SYSOPENDIGIA Plc STOCK EXCHANGE RELEASE, 5 February 2008 at 8:30 am
SYSOPENDIGIA Plc's FOURTH QUARTER AND FINANCIAL STATEMENT FOR 2007 (IFRS)
Summary
Financial Statement 2007
- Consolidated net sales: EUR 105.8 million, up 24.6 per cent year on year
- Pro forma growth in reported net sales: 6.0 per cent
- Consolidated operating profit: EUR 11.1 million, up 32.6 per cent year on year
- Profitability (EBIT-%): 10.5 per cent (9.8 per cent 1-12/2006)
- Profitability (EBIT-%) before approximately EUR 1 million one-off expenses:
11.3 per cent
- Product business accounted for 17.3 per cent of net sales (13.4 per cent
1-12/2006)
- Earnings per share: EUR 0.29, up 16 per cent
October-December 2007
- Consolidated turnover: EUR 31.0 million, up 16.5 per cent year on year
- Pro forma growth in reported net sales: 12.7 per cent
- Consolidated operating profit: EUR 4.2 million, up 41.1 per cent year on year
- Profitability (EBIT-%): 13.6 per cent (11.2 per cent 10-12/2006)
- Product business accounted for 15.9 per cent of net sales (15.1 per cent
10-12/2006)
- Earnings per share: EUR 0.13, up 63 per cent
For the first quarter 2008 the company estimates that both the organic growth
and the profitability will exceed 10 per cent level.
PROPOSAL FOR DIVIDEND DISTRIBUTION
At the end of the 2007 fiscal year, the distributable shareholders' equity of
the parent company was EUR 39,477,546.59. SYSOPENDIGIA Plc's Board of Directors
will propose at the Annual General Meeting that a dividend of EUR 0,10 per share
be paid for 2007 (2006: EUR 0.08).
BRIEFING FOR MEDIA AND ANALYSTS
SYSOPENDIGIA will hold a briefing on its Interim Report for Q4/2007 and
financial statement for analysts and the media on Tuesday 5 February 2008 at
11.00 am in the 2 cabinet of the World Trade Center, Aleksanterinkatu 17,
Helsinki, Finland. All are welcome.
REVIEW BY CEO
President and CEO Juha Varelius: ″The last quarter of 2007 was a great success.
Thanks to the full employment of our professionals in all of our business
operations, our consolidated operating profit and the profitability considerably
exceeded the company's corresponding figures year on year. As planned, during
the last quarter of the year the company's organic growth was raised to a new
level and the earnings per share improved significantly. During the 2007 fiscal
year, consolidated net sales increased by 24.6 per cent compared to 2006, and
operating profit improved by 32.6 per cent year on year. Earnings per share in
2007 were EUR 0.29, representing growth of 16 per cent as compared to the
previous fiscal year.
During 2007 we developed our company's offerings, established corporate values
and a value-based bonus system, and reformed the organisation to meet customer
needs more effectively. These reforms further improved the efficiency, quality,
and delivery capacity of our company.
SYSOPENDIGIA has the capability to supply sophisticated solution packages in
smartphone development projects and superior competencies in the delivery of
real-time enterprise systems. To demonstrate our competencies, at the end of
last year we launched a Linux-based 3G smartphone at the Norwegian TrollTech
Qtopia Mobile Communications Summit. The results of this work can be utilised in
the future development of commercial Linux-based mobile devices.
The Group adheres to its long-term target for average net sales growth of 25 per
cent, the same goal we have successfully implemented after the publication of
our strategy. Operative efficiency is the key critical success factor in the
achievement of profitable growth.
SYSOPENDIGIA has been implementing its internationalisation strategy through
carefully managed steps. In August, we obtained a foothold in the Swedish market
by purchasing a financial software company, Capital C, and the investment made
after the end of the fiscal year in January in the Russian market (Sunrise-r)
will again open up new opportunities for us. In 2008, it is our objective to
accelerate organic growth and to expand our international operations in line
with our strategy.″
SYSOPENDIGIA Plc's 2007 financial statement (IFRS)
GROUP KEY FIGURES AND RATIOS
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| | 10-12/20 | 10-12/20 | Change, | 2007 | 2006 | Change, |
| | 07 | 06 | % | | | % |
--------------------------------------------------------------------------------
| Net sales | 31,012 | 26,621 | 16 % | 105,839 | 84,968 | 25 % |
--------------------------------------------------------------------------------
| Operating | 4,212 | 2,985 | 41 % | 11,080 | 8,354 | 33 % |
| profit | | | | | | |
--------------------------------------------------------------------------------
| - % of net | 14 % | 11 % | | 10 % | 10 % | |
| sales | | | | | | |
--------------------------------------------------------------------------------
| Profit for | 2,655 | 1,625 | 63 % | 5,871 | 4,867 | 21 % |
| the period | | | | | | |
--------------------------------------------------------------------------------
| - % of net | 9 % | 6 % | | 6 % | 6 % | |
| sales | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Return on | 16 % | 10 % | | 9 % | 8 % | |
| equity, % | | | | | | |
--------------------------------------------------------------------------------
| Return on | 14 % | 10 % | | 9 % | 9 % | |
| investment, % | | | | | | |
--------------------------------------------------------------------------------
| Interest-bear | 56,413 | 56,664 | 0 % | 56,413 | 56,664 | 0 % |
| ing | | | | | | |
| liabilities | | | | | | |
--------------------------------------------------------------------------------
| Cash and cash | 11,739 | 11,506 | 2 % | 11,739 | 11,506 | 2 % |
| equivalents | | | | | | |
--------------------------------------------------------------------------------
| Gearing, % | 65 % | 72 % | | 65 % | 72 % | |
--------------------------------------------------------------------------------
| Equity ratio, | 47 % | 44 % | | 47 % | 44 % | |
| % | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.13 | 0.08 | 63 % | 0.29 | 0.25 | 16 % |
| share, EUR, | | | | | | |
| undiluted | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.13 | 0.08 | 63 % | 0.29 | 0.25 | 16 % |
| share, EUR, | | | | | | |
| diluted | | | | | | |
--------------------------------------------------------------------------------
OVERVIEW OF BUSINESS SEGMENTS
Telecommunications
SYSOPENDIGIA has a strong position in the product development of smartphones and
operator ICT solutions. SYSOPENDIGIA offers comprehensive product and service
portfolio, which help our customers - hand set manufacturers, semi-conductor
vendors and operators - to develop their products and offering.
During the last quarter of the year, SYSOPENDIGIA launched a Linux-based 3G
smartphone at the TrollTech Qtopia Mobile Communications Summit. The results of
this work can be utilised in the future development of commercial Linux-based
mobile devices.
The company gained during year 2007 significant new international customers. The
company intends to strengthen its delivery capacity significantly by continuing
the strong recruitment activity initiated during the second half of the 2007
fiscal year. In the future, recruitment measures will be extended to countries
with lower cost levels.
The investment made in January 2008, after the end of the fiscal year, in the
Russian market in the form of the purchase of Sunrise-r, will expand the
business division's current offering, enhance its competitiveness and facilitate
the expansion of its customer base in the contract engineering market.
Finance and Services
During the last quarter 2007 the capacity utilisation rates were at a very high
level in all business operations of the division. During the third quarter,
Finance and Services restructured its organisation in order to increase its
operational efficiency. This organisational change, combined with high demand,
enabled the division to achieve an excellent result during the last quarter of
2007. The strengthening of delivery capacity and organic growth will be
continued during year 2008.
The business activities in Sweden, based on the Capital C company acquisition,
have been promising and the company goal is to continue strengthening its
Swedish operations organically. The company's position in Sweden will also
strengthen a fund management system delivery, based on Samstock by SYSOPENDIGIA
product family, which will be implemented in the first half of year 2008.
