of SysOpen Plc and Digia Inc. burdened the profitability of
Telecommunications by a total of EUR 1.4 million in 2006 (2005: EUR 1.2 million).
For the Finance and Services division, EBIT was EUR 2.3 million, representing a
growth of 11 per cent (2005: EUR 2.1 million). The EBIT for Industry and Trade
totalled EUR 2.0 million (2005: EUR -0.4 million).
The EBIT for the fourth quarter amounted to EUR 3.0 million (Q4/2005: EUR 1.9
million). The EBIT for the Telecommunications division fell by three per cent
year on year, to EUR 1.6 million (Q4/2005: EUR 1.6 million). By contrast, EBIT
for Finance and Services grew by 53 per cent, to EUR 0.5 million (Q4/2005: EUR
0.3 million).For Industry and Trade it totalled EUR 0.9 million (Q4/2005: EUR
-0.1 million).
Earnings before taxes stood at EUR 6.7 million (Q4/2005: EUR 3.3 million) in
2006, and earnings after taxes came to EUR 4.9 million (Q4/2005: EUR 2.4
million).
Pro forma EBIT for the period came to EUR 9.4 million, showing a considerable
increase compared with the previous year, when it was EUR 3.7 million. The pro
forma EBIT for the Telecommunications division was EUR 4.0 million, the pro forma
EBIT for Finance and Services EUR 2.2 million, and the pro forma EBIT for
Industry and Trade EUR 3.2 million.
Earnings per share for 2006 were EUR 0.25 (2005: EUR 0.14).
The Group's net financial expenses for 2006 were EUR 1.7 million (2005: EUR 0.9
million).
FINANCING AND INVESTMENTS
SysOpen Digia Group's balance sheet total at the end of 2006 amounted to EUR
146.3 million (12/2005: EUR 96.0 million), and the equity ratio stood at 44.0 per
cent (12/2005: 56 per cent). Net gearing stood at 72 per cent (12/2005: 26 per
cent). At the end of 2006, the Group's liquid assets totalled EUR 11.5 million
(12/2005: EUR 12.3 million). The Group had EUR 56.7 million in interest-bearing
liabilities at the end of 2006 (12/2005: EUR 26.1 million).
In the reporting period, SysOpen Digia Plc acquired Samstock Oy for EUR 5.1
million, on 26 April 2006. In connection with the Samstock deal, unallocated
goodwill of around two million euros was generated. Furthermore, the company
acquired Sentera Plc for EUR 42.6 million on 31 May 2006. The acquisition of
Sentera Plc was financed using a bank loan worth EUR 37.8 million and by issuing
new shares in SysOpen Digia Plc. Total goodwill of EUR 29.6 million was generated
by the acquisition of Sentera Plc, EUR 4.3 million of which has been allocated
for the acquired customers, with the rest remaining as unallocated goodwill.
Annual impairment testing is performed in accordance with the IAS 36 standard for
goodwill and intangible assets with limitless useful life. As of 1 January 2004,
amortisation of goodwill will not be carried out, and residual value will be
tested annually.
Distribution of goodwill and tested values across the business divisions is
presented in the following table:
GOODWILL, EUR 1,000 Allocated Unallocated Other Value tested,
goodwill goodwill items total
Telecommunications 9 293 46 829 3 938 60 060
Finance and Services 1 270 12 652 3 178 17 100
Industry and Trade 4 489 26 479 3 121 34 089
SysOpen Digia Group total 15 052 85 960 10 237 111 249
The Telecommunications division's goodwill is chiefly related to the merger of
Digia Inc and SysOpen Plc and the acquisition of Yomi Software Ltd. The Finance
and Services division's goodwill is chiefly related to the acquisition of Sentera
Plc and Samstock Oy. The Industry and Trade division's goodwill relates chiefly
to the acquisition of Sentera Plc and Yomi Software Ltd.
The Group has defined business divisions as units generating cash flow. Goodwill
impairment is tested by comparing the recoverable current amount of a business
division's cash flows to their carrying amount. Current cash flow amounts are
based on the continuous use of an asset and the financial plans, and on estimates
of the division's future development, as approved by the relevant business
division's management.
Current amounts are determined on the basis of realised earnings and five-year
forecasts by business division, in which growth varies between three and eight
per cent and earnings from 10 to 13 per cent.
Cash flows following the forecast period have been estimated by extrapolating the
cash flows using a steady growth estimate of three per cent for turnover, with
earnings estimated at 10 per cent of the turnover. Discount rates have been
determined with the sector's general risk level taken into account, and they are
equivalent to an annual rate of 11 per cent in 2006.
