STOCK EXCHANGE RELEASE
Free for publication on February 6, 2008 at 8.00 am. (EET)
EB, ELEKTROBIT CORPORATION, FINANCIAL STATEMENT BULLETIN 2007
SUMMARY
Strong Growth in Focus Businesses
EB's Continuing Operations' net sales for the fourth quarter amounted
to EUR 44.6 million (EUR 33.3 million in the fourth quarter of 2006),
representing a 33.6 per cent growth year-on-year. The operating loss
for the fourth quarter, including non-recurring net income of
approximately EUR 1.5 million, as announced in December 28, 2007,
amounted to EUR -2.4 million (EUR -5.3 million in the fourth quarter
of 2006).
During the reporting period from January to December 2007, the
company's net sales amounted to EUR 144.3 million (EUR 120.5 million
in 2006), indicating a growth of 19.8 per cent. The operating loss,
including the aforementioned non-recurring net income of
approximately EUR 1.5 million, was EUR -20.3 million (EUR -6.0
million in 2006).
The net sales of the Automotive Business Segment from January to
December 2007 continued to grow strongly. The net sales amounted to
EUR 52.6 million (EUR 38.9 million in 2006), representing a growth of
35.3 per cent. The operating profit was EUR 0.7 million (EUR 2.1
million in 2006) reflecting the increased investments in the R&D of
EB's automotive software platform products, in accordance with the
strategy.
During the reporting period from January to December 2007, the net
sales of the Wireless Business Segment amounted to EUR 90.9 million
(EUR 81.4 million in 2006), representing a growth of 11.7 per cent,
and the operating loss was EUR -22.8 million (EUR -8.3 million in
2006) reflecting the significant investments in the R&D of mobile
WiMAX base station module products and RFID reader systems and the
profitability challenges of R&D services in the first half of 2007.
Strategy Implementation
During 2007, EB continued to follow the strategic path as defined in
the spring 2006. EB has focused its business operations and
concentrates on growth businesses in the Automotive and Wireless
Business Segments.
EB balanced its customer portfolio during 2007 by entering new
markets and acquiring new customers. In the end of the reporting
period, none of the customer shares exceeded 11 per cent of the net
sales and, in addition, the compound share of the ten biggest
customers was 56 per cent.
EB continued significant investments in research and product
development in order to develop new businesses in line with the
strategy.
In June, EB reduced the number of business segments into two, namely"Automotive" and "Wireless". The Production Solutions business was
sold, the former System Test Business Unit was refocused on advanced
wireless engineering tools, renamed as the Wireless Communications
Tools Business Unit and transferred under the Wireless Business
Segment.
Further in June, The Wireless Sensor Solutions Business Unit focusing
on RFID reader systems and related industrial wireless network
solutions was established under the Wireless Business Segment.
To fortify its automotive offering, EB acquired DECOMSYS Beteiligungs
GmbH, a specialist in FlexRay, the new high performance network
communications protocol standard for automotive electronics.
Additionally the new Wireless Sensor Solutions Business Unit was
strengthened by the purchase of 7iD Technologies GmbH. EB continues
to search acquisition opportunities to strengthen the business
growth.
EB continued the actions to render the company cost structure to
correspond to the new focused business setup. The aim was to increase
the productivity and improve the fixed cost efficiency of such
operational activities as facilities, sourcing, logistics,
information management and administration.
In December, EB sold the properties located at Tutkijantie in Oulu to
Foriva Oy with the cash and debt free purchase price of approximately
EUR 16.4 million. EB also re-assessed the value of the remaining
property in Oulunsalo and, as a result, executed a non-recurring
write-off of approximately EUR 4 million. At the same time, the
group's operations related goodwill valuations were re-assessed and a
write-off of approximately EUR 1 million concerning certain non-core
operations has been made thereof. The property sales transaction and
conducted write-offs lead to non-recurring net income of
approximately EUR 1.5 million for the fourth quarter of 2007.
EB also outsourced the Radio Network Solutions Business Unit's R&D
and testing activities in Tampere and Espoo to Embio Oy.
According to the IFRS5 standard, EB reports its financial results
divided between Discontinued and Continuing Operations. In this
Financial Statement Bulletin, financial figures concerning the income
statement of 2006 and 2007 are reported based on Continuing
Operations, without the Network Test (sold in November 2006) and
Production Solutions business figures. Discontinued business figures
are reported separately after Continuing Operations' net profit as
long as they have been part of the business portfolio. In addition to
the sales price of the Network Test business, an additional amount,
capped at EUR 12 million, is payable in cash to EB upon the
achievement of certain financial performance targets for the Network
Test Business between January 1, and December 31, 2007. According to
the information given by the buyer of the Network Test business,
there is only a small or no additional amount payable for the time
period between January 1 and December 31, 2007. The final
determination on the possible additional amount will take place
during March 2008. Regarding the sales price of the Production
Solutions business, there is an additional purchase price component
that will depend on the financial performance of 2007 and 2008.
According to the initial information given by the buyer no additional
payment for 2007 is foreseeable.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-12/2007 1-12/2006
12 months 12 months
Continuing Operations
NET SALES 144.3 120.5
OPERATING PROFIT (LOSS) -20.3 -6.0
Financial income and expenses 0.3 0.0
PROFIT BEFORE TAX -20.0 -6.1
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS -20.0 -6.1
Profit after tax for the year from discontinued 13.1
operations 80.3
PROFIT FOR THE YEAR -6.9 74.2
Attributable to
Equity holders of the parent -6.9 73.9
Minority interest 0.0 0.3
Earnings per share EUR continuing operations -0.15 -0.05
Earnings per share EUR discontinued operations 0.10 0.62
Earnings per share EUR continuing and
discontinued operations -0.05 0.57
Net gearing, % -24.0 -49.2
Equity ratio, % 70.9 72.2
Comparisons between the Continuing Operations figures for the fourth
quarter of 2007 and the corresponding period in 2006:
- Net sales amounted to EUR 44.6 million (EUR 33.3 million; an
increase of EUR 11.2 million or 33.6%). The net sales of the
Automotive Business Segment were EUR 16.2 million (EUR 11.3 million;
an increase of EUR 4.9 million or 43.3%). The net sales of the
Wireless Business Segment were EUR 28.2 million (EUR 22.0 million; an
increase of EUR 6.3 million or 28.6%).
- Operating loss totalled to EUR -2.4 million (EUR -5.3 million) and
was distributed as follows: the Automotive Business Segment EUR 1.0
million (EUR 0.9 million), the Wireless Business Segment EUR -4.1
million (EUR -6.2 million) and the other businesses EUR 0.7 million
(EUR 0.0 million).
- Net cash flow from operations amounted to EUR -8,6 million
(EUR -1.2 million).