Industry and Trade
The sales of Enterprise Resource Planning systems rose also during the last
quarter 2007. The projects of the Enterprise RAPID concept, which was launched
in early 2007, have continued to develop according to plan. In the field of
e-business solutions, SYSOPENDIGIA has invested in the deliveries of
Microsoft-based portal solutions, e-service solutions and document management
solutions. In the area of Industry and Trade integration solutions, activity
levels have remained high, the focus being on the development of current
customer relationships. Integration solutions function as key facilitators and
provide the basis for the implementation of real-time enterprise systems,
supporting all solution areas of SYSOPENDIGIA. The company believes in
increasing demand for new productised integration solutions around technologies
such as RFID.
MARKETS AND COMPANY TARGETS
The annual growth estimate for the consulting and system integration market
varies between 2.3 and 6.4 per cent, depending on the market analyst (Gartner
2007, EITO and IDC 2006).
Customers require a partner capable of supplying sophisticated solution packages
and managing services throughout the lifecycle of the applications. The
consolidation of various sectors, the networking of value chains, the
harmonisation of processes and the strengthening of core partnerships will guide
business decisions.
The ICT market demand will focus on outsourcing, contract engineering, extensive
turnkey deliveries and the integration of standard software products. Key value
creators include business focus and industry expertise, usability and the user
interface, scalability and the system's lifecycle as well as productivity and
quality. In the future the self care and service-chain digitisation and
mobilisation will be emphasised.
Information systems will be developed through portals, eBusiness solutions,
business intelligence and mobile solutions as well as RFID technology and
payment cards. Strategic development projects increasingly involve wireless and
mobile solutions based on the product platform architecture, which will open
SYSOPENDIGIA interesting business opportunities. The product development market
for smartphones will develop through consolidation, operating models based on
the full-responsibility concept, and alliances. SYSOPENDIGIA is a forerunner as
a supplier of wireless and mobile solutions integrated as part of information
systems related to its customers' core business.
For the year 2008, the company aims to achieve strong organic growth while
continuing its internationalisation in a controlled manner in line with the
corporate strategy. Alongside these, the goal is to maintain profitability at a
level of over 10 per cent. For the first quarter 2008 the company estimates that
both the organic growth and the profitability will exceed 10 per cent level.
NET SALES
SysOpenDigia's consolidated net sales for 2007 were EUR 105.8 million, up by
24.6 per cent from the previous year (1-12/2006: EUR 85.0 million).
Net sales posted by Telecommunications in 2007 were EUR 48.0 million, up by 10.0
per cent (1-12/2006: EUR 43.6 million) while net sales by Finance and Services
totalled EUR 29.3 million, up by 24.0 per cent (1-12/2006: EUR 23.6 million).
Industry and Trade recorded net sales of EUR 28.6 million, up by 61.3 per cent
(1-12/2006: EUR 17.7 million).
SYSOPENDIGIA's consolidated net sales for the fourth quarter 2007 rose to EUR
31.0 million, up by 16.5 per cent (10-12/2006: EUR 26.6 million).
Net sales by Telecommunications for the last quarter 2007 were EUR 14.0 million,
up by 17.0 per cent year on year (10-12/2006: EUR 11.9 million), while net sales
by Finance and Services totalled EUR 9.3 million, up by 26.6 per cent
(10-12/2006: EUR 7.4 million). Industry and Trade recorded net sales of EUR 7.7
million for the fourth quarter, up by 5.5 per cent (10-12/2006: EUR 7.3
million).
During the reporting period, the product business accounted for EUR 18.3 million
(1-12/2006: EUR 11.4 million) of consolidated net sales, up by 17.3 per cent
year on year (1-12/2006: 13.4 per cent). During the fourth quarter, the product
business accounted for EUR 4.9 million (10-12/2006: EUR 4.0 million) of
consolidated net sales, or 15.9 per cent (10-12/2006: 15.1 per cent).
During the reporting period, the pro forma figures include the net sales and
operating profit of Capital C AB as of 1 January 2007. During the period of
comparison, the pro forma figures include the net sales and operating profit of
Sentera Oyj, Samstock Oy and Capital C AB as of 1 January 2006. Consolidated pro
forma net sales for the 2007 fiscal year were EUR 108.3 million and comparable
consolidated pro forma net sales were EUR 102.2 million, showing year-on-year
organic growth of 6.0 per cent reported for the period. Pro forma net sales by
Telecommunications for the 2007 fiscal year were EUR 48.0 million and for the
previous year EUR 43.6 million, showing year-on-year growth of 10.0 per cent.
Pro forma net sales by Finance and Services division for the 2007 reporting
period came to EUR 31.7 million and, for the previous year, EUR 31.3 million,
showing year-on-year growth of 1.5 per cent. Pro forma net sales by Industry and
Trade for 2007 fiscal year amounted to EUR 28.6 million and for the previous
year EUR 27.3 million, showing year-on-year growth of 4.7 per cent.
Consolidated pro forma group net sales of the fourth quarter 2007 were EUR 31.0
million and comparable consolidated pro forma net sales in 2006 were EUR 27.5
million, showing year-on-year organic growth of 12.7 per cent. Pro forma net
sales by Telecommunications for the fourth quarter were EUR 14.0 million and
comparable pro forma net sales in 2006 were EUR 11.9 million, showing
year-on-year growth of 17.0 per cent. Pro forma net sales by Finance and
Services for the fourth quarter came to EUR 9.3 million and comparable pro forma
net sales in 2006 were EUR 8.3 million, showing year-on-year growth of 12.7 per
cent. Pro forma net sales by Industry and Trade for the fourth quarter amounted
to EUR 7.7 million and comparable pro forma net sales in 2006 were EUR 7.3
million, showing year-on-year growth of 5.5 per cent.
International business accounted for 8.9 per cent of consolidate net sales in
2007 (1-12/2006: 7.0 per cent).
PROFIT PERFORMANCE AND PROFITABILITY
SYSOPENDIGIA's consolidated operating profit (EBIT) for the reporting period
2007 amounted to EUR 11.1 million, up 32.6 per cent on a year earlier
(1-12/2006: EUR 8.4 million). The profitability (EBIT-%) during fiscal year 2007
was 10.5 per cent (1-12/2006 9.8 per cent).
The 2007 fiscal year results include one-off expenses of EUR 0.7 million
unallocated to segments relating to top management changes and project
reservations of approximately EUR 0.2 million allocated to segments.
During the 2007 reporting period, Telecommunications reported an operating
profit of EUR 5.7 million, representing a year-on-year increase of 41.1 per cent
(1-12/2006: EUR 4.0 million) and the profitability (EBIT-%) was 11.8 per cent
(1-12/2006 9.2 per cent). Finance and Services showed an operating profit of EUR
2.6 million, showing an increase of 12.7 per cent (1-12/2006: EUR 2.3 million)
and the profitability (EBIT-%) was 8.9 per cent (1-12/2006 9.8 per cent).
Industry and Trade posted an operating profit of EUR 3.5 million, representing a
year-on-year increase of 74.3 per cent (1-12/2006: EUR 2.0 million) and the
profitability (EBIT-%) was 12.3 per cent (1-12/2006 11.4 per cent).
SYSOPENDIGIA's consolidated operating profit (EBIT) for the fourth quarter 2007
amounted to EUR 4.2 million, representing growth of 41.1 per cent on a year
earlier (10-12/2006: EUR 3.0 million). The profitability (EBIT-%) during the
fourth quarter 2007 was 13.6 per cent (1-12/2006 11.2 per cent).
Telecommunications reported an operating profit of EUR 1.8 million for the
fourth quarter, representing a year-on-year increase of 13.4 per cent
(10-12/2006: EUR 1.6 million) and the profitability (EBIT-%) was 12.7 per cent
(1-12/2006 13.1 per cent). Finance and Services showed an operating profit of
EUR 1.4 million, up by 193.7 per cent on a year earlier (10-12/2006: EUR 0.5
million) and the profitability (EBIT-%) was 15.1 per cent (1-12/2006 6.5 per
cent). Industry and Trade posted an operating profit of EUR 1.0 million,
representing a year-on-year increase of 9.4 per cent (10-12/2006: EUR 0.9
million) and the profitability (EBIT-%) was 13.4 per cent (1-12/2006 12.9 per
cent).
