STOCK EXCHANGE RELEASE
Free for publication on August 8, 2008 at 8.00 am. (CEST+1)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY TO JUNE 2008
SUMMARY 2Q 2008
- Net sales amounted to EUR 41.0 million (EUR 33.5 million, 2Q 2007),
representing a 22.4 per cent growth year-on-year.
- Operating loss from business operations amounted to EUR -9.9
million and write-offs amounting to EUR -3.4 million, resulting in a
total operating loss of EUR -13.3 million (EUR -6.6 million, 2Q
2007).
- EB continued to invest substantially in R&D, amounting in 2Q to EUR
10.0 million (EUR 8.5 million in 2Q 2007) equaling to 24.4 per cent
of net sales.
- Operating cash flow amounted to EUR -9.0 million. The net cash flow
amounted to EUR -10.9 million (EUR 2.1 million 2Q 2007).
- Equity ratio remained at a high level of 69.9% (69.6 % 2Q 2007).
EB'S CEO PERTTI KORHONEN:"EB's sales continued to increase during the first half of the year
due to the growth of the automotive software and mobile terminals
businesses. We are unsatisfied with our profitability and the
development of the sales of the radio network solutions and wireless
communications tools businesses. Our main focus is to improve
profitability during the second half of 2008."
FINANCIAL PERFORMANCE DURING JANUARY - JUNE 2008
(Comparisons are given to the first half of 2007, unless otherwise
indicated.)
EB's net sales during January - June 2008 increased 37.0 per cent to
EUR 88.3 million, compared with EUR 64.5 million in the first half of
2007.
Operating loss, including the non-recurring items costs of EUR -6.3
million, for first half of 2008 amounted to EUR -21.4 million (EUR
-13.8 million in the first half of 2007).
The non-recurring items of EUR 6.3 million include
- restructuring costs of EUR 2.9 million, as announced in March, due
to the rearrangements in the Wireless Business Segment and a capital
loss and a write-off from the sale of the shares of the Swiss
subsidiary, Elektrobit AG,
- a write-off of EUR 2.8 million, as announced in June, due to review
of EB's goodwill valuations of the RFID reader system business
belonging to the Wireless Business Segment,
- a write-off of EUR 0.6 million of an activated R&D investment.
The net sales of the Automotive Business Segment during the first
half of 2008 amounted to EUR 28.7 million (EUR 21.8 million in the
first half of 2007) representing a growth of 31.5 per cent compared
to the first half of 2007. The operating loss was EUR -5.7 million
(EUR -0.8 million in the first half of 2007), reflecting the
significantly increased investments in the R&D of EB's automotive
software platform products as well as expanding the geographical
footprint to acquire new customers and grow the business.
During the first half of 2008, the net sales of the Wireless Business
Segment amounted to EUR 59.4 million (EUR 42.2 million in the first
half of 2007), representing a growth of 40.5 per cent compared to the
first half of 2007. The net sales included extraordinary low-margin
through-licensing revenues of approximately EUR 3 million. The
operating loss, including the aforementioned non-recurring
restructuring costs of EUR -6.3 million, was EUR -15.6 million (EUR
-13.5 million in first half of 2007) reflecting:
- significant and larger than originally anticipated investments in
the R&D of Mobile WiMAX base station module products,
- loss in RFID reader systems especially in the first quarter of
2008,
- rapid deceleration of the market and therefore the sales of
wireless communications emulation and design tools,
- delay of the accumulation of net sales of WiMAX base station module
products,
- weaker demand and stronger than expected price competition in radio
network solutions' R&D services.
The total R&D investments during the reporting period were EUR 21.6
million (EUR 15.7 million in the first half of 2007), equaling 24.5
per cent of the net sales (24.4% in 2007). EUR 1.0 million of them
were capitalized. Overall, EB continued significant investments in
R&D, in order to develop new businesses, with the share of
investments in the Automotive Business Segment growing.
EB initiated personnel negotiations in March relating to the wireless
communication tools and radio network solutions businesses in
Finland. Personnel negotiations were concluded in May and as a
result, 59 jobs were cut out.
CONSOLIDATED INCOME STATEMENT (MEUR) 1H 2008 1H 2007
6 months 6 months
NET SALES 88.3 64.5
OPERATING PROFIT (LOSS) -21.4 -13.8
Financial income and expenses 0.2 1.1
PROFIT BEFORE TAX -21.2 -12.7
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS -21.2 -12.7
Profit after tax for the year from discontinued 0.1
operations 12.8
PROFIT FOR THE YEAR -21.0 0.0
Attributable to
Equity holders of the parent -21.0 0.0
Minority interest 0.0 0.0
Earnings per share EUR continuing operations -0.16 -0.10
Earnings per share EUR discontinued operations 0.00 0.10
Earnings per share EUR continuing and discontinued -0.16
operations 0.00
- Cash flow from Business Operations amounted to EUR -16.5 million
(EUR -11.7 million).