Comparisons between the Continuing Operations figures from January to
December 2007 and the figures for the corresponding period in 2006:
- Net sales amounted to EUR 144.3 million (EUR 120.5 million, an
increase of EUR 23.8 million or 19.8%). The net sales of the
Automotive Business Segment were EUR 52.6 million (EUR 38.9 million,
an increase of EUR 13.7 million or 35.3%) and the net sales of
Wireless Business Segment were EUR 90.9 million (EUR 81.4 million, an
increase of EUR 9.5 million or 11.7%).
- Operating loss was EUR -20.3 million (EUR -6.0 million, a decrease
of EUR 14.2 million) and it was distributed as follows: the
Automotive Business Segment EUR 0.7 million (EUR 2.1 million), the
Wireless Business Segment EUR -22.8 million (EUR -8.3 million, a
decrease of EUR 14.5 million) and other businesses a profit of
EUR 1.8 million (EUR 0.1 million).
- Cash flow from operations amounted to EUR -27,1 million (EUR -1,4
million).
- Equity ratio was 70.9% (72.2%).
QUARTERLY FIGURES, CONTINUING OPERATIONS
The quarterly distribution of the Group's Continuing Operations
overall net sales and profit, MEUR:
+-------------------------------------------------------------------+
| | 10-12/07 | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 |
|------------------+----------+--------+--------+--------+----------|
| Net sales | 44.6 | 35.3 | 33.5 | 31.0 | 33.3 |
|------------------+----------+--------+--------+--------+----------|
| Operating profit | -2.4 | -4.0 | -6.6 | -7.2 | -5.3 |
| (loss) | | | | | |
|------------------+----------+--------+--------+--------+----------|
| Result before | -3.3 | -4.0 | -6.3 | -6.4 | -4.9 |
| taxes | | | | | |
|------------------+----------+--------+--------+--------+----------|
| Result for the | -3.3 | -4.0 | -6.4 | -6.3 | -4.6 |
| period | | | | | |
+-------------------------------------------------------------------+
The distribution of the Continuing Operations net sales by Business
Segment, MEUR:
+-------------------------------------------------------------------+
| | 10-12/07 | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 |
|------------------+----------+--------+--------+--------+----------|
| Automotive | 16.2 | 14.5 | 11.2 | 10.6 | 11.3 |
|------------------+----------+--------+--------+--------+----------|
| Wireless | 28.2 | 20.4 | 22.2 | 20.1 | 22.0 |
|------------------+----------+--------+--------+--------+----------|
| Corporation | 44.6 | 35.3 | 33.5 | 31.0 | 33.3 |
| Total | | | | | |
+-------------------------------------------------------------------+
The distribution of the Continuing Operations net sales by market
area, MEUR (%):
+--------------------------------------------------------------+
| | 10-12/07 | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 |
|----------+----------+---------+---------+---------+----------|
| Asia | 2.0 | 4.4 | 0.6 | 2.5 | 1.9 |
| | (4.5%) | (12.5%) | (1.7%) | (8.0%) | (5.7%) |
|----------+----------+---------+---------+---------+----------|
| Americas | 14.5 | 7.4 | 7.3 | 4.1 | 4.2 |
| | (32.5%) | (20.9%) | (21.7%) | (13.4%) | (12.5%) |
|----------+----------+---------+---------+---------+----------|
| Europe | 28.1 | 23.5 | 25.7 | 24.3 | 27.3 |
| | (63.0%) | (66.5%) | (76.6%) | (78.6%) | (81.8%) |
+--------------------------------------------------------------+
Net sales (external) and operating profit development by Business
Segments and Other businesses of the Continuing Operations were as
follows, MEUR:
+-------------------------------------------------------------------+
| | 10-12/07 | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 |
|------------------+----------+--------+--------+--------+----------|
| Automotive | | | | | |
| Net sales | 16.2 | 14.5 | 11.2 | 10.6 | 11.3 |
| Operating profit | 1.0 | 0.5 | -0.2 | -0.6 | 0.9 |
| (loss) | | | | | |
|------------------+----------+--------+--------+--------+----------|
| Wireless | | | | | |
| Net sales | 28.2 | 20.4 | 22.2 | 20.1 | 22.0 |
| Operating profit | -4.1 | -5.2 | -7.1 | -6.4 | -6.2 |
| (loss) | | | | | |
|------------------+----------+--------+--------+--------+----------|
| Other businesses | | | | | |
| Net sales | 0.1 | 0.3 | 0.1 | 0.3 | 0.1 |
| Operating profit | 0.7 | 0.7 | 0.7 | -0.2 | 0.0 |
| (loss) | | | | | |
|------------------+----------+--------+--------+--------+----------|
| Total | | | | | |
| Net sales | 44.6 | 35.3 | 33.5 | 31.0 | 33.3 |
| Operating profit | -2.4 | -4.0 | -6.6 | | -5.3 |
| (loss) | | | | -7.2 | |
+-------------------------------------------------------------------+
QUARTERLY FIGURES, DISCONTINUED OPERATIONS
Discontinued Operations (Production Solutions in 2006 and 2007 and
Network Test in 2006) figures were as follows, MEUR:
+---------------------------------------------------------------------+
| | 10-12/07| 7-9/07|4-6/07|1-3/07|10-12/06|
|------------------------+----------+----------+------+------+--------|
|Operative business | No| No| | | |
| |operations|operations| | | |
|------------------------+----------+----------+------+------+--------|
|Net sales | 0.0| | 6.7| 8.6| 15.9|
|------------------------+----------+----------+------+------+--------|
|Operating profit (loss) | -0.0| | -1.6| -1.6| 0.9|
|------------------------+----------+----------+------+------+--------|
|Result before taxes | -0.0| | -1.7| -1.7| 0.7|
|------------------------+----------+----------+------+------+--------|
|Income tax | | | -0.1| -0.1| -0.3|
|------------------------+----------+----------+------+------+--------|
|Result for the period | -0.0| | -1.8| -1.8| 0.4|
|------------------------+----------+----------+------+------+--------|
| | | | | | |
|------------------------+----------+----------+------+------+--------|
|Disposal gain | | | | | |
|------------------------+----------+----------+------+------+--------|
|Profit of the | 0.3| | 16.7| | 73.7|
|Discontinued Operations | | | | | |
|------------------------+----------+----------+------+------+--------|
|Income tax | 0.1| | -0.4| | -0.5|
|------------------------+----------+----------+------+------+--------|
|Profit after taxes of | 0.4| | 16.4| | 73.2|
|the Discontinued | | | | | |
|Operations | | | | | |
|------------------------+----------+----------+------+------+--------|
| | | | | | |
|------------------------+----------+----------+------+------+--------|
|Result for the period | 0.4| | 14.5| -1.8| 73.7|
+---------------------------------------------------------------------+
BUSINESS SEGMENTS AND BUSINESS UNITS
EB's reporting as from April 1, 2007 is based on the Automotive and
Wireless Business Segments and business units divided under them as
follows:
+-------------------------------------------------------------------+
| Automotive Business Segment | Wireless Business Segment |
|-----------------------------+-------------------------------------|
| Automotive Software | Mobile Terminal Solutions Business |
| Business Unit | Unit |
|-----------------------------+-------------------------------------|
| | Radio Network Solutions Business |
| | Unit |
|-----------------------------+-------------------------------------|
| | Wireless Communications Tools |
| | Business Unit |
|-----------------------------+-------------------------------------|
| | Wireless Sensor Solutions Business |
| | Unit |
+-------------------------------------------------------------------+
AUTOMOTIVE BUSINESS SEGMENT FROM JANUARY TO DECEMBER 2007
The Automotive Business Segment consists of in-car software products,
navigation software for after market devices (personal navigation
devices) and R&D services for the automotive industry with leading
car manufacturers, car electronics (Tier 1) and automotive chipset
suppliers as customers.