Reported earnings of the group before tax stood at EUR 7.9 million in the 2007
fiscal period, representing growth of 18 per cent (1-12/2006: EUR 6.7 million),
and net profit totalled EUR 5.9 million, up by 21 per cent (1-12/2006: EUR 4.9
million).
The pro forma operating profit for the reporting period before one-off expenses
unallocated to segments was EUR 12.1 million and the like-for-like pro forma
operating profit for 2006 was EUR 10.1 million, showing year-on-year growth of
19.7 per cent. The pro forma profitability (EBIT-%) during the fiscal year 2007
was 11.2 per cent (1-12/2006 9.9 per cent). The pro forma operating profit of
Telecommunications for the 2007 fiscal year amounted to EUR 5.7 million and for
the previous year EUR 4.0 million, showing year-on-year growth of 41.1 per cent
and the profitability (EBIT-%) was 11.8 per cent (1-12/2006 9.2 per cent). Pro
forma operating profit by Finance and Services came to EUR 2.9 million in 2007
and to EUR 2.9 million in 2006, and thus the operating profit for the reporting
period was at the same level as reported for the previous fiscal year, and the
profitability (EBIT-%) was 9.3 per cent (1-12/2006 9.3 per cent). Pro forma
operating profit by Industry and Trade for the 2007 fiscal year amounted to EUR
3.5 million and for the previous year EUR 3.2 million, showing year-on-year
growth of 9.3 per cent, and the profitability (EBIT-%) was 12.3 per cent
(1-12/2006 11.8 per cent).
The consolidated pro forma operating profit for the fourth quarter 2007 was EUR
4.2 million and comparable consolidated pro forma operating profit in 2006 was
EUR 3.3 million, showing growth of 26.3 per cent. The pro forma profitability
(EBIT-%) during the fourth quarter 2007 was 13.6 per cent (1-12/2006 12.1 per
cent). The pro forma operating profit of Telecommunications in the fourth
quarter was EUR 1.8 million and comparable pro forma operating profit for the
same period in 2006 was EUR 1.6 million, showing growth of 13.5 per cent and the
profitability (EBIT-%) was 12.7 per cent (1-12/2006 13.1 per cent). Pro forma
operating profit by Finance and Services in the fourth quarter came to EUR 1.4
million and comparable pro forma operating profit for the same period in 2006
was EUR 0.8 million, showing growth of 69.8 per cent in the operating profit,
and the profitability (EBIT-%) was 15.1 per cent (1-12/2006 10.0 per cent). Pro
forma operating profit by Industry and Trade in the fourth quarter was EUR 1.0
million and comparable pro forma operating profit for the same period in 2006
was EUR 0.9 million, showing growth of 9.4 per cent, and the profitability
(EBIT-%) was 13.4 per cent (1-12/2006 12.9 per cent).
Earnings per share for the 2007 fiscal year were EUR 0.29 (1-12/2006: 0.25 EUR).
Earnings per share in Q4/2007 were EUR 0.13 (10-12/2006: EUR 0.08).
The Group's net financial expenses for 2007 totalled EUR 3.2 million (1-12/2006:
EUR 1.7 million).
FINANCIAL POSITION AND EXPENDITURE
On 31 December 2007, SYSOPENDIGIA Group's consolidated balance sheet total at
the end of 2007 stood at EUR 149.6 million (31 December 2006: EUR 146.3
million), and equity ratio was 46.5 per cent (31 December 2006: 44.1 per cent).
Gearing stood at 65.1 per cent (31 December 2006: 71.5 per cent). The period-end
cash and cash equivalents totalled EUR 11.7 million (31 December 2006: EUR 11.5
million) and interest-bearing liabilities amounted to EUR 56.4 million at the
end of 2007 (31 December 2006: EUR 56.7 million).
The Group carries out annual impairment tests for goodwill and intangible assets
with an indefinite useful life in accordance with the IAS 36 standard. Goodwill
has not been subject to amortisation since 1 January 2004, and residual value is
tested annually.
The table below shows goodwill and values subject to testing at the end of 2007
fiscal year by business segment:
--------------------------------------------------------------------------------
| EUR 1,000 | Allocate | Depreciati | Unallocated | Other | Total value |
| | d | on during | goodwill | items | subject to |
| | goodwill | the | | | testing |
| | | reporting | | | |
| | | period | | | |
--------------------------------------------------------------------------------
| Telecommunica | 8,156 | 1,137 | 46,829 | 4,633 | 59,617 |
| tions | | | | | |
--------------------------------------------------------------------------------
| Finance and | 2,173 | 256 | 13,692 | 2,539 | 18,404 |
| Services | | | | | |
--------------------------------------------------------------------------------
| Industry and | 3,486 | 585 | 26,410 | 2,417 | 32,313 |
| Trade | | | | | |
--------------------------------------------------------------------------------
| Group total | 13,814 | 1,978 | 86,930 | 9,589 | 110,334 |
--------------------------------------------------------------------------------
Telecommunications goodwill is mainly associated with the combination of Digia
Inc. and SysOpen Plc and the acquisition of Yomi Software Ltd which took place
in 2005. Finance and Services goodwill is mainly associated with the
acquisitions of Sentera Plc and Samstock Ltd in 2006 and the acquisition of
Capital C AB in 2007. Industry and Trade goodwill is mainly associated with the
acquisitions of Sentera Plc and Yomi Software Ltd.
The Group has defined its business segments as cash-generating units (CGU).
Testing goodwill for any impairment loss is based on comparing the present value
of the CGU's recoverable cash flows with the carrying amount. The present values
of cash flows are based on the continuous use of an asset as well as on the
financial plans and estimates of the CGU's future development approved by the
relevant CGU management.
Present values are determined on the basis of actual operating profit and
five-year forecasts by the CGU, with growth varying between three and five per
cent and the operating margin between 10 and 12 per cent.
Cash flows following the forecast period are estimated by extrapolating the cash
flows using a steady net sales growth forecast of three per cent, with operating
profit estimated at 10 per cent of net sales. Discount rates have been
determined in view of the industry's general risk level, corresponding to an
annual interest rate of 11 per cent in 2007.
Net sales growth is reckoned to constitute the most critical factor in
calculating the present values of cash flows. The amount of goodwill for
Telecommunications requires average annual long-term growth of around two per
cent in its net sales and an operating margin of 10 per cent before amortisation
of allocated goodwill. The amount of goodwill for Finance and Services requires
average annual growth of two per cent for the business operations and six per
cent profitability before allocated goodwill amortisation. The amount of
goodwill for Industry and Trade requires average annual long-term growth of two
per cent in its net sales and an operating margin of nine per cent before
amortisation on allocated goodwill.
Based on a reasonable estimate, any change in key variables used in calculations
during the reporting period would not lead to a situation in which the segment's
carrying amount would exceed its recoverable amount. Consequently, in the
management's view, there is no need to recognise impairment losses.
During the 2007 fiscal year, the Group's cash flow from business operations was
positive by EUR 6.2 million (1-12/2006: positive cash flow of EUR 5.8 million).
Gross capital expenditure during the period totalled EUR 2.0 million (1-12/2006:
EUR 1.9 million). Acquisitions of tangible fixed assets totalled EUR 1.4 million
(1-12/2006: EUR 1.8 million).
Return on investment (ROI) stood at 9.4 per cent in 2007 (1-12/2006: 9.2 per
cent) and return on equity (ROE) at 8.9 per cent (1-12/2006: 8.4 per cent).
RISK ASSESSMENT
Customer, personnel, project, data security, integration and goodwill risks
number among the key risks subject to monitoring in SYSOPENDIGIA's risk
management.
The company manages customer risks by actively developing its customer portfolio
structure and avoiding any potential risk positions. Its customer portfolio
structure and strategic customer relationships should be enhanced when the Group
adopts shared customer relationship management processes and operating models.