- Equity ratio was 69.9% (69.6%).
- Net gearing was -30.3% (-34.8%).
QUARTERLY FIGURES
The quarterly distribution of the Group's overall net sales and
profit, MEUR:
+-------------------------------------------------------------+
| | 2Q08 | 1Q08 | 4Q07 | 3Q07 | 2Q07 |
|-------------------------+-------+------+------+------+------|
| Net sales | 41.0 | 47.3 | 44.6 | 35.3 | 33.5 |
|-------------------------+-------+------+------+------+------|
| Operating profit (loss) | -13.3 | -8.0 | -2.4 | -4.0 | -6.6 |
|-------------------------+-------+------+------+------+------|
| Result before taxes | -13.6 | -7.7 | -3.3 | -4.0 | -6.3 |
|-------------------------+-------+------+------+------+------|
| Result for the period | -13.5 | -7.7 | -3.3 | -4.0 | -6.4 |
+-------------------------------------------------------------+
The distribution of the net sales by Business Segment, MEUR:
+------------------------------------------------------+
| | 2Q08 | 1Q08 | 4Q07 | 3Q07 | 2Q07 |
|-------------------+------+------+------+------+------|
| Automotive | 13.2 | 15.5 | 16.2 | 14.5 | 11.2 |
|-------------------+------+------+------+------+------|
| Wireless | 27.7 | 31.7 | 28.2 | 20.4 | 22.2 |
|-------------------+------+------+------+------+------|
| Corporation total | 41.0 | 47.3 | 44.6 | 35.3 | 33.5 |
+------------------------------------------------------+
The distribution of the net sales by market area, MEUR and %:
+--------------------------------------------------+
| | 2Q08 | 1Q08 | 4Q07 | 3Q07 | 2Q07 |
|----------+-------+-------+-------+-------+-------|
| Asia | 2.1 | 2.0 | 2.0 | 4.4 | 0.6 |
| | 5.2% | 4.3% | 4.5% | 12.5% | 1.7% |
|----------+-------+-------+-------+-------+-------|
| Americas | 12.7 | 18.5 | 14.5 | 7.4 | 7.3 |
| | 31.0% | 39.2% | 32.5% | 20.9% | 21.7% |
|----------+-------+-------+-------+-------+-------|
| Europe | 26.2 | 26.8 | 28.1 | 23.5 | 25.7 |
| | 63.8% | 56.5% | 63.0% | 66.5% | 76.6% |
+--------------------------------------------------+
Net sales (external) and operating profit development by Business
Segments and Other businesses were as follows, MEUR:
+-----------------------------------------------------------------+
| | 2Q08 | 1Q08 | 4Q07 | 3Q07 | 2Q07 |
|-------------------------+-------+------+------+--------+--------|
| Automotive | | | | | |
| Net sales | 13.2 | 15.5 | 16.2 | 14.5 | 11.2 |
| Operating profit (loss) | -4.1 | -1.6 | 1.0 | 0.5 | -0.2 |
|-------------------------+-------+------+------+--------+--------|
| Wireless | | | | | |
| Net sales | 27.7 | 31.7 | 28.2 | 20.4 | 22.2 |
| Operating profit (loss) | -9.1 | -6.5 | -4.1 | -5.2 | -7.1 |
|-------------------------+-------+------+------+--------+--------|
| Other businesses | | | | | |
| Net sales | 0.1 | 0.1 | 0.1 | 0.3 | 0.1 |
| Operating profit (loss) | -0.2 | 0.1 | 0.7 | 0.7 | 0.7 |
|-------------------------+-------+------+------+--------+--------|
| Total | | | | | |
| Net sales | 41.0 | 47.3 | 44.6 | 35.3 | 33.5 |
| Operating profit (loss) | -13.3 | -8.0 | -2.4 | -4.0 | -6.6 |
+-----------------------------------------------------------------+
BUSINESS SEGMENTS' MAIN EVENTS DURING 2Q 2008
EB's reporting as from January 1, 2008 is based on the Automotive and
Wireless Business Segments.
AUTOMOTIVE
The Automotive Business Segment consists of in-car software products,
navigation software for after market devices (PND, personal
navigation devices) and R&D services for the automotive industry with
leading car manufacturers, car electronics suppliers (Tier 1) and
automotive chipset suppliers as customers.
During the second quarter, the net sales of the Automotive Business
Segment amounted to EUR 13.2 million (EUR 11.2 million in 2Q 2007),
which represents a year-on-year growth of 17.9 per cent. The
operating loss was EUR -4.1 million (EUR -0.2 million in 2Q 2007),
reflecting weaker than expected sales of PND software licenses, the
increased investments in the R&D of EB's automotive software platform
products as well as marketing and sales investments and expanding the
geographical footprint.
