IXONOS PLC STOCK EXCHANGE RELEASE 13 AUGUST 2008 at 9:30
IXONOS PLC INTERIM REPORT 1 JANUARY - 30 JUNE 2008
CONTINUED TURNOVER GROWTH; PROFITABILITY CHALLENGING AS FORESEEN
- Turnover for the review period was EUR 38.0 million (2007: EUR 27.3 million);
turnover growth was 38.9 per cent. Organic turnover growth was 20.3 per cent.
- Operating profit was EUR 2.2 million (2007: EUR 2.3 million), 5.9 per cent of
turnover, operating profit fell 3.5 per cent.
- Net profit was EUR 1.3 million (2007: EUR 1.6 million), 3.4 per cent of
turnover, net profit decreased 19.7 per cent.
- Earnings per share were EUR 0.15 (2007: EUR 0.20).
- Diluted earnings per share were EUR 0.14 (2007: EUR 0.20).
- Turnover of Consulting Services for the review period was EUR 16.2 million
(2007: EUR 11.1 million), an increase of 45.9 per cent. Consulting Services'
operating profit was EUR 1.1 million (2007: EUR 1.2 million), 7.1 per cent of
turnover; operating profit fell 10.9 per cent.
- Turnover of Software Production Services for the review period was
EUR 22.6 million (2007: EUR 16.5 million), an increase of 37.5 per cent.
Software Production Services' operating profit was EUR 2.6 million (2007: EUR
2.6 million), 11.7 per cent of turnover; operating profit fell 0.8 per cent.
- The Group's turnover for the third quarter, as well as for the entire
financial period, is anticipated to significantly exceed the corresponding
turnover for the previous year.
- The Group's operating profit for the third quarter is expected to be at the
previous year's level.
- As the operating profit percentage for the entire year is expected to be at
the previous year's level, the operating profit is anticipated to exceed that
of the previous year.
Kari Happonen, President and CEO:
Ixonos succeeded in reaching its growth target in the first half of the year and
continued to win market share. Following the rationalizing actions started in
the second quarter also profitability was again turned into growth.
Our turnover continued to grown by close to 40 per cent in the second quarter,
and during the entire first half of the year. Growth was strong in both of our
business operations.
The internationalizing of our business was advanced according our plans. We won
as new clients two significant international companies operating in the
telecommunications sector in the second quarter of the year. We also continued
to increase our lower-cost service capacity in Tallinn and Kosice, where
altogether more than 130 specialists were working in software development and
quality assurance by the end of the review period.
In order to restore the profitability to the customary good level and to make
our operations more efficient after a strong growth period and several
acquisitions, we launched a rationalization program during the second quarter.
The program is aimed at rationalizing the Group's administration and support
functions, boosting the proportion of chargeable work performed by the company's
specialist staff, and increasing the contribution of international offices in
proportion to the service output of the entire Group. The cooperation
negotiations associated with the rationalizing program were held during May in
collaboration with the personnel representatives.
The program seeks to achieve some EUR 3 million in yearly savings from the
third quarter of the current financial period. Following the rationalizing
actions the profitability was somewhat higher than expected already in the
second quarter.
The market situation in the ICT industry remained reasonably good during the
first half of the year, in spite of pessimistic expectations. As the global
economy and the general economic prospects are currently uncertain, overall
demand in the industry is now expected to slow down somewhat during the second
half of this year, or, at the latest, during the first half of next year.
However, in our selected customer sectors we expect to continue strong growth
and to advance our profitability according to our plans.
FUTURE PROSPECTS
Research institute estimates regarding the growth of Finland's ICT service
market in the current year remain more pessimistic than before. As the economic
outlook darkens, a number of institutes expect corporate customers to limit
their IT investments at least temporarily.
The demand for Ixonos' consulting services and software production services is
nevertheless anticipated to grow significantly faster than the market, both
during the third quarter of this year and for the entire financial period. Thus
the company expects to continue gaining market share.
The Ixonos Group's turnover for the third quarter, as well as for the entire
financial period, is anticipated to significantly exceed the corresponding
turnover for the previous year.
The Group's operating profit for the third quarter is expected to remain at the
level of the previous year.
As the operating profit percentage for the entire year is expected to be at the
previous year's level, the operating profit is anticipated to exceed that of the
previous year.
BUSINESS OPERATIONS
Ixonos operates in the ICT service market, offering its customers flexible
technology consulting, project management, software development and software
maintenance solutions that support their competitiveness and risk management.
The Group's clientele on the international market comprises leading mobile and
smartphone manufacturers, mobile network suppliers and telecom carriers. Finnish
customers include finance, industry and service sector companies, as well as
public administration organizations.
Consulting Services
Ixonos' consulting services encompass technology consulting, user interface and
usability design, and project management services.
During the review period, the demand for technology consulting and project
management services grew in comparison with the previous year.
Software Production Services
Ixonos' software production services include software project deliveries with
total responsibility, as well as software maintenance, testing, and quality
assurance services.