During the reporting period the Automotive Business Segment continued
to grow confirming the potential of this market. The net sales during
the period under review amounted to EUR 52.6 million (EUR 38.9
million in 2006), which represents a strong year-on-year growth of
35.3 per cent, and the operating profit was EUR 0.7 million (EUR 2.1
million) reflecting the increased investments in the R&D of EB's
automotive software platform products, in accordance with the
strategy.
Automotive Software Business Unit from January to December 2007
The sales of the Automotive Software Business Unit's products and
associated solutions have grown strongly and EB aims to continue
to increase the share of automotive software products and services in
the company's net sales.
The Automotive Software Business Unit's products include:
- EB street director, which is a navigation software for in-car
navigation, Personal Navigation Devices (PND), Personal Digital
Assistants (PDA) and smartphones,
- EB GUIDE product family of HMI (Human Machine Interface) design
tools,
- EB tresos® ECU AUTOSAR (Automotive Open System Architecture)
software components used for the development of electronic control
units (ECU) for cars, and
- high performance network communications protocol standards and
solutions for automotive electronics including FlexRay(TM), CAN
(Controller Area Network) and LIN (Local Interconnect
Network) solutions.
The R&D services business of the Automotive Software Business Unit
covers in-car infotainment and body control applications.
In February, EB presented its tresos® ECU AUTOSAR (Automotive Open
System Architecture) Suite 2007 for the AUTOSAR specification 2.0. It
has been delivered to several major evaluation projects within the
car industry. EB is for example the leading AUTOSAR technical partner
for JasPar in Japan.
In April, the next generation of Blue&Me(TM) navigation software,
developed in collaboration between EB, Fiat and Microsoft, was
announced. The system integrates a hands-free navigation solution
with predictive graphic interface and voice control.
In May a version of the EB street director(TM) portable navigation
solution, which responds to spoken voice commands, was introduced to
the market.
With the acquisition of DECOMSYS Beteiligungs GmbH in June, EB
became the leading solution provider for FlexRay(TM), the new high
performance network communications protocol standard for automotive
electronics. The first car in the market with FlexRay(TM) car
networking technology is BMW's new X5 Sports Activity Vehicle (SAV).
It has been implemented by using EB's FlexRay(TM) knowledge and
solution.
In August, the availability of the new version of EB tresos®
introducing a complete ready-for-production AUTOSAR kernel capable of
operating on a number of different chipset environments for the
automotive industry, was announced.
EB announced in October a licensing agreement with Agilent
Technologies, where by EB licences its FlexRay networking technology
analysis software for Agilent Technologies. Agilent Technologies
incorporates this EB technology in its testing and measurement tools
offering.
In December the JasPar consortium (Japanese standard software
definition consortium consisting of leading Japanese OEM's and
automotive suppliers) invited EB to participate as the technology
supplier in its development and definition work for FlexRay
networking technologies. With this decision EB has been chosen as the
evaluation software vendor for all JasPar working streams.
The fourth quarter sales were particularly strong due to success in
standard software licensing agreements and strong sales of after
market navigation devices and hence software for the Christmas
season.
WIRELESS BUSINESS SEGMENT FROM JANUARY TO DECEMBER 2007
The Wireless Business Segment comprises the following business units:
- the Mobile Terminal Solutions Business Unit, which is responsible
for mobile terminal R&D services and design business,
- the Radio Network Solutions Business Unit, which is responsible for
radio network infrastructure-related R&D services and standard-based
products sold to telecommunications infrastructure suppliers,
- the Wireless Communications Tools Business Unit, which is
responsible for advanced wireless engineering tools, and
- the Wireless Sensor Solutions Business Unit, which is responsible
for RFID reader systems and related industrial wireless network
solutions.
The net sales of the Wireless Business Segment from January to
December 2007 amounted to EUR 90.9 million (EUR 81.4 million in 2006)
representing a year-on-year growth of 11.7 per cent and the operating
loss was EUR -22.8 million (EUR -8.3 million). Compared to the year
2006, the decline in profitability was due to significant increase in
the investments in product development of mobile WiMAX module
products and RFID reader system portfolio, weaker than expected
demand, price competition and lower than planned resource utilisation
rate of Mobile Terminal Solutions R&D services during the first half
of 2007 and weaker than expected demand and intensive price
competition in Radio Network Solutions R&D services during 2007. The
growth of the Wireless Communications Tools Business Unit was good
and the Mobile Terminal Solutions Business Unit was able to balance
the customer portfolio and achieved a high resource utilisation rate
during the second half of 2007.
Mobile Terminals Solutions Business Unit from January to December
2007
The Mobile Terminal Solutions Business Unit delivers R&D services and
platforms for 3G and smartphone devices, professional mobile radios,
mobile internet multimedia devices (MIMD), security, defence and
industrial applications.
The business environment for the mobile terminals business continued
to be under intense competition but the demand was rather strong
during the fourth quarter. The business unit continued its close
co-operation with technology vendors and OEM customers. During 2007,
efforts were made to improve its profitability through widening the
customer portfolio, redirecting the project portfolio, improving
internal efficiency and growing new application areas such as
professional mobile radios. As a result, the business unit reached a
more balanced customer portfolio and the resource utilisation rate
reached a high level during the fourth quarter.
In June, EB demonstrated the EB Mobile Internet Multimedia reference
Device (MIMD) for the first time at the Computex Taipei International
Information Technology Show. EB offers the EB MIMD reference design
and related product design services under license to OEM's, ODM's and
other customers.
In September, EB and TerreStar Networks Inc. entered into an
agreement concerning the development of handset technologies and
reference designs for TerreStar's upcoming satellite-terrestrial
all-IP mobile network. The agreement between the parties comprises
the development of two dual-mode reference smartphones where EB acts
as the main integrator and delivers turn-key product creation
services to TerreStar. The partnership with TerreStar is important
for EB as it brings the opportunity to apply and enhance the
company's strong wireless communications and 3G smartphone
capabilities to a new demanding application area where terrestrial
HSPA and GMR-3G satellite technologies are combined to one seamless
implementation. This is in line with EB's strategy of entering new
markets and broadening the company's customer base.
