Highlights of 2007 compared with the previous year: - Net sales rose to EUR 56.9 million (EUR 44.8 million), an increase of 26.9 % - EBITDA (earnings before interest, taxes, depreciation and amortization) rose to EUR 28.6 million (EUR 22.7 million), an increase of 26.1 % - Operating profit was EUR 42.6 million (EUR 38.2 million), which includes EUR 14.6 million (EUR 16.1 million) from change in fair value of investment properties - Earnings/share was EUR 0.58 (EUR 0.63). - The Board proposes a dividend distribution of EUR 0.15/share (EUR 0.14/share) Overview In terms of the number of customer companies, Technopolis Plc is one of Europe's largest technology centers. The Technopolis Group is Finland's largest specialized provider of operating environments for high tech companies, and it offers a comprehensive service package combining modern premises and business and development services. Technopolis operates or is building operating environments in Espoo, Helsinki, Jyväskylä, Lappeenranta, Oulu, Tampere and Vantaa in Finland, and in St. Petersburg in Russia. Some 13,000 people employed by about 1,000 companies and entities are currently working in the Technopolis technology centers. In 2007, Technopolis continued to implement its growth strategy by acquiring new properties and investing in its existing technology centers. The acquisition of Kiinteistö Oy Innopoli II in August for EUR 54.2 million was an important investment. The deal nearly doubled Technopolis's rentable floor area in Otaniemi, Espoo. The fair value of the Group's investment property at the end of 2007 was EUR 468.8 million (EUR 392.2 million). The fair value was increased not only by investments and acquisitions, but also by lower net return requirements and changes in leasing operations. During the year, the Group initiated several technology center projects in its operating areas. An important step in expansion was taken in November when a preliminary agreement was signed on the acquisition of Kuopion Teknologiakeskus Teknia Oy. The deal is expected to be closed by February 2008 and its total value is approximately EUR 67.3 million. The demand for high-tech operating environments in Technopolis's operating areas developed favorably and the Group's financial occupancy ratio increased in 2007. At the end of the year under review the financial occupancy ratio was 96.8 % (94.4 %). In the Group's operating areas in the capital city region, Jyväskylä and Oulu, the demand for high quality operating premises continued at a good level and the financial occupancy ratios increased. In Tampere, the demand for modern operating premises and the financial occupancy ratio were both at a good level. In Lappeenranta, the demand for the Group's premises remained at a satisfactory level, with the exception of the new premises in the city center, which enjoyed good demand. Business The Group's net sales for the review period were EUR 56.9 million (EUR 44.8 million in 2006), representing growth of 26.9 %. EBITDA (earnings before interest, taxes, depreciation and amortization) for the year under review was EUR 28.6 million (EUR 22.7 million), an increase of 26.1 %. Operating profit for the year was EUR 42.6 million (EUR 38.2 million). Profit before taxes was EUR 32.9 million (EUR 33.0 million). The Group's net financial expenses totaled EUR 9.7 million (EUR 5.2 million). Earnings per share were EUR 0.58 (EUR 0.63). Technopolis's Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.15 per share be paid for the 2007 financial year. Under the proposal, dividends would total EUR 6.6 million (EUR 5.7 million), representing an increase of 16.6 %. The balance sheet total was EUR 534.2 million (EUR 431.4 million), an increase of 23.8 %. The Group's equity to assets ratio at the end of the period was 39 % (38.5 %). The fair value of the Group's investment property at the end of 2007 was EUR 468.8 million (EUR 392.2 million). The change in the fair value of investment property was due to the effect of the fair value of properties bought and completed, a reduction in the return requirements of the market, changes in future returns and modernization costs, the revaluation of properties owned throughout the year under review, and increases in the acquisition cost recognized in separate companies during the year. The effect on profit of the change in the fair value of investment property was EUR 14.6 million (EUR 16.1 million). The Group's total rentable area was 