During the review period, turnover, as compared to the previous year, was
boosted particularly by project deliveries and software maintenance.
The business activities in software projects and in testing are successfully
utilizing the offerings of the Group's cost-effective offices in Tallinn and
Kosice.
RISK MANAGEMENT AND NEAR-FUTURE UNCERTAINTY FACTORS
The aim of Ixonos Plc's risk management is to ensure undisturbed continuity and
development of the company's business operations, to back up the attainment of
operational targets, and to support increasing the company's value. Information
on the risk management organization and process, as well as on identified risks,
is presented on the company's website, at
www.ixonos.com/en/investors/risk_management.
Today's biggest uncertainty factors relate to increasing costs in Finland, and
to simultaneously growing international competition. Any downswing in the global
economy would be likely to also affect the European and Finnish economies, and
might lead to companies reducing their investments in information systems
development. Nevertheless, such a weakening is not considered likely to
significantly affect Ixonos' mobile terminal and mobile software
product-development operations.
Should international—especially Indian and Chinese—competition proliferate
faster than anticipated, price competition could escalate further, thereby
cutting profit margins of Finnish companies. Ixonos has prepared for growing
price competition by establishing offices in lower-cost regions.
The rapid growth of the company and of its project operations has increased the
company's need for working capital. This increase is being managed through
creating adequate buffers in order to ensure sufficient funds together with the
financiers, and also by facilitating the circulation of working capital.
During the second quarter, the company launched a rationalization program
seeking to achieve some EUR 3 million in yearly savings. Should the savings
effects of the rationalization program be delayed, the operating profit for the
year 2008 would be affected. This, in turn, could prejudice the attainment of
the company's operating profit targets.
TURNOVER
Consolidated turnover was EUR 38.0 million (2007: EUR 27.3 million), which is
38.9 per cent more than in the previous year. Of the turnover, 40 per cent was
accrued by Consulting Services, and 60 per cent by Software Production Services.
TURNOVER BY SEGMENT
--------------------------------------------------------------------------------
| EUR 1,000 | 1-6 2008 | 1-6 2007 | 1-12 2007 |
--------------------------------------------------------------------------------
| Consulting Services | 16,199 | 11,102 | 23,879 |
--------------------------------------------------------------------------------
| Software Production | 22,639 | 16,461 | 35,686 |
| Services | | | |
--------------------------------------------------------------------------------
| Eliminations | - 850 | - 213 | - 337 |
--------------------------------------------------------------------------------
| Group total | 37,988 | 27,349 | 59,228 |
--------------------------------------------------------------------------------
FINANCIAL RESULT
Consolidated operating profit was EUR 2.2 million (2007: EUR 2.3 million);
profit before taxes was EUR 1.7 million (2007: EUR 2.2 million). Profit for the
review period was EUR 1.3 million (2007: EUR 1.6 million), which is 3.4 per cent
of turnover. Diluted earnings per share were EUR 0.14 (2007: EUR 0.20). Diluted
Cash flow from business operations was EUR 0.20 per share (2007: EUR 0.14).
OPERATING PROFIT BY SEGMENT
--------------------------------------------------------------------------------
| EUR 1,000 | 1-6 2008 | 1-6 2007 | 1-12 2007 |
--------------------------------------------------------------------------------
| Consulting Services | 1,104 | 1,239 | 2,136 |
--------------------------------------------------------------------------------
| Software Production | 2,591 | 2,635 | 5,030 |
| Services | | | |
--------------------------------------------------------------------------------
| Administration* | - 1,458 | - 1,555 | - 2,487 |
--------------------------------------------------------------------------------
| Group total | 2,237 | 2,319 | 4,679 |
--------------------------------------------------------------------------------
* The administrative costs under 1-6 2007 include EUR 0.55 million in
non-recurring expenses for the review period.
RETURN ON CAPITAL INVESTMENT
Consolidated return on equity (ROE) was 12.0 per cent (2007: 25.8). Return on
investment (ROI) was 10.0 per cent (2007: 25.9).
BALANCE SHEET AND FINANCING
The balance sheet total amounted to EUR 54.0 million (2007: EUR 30.5 million).
Shareholders' equity was EUR 22.0 million (2007: EUR 14.4 million). The equity
ratio was 40.7 per cent (2007: 47.1). The Group's liquid assets stood at EUR 2.9
million at the end of the review period (2007: EUR 1.7 million).
CASH FLOW
Consolidated cash flow from business operations for the review period was EUR
1.8 million (2007: EUR 1.0 million). The increase in cash flow from business
operations was mainly due to the Group's increased earnings before interest,
taxes, depreciation and amortization (EBITDA).
PERSONNEL
The number of personnel averaged 930 (2007: 640) during the review period, and
was 937 (2007: 753) at the end of the period. Cooperation negotiations were
launched in the Group's units in Finland on 6 May 2008. The negotiations were
completed on 3 June 2008. As a result of the negotiations, 32 Group employees
were terminated, and 7 were laid off temporarily.