During the second quarter EB was preparing and investing in building
stronger footholds for the future of automotive business on the
global market. EB continued to consolidate its position in the USA to
enable the future growth and was preparing the acquisition of Net
Consulting & Services S.A.R.L in France which was signed and closed
in July. The acquisition strengthens EB's position in France and
brings further assets to ECU (Electronic Control Unit) software
product portfolio.
WIRELESS
The Wireless Business Segment comprised the following businesses:
- Mobile terminal solutions
- Radio network solutions
- Wireless communications tools
- Wireless sensor solutions.
During the second quarter of 2008, the net sales of the Wireless
Business Segment amounted to EUR 27.7 million (EUR 22.2 million in 2Q
2007), representing a growth of 24.8 per cent. The operating loss,
including the aforementioned non-recurring restructuring costs of EUR
-3.4 million, was EUR -9.1 million (EUR -7.1 million in 2Q 2007)
reflecting the significant and larger than originally anticipated
investments in the R&D of Mobile WiMAX base station module products,
the rapid deceleration of the sales of wireless communications
emulation and design tools and the delay of the accumulation of net
sales of WiMAX base station modules products.
During the quarter, the mobile terminal R&D services have
increasingly evolved to providing solutions for example in
multi-radio applications, which has improved the profitability
through higher value added. The development of handset technologies
and reference designs for TerreStar Networks' upcoming
satellite-terrestrial all-IP mobile network continued, while its
share of the mobile terminal business' net sales started to decrease
as planned.
The demand of R&D services in radio network solutions was weaker and
the price competition stronger than expected during the quarter.
Therefore, in May, personnel negotiations were concluded to adjust
the fixed cost level.
The sales of wireless communications emulation and design tools
declined especially in the USA and Asia apart from China in
comparison to the corresponding period in 2007. The slow sales
reflects the phase of test tool investments in wireless technologies
where the initial investments for WiMAX have been made and the LTE
test tool investments have not yet started in a large scale. The
outsourcing of the production of the emulator products was completed
in the second quarter, consequently improving the future cost
efficiency and flexibility of the supply chain.
The deliveries of industrial WLAN Access Points to a major automotive
OEM vendor were started in May. The product development of RFID
reader systems products progressed and the deliveries of first
solutions to customers were started. The UHF (Ultra High Frequency)
RFID reader system market's volume growth has been delayed as it
consists mostly of pilots and trials, which keep the market and its
growth lower than expected. To reflect these changes on the market,
EB reviewed the goodwill valuations of the RFID reader system
business, which has resulted in a write-off of approximately EUR 2.8
million, as announced in June.
MARKET OUTLOOK
The share of electronics and software in cars has grown and it is
expected that the trend for increased use of software continues to
prevail in the market. The majority of the innovation and
differentiation in the automotive industry is brought about by
software and electronics and the use of standard software solutions
is expected to increase. The automotive software market is expected
to enjoy a 15 per cent Compound Annual Growth Rate (CAGR) during
2007-2012 in Europe (Frost & Sullivan). A general slow down in
economy, increasing fuel prices and the consequent uncertainties have
an effect in the short term on the demand of cars, which might have
an impact on the timing of the automotive software projects. In the
long term, the usage of software in cars will continue to grow.
The volume share of smartphones is expected to continue to grow
during the next years due to the rapid increase in demand for new
features and services (Canalys). New multi-radio combinations and
software platforms are creating new business opportunities.
The value chain and hence the horizontal technology and product
market for Mobile WiMAX are still in a forming phase, and as a
result, the commercial market start has delayed. The main Mobile
WiMAX operator services market in America has been announced to start
during the second half of 2008.
After having plummeted during the first half of 2008, the wireless
communications tools market is predicted to expand moderately, as the
development of cellular technologies (HSDPA, HSUPA, 3GPP LTE, MIMO)
and non-cellular technologies (Mobile WiMAX, WiBRO) are generating
demand for development tools, such as channel emulators. Wireless
applications for aerospace and defense industries are becoming an
important opportunity for the air-interface emulator providers.
The UHF (Ultra High Frequency) RFID reader system market growth has
been delayed. The market is expected to start moving gradually from
pilot and trial projects to commercial deployments. The global RFID
reader market is estimated to grow with a CAGR of over 20 per cent
for the period of 2006 to 2011 (VDC).
RESEARCH AND DEVELOPMENT DURING 2Q 2008
EB continued to invest in the following development areas:
- Automotive software platform based products
- Mobile WiMAX radio base station module products
- Radio channel emulation product portfolio
- RFID reader systems product portfolio
- Technical core competence areas.
The total R&D investments during the second quarter were EUR 10.0
million (EUR 8.5 million in 2Q 2007), equaling 24.4 per cent of the
net sales (25.3% in 2007).
EVENTS AFTER THE REPORTING PERIOD
On July 4, EB and RL-Nordic Oy signed an agreement, under which EB
sold the property in Oulunsalo to RL-Nordic Oy. The debt free
purchase price for the sold property was EUR 7.9 million. The cash
consideration was approximately EUR 2.1 million. The property sales
transaction will not lead to significant capital gains.
