Aldata Solution Oyj STOCK EXCHANGE RELEASE 1 November 2007 at 9.00 a.m. (EET) ALDATA SOLUTION INTERIM REPORT JANUARY - SEPTEMBER 2007 (unaudited) Aldata in Q3 2007 (compared to Q3 2006) The quarterly figures are prepared in accordance with the principles of the International Financial Reporting Standards (IFRS). - Net sales decreased by 16.4% to EUR 16.6 million (EUR 19.9 million). - Gross profit decreased by 13.0% to EUR 14.1 million (EUR 16.2 million). - Operating profit, EBIT, decreased to EUR -1.8 million (EUR 1.5 million) - Profit before taxes was EUR -2.0 million (EUR 1.6 million). - Net profit was EUR -1.9 million (EUR 0.9 million) and earnings per share, EPS, were -0.027 euros (0.014 EUR). Message from CEO Bertrand Sciard:"After 2 months as the CEO of Aldata I have three clear messages from our customers and employees to share with our shareholders. 1. Our product, services and the majority of our people are world leading in our sector 2. The uncertainty of ownership change has caused major distraction for all this year 3. We have significant opportunities for profitable growth to be executed correctly Our major assets are the quality, resources, and experience of our people that are delivered to our customers via our products and services. Each customer I have met has made this very clear to me and has described the global leadership potential for our business. 2007 however has been a period of uncertainty for all as potential ownership change has affected investment planning, customer contracts, and employee morale. This period will now come to an end as the benefits of Symphony Technology's confidence in Aldata, our new management and organizational changes, and our plans for profitable growth are communicated internally and externally and then executed effectively in the market. Q3 2007 results reflect a pause in the business as we analyzed the details of our costs, assessed our opportunities, and planned the changes to return to profitable growth. The figures show a decline in Net Sales and a significant operating loss. Q4 2007 will see the first stages of the execution of our plans to streamline our processes and operations, focus on specific market development, and lay the groundwork for profitable growth. We will work with customers to meet existing expectations for Q4 and to ensure stronger and longer term business in 2008 and beyond. In order to bring Aldata back to profitability, we have today announced a plan of actions to significantly reduce our cost base. Details of the restructuring are presented in a separate Stock Exchange release. Although the planned actions will negatively impact the fourth quarter results, they will provide a solid foundation from which we can grow the business profitably in the coming quarters and years." July - September 2007 financial performance The Group's net sales were EUR 16.6 million (EUR 19.9 million), which represents a decline of 3.3 million euros compared to third quarter net sales in the previous year. Product sales, which include licences for standard products, licences for customer specific developments, and maintenance revenues, accounted for 38% (56%) of total net sales. Consulting services accounted for 50% (36%), and third party licences and hardware accounted for 12% (8%). The Group's gross profit was EUR 14.1 million (EUR 16.2 million), which represents an 85% (81%) gross margin. Operating profit, EBIT, totalled EUR -1.8 million (EUR 1.5 million) and operating profit excluding expenses for option plans was EUR -1.7 million (EUR 1.5 million). Pre-tax profit was EUR -2.0 million (EUR 1.6 million), net profit was EUR -1.9 million (EUR 0.9 million) and earnings per share, EPS, were -0.027 euros (0.014 euros). Research and development costs in the third quarter totalled EUR 2.4 million (EUR 3.0 million), of which EUR 0.2 million (EUR 0.2 million) or 8% were capitalized. EUR 0.1 million (EUR 0.0 million) of capitalized development costs were amortized. Aldata's reported