SHARES AND SHARE CAPITAL
Share turnover and price
During the review period, the highest price of the company's share was EUR 6.15
(2007: EUR 8.08), and the lowest EUR 3.55 (2007: EUR 4.55). The closing price on
30 June 2008 was EUR 3.80 (2007: EUR 7.05). The average price over the review
period was EUR 4.38 (2007: EUR 5.64). The number of shares traded during the
review period was 2,110,324 (2007: 3,914,081), which corresponds to 23 per cent
(2007: 49 per cent) of the total number of shares at the end of the review
period. The market value of the company's shares, according to the closing price
on 30 June 2008, was EUR 34,332,563 (2007: EUR 56,658,242).
Share capital
At the beginning of the year 2008, the company's registered share capital was
EUR 355,485.20; the number of shares was 8,887,130. During the year 2008, 13,000
shares have been subscribed with option rights of the 2002 stock options plan
DII, and 8,500 shares with option rights of the 2006 options plan AI. During the
review period, a directed share issue of 126,255 new Ixonos Plc shares was made
as part of the additional acquisition price for the share capital of Service 4
Mobile Oy (presently Ixonos Project Management Ltd). The issue of shares was
announced in a stock exchange release on 9 June 2008. The subscription price was
EUR 4.83 per share. At the end of the review period, Ixonos' share capital was
EUR 361,395.40; the total number of shares was 9,034,885.
Stock Options Plan II (2002) and III (2006)
Under the 2002 stock options plan, 10,000 options have been released under AI;
10,000 options under AII; 82,500 options under BI; 22,500 options under BII;
100,000 options under CI; 35,000 options under CII; 127,500 options under DI;
and 112,500 options under DII. Under the 2002 options plan, 45,000 shares have
been subscribed with BI options; 5,000 shares with BII options; 23,500 shares
with CI options; 25,500 shares with CII options; 64,500 shares with DI options;
and 15,500 shares with DII options. At the end of the review period, the maximum
number of shares that can be subscribed with outstanding options under options
plan 2002 is 321,000, which is equivalent to 3.5 per cent of the company's total
shares. The subscription price is EUR 1.88 for AI and AII options; EUR 1.56 for
BI and BII options; EUR 3.32 for CI and CII options; and EUR 3.22 for DI and DII
options. The subscription period for the options of 2002 will end on 31 December
2008.
Under the 2006 stock options plan, 140,000 options have been released under AI;
140,000 options have been released under AII; and 60,000 options have been
released under BI. Of the series A options, 15,000 AI options and 15,000 AII
options have been returned to the company based on the terms of the options.
These options have been converted to series B options in accordance with the
option terms, and they have been redistributed. The maximum number of shares
that can be subscribed with outstanding options under options plan 2006 is
391,500, which is equivalent to 4.3 per cent of the company's total shares. The
share subscription period for AI options of 2006 began on 1 October 2007. The
subscription period for options AII and BI will begin on 1 October 2008, and for
BII options on 1 October 2009. The subscription price is EUR 4.13 for AI and AII
options, and EUR 5.10 for BI and BII options. The subscription period for the
options of 2006 will end on 31 December 2011.
Shareholders
There were 2,938 shareholders on 30 June 2008. Private persons owned 58 per cent
of the company's shares, while institutions owned 42 per cent. Foreign ownership
was 3 per cent of the total number of shares.
Board authorizations
On 3 April 2008, the Annual General Meeting authorized the Board of Directors to
decide on issuing up to 890,000 shares in one or more issues. The Board may
decide to issue either new shares, or existing shares possibly held by the
company. The maximum of the authorization is equivalent to approximately 10 per
cent of all company shares. The authorization may be used for financing or
executing corporate acquisitions or other arrangements, or for other purposes
decided by the Board. The authorization entitles the Board to decide on all
terms and conditions of the share issue, including the recipients of shares as
well as the compensation to be paid. Thus, the authorization also includes the
right to directed share issues, i.e. to deviate from the shareholders´
pre-emptive right, under conditions defined by law. The authorization is
effective until the next Annual General Meeting, although not beyond 30 June
2009.
The Board has used the above authorization in the issue of 126,255 shares.
Hence, an authorization of 763,745 shares remains.
ANNUAL GENERAL MEETING DECISIONS
The Annual General Meeting of Ixonos Plc, held on 3 April 2008, adopted the
company's financial statements, including the consolidated financial statements,
for the financial period 1 January - 31 December 2007, and also granted
discharge from liability to the Members of the Board of Directors and to the
CEO.
The Annual General Meeting decided to distribute as dividend EUR 0.18 per share.
The dividend was paid on 16 April 2008 on the shares that were, on the balance
date 8 April 2008, registered on the shareholder list maintained by the Finnish
Central Securities Depository Ltd.
The Annual General Meeting confirmed the number of Board members to be six.