366,045 floor square meters at the end of 2007 (348,415 floor square meters). The Group's average financial occupancy ratio at the end of the year was 96.8 % (94.4 %). The financial occupancy ratio describes the rental revenue from the properties as a percentage of the combined total of the rent for the rented space and the estimated market rent for the vacant space. The Group's leases at the end of the year totaled EUR 111.0 million (EUR 121.1 million). Group structure The Technopolis Group includes the parent company, Technopolis Plc, which has operations in Espoo, Jyväskylä, Lappeenranta, Oulu, Tampere and Vantaa, and its subsidiaries Innopoli Oy (100 % owned) and Kiinteistö Oy Innopoli II (100 %), both in Espoo, and other subsidiaries. The Group has carried out the merger of the following Group subsidiaries with their respective parent companies: Technopolis JSP Ltd, Technopolis JSPF Oy, Technopolis Kareltek Ltd, Technopolis TSP Oy, Kiinteistö Oy Hermia Kymppi, Kiinteistö- ja Sijoitusyhtiö Joreco Oy, Kiinteistöosakeyhtiö Teknologiantie 11, Kiinteistö Oy Oulun Teknologiatalot, Kiinteistö Oy Oulun Moderava, Kiinteistö Oy Oulun Mediaani and Medipolis Oy. The purpose of the merger is to increase the cost efficiency of the Group's operations and streamline Group administration. The parent company has a minority holding in the affiliated companies Kiinteistö Oy Hermia (49.3 %), Technocenter Kempele Oy (48.5 %), Iin Micropolis Oy (25.7 %), Jyväskylä Innovation Ltd (24 %) and Lappeenranta Innovation Ltd (20 %). Technopolis Plc has a 13 % holding in Oulu Innovation Ltd. The Group also includes Technopolis Ventures Oy in Espoo (fully owned by Innopoli Oy). Technopolis Ventures Oy has the subsidiaries Technopolis Ventures Kareltek Ltd in Lappeenranta (100 % owned), Technopolis Ventures JSP Ltd in Jyväskylä (100 %), Technopolis Ventures Oulutech Oy in Oulu (70 %) and Technopolis Ventures Professia Oy in Tampere (50.1 %). Technopolis Ventures Oy also has a 25 % holding in Otaniemi Development Ltd. Technopolis has established two Russian companies in St. Petersburg, Technopolis Neudorf LLC and Technopolis St. Petersburg LLC, both fully owned by Technopolis. Principal investments and development projects In February, Technopolis decided to commence the construction of the Hermia 12 property in Tampere. The project's cost estimate is EUR 9 million and the gross area is 8,600 square meters, which includes a parking facility for 115 vehicles. 97 % of the facilities have so far been rented. The building's size is 5,000 floor square meters and it is expected to reach completion before the end of February 2008. In February, Technopolis reached a result in negotiations with the City of Oulu and the Northern Ostrobothnia Hospital District concerning the purchase of a total of 19,250 shares in Medipolis Oy. Following transactions with the said parties and minority shareholders, Technopolis is the sole owner of Medipolis Oy. The total acquisition price of the shares was EUR 3.7 million. In May, Technopolis launched the construction of the first stage of its technology center in Ruoholahti, Helsinki. The size of the stage is 6,600 floor square meters and the cost estimate is somewhat over EUR 20 million, which includes the costs of parking spaces and site costs. 47 % of the facilities have so far been rented. The first stage is estimated to be completed in August 2008. In May, Technopolis launched the construction of the first stage of its Lappeenranta City project. The stage measures 3,150 floor square meters and is estimated to cost approximately EUR 6.5 million. 89 % of the facilities have so far been rented. Planned completion is by the end of April 2008. In spring, Technopolis Plc commenced planning a new technology center in the heart of Tampere, adjacent to the University of Tampere. In its meeting on June 4, 2007, the City Board of Tampere approved Technopolis's request to reserve a plot of land containing the building rights to around 30,000 floor square meters for Technopolis Plc, for the purpose of building a new technology center. In June, Technopolis commenced the third and fourth expansion stages of the Kontinkangas technology center in Oulu. The size of the third stage is 3,500 gross square meters and the investment totals approximately EUR 5 million. 