Enea Annual Statement 2012

Enea Annual Statement 2012

A fourth quarter of revenue growth and improved profitability

Enea increased sales by 10.9 percent over the fourth quarter to SEK 200.8
(181.1) million. The operating margin improved to 13.8 (9.4) percent.

On December 30, an agreement was signed concerning the divestment of the Swedish
consultancy business to Alten Group and its Swedish subsidiary Xdin. The company
will be transferred to its new owners in February 2012.

The remaining business increased net sales by 17.1 percent to SEK 124.7 (106.5)
million over the fourth quarter. The operating margin improved, to 14.6 (5.4)
percent.

Enea’s sales fell by 0.6 percent to SEK 721.5 (726.1) million for the full year.
The operating margin amounted to 0.3 (9.3) percent, and to 8.6 percent excluding
writedown of goodwill and capitalized development expenses. Corresponding
figures for the remaining business were net sales of SEK 446.7 (446.6) million,
with an operating margin of 0.5 (8.4) percent. Excluding writedowns, the
operating margin amounted to 13.9 percent for the full year.

Writedown of goodwill and capitalized development expenses during the year
amounted to SEK 46 million and SEK 14 million respectively.

Cash flow from operations for the whole year amounted to SEK 77.2 (76.1)
million.

The Board of Directors proposes that the Annual General Meeting should elect to
transfer to shareholders an amount equivalent to SEK 8.00 (5.00) per share in
the form of a redemption program.

October to December 2011

Remaining business

  · Net sales, SEK 124.7 (106.5) million
  · Growth 17.1%
  · Operating profit, SEK 18.2 (5.7) million
  · Operating margin 14.6 (5.4)%
  · Net profit before tax, SEK 18.9 (6.8) million
  · Net profit after tax, SEK 15.6 (4.6) million
  · Earnings per share, SEK 0.91 (0.26)
  · Cash flow from operations, SEK 29.7 million

Divested business1

  · Net sales, SEK 76.1 (74.6) million
  · Growth 2.0%
  · Operating profit, SEK 9.6 (11.4) million
  · Operating margin 12.6 (15.3)%
  · Net profit before tax, SEK 8.6 (10.3) million
  · Net profit after tax, SEK 6.3 (7.2) million
  · Earnings per share, SEK 0.37 (0.41)
  · Cash flow from operations, SEK -20.1 million

Total business

  · Net sales, SEK 200.8 (181.1) million
  · Growth 10.9 (-7.2) %
  · Growth, currency adjusted 11.1 (0.0)%
  · Operating profit, SEK 27.8 (17.1) million
  · Operating margin 13.8 (9.4)%
  · Net profit before tax, SEK 27.5 (17.1) million
  · Net profit after tax, SEK 21.9 (11.8) million
  · Earnings per share, SEK 1.28 (0.68)
  · Cash flow from operations, SEK 9.6 (-21.8) million

1) The numbers for the divested business do not include corporate cost
previously allocated on the divested business.

Full year 2011

Remaining business

  · Net sales, SEK 446.7 (446.6) million
  · Growth 0.0 %
  · Operating profit, SEK 2.2 (37.3) million
  · Operating margin 0.5 (8.4)%
  · Net profit before tax, SEK 6.0 (37.0) million
  · Net profit after tax, SEK -1.0 (23.4) million
  · Earnings per share, SEK -0.06 (1.35)
  · Cash flow from operations, SEK 69.6 (124.6) million

Divested business1

  · Net sales, SEK 274.8 (279.5) million
  · Growth -1.7%
  · Operating profit, SEK 0.3 (30.1) million
  · Operating margin 0.1 (10.8)%
  · Net profit before tax, SEK 0.3 (31.1) million
  · Net profit after tax, SEK -5.4 (22.6) million
  · Earnings per share, SEK -0.31 (1.30)
  · Cash flow from operations, SEK 7.6 (-48.5) million

Total business

  · Net sales, SEK 721.5 (726.1) million
  · Growth -0.6 (-6.6)%
  · Growth, currency adjusted 1.5 (-4.8)%
  · Operating profit, SEK 2.5 (67.4) million
  · Operating margin 0.3 (9.3)%
  · Net profit before tax, SEK 6.3 (68.1) million
  · Net profit after tax, SEK -6.4 (46.0) million
  · Earnings per share, SEK -0.37 (2.65)
  · Cash flow from operations, SEK 77.2 (76.1) million

1) The numbers for the divested business do not include corporate cost
previously allocated on the divested business..