Members of the Board Eero Hurme, Matti Järvinen, Tero Laaksonen, Matti Makkonen
and Esko Siik were re-elected; Markku Toivanen was elected as new member. At its
meeting following the Annual General Meeting, the Board of Directors elected
Tero Laaksonen Chairman of the Board, and Eero Hurme Deputy Chairman of the
Board.
The Annual General Meeting elected Paul Ehrnrooth and Staffan Sevon as
shareholders´ representatives on the Nomination Committee.
According to the decision of the Annual General Meeting, KHT firm
PricewaterhouseCoopers Oy will continue as auditor, with Heikki Lassila, KHT
auditor, as principal auditor.
The Annual General Meeting decided to reduce the premium fund, according to the
balance sheet of 31 December 2007, with EUR 4,511,774.54. The reduction will be
transferred to the invested non-restricted equity fund. Before the premium fund
is reduced, a public notice will be issued in accordance with the Limited
Liability Companies Act.
The Annual General Meeting authorized the Board of Directors to decide on
issuing up to 890,000 shares in one or more issues. The Board may decide to
issue either new shares, or existing shares possibly held by the company. The
maximum of the authorization is equivalent to approximately 10 per cent of all
company shares. The authorization may be used for financing or executing
corporate acquisitions or other arrangements, or for other purposes decided by
the Board. The authorization entitles the Board to decide on all terms and
conditions of the share issue, including the recipients of shares as well as the
compensation to be paid. Thus, the authorization also includes the right to
directed share issues, i.e. to deviate from the shareholders´ pre-emptive right,
under conditions defined by law. The authorization is effective until the next
Annual General Meeting, although not beyond 30 June 2009.
SUMMARY OF STOCK EXCHANGE RELEASES UNDER CHAPTER 2, SECTION 7 OF THE SECURITIES
MARKETS ACT
On 29 January 2008, the company published a release stating that Timo Leinonen,
Master of Administrative Sciences, age 37, had been appointed Chief Financial
Officer and Vice President of Ixonos.
On 7 February 2008, Ixonos announced that from the first Interim Report in 2008,
the company would report its consolidated business operations as two segments:
Consulting Services, and Software Production Services. The new segments, which
are based on the company's service products, illustrate more accurately the
character of the company's business operations and the efforts to develop them.
The rearrangement of segment reporting was related to the development of the
company's organization.
The financial statement bulletin released on 13 February 2008 stated that
judging from Ixonos' order backlogs and tender prospects, the company's
turnover, both in the first quarter of 2008 and during the entire financial
period, will be significantly higher than for the corresponding periods in 2007.
Due to heavy upfront recruitment, the Group's first-quarter operating profit
percentage, excluding depreciation of intangible rights of corporate
acquisitions, was expected to fall short of the previous year. However, for the
entire fiscal year, the operating profit percentage, excluding depreciation of
intangible rights of corporate acquisitions, was expected to be on the level of
the previous year. The operating profit was thus expected to increase clearly
from that of the previous year.
The company's Interim Report for the period 1 January - 31 March 2008, published
on 29 April 2008, anticipated the Group's turnover for the second quarter, as
well as for the entire financial period, to significantly exceed the
corresponding turnover for the previous year. The Group's operating profit for
the second quarter was foreseen to fall short of the previous year. The
operating
profit percentage for the entire year is expected to be at the previous year's
level and the operating profit is anticipated to exceed that of the previous
year.
Ixonos announced that a rationalization program would be launched in order
to strengthen the company's operations after a period of strong growth
and several acquisitions, and to prepare for potentially decreasing growth.
The program seeks to achieve some EUR 3 million in yearly savings from
the fourth quarter of the current financial period. In this
connection, the company published a stock exchange release on 29 April 2008,
announcing the launch of cooperation negotiations that would apply to employees
working in the Group's administration and support functions, as well as to those
working in the Finnish offices.
On 3 June 2008, the company announced that the cooperation negotiations had been
completed on an accelerated schedule. The negotiations, which applied to the
Group's administration and support functions and Finnish offices, had begun on 6
May 2008. On a Group level, the negotiations will result in the termination of
32 employees, and in 7 temporary lay-offs. In addition, 13 employees have given
their notice during the process. The realized yearly savings will amount to
approximately EUR 2.5 million from the third quarter of this year. In order to
increase productivity, the company continues to develop and rationalize its
operations.
EVENTS AFTER THE REVIEW PERIOD
On 23 July 2008, the company published a stock exchange release containing
advance information on the second quarter. The company announced that turnover
in the second quarter had increased to EUR 19.7 million (2007: EUR 14.1
million), and that operating profit (EBIT) in the second quarter would exceed
that of the previous year. According to preliminary information, EBIT would
amount to EUR 1.6 million (2007: EUR 1.4 million). In its Interim Report
published on 29 April 2008, the company had estimated its second-quarter
operating profit to fall short of the previous year's figure. The company
reported that it would publish new guidance in its Interim Report on 13 August
2008.