Business growth has been estimated to constitute the most critical factor in
calculation of current values of cash flows. The amount of goodwill for the
Telecommunications division requires average annual long-term growth of two per
cent for the business operations and 10 per cent profitability before allocated
goodwill amortisation.
The amount of goodwill for the Finance and Services division requires turnover to
grow at an annual rate of two per cent and profitability before allocated
goodwill amortisation to be at a level of at least five per cent. The amount of
goodwill for Industry and Trade requires in the long term growth at an annual
rate of two per cent, with profitability before allocated goodwill amortisation
at a nine per cent level.
The company's management hold the view that the largest impairment risk is
associated with the Telecommunications division. On the date of closing the
accounts, however, no potential change, estimated reasonably, in any of the
essential variables used in the calculation would lead to a situation in which
the division's carrying amount would exceed its recoverable amount. Thus, no
requirement for impairment records exists, in the management's view.
The Group's cash flow from business operations was positive by EUR 5.8 million in
2006 (2005: EUR 5.7 million to the positive).
Gross capital expenditure totalled EUR 1.9 million in 2006 (2005: EUR 2.3
million).
The return on investment (ROI) was nine per cent in 2006 (2005: six per cent).
Return on equity (ROE) was eight per cent (2005: five per cent).
RISK ASSESSMENT
The key risks under SysOpen Digia's risk management are customer, personal,
project, data security, integration, and goodwill risks.
Measures for managing customer risks include active development of the customer's
corporate structure and prevention of the generation of potential risk positions.
Customer structure and strategic customer relationships are expected to develop
favourably owing to the unified implementation of customer management processes
and operating models.
Personnel risks are evaluated and managed using a quarterly goal and development
discussion process in which key personnel participate. To develop personnel
commitment, the efficiency of internal communications is improved systematically,
utilising monthly personnel events and making the management more visible. A job
satisfaction survey will be conducted at the beginning of 2007. On the basis of
the resulting feedback, the Group's internal procedures will be developed to
improve working conditions and job satisfaction further. With regard to the job
satisfaction survey, a quarterly pulse method for recognising immediate
development needs in all of our business areas is still under development.
By auditing the key projects of our business divisions we aim to enhance the
management of the Group's project risks and ensure successful project deliveries
for customers. In addition, the Group's certified quality systems have been re-
evaluated and approved, and project delivery reporting procedures made more
efficient; further investments will be made to ensure delivery capacity and the
faultlessness of projects.
Data security audits are carried out to manage data security risks. The company
continually is developing its working models, and practices and processes that
promote data security. The risks associated with the integration of business
operations, unified operating models and best practices, and their integrated
development are managed in the Management Group. The integration of corporate
culture is a continuous process, and requires sustained and determined efforts at
all levels. With respect to IFRS-compliant accounting policies, goodwill and the
related impairment tests have been included in the risks to be monitored as part
of careful and forward-looking risk management practices in financial management.
PERSONNEL, MANAGEMENT, AND ADMINISTRATION
At the end of 2006, the number of personnel stood at 1,087, showing an increase
of 294 persons or 37.1 per cent from the end of the previous year (2005: 793
persons). The average number of personnel during 2006 was 981, an increase of 250
persons or 34.2 per cent (2005: 731).
Reported employee turnover came to 10.2 per cent in 2006 (2005: 10.6 per cent).
Employees by function, year-end 2006:
Telecommunications 48%
Finance and Services 25%
Industry and Trade 22%
Administration and management 5%
At the end of 2006, one per cent of SysOpen Digia personnel worked abroad.
The Annual General Meeting on 9 March 2006 elected the following to the Board of
Directors: Pekka Sivonen (Chairman), Kari Karvinen (Vice Chairman), Pekka
Eloholma, Matti Mujunen, Mikko Terho, and Pertti Kyttälä. Jari Mielonen is the
CEO of the company, and Seppo Laaksonen is deputy CEO. Pekka Eloholma resigned
from the Board of Directors of SysOpen Digia Plc on 25 April 2006 after being
appointed as CEO of AffectoGenimap, starting on 1 September 2006.
Authorised public accountancy firm KPMG Oy Ab was chosen as the Group's auditor,
with Ari Ahti, Authorised Public Accountant, as the principal auditor.
CORPORATE AND BUSINESS ACQUISITIONS
SAMSTOCK OY
SysOpen Digia acquired the entire share capital of Samstock Oy on 26 April 2006.
With this acquisition, SysOpen Digia strengthened its operations in the financial
sector in Finland and the other Nordic countries in accordance with its strategy.
The acquisition will enhance SysOpen Digia's product and solution offering
significantly in this market segment.