84 % of the third stage has so far been rented. Its estimated time of completion is August 2008. The size of the fourth stage is 4,290 gross square meters and the investment totals approximately EUR 7.5 million. Its estimated time of completion is September 2008. Approximately 98 % of the fourth expansion stage has been rented. On August 15, 2007, Technopolis Plc signed a preliminary agreement with the City of Espoo, the Etera Mutual Pension Insurance Company, and Sitra (the Finnish Innovation Fund) on the acquisition of the entire stock of Kiinteistö Oy Innopoli II. The transaction price was EUR 54.2 million. Of the price, 19.4 % was paid in new shares of Technopolis Plc and the rest in cash. Kiinteistö Oy Innopoli II comprises a building of 20,625 floor square meters and 1.9 hectares of land owned by the company and located in the Otaniemi district of the City of Espoo. The property was completed in 2002. Building of the fifth stage of the Helsinki-Vantaa technology center commenced in September. The size of the building is 6,700 gross square meters and the investment totals approximately EUR 15 million. The fifth stage is expected to reach completion in late fall 2008. On November 5, 2007, Technopolis Plc signed a preliminary agreement with the City of Kuopio on the acquisition of 99.8 % of Kuopion Teknologiakeskus Teknia Oy's stock. The transaction price is EUR 18.1 million, based on the company's net debt position on September 30, 2007. The net debt of Kuopion Teknologiakeskus Teknia Oy totaled EUR 49.2 million on September 30, 2007. If the net debt position changes prior to the execution of the transaction, the transaction price will be adjusted accordingly. The transaction price will be paid in cash. Closure of the transaction will require, for example, that the Kuopio City Council approves the share transaction intended in the preliminary agreement, that the City Board approves the final deed of sale, and that no significant new information that would prevent the transaction from taking place is revealed by the due diligence examinations ordered by Technopolis or otherwise. The Kuopio City Council approved the share transaction intended in the preliminary agreement at its meeting on November 19, 2007. Kuopion Teknologiakeskus Teknia Oy comprises three modern property companies, the total rentable area of which adds up to 47,860 square meters. Teknia's premises currently house 148 companies or other entities with a combined total of approximately 2,500 employees. The net rental income of Teknia's premises as at September 30, 2007 was 7.9 %. According to the information received, the Teknia Group's net sales for 2007 are estimated at EUR 7.2 million and EBITDA at EUR 3.4 million. According to the information received, the Group's net sales for 2008 are estimated at EUR 7.4 million and EBITDA at EUR 4.4 million. The planning of the technology center in Jyväskylä's Korkeakoskenlahti district took a major step forward in December when the architectural competition for the center was resolved. The intention is to build a technology center of some 40,000 square meters, with work starting in 2009. In June, Technopolis signed an agreement with Stockmann plc to lease some 4,300 square meters of office space in the Nevsky Centre shopping center currently under construction in St. Petersburg for the purpose of subletting it to its customer companies. The Nevsky Centre is in St. Petersburg's main street, Nevsky Prospekt. According to the information released by Stockmann in October, the target is to open a department store and shopping center by the end of 2009. The area plan for the Pulkovo technology center in St. Petersburg is expected to be completed within the first quarter of 2008. It is estimated that the conditions for commencing work on the approximately 22,000-square-meter first stage will be in place in the first half of 2008. Technopolis and the St. Petersburg company, Petersburg Technopark OJSC, signed a co-operation agreement in December on a technology center to be built in the city. The planned center would cooperate closely with St. Petersburg's Bonch-Bruevich University, which specializes in telecommunications. Technopolis has commenced preliminary inquiries on launching technology center operations in the Moscow area. A memorandum of understanding concerning the collaboration was signed with the City of Moscow in October. Events after the financial year To ensure the continuation of its solid development, Technopolis intends to strengthen the Board and revise the operating organization and initiate a related process of selecting a