On July 17, EB acquired Net Consulting & Services S.A.R.L in France.
With the acquisition, EB strengths its automotive software position
in France and strengthens further its ECU (Electronic Control Unit)
software product portfolio. The acquisition does not have a
significant impact on EB's balance sheet or result.
ACTIONS TO IMPROVE PROFITABILITY
Improvement of profitability is the main focus of EB during the
second half of 2008.
The own R&D investments of EB will be adjusted to a sustainable
level. Thus, they will in second half of 2008 reduce compared to the
first half of 2008.
The corporate research organization of EB will be dismantled and the
R&D teams thus released will be moved to chargeable customer solution
work.
Within the Wireless Business Segment, as a part of the structural and
profitability improvement actions, EB has decided to merge the mobile
terminal solutions and radio network solutions businesses into a
wireless solutions business. With this change, EB will improve the
cost structure, flexibility and resource utilization, and strengthen
the capability to penetrate new market domains and customers.
OUTLOOK FOR THE SECOND HALF OF 2008
Improvement of profitability is the main focus of EB during the
second half of 2008.
EB expects the net sales during the second half of 2008 to be roughly
at the level of the first half of 2008 (EUR 88.3 million).
EB expects the operating result from business operations in the
second half of 2008 to be significantly better than the operating
loss from business operations in the first half of 2008 (EUR -15,1
million without non-recurring items).
RISKS AND UNCERTAINTIES
EB follows a risk management policy with the objective of covering
risks related to business operations, properties, agreements,
competences, currencies, financing and strategy. The company has
identified risks and uncertainties related to such issues as
strategy, business operations, personnel, product development,
product liability, property and financing.
Among others, the following risks are related to the company's
business operations in the ongoing financial period:
In R&D services businesses the risks are mainly related to
uncertainties of customers' product program decisions, their make or
buy decisions and, on the other hand, their decisions to continue,
downsize or terminate current product programs, ramping up of project
resources, timing of the most important technology components and,
competitive situation in the market, which all may affect the R&D
service demand and price levels. Further, there are typical industry
warranty and liability risks involved in selling R&D services.
Additional risks emanate from ongoing restructuring of the
telecommunications infrastructure industry.
In the technology product businesses the risks are related to
potential market delays (in particular in the areas of Mobile WiMAX
and RFID reader systems), to size, timing and short visibility of the
customers' product purchases and orders, timely closing of customer
contracts, delays in R&D projects, activations based on customer
contracts, obsolescence of inventories and technology risks in
product development causing higher than planned R&D costs. Revenues
expected to come from new products for existing and new customers
include normal timing risks.
More information on the risks and uncertainties affecting EB can be
found on the company website at www.elektrobit.com/aboutelektrobit.
BALANCE SHEET AND FINANCING
The figures presented in the balance sheet of June 30, 2008, have
been compared with the balance sheet of December 31, 2007
(EUR 1,000).
6/2008 12/2007
Non-current assets 62,804 77,196
Current assets 144,357 158,918
Total assets 207,161 236,114
Share capital 12,941 12,941
Other equity 129,399 152,710
Minority interest 0 0
Total shareholders' equity 142,340 165,651
Non-current liabilities 26,785 28,937
Current liabilities 38,036 41,526
Total shareholders' equity and liabilities 207,161 236,114
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -9.0 million
- increase in net working capital EUR -6.3 million
+ interest, taxes and dividends EUR -1.2 million
= cash generated from operations EUR -16.5 million
- net cash used in investment activities EUR +25.7 million
- net cash used in financing EUR -6.3 million
= net change in cash and cash equivalents EUR +2.9 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 61.9 million (EUR 78.8 million on December 31,
2007). Accounts and other payables, booked in interest-free current
liabilities, were at EUR 29.1 million (EUR 33.2 million on December
31, 2007).
The amount of non-depreciated consolidation goodwill at the end of
the period under review was EUR 17.6 million (EUR 19.6 million on
December 31, 2007).
The amount of investments, excluding the termination of a long-term
investment portfolio, in the period under review was EUR 5.3 million,
consisting of replacement investments, and items created by the sales
of Elektrobit AG. Net investments for the reporting period totaled to
EUR -5.5 million. The total amount of depreciation during the period
under review was EUR 9.7 million, including EUR 4.2 million of
depreciation owing to business acquisitions.
The amount of interest-bearing debt at the end of the reporting
period was EUR 31.7 million. The distribution of net financing
expenses on the income statement was as follows:
interest, dividend and other financial income EUR 1.6 million
interest expenses and other financial expenses EUR -2.2 million
foreign exchange gains and losses EUR 0.8 million
EB's equity ratio at the end of the period was 69.9 per cent (70.9
per cent at the end of 2007).