The Group assesses and manages personnel risks by carrying out quarterly
performance reviews with key personnel. With a view to enhancing employee
motivation and commitment, SYSOPENDIGIA has taken measures aimed at more
systematic and effective internal communication by staging monthly personnel
events and making the management more visible within the organisation. On the
basis of the results of a job satisfaction survey, the Group will develop its
internal policies and practices further, with the aim of improving working
conditions and job satisfaction. In addition, the Group will implement a
quarterly pulse method for job satisfaction measurement in all of its
businesses, in order to identify areas in need of immediate improvement.
The Group carries out project audits with a view to enhancing project risk
management and securing the success of project deliveries to customers. In
addition, the Group's certified quality management systems have undergone a
re-evaluation and approval, and the Group has streamlined its project delivery
reporting procedures and plans further investments in order to ensure high
project delivery capacity and error-free projects.
In order to manage data-security risks, the Group carries out data-security
audits and is continuously developing operating models, practices and processes
that promote data security. The management group is tasked with managing risks
associated with the integration of businesses, shared operating models and best
practices, as well as their integrated development. The integration of the
corporate culture is an ongoing process, and its successful implementation
requires sustained and determined efforts at all organisational levels. With
respect to IFRS-compliant accounting policies, the Group actively monitors
goodwill and the related impairment tests as part of prudent and proactive risk
management practices within financial management.
HUMAN RESOURCES, MANAGEMENT AND ADMINISTRATION
On 31 December 2007, the number of Group employees totalled 1,155, up by 68, or
6.2 per cent, from the staff number on 31 December 2006 (2006: 1,087). During
the reporting period, the number of employees averaged 1,116, showing an
increase of 135, or 13.8 per cent, (2006: 981) over the same period a year
earlier.
Reported cumulative employee turnover came to 11.7 per cent (1-12/2006: 10.2 per
cent).
Employees by function on 31 December 2007:
--------------------------------------------------------------------------------
| Telecommunications | 49 % |
--------------------------------------------------------------------------------
| Finance and Services | 24 % |
--------------------------------------------------------------------------------
| Industry and Trade | 22 % |
--------------------------------------------------------------------------------
| Administration and Management | 5 % |
--------------------------------------------------------------------------------
As of 31 December 2007, 2.3 per cent of SYSOPENDIGIA's personnel were working
abroad.
The Annual General Meeting (AGM) of 28 February 2007 elected the following Board
members: Pekka Sivonen (Chairman), Pertti Kyttälä (Vice Chairman), Kari
Karvinen, Matti Mujunen, Mikko Terho, Eero Makkonen and Martti Mehtälä. On 21
March 2007, Mikko Terho resigned from SYSOPENDIGIA Plc's Board of Directors for
personal reasons. On 17 September 2007, the company's Executive Vice President
and Deputy CEO, Seppo Laaksonen, left the company's service, and the previous
President and CEO, Jari Mielonen, resigned on 18 September 2007 for personal
reasons. Juha Sihvonen was the acting CEO of the company until 31 December 2007,
and since that date the position of the President and CEO has been held by Juha
Varelius.
KPMG Oy Ab, a firm of authorised public accountants, is the Group's auditor,
with Ari Ahti, Authorised Public Accountant, as the chief auditor.
ACQUISITIONS AND DIVESTMENTS
During the reporting period, SYSOPENDIGIA acquired the entire share capital of
Capital C AB from Carnegie Investment Bank AB. Capital C AB is a Swedish
financial software company. With this acquisition, SYSOPENDIGIA has strengthened
its operations as well as its product and solution offering in the financial
sector for the Nordic market.
Capital C produces and delivers post-trade management solutions for the
securities industry. The company was founded in 1998 and employs about 30 highly
skilled and experienced staff. The company's offering includes development,
maintenance and the support of software products targeted at the finance
industry.
Capital C's product portfolio consists of the Claes product and Moonray product
families. The Claes back-office system is used by some of the largest financial
players in the Nordic region. Parallel to this, Capital C has recently launched
the first modules of the next-generation Moonray product family. Moonray
products can be combined with, and complement, SYSOPENDIGIA's existing business
systems within the Nordic securities industry.
Capital C's whole personnel transferred to SYSOPENDIGIA Group under their
existing employment rights and privileges. Capital C is a very important asset
in strengthening SYSOPENDIGIA's presence in Sweden and from the perspective of
the entire SYSOPENDIGIA Group. This acquisition is in line with SYSOPENDIGIA's
internationalisation strategy of strengthening its market position in Northern
Europe. The deal significantly enhanced the company's product and solution
offerings in the financial sector, bringing it very important new customer
relationships in Sweden.
GROUP STRUCTURE AND ORGANISATION
On 31 December 2007, SYSOPENDIGIA Group consisted of SYSOPENDIGIA Plc, the
parent company, and active subsidiaries SYSOPENDIGIA Finland Ltd (parent company
holding 100 %) and Capital C AB (100%). In addition, SYSOPENDIGIA Finland Ltd
has the wholly-owned active subsidiaries SYSOPENDIGIA Service Ltd (100%) and
SYSOPENDIGIA Financial Software Ltd (100%). After the reporting period in
January 2008 SYSOPENDIGIA acquired all shares of Sunrise Resources Ltd. Sunrise
Resources Ltd has in Russia an active subsidiary, OOO Sunrise-r Spb (100%).
EVENTS AFTER THE BALANCE SHEET DATE
On 14 January 2008, SYSOPENDIGIA acquired the entire share capital of a Finnish
software company, Sunrise Resources (Sunrise-r or company). The company has a
Russian subsidiary OOO Sunrise-r Spb and 80% of the Sunrise-group's employees
are Russian. Through acquiring Sunrise-r, SYSOPENDIGIA has entered the rapidly
developing Russian software market.
The acquisition price was EUR 3.6 million, which was paid as a cash
consideration, SYSOPENDIGIA financing the transaction through its cash
reserves. In addition, the sellers may receive an additional purchase price
based on Sunrise-r's objectives for the year 2008. The maximum amount of the
additional purchase price is EUR 0.6 million, which may be paid either in cash
or in SYSOPENDIGIA shares, as determined by SYSOPENDIGIA.
The company acquisition was part of SYSOPENDIGIA's internationalisation strategy
and strengthens the company's current services with qualified near-shore
development services as well as local support for customers operating in the
Russian markets. Additionally, SYSOPENDIGIA will expand its activities in the
Russian markets through its current products and services. Sunrise-r's expertise
of many years in the Russian markets will be highly beneficial in that respect.
Sunrise-r's revenues for 2007 amounted to approximately EUR 2.4 million and its
operating profit to approximately EUR 0.6 million. In 2008, the company's
revenues for 2008 are expected to exceed EUR 3.0 million and the company
currently employs over 50 software developing experts in St. Petersburg and
Jaroslaw, Russia, and 10 in Helsinki. All employees were transferred to
SYSOPENDIGIA Group under their current employment terms. Sunrise-r's 2006
balance sheet totalled EUR 908,000. The company had intangible assets worth
EUR 7,000, tangible assets and investments worth EUR 338,000 and current assets
amounting to EUR 563,000. It recorded shareholders' equity of EUR 709,000 and
current liabilities of EUR 199,000. Currently, the company's net assets total
approximately EUR 1.0 million. The company does not have any long-term debt.
SHAREHOLDERS' MEETINGS
Annual General Meeting on 28 February 2007
Convened on 28 February 2007, SYSOPENDIGIA Plc's Annual General Meeting (AGM)
adopted the financial statement for 2006, discharged Board members and the CEO
from liability and, as proposed by the Board of Directors, approved the profit
distribution for 2006, determined Board emoluments and elected the company's
Board of Directors for a new term. In addition, the AGM decided to alter the
Articles of Association throughout, which also resulted in a new company name,
SYSOPENDIGIA Plc. The AGM granted authorisations to the Board which it has not
exercised.
SHARE CAPITAL AND SHARES
On 31 December 2007, the total number of SYSOPENDIGIA shares was 20,853,645,
when the 494,145 shares subscribed and paid for in December 2007 under the stock
option scheme 2005K2 are taken into account.