new President and CEO. The Chairman and Vice Chairman of Technopolis Plc's Board have, in accordance with the Board's decisions and the company's corporate governance system, held discussions with the company's largest shareholders on the new composition of the company's Board and the related selection of a new President and CEO. The intention is to propose the following changes to be decided on by the Annual General Meeting of Technopolis, to take place on March 27, 2008. The five largest groups of the company's shareholders, two of which are foreign and three domestic representing a total of 28.1 % of the company's stock, have announced their support for the proposed changes. Once approved and carried out, the changes will substantially bolster the company's expertise in its Russian affairs and financing, while the company's considerable expertise with respect to technology centers will increasingly boost its growth. The intention is to propose to the Annual General Meeting that Pertti Huuskonen, current President and CEO of Technopolis, vacate his position to become a full-time Chairman of the company's Board. This move would take place early in the fall of 2008, when the new President and CEO would commence in the company. To recruit a new President and CEO, a nomination committee will be established, comprising Timo Parmasuo, current Chairman of the Board, Matti Pennanen, Vice Chairman, and Pertti Huuskonen, President and CEO. At the Annual General Meeting, the intention is to propose as new Board members Jussi Kuutsa, Development Director of the Stockmann Group's international operations, and Timo Ritakallio, Deputy Chief Executive Officer, OKO Bank plc. Additionally, the intention is to propose to the Annual General Meeting that Timo Parmasuo (Board Chairman until the change), Matti Pennanen, Erkki Veikkolainen and Juha Yli-Rajala be re-elected as Board members. The Board of Directors has decided to realign the company's operating organization to comprise three profit centers: Capital Area, Other Finland and Russia. Keith Silverang, Vice President, is the head of the Capital Area, while Reijo Tauriainen, Vice President, heads Other Finland, and Peter Coachman, General Director, is in charge of the Russian unit. In addition, the Group's organization features matrix functions to manage corporate property development, sales and marketing and the service concept. The Group's Consulting unit and the business development company, Technopolis Ventures Oy, will report to Keith Silverang. Jarkko Ojala will continue as the company's CFO. The composition of the Group's Executive Board will remain unchanged. Technopolis acquired a plot of land some 3,950 square meters in size from the City of Tampere, located at the corner of the Kalevantie and Kanslerinrinne streets adjacent to the University of Tampere. The deed of sale on the plot was signed on January 3, 2008 and the Tampere City Council approved it in its meeting on January 23, 2008. The transaction price was EUR 480 per square meter of building rights area, which amounts to approx. EUR 5.6 million. Technopolis aims at commencing the technology center project in downtown Tampere during 2008. Events related to the Technopolis share During the year, Technopolis implemented two share offerings for institutional investors, with the purpose of financing planned investments, ensuring growth and protecting the company's equity to assets ratio. In addition, a share offering was carried out as a part of the transaction price for Kiinteistö Oy Innopoli II. At its meeting on January 4, 2007, the Board of Directors resolved, in accordance with the authorization granted by the Annual General Meeting of March 24, 2006, to increase the company's share capital by a maximum of EUR 1,162,652.40, a total of 687,960 shares, through accepting the subscriptions of institutional investors. The demand was about 3.5 times greater than the number of shares offered. The subscription price was set at EUR 7.70 per share. The increase in share capital was entered in the Trade Register on January 8, 2007, and trading in the shares began on January 9, 2007. At its meeting on November 8, 2007, the Board of Directors resolved to increase the company's share capital by a maximum of EUR 3,177,200.00, a total of 1,880,000 shares, through accepting the subscriptions of institutional investors. This share offering was based on the authorization provided at the company's Annual General