In December, EB sold its Microwave Measurement business to SenFit Oy.
Radio Network Solutions Business Unit from January to December 2007
The Radio Network Solutions Business Unit provides radio network
infrastructure-related R&D services and develops standard-based radio
base station module products sold to telecommunications
infrastructure suppliers. An important investment area for EB under
this business unit is the development of mobile WiMAX (IEEE 802.16e)
base station modules. Currently, the business unit offers WiMAX
baseband and RF technology, as well as OBSAI and CPRI base station
interface technologies to its customers.
The R&D services business comprises design services (software,
digital and analogue HW, mechanics, ASIC, FPGA, RF and PCB design)
for communications network products and applications.
The business environment for R&D services was somewhat volatile and
under intense price competition during the reporting period. The
revenue from R&D services has grown slightly in comparison with the
corresponding period in 2006 despite the fact that a significant part
of the R&D resources has been allocated to the development of EB's
own mobile WiMAX base station module products, which started to
generate revenue at the end of 2007 as planned.
During the reporting period, EB continued to invest significantly in
product development associated with mobile WIMAX base stations
technology.
In December, EB and Embio Ltd. signed an agreement, according to
which EB's Radio Network Solutions Business Unit related R&D
activities in Espoo and hardware design and testing activities in
Tampere were transferred to Embio as of 31.12.2007. In the context,
70 employees of EB were transferred to Embio with corresponding terms
of employment. This outsourcing arrangement is a part of EB's
previously published project to increase the productivity and improve
the fixed cost efficiency. With the transaction the business unit
will concentrate its operations on larger sites.
Wireless Communications Tools Business Unit from January to December
2007
In June, EB decided to include the Wireless Communications Tools
Business Unit in the Wireless Business Segment. The decision was
based on the confirmation of the business unit's undisputed global
product leadership and critical role in generating leading-edge radio
propagation know-how for the integrated use of the whole company.
The products of the business unit include radio channel emulators and
measurement instruments (the Propsim(TM) and PropsoundTM products)
and other high-end communications engineering tools sold to chipset
manufacturers, mobile terminal and infrastructure equipment
suppliers, wireless network operators and military communications
companies.
The total sales of the Wireless Communications Tools Business Unit
grew well from 2006. During 2007, the three sales regions (EMEA, APAC
and the Americas) generated approximately equal sales revenues. The
sales progressed well in the new application domains of radio channel
emulation technology, aerospace and automotive applications.
During 2007, R&D investments expanding the application domain and the
product portfolio of the Propsim(TM) radio channel emulator product
family continued. In February, a scalable single-box handset testing
solution was released and delivered. In March, a turnkey solution for
2 x 2 MIMO fading testing for multiple systems, like WCDMA, HSPA,
mobile WiMAX, 3G LTE and 4G, was introduced, and the sales of the
solution started. In June, the first deliveries of the new tester
products for the R&D of open-interface-based base stations (OBSAITM)
were made. In September, new releases of the OBSAI tester (EB Base
Station Interface Tester) supporting the mobile WiMAX and LTE base
stations were published and delivered. The EB Wireless Environment
Solution enabling operators, telecommunications infrastructure
suppliers and device manufacturers to bring the real-world field data
of the radio environment to the laboratory, was introduced to the
market at the end of the third quarter.
Wireless Sensor Solutions Business Unit from January to December 2007
The Wireless Sensor Solutions Business Unit provides RFID reader
systems and related industrial wireless network solutions. A line of
RFID reader systems introduced in November 2006 together with EB's
industrial WLAN products represents the initial product portfolio of
the business unit. The EB RFID solutions are targeted especially at
serving the supply chain and manufacturing of logistics service
providers, automotive, telecommunications, electronics, and other
high technology industries.
The acquisition of 7iD, in June, strengthened EB's offering in the
Wireless Sensor Solutions Business Unit. The work to combine 7iD's
offering with the EB RFID portfolio has been concluded. As a result,
customers can utilize the EB Identification Network that offers
scalable performance for various demanding RFID applications. EB's
Identification Network Architecture is based on Facility Sounding(TM)
technology and distributed intelligence in both RFID readers and RFID
controllers. It provides customers with the abilities to reduce the
traffic in the backbone network and to tune the RFID networks against
internal or external interference.
EB continued to invest significantly in the product development of
RFID reader system related products during 2007.
RESEARCH AND DEVELOPMENT FROM JANUARY TO DECEMBER 2007
The R&D investments continued in the following development areas:
- the development of software platform based products in the
Automotive Software Business Unit,
- the development of mobile WiMAX radio base station module products
in the Radio Network Solutions Business Unit,
- expanding the application domain and the product portfolio in the
Wireless Communications Tools Business Unit,
- the development of RFID reader systems portfolio in the Wireless
Sensor Solutions Business Unit, and
- the technical core competence areas as defined in the strategy.
The total R&D expenses during 2007 were EUR 38.3 million (EUR 23.7
million in 2006) equalling 26.6 per cent of the net sales (19.6% in
2006) and EUR 3.9 million of them were capitalised.
BUSINESS ENVIRONMENT
It is expected that the share of electronics and software in cars
will continue to grow. The automotive embedded software market is
expected to enjoy a 15 per cent Compound Annual Growth Rate (CAGR)
during 2005-2009 in North America and Europe (Frost & Sullivan).
The volume share of smartphones is growing at a rate of more than 40
per cent year-on-year due to the rapid increase in demand for new
features and services (Canalys). The related R&D services market is
facing a price pressure that tightens the margins. However,
attractive niches continue to exist (OVUM).
In the wireless network equipment market, operators are expected to
continue to invest in network capacity and in new cellular network
technologies (WCDMA, HSPA). The mobile WiMAX operator services market
is expected to start in 2008. The value chain and hence the
horizontal technology and product market for Mobile WiMAX is still in
a forming phase.
The wireless communications tools market is predicted to expand
moderately, as the development of new cellular technologies,
enhancements to existing technologies (HSDPA, HSUPA, 3GPP LTE, MIMO)
and new non-cellular technologies (mobile WiMAX, WiBRO) are
generating demand for test system replacements and for new test
systems.
The global RFID reader system market is estimated to grow with a CAGR
of over 20 per cent for the period 2006 to 2011 (VDC). However, the
RFID reader system market is still having its major focus on trials
and pilot projects.
OUTLOOK FOR THE FIRST HALF OF 2008
EB expects the revenue during the first half of 2008 to grow compared
to the second half of 2007 (EUR 79.9 million).
The company's R&D investments during the first half of 2008 will
remain roughly at the level of the second half of 2007, with the
share of the investments in the Automotive Business Segment growing.
The company will continue to invest in:
- Software platform based products in the Automotive Software
Business Unit.
- Development of mobile WiMAX radio base station module products in
the Radio Network Solutions Business Unit.