On 23 July 2008, the company published a stock exchange release stating that
5,000 new shares had been subscribed with Ixonos Plc stock options plan II
subtype II/C1 warrants, 7,000 new shares with subtype II/D1 warrants, and 2,000
new shares with II subtype II/D2 warrants. The corresponding share capital
increase of EUR 560 had been entered into the Finnish Trade Register on 23 July
2008. After the increase, the share capital of Ixonos Plc is EUR 361,955.40; the
number of shares is 9,048,885. The new shares carry full shareholder rights,
including the right to dividend for the financial period of 2008.
NEXT REPORTS
The Interim Report for the period 1 January - 30 September 2008 will be
published on Wednesday, 29 October 2008.
IXONOS PLC
BOARD OF DIRECTORS
FURTHER INFORMATION IS AVAILABLE FROM:
Ixonos Plc
Kari Happonen, President and CEO
tel. +358 424 2231, mobile +358 400 700 761, kari.happonen@ixonos.com
CFO and Vicepresident Timo Leinonen, phone +358 424 2231,
mobile +358 400 793 073, timo.leinonen@ixonos.com
DISTRIBUTION:
OMX Nordic Exchange Helsinki
Main media
IXONOS GROUP
ABBREVIATED FINANCIAL STATEMENTS 1 JANUARY - 30 JUNE 2008
Accounting principles
This Interim Report has been prepared in accordance with the standard IAS 34,
Interim Financial Reporting, in compliance with the accounting principles for
the 31 December 2007 financial reports, and in accordance with IFRS standards
and interpretations as adopted by the European Union. Forthcoming changes are
presented among the accounting principles in the Annual Report for 2007. Income
tax expense is based on the performance-based taxes corresponding to the result
for the review period.
Preparing the financial statements in accordance with IFRS standards requires
Ixonos management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the time of preparing the balance sheet, as
well as the amounts of income and expense for the financial period. In addition,
the principles for preparing financial statements must be applied with
consideration. The actual results may differ from the estimates and assumptions.
The Interim Report is unaudited.
The figures in the income statement and balance sheet have been consolidated.
All group companies are included in the consolidated balance sheet. The original
Interim Report is in Finnish. The Interim Report in English is a translation.
CONSOLIDATED PROFIT AND LOSS ACCOUNT, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | Change, | 1.4.- | 1.4.- | 1.1.- |
| | 30.6.08 | 30.6.07 | per | 30.6.08 | 30.6.07 | 31.12.07 |
| | | | cent | | | |
--------------------------------------------------------------------------------
| Turnover | 37,988 | 27,349 | 38.9 | 19,721 | 14,125 | 59,229 |
--------------------------------------------------------------------------------
| Operating | - 35,751 | - 25,030 | 42.8 |- 18,145 |- 12,770 | - 54,550 |
| costs | | | | | | |
--------------------------------------------------------------------------------
| OPERATING | 2,237 | 2,319 | - 3.5 | 1,576 | 1,356 | 4,679 |
| PROFIT | | | | | | |
--------------------------------------------------------------------------------
| Financial | - 517 | - 102 | 405.9 | - 355 | - 50 | - 303 |
| income and | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Profit | 1,720 | 2,217 | - 22.4 | 1,221 | 1,305 | 4,376 |
| before | | | | | | |
| taxes | | | | | | |
--------------------------------------------------------------------------------
| Income | - 412 | - 590 | - 36.7 | - 282 | - 348 | - 1,229 |
| taxes | | | | | | |
--------------------------------------------------------------------------------
| NET PROFIT | 1,307 | 1,627 | - 19.7 | 938 | 957 | 3,147 |
| FOR THE | | | | | | |
| PERIOD | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, K EURO
--------------------------------------------------------------------------------
| ASSETS | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| FIXED ASSETS | | | |
--------------------------------------------------------------------------------
| Goodwill | 25,196 | 13,906 | 21,067 |
--------------------------------------------------------------------------------
| Intangible assets | 6,317 | 1,009 | 6,282 |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1,532 | 593 | 1,332 |
--------------------------------------------------------------------------------
| Deferred tax claims | 102 | 41 | 43 |
--------------------------------------------------------------------------------
| Other assets | 110 | 110 | 110 |
--------------------------------------------------------------------------------
| Receivables | 0 | 4 | 12 |
--------------------------------------------------------------------------------
| FIXED ASSETS TOTAL | 33,258 | 15,663 | 28,846 |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | |
--------------------------------------------------------------------------------
| Accounts receivable and other | 17,832 | 13,161 | 15,411 |
| receivables | | | |
--------------------------------------------------------------------------------
| Financial assets | 152 | 148 | 151 |
--------------------------------------------------------------------------------
| Liquid assets | 2,761 | 1,504 | 2,331 |
--------------------------------------------------------------------------------
| CURRENT ASSETS TOTAL | 20,745 | 14,814 | 17,893 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 54,003 | 30,477 | 46,740 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS´ EQUITY AND | | | |
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS´ EQUITY | | | |
--------------------------------------------------------------------------------
| Share capital | 361 | 321 | 355 |
--------------------------------------------------------------------------------
| Premium fund | 76 | 4,510 | 4,512 |
--------------------------------------------------------------------------------
| Share issue | 46 | 0 | 77 |
--------------------------------------------------------------------------------