Meeting on March 29, 2007. The demand was about 1.3 times greater than the number of shares offered. The subscription price was set at EUR 6.00 per share. The increase in share capital was entered in the Trade Register on November 13, 2007, and trading in the shares began on November 14, 2007. The Board of Directors of Technopolis decided on August 14, 2007, based on an authorization by the Annual General Meeting of March 29, 2007, on a share offering to the City of Espoo, the Etera Mutual Pension Insurance Company and Sitra (Finnish Innovation Fund) of a total of 1,581,429 shares for payment of the share consideration of Kiinteistö Oy Innopoli II. An increase in share capital of EUR 2,672,615.01 was entered in the Trade Register on August 20, 2007, and trading in the new shares began on August 21, 2007. In December 2006, a total of 26,131 Technopolis shares were subscribed with year 2001 options. An increase in share capital of EUR 44,161.39 was entered in the Trade Register on February 13, 2007. Including earlier subscriptions, a total of 98,399 Technopolis shares were subscribed by April 30, 2007 with year 2001 options. An increase in share capital of EUR 166,294.31 was entered in the Trade Register on June 12, 2007. The subscription period for all year 2001 options expired on April 30, 2007. Following these increases, the Technopolis share capital is EUR 74,541,676.70 and there are 44,107,501 shares. Financing The Group's net financial expenses totaled EUR 9.7 million (EUR 5.2 million). The Group's balance sheet total was EUR 534.2 million (EUR 431.4 million), of which liabilities accounted for EUR 327.0 million (EUR 266.1 million). The Group's equity to assets ratio was 39 % (38.5 %). The Group's equity per share was EUR 4.69 (EUR 4.03). The Group's interest-bearing liabilities at the end of the review period were EUR 277.9 million (EUR 229.5 million). The average interest rate of interest-bearing loans was 4.82 % on December 31, 2007 (3.99 %). Technopolis supplements its financing with a EUR 90 million domestic commercial paper program which allows the company to issue commercial papers with a maturity of less than a year. The commercial paper program was expanded from EUR 60 million to EUR 90 million in the last quarter of 2007. Total commercial paper issues were EUR 35.2 million on December 31, 2007. Organization and personnel The Group Executive Board includes the President and CEO Pertti Huuskonen, the directors Jukka Akselin, Satu Eskelinen, Martti Launonen, Seppo Selmgren, Keith Silverang, Reijo Tauriainen and Markku Hokkanen, and the CFO Jarkko Ojala. The Group employed an average of 142 (113) people during the period. In premises activities there were 49 (34) people, in business services 33 (28) people and in development services 60 (51) people. Annual General Meeting The Annual General Meeting of March 29, 2007, confirmed the consolidated and parent company income statements and balance sheets for the year 2006, released those responsible for accounts from further liability and decided on the distribution of a dividend of EUR 0.14 per share for the year that ended on December 31, 2006. The Board of Directors appointed by the Annual General Meeting comprises Timo Parmasuo, chairman, and Matti Pennanen, vice chairman, and the members Pekka Korhonen, Erkki Veikkolainen and Juha Yli-Rajala. Pertti Huuskonen is the President and CEO of Technopolis. The Group's auditor is KPMG Oy Ab, Authorized Public Accountants, and the principally responsible auditor is Tapio Raappana, APA. The Annual General Meeting decided to amend the Group's articles of association. The amendments are largely the result of the Companies Act that came into force on September 1, 2006, and are mostly technical in nature. In addition, the Annual General meeting decided to authorize the Board of Directors to decide on acquiring Group shares, a share issue and granting options and other special rights entitling to Group shares, granting options for the year 2007 to Group key personnel and annulment of the 2005C options. Extraordinary General Meeting An Extraordinary General Meeting of Technopolis Plc shareholders was held on November 29, 2007, in Oulu. The Extraordinary General Meeting resolved to authorize the Board of Directors to decide on a share issue and granting options and other special rights giving entitlement to shares as referred to in Chapter 10, section 1, of the Limited Liability Companies Act as