- Expanding the application domain and the product portfolio in the
Wireless Communications Tools Business Unit.
- Widening the product portfolio of the Wireless Sensor Solutions
Business Unit.
- The technical core competence areas defined in the strategy.
- Developing the marketing and sales capabilities.
- Further developing efficient and unified structures and platforms
to enable global business operations in accordance with the strategy.
EB will continue actions to increase the productivity and improve the
fixed cost efficiency of such operational activities as facilities,
sourcing, logistics, information management and administration.
EB expects the operating loss in the first half of 2008 to be less
than during the second half of 2007, (EUR -7.9 million without the
non-recurring net income of EUR 1.5 million as announced in December
28, 2007), with the start of the year being weaker than the latter
part of the half.
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 R&D services businesses the risks are mainly related to
uncertainties of customers' product program decisions, their make or
buy decisions, ramping up of project resources, timing of the most
important technology components, competitive situation in the market,
and to typical industry warranty and liability risks involved in
selling R&D services. In the short term, additional risks emanate
from ongoing restructuring of the telecommunications infrastructure
industry.
In the technology product businesses the risks are related to
potential market delays, short visibility to customer 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 December 31, 2007, have
been compared with the balance sheet of December 31, 2006
(EUR 1,000).
12/2007 12/2006
Non-current assets 77.196 66.315
Inventories 7.560 13.878
Accounts and other receivables 79.465 57.518
Financing securities, cash and bank deposits 71.893 125.091
Current assets total 158.918 196.487
Total assets 236.114 262.803
Share capital 12.941 12.941
Other equity 152.710 173.513
Minority interest 0.0 2.107
Total shareholders' equity 165.651 188.562
Non-current liabilities 28.937 23.728
Current liabilities 41.526 50.513
Total shareholders' equity and liabilities 236.114 262.803
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -13.2 million
- increase in net working capital EUR -11.6 million
+ interest, taxes and dividends EUR -2.2 million
= cash generated from operations EUR -27.1 million
- net cash used in investment activities EUR -6.8 million
- net cash used in financing EUR -19.3 million
= net change in cash and cash equivalents EUR -53.2 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 79.5 million (EUR 57.5 million on December 31,
2006). The amount comprises a cash consideration of EUR 13.3 million
from the property sales transaction done in December. Accounts and
other payables, booked in interest-free current liabilities, were at
EUR 33.2 million (EUR 35.3 million on December 31, 2006).
The amount of non-depreciated consolidation goodwill at the end of
the period under review was EUR 19.6 million (EUR 8.2 million on
December 31, 2006) and depreciation on business acquisitions during
the reporting period amounted to a total of EUR 4.0 million (compared
to EUR 1.9 million during the corresponding period in 2006).
The amount of net investments in the period under review was EUR 27.9
million, consisting of replacement investments and items created by
business acquisitions and the sales of the Production Solutions
business and the property Kiinteistö Oy Tutkijantie 8. The total
amount of depreciation during the period under review was EUR 15.9
million, including EUR 4.0 million of depreciation owing to business
acquisitions.
EB's other long-term investments include an investment portfolio with
a book value of approximately EUR 10.8 million, which mainly consists
of long-term bonds. The portfolio is valued at market value on
December 31, 2007.
The amount of interest-bearing debt at the end of the reporting
period was EUR 32.2 million. The distribution of net financing
expenses on the income statement was as follows:
interest, dividend and other financial income EUR 1.9 million
interest expenses EUR -1.8 million
foreign exchange gains and losses EUR 0.2 million
EB's equity ratio at the end of the period was 70.9 per cent
(compared with 72.2 per cent at the end of 2006).
The figures from the period under review do not include any of the
statutory reserves stipulated in Chapter 5, section 14 of the
Accounting Act.
EB follows a currency strategy, the objective of which is to ensure
the margins of business operations in changing market circumstances
by minimising 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 26.4 million.
PERSONNEL
EB employed an average of 1695 people between January and December
2007. At the end of December, EB had 1725 employees (1621, Continuing
Operations, at the end of 2006). A significant part of EB's personnel
are product development engineers.
PUBLIC REPRIMAND BY THE FINANCIAL SUPERVISION AUTHORITY
The Financial Supervision Authority issued on 21 September, 2007 a
public reprimand to Elektrobit Corporation according to which the
company failed to disclose without undue delay its decision to
withdraw from the original design with partnered manufacturing
business model in 3G smartphones.
EB has a different view on the matter of the reprimand and believes
to have acted diligently in the matter. The company has made a severe
internal investigation of the matter and given the answers requested
to the Financial Supervision. The company abides by the decision.
According to the Financial Supervision Authority, the decision to
withdraw from the said business model was information that had a
material effect on the value of the company's security. The Financial
Supervision Authority considers that the obligation to disclose the
information was triggered on 30 November 2006 at the latest, when the
CEO of the company informed the company's Board of Directors of the
withdrawal decision. The company did not disclose the information
until in its financial bulletin on 7 February 2007.
According to the Financial Supervision Authority, the earlier
coherent disclosure in the company's stock exchange and press
releases of the manufacturing of smartphones by using the original
design with partnered manufacturing business model and of the
contracts related to the project seem to indicate that also the
company has considered the issue as material. The materiality is also
supported by market reactions. The decision to withdraw from the
business model should have been disclosed by means of a separate
stock exchange release on 30 November 2006 at the latest. Elektrobit
has thus violated the regulations and its conduct has, in the
Financial Supervision's view, been at the least negligent. However,
when judged as a whole, the matter does not give rise to more severe
measures than a public reprimand.
OPTION RIGHTS
I. The Annual General Meeting of March 17, 2005 decided to authorise
the Board of Directors to issue option rights. By virtue of the
authorisation the Board of Directors granted 4,500,000 option rights
to the company's management and EB's fully owned subsidiary serving
as a reserve company in the stock option scheme. Subscriptions made
by virtue of the 2005 option rights may increase the share capital of
Elektrobit Corporation by a maximum of EUR 450,000 and the number of
shares by a maximum of 4,500,000.
II. The Annual General Meeting held on March 15, 2006 decided that
option rights with a commitment to shareholding be granted to
Elektrobit Corporation's new directors. The number of option rights
granted totals 1,750,000, of which 750,000 were granted to the
Chairman of the Board and 1,000,000 were granted to the CEO.
Subscriptions made by virtue of the said option rights might increase
the share capital of Elektrobit Corporation by a maximum of
EUR 175,000 and the number of shares by a maximum of 1,750,000 new
shares.
