STOCK EXCHANGE RELEASE
Free for publication on November 7, 2007 at 8.00 am. (EET)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT JANUARY - SEPTEMBER 2007
(unaudited)
SUMMARY
During the third quarter of 2007, EB continued to follow the
strategic path as defined in the spring 2006. EB has focused its
business operations and concentrates on clear growth businesses in
the Automotive and Wireless Business Segments.
EB's net sales grew steadily and amounted to EUR 35.3 million for
third quarter (an increase of 5.3% compared to second quarter of 2007
of EUR 33.5 million; an increase of 27.7% compared to the
corresponding period of 2006 of EUR 27.6 million).
The operating loss totalled to EUR -4.0 million (EUR -6.6 million in
second quarter of 2007 and EUR -2.5 million corresponding period of
2006).
During the reporting period EB balanced its customer portfolio by
entering new markets and acquiring new customers. During the
reporting period none of the customer shares exceeded 11 per cent of
the net sales and in addition, the summarized share of the ten
biggest customers was 54 per cent. EB announced an agreement
concerning the development of handset technologies and reference
designs for TerreStar's (TerreStar Networks Inc.) upcoming
satellite-terrestrial all-IP mobile network.
During the third quarter of 2007 EB continued significant investments
in research and product development in order to develop new business
for the company in line with the strategy.
EB continued the actions to render the company cost structure to
correspond with the new focused business setup after the divestments
of the Network Test and Production Solutions businesses. EB has
commenced actions to increase the productivity and improve the fixed
costs efficiency of such operational activities as facilities,
sourcing, logistics, information management and administration.
According to the IFRS5 standard, EB reports its financial results
divided between Discontinued and Continuing Operations. In this
Interim Report, financial figures concerning the income statement of
2007 and 2006 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 in the Interim Report, after Continuing Operations' net
profit, so that the 2007 figures include Production Solutions figures
and the 2006 figures include the Network Test and Production
Solutions figures. In addition to the sales price of the Network Test
business, an additional amount, capped at EUR 12 million, is payable
in cash for 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 no additional amount payable for the
time period between January 1 and September 30, 2007. The final
determination on the possible additional amount will take place based
on an annual review.
Comparisons between the Continuing Operations figures for the third
quarter of 2007 and the corresponding period in 2006:
- The net sales amounted to EUR 35.3 million (EUR 27.6 million; an
increase of EUR 7.6 million or 27.7%). The net sales of the
Automotive Business Segment were EUR 14.5 million (EUR 10.1 million;
an increase of EUR 4.5 million or 44.3%). The net sales of the
Wireless Business Segment were EUR 20.4 million (EUR 17.5 million; an
increase of EUR 2.9 million or 16.5%).
- Operating loss totalled to EUR -4.0 million (EUR -2.5 million) and
was distributed as follows: the Automotive Business Segment EUR 0.5
million (EUR 0.5 million), the Wireless Business Segment EUR -5.2
million (EUR -3.0 million) and the other businesses EUR 0.7 million
(EUR 0.0 million).
- Net cash flow from operations amounted to EUR -6.7 million (EUR 1.7
million).
Comparisons between the Continuing Operations figures from January to
September 2007 and the figures for the corresponding period in 2006:
- Net sales amounted to EUR 99.7 million (EUR 87.1 million, an
increase of EUR 12.6 million or 14.5%). The net sales of the
Automotive Business Segment were EUR 36.4 million (EUR 27.5 million,
an increase of EUR 8.8 million or 32.0%) and the net sales of
Wireless Business Segment were EUR 62.6 million (EUR 59.4 million, an
increase of EUR 3.2 million or 5.4%).
- Operating loss was EUR -17.8 million (EUR -0.8 million, a decrease
of EUR 17.1 million) and it was distributed as follows: the
Automotive Business Segment EUR -0.3 million (EUR 1.2 million), the
Wireless Business Segment EUR -18.7 million (EUR -2.1 million, a
decrease of EUR 16.5 million) and other businesses a profit of
EUR 1.1 million (EUR 0.1 million).
- Cash flow from operations amounted to EUR -18.4 million (EUR -0.2
million).
- Equity ratio was 72.1% (64.3%).