follows. The maximum number of shares to be issued pursuant to this authorization is 13,000,000 shares, corresponding to approximately 30.79 percent of the company's total stock. The Board of Directors was authorized to decide on all terms of the share issue and the granting of special rights giving entitlement to shares. The authorization concerns both the issuance of new shares and conveyance of the company's own shares. The share issue and the granting of special rights giving entitlement to shares may be offered to certain parties. The authorization shall not cancel the authorization given to the Board by the Annual General Meeting on March 29, 2007 to decide on a share issue and on granting special rights giving entitlement to shares. The authorization will expire on December 31, 2010, at the latest. Evaluation of operational risks and uncertainty factors The most significant risks to Technopolis's business operations are mainly financial risks and customer risks. Technopolis's main financial risk is the interest rate risk on the loan portfolio. The objective of interest rate risk management is to lower or remove the negative impact of market rate fluctuation on the Group's performance, balance sheet and cash flow. The company's financing policy aims to diversify the interest rate risk of loan contracts over various loan periods on the basis of the market situation prevailing at any particular time and the interest rate prognosis created in the company. If necessary, the company will employ forward rate agreements, interest rate swaps and interest rate options. In order to manage financial risk, Technopolis uses a wide range of financing companies and maintains a high capital adequacy level. Technopolis only uses derivatives to reduce or remove financial risks in the balance sheet. Because of the structure of the Technopolis loan portfolio at the end of the review period, a one percentage point increase in money market rates would increase interest rate costs by EUR 1.2 million per annum. Due to the related interest rate risk, Technopolis has followed a policy of diversification. On December 31, 2007, 65.2 % of the company's loans were bound to the 3-12 month Euribor rate. Of the loans, 34.8 % were fixed-interest loans of 13 to 60 months. The average capital-weighted outstanding loan period was 11.1 years. Technopolis supplements its total financing with a EUR 90.0 million domestic commercial paper program which allows the company to issue commercial papers with a maturity of less than a year. Total commercial papers issues were EUR 35.2 million on December 31, 2007. Changes in the exchange rates between the Russian ruble and euro may have an effect on the company's financial situation and operations. Business transactions denominated in rubles are recorded at the exchange rate of the transaction date. Any translation differences are entered in the income statement under other operating expenses or financial income and expenses depending on the nature of the transaction. The purchase of land in St. Petersburg was financed in local currency. Currency risks have been minimized by applying a currency swap. Customer risk management aims to minimize the negative impact of any changes in customers' financial situation on the business and the company's profit. In customer risk management, emphasis is on familiarity with the customer's business and active monitoring of customer information. As part of customer risk management, Technopolis's leases include rent collateral arrangements. Properties are insured with full value insurance. The Group's property portfolio is divided geographically between the Helsinki capital area, Jyväskylä, Lappeenranta, Tampere and the Oulu region. No single customer accounts for more than 11.1 % of the Group's net sales. The Group has a total of about 1,000 customers, which operate in several different sectors. The company's lease agreements comprise two groups: fixed-term leases and leases in force until further notice. The company's aim is to use both lease types depending on the market situation, property, and the lessee customer's industry. The value of the Group's lease portfolio was EUR 111.0 million on December 31, 2007. Of the leases, 15 % will expire in 2008, 25 % will expire in 2009-2011, 24 % in 2012-2014, 17 % in 2015-2017, and 19 % in 2018 or later. The portfolio distribution describes the rent income based on the leases, which has been allocated to the final