| Invested non-restricted equity | 13,985 | 3,392 | 8,869 |
| fund | | | |
--------------------------------------------------------------------------------
| Retained earnings | 6,198 | 4,505 | 8,909 |
--------------------------------------------------------------------------------
| Net profit for the period | 1,307 | 1,627 | 3,147 |
--------------------------------------------------------------------------------
| SHAREHOLDERS´ EQUITY TOTAL | 21,973 | 14,355 | 21,548 |
--------------------------------------------------------------------------------
| LIABILITIES | | | |
--------------------------------------------------------------------------------
| Long-term liabilities | 7,808 | 4,421 | 8,681 |
--------------------------------------------------------------------------------
| Current liabilities | 24,221 | 11,701 | 16,511 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 32,029 | 16,122 | 25,192 |
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND | 54,003 | 30,477 | 46,740 |
| LIABILITIES TOTAL | | | |
--------------------------------------------------------------------------------
CHANGES IN EQUITY, K EURO
--------------------------------------------------------------------------------
| | Share | Premium | Share | Inv. | Retained | Total |
| | capital| fund | issue | non- | earnings | |
| | | | | restr. | | |
| | | | | equity | | |
| | | | | fund | | |
--------------------------------------------------------------------------------
| Shareholders´ | 297 | 4,176 | 0 | 0 | 6,406 | 10,879 |
| equity | | | | | | |
| 1.1.2007 | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 103 | 103 |
| expense | | | | | | |
| write-off | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 25 | 334 | | 3,392 | | 3,750 |
--------------------------------------------------------------------------------
| Dividend | | | | | - 2,004 | - 2,004 |
--------------------------------------------------------------------------------
| Profit for | | | | | 1,627 | 1,627 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Shareholders´ | 321 | 4,510 | 0 | 3,392 | 6,028 | 14,355 |
| equity | | | | | | |
| 30.6.2007 | | | | | | |
--------------------------------------------------------------------------------
| Shareholders´ | 355 | 4,512 | 77 | 8,869 | 7,734 | 21,548 |
| equity | | | | | | |
| 1.1.2008 | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 65 | 65 |
| expense | | | | | | |
| write-off | | | | | | |
--------------------------------------------------------------------------------
| Premium Fund | | - 4,512 | | 4,512 | | 0 |
| transfer to | | | | | | |
| Inv. | | | | | | |
| non-restr. | | | | | | |
| equity fund | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 6 | 76 | - 31 | 605 | | 655 |
--------------------------------------------------------------------------------
| Dividend | | | | | - 1,604 | - 1,604 |
--------------------------------------------------------------------------------
| Profit for | | | | | 1,307 | |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Shareholders´ | 361 | 76 | 46 | 13,985 | 7,504 | 21,973 |
| equity | | | | | | |
| 30.6.2008 | | | | | | |
--------------------------------------------------------------------------------
SOURCES AND APPLICATION OF FUNDS, GROUP, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Cash flow from business | | | |
| operations | | | |
--------------------------------------------------------------------------------
| Net profit for the period | 1,307 | 1,627 | 3,147 |
--------------------------------------------------------------------------------
| Adjustments to cash flow from | | | |
| business operations | | | |
--------------------------------------------------------------------------------
| Taxes | 413 | 590 | 1,229 |
--------------------------------------------------------------------------------
| Depreciation and impairment | 1,009 | 261 | 1,226 |
--------------------------------------------------------------------------------
| Financial income and expenses | 517 | 102 | 303 |
--------------------------------------------------------------------------------
| Other adjustments | - 24 | 0 | 186 |
--------------------------------------------------------------------------------
| Income financing before change | 3,221 | 2,652 | 6,010 |
| in net working capital | | | |
--------------------------------------------------------------------------------
| Change in net working capital | - 456 | - 1,214 | - 1,077 |
--------------------------------------------------------------------------------
| Interest received | 36 | 28 | 68 |
--------------------------------------------------------------------------------
| Interest paid | - 303 | - 125 | - 332 |
--------------------------------------------------------------------------------
| Transfer income from fixed | - 7 | 0 | 0 |
| assets | | | |
--------------------------------------------------------------------------------
| Taxes paid | - 642 | - 307 | - 1,297 |
--------------------------------------------------------------------------------
| Net cash flow from business | 1,849 | 1,034 | 3,371 |
| operations | | | |
--------------------------------------------------------------------------------
| Cash flow from investments | | | |
--------------------------------------------------------------------------------
| Investments in tangible and | - 828 | - 378 | - 1,357 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Change in financial assets | - 1 | 546 | 544 |
--------------------------------------------------------------------------------
| Transfer income from fixed | 0 | 0 | 0 |
| assets | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries | - 331| - 294 | - 4,136 |
--------------------------------------------------------------------------------
| Net cash flow from investments | - 1,161 | - 125 | - 4,949 |
--------------------------------------------------------------------------------
| Net cash flow before financing | 688 | 909 | - 1,578 |
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| Dividend paid | - 1,604 | - 2,004 | - 2,004 |