 

Anders Lidbeck, President and CEO comments:

“The fourth quarter was good. We grew by 11 percent compared with the same
period in 2010, and by 29 percent compared with the third quarter of 2011.
Profitability also increased by 63 percent compared with the same period in
2010, and more than quadrupled compared with the third quarter of 2011. We are
of the view that our market grew over the year, although several of our
customers saw a weak end to 2011.

The market for mobile communication is undergoing rapid growth, and we estimate
that our addressable market will double within 5 to 7 years. Our technology is
world-leading and incorporated in market-leading mobile infrastructure products
the world over. For example, Enea’s operating systems are built into much of the
world’s 4G infrastructure.

Focus on the global software business

We implemented a number of measures to further streamline Enea over the quarter.
Our aim is to reinforce our position as the leading supplier of operating system
solutions to the telecoms industry. We have reorganized our sales and product
units to assist in the creation of better conditions for this. We have invested
in the framework for our Linux offering, and we have clarified our focus on our
major customers and the leading hardware suppliers.

In December, we also entered into an agreement concerning the sale of our Nordic
consultancy business to Alten Group and its Swedish subsidiary Xdin. The Nordic
consultancy business is significantly different to our global software business.
By selling off this unit, we are focusing Enea’s operations on our global
software business and will have the opportunity to further invest in important
technology areas. We will also be continuing to invest in our service business
in Romania, China and the USA. Their expertise is important to help us build
customized solutions as part of large-scale global projects. We also need
consultancy capacity to be able to supply advanced solutions to the major
telecoms companies. For this reason, we have also agreed on a partnership with
Alten Group.

The Enea remaining when we separate the Nordic consultancy business reported
revenues of SEK 446.7 million in 2011, with an operating margin of 13.9 percent
excluding write downs. The Enea entering 2012 is considerably more focused.

Dividends

Our cash flow has been good over the year, and we estimate that the future
income from the sale of the Nordic consultancy business will amount to SEK 135
million. Given Enea’s present and future financial position, the Board proposes
a transfer to shareholders of SEK 136.9 million, equivalent to SEK 8.00 per
share.

Long-term ambition

Our ambition over the next five years is to create a global software company
with significantly higher revenues, high profitability, good cash flows and a
large proportion of recurring revenues. We will be focusing on organic growth,
but both strategic and supplementary acquisitions will be evaluated regularly.
This growth will vary over the years and between the quarters, depending on when
individual deals take place and the development of royalty revenue streams which
are dependent on customers’ sales volumes. The operating margin will vary in
line with growth over the various quarters of the period. Our objective during
this five year period is to achieve an operating margin of 20 percent.

The long term objective will not be reached in 2012. We have decided not to
provide any further outlook for 2012.”

 

Press and analyst meeting

Press and financial analysts are invited to a press and analyst meeting where
Anders Lidbeck, President and CEO, will present and comment on the report.

Time: Thursday February 9 at 10:30 am CET.

Link: Financial Hearings (http://financialhearings.nu/120209/enea/)

Phone number: +46 (0)8 50559875 or +44 (0) 2077509950

The full report is published at www.enea.com/investors

 

For more information

Anders Lidbeck, President & CEO
Email: anders.lidbeck@enea.com

Lars Kevsjö, CFO
Email: lars.kevsjo@enea.com

Catharina Paulcén, VP Communications
Phone: 46 709 714133
Email: catharina.paulcen@enea.com