QUARTERLY FIGURES, CONTINUING OPERATIONS
According to the guidance given in conjunction with Q2 results on
August 2, 2007, the company expected the sequential revenue growth
from the first half of 2007 to the second half of 2007 to be stronger
than it was from the second half of 2006 (MEUR 61.0) to the first
half of 2007 (MEUR 64.5) and the operating loss in the second half of
2007 was expected to reduce significantly compared to the operating
loss of the first half of 2007 (MEUR -13.8).
The quarterly distribution of the Group's Continuing Operations
overall net sales and profit, MEUR:
+-------------------------------------------------------------------+
| | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 | 7-9/06 |
|--------------------+--------+--------+--------+----------+--------|
| Net sales | 35.3 | 33.5 | 31.0 | 33.3 | 27.6 |
|--------------------+--------+--------+--------+----------+--------|
| Operating profit | -4.0 | -6.6 | -7.2 | -5.3 | -2.5 |
| (loss) | | | | | |
|--------------------+--------+--------+--------+----------+--------|
| Result before | -4.0 | -6.3 | -6.4 | -4.9 | -2.4 |
| taxes | | | | | |
|--------------------+--------+--------+--------+----------+--------|
| Result for the | -4.0 | -6.4 | -6.3 | -4.6 | -2.2 |
| period | | | | | |
+-------------------------------------------------------------------+
The distribution of the Continuing Operations net sales by Business
Segment, MEUR:
+------------------------------------------------------------------+
| | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 | 7-9/06 |
|-------------------+--------+--------+--------+----------+--------|
| Automotive | 14.5 | 11.2 | 10.6 | 11.3 | 10.1 |
|-------------------+--------+--------+--------+----------+--------|
| Wireless | 20.4 | 22.2 | 20.1 | 22.0 | 17.5 |
|-------------------+--------+--------+--------+----------+--------|
| Corporation Total | 35.3 | 33.5 | 31.0 | 33.3 | 27.6 |
+------------------------------------------------------------------+
The distribution of the Continuing Operations net sales by market
area, MEUR (%):
+-------------------------------------------------------------+
| | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 | 7-9/06 |
|----------+---------+---------+---------+----------+---------|
| Asia | 4.4 | 0.6 | 2.5 | 1.9 | 2.1 |
| | (12.5%) | (1.7%) | (8.0%) | (5.7%) | (7.4%) |
|----------+---------+---------+---------+----------+---------|
| Americas | 7.4 | 7.3 | 4.1 | 4.2 | 3.2 |
| | (20.9%) | (21.7%) | (13.4%) | (12.5%) | (11.4%) |
|----------+---------+---------+---------+----------+---------|
| Europe | 23.5 | 25.7 | 24.3 | 27.3 | 22.4 |
| | (66.5%) | (76.6%) | (78.6%) | (81.8%) | (81.1%) |
+-------------------------------------------------------------+
Net sales (external) and operating profit development by Business
Segments and Other businesses of the Continuing Operations were as
follows, MEUR:
+-------------------------------------------------------------------+
| | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 | 7-9/06 |
|-------------------+--------+--------+---------+----------+--------|
| Automotive | | | | | |
| Net sales | 14.5 | 11.2 | 10.6 | 11.3 | 10.1 |
| Operating profit | 0.5 | -0.2 | -0.6 | 0.9 | 0.5 |
| (loss) | | | | | |
|-------------------+--------+--------+---------+----------+--------|
| Wireless | | | | | |
| Net sales | 20.4 | 22.2 | 20.1 | 22.0 | 17.5 |
| Operating profit | -5.2 | -7.1 | -6.4 | -6.2 | -3.0 |
| (loss) | | | | | |
|-------------------+--------+--------+---------+----------+--------|
| Other businesses | | | | | |
| Net sales | 0.3 | 0.1 | 0.3 | 0.1 | 0.0 |
| Operating profit | 0.7 | 0.7 | -0.2 | 0.0 | -0.0 |
| (loss) | | | | | |
|-------------------+--------+--------+---------+----------+--------|
| Total | | | | | |
| Net sales | 35.3 | 33.5 | 31.0 | 33.3 | 27.6 |
| Operating profit | -4.0 | -6.6 | | -5.3 | -2.5 |
| (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:
+-------------------------------------------------------------------+
| | 7-9/07 | 4-6/07 | 1-3/07 | 10-12/06 | 7-9/06 |
|----------------+------------+--------+--------+----------+--------|
| Operative | No | | | | |
| business | operations | | | | |
|----------------+------------+--------+--------+----------+--------|
| Net sales | | 6.7 | 8.6 | 15.9 | 21.1 |
|----------------+------------+--------+--------+----------+--------|
| Operating | | -1.6 | -1.6 | 0.9 | 3.7 |
| profit (loss) | | | | | |
|----------------+------------+--------+--------+----------+--------|
| Result before | | -1.7 | -1.7 | 0.7 | 3.6 |
| taxes | | | | | |
|----------------+------------+--------+--------+----------+--------|
| Income tax | | -0.1 | -0.1 | -0.3 | -0.6 |