dates of the leases and divided with the total value of the lease portfolio. In new building projects, Technopolis focuses on quality determination and the manageability of the property's entire lifecycle. In the design phase, all the building's maintenance and repair requirements are taken into account, in the aim of implementing environmentally friendly solutions in terms of energy consumption, the adaptability of office facilities, and recycling possibilities. In connection with property purchases, Technopolis carries out the usual property and environmental assessments before committing to the transaction. Changes in market return requirements may have substantial effect on profit development. When return requirements increase, the fair value of properties decreases and when they decrease, the fair value of properties increases. The changes have either an increasing or decreasing effect on the Group operating profit. Outlook for the future Technopolis management estimates that demand for the company's high tech operating environments will be satisfactory in 2008 and that the occupancy ratio of its facilities and demand for its services will remain good. Technopolis estimates that its net sales and EBITDA for 2008 will grow by 16-20 % on the previous year, assuming that the acquisition of Kuopion Teknologiakeskus Teknia Oy will go through as planned by the end of February 2008. As part of its strategy for growth, Technopolis aims to operate in top high technology cities in Finland, as well as in Russia and 1-2 other countries by 2011. The Group aims to increase its net sales by an average of 15 % annually. It seeks to grow organically as well as through acquisitions. The Group's financial performance is dependent on trends in the general operating environment, in customer business, in the financial markets and in the return requirements for properties. Factors in these areas may affect the Group's result through changes in occupancy ratios, the use of services, financing costs, the fair values of properties and office rent levels. Oulu, January 31, 2008 TECHNOPOLIS PLC Board of Directors Pertti Huuskonen President and CEO Further information: Pertti Huuskonen, tel. +358 400 680 816 or +358 8 551 3213 A PDF version of this financial statement release can be found at www.technopolis.fi. Requests for a printed version can be made to Teija Koskela, tel. +358 8 551 3242. Technopolis Plc has an information bulletin service, which can be subscribed to on the Internet. Subscribers will receive the company's information bulletins by email. The company's printed annual report in the Finnish language will be published in week 11. Investment property is valued in accordance with the fair value model. The internal and external construction period costs from investment properties are included immediately in the acquisition cost in accordance with the IAS 16 standard. In accordance with the IAS 23 standard, borrowing costs for construction periods have been entered under the acquisition cost of properties under construction. The figures are audited. INCOME STATEMENT EUR MILLION 10-12/ 10-12/ 1-12/ 1-12/ 2007 2006 2007 2006 Net sales 15.75 14.26 56.90 44.84 Other operating income 1) 1.33 1.69 5.24 3.86 Other operating expenses -9.99 -9.46 -33.50 -26.00 Change in fair value of investment properties 5.21 4.16 14.55 16.07 Depreciation according to plan -0.14 -0.20 -0.62 -0.56 Operating profit 12.16 10.44 42.56 38.21 Financial income and expenses -2.90 -1.48 -9.67 -5.17 Profit before taxes 9.26 8.97 32.89 33.05 Income taxes -2.48 -2.25 -8.81 -8.46 Net profit for the period 6.78 6.71 24.08 24.59 Distribution of profit for the period: To parent company shareholders 6.77 6.36 24.04 23.74 To minority shareholders 0.01 0.35 0.04 0.85 BALANCE SHEET, ASSETS EUR MILLION 31.12.2007 31.12.2006 Non-current assets Intangible assets 2.49 2.63 Tangible assets 26.90 2.44 Investment property 468.76 392.16 Investments 22.22 21.82 Deferred tax assets 2.41 1.77 Total non-current assets 522.78 420.83 Current assets 9.50 10.57 Non-current assets available for sale 1.87 Total assets 534.16 431.39 BALANCE SHEET, SHAREHOLDERS' EQUITY AND LIABILITIES EUR MILLION Equity Share capital 74.54 67.32 Premium fund 18.55 18.55 Other funds 27.38 7.37 Other shareholders' equity 0.55 0.32 Retained earnings 61.70 43.40 Net profit for the period 24.04 23.74 Parent company's shareholders' interests 206.77 160.70 Minority interests 0.40 4.58 Total