Samstock is a leading financial software company creating duplicable software
applications for the needs of the investment market. The company's main product
areas are asset management and private banking, securities trading back-office,
mutual fund management, and custody operations. The company's customers include
banks, brokerage firms, and investment fund companies, as well as institutional
investors in the Nordic countries.
Samstock's business operations have been integrated into the Group's Finance and
Services division. Samstock Oy was renamed 'SysOpen Digia Financial Software Oy'.
'Samstock' will remain the brand name within SysOpen Digia Group.
SENTERA PLC
SysOpen Digia acquired a total of 77.39 per cent of the share capital and votes
of Sentera from the main shareholders of Sentera Oy on 31 May 2006. The purchase
price was EUR 3.20 per share, consisting of a share and cash consideration. In
June, SysOpen Digia made a redemption offer in the manner prescribed in the
Finnish Securities Market Act for all remaining Sentera shares and presented a
redemption claim in accordance with the Finnish Companies Act after SysOpen
Digia's ownership exceeded 90% of all Sentera shares (excluding own shares held
by Sentera).
The arbitration tribunal appointed by the Redemption Committee of the Central
Chamber of Commerce confirmed on 26 September 2006 that SysOpen Digia Plc's right
to redeem the shares of Sentera Plc held by other shareholders than SysOpen Digia
was not in dispute and that SysOpen Digia had the right to obtain title to the
shares of Sentera that are to be redeemed by depositing collateral for the
payment of the redemption price approved by the tribunal. On the same day,
SysOpen Digia deposited collateral as referred to in Chapter 14, Section 21 of
the Finnish Companies Act (29.9.1978/734) and approved by the arbitration
tribunal. Thus, SysOpen Digia has, in accordance with Chapter 14, Section 21 of
the Finnish Companies Act (29.9.1978/734), obtained title to all shares of
Sentera that are to be redeemed. With the exception of Sentera's own shares,
SysOpen Digia owns all Sentera shares. Sentera was delisted from the NM list of
the Helsinki Stock Exchange on the same day. The share subscription period for
all Sentera stock option rights terminated on 19 September 2006, and trading of
the stock option rights terminated on 12 September 2006.
On 6 October 2006, the company published a stock exchange announcement stating
that the Finnish Financial Supervision Authority had granted Sentera Plc an
exemption from the obligation to publish an interim report for the period 1
January - 30 September 2006 in accordance with Chapter 2, Section 11 of the
Finnish Securities Market Act. In its decision, the Finnish Financial
Supervision Authority took into account that the amount of the redemption price
that is to be determined in the redemption procedure has, in general and
according to legal practice concerning the claim for redemption referred to in
the Finnish Companies Act, been determined on the basis of the moment when the
claim for redemption was presented. SysOpen Digia presented its claim for
redemption on 19 June 2006, and Sentera published an interim report for the
period 1 January - 30 June 2006. As the claim for redemption was presented within
the above-mentioned time period, the position of the investors cannot be
considered to be endangered.
Through acquiring Sentera, SysOpen Digia is striving to expand and strengthen
SysOpen Digia's integrated business solutions. This acquisition will provide
SysOpen Digia with a seasoned product business and strengthen its high-added-
value professional services in the following areas:
- Enterprise mobile solutions
- ERP and ERP integration
- Supply chain management
- Multi-channel solutions
- Business intelligence solutions
- Bespoke solutions
- Application and service outsourcing
The transaction will strengthen SysOpen Digia's business domain know-how,
especially in industry, trade, and logistics verticals. This will give it a
unique position in the integrated retail value chain by strengthening its full
product and service range.
Sentera's business operations have been integrated into SysOpen Digia Group's
Industry and Trade and Finance and Services divisions. The integration of Sentera
with SysOpen Digia will provide good opportunities for business synergies. Annual
synergy benefits are expected to exceed one million euros, effective in the 2007
fiscal year. As part of the process of incorporation, Sentera Plc was renamed
SysOpen Digia Industry and Trade Ltd.
GROUP STRUCTURE AND ORGANISATION
At the end of 2006, the SysOpen Digia Group consisted of parent company SysOpen
Digia Plc and the following active subsidiaries: SysOpen Digia Integration Ltd
(parent company holding: 100%), SysOpen Digia Smartphone Ltd (100%), SysOpen
Digia Industry and Trade Ltd (formerly Sentera Plc) (100%), SysOpen Digia
Financial Software Ltd (formerly Samstock Oy) (100%), and SysOpen Digia Object
Team Ltd (current holding: 100%). In addition, SysOpen Digia Integration Ltd has
a wholly owned active subsidiary, SysOpen Digia Service Ltd. The company also has
inactive subsidiaries, and has begun their voluntary dissolution in order to
simplify the Group's structure.