order backlog includes product and third party product sales that will be recognized as revenues during the following twelve months. At the end of September 2007, the order backlog was EUR 19.4 million (EUR 19.2 million at the end of September 2006 and EUR 17.9 million at the end of June 2007). Business units Net sales of the Supply Chain Management (SCM) Software business unit were EUR 12.4 million (EUR 17.3 million). The gross profit was EUR 11.4 million (EUR 14.1 million) and the operating profit, EBIT, was EUR -1.4 million (EUR 1.4 million). Net sales of the In-Store Software business unit were EUR 4.2 million (EUR 2.7 million). The gross profit was EUR 2.7 million (EUR 2.1 million) and the operating profit, EBIT, was EUR 0,3 (EUR 0.2) million. There were no internal sales between the Group's business segments. Unallocated costs, the Group's shared items netted, decreased the Group's operating profit, EBIT, by EUR 0.6 million (EUR 0.1 million). January - September 2007 financial performance The Group's net sales were EUR 54.1 million (EUR 63.5 million), which represents a decline of EUR 9,4 million compared to first three quarters net sales in the previous year. Product sales, which include licences for standard products, licences for customer specific developments and maintenance revenues, accounted for 41% (50%) of total net sales. Consulting services accounted for 49% (42%) and third party licences and hardware accounted for 10% (7%). The Group's gross profit was EUR 44.5 million (EUR 51.3 million), which represents a 82% (81%) gross margin. Operating profit, EBIT, totalled EUR -5.3 million (EUR 4.3 million) and operating profit excluding expenses for option plans was EUR -4.9 million (EUR 4.7 million). Pre-tax profit was EUR -5.6 million (EUR 4.2 million), net profit was EUR -5.7 million (EUR 2.2 million) and earnings per share, EPS, were -0.083 euros (0.032 euros). Research and development costs in the financial period totalled EUR 7.9 million (EUR 9.7 million), of which EUR 0.5 million (EUR 0.5 million) or 6 % were capitalized. EUR 0.3 million (EUR 0.1 million) of capitalized development costs were amortized. Taxes for the period were EUR 0.1 million (EUR 2.0 million). Finance and investments Cash flow from operating activities in the first three quarters of the year was EUR -0,9 million (EUR -3.5 million) and net cash flow was EUR 2.0 million (EUR -3.7 million). At the end of September 2007, Aldata Group's cash, cash equivalents and marketable securities amounted to EUR 7.7 million (EUR 5.5 million) and total assets were EUR 50.4 million (EUR 50.8 million). The Group had interest-bearing debt EUR 3.5 million (EUR 0.0 million) and interest-bearing net liabilities totalled EUR -3.2 million (EUR -4.9 million). Short term receivables totalled EUR 27.4 million (EUR 31.2 million). The Group's solvency ratio was 51.0 % (58.5%), gearing was -12.7 % (-16.7%), and shareholders' equity per share was EUR 0.369 (EUR 0.428). The Group's capital expenditure on hardware and software purchases amounted to EUR 1.9 million (EUR 1.2 million) in the first three quarters of the year. A total of EUR 0.5 million (EUR 0.5 million) of development costs were capitalized during the period. Research and Development Aldata's research and development costs were EUR 7.9 million (EUR 9.7 million) and made up 14.6% (15.3%) of net sales. A total of EUR 0.5 million (EUR 0.5 million) of development costs were capitalized during the period. EUR 0.3 million (EUR 0.1 million) of capitalized development costs were amortized. At the end of the review period 177 (178) employees were involved in R&D activities. This represents 29% (28%) of the Group's total personnel. Aldata's R&D centres are located in Paris, France and in Vantaa, Finland. Personnel Aldata Group employed 616 (625) persons at the end of September 2007, and on average had 630 (609) employees during the period. 