--------------------------------------------------------------------------------
| Increase in short-term loans | 2,000 | 0 | 0 |
--------------------------------------------------------------------------------
| Increase in long-term loans | 0 | 0 | 3,800 |
--------------------------------------------------------------------------------
| Repayment of long-term loans | - 700 | - 429 | - 993 |
--------------------------------------------------------------------------------
| Share issue | 46 | 338 | 417 |
--------------------------------------------------------------------------------
| Net cash flow from financing | - 258 | - 2,095 | 1,220 |
| activities | | | |
--------------------------------------------------------------------------------
| Change in funds | 430 | - 1,185 | - 359 |
--------------------------------------------------------------------------------
| Liquid assets at start of period | 2,331 | 2,689 | 2,689 |
--------------------------------------------------------------------------------
| Liquid assets at end of period | 2,761 | 1,504 | 2,331 |
--------------------------------------------------------------------------------
CONSOLIDATED PROFIT AND LOSS ACCOUNT, QUARTERLY, K EURO
--------------------------------------------------------------------------------
| | Q2/2008 | Q1/2008 | Q4/2007 | Q3/2007 | Q2/2007 |
| | 1.4.08- | 1.1.08- | 1.10.07- | 1.7.07- | 1.4.07- |
| | 30.6.08 | 30.3.08 | 31.12.07 | 30.9.07 | 30.6.07 |
--------------------------------------------------------------------------------
| Turnover | 19,721 | 18,268 | 18,011 | 13,868 | 14,125 |
| | | | | | |
--------------------------------------------------------------------------------
| Operating costs | - 18,145 | - 17,607 | - 16,931 | - 12,589 | - 12,770 |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 1,576 | 661 | 1,080 | 1,280 | 1,356 |
--------------------------------------------------------------------------------
| Financing income | - 355 | - 162 | - 173 | - 28 | - 50 |
| and | | | | | |
| expenses | | | | | |
--------------------------------------------------------------------------------
| Profit before | 1,221 | 499 | 908 | 1,252 | 1,305 |
| taxes | | | | | |
--------------------------------------------------------------------------------
| Income taxes | - 282 | - 130 | - 294 | - 345 | -348 |
--------------------------------------------------------------------------------
| PROFIT FOR THE | 938 | 369 | 614 | 906 | 957 |
| PERIOD | | | | | |
--------------------------------------------------------------------------------
SEGMENT REPORT, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Turnover by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 16,199 | 11,102 | 23,879 |
--------------------------------------------------------------------------------
| Software Production Services | 22,639 | 16,461 | 35,686 |
--------------------------------------------------------------------------------
| Eliminations | - 850 | - 213 | - 337 |
--------------------------------------------------------------------------------
| Turnover total | 37,988 | 27,349 | 59,228 |
--------------------------------------------------------------------------------
| Operating profit by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 1,104 | 1,239 | 2,136 |
--------------------------------------------------------------------------------
| Software Production Services | 2,591 | 2,635 | 5,030 |
--------------------------------------------------------------------------------
| Administration | - 1,458 | - 1,555 | - 2,487 |
--------------------------------------------------------------------------------
| Total operating profit | 2,237 | 2,319 | 4,679 |
--------------------------------------------------------------------------------
| Operating profit, per cent of | 5,9 | 8,5 | 7,9 |
| turnover | | | |
--------------------------------------------------------------------------------
| Interest and financial income | - 517 | - 102 | - 303 |
--------------------------------------------------------------------------------
| Profit before taxes | 1,720 | 2,217 | 4,376 |
--------------------------------------------------------------------------------
| Taxes | - 413 | - 590 | - 1,229 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 1,306 | 1,627 | 3,147 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 19,706 | 13,638 | 15,381 |
--------------------------------------------------------------------------------
| Software Production Services | 32,679 | 16,453 | 29,683 |
--------------------------------------------------------------------------------
| Other | 1,618 | 386 | 1,675 |
--------------------------------------------------------------------------------
| Total assets | 54,003 | 30,477 | 46,740 |
--------------------------------------------------------------------------------
| Liabilities by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 7,857 | 3,983 | 5,486 |
--------------------------------------------------------------------------------
| Software Production Services | 17,181 | 9,317 | 15,899 |
--------------------------------------------------------------------------------
| Other | 6,952 | 2,822 | 3,807 |
--------------------------------------------------------------------------------
| Total liabilities | 31,990 | 16,122 | 25,192 |
--------------------------------------------------------------------------------
| Depreciation by segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 215 | 166 | 394 |
--------------------------------------------------------------------------------
| Software Production Services | 780 | 93 | 696 |
--------------------------------------------------------------------------------
| Other | 14 | 1 | 135 |
--------------------------------------------------------------------------------
| Total depreciation | 1,009 | 261 | 1,226 |
--------------------------------------------------------------------------------
| Investments per segment | | | |