The figures from the period under review do not include any of the
statutory reserves.
EB follows a currency strategy, the objective of which is to ensure
the margins of business operations in changing market circumstances
by minimizing the influence of exchange rates. In accordance with the
principles of the currency strategy, the upcoming 12-month net cash
flow of the currency in question is hedged. The net cash flow is
determined on the basis of sales receivables, payables, the order
book and the budgeted net currency cash flow. The hedged foreign
currency exposure at the end of the review period was equivalent to
EUR 41.4 million.
PERSONNEL
EB employed an average of 1775 people between January and June 2008.
At the end of June, EB had 1774 employees (1725 at the end of 2007).
A significant part of EB's personnel are product development
engineers.
FLAGGING NOTIFICATIONS
There were no changes in ownership during the period under review
that would have caused flagging notifications which are obligations
for disclosure in accordance with Chapter 2, section 9 of the
Securities Market Act.
Oulu, August 8, 2008
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Tel. +358 40 344 5148
Outi Torniainen
Director, Communications and Marketing
Tel. +358 40 512 1375
Distribution:
OMX Nordic Exchange Helsinki
Principal media
INVITATION TO PRESS CONFERENCE ON EB'S 2Q RESULT
EB, Elektrobit Corporation, will hold a press conference for media,
analysts and institutional investors concerning the Interim Report 2Q
2008 on
August 8, 2008 at 11.00 - 12.00 hours (CEST+1)
in Helsinki
Restaurant Savoy
Eteläesplanadi 14
Cabinet Banquet, 7th floor
The conference will be audio webcast and published live on the
Internet on
http://wip.goodmood.tv:80/wip/directlink.do?newbrowser=1&pid=2344636.
There will be a possibility to present questions in place as well as
by calling to the following conference call numbers:
Participants - Finland and other Europe: +358 (0)9 2313 9201
Participants - UK: +44 (0)20 7162 0025
Participants - US: +1 334 323 6201
An on-demand version of the audio webcast will be available after the
conference on EB's website www.elektrobit.com/investors. The
presentation material will be available after the publication of the
Interim Report on the same address.
CONSENSUS ESTIMATE
The EB consensus estimate made by the analysts who observe the
company is updated approximately a week before the release of the
financial report. The latest estimate is available on the company
website www.elektrobit.com/investors.
August 1, 2008
EB, Elektrobit Corporation
Corporate Communications
ELEKTROBIT CORPORATION, INTERIM REPORT JANUARY - JUNE 2008
(unaudited)
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-6/2008 1-6/2007 1-12/2007
6 months 6 months 12 months
NET SALES 88.3 64.5 144.3
Other operating income 2.1 2.8 14.4
Change in work in progress and finished
goods -0.7 2.5 1.5
Work performed by the undertaking for its
own purpose
and capitalized 0.1 0.2 0.5
Raw materials -9.2 -4.4 -10.1
Personnel expenses -52.0 -47.3 -96.5
Depreciation -9.7 -4.8 -15.9
Other operating expenses -40.3 -27.2 -58.5
OPERATING PROFIT (LOSS) -21.4 -13.8 -20.3
Financial income and expenses 0.2 1.1 0.3
RESULT BEFORE TAXES -21.2 -12.7 -20.0
Income taxes 0.0 -0.0 0.0
RESULT FOR THE PERIOD FROM CONTINUING
OPERATIONS -21.2 -12.7 -20.0
Result after taxes for the period from
discontinued
operations 0.1 12.8 13.1
RESULT FOR THE PERIOD -21.0 0.0 -6.9
Attributable to
Equity holders of the parent -21.0 0.0 -6.9
Minority interest 0.0 -0.0 0.0
Earnings per share EUR continuing
operations
Basic earnings per share -0.16 -0.10 -0.15
Diluted earnings per share -0.16 -0.10 -0.15
Earnings per share EUR discontinued
operations
Basic earnings per share 0.0 0.10 0.10
Diluted earnings per share 0.0 0.10 0.10
Earnings per share EUR continuing and
discontinued
Operations
Basic earnings per share -0.16 0.0 -0.05
Diluted earnings per share -0.16 0.0 -0.05
Average number of shares, 1000 pcs 129 413 129 413 129 413
CONSOLIDATED BALANCE SHEET (MEUR) June 30, June 30, Dec. 31,
2008 2007 2007
ASSETS
Non-current assets
Property, plant and equipment 24.3 35.0 25.1
Goodwill 17.6 21.1 19.6
Intangible assets 16.3 16.8 18.0
Financial assets at fair value through
profit or loss 0.0 10.9 10.8