30 September.2007 30 September 2006 By business unit Persons % Persons % SCM Software 495 80 511 82 In-Store Software 110 18 103 16 Group Administration 11 2 11 2 Total 616 100 625 100 Approximately 53% of personnel were employed by Aldata companies in France, 15% in Finland, 12% in Germany, 6% in Sweden, 5% in the US, 4% in Slovenia, 4% in the UK and 1% in Russia. Share performance The highest price of the Aldata Solution Oyj share during January - September 2007 was EUR 1.90 and the lowest price EUR 1.27. The average price was EUR 1.60 and the closing price EUR 1.37. The trading volume on the Helsinki Stock Exchange was EUR 68.8 million and altogether 42.9 million shares were traded, which represents 63% of the shares. Aldata Solution Oyj has 68.6 million shares outstanding. The number of shares outstanding has increased by 457.900 shares during the period. The number of shareholders was 4891 and the free float was 99.8 % of the share capital at the end of September 2007. A total of 49.6 % of Aldata Solution Oyj's shares were owned by foreign investors at the end of the period. Outlook Aldata will in the fourth quarter 2007 implement a restructuring plan in order to lower its cost base and streamline its organizational structure. All operating expenses of the Company have been analyzed carefully and multiple measures to cut costs will be implemented. The restructuring plan includes a personnel reduction of up to 100 employees, covering all areas of the Company. The other largest item is a significant reduction in office facilities and administrative overheads. The estimated financial impact of these measures is approximately EUR 6 million of non-recurring costs and provisions. These costs will impact the financial results for the fourth quarter of 2007. The cash impact in the fourth quarter of these costs is approximately EUR 3 million. The impact of the restructuring process on Q4 business is difficult to quantify exactly so the financial guidance for the last quarter is provided as a range of results. Depending on the effect of the restructuring process to business activity, the Company expects its fourth quarter Net Sales to be EUR 20-23 million and operating profit (EBIT) excluding restructuring costs to be positive. In total, the full-year 2007 Net Sales are expected to be EUR 74-77 million and operating loss (EBIT) including restructuring costs to be EUR 9-11 million. Based on the plan, the net annualized cost improvement is estimated to be approximately EUR 8 million and will have full annual impact in 2008. Helsinki, October 31, 2007 Aldata Solution Oyj Board of Directors Further information: Aldata Solution Oyj, Bertrand Sciard, President and CEO, tel. +358 10 820 8016 / Aldata Solution Oyj. Aldata Solution Oyj, Thomas Hoyer, CFO, tel. +358 10 820 8010 Aldata will hold a press conference for the media and financial analysts in Helsinki on 1 November, at 12.00 (EET) at the Scandic Hotel Simonkenttä (Simonkatu 9) in the Espa cabinet on the ground floor. The presentation material will be published on the Group's website at www.aldata-solution.com Aldata in brief Aldata Solution is one of the global leaders in supply chain software for retail, wholesale and logistics companies. The company's comprehensive range of Supply Chain Management and In-Store solutions enable its more than 300 customers across 50 countries to enhance productivity, profitability, performance and competitiveness. Aldata is a public company quoted on the Helsinki Stock Exchange with the identifier ALD1V. More information at: www.aldata-solution.com Distribution: OMX Helsinki Stock Exchange Media APPENDICES 1 Income Statement 2 Balance Sheet 3 Statement of Changes in Equity 4 Cash Flow 5 Contingent Liabilities 6 Key Figures 7 Segment Information 8 Quarterly Income Statement and Balance Sheet 9 Quarterly Key Figures APPENDIX 1 INCOME STATEMENT MEUR MEUR MEUR Jan-Sep Jan-Sep/ /2007 2006 Change % Total 2006 Net sales 54,1 63,5 -14,8 88,8 Other operating income 0,4 0,4 4,3 0,4 Operating expenses -58,8 -58,7 0,0 -82,5 Depreciations and impairments -1,0 -0,8 -17,2 -1,1 Operating profit -5,3 4,3 -223,3 5,5 Financial items -0,3 0,0 -771,0 -0,1 Profit before taxes -5,6 4,2 -232,0 5,5 Income taxes -0,1 -2,0 95,7 -2,9 Minority interest 0,0 0,0 123,1 0,0 Profit for the financial period -5,7 2,2 -358,6 2,5 Earnings per share, EUR -0,083 0,032 0,037 Earnings per share, EUR (EPS), adjusted for dilution effect -0,083 0,032 0,037 APPENDIX 2 BALANCE SHEET MEUR MEUR MEUR 30 Sep 2007 30 Sep 2006 31 Dec 2006 ASSETS NON-CURRENT ASSETS Goodwill 9,4 9,4 9,4 Capitalized development cost 1,8 1,3 1,4 Intangible assets 0,4 0,2 0,2 Tangible assets 1,7 1,5 1,5 Investments 0,0 0,0 0,0 Other long-term assets 0,7 0,6 1,0 Deferred tax assets 0,4 0,5 0,5 NON-CURRENT ASSETS TOTAL 14,6 13,6 14,1 CURRENT ASSETS Inventories 0,6 0,3 0,5 Short-term receivables 27,4 31,2 34,9 Cash and cash equivalents 7,7 5,5 5,7 CURRENT ASSETS TOTAL 35,7 37,2 41,2 ASSETS TOTAL 50,4 50,8 55,3 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity 25,3 29,2 29,8 Minority interest 0,1 0,1 0,1 Long-term loans 2,0 1,9 1,7 Short-term loans 23,0 19,6 23,7 EQUITY AND LIABILITIES TOTAL 50,4 50,8 55,3 APPENDIX 3 STATEMENT OF CHANGES IN EQUITY Share Share premium Translation Retained TEUR capital fund difference earnings Total EQUITY 01.01.2005 674 17 002 126 3 559 21 361 Translation difference 0 0 -201 0 -201 Result of the financial year 0 0 0 3 401 3 401 Total 0 0 -201 3 401 3 200 Share based payments recognised against equity 0 0 0 516 516 EQUITY 31.12.2005 674 17 002 -75 7 476 25 078 Issue of share capital 6 1 143 0 0 1 149 Exercise of options 1 146 0 0 147 Translation difference 0 0 42 0 42 Result of the financial year 0 0 0 2 526 2 526 Total 7 1 289 42 2 526 3 864 Share based payments recognised against equity 0 0 0 860 860 EQUITY 31.12.2006 681 18 291 -33 10 862 29 802 Translation difference 0 0 157 0 157 Exercise of options 5 705 0 0 710 Result of the financial period 0 0 0 -5 686 -5 686 Total 5 705 157 -5 686 -4 819 Share based payments recognised against equity 0 0 0 344 344 EQUITY 30.9.2007 686 18 996 124 5 520 25 326 APPENDIX 4 CASH FLOW STATEMENT MEUR MEUR MEUR Jan-Sep 2007 Jan-Sep 2006 Jan-Dec 2006 Cash flow from operating activities Operating result -5,3 4,3 5,5 Adjustment to operating result 1,1 1,2 1,7 Change in working capital 4,0 -5,9 -6,3 Interest received and other financial income 0,1 0,1 0,2 Interest paid and other financial expenses -0,1 -0,1 -0,1 Taxes paid -0,7 -2,3 -3,2 Net cash from operating activities -0,9 -2,7 -2,2 Cash flow from investing activities Group companies acquired 0,0 -0,1 -0,1 Investments in tangible and intangible assets -1,3 -1,1 -1,3 Loans granted 0,0 0,0 -0,2 Net cash used in investing activities -1,3 -1,2 -1,6 Cash flow before financing activities -2,1 -4,0 -3,8 Cash flow from financing activities Long-term loans, repayments -0,1 -0,1 -0,1 Short term loans, received 3,5 0,0 0,0 Share issue 0,0 0,0 0,1 Net cash used in financing activities 4,2 0,1 0,1 Net cash flow, total 2,0 -3,9 -3,7 Change in cash and cash equivalents 2,0 -3,9 -3,7 Cash and cash equivalents at the beginning of period 5,7 9,4 9,4 Cash and cash equivalents at the end of period 7,7 5,5 5,7 APPENDIX 5 COMMITMENTS AND CONTINGENCIES MEUR MEUR MEUR 30 Sep 2007 30 Sep 2006 31 Dec 2006 Mortages 5,4 5,4 5,4 Leasing liabilities 14,6 13,7 16,1 Guarantees on behalf of company debt 0,1 0,2 0,2 APPENDIX 6 KEY FIGURES, MEUR Jan-Sep /2007 Jan-Sep /2006 Total 2006 Scope of Operations Net sales, MEUR 54,1 63,5 88,8 Average number of personnel 630 609 614 Profitability Operating profit , MEUR -5,3 4,3 5,5 Operating profit, % of net sales -9,8 6,7 6,2 Profit before taxes and minority interest, MEUR -5,6 4,2 5,5 Profit before taxes and minority interest, % of net sales -10,4 6,7 6,2 Return on equity, % (ROE) -27,5 10,9 9,2 Return on investment, % (ROI) -21,7 21,9 21,0 Financial Standing Quick ratio 1,5 1,9 1,7 Current ratio 1,6 1,9 1,7 Equity ratio, % 51,0 58,5 54,5 Interest-bearing net debt, MEUR -3,2 -4,9 -5,1 Gearing, % -12,7 -16,7 -16,9 