|----------------+------------+--------+--------+----------+--------|
| Result for the | | -1.8 | -1.8 | 0.4 | 2.9 |
| period | | | | | |
|----------------+------------+--------+--------+----------+--------|
| | | | | | |
|----------------+------------+--------+--------+----------+--------|
| Disposal gain | | | | | |
|----------------+------------+--------+--------+----------+--------|
| Profit of the | | 16.7 | | 73.7 | |
| Discontinued | | | | | |
| Operations | | | | | |
|----------------+------------+--------+--------+----------+--------|
| Income tax | | -0.4 | | -0.5 | |
|----------------+------------+--------+--------+----------+--------|
| Profit after | | 16.4 | | 73.2 | |
| taxes of the | | | | | |
| Discontinued | | | | | |
| Operations | | | | | |
|----------------+------------+--------+--------+----------+--------|
| | | | | | |
|----------------+------------+--------+--------+----------+--------|
| Result for the | | 14.5 | -1.8 | 73.7 | 2.9 |
| period | | | | | |
+-------------------------------------------------------------------+
The sales price of the Production Solutions business was EUR 29
million. Details concerning the transaction have been disclosed in a
stock exchange release on June 1, 2007.
STATUS OF STRATEGY IMPLEMENTATION
The major strategy related changes in EB's business portfolio have
been made during the second half of 2006 and 2007. EB is seeking for
growth by becoming a focused global leader in selected automotive and
wireless businesses with a balanced customer portfolio and scalable
business models. In addition to focusing the business portfolio,
major progress has been made in building a balanced customer
portfolio. In addition to the acquisitions of DECOMSYS and 7iD, EB
continues to search acquisition opportunities to strengthen the
business growth.
As announced on June 1, EB has reduced the number of business
segments into two. They are "Automotive" and "Wireless". During the
second quarter of 2007, the former System Test Business Unit was
refocused on advanced wireless emulation and engineering tools. It
was renamed as Wireless Communications Tools Business Unit and
transferred under the Wireless Business Segment. The Wireless Sensor
Solutions Business Unit was established also under the Wireless
Business Segment. Therefore, the Test and Automation Business Segment
has ceased to exist.
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 SEPTEMBER 2007
The Automotive Business Segment consists of in-car software products
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 36.4 million (EUR 27.5
million), which represents a growth of 32 per cent, and the operating
loss was EUR -0.3 million (EUR 1.2 million) due to the continued
significant investments in the R&D of EB's automotive software
platform products.
Automotive Software Business Unit from January to September 2007
The sales of the Automotive Software Business Unit products and
associated solutions have grown steadily and EB's strategy is to
continue to increase the share of automotive software products 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® AUTOSAR (Automotive Open System Architecture) software
components used for the development of electronic control units (ECU)
for passenger cars, and
- high performance network communications protocol standards 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 (Japan Automotive Software Platform Architecture) 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 now integrates a hands-free navigation solution
with predictive graphic interface and voice control.
The newest version of the EB street director(TM) portable navigation
solution, which responds to spoken commands, was published in May.
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.
WIRELESS BUSINESS SEGMENT FROM JANUARY TO SEPTEMBER 2007
The Wireless Business Segment comprises the four 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 emulation and 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
September 2007 amounted to EUR 62.6 million (EUR 59.4 million) and
the operating loss was EUR -18.7 million (EUR -2.1 million). Compared
to the corresponding period in 2006, the decline in profitability was
due to significantly higher investments in product development of
mobile WiMAX products, 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, weaker than
expected demand and intensive price competition in Radio Network
Solutions R&D services, and R&D investments in RFID reader products
portfolio.
Mobile Terminals Solutions Business Unit from January to September
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 and defence,
industrial and other applications.