Other financial assets 0.3 0.4 0.3
Receivables 0.9 0.1 0.7
Deferred tax assets 3.4 3.5 2.8
Non-current assets total 62.8 87.7 77.2
Current assets
Inventories 7.2 8.8 7.6
Trade and other receivables 61.9 53.7 78,8
Financial assets at fair value through
profit or loss 0.5 81.0 50.9
Cash and short term deposits 74.8 17.8 21.6
Current assets total 144.4 161.3 158.9
TOTAL ASSETS 207.2 249.1 236.1
EQUITY AND LIABILITIES
Equity attributable to equity holders of
the parent
Share capital 12.9 12.9 12.9
Share premium 64.6 64.6 64.6
Translation difference -0.8 -0.1 -0.4
Retained earnings 65.6 94.9 88.5
Minority interest 0.0 0.0 0.0
Total equity 142.3 172.3 165.7
Non-current liabilities
Deferred tax liabilities 3.5 5.6 4.4
Interest-bearing liabilities 22.8 28.0 23.9
Other liabilities 0.6 0.7 0.6
Non-current liabilities total 26.8 34.3 28.9
Current liabilities
Trade and other payables 28.0 30.8 31.1
Pension obligations 1.1 0.9 0.9
Current tax liabilities 0.0 0.0 1.2
Interest-bearing loans and borrowings 8.9 10.7 8.3
Current liabilities total 38.0 42.4 41.5
Total liablities 64.8 76.8 70.5
TOTAL EQUITY AND LIABILITIES 207.2 249.1 236.1
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-6/2008 1-6/2007 1-12/2007
6 months 6 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -21.0 0.0 -6.9
Adjustment of accrual basis items 12.0 -11.4 -6.4
Change in net working capital -6.3 -2.2 -11.6
Interest paid on operating activities -1.4 -1.2 -1.8
Interest received from operating
activities 2.5 2.5 1.5
Other financial income and expenses, net
received 0.0 0.0 0.0
Income taxes paid -2.2 0.5 -1.9
NET CASH FROM OPERATING ACTIVITIES -16.5 -11.7 -27.1
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit, net of cash
acquired -2.3 -4.7
Acquisition of minority interest -10.2 -10.2
Disposal of business unit, net of cash
acquired 18.3 15.0 16.9
Purchase of property, plant and equipment -0.5 -2.0 -3.9
Purchase of intangible assets -2.1 -1.8 -6.3
Purchase of other investments -0.5 -2.7 -3.9
Sale of property, plant and equipment 0.3 0.5
Sale of intangible assets 0.7 1.1
Proceeds from sale of investments 10.4 2.5 3.7
NET CASH FROM INVESTING ACTIVITIES 25.7 -0.5 -6.8
CASH FLOW FROM FINANCING ACTIVITIES
Loans granted -0.5
Proceeds from borrowing 0.5 4.0 8.2
Repayment of borrowing -1.1 -1.5 -7.6
Payment of finance liabilities -3.0 -2.4 -5.1
Dividends paid -2.6 -14.2 -14.2
NET CASH FROM FINANCING ACTIVITIES -6.3 -14.1 -19.3
NET CHANGE IN CASH AND CASH EQUIVALENTS 2.9 -26.3 -53.2
Cash and cash equivalents at beginning of
period 71.9 125.1 125.1
Cash and cash equivalents at end of
period 74.8 98.7 71.9
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Result for the period
E = Minority interest
F = Total equity
A B C D E F
Equity on January 1, 2007 12.9 64.6 108.9 2.1 188.6
Result for the period 0.0 0.0
Dividend distribution -14.2 -14.2
Share-related compensation 0.5 0.5
Translation difference 0.1 -2.1 -2.0
Others -0.6 -0.6
Equity on June 30, 2007 12.9 64.6 94.8 0.0 0.0 172.3
Equity on January 1, 2008 12.9 64.6 88.1 165.7
Result for the period -21.0 -21.0
Dividend distribution -2.6 -2.6
Share-related compensation 0.5 0.5
Translation difference -0.4 -0.4
Others 0.2 0.2
Equity on June 30, 2008 12.9 64.6 85.8 -21.0 142.3
NOTES TO THE INTERIM REPORT
Accounting principles for the Interim Report:
The same accounting policies and methods of computation are followed
in the interim report as compared with annual financial statements.
Explanatory comments about the seasonality or cyclicality of
reporting period operations:
The company operates in business areas which are subject to seasonal
fluctuations.
The nature and amount of items affecting assets, liabilities, equity,
net income, or cash flows which are unusual because of their nature,
size or incidence:
The investment portfolio in the non-current assets worth of EUR 10.6
million was dissolved and the amount was transferred into assets
during the reporting period. The cash flow from investments during
the reporting period includes the sale price payment of EUR 13.1
million from the property sales transaction done in December.
The result of the reporting period comprises non-recurring
restructuring costs of EUR 2.9 million, goodwill write-offs of EUR
2.8 million and a write-off of EUR 0.6 million of an activated R&D
investment.