SysOpen Digia has a common Group administration and in the third quarter the
company's business operations were divided among three business divisions:
Telecommunications, Finance and Services, and Industry and Trade. During October,
joint discussions with employees were carried out in the Group administration,
due to overlap in operations as a result of corporate restructuring. As a
consequence of the negotiations, the number of staff in Group administration was
reduced by four.
EVENTS AFTER THE 2006 FINANCIAL YEAR
There were no significant events.
SHAREHOLDERS' MEETINGS
Annual General Meeting of 9 March 2006
Convened on 9 March 2006, the Group's Annual General Meeting (AGM) adopted the
financial statements for 2005; discharged Board members and the CEO from
liability; and, pursuant to the Board's proposal, confirmed the profit
distribution for 2005 and Board emoluments, and elected the new Board of
Directors.
In addition, the Annual General Meeting decided:
1) To reduce the share premium account so that all of the funds in the share
premium accounts, EUR 39.735.545,65, shall be transferred to a contingency
reserve included in unrestricted shareholders' equity and administered by the
General Meeting. The Registration Authority has given its permission for the
implementation of this decision.
2) To authorise the Board of Directors under certain conditions to make decisions
regarding the issue of one or more convertible bonds or stock options and/or
regarding an increase of share capital through one or more rights issues. The
authorisation shall be effective for one year from the date of the General
Meeting's decision. In total, 1.798.252 shares have been used in exercise of the
authorisation as a private placement in connection with the Sentera transaction.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of SysOpen Digia has established two committees: a
Compensation Committee and an Inspection Committee.
The purpose of the Compensation Committee is to plan remuneration systems and
study how well they work in achieving the company's goals, ensure that decision-
making remains objective, and ensure that remuneration systems are transparent
and in order. The members of the Compensation Committee are Pekka Sivonen
(Chairman), Kari Karvinen, and Mikko Terho. In financial year 2006, the
Compensation Committee convened twice.
The purpose of the Inspection Committee is to assist the Board of Directors in
ensuring that the company's financial reporting, accounting methods, financial
statements, and other financial information provided by the company are balanced,
transparent, and clear. The members of the Inspection Committee are Pertti
Kyttälä (Chairman), Matti Mujunen, and Mikko Terho, who are Board members
independent of the company. In the 2006 financial year, the Inspection Committee
convened three times.
SHARE CAPITAL AND SHARES
The nominal value of a share in the company is EUR 0.1. The number of shares at
the end of 2006 totalled 20,311,670.
On 31 December 2006, SysOpen Digia had a total of 3,520 shareholders. The 10
largest shareholders were:
Shareholder Shares and votes
Pekka Sivonen 14.4%
Evli Bank Plc 8.3%
Kari Karvinen 7.8%
Matti Savolainen 6.5%
Jorma Kylätie's estate 4.7%
OP-Suomi pienyhtiöt -sijoitusrahasto 3.9%
Varma Mutual Pension Insurance Company 3.7%
UMO Capital Oy 2.2%
Veikko Laine Oy 2.1%
OMXBS/Skandinaviska Enskilda Banken Ab 2.1%
The distribution of holdings by number of shares held was as follows on 31
December 2006:
Number of shares Percentage of Percentage of
holdings shares and votes
1 - 100 23.3% 0.3%
101 - 1,000 52.7% 4.5%
1,001 - 10,000 20.9% 11.1%
10,001 - 100,000 2.4% 13.3%
100,001 - 1,000,000 0.6% 33.8%
1,000,001 - 3,000,000 0.1% 37.0%
Total number of shares: 20,311,670
The distribution of shareholding on 31 December 2006, by sector, was:
Percentage of Percentage of
holdings shares
Businesses 6.6% 14.5%
Financing and insurance institutions 0.5% 17.7%
Public corporations 0.1% 3.8%
Not-for-profit organisations 0.3% 0.5%
Households 92.0% 62.0%
Foreign holding 0.5% 1.5%
SHARE PERFORMANCE ON THE HELSINKI EXCHANGES DURING 2006
SysOpen Digia Plc shares have been quoted on the Nordic Exchange under the
Information technology IT Services sector for the 2006 financial year. The
company's trading code is SYS1V. The lowest reported share quotation in 2006 was
EUR 3.00 and the highest EUR 4.97. The share closed at EUR 3.42 on the final
trading day of 2006. The trade-weighted average was EUR 3.75. The Group's market
capitalisation totalled EUR 65.669.028 at the end of the financial year.