Per Share Data Earnings per share, EUR (EPS) -0,083 0,032 0,037 Earnings per share, EUR (EPS), adjusted for dilution effect -0,083 0,032 0,037 Shareholders' equity per share, EUR 0,369 0,428 0,437 APPENDIX 7 SEGMENT INFORMATION, MEUR BUSINESS SEGMENTS Jan-Sep/2007 Jan-Sep/2006 Jan-Dec/2006 Net sales to external customers Supply Chain Management Software 42,6 54,4 74,2 In-Store Software 11,5 9,1 14,6 Total 54,1 63,5 88,8 Operating result, continuing operations Supply Chain Management Software -4,2 4,5 5,1 In-Store Software 0,1 0,8 2,6 Total -4,2 5,3 7,7 Unallocated items -1,1 -1,0 -2,1 Operating profit -5,3 4,3 5,5 Financial income and expenses -0,3 0,0 0,0 Result before taxes and minority interest -5,6 4,2 5,5 Taxes -0,1 -2,0 -2,9 Minority interest 0,0 0,0 0,0 Result from continuing operations -5,7 2,2 2,5 Result for the financial period -5,7 2,2 2,5 APPENDIX 8 INCOME STATEMENT MEUR MEUR MEUR MEUR MEUR quarterly figures Q3/2007 Q2/2007 Q1/2007 Q4/2006 Q3/2006 Net sales 16,6 19,1 18,3 25,3 19,9 Other operating income 0,1 0,1 0,2 0,0 0,1 Operating expenses -18,2 -20,4 -20,2 -23,8 -18,2 Depreciations and impairments -0,4 -0,3 -0,3 -0,3 -0,3 Operating profit -1,8 -1,5 -2,0 1,3 1,5 Financial items -0,2 0,0 -0,1 0,0 0,1 Profit before taxes -2,0 -1,5 -2,1 1,2 1,6 Income taxes 0,1 -0,2 0,0 -0,9 -0,7 Minority interest 0,0 0,0 0,0 0,0 0,0 Profit for the financial period -1,9 -1,7 -2,1 0,3 0,9 INCOME STATEMENT MEUR MEUR MEUR MEUR MEUR cumulative 1-9/07 1-6/07 1-3/07 1-12/06 1-9/06 Net sales 54,1 37,5 18,3 88,8 63,5 Other operating income 0,4 0,2 0,2 0,4 0,4 Operating expenses -58,8 -40,6 -20,2 -82,5 -58,7 Depreciations and impairments -1,0 -0,6 -0,3 -1,1 -0,8 Operating profit -5,3 -3,5 -2,0 5,5 4,3 Financial items -0,3 -0,2 -0,1 -0,1 0,0 Profit before taxes -5,6 -3,6 -2,1 5,5 4,2 Income taxes -0,1 -0,2 0,0 -2,9 -2,0 Minority interest 0,0 0,0 0,0 0,0 0,0 Profit for the financial period -5,7 -3,8 -2,1 2,5 2,2 BALANCE SHEET MEUR MEUR MEUR MEUR MEUR 30.9.07 30.6.07 31.3.07 31.12.06 30.9.06 ASSETS NON-CURRENT ASSETS Goodwill 9,4 9,4 9,4 9,4 9,4 Capitalized development cost 1,8 1,6 1,4 1,4 1,3 Intangible assets 0,4 0,3 0,3 0,2 0,2 Tangible assets 1,7 1,6 1,5 1,5 1,5 Investments 0,0 0,0 0,0 0,0 0,0 Other long-term assets 0,7 0,7 0,8 1,0 0,6 Deferred tax assets 0,4 0,3 0,5 0,5 0,5 NON-CURRENT ASSETS TOTAL 14,6 14,0 14,0 14,1 13,6 CURRENT ASSETS Inventories 0,6 0,4 0,6 0,5 0,3 Short-term receivables 27,4 31,3 34,0 35,0 31,2 Cash and cash equivalents 7,7 4,3 6,7 5,7 5,5 CURRENT ASSETS TOTAL 35,7 36,0 41,4 41,2 37,2 ASSETS TOTAL 50,4 50,1 55,3 55,3 50,8 SHAREHOLDERS' EQUITY AND LIABILITIES Shareholders' equity 25,3 27,0 27,9 29,8 29,2 Minority interest 0,1 0,1 0,1 0,1 0,1 Non-current liabilities 2,0 1,7 1,7 1,7 1,9 Current liabilities 23,0 21,3 25,6 23,7 19,6 EQUITY AND LIABILITIES TOTAL 50,4 50,1 55,3 55,3 50,8 APPENDIX 9 KEY FIGURES, MEUR Q3/2007 Q2/2007 Q1/2007 Q4/2006 Q3/2006 quarterly figures Scope of Operations Net sales, MEUR 16,6 19,1 18,3 25,3 19,9 Average number of personnel 630 634 632 614 609 Profitability Operating profit , MEUR -1,8 -1,5 -2,0 1,3 1,5 Operating profit, % of net sales -10,8 -7,8 -10,9 4,9 7,5 Profit before taxes and minority interest, MEUR -2,0 -1,5 -2,1 1,2 1,6 Profit before taxes and minority interest, % of net sales -11,9 -8,0 -11,5 4,8 7,9 Return on equity, % (ROE) -27,5 -27,0 -28,8 9,2 10,9 Return on investment, % (ROI) -21,7 -22,0 -25,3 21,0 21,9 Financial Standing Quick ratio 1,5 1,7 1,6 1,7 1,9 Current ratio 1,6 1,7 1,6 1,7 1,9 Equity ratio, % 51,0 54,7 51,3 54,5 58,5 Interest-bearing net debt, MEUR -3,2 -3,6 -6,0 -5,1 -4,9 Gearing, % -12,7 -13,2 -21,6 -16,9 -16,7 Per Share Data Earnings per share, EUR (EPS) -0,027 -0,26 -0,031 0,005 0,014 Earnings per share, EUR (EPS), adjusted for dilution effect -0,027 -0,025 -0,030 0,005 0,014 Shareholders' equity per share, EUR 0,369 0,396 0,409 0,437 0,428
ALDATA SOLUTION INTERIM REPORT JANUARY - SEPTEMBER 2007 (unaudited)
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