The business environment for the mobile terminals business continued
to be under intense competition during the early part of the
reporting period. However, the demand started to strengthen during
the third quarter. The Mobile Terminal Solutions Business Unit
continued its close co-operation with technology vendors and OEM
customers. The Mobile Terminal Solutions Business Unit continued
efforts 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. During the third quarter the resource utilisation rate
reached a good level.
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 plans to offer the EB MIMD Reference
Product and related product design services under license to OEM's,
ODM's and other customers.
In September, EB and TerreStar 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.
Radio Network Solutions Business Unit from January to September 2007
The Radio Network Solutions Business Unit provides radio network
infrastructure-related R&D services and develops standard-based
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.
The R&D services business comprises design services (software,
digital and analogue HW, mechanics, ASIC, FPGA, RF and PCB design)
for wireless base stations.
The business environment for R&D services has been 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 are expected to
start generating revenue from the end of 2007 or early 2008.
During the reporting period, EB continued to invest significantly in
product development associated with mobile WIMAX base stations.
Wireless Communications Tools Business Unit from January to September
2007
In June, EB decided to include the Wireless Communications Tools
Business Unit in the Wireless Business Segment. The decision is 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 Wireless Communications Tools Business Unit
include mainly radio channel emulators and measurement instruments
(the Propsim(TM) and PropsoundTM products) 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 strongly from the corresponding period of 2006. During the
reporting period the three sales regions (EMEA, APAC and the
Americas) were generating sales in a well-balanced manner. The sales
organization in China was reinforced by adding own resources to
complement the channel sales. The sales footprint in the US was
strengthened with new distributors. The sales progressed well in the
new application domains of radio channel emulation technology,
aerospace and automotive applications as an example.
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 (Long Term Evolution) 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 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 September
2007
The Wireless Sensor Solutions Business Unit provides UHF RFID reader
systems and related industrial wireless network solutions. A line of
RFID reader products introduced in November 2006 together with EB's
industrial WLAN products represents the initial product portfolio of
the Wireless Sensor Solutions 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
offering with the EB RFID portfolio is progressing as planned. 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 product development of RFID
reader network related products during the reporting period.
The business environment of the Wireless Sensor Solutions Business
Unit has been developing as expected with the RFID reader system
market still having its major focus on trials and pilot projects.
RESEARCH AND DEVELOPMENT FROM JANUARY TO SEPTEMBER 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 product portfolio in the Wireless Sensor
Solutions Business Unit, and
- the technical core competence areas as defined in the strategy.
The total R&D investments during the period under review were EUR
25.1 million (EUR 13.4 million) and EUR 3.6 million of them have been
capitalized.
BUSINESS ENVIRONMENT
It is expected that the share of electronics and software in cars
will continue to grow. For reference, the market for automotive
software solutions grew more than 15 per cent in 2006 (Mercer study
2005, The Impact of AUTOSAR on the Auto Software and Tools Market).
The automotive embedded software market is expected to grow 15 per
cent 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 R&D services market is facing a
price pressure that tightens the margins. This has created a need for
increased off shoring in the industry. 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 leading operators and OEMs having
their mobile WiMAX implementations planned to start from late 2007 or
from the beginning of 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 component market is estimated to grow
with a CAGR of over 20 per cent for the period 2006 to 2009 (VDC).
EVENTS AFTER THE REPORTING PERIOD
EB has decided, as a part of the actions to rationalize the company
cost structure, to investigate the possibility of selling its
properties in Oulunsalo and Oulu. The potential sale objects would be
a property located on Automaatiotie in Oulunsalo as well as the
properties located on Tutkijantie in Oulu. EB has the intention to
lease back its current premises should the potential sale
materialize.
EB's building in Oulunsalo has a total floor space of approximately
13,000 square meters, and those in Oulu have a total floor space of
approximately 10,000 square meters. The total book value of these
properties is about EUR 18.2 million.
The financial effects of a possible sale and the lease-back can only
be assessed once an arrangement is carried out. The potential sale of
the properties could be finalized by the end of the year 2007 or
during the first quarter of 2008 at the latest.
OUTLOOK FOR THE SECOND HALF OF 2007
EB expects the sequential revenue growth from the first half of 2007
to the second half of 2007 to be stronger than it was from the second
half of 2006 (MEUR 61.0) to the first half of 2007 (MEUR 64.5).
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.
- Building up efficient and unified structures and platforms to
enable global business operations according to the strategy.