--------------------------------------------------------------------------------
| Consulting Services | 1,791 | 3,141 | 4,807 |
--------------------------------------------------------------------------------
| Software Production Services | 3,883 | 174 | 10,758 |
--------------------------------------------------------------------------------
| Administration | 16 | 2 | 201 |
--------------------------------------------------------------------------------
| Investments total | 5,690 | 3,317 | 15,766 |
--------------------------------------------------------------------------------
CHANGES IN FIXED ASSETS, K EURO
--------------------------------------------------------------------------------
| | Goodwill |Intangible| Property, | Other | Total |
| | | fixed | plant and | tangible | |
| | | assets | equipment | assets | |
--------------------------------------------------------------------------------
| Carrying amount | 11,190 | 450 | 309 | 110 | 12,059 |
| 1.1.2007 | | | | | |
--------------------------------------------------------------------------------
| Additions | 2,717 | 134 | 243 | | 3,095 |
--------------------------------------------------------------------------------
| Additions from | | 631 | 94 | | 725 |
| corporate | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| Disposals | | | | | |
--------------------------------------------------------------------------------
| Depreciation | | - 207 | - 54 | | - 261 |
| during the | | | | | |
| financial period | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 13,906 | 1,009 | 593 | 110 | 15,618 |
| 30.6.2007 | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 21,067 | 6,282 | 1,332 | 110 | 28,791 |
| 1.1.2008 | | | | | |
--------------------------------------------------------------------------------
| Additions | 4,130 | 978 | 779 | | 5,887 |
--------------------------------------------------------------------------------
| Additions from | | | | | |
| corporate | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| Disposals | | - 106 | - 407 | | - 513 |
--------------------------------------------------------------------------------
| Depreciation | | - 837 | - 172 | | - 1,009 |
| during the | | | | | |
| financial period | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 25,196 | 6,317 | 1,532 | 110 | 33,156 |
| 31.3.2008 | | | | | |
--------------------------------------------------------------------------------
FINANCIAL RATIOS
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Earnings per share, EUR diluted | 0.14 | 0.20 | 0.40 |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.15 | 0.20 | 0.41 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 2.43 | 1.75 | 2.42 |
--------------------------------------------------------------------------------
| Operating cash flow per share, | 0.20 | 0.14 | 0.43 |
| EUR diluted | | | |
--------------------------------------------------------------------------------
| Return on investment, per cent | 10.0 | 25.9 | 19.4 |
--------------------------------------------------------------------------------
| Return on equity, per cent | 12.0 | 25.8 | 19.4 |
--------------------------------------------------------------------------------
| Operating profit/turnover, per | 5.9 | 8.5 | 7.9 |
| cent | | | |
--------------------------------------------------------------------------------
| Net gearing | 58.4 | 22.8 | 33.8 |
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | 1.1.- |
| | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| PERSONNEL | 930 | 640 | 726 |
| Average number of personnel | | | |
--------------------------------------------------------------------------------
| Personnel at the end of the period | 937 | 753 | 874 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS, K EUR | 30.6.2008 | 30.6.2007 | 31.12.2007 |
--------------------------------------------------------------------------------
| Collateral for own commitments | | | |
--------------------------------------------------------------------------------
| Corporate mortgages | 9,800 | 9,800 | 9,800 |
--------------------------------------------------------------------------------
| Other collateral | 369 | 253 | 273 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing and other rental | | | |
| commitments | | | |
--------------------------------------------------------------------------------
| Falling due within 1 year | 3,383 | 667 | 3,559 |
--------------------------------------------------------------------------------
| Falling due within 1-5 years | 7,484 | 2,132 | 7,623 |
--------------------------------------------------------------------------------
| Falling due after 5 years | 0 | 0 | 616 |
--------------------------------------------------------------------------------
| Total | 10,867 | 2,799 | 11,798 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal value of interest rate | | | |
| swap agreement | | | |
--------------------------------------------------------------------------------
| Falling due within 1 year | 1,400 | 857 | 1,400 |
--------------------------------------------------------------------------------
| Falling due within 1-5 years | 1,750 | 1,928 | 2,450 |
--------------------------------------------------------------------------------
| Falling due after 5 years | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Total | 3,150 | 2,785 | 3,850 |
--------------------------------------------------------------------------------
| Fair value | | | 26 |
--------------------------------------------------------------------------------
CALCULATION OF FINANCIAL RATIOS
Return on equity (ROE) = 100 x net profit / shareholders´ equity (average)
Return on investment (ROI) =
100 x (profit before taxes + interest + other financial expenses) /
balance sheet total - non-interest bearing liabilities (average)
Diluted result per share = net profit / diluted number of shares
Shareholders´ equity per share = shareholders´ equity / share-issue adjusted
number of shares