In the 2006 financial year, the company received nine notifications in accordance
with Chapter 2006, Section 9 of the Securities Market Act:
1. Osuuspankkikeskus Osk (OPK) notified SysOpen Digia on 13 March 2006 that the
total percentage of the votes and share capital of SysOpen Digia controlled by
OPK, its subsidiaries, and investment funds controlled by its subsidiaries
exceeded five per cent.
2. Columbia Wanger Asset Management, L.P. notified the company on 4 March 2006
that the total percentage of SysOpen Digia votes and share capital it controls
exceeded five per cent.
3. Osuuspankkikeskus Osk (OPK) notified SysOpen Digia on 11 May 2006 that the
total percentage of SysOpen Digia votes and share capital controlled by OPK, its
subsidiaries, and investment funds controlled by its subsidiaries fell below five
per cent.
4. Jorma Kylätie's estate notified SysOpen Digia on 5 June 2006 that the total
percentage of its SysOpen Digia votes and share capital fell below five per cent.
5. Pekka Päiviö Sivonen notified SysOpen Digia on 5 June 2006 that the total
percentage of his votes and share capital of SysOpen Digia fell below 15 per
cent.
6. Pekka Päiviö Sivonen notified SysOpen Digia on 21 September 2006 that he had
signed a forward contract upon the maturity of which his share of SysOpen Digia
Plc's votes and share capital will exceed 20%.
7. Evli Bank Plc notified SysOpen Digia on 21 September 2006 that the percentage
of SysOpen Digia Plc votes and share capital held by Evli Bank exceeded five per
cent after share trading on that day. Evli Bank also announced that its share of
SysOpen Digia Plc's votes and share capital would fall below five per cent as a
result of a forward contract signed on 21 September 2006.
8. Columbia Wanger Asset Management, L.P. notified the company on 28 September
2006 that the total percentage of SysOpen Digia votes and share capital in its
control had fallen below five per cent.
9. Osuuspankkikeskus Osk (OPK) notified SysOpen Digia on 11 October 2006 that the
total percentage of SysOpen Digia votes and share capital controlled by OPK had
exceeded five per cent temporarily, promptly falling below five per cent again as
a result of a share transaction conducted on the same day (10 October 2006).
STOCK OPTION SCHEMES
Option scheme 2003
Under the 2003 option scheme, 670,000 warrants were originally issued; they are
distributed as follows: 210,000 warrants for 2003A, 160,000 warrants for 2003B,
150,000 warrants for 2003C, and 150,000 warrants for 2003D. All of the warrants
have been exercised via subscription. The share subscription period for the 2003A
series was from 2 May 2004 to 31 October 2005 (and thus has expired), for 2003B
warrants was from 1 November 2004 to 31 October 2006 (and thus has expired), for
2003C warrants is from 1 November 2005 to 31 October 2007, and for 2003D warrants
is from 1 November 2006 to 31 October 2008. The current dividend-adjusted share
subscription price for series 2003C is EUR 3.70 per share, and for 2003D is EUR
4.27 per share. Dividends paid will be deducted from the subscription prices in
accordance with the terms and conditions of the scheme. On 31 December 2006,
SysOpen Digia Plc's wholly owned subsidiary SysOpen Digia Partners Oy held a
total of 47,582 warrants under the 2003 option scheme. Warrants in the 2003C
series have been listed on the Helsinki Stock Exchange from 1 November 2005, and
2003D warrants from 15 November 2006.
By 31 December 2006, 316,429 new shares had been subscribed for under the 2003
option scheme. The shares were subscribed for using 172,515 of the now expired
2003A warrants, 143,114 of the now expired 2003B warrants, and 800 of the 2003C
warrants.
Option scheme 2005K
A total of 663,049 warrants were originally issued under the 2005K option scheme,
105,408 of which were marked 2005K1 and 557,641 of which will be marked 2005K2.
All of the warrants have been subscribed for. The warrants can be used to
subscribe for an aggregate maximum of 663,049 SysOpen Digia Plc shares with a
nominal value of EUR 0.10.
The share subscription price for 2005K1 warrants was EUR 1.21, and for 2005K2
warrants it is EUR 2.36 (dividend-adjusted). On the record date for each
distribution of dividends, the share subscription price will be reduced by the
amount of dividends for which the decision to distribute has been made between 1
June 2005 and the date of subscription. However, the minimum subscription price
always will be the nominal value of the share. The share subscription period for
2005K1 warrants started on the date of recording of the 2005K warrants in the
Trade Register, 12 August 2005, and will end on 31 December 2007; the
subscription period for 2005K2 warrants started on 1 January 2006 and will end on
31 December 2007. The 2005K1 warrant series could be used only for subscription
for shares. On 31 December 2006, SysOpen Digia Plc's wholly owned subsidiary
SysOpen Digia Partners Oy held a total of 5,657 warrants under the 2005K2 option
scheme.