EB will continue actions to increase the productivity and improve the
fixed costs efficiency of such operational activities as facilities,
sourcing, logistics, information management and administration.
EB expects the operating loss in the second half of 2007 to reduce
significantly compared to the operating loss of the first half of
2007 (MEUR -13.8), with the third and the fourth quarter of 2007
being approximately at the same level.
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 near 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 September 30, 2007,
have been compared with the balance sheet of December 31, 2006
(EUR 1,000).
09/2007 12/2006
Non-current assets 90.090 66.315
Inventories 8.738 13.878
Accounts and other receivables 53.770 57.518
Financing securities, cash and bank deposits 82.691 125.091
Current assets total 145.199 196.487
Total assets 235.289 262.803
Share capital 12.941 12.941
Other equity 155.462 173.513
Minority interest 2.107
Total shareholders' equity 168.403 188.562
Non-current liabilities 29.698 23.728
Current liabilities 37.188 50.513
Total shareholders' equity and liabilities 235.289 262.803
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -11.9 million
- increase in net working capital EUR -6.7 million
+ interest, taxes and dividends EUR 0.2 million
= cash generated from operations EUR -18.4 million
- net cash used in investment activities EUR -6.1 million
- net cash used in financing EUR -17.9 million
= net change in cash and cash equivalents EUR -42.4 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 53.8 million (EUR 57.5 million on December 31,
2006), while accounts and other payables, booked in interest-free
current liabilities, were at EUR 28.3 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 21.7 million (EUR 8.2 million on
December 31, 2006) and depreciation on business acquisitions during
the reporting period amounted to a total of EUR 2.1 million (compared
to EUR 1.4 million during the corresponding period in 2006).
The amount of net investments in the period under review was EUR 32.4
million, consisting of replacement investments and items created by
business acquisitions and the sale of the Production Solutions
business. The total amount of depreciation during the period under
review was EUR 8.4 million, including EUR 2.1 million of depreciation
owing to business acquisitions.
EB's other long-term investments include an investment portfolio with
a book value of approximately EUR 10.9 million, which mainly consists
of long-term bonds. The portfolio is valued at market value on
September 30, 2007.
The amount of interest-bearing debt at the end of the reporting
period was EUR 32.7 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 -1.2 million
foreign exchange gains and losses EUR 0.5 million
EB's equity ratio at the end of the period was 72.1 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 22.6 million.
PERSONNEL
EB employed an average of 1 673 people between January and September
2007. At the end of September, EB had 1 766 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 of 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.
Oulunsalo, November 7, 2007
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Tel. +358 40 344 5148
Seppo Laine
CFO
Tel. +358 40 344 2250
Susanna Marklund
Director, Investor and Press Relations
Tel. +358 40 344 5321
Distribution:
OMX Nordic Exchange Helsinki
Principal financial media
INVITATION TO PRESS CONFERENCES ON EB'S Q3 RESULT
EB (Elektrobit Corporation) will hold press conferences for media,
analysts and institutional investors concerning the Interim Report Q3
2007 on November 7, 2007 as follows:
In Oulu at 9.15 - 10.00 am. (EET)
Restaurant Kastari, the University of Oulu
Pentti Kaiteran katu 1
In Helsinki at 1.30 - 2.30 pm. (EET)
Restaurant Savoy
Eteläesplanadi 14
Cabinets II-III, 7th floor
The Helsinki conference will be audio webcast and published live on
the Internet on
http://wcast.goodmood.tv:80/wip/directlink.do?newbrowser=1&pid=1863438.
There will be a possibility to present questions in place as well as
by calling to the following conference call numbers:
Participants - Finland: +358 (0)9 2313 9201
Participants - UK: +44 (0)20 7162 0025
Participants - US: +1 877 491 0064
An on-demand version of the audio webcast will be available after the
conference on EB's website www.elektrobit.com/investors. The
presentation material will be available after the publication of the
Interim Report on the same address.
CONSENSUS ESTIMATE
EB consensus estimates 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.