THE AUTHORISATIONS OF THE BOARD OF DIRECTORS AT THE END OF THE
REPORTING PERIOD
The Annual Shareholders' Meeting held on March 14, 2007 resolved to
authorize the Board of Directors to repurchase shares of the company
as follows: The amount of the repurchased own shares shall not be
more than 12,500,000 shares, which represents approximately 9.66 per
cent of all the shares of the company. Only the unrestricted equity
of the company can be used to repurchase own shares on the basis of
the authorization. Own shares can be repurchased at a price
determined in public trading on the date of repurchase or otherwise
on the market. The Board of Directors shall resolve on how the
repurchase of shares is carried out. The repurchase can be carried
out by using, among others, derivatives. Shares may be repurchased
also otherwise than in proportion to the shares owned by the
shareholders of the company (directed repurchase of shares). The
authorization is effective until 30 June 2008.
The Annual Shareholders' Meeting held on March 14, 2007 authorized
the Board of Directors to resolve on the issuance of shares and stock
options and other special rights entitling to shares subject to
chapter 10, section 1 of the Companies Act as follows: The aggregate
number of shares issued on the basis of the authorization may not
exceed 25,000,000 shares, which represents approximately 19.3 per
cent of all the shares of the company. The Board of Directors is
authorized to resolve on all the terms and conditions concerning the
issue of shares and stock options and other special rights entitling
to shares. The authorization concerns both the issuance of new shares
and transfer of the company's own shares. Issuance of shares and
other special rights entitling to shares can be carried out as a
directed issue.
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.
BOARD OF DIRECTORS AND AUDITOR
The Annual Shareholders' Meeting held on March 14, 2007 fixed the
number of the Board members to six (6). Mr. J.T. Bergqvist, Mr. Jukka
Harju, Mr. Juha Hulkko, Mr. Matti Lainema, Mr. Juha Sipilä and Mr.
Tapio Tammi were elected as Board members. The term of office of the
Board members will end at the next Annual Shareholders' Meeting. At
its assembly meeting held on March 14, 2007 the Board of Directors
elected J.T. Bergqvist as the Chairman of the Board.
The Annual Shareholders' Meeting elected Ernst & Young Oy, an
auditing entity authorized by the Central Chamber of Commerce, as the
auditor of the company.
DIVIDEND FROM 2006
The Annual Shareholders' Meeting of March 14, 2007 approved the Board
of Directors' proposal to pay dividend of EUR 0.11 per share, a total
of EUR 14,235,395.90, for the financial period from January 1 to
December 31, 2006. The payment date of the dividend was March 26,
2007.
AMENDMENT OF THE ARTICLES OF ASSOCIATION AND THE COMPANY NAME CHANGE
The Annual Shareholders' Meeting held on March 14, 2007 approved the
Board of Directors' proposal to amend the Articles of Association
mainly due to the new Companies Act, which entered into force on
September 1, 2006. Simultaneously the company name was changed into
Elektrobit Oyj, in English Elektrobit Corporation. By virtue of the
registration of the changes, the amendments of the Articles of
Association and the company's new name became effective on March 23,
2007.
BOARD OF DIRECTORS' PROPOSAL TO DISTRIBUTE PROFITS
According to the parent company's balance sheet, the distributable
funds are EUR 29,798,815.35 million, of which EUR 6,852,190.96 is the
profit for the financial period. Elektrobit Corporation's Board of
Directors will propose to the Annual General Shareholders Meeting a
dividend of EUR 0.02 per share for 2007, a total of EUR 2,588,253.80.
Oulunsalo, February 6, 2008
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Tel. +358 40 344 5148
Panu Miettinen
CFO
Tel. +358 40 344 5338
Distribution:
OMX Nordic Exchange Helsinki
Principal financial media
INVITATION TO PRESS CONFERENCE ON EB'S FINANCIAL STATEMENT BULLETIN
2007
EB, Elektrobit Corporation, will hold a press conference for media,
analysts and institutional investors concerning the Financial
Statement Bulletin 2007 on February 6, 2008 as follows:
In Helsinki at 10.00 - 11.00 am. (EET)
Hotel Radisson SAS Royal
Runeberginkatu 2
Cabinet Iceland
The conference will be audio webcast and published live on the
Internet on
http://webcast.goodmood.tv:80/wip/directlink.do?newbrowser=1&pid=2065199.
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
Financial Statement Bulletin on the same address.
CONSENSUS ESTIMATE
The EB consensus estimate made by the analysts who observe the
company is updated a week before the release of the financial report.
The latest estimate is available on the company website
www.elektrobit.com/investors.
January 30, 2008
EB, Elektrobit Corporation
Corporate Communications
EB, ELEKTROBIT CORPORATION, FINANCIAL STATEMENT BULLETIN 2007
The consolidated financial statement has been prepared in accordance
with International Financial Reporting Standards (IFRS). The
Financial Statement of 2007 has been audited and the auditing report
has been dated on February 5, 2008.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-12/2007 1-12/2006
12 months 12 months
Continuing operations
NET SALES 144.3 120.5
Other operating income 14.4 1.8
Change in work in progress and finished goods 1.5 0.6
Work performed by the undertaking for its own
purpose
and capitalized 0.5 0.3
Raw materials -10.1 -7.1
Personnel expenses -96.5 -78.4
Depreciation -15.9 -8.2
Other operating expenses -58.5 -35.5
OPERATING PROFIT (LOSS) -20.3 -6.0
Financial income and expenses 0.3 -0.0
RESULT BEFORE TAXES -20.0 -6.1
Income taxes 0.0 -0.1
RESULT FOR THE PERIOD FROM CONTINUING
OPERATIONS -20.0 -6.1
Result after taxes for the period from
discontinued
operations 13.1 80.3
RESULT FOR THE PERIOD -6.9 74.2
Attributable to
Equity holders of the parent -6.9 73.9
Minority interest 0.0 0.3
Earnings per share EUR continuing operations
Basic earnings per share -0.15 -0.05
Diluted earnings per share -0.15 -0.05
Earnings per share EUR discontinued operations
Basic earnings per share 0.10 0.62
Diluted earnings per share 0.10 0.62
Earnings per share EUR continuing and
discontinued
operations
Basic earnings per share -0.05 0.57
Diluted earnings per share -0.05 0.57
Average number of shares, 1000 pcs 129 413 129 413
CONSOLIDATED BALANCE SHEET (MEUR) Dec. 31, Dec. 31,
2007 2006
ASSETS
Non-current assets
Property, plant and equipment 25.1 32.5