All warrants in the 2005K1 series (105,408 warrants) have been exercised to
subscribe for shares. By 31 December 2006, 8,631 new shares had been subscribed
for under the 2005K2 option scheme. The 2005K2 options have been quoted on the
Helsinki Stock Exchange since 2 January 2006.
Option scheme 2005
In total, 900,000 warrants were issued under the 2005 option scheme, 300,000 of
which are marked 2005A, 300,000 marked 2005B, and 300,000 marked 2005C. The
warrants may be used to subscribe for an aggregate maximum of 900,000 SysOpen
Digia Plc shares with a nominal value of EUR 0.10.
The share subscription price for warrants in the 2005A series is EUR 4.28
(dividend-adjusted), for 2005B warrants it is EUR 3.98, and for 2005C warrants
the trading-weighted average price of a SysOpen Digia Plc share on the Helsinki
Stock Exchange in the 20 trading days following publication of the Q1 2007
interim report. On the date of record for each distribution of dividends, the
share subscription price will be reduced by the dividend amount for which the
decision to distribute has been made between the beginning of the price-setting
period and the date of subscription. However, the minimum subscription price
always will be the nominal value of the share. The subscription period for 2005A
warrants is 1 November 2007 to 30 November 2009, for 2005B warrants is 1 November
2008 to 30 November 2010, and for the 2005C series is 1 November 2009 to 30
November 2011. As a result of share subscriptions exercising 2005A, 2005B, and
2005C warrants, the share capital of SysOpen Digia Plc may increase by a maximum
of EUR 90,000, and the number of shares may increase by, at most, 900,000 new
shares. On 31 December 2006, SysOpen Digia Plc's wholly owned subsidiary SysOpen
Digia Partners Oy held a total of 512,000 warrants under the 2005 option scheme.
On 31 December 2006, a total of 1,748,210 warrants issued by SysOpen Digia
remained outstanding. Shares subscribed for using the warrants represent a
maximum of 7.92 per cent of the company's share capital and voting rights after a
potential increase in share capital. Of all valid warrants, SysOpen Digia
Partners held a total of 565.239 warrants on 31 December 2006. The dilution
effect of the distributed stock options was a maximum of 5.50 per cent on 31
December 2006.
Helsinki, 8 February 2007
SYSOPEN DIGIA PLC
Board of Directors
CONTACT POINT FOR FURTHER INFORMATION
Jari Mielonen, President and CEO,
telephone: +358 40 703 8383; email: jari.mielonen@sysopendigia.com
The financial statements and associated slide show will be available at
www.sysopendigia.fi in the 'Investors' section from 11:00am.
DISTRIBUTION
Helsinki Stock Exchange
Key media
APPENDICES
Consolidated income statement by quarter, IFRS
Segment information, IFRS
Consolidated balance sheet, IFRS
Changes in shareholders' equity
Consolidated cash flow statement, IFRS
Consolidated income statement by quarter, IFRS
Consolidated key figures, IFRS
The financial statement data are audited.