November 7, 2007
Elektrobit Corporation
Corporate Communications
EB, ELEKTROBIT CORPORATION, INTERIM REPORT JANUARY - SEPTEMBER 2007
(unaudited)
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-9/2007 1-9/2006 1-12/2006
9 months 9 months 12 months
Continuing operations
NET SALES 99.7 87.1 120.5
Other operating income 3.6 0.5 1.8
Change in work in progress and finished
goods 2.6 0.5 0.6
Work performed by the undertaking for
its own purpose
and capitalized 0.4 0.2 0.3
Raw materials -7.0 -5.0 -7.1
Personnel expenses -69.9 -54.7 -78.4
Depreciation -8.4 -6.1 -8.2
Other operating expenses -39.0 -23.3 -35.5
OPERATING PROFIT (LOSS) -17.8 -0.8 -6.0
Financial income and expenses 1.1 -0.3 -0.0
RESULT BEFORE TAXES -16.7 -1.1 -6.1
Income taxes 0.0 -0.4 -0.1
RESULT FOR THE PERIOD FROM CONTINUING
OPERATIONS -16.7 -1.5 -6.1
Result after taxes for the period from
discontinued
operations 12.7 6.7 80.3
RESULT FOR THE PERIOD -4.0 5.2 74.2
Attributable to
Equity holders of the parent -4.0 5.0 73.9
Minority interest -0.0 0.2 0.3
Earnings per share EUR continuing
operations
Basic earnings per share -0.13 -0.01 -0.05
Diluted earnings per share -0.13 -0.01 -0.05
Earnings per share EUR discontinued
operations
Basic earnings per share 0.10 0.05 0.62
Diluted earnings per share 0.10 0.05 0.62
Earnings per share EUR continuing and
discontinued
operations
Basic earnings per share -0.03 0.04 0.57
Diluted earnings per share -0.03 0.04 0.57
Average number of shares, 1000 pcs 129 413 129 413 129 413
CONSOLIDATED BALANCE SHEET (MEUR) Sept. 30, Sept. 30, Dec. 31,
2007 2006 2006
ASSETS
Non-current assets
Property, plant and equipment 35.3 32.2 32.5
Goodwill 21.7 9.2 8.2
Intangible assets 17.5 11.3 10.6
Financial assets at fair value
through profit or loss 10.9 10.5 10.7
Other financial assets 0.3 0.1 0.1
Receivables 0.2 1.7 1.6
Deferred tax assets 4.2 2.7 2.7
Non-current assets total 90.1 67.8 66.3
Current assets
Inventories 8.7 14.8 13.9
Trade and other receivables 53.8 57.7 57.5
Cash and short term deposits 82.7 45.6 125.1
Current assets total 145.2 118.1 196.5
TOTAL ASSETS 235.3 185.9 262.8
EQUITY AND LIABILITIES
Equity attributable to equity holders
of the parent
Share capital 12.9 12.9 12.9
Share premium 64.6 64.6 64.6
Translation difference -0.3 -0.1 -0.2
Retained earnings 91.1 38.8 109.2
Minority interest 0.0 1.9 2.1
Total equity 168.4 118.1 188.6
Non-current liabilities
Deferred tax liabilities 5.2 6.9 6.2
Interest-bearing liabilities 23.8 17.2 17.2
Other liabilities 0.7 0.1 0.3
Non-current liabilities total 29.7 24.1 23.7
Current liablities
Trade and other payables 27.2 30.3 32.8
Pension obligations 1.1 0.8 0.8
Current tax liabilities 0.0 0.0 1.7
Interest-bearing loans and borrowings 8.9 12.6 15.2
Current liabilities total 37.2 43.6 50.5
Total liablities 66.9 67.7 74.2
TOTAL EQUITY AND LIABILITIES 235.3 185.9 262.8
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-9/2007 1-9/2006 1-12/2006
9 months 9 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -4.0 5.0 73.9
Adjustment of accrual basis items -7.9 11.0 -63.7
Change in net working capital -6.7 -11.0 -7.4
Interest paid on operating activities -1.3 -1.5 -1.9
Interest received from operating
activities 2.6 1.2 1.8
Other financial income and expenses, net
received 0.0 0.0 0.0
Income taxes paid -1.1 -5.0 -4.1
NET CASH FROM OPERATING ACTIVITIES -18.4 -0.2 -1.4
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit, net of cash
acquired -5.3 -0.3
Acquisition of minority interest -10.2
Disposal of business unit, net of cash
acquired 14.9 81.1
Purchase of property, plant and equipment -2.5 -1.6 -2.8