According to Finnish Central Securities Depository Ltd, on 31 December 2007
SYSOPENDIGIA had 3,114 shareholders. The ten major shareholders were:
--------------------------------------------------------------------------------
| Shareholder | Proportion (%) of shares and |
| | votes |
--------------------------------------------------------------------------------
| Pekka Sivonen | 13.6 % |
--------------------------------------------------------------------------------
| Evli Bank Plc | 8.5 % |
--------------------------------------------------------------------------------
| Kari Karvinen | 7.6 % |
--------------------------------------------------------------------------------
| Matti Savolainen | 6.3 % |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc | 5.7 % |
--------------------------------------------------------------------------------
| OP-Suomi Pienyhtiöt mutual fund | 3.6 % |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 3.6 % |
--------------------------------------------------------------------------------
| Skandinaviska Enskilda Banken / | 3.3 % |
| Nominee-registered | |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc / Nominee-registered | 3.2 % |
--------------------------------------------------------------------------------
| Veikko Laine Oy | 2.8 % |
--------------------------------------------------------------------------------
The proportion of shares presented in the table above takes account of shares
subscribed under the stock option scheme 2005K2.
Shareholding by number of shares held on 31 September 2007:
--------------------------------------------------------------------------------
| Number of shares | Proportion (%) of | Proportion (%) of |
| | holdings | shares and votes |
--------------------------------------------------------------------------------
| 1 - 100 | 23.7 % | 0.3 % |
--------------------------------------------------------------------------------
| 101 - 1,000 | 52.7 % | 3.8 % |
--------------------------------------------------------------------------------
| 1,001 - 10,000 | 20.2 % | 9.1 % |
--------------------------------------------------------------------------------
| 10,001 - 100,000 | 2.6 % | 12.6 % |
--------------------------------------------------------------------------------
| 100,001 - 1,000,000 | 0.6 % | 31.5 % |
--------------------------------------------------------------------------------
| 1,000,001 - 3,000,000 | 0.2 % | 42.7 % |
--------------------------------------------------------------------------------
Shareholding by sector on 31 December 2007
--------------------------------------------------------------------------------
| | Proportion (%) of | Proportion (%) of |
| | holdings | shares |
--------------------------------------------------------------------------------
| Companies | 5.9 % | 11.0 % |
--------------------------------------------------------------------------------
| Financial institutions and | 0.6 % | 28.1 % |
| insurance companies | | |
--------------------------------------------------------------------------------
| Non-corporate public sector | 0.1 % | 3.8 % |
--------------------------------------------------------------------------------
| Non-profit organisations | 0.4 % | 0.6 % |
--------------------------------------------------------------------------------
| Households | 92.4 % | 55.0 % |
--------------------------------------------------------------------------------
| Foreign holding | 0.6 % | 1.5 % |
--------------------------------------------------------------------------------
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
SYSOPENDIGIA Plc shares are listed on the Nordic Exchange under Information
Technology IT Services. The company's short name is SYS1V. The lowest reported
share quotation was EUR 2.93 and the highest was EUR 4.26. The share closed at
EUR 3.00 on the final trading day in 2007. The trade-weighted average amounted
to EUR 3.77. The Group's market capitalisation totalled EUR 61,078,500 at the
end of the fiscal year.
During the reporting period, the following announcements in accordance with
Chapter 2, Section 10 of the Finnish Securities Market Act were brought to the
company's attention:
1. Osuuspankkikeskus Osk ("OPK") informed SYSOPENDIGIA on 11 May 2007 that the
ownership share of SYSOPENDIGIA Plc's votes and share capital held by investment
funds of OPK exceeded the 5 per cent limit of SYSOPENDIGIA's shares and voting
rights. Altogether, OPK and the entities over which it exercises control hold
1,101,958 shares of SYSOPENDIGIA, corresponding to 5.43 per cent of
SYSOPENDIGIA's shares and votes.
2. Nordea Bank AB (publ) informed SYSOPENDIGIA on 24 September 2007 that its
subsidiary Nordea Pankki Suomi Oyj purchased 105,100 shares of SYSOPENDIGIA on
20 September 2007, against sale options it held earlier. After the transaction,
Nordea Pankki Suomi Oyj owned 1,091,797 shares in SYSOPENDIGIA, its ownership
share thus exceeding the 5 per cent limit of SYSOPENDIGIA's shares and voting
rights, at 5.37%. In the same connection, Nordea Pankki Suomi Oyj announced that
it had made forward contracts, the first of which would fall due in December
2007, being equal to 1,000 forwards (100,000 shares), and the second in February
2008, being equal to 7,068 forwards (706,800 shares). After the forward
contracts fell due in December 2007, the ownership share of Nordea Pankki Suomi
Oyj in SYSOPENDIGIA's shares and votes would decrease to under the 5 per cent
limit. According to Nordea Pankki Suomi Oyj, it acquired the shares in
SYSOPENDIGIA as part of its market maker business.
3. Osuuspankkikeskus Osk ("OPK") informed SYSOPENDIGIA on 11 December 2007 that
the combined ownership share of SYSOPENDIGIA Plc's votes and share capital held
by the investment funds of OPK's subsidiary, OP-Rahastoyhtiö Oy, had fallen
under the 5 per cent limit of SYSOPENDIGIA's shares and voting rights.
Altogether, OPK and the entities over which it exercises control own 951,958
shares in SYSOPENDIGIA, corresponding to 4.68 per cent of SYSOPENDIGIA's shares
and votes.
4. Nordea Bank AB (publ) informed SYSOPENDIGIA on 28 December 2007 that,
deviating from the announcement made by SYSOPENDIGIA on 25 September 2007
concerning the changes in the company's ownership, Nordea Bank AB had continued
the forward contracts which would have become due in December 2007 and that the
ownership share in SYSOPENDIGIA's shares and votes held by its subsidiary,
Nordea Pankki Suomi Oyj, remained above the 5 per cent limit. On the said date,
Nordea Pankki Suomi Oyj owned 1,180,233 shares in SYSOPENDIGIA Plc, representing
5.8 per cent of SYSOPENDIGIA Plc's share capital and votes. According to the
same announcement, Nordea Pankki Suomi Oyj also holds 4,000 put options in
SYSOPENDIGIA shares. One option entitles the holder to sell 100 SYSOPENDIGIA Plc
shares at a certain price by 15 February 2008. When the put options are
exercised, the ownership share of Nordea Pankki Suomi Oyj in SYSOPENDIGIA's
shares and votes shall decrease under the 5 per cent limit. Nordea Pankki Suomi
Oyj has also made forward contracts as communicated earlier. Current forward
contracts will fall due in February 2008, being equal to 8,068 forwards (806,800
shares). After the forward contracts fall due in February 2008, Nordea Pankki
Suomi Oyj's ownership of SYSOPENDIGIA's shares shall decrease under the 5 per
cent limit. Nordea Pankki Suomi Oyj acquired these shares in SYSOPENDIGIA Plc in
relation to its market maker business.
5. Pekka Päiviö Sivonen informed SYSOPENDIGIA on 28 December 2007 that he had
continued the forward contracts which would have fallen due in December 2007.
After the forward contracts held by Sivonen fall due, his ownership share of
SYSOPENDIGIA Plc's share capital and votes will increase over the 20 per cent
limit. Currently Pekka Sivonen owns 2,826,213 shares in SYSOPENDIGIA Plc. After
the forward contracts, being equal to 2,256,800 shares, fall due on 15 February
2008, the ownership share of Pekka Sivonen will increase to 5,083,013 shares,
corresponding to 24.97 per cent of SYSOPENDIGIA's shares and votes.
STOCK OPTION SCHEMES
SYSOPENDIGIA Plc's stock option scheme 2005K ended on 31 December 2007. A total
of 646,814 shares were subscribed through the stock option scheme. The current
option schemes of SYSOPENDIGIA include the stock option scheme 2003D, on the
basis of which a maximum number of 150,000 shares in SYSOPENDIGIA can be
subscribed, and stock option scheme 2005A-C, on the basis of which a maximum
number of 900,000 shares in SYSOPENDIGIA can be subscribed.