Dividends paid:
According to the decision of the company's Annual Shareholders'
Meeting held on March 14, 2008, dividend of EUR 0.02 per share, a
total of EUR 2,588,253.80 was paid on March 28, 2008
SEGMENT INFORMATION (MEUR) 1-6/2008 1-6/2007 1-12/2007
6 months 6 months 12 months
Automotive
Net sales to external customers 28.7 21.8 52.6
Net sales to other segments 0.1 0.0 0.0
Net sales total 28.8 21.8 52.7
Operating profit (loss) -5.7 -0.8 0.7
Wireless
Net sales to external customers 59.4 42.2 90.9
Net sales to other segments 0.1 0.6 0.8
Net sales total 59.4 42.9 91.7
Operating profit (loss) -15.6 -13.5 -22.8
Other businesses
Net sales to external customers 0.2 0.4 0.8
Net sales to other segments 0.0 0.0 0.0
Net sales total 0.2 0.4 0.8
Operating profit (loss) -0.1 0.4 1.8
Eliminations
Net sales to external customers 0.0 0.0 0.0
Net sales to other segments -0.2 -0.6 -0.8
Net sales total -0.2 -0.6 -0.8
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 88.3 64.5 144.3
Operating profit (loss) -21.4 -13.8 -20.3
Net sales of geographical segments (MEUR) 1-6/2008 1-6/2007 1-12/2007
6 months 6 months 12 months
Net sales
Europe 52.9 50.0 101.6
Americas 31.2 11.4 33.3
Asia 4.2 3.1 9.5
Net sales total 88.3 64.5 144.3
Material events subsequent to the end of the interim period that have
not been reflected in the financial statements for the interim
period:
On July 4, 2008 EB sold 100 per cent of the share capital of
Kiinteistö Oy Automaatiotie 1.
The effect of changes in the composition of the group structure
during the interim period:
During the reporting period, EB sold 100 per cent of the share
capital of Elektrobit AG.
Related party transactions: 1-6/2008 1-6/2007 1-12/2007
Employee benefits for key management and
stock
option expenses total 1.3 1.3 2.5
Loans and guarantees to related party
There have not been other transactions
between the
related parties
INCOME STATEMENT BY 4-6/ 1-3/ 10-12/ 7-9/ 4-6/
QUARTER (MEUR) 2008 2008 2007 2007 2007
3 months 3 months 3 months 3 months 3 months
NET SALES 41.0 47.3 44.6 35.3 33.5
Other operating income 0.7 1.4 10.7 0.9 2.2
Change in work in
progress and
finished goods -0.1 -0.6 -1.1 0.1 0.6
Work performed by the
undertaking
for its own purpose and
capitalized 0.0 0.1 0.1 0.2 0.2
Raw materials -3.6 -5.6 -3.1 -2.5 -2.4
Personnel expenses -24.8 -27.2 -26.6 -22.6 -23.9
Depreciation -6.5 -3.2 -7.6 -3.5 -2.5
Other operating
expenses -20.1 -20.2 -19.5 -11.8 -14.3
OPERATING PROFIT (LOSS) -13.3 -8.0 -2.4 -4.0 -6.6
Financial income and
expenses -0.2 0.4 -0.9 0.0 0.3
RESULT BEFORE TAXES -13.6 -7.7 -3.3 -4.0 -6.3
Income taxes 0.0 -0.0 0.0 0.0 -0.1
RESULT FOR THE PERIOD
FROM
CONTINUING OPERATIONS -13.5 -7.7 -3.3 -4.0 -6.4
Result after taxes for
the period from
discontinued operations 0.1 0.0 0.4 -0.0 14.5
RESULT FOR THE PERIOD -13.4 -7.7 -2.9 -4.0 8.1
Attributable to
Equity holders of the
parent -13.4 -7.7 -2.9 -4.0 8.1
Minority interest 0.0 0.0 0.0 0.0 0.0
BALANCE SHEET BY June 30, March 31, Dec. 31, Sept. June 30,
QUARTER 30,
(MEUR) 2008 2008 2007 2007 2007
ASSETS
Non-current assets
Property, plant and
equipment 24.3 24.5 25.1 35.3 35.0
Goodwill 17.6 19.6 19.6 21.7 21.1
Intangible assets 16.3 18.2 18.0 17.5 16.8
Financial assets at
fair value
through profit or
loss 0.0 0.0 10.8 10.9 10.9
Other financial
assets 0.3 0.4 0.3 0.3 0.4
Receivables 0.9 0.7 0.7 0.2 0.1
Deferred tax assets 3.4 3.0 2.8 4.2 3.5
Non-current assets
total 62.8 66.4 77.2 90.1 87.7
Current assets
Inventories 7.2 7.4 7.6 8.7 8.8
Trade and other
receivables 61.9 64.9 78.8 53.7 53.7
Financial assets at
fair value