CONSOLIDATED INCOME STATEMENT, EUR 1000
Q4/2006 Q4/2005 Change 2006 2005 Change
, % , %
Turnover 26 620.8 17 927.2 48.49 84 968.1 60 525.5 40%
%
Other operating 80.1 32.8 144% 280.2 230.1 22%
income
Materials and -1 939.8 -989.0 96% -4 699.6 -3 320.6 42%
services
Depreciation -1 304.1 -1 033.9 26% -4 557.3 -3 318.0 37%
and write-downs
Other operating -20 -14 45% -67 -49 36%
expenses 471.5 076.0 637.4 887.8
EBIT 2 985.4 1 861.2 60% 8 354.1 4 229.2 98%
Financial -646.6 -203.8 217% -1 659.3 -897.1 85%
income (net)
Earnings before 2 338.8 1 657.4 41% 6 694.8 3 332.1 101%
tax
Income taxes -713.5 -449.9 59% -1 827.6 -977.5 87%
Profit for the 1 625.3 1 207.5 35% 4 867.2 2 354.6 107%
period
Distribution:
Parent company 1 629.8 1 199.5 36% 4 854.1 2 331.7 108%
shareholders
Minority -4.5 8.0 -156% 13.1 22.9 -43%
Earnings per 0.08 0.07 14% 0.25 0.14 79%
share (EUR)
Earnings per 0.08 0.07 14 % 0.25 0.14 79 %
share, diluted
(EUR)
SEGMENT INFORMATION, EUR 1000
TURNOVER Q4/2006 Q4/2005 Change Q1 to Q1 to Change
, % Q4/2006 Q4/2005 , %
Telecommunicatio 11 931 12 416 -4% 43 618 38 735 13%
ns
Finance and 7 386 4 213 75% 23 633 16 604 42%
Services
Industry and 7 303 1 298 463% 17 717 5 185 242%
Trade
SysOpen Digia 26 621 17 927 48% 84 968 60 525 40%
Group, total
EBIT Q4/2006 Q4/2005 Change Q1 to Q1 to Change
, % Q4/2006 Q4/2005 , %
Telecommunicatio 1 562 1 607 -3% 4 018 4 326 -7%
ns
Finance and 479 313 53% 2 322 2 090 11%
Services
Industry and 942 -142 2 014 -392
Trade
Restructuring - 83 -1 795 -100%
costs
SysOpen Digia 2 985 1 861 60% 8 354 4 229 98%
Group total
CONSOLIDATED BALANCE SHEET, EUR 1000
Assets 31 Dec. 2006 31 Dec. Change, %
2005
Non-current assets
Intangible assets 103 210.0 63 569.4 62%
Tangible assets 3 251.6 3 116.8 4%
Investments 608.4 589.3 3%
Deferred tax receivable 2 909.9 1 621.1 80%
Total non-current 109 979.9 68 896.6 60%
assets
Current assets
Inventories
Current receivables 24 836.9 14 745.8 68%
Financial assets 2 778.3 1 720.5 61%
available for sale
Cash and cash 8 727.3 10 605.4 -18%
equivalents
Total current assets 36 342.5 27 071.7 34%
Total assets 146 322.4 95 968.4 52%
Shareholders' equity 31 Dec. 2006 31 Dec. Change, %
and liabilities 2005
Share capital 2 031.2 1 839.5 10%
Share premium account 6 729.5 39 718.0 -83%
Unrestricted, invested 39 735.5 0.0
shareholders' equity
reserve
Other reserves 5 203.8 5 203.8 0%
Revaluation reserve 0.0 166.2 -100%
Translation difference -6.6 23.1 -129%
Accrued earnings 4 458.0 2 796.6 59%
Profit for the period 4 854.1 2 331.7 108%
Shareholders' equity 63 005.5 52 078.9 21%
belonging to parent
company shareholders
Minority interest 113.8 110.7 3%
Shareholders' equity, 63 119.4 52 189.6 21%
total
Liabilities
Non-current 56 081.5 21 296.2 163%
interest-bearing
liabilities
Deferred tax 3 822.3 3 211.8 19%
liabilities
Total non-current 59 903.8 24 508.0 144%
liabilities
Current 582.6 4 759.2 -88%
interest-bearing
liabilities
Other current 22 716.7 14 511.5
liabilities
Total current 23 299.2 19 270.7 21%
liabilities
Total liabilities 83 203.0 43 778.7 90%
Shareholders' equity 146 322.4 95 968.4 52%
and liabilities
STATEMENT ON CHANGES IN SHAREHOLDERS' EQUITY, EUR 1000
CHANGES IN SHAREHOLDERS' EQUITY
EUR 1000
a b c d e f g h
Shareholders' 926 7 102 0 23 85 3 168 122 11 426
equity, 1
Jan. 2005
Avail.-for-sa
le
investments:
Gains/losses 81 81
from fair
value
measurement
Other 649 649
Items 0 0 0 0 81 649 730
recorded
directly in
shareholders'
equity
Profit for 2 331 24 2 355
the period
Total income 0 0 0 0 0 2 331 24 2 355
and expenses
recorded
during the
period
Increase of 914 32 616 33 530
share capital
Dividend -1 019 -1 019
payment
Other 5 204 -35 5 169
Shareholders' 1 840 39 718 5 204 23 166 5 128 111 52 189
equity, 1
Jan. 2006
a b c d e f g h
Shareholders' 1 840 39 718 5 204 23 166 5 128 111 52 189
equity, 1
Jan. 2006
Avail.-for-sa 0
le
investments:
Gains/losses -166 -166
from fair
value
measurement
Other 12 255 0 264
Items 12 0 0 0 -166 255 0 97
recorded
directly in
shareholders'