On 31 January 2008, the remaining number of warrants issued by SYSOPENDIGIA
totalled 1,050,000. Shares subscribed for using the warrants represent a maximum
of 4.79 per cent of the company's share capital and voting rights after any
potential increase in share capital. On 31 January 2008, the number of warrants
held by SYSOPENDIGIA still totalled 634,082 of all valid warrants. On 31 January
2008, the maximum dilution effect of the issued warrants was 2.00 per cent.
During the fourth quarter of 2007, 533,646 warrants were exercised to subscribe
shares.
Helsinki, 5 February 2008
SYSOPENDIGIA PLC
Board of Directors
FURTHER INFORMATION
Juha Varelius, President and CEO
Mobile: +358 400 855849
e-mail: juha.varelius@sysopendigia.com
The Interim Report and access to the related live briefing for the media and
analysts (in Finnish) will be available in the ‘Investors' section at
www.sysopendigia.fi. The briefing starts at 11.00 a.m.
DISTRIBUTION
Helsinki Stock Exchange
Key media
ATTACHMENTS
Consolidated profit and loss account
Consolidated Balance Sheet
Consolidated cash flow statement
Statement on changes in shareholders' equity
Notes to the accounts
The Interim Report has been prepared in compliance with IFRS recognition and
measurement principles. This Interim Report is based on unaudited figures.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| | 10-12/20 | 10-12/20 | Change | 2007 | 2006 | Change, |
| | 07 | 06 | , % | | | % |
--------------------------------------------------------------------------------
| Net sales | 31,012.5 | 26,620.8 | 16 % | 105,839 | 84,968.1 | 25 % |
| | | | | .4 | | |
--------------------------------------------------------------------------------
| Other | -5.2 | 80.1 | -106 % | 211.6 | 280.2 | -25 % |
| operating | | | | | | |
| income | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -2,706.7 | -1,939.8 | 40 % | -8,363. | -4,699.6 | 78 % |
| services | | | | 5 | | |
--------------------------------------------------------------------------------
| Depreciation | -1,285.6 | -1,304.1 | -1 % | -4,893. | -4,557.3 | 7 % |
| and impairment | | | | 5 | | |
--------------------------------------------------------------------------------
| Other | -22,803. | -20,471. | 11 % | -81,713 | -67,637. | 21 % |
| operating | 1 | 5 | | .9 | 4 | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Operating | 4,211.9 | 2,985.4 | 41 % | 11,080. | 8,354.1 | 33 % |
| profit | | | | 1 | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Financial | -858.2 | -646.6 | 33 % | -3,182. | -1,659.3 | 92 % |
| expenses (net) | | | | 5 | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Pre-tax profit | 3,353.7 | 2,338.8 | 43 % | 7,897.6 | 6,694.8 | 18 % |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Direct tax | -699.0 | -713.5 | -2 % | -2,026. | -1,827.6 | 11 % |
| | | | | 4 | | |
--------------------------------------------------------------------------------
| Profit for the | 2,654.7 | 1,625.3 | 63 % | 5,871.2 | 4,867.2 | 21 % |
| period | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Allocation: | | | | | | |
--------------------------------------------------------------------------------
| Parent company | 2,654.7 | 1,629.8 | 63 % | 5,871.2 | 4,854.1 | 21 % |
| shareholders | | | | | | |
--------------------------------------------------------------------------------
| Minority | 0.0 | -4.5 | -100 % | 0.0 | 13.1 | -100 % |
| shareholders | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.13 | 0.08 | 63 % | 0.29 | 0.25 | 16 % |
| share, EUR | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.13 | 0.08 | 63 % | 0.29 | 0.25 | 16 % |
| share | | | | | | |
| (diluted), EUR | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
--------------------------------------------------------------------------------
| Assets | 31.12.2007 | 31.12.2006 | Change, % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Fixed and other | | | |
| non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | 102,107.6 | 103,210.0 | -1 % |
--------------------------------------------------------------------------------
| Tangible assets | 2,935.5 | 3,251.6 | -10 % |
--------------------------------------------------------------------------------
| Financial assets | 660.3 | 608.4 | 9 % |
--------------------------------------------------------------------------------
| Deferred tax assets | 2,312.0 | 2,909.9 | -21 % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total fixed and other | 108,015.4 | 109,979.9 | -2 % |
| non-current assets | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Current receivables | 29,889.0 | 24,836.9 | 20 % |
--------------------------------------------------------------------------------
| Available-for-sale | 5,180.4 | 2,778.3 | 86 % |
| financial assets | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 6,558.4 | 8,727.3 | -25 % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total current assets | 41,628.2 | 36,342.5 | 15 % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total assets | 149,643.2 | 146,322.4 | 2 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and | 31.12.2007 | 31.12.2006 | Change, % |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Share capital | 2,085.4 | 2,031.2 | 3 % |
--------------------------------------------------------------------------------
| Issue premium fund | 7,892.5 | 6,729.5 | 17 % |
--------------------------------------------------------------------------------
| Other reserves | 5,203.8 | 5,203.8 | 0 % |
--------------------------------------------------------------------------------
| Unrestricted invested | 38,110.6 | 39,735.5 | -4 % |
| shareholders' equity | | | |
--------------------------------------------------------------------------------
| Fair value reserve | 0.0 | 0.0 | |
--------------------------------------------------------------------------------
| Translation difference | -11.8 | -6.6 | 79 % |
--------------------------------------------------------------------------------
| Retained earnings/loss | 9,450.3 | 4,458.0 | 112 % |
--------------------------------------------------------------------------------
| Profit for the period | 5,871.2 | 4,854.1 | 21 % |
--------------------------------------------------------------------------------
| Equity attributable to | 68,602.0 | 63,005.6 | 9 % |
| parent company | | | |
| shareholders | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 113.8 | -100 % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total shareholders' equity | 68,602.0 | 63,119.4 | 9 % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Long-term, | 55,646.7 | 56,081.5 | -1 % |
| interest-bearing | | | |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 3,442.4 | 3,822.3 | -10 % |
--------------------------------------------------------------------------------
| Total long-term | 59,089.1 | 59,903.8 | -1 % |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | 766.3 | 582.6 | 32 % |
| liabilities | | | |
--------------------------------------------------------------------------------
| Other short-term debt | 21,185.8 | 22,716.7 | -7 % |
--------------------------------------------------------------------------------
| Total short-term | 21,952.5 | 23,299.2 | -6 % |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total liabilities | 81,041.6 | 83,203.0 | -3 % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Shareholders' equity and | 149,643.2 | 146,322.4 | 2 % |
| liabilities | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| Cash flow from business operations: | 1.1.2007 - | 1.1.2006 - |
| | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Profit for the period | 5,871 | 4,854 |
--------------------------------------------------------------------------------
| Adjustments to net profit | 10,165 | 8,323 |
--------------------------------------------------------------------------------
| Change in working capital | -4,566 | -4,093 |
--------------------------------------------------------------------------------
| Interest paid | -3,329 | -1,917 |
--------------------------------------------------------------------------------
| Interest received | 250 | 271 |
--------------------------------------------------------------------------------
| Income tax paid | -2,233 | -1,682 |
--------------------------------------------------------------------------------
| Net cash flow from operating activities | 6,157 | 5,756 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Cash flow from investments: | | |
--------------------------------------------------------------------------------
| Purchase of property, plant and | -1,979 | -1,876 |
| equipment, and intangible assets | | |
--------------------------------------------------------------------------------
| Proceeds from sale of intangible assets | - | 376 |
| and PPE | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiary, net of cash | -2,339 | -34,229 |
| acquired | | |