shareholders' equity 207.17 165.28 Liabilities Long-term liabilities Interest-bearing liabilities 227.95 183.16 Non-interest-bearing liabilities 1.42 1.51 Deferred tax liabilities 35.08 22.68 Short-term liabilities Interest-bearing liabilities 49.90 46.33 Non-interest-bearing liabilities 12.64 12.44 Total liabilities 326.99 266.12 Total shareholders' equity and liabilities 534.16 431.39 CONSOLIDATED STATEMENT OF CASH FLOWS EUR MILLION 1-12/ 1-12/ 2007 2006 Net cash provided by operating activities Operating profit 42.56 38.21 Revaluation of investment properties -14.55 -16.07 Depreciation 0.62 0.56 Other adjustments to operating profit, non-cash transactions 0.52 0.32 Increase / decrease in working capital 0.33 0.46 Interests received 0.82 0.29 Interest paid and fees -11.15 -5.50 Income from other investments of non-current assets 0.02 0.01 Taxes paid -2.91 -1.92 Cash flows from operating activities 16.25 16.35 Net cash used in investing activities Investments in other instruments -1.65 -0.02 Investments in investment properties -27.56 -40.66 Investments in tangible and Intangible assets -0.38 -0.44 Repayments of loan receivables 0.02 0.04 Income from other investments of non-current assets 0.34 0.15 Acquisition of subsidiaries -48.93 -18.17 Net cash used in investing activities -78.15 -59.10 Cash flows from financing activities Increase in long-term loans 67.89 31.49 Decrease in long-term loans -20.09 -12.39 Dividends paid -5.68 -4.66 Paid share issue 16.79 1.12 Repayments of finance leasing receivables 0.81 Change in short-term loans 0.46 27.60 Net cash provided by financing activities 60.18 43.16 Net increase/decrease in cash assets -1.73 0.40 Cash assets at beginning of period 2.80 2.40 Cash assets at end of period 1.08 2.80 ACCOUNT OF CHANGES IN SHAREHOLDERS' EQUITY EUR MILLION Share Premium Other Retained Minority Share- capital fund funds earnings interest holders' equity Shareholders' equity 31.12.2005 60.59 12.73 0.02 48.07 3.39 124.81 Share capital increase 6.73 6.73 Directed share issue 5.85 7.32 13.17 Dividend distribution -4.66 -4.66 Net profit for the period 23.74 0.85 24.59 Other changes -0.03 0.03 0.31 0.33 0.64 Shareholders' equity 31.12.2006 67.32 18.55 7.37 67.46 4.58 165.28 Share capital increase 0.21 0.21 Directed share issue 7.01 20.08 27.09 Dividend distribution -5.68 -5.68 Net profit for the period 24.04 0.04 24.08 Other changes -0.07 0.47 -4.22 -3.82 Shareholders' equity 31.12.2007 74.54 18.55 27.38 86.29 0.40 207.17 KEY INDICATORS 1-12/ 1-12/ 2007 2006 Change in net sales, % 26.9 41.3 Operating profit/net sales, % 74.8 85.2 Equity on assets ratio, % 39.0 38.5 Employees in Group companies 142 113 Gross investments in non-current assets in balance sheet, EUR 1,000 88,962 137,974 Net rental income of property portfolio, % 2) 7.5 7.7 Financial occupancy ratio, % 96.8 94.4 SHARE-RELATED INDICATORS Earnings/share undiluted, EUR 0.58 0.63 diluted, EUR 0.58 0.63 Equity/share, EUR 4.69 4.03 Dividend/share, EUR 3) 0.15 0.14 Average (issue-adjusted) no. of shares undiluted 41,407,380 37,472,329 diluted 41,469,091 37,619,867 Issue-adjusted no. of shares at year-end 44,107,501 39,833,582 P/E ratio 10.0 12.2 Dividend payout ratio, % 25.8 22.1 Effective dividend yield, % 2.6 1.8 OTHER KEY INDICATORS AND FINANCIAL RATIOS Market value of shares, EUR mill, 31.12. 256.26 306.72 Share turnover, shares 21,519,642 23,293,922 Share turnover/ ave. no. of shares, % 52.0 62.2 Share prices, EUR Highest price 8.31 7.99 Lowest price 4.55 4.41 Average price 6.85 6.01 Price 31.12. 5.81 7.70 CONTINGENT LIABILITIES EUR MILLION 31.12.2007 31.12.2006 Pledges and guarantees on own debt Mortgages 201.72 195.50 Land lease liabilities 1.06 0.53 Other mortgage liabilities 0.93 0.93 Pledged investment properties 97.77 35.21 Interest rate and currency swaps, nominal values 17.28 11.26 fair values 0.28 -0.07 VAT return liability 11.49 13.27 Project liabilities 6.14 0.01 Collateral given on behalf of affiliated companies Guarantees 0.50 0.50 Other guarantee liabilities 0.10 0.10 Leasing liabilities, machinery and equipment 0.48 0.38 1) Other operating income comprises operating subsidies received for development services, for which the same amount of development service expenses have been recorded as operating expenses. 2) Does not include properties taken into use and acquired during the year. 3) Proposal for distribution of 2007 dividends Distribution: OMX Nordic Exchange Helsinki Main news media www.technopolis.fi