equity
Profit for 4 854 13 4 867
the period
Total income 0 0 0 0 0 4 854 13 4 867
and expenses
recorded
during the
period
Increase of 180 6 723 6 903
share capital
Dividend -920 -10 -930
payment
Other -39 39 736 -23 -8 -7
712
SHAREHOLDERS' 2 031 6 729 44 939 0 0 9 305 114 63 119
EQUITY, 31
DEC. 2006
a = share capital
b = share premium account
c = other reserves, and unrestricted and invested shareholders' equity reserve
d = translation difference
e = revaluation reserve
f = accrued earnings
g = minority interest
h = total shareholders' equity
CONSOLIDATED CASH FLOW STATEMENT, EUR 1000
Cash flow from operations: 1 Jan. 2006 - 1 Jan. 2005
31 Dec. 2006 - 31 Dec.
2005
Profit for the period 4 854 2 355
Adjustments to profit for the period 8 323 3 734
Change in working capital -4 093 18
Interest paid -1 917 -264
Interest income 271 2
Taxes paid -1 682 -153
Cash flow from business operations 5 756 5 691
Cash flow from investments:
Investments in tangible and -1 876 -2 288
intangible assets
Capital gains on tangible and 376 1
intangible assets
Other investments 0 -4
Acquisition of subsidiaries -34 229 18 448
Capital gains on other investments -1 214
Dividends received from investments 12 5
Interest income from investments 0 381
Cash flow from investments -35 718 16 757
Cash flow from financing:
Rights issue 320 719
Short-term loan instalments -41 208 0
Long-term loan instalments -21 875 -40 810
Taking out of short-term loans 38 000 0
Taking out of long-term loans 55 000 25 000
Dividends paid and other profit -930 -1 020
distribution
Cash flow from financing 29 307 -16 112
Change in liquid assets -655 6 336
Liquid assets at period start 12 326 5 909
Change in market value -166 81
Change in liquid assets -655 6 336
Liquid assets at period end 11 505 12 326
CONSOLIDATED INCOME STATEMENT BY QUARTER, EUR 1000
Q4/2006 Q3/2006 Q2/2006 Q1/2006 Q4/2005
Turnover 26 621 21 661.0 19 760.4 16 925.9 17 927.2
Other operating 80 140.5 24.3 35.3 32,8
income
Materials and -1 940 -1 170.9 -1 032.9 -556.0 -989.0
services
Depreciation and -1 304 -1 280.9 -1 059.6 -912.6 -1 033.9
write-downs
Other operating -20 472 -16 629.4 -16 -13 -14 076.0
expenses 677.7 858.7
EBIT 2 985 2 720.3 1 014.5 1 633.9 1 861.2
Financial income -647 -618.9 -355.9 -37.9 -203.8
(net)
Earnings before tax 2 339 2 101.3 658.6 1 596.0 1 657.4
Income taxes -713 -506.6 -173.2 -434.4 -449.9
Profit for the period 1 625 1 594.8 485.4 1 161.6 1 207.5
Distribution:
Parent company 1 630 1 586.7 479.6 1 157.9 1 199.5
shareholders
Minority -4 8.0 5.8 3.7 8.0
Earnings per share 0.08 0.08 0.03 0.06 0.07
(EUR)
Earnings per share, 0.08 0.08 0.02 0.06 0.07
diluted (EUR)
CONSOLIDATED KEY FIGURES
2006 2005
Scope of operations
Turnover 84 968 60 525
- change from previous year 40% 131%
Invested capital, on average 119 783 78 245
Number of personnel at end of year 1 087 793
Average number of personnel 981 731
Profitability
EBIT 8 354 4 229
- relative to turnover 10% 7%
Earnings before tax 6 695 3 332
- relative to turnover 8% 6%
Profit for the period 4 854 2 332
- relative to turnover 6% 4%
Return on equity (%) 8% 5%
Return on investment (%) 9% 6%
Financing and financial standing
Interest-bearing liabilities 56 664 26 055
Financial assets + cash and bank 11 506 12 326
receivables
Net gearing (%) 72% 26%
Equity ratio (%) 44% 56%
Cash flow from business operations 5 756 5 691
Earnings per share (EUR), undiluted 0.25 0.14
Earnings per share (EUR), diluted 0.25 0.14
Equity per share 3.10 3.15
Lowest share price 3.00 3.43
Highest share price 4.97 4.93
Average share price 3.75 4.36
Market capitalisation 69 669 85 170
The weighted average number of shares during the financial year, adjusted for
share issues, was 19,440,834. The weighted average number of shares during the
financial year, adjusted for dilution, was 19,650,916. The number of shares
outstanding at the end of 2006 was 20,311,670.
The company does not hold any of its own shares.
The Group does not have any liabilities arising from derivative contracts.