--------------------------------------------------------------------------------
| Proceeds of sale of other investments | - | -1 |
--------------------------------------------------------------------------------
| Dividends received | - | 12 |
--------------------------------------------------------------------------------
| Cashflow from investments | -4,318 | -35,718 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Cashflow from financing: | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 1,241 | 320 |
--------------------------------------------------------------------------------
| Equity financing of share-based bonus | -971 | - |
| scheme | | |
--------------------------------------------------------------------------------
| Repayment of current loans | - | -41,208 |
--------------------------------------------------------------------------------
| Repayments of non-current loans | -252 | -21,875 |
--------------------------------------------------------------------------------
| Proceeds from current loans | - | 38,000 |
--------------------------------------------------------------------------------
| Proceeds from non-current loans | - | 55,000 |
--------------------------------------------------------------------------------
| Dividends paid and other profit | -1,625 | -930 |
| distribution | | |
--------------------------------------------------------------------------------
| Cashflow from financing: | -1,606 | 29,307 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Change in liquid assets | 234 | -655 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Liquid assets at beginning of period | 11,505 | 12,326 |
--------------------------------------------------------------------------------
| Change in fair value of cash and cash | - | -166 |
| equivalents | | |
--------------------------------------------------------------------------------
| Change in liquid assets | 234 | -655 |
--------------------------------------------------------------------------------
| Liquid assets at period-end | 11,739 | 11,505 |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g | h |
--------------------------------------------------------------------------------
| Balance 1 | 1,84 | 39, | 5,204 | 23 | 166 | 5,128 | 111 | 52,189 |
| Jan. 2006 | 0 | 718 | | | | | | |
--------------------------------------------------------------------------------
| Available- | | | | | | | | 0 |
| for-sale | | | | | | | | |
| investment | | | | | | | | |
| s: | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | | -166 | | | -166 |
| gains/loss | | | | | | | | |
| es | | | | | | | | |
--------------------------------------------------------------------------------
| Other | 12 | | | | | 255 | 0 | 264 |
--------------------------------------------------------------------------------
| Items | 12 | 0 | 0 | 0 | -166 | 255 | 0 | 97 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | 4,854 | 13 | 4,867 |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 0 | 0 | 0 | 0 | 0 | 4,854 | 13 | 4,867 |
| recognised | | | | | | | | |
| income and | | | | | | | | |
| expenses | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Increase | 180 | 6,72 | | | | | | 6,903 |
| of share | | 3 | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -920 | -10 | -930 |
| payment | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | -39 | 39,73 | -30 | | -1 | | -7 |
| | | 712 | 6 | | | | | |
--------------------------------------------------------------------------------
| BALANCE 31 | 2,03 | 6,72 | 44,93 | -7 | 0 | 9,312 | 114 | 63,119 |
| DEC. 2006 | 1 | 9 | 9 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g | h |
--------------------------------------------------------------------------------
| Balance 1 | 2,03 | 6,72 | 44,93 | -7 | 0 | 9,312 | 114 | 63,119 |
| Jan. 2007 | 1 | 9 | 9 | | | | | |
--------------------------------------------------------------------------------
| Available- | | | | | | | | 0 |
| for-sale | | | | | | | | |
| investment | | | | | | | | |
| s: | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | | | | | 0 |
| gains/loss | | | | | | | | |
| es | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 62 | | 62 |
--------------------------------------------------------------------------------
| Items | 0 | 0 | 0 | 0 | 0 | 62 | 0 | 62 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Profit for | | | | | | 5,871 | 0 | 5,871 |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Total | 0 | 0 | 0 | 0 | 0 | 5,871 | 0 | 5,871 |
| recognised | | | | | | | | |
| income and | | | | | | | | |
| expenses | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Increase | 5 | 117 | | | | | | 121 |
| of share | | | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | -1,62 | | | | | -1,625 |
| payment | | | 5 | | | | | |
--------------------------------------------------------------------------------
| Share-base | | | | | | 50 | | 50 |
| d | | | | | | | | |
| transactio | | | | | | | | |
| ns settled | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Stock | 49 | 1,07 | | | | | | 1,120 |
| options | | 0 | | | | | | |
| exercised | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | -23 | | -5 | | 26 | -114 | -114 |
--------------------------------------------------------------------------------
| BALANCE 31 | 2,08 | 7,89 | 43,31 | -12 | 0 | 15,321 | 0 | 68,602 |
| JAN. 2007 | 5 | 3 | 4 | | | | | |
--------------------------------------------------------------------------------
a = Share capital
b = Share premium
c = Other reserves and invested unrestricted equity
d = Currency translation differences
e = Fair value reserve
f = Retained earnings
g = Minority interest
h = Total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles:
The accounting principles and calculation methods used in the previous year-end
accounts have been applied to this Interim Report.
The subsidiary acquired in the third quarter, Capital C AB, has been included in
the consolidated financial statement as of 1 September 2007.
Seasonal nature of business:
The Group's business is affected by the number of workdays each month as well as
by holiday seasons.
Dividends paid:
A per-share dividend of EUR 0.08, or a total of EUR 1,624,985.44, was paid based
on the decision of the AGM of 28 February 2007. The dividend payment date was 9
March 2007.
Events after the balance sheet date: SYSOPENDIGIA Plc acquired all shares of
Sunrise Resources Ltd on 14 January 2008.
Segment information:
--------------------------------------------------------------------------------
| NET SALES, EUR | 10-12/ | 10-12/ | Change | 1-12/20 | 1-12/20 | Change, |
| 1,000 | 2007 | 2006 | , % | 07 | 06 | % |
--------------------------------------------------------------------------------
| Telecommunications | 13,956 | 11,931 | 17 % | 47,963 | 43,618 | 10 % |
--------------------------------------------------------------------------------
| Finance and | 9,349 | 7,386 | 27 % | 29,298 | 23,633 | 24 % |
| Services | | | | | | |
--------------------------------------------------------------------------------
| Industry and Trade | 7,708 | 7,303 | 6 % | 28,578 | 17,717 | 61 % |
--------------------------------------------------------------------------------
| Group total | 31,012 | 26,621 | 16 % | 105,839 | 84,968 | 25 % |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING PROFIT, | 10-12/ | 10-12/ | Change | 1-12/20 | 1-12/20 | Change, |
| EUR 1,000 | 2007 | 2006 | , % | 07 | 06 | % |
--------------------------------------------------------------------------------
| Telecommunications | 1,772 | 1,562 | 13 % | 5,671 | 4,018 | 41 % |
--------------------------------------------------------------------------------
| Finance and | 1,408 | 479 | 194 % | 2,617 | 2,322 | 13 % |
| Services | | | | | | |
--------------------------------------------------------------------------------
| Industry and Trade | 1,031 | 942 | 9 % | 3,511 | 2,014 | 74 % |
--------------------------------------------------------------------------------
| One-off items | | | | -719 | | |
--------------------------------------------------------------------------------
| Group total | 4,212 | 2,985 | 41 % | 11,080 | 8,354 | 33 % |
--------------------------------------------------------------------------------
Acquired business operations:
SYSOPENDIGIA Plc acquired all shares of Capital C AB on 31 August 2007. The
acquisition price was EUR 2.6 million, paid as a cash consideration, and the
Group financed the transaction through its cash reserves. Capital C AB's
four-month earnings of EUR 0.4 million are included in the consolidated income
statement for 2007. Capital C AB is a Swedish financial software company. With
this acquisition, SYSOPENDIGIA strengthened its operations as well as product
and solution offering in the financial sector for the Nordic market. The
acquisition generated EUR 1.3 million of goodwill, EUR 0.4 million of which has
been allocated for the acquired products.