Goodwill 19.6 8.2
Intangible assets 18.0 10.6
Financial assets at fair value through profit
or loss 10.8 10.7
Other financial assets 0.3 0.1
Receivables 0.7 1.6
Deferred tax assets 2.8 2.7
Non-current assets total 77.2 66.3
Current assets
Inventories 7.6 13.9
Trade and other receivables 79.5 57.5
Cash and short term deposits 71.9 125.1
Current assets total 158.9 196.5
TOTAL ASSETS 236.1 262.8
EQUITY AND LIABILITIES
Equity attributable to equity holders of the
parent
Share capital 12.9 12.9
Share premium 64.6 64.6
Translation difference -0.4 -0.2
Retained earnings 88.5 109.2
Minority interest 0.0 2.1
Total equity 165.7 188.6
Non-current liabilities
Deferred tax liabilities 4.4 6.2
Interest-bearing liabilities 23.9 17.2
Other liabilities 0.6 0.3
Non-current liabilities total 28.9 23.7
Current liabilities
Trade and other payables 31.1 32.8
Pension obligations 0.9 0.8
Current tax liabilities 1.2 1.7
Interest-bearing loans and borrowings 8.3 15.2
Current liabilities total 41.5 50.5
Total liablities 70.5 74.2
TOTAL EQUITY AND LIABILITIES 236.1 262.8
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-12/2007 1-12/2006
12 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -6.9 73.9
Adjustment of accrual basis items -6.4 -63.7
Change in net working capital -11.6 -7.4
Interest paid on operating activities -1.8 -1.9
Interest received from operating activities 1.5 1.8
Other financial income and expenses, net received 0.0 0.0
Income taxes paid -1.9 -4.1
NET CASH FROM OPERATING ACTIVITIES -27.1 -1.4
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit, net of cash
acquired -4.7 -0.3
Acquisition of minority interest -10.2
Disposal of business unit, net of cash acquired 16.9 81.1
Purchase of property, plant and equipment -3.9 -2.8
Purchase of intangible assets -6.3 -1.8
Purchase of other investments -3.9 -6.1
Sale of property, plant and equipment 0.5 2.9
Sale of intangible assets 1.1 0.0
Proceeds from sale of investments 3.7 5.6
NET CASH FROM INVESTING ACTIVITIES -6.8 78.5
CASH FLOW FROM FINANCING ACTIVITIES
Loans granted -0.5
Proceeds from borrowing 8.2 4.2
Repayment of borrowing -7.6 -4.4
Payment of finance liabilities -5.1 -3.4
Dividends paid -14.2 -9.1
NET CASH FROM FINANCING ACTIVITIES -19.3 -12.6
NET CHANGE IN CASH AND CASH EQUIVALENTS -53.2 64.5
Cash and cash equivalents at beginning of period 125.1 60.6
Cash and cash equivalents at end of period 71.9 125.1
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Net profit for the period
E = Minority interest
F = Total equity
A B C D E F
Equity on January 1, 2006 12.9 64.6 42.7 1.8 122.0
Result for the period 73.9 73.9
Dividend distribution -9.1 -9.1
Share-related compensation 0.9 0.9
Translation difference -0.5 0.3 -0.2
Others 1.1 1.1
Equity on Dec. 31, 2006 12.9 64.6 35.1 73.9 2.1 188.6
Equity on January 1, 2007 12.9 64.6 108.9 2.1 188.6
Result for the period -6.9 -6.9
Dividend distribution -14.2 -14.2
Share-related compensation 1.2 1.2
Translation difference -0.2 -2.1 -2.3
Others -0.7 -0.7
Equity on Dec. 31, 2007 12.9 64.6 95.0 -6.9 0.0 165.7
NOTES TO THE FINANCIAL STATEMENT BULLETIN
Accounting principles for the Financial Statement Bulletin:
The same accounting policies and methods of computation are followed
in the financial statement bulletin 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 that are unusual because of their nature,
size or incidence:
During the first quarter, the purchase of minority shares of
Elektrobit Automotive GmbH created a goodwill of EUR 8.1 million.
During the second quarter, the purchasing of DECOMSYS Beteiligungs
GmbH and 7iD Technologies GmbH created a goodwill of EUR 4.7 million
and a share of EUR 6.5 million of other intangible rights subject to
depreciation. During the second quarter, the Production Solutions
business was sold. The result of the Production Solutions business
and the return from the sale of the Production Solutions business are
presented in the income statement under Discontinued Operations. In
December, the properties located at Oulu were sold, decreasing the
balance sheet value of non-current assets by EUR 8.4 million. EB also
re-assessed the value of the remaining property in Oulunsalo and, as
a result, executed a non-recurring write-off of approximately EUR 4.0
million. At the same time, the group's operations related goodwill
valuations were re-assessed and a write-off of approximately EUR 1.0
million concerning certain non-core operations has been made
thereof.
Dividends paid:
According to the decision of the company's Annual Shareholders'
Meeting held on March 14, 2007, dividend of EUR 0.11 per share, a
total of EUR 14,235,395.90 was paid on March 26, 2007
SEGMENT INFORMATION (MEUR) 1-12/2007 1-12/2006
Continuing operations 12 months 12 months
Automotive
Net sales to external customers 52.6 38.9
Net sales to other segments 0.0 0.0
Net sales total 52.7 38.9
Operating profit (loss) 0.7 2.1
Wireless
Net sales to external customers 90.9 81.4
Net sales to other segments 0.8 2.2
Net sales total 91.7 83.6
Operating profit (loss) -22.8 -8.3
Other businesses
Net sales to external customers 0.8 0.2
Net sales to other segments 0.0 9.4
Net sales total 0.8 9.6
Operating profit (loss) 1.8 0.1
Eliminations
Net sales to external customers 0.0 0.0
Net sales to other segments -0.8 -11.7
Net sales total -0.8 -11.7
Operating profit (loss) 0.0 0.0
Group total
Net sales to external customers 144.3 120.5
Operating profit (loss) -20.3 -6.0
Net sales of geographical segments (MEUR) 1-12/2007 1-12/2006
12 months 12 months
Net sales
Europe 101.6 96.5
Americas 33.3 15.2
Asia 9.5 8.7
Net sales total 144.3 120.5
Material events subsequent to the end of the interim period that have
not been reflected in the financial statements for the interim
period:
There were no material events subsequent to the end of the interim
period.
The effect of changes in the composition of the group structure
during the interim period:
During the first quarter, Elektrobit Corporation acquired the
minority shares of Elektrobit Automotive GmbH. During the second
quarter, in June, Elektrobit Corporation purchased 100 per cent of
the shares in DECOMSYS Beteiligungs GmbH. Additionally, Elektrobit
Corporation purchased 7iD Technologies GmbH in June. Elektrobit
Corporation sold its Production Solutions business as of June 1,
2007. The transaction comprised the subsidiaries belonging to the
Production Solutions business. In December, EB sold 100 per cent of
the shares in Kiinteistö Oy Tutkijantie 8.