through profit or
loss 0.5 1.6 50.9 70.8 81.0
Cash and short term
deposits 74.8 85.7 21.6 12.0 17.8
Current assets total 144.4 159.6 158.9 145.2 161.3
TOTAL ASSETS 207.2 226.0 236.1 235.3 249.1
EQUITY AND LIABILITIES
Equity attributable to
equity holders
of the parent
Share capital 12.9 12.9 12.9 12.9 12.9
Share premium 64.6 64.6 64.6 64.6 64.6
Translation
difference -0.8 -0.8 -0.4 -0.3 -0.1
Retained earnings 65.6 78.6 88.5 91.1 94.9
Minority interest 0.0 0.0 0.0 0.0 0.0
Total equity 142.3 155.3 165.7 168.4 172.3
Non-current liabilities
Deferred tax
liabilities 3.5 4.2 4.4 5.2 5.6
Interest-bearing
liabilities 22.8 23.9 23.9 23.8 28.0
Other liabilities 0.6 0.6 0.6 0.7 0.7
Non-current liabilities
total 26.8 28.7 28.9 29.7 34.3
Current liablities
Trade and other
payables 28.0 33.4 32.3 27.2 30.8
Pension obligations 1.1 1.1 0.9 1.1 0.9
Interest-bearing
loans and
borrowings
(non-current) 8.9 7.5 8.3 8.9 10.7
Current liabilities
total 38.0 42.0 41.5 37.2 42.4
Total liablities 64.8 70.7 70.5 66.9 76.8
TOTAL EQUITY AND
LIABILITIES 207.2 226.0 236.1 235.3 249.1
CONSOLIDATED CASH FLOW 4-6/ 1-3/ 10-12/ 7-9/ 4-6/
STATEMENT BY QUARTER 2008 2008 2007 2007 2007
3 months 3 months 3 months 3 months 3 months
Net cash from
operating activities -9.0 -7.4 -8.6 -6.7 -6.2
Net cash from
investing activities -0.0 25.7 -0.7 -5.6 11.2
Net cash from
financing activities -1.8 -4.5 -1.4 -3.8 -2.9
Net change in cash and
cash
equivalents -10.9 13.8 -10.8 -16.1 2.1
FINANCIAL PERFORMANCE RELATED RATIOS 1-6/2008 1-6/2007 1-12/2007
6 months 6 months 12 months
INCOME STATEMENT (MEUR)
Net sales 88.3 64.5 144.3
Operating profit (loss) -21.4 -13.8 -20.3
Operating profit (loss), % of net
sales -24.2 -21.4 -14.1
Result before taxes -21.2 -12.7 -20.0
Result before taxes, % of net sales -24.0 -19.7 -13.9
Result for the period -21.2 -12.7 -20.0
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities, (MEUR) -43.2 -60.0 -39.7
Net gearing, -% -30.3 -34.8 -24.0
Equity ratio, % 69.9 69.6 70.9
Gross investments, (MEUR) 6.2 32.4 44.1
Average personnel during the period 1775 1633 1695
Personnel at the period end 1774 1729 1725
AMOUNT OF SHARE ISSUE ADJUSTMENT June 30, June 30, Dec. 31,
(1,000 pcs) 2008 2007 2007
At the end of period 129 413 129 413 129 413
Average for the period 129 413 129 413 129 413
Average for the period diluted with stock
options 129 413 129 413 129 413
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-6/2008 1-6/2007 1-12/2007
6 months 6 months 12 months
Basic earnings per share -0.16 -0.10 -0.15
Diluted earnings per share -0.16 -0.10 -0.15
Equity *) per share 1.10 1.33 1.28
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES 1-6/2008 1-6/2007 1-12/2007
(EUR)
Highest 1.79 2.48 2.48
Lowest 0.86 1.51 1.51
Average 1.49 1.98 1.93
At the end of period 0.94 1.88 1.64
Market value of the stock,
(MEUR) 121.6 243.3 212.2
Trading value of shares,
(MEUR) 6.0 42.1 53.4
Number of shares traded,
(1,000 pcs) 4 044 21 277 27 656
Related to average number
of shares % 3.1 16.4 21.4
SECURITIES AND CONTINGENT June 30, June 30, Dec. 31,
LIABILITIES
(MEUR) 2008 2007 2007
AGAINST OWN LIABILITIES
Floating charges 3.1 3.0 3.1
Mortgages 7.0 18.0 7.0
Pledges 9.8 7.9 9.8
Guarantees 2.1 2.1
Mortgages are pledged for
liabilities totaled 16.6 12.6 17.3
OTHER DIRECT AND CONTINGENT
LIABILITIES
Rental liabilities
Falling due in the next
year 4.1 3.0 4.0
Falling due after one
year 5.9 4.5 4.9
NOMINAL VALUE OF CURRENCY June 30, 2008 June 30, 2007 Dec. 31, 2007
DERIVATIVES (MEUR)
Foreign exchange forward
contracts
Market value 0.5 0.1 0.7
Nominal value 41.4 14.0 26.4