--------------------------------------------------------------------------------
| EUR 1,000 | Fair value | Book value before |
| | recognised upon | combination |
| | combination | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 55 | 55 |
--------------------------------------------------------------------------------
| Tax receivables | 1 | 1 |
--------------------------------------------------------------------------------
| Receivables | 500 | 500 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 1,428 | 1,428 |
--------------------------------------------------------------------------------
| Total assets | 1,984 | 1,984 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Other creditors | 709 | 709 |
--------------------------------------------------------------------------------
| Total liabilities | 709 | 709 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Net assets | 1,275 | 1,275 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Acquisition cost | 2,608 | |
--------------------------------------------------------------------------------
| Business value | 1,333 | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Acquisition price paid in cash, | -2,608 | |
| total | | |
--------------------------------------------------------------------------------
| Liquid assets of the acquired | 1,428 | |
| subsidiary | | |
--------------------------------------------------------------------------------
| Cash flow effect | -1,180 | |
--------------------------------------------------------------------------------
After the end of 2007 fiscal year, on 14 January 2008, SYSOPENDIGIA Plc acquired
the entire share capital of Sunrise Resources Ltd. The sales price was EUR 3.6
million paid as a cash consideration and SYSOPENDIGIA financed the transaction
through its cash reserves. In addition, the sellers may receive an additional
purchase price based on Sunrise-r objectives for the year 2008. The maximum
amount of the additional purchase price is EUR 0.6 million, which may be paid
either in cash or in SYSOPENDIGIA's shares, as determined by SYSOPENDIGIA. The
acquisition forms part of SYSOPENDIGIA's internationalisation strategy and has
strengthened the company's current services with qualified near-shore
development services as well as local support for customers operating in the
Russian markets. The acquisition generated EUR 3.1 million of goodwill.
--------------------------------------------------------------------------------
| EUR 1,000 | Fair value | Book value before |
| | recognised upon | combination |
| | combination | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 50 | 50 |
--------------------------------------------------------------------------------
| Intangible assets | 4 | 4 |
--------------------------------------------------------------------------------
| Financial assets | 32 | 32 |
--------------------------------------------------------------------------------
| Receivables | 463 | 463 |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 865 | 865 |
--------------------------------------------------------------------------------
| Total assets | 1,413 | 1,413 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Tax liabilities | 27 | 27 |
--------------------------------------------------------------------------------
| Other creditors | 260 | 260 |
--------------------------------------------------------------------------------
| Total liabilities | 287 | 287 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Net assets | 1,126 | 1,126 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Acquisition cost | 4,200 | |
--------------------------------------------------------------------------------
| Business value | 3,074 | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Acquisition price, total | -4,200 | |
--------------------------------------------------------------------------------
| Additional purchase price, | 600 | |
| conditional | | |
--------------------------------------------------------------------------------
| Liquid assets of the acquired | 865 | |
| subsidiary | | |
--------------------------------------------------------------------------------
| Cash flow effect | -2,735 | |
--------------------------------------------------------------------------------
Consolidated income statement by quarter:
--------------------------------------------------------------------------------
| EUR 1,000 | 10-12/200 | 7-9/2007 | 4-6/2007 | 1-3/2007 | 10-12/200 |
| | 7 | | | | 6 |
--------------------------------------------------------------------------------
| Net sales | 31,012.5 | 22,645.0 | 25,903.1 | 26,278.9 | 26,620.8 |
--------------------------------------------------------------------------------
| Other operating | -5.2 | 13.0 | 80.3 | 123.4 | 80.1 |
| income | | | | | |
--------------------------------------------------------------------------------
| Materials and | -2,706.7 | -1,978.7 | -1,755.9 | -1,922.2 | -1,939.8 |
| services | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -1,285.6 | -1,178.2 | -1,159.6 | -1,270.1 | -1,304.1 |
| impairment | | | | | |
--------------------------------------------------------------------------------
| Other operating | -22,803.1 | -17,977.2 | -20,599.8 | -20,333. | -20,471.5 |
| expenses | | | | 8 | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 4,211.9 | 1,524.0 | 2,468.0 | 2,876.2 | 2,985.4 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Financial | -858.2 | -800.2 | -733.8 | -790.4 | -646.6 |
| expenses (net) | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Pre-tax profit | 3,353.7 | 723.8 | 1,734.3 | 2,085.8 | 2,338.8 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Direct tax | -699.0 | -177.5 | -465.8 | -684.1 | -713.5 |
--------------------------------------------------------------------------------
| Profit for the | 2,654.7 | 546.3 | 1,268.6 | 1,401.6 | 1,625.3 |
| period | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Allocation: | | | | | |
--------------------------------------------------------------------------------
| Parent company | 2,654.7 | 546.3 | 1,268.6 | 1,401.6 | 1,629.8 |
| shareholders | | | | | |
--------------------------------------------------------------------------------
| Minority | 0.0 | 0.0 | 0.0 | 0.0 | -4.5 |
| shareholders | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.13 | 0.03 | 0.06 | 0.07 | 0.08 |
| share, EUR | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.13 | 0.03 | 0.06 | 0.07 | 0.08 |
| share (diluted), | | | | | |
| EUR | | | | | |
--------------------------------------------------------------------------------
Group key figures and ratios:
--------------------------------------------------------------------------------
| | 2007 | 2006 |
--------------------------------------------------------------------------------
| Extent of business | | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Net sales | 105,839.4 | 84,968 |
--------------------------------------------------------------------------------
| - change from previous year | 25 % | 40 % |
--------------------------------------------------------------------------------
| Average capital invested | 123,994 | 119,783 |
--------------------------------------------------------------------------------
| Personnel at period-end | 1,155 | 1,087 |
--------------------------------------------------------------------------------
| Average number of personnel | 1,116 | 981 |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Profitability | | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Operating profit | 11,080 | 8,354 |
--------------------------------------------------------------------------------
| - % of turnover | 10 % | 10 % |
--------------------------------------------------------------------------------
| Result before taxes | 7,898 | 6,695 |
--------------------------------------------------------------------------------
| - % of turnover | 7 % | 8 % |
--------------------------------------------------------------------------------
| Profit for the period | 5,871 | 4,854 |
--------------------------------------------------------------------------------
| % of turnover | 6 % | 6 % |
--------------------------------------------------------------------------------
| Return on equity, % | 9 % | 8 % |
--------------------------------------------------------------------------------
| Return on investment, % | 9 % | 9 % |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Financing and financial position | | |
--------------------------------------------------------------------------------
| | | |
--------------------------------------------------------------------------------
| Interest-bearing liabilities | 56,413 | 56,664 |
--------------------------------------------------------------------------------
| Short-term investments & cash and bank | 11,739 | 11,506 |
| receivables | | |
--------------------------------------------------------------------------------
| Gearing, % | 65 % | 72 % |
--------------------------------------------------------------------------------
| Equity ratio, % | 47 % | 44 % |
--------------------------------------------------------------------------------
| Net cash flow from operating activities | 6,157 | 5,756 |
--------------------------------------------------------------------------------
| Basic earnings per share (EUR) | 0.29 | 0.25 |
--------------------------------------------------------------------------------
| Earnings per share (EUR), diluted | 0.29 | 0.25 |
--------------------------------------------------------------------------------
| Equity per share | 3.32 | 3.10 |
--------------------------------------------------------------------------------
| Lowest share price | 2.93 | 3.00 |
--------------------------------------------------------------------------------
| Highest share price | 4.26 | 4.97 |
--------------------------------------------------------------------------------
| Average share price | 3.77 | 3.75 |
--------------------------------------------------------------------------------
| Closing share price | 3.00 | 3.42 |
--------------------------------------------------------------------------------
| Market capitalization, | 61,079 | 69,669 |
--------------------------------------------------------------------------------
The formulae for the key figures and ratios are available in the financial
statements section. These formulae remained unchanged during the reporting
period.
A total of 494,145 new shares were subscribed and paid under the option scheme
2005K2 during December 2007, and entered into the Trade Register on 18 January
2008. These shares have been taken into account when calculating the total
number of company shares. The weighted average number of shares during the
reporting period, adjusted for share issues, totalled 20,332,411. The weighted
average number of shares during the reporting period, adjusted for dilution,
totalled 20,530,553. The number of outstanding shares totalled 20,853,635 at the
end of the fiscal year.
The company does not hold any of its own shares. Relating to the company's
performance-based incentive system, SYSOPENDIGIA has financed the acquisition of
300,000 company's shares. In the coming years, these shares are intended for
distribution to key personnel as rewards for targets achieved in accordance with
the conditions of the performance-based incentive system. In accordance with the
Board of Directors decision, performance-based incentives to key personnel will
be paid in company shares.
The Group has no liabilities associated with derivative contracts.