Related party transactions: 1-12/2007 1-12/2006
Employee benefits for key management and stock
option expenses total 2.5 2.0
Loans and guarantees to related party
There have not been other transactions between
the
related parties
INCOME STATEMENT BY 10-12/ 7-9/ 4-6/ 1-3/ 10-12/
QUARTER (MEUR) 2007 2007 2007 2007 2006
3 months 3 months 3 months 3 months 3 months
NET SALES 44.6 35.3 33.5 31.0 33.3
Other operating income 10.7 0.9 2.2 0.6 1.3
Change in work in
progress and
finished goods -1.1 0.1 0.6 1.9 0.1
Work performed by the
undertaking
for its own purpose
and capitalized 0.1 0.2 0.2 0.0 0.1
Raw materials -3.1 -2.5 -2.4 -2.0 -2.1
Personnel expenses -26.6 -22.6 -23.9 -23.4 -23.6
Depreciation -7.6 -3.5 -2.5 -2.3 -2.1
Other operating
expenses -19.5 -11.8 -14.3 -12.9 -12.2
OPERATING PROFIT
(LOSS) -2.4 -4.0 -6.6 -7.2 -5.3
Financial income and
expenses -0.9 0.0 0.3 0.8 0.3
RESULT BEFORE TAXES -3.3 -4.0 -6.3 -6.4 -4.9
Income taxes 0.0 0.0 -0.1 0.1 0.3
RESULT FOR THE PERIOD
FROM
CONTINUING OPERATIONS -3.3 -4.0 -6.4 -6.3 -4.6
Result after taxes for
the period from
discontinued
operations 0.4 -0.0 14.5 -1.8 73.7
RESULT FOR THE PERIOD -2.9 -4.0 8.1 -8.1 69.0
Attributable to
Equity holders of
the parent -2.9 -4.0 8.1 -8.1 68.9
Minority interest 0.0 0.0 0.0 -0.0 0.2
BALANCE SHEET BY Dec. 31, Sept. 30, June 30, March 31, Dec. 31,
QUARTER
(MEUR) 2007 2007 2007 2007 2006
ASSETS
Non-current assets
Property, plant and
equipment 25.1 35.3 35.0 34.6 32.5
Goodwill 19.6 21.7 21.1 16.2 8.2
Intangible assets 18.0 17.5 16.8 10.6 10.6
Financial assets at
fair value
through profit or
loss 10.8 10.9 10.9 10.8 10.7
Other financial
assets 0.3 0.3 0.4 0.1 0.1
Receivables 0.7 0.2 0.1 0.2 1.6
Deferred tax assets 2.8 4.2 3.5 3.5 2.7
Non-current assets
total 77.2 90.1 87.7 76.0 66.3
Current assets
Inventories 7.6 8.7 8.8 16.3 13.9
Trade and other
receivables 79.5 53.8 53.8 52.7 57.5
Cash and short term
deposits 71.9 82.7 98.7 96.6 125.1
Current assets total 158.9 145.2 161.3 165.6 196.5
TOTAL ASSETS 236.1 235.3 249.1 241.6 262.8
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 -0.4 -0.3 -0.1 -0.2 -0.2
Retained earnings 88.5 91.1 94.9 87.0 109.2
Minority interest 0.0 0.0 0.0 0.0 2.1
Total equity 165.7 168.4 172.3 164.3 188.6
Non-current
liabilities
Deferred tax
liabilities 4.4 5.2 5.6 6.3 6.2
Interest-bearing
liabilities 23.9 23.8 28.0 22.3 17.2
Other liabilities 0.6 0.7 0.7 0.3 0.3
Non-current
liabilities total 28.9 29.7 34.3 28.9 23.7
Current liablities
Trade and other
payables 32.3 27.2 30.8 34.1 34.5
Pension obligations 0.9 1.1 0.9 0.8 0.8
Interest-bearing
loans and
borrowings
(non-current) 8.3 8.9 10.7 13.6 15.2
Current liabilities
total 41.5 37.2 42.4 48.5 50.5
Total liablities 70.5 66.9 76.8 77.3 74.2
TOTAL EQUITY AND
LIABILITIES 236.1 235.3 249.1 241.6 262.8
CONSOLIDATED CASH FLOW 10-12/ 7-9/ 4-6/ 1-3/ 10-12/
STATEMENT BY QUARTER 2007 2007 2007 2007 2006
3 months 3 months 3 months 3 months 3 months
Net cash from
operating activities -8.6 -6.7 -6.2 -5.5 -1.2
Net cash from
investing activities -0.7 -5.6 11.2 -11.7 80.5
Net cash from
financing activities -1.4 -3.8 -2.9 -11.3 0.2
Net change in cash and
cash
equivalents -10.8 -16.1 2.1 -28.5 79.5
FINANCIAL PERFORMANCE RELATED RATIOS 1-12/2007 1-12/2006
12 months 12 months
INCOME STATEMENT (MEUR)
Net sales 144.3 120.5
Operating profit (loss) -20.3 -6.0
Operating profit (loss), % of net sales -14.1 -5.0
Result before taxes -20.0 -6.1
Result before taxes, % of net sales -13.9 -5.0
Result for the period -20.0 -6.1
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities, (MEUR) -39.7 -92.7
Net gearing, % -24.0 -49.2
Equity ratio, % 70.9 72.2
Gross investments, (MEUR) 44.1 16.4
Average personnel during the period 1695 1424
Personnel at the period end 1725 1621
AMOUNT OF SHARE ISSUE ADJUSTMENT Dec. 31, Dec. 31,
(1,000 pcs) 2007 2006
At the end of period 129 413 129 413
Average for the period 129 413 129 413
Average for the period diluted with stock options 129 413 129 413
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-12/2007 1-12/2006
12 months 12 months
Basic earnings per share -0.15 -0.05
Diluted earnings per share -0.15 -0.05
Equity *) per share 1.28 1.44
Dividend per share **) 0.02 0.11
Dividend per earnings, % -12.9 -220,4
P/E ratio -10,6 -41,3
Effective dividend yield, % 1.22 5,3
*) Equity attributable to equity holders of the
parent
**) According to Board of Director's proposal,
year 2007
MARKET VALUES OF SHARES (EUR) 1-12/2007 1-12/2006
Highest 2.48 2.56
Lowest 1.51 1.82
Average 1.93 2.18
At the end of period 1.64 2.06
Market value of the stock, (MEUR) 212.2 266.6
Trading value of shares, (MEUR) 53.4 72.4
Number of shares traded, (1,000 pcs) 27 656 33 206
Related to average number of shares % 21.4 25.7
SECURITIES AND CONTINGENT LIABILITIES Dec. 31, Dec. 31,
(MEUR) *) 2007 2006
AGAINST OWN LIABILITIES
Floating charges 3.1 3.0
Mortgages 7.0 18.0
Pledges 9.8 7.1
Guarantees 2.1
Mortgages are pledged for liabilities
totalled 17.3 13.4
OTHER DIRECT AND CONTINGENT LIABILITIES
Rental liabilities
Falling due in the next year 4.0 3.1
Falling due after one year 4.9 3.7
*) The comparison data does not include
contingent
liabilities relating to discontinued
operations
NOMINAL VALUE OF CURRENCY DERIVATIVES Dec. 31, 2007 Dec. 31, 2006
(MEUR)
Foreign exchange forward contracts
Market value 0.7 -0.0
Nominal value 26.4 9.5
Purchased currency options
Market value 0.0
Nominal value 2.5
Sold currency options
Market value -0.0
Nominal value 5.0