Purchase of intangible assets -4.1 -0.8 -1.8
Purchase of other investments -2.9 -4.1 -6.1
Sale of property, plant and equipment 0.5 0.2 2.9
Sale of intangible assets 0.7 0.1 0.0
Proceeds from sale of investments 2.8 4.1 5.6
NET CASH FROM INVESTING ACTIVITIES -6.1 -2.0 78.5
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowing 4.2 1.4 4.2
Repayment of borrowing -4.2 -2.7 -4.4
Payment of finance liabilities -3.7 -2.4 -3.4
Dividends paid -14.2 -9.1 -9.1
NET CASH FROM FINANCING ACTIVITIES -17.9 -12.8 -12.6
NET CHANGE IN CASH AND CASH EQUIVALENTS -42.4 -15.0 64.5
Cash and cash equivalents at beginning of
period 125.1 60.6 60.6
Cash and cash equivalents at end of
period 82.7 45.6 125.1
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 5.0 5.0
Dividend distribution -9.1 -9.1
Share-related compensation 0.6 0.6
Translation difference -0.4 0.2 -0.2
Others -0.2 -0.2
Equity on Sept. 30, 2006 12.9 64.6 33.7 5.0 1.9 118.1
Equity on January 1, 2007 12.9 64.6 108.9 2.1 188.6
Result for the period -4.0 -4.0
Dividend distribution -14.2 -14.2
Share-related compensation 0.9 0.9
Translation difference 0.0 -2.1 -2.1
Others -0.6 -0.6
Equity on Sept. 30, 2007 12.9 64.6 94.9 -4.0 0.0 168.4
NOTES TO THE INTERIM REPORT
Accounting Principles for the Interim Report:
The same accounting policies and methods of computation are followed
in the interim financial statements as compared with the most recent
annual financial statements.
Explanatory comments about the seasonality or cyclicality of interim
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 5.5 million
and a share of EUR 7.1 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.
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) 1-9/2007 1-9/2006 1-12/2006
Continuing operations 9 months 9 months 12 months
Automotive
Net sales to external customers 36.4 27.5 38.9
Net sales to other segments 0.0 0.0 0.0
Net sales total 36.4 27.6 38.9
Operating profit (loss) -0.3 1.2 2.1
Wireless
Net sales to external customers 62.6 59.4 81.4
Net sales to other segments 0.7 1.7 2.2
Net sales total 63.3 61.2 83.6
Operating profit (loss) -18.7 -2.1 -8.3
Other businesses
Net sales to external customers 0.7 0.1 0.2
Net sales to other segments 0.0 4.5 9.4
Net sales total 0.7 4.7 9.6
Operating profit (loss) 1.1 0.1 0.1
Eliminations
Net sales to external customers 0.0 0.0 0.0
Net sales to other segments -0.7 -6.3 -11.7
Net sales total -0.7 -6.3 -11.7
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 99.7 87.1 120.5
Operating profit (loss) -17.8 -0.8 -6.0
Net sales of geographical segments (MEUR) 1-9/2007 1-9/2006 1-12/2006
9 months 9 months 12 months
Net sales
Europe 73.5 69.3 96.5
Americas 18.8 11.0 15.2
Asia 7.5 6.8 8.7
Net sales total 99.7 87.1 120.5
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.
Related party transactions: 1-9/2007 1-9/2006
Employee benefits for key management and stock
option expenses total 1.9 1.4
Loans and guarantees to related party
There have not been other transactions between the
related parties
INCOME STATEMENT BY 7-9/ 4-6/ 1-3/ 10-12/ 7-9/
QUARTER (MEUR) 2007 2007 2007 2006 2006
3 months 3 months 3 months 3 months 3 months
NET SALES 35.3 33.5 31.0 33.3 27.6
Other operating income 0.9 2.2 0.6 1.3 0.2
Change in work in
progress and
finished goods 0.1 0.6 1.9 0.1 0.3
Work performed by the
undertaking
for its own purpose
and capitalized 0.2 0.2 0.0 0.1 0.1
Raw materials -2.5 -2.4 -2.0 -2.1 -1.6
Personnel expenses -22.6 -23.9 -23.4 -23.6 -18.3
Depreciation -3.5 -2.5 -2.3 -2.1 -2.0
Other operating
expenses -11.8 -14.3 -12.9 -12.2 -8.8
OPERATING PROFIT
(LOSS) -4.0 -6.6 -7.2 -5.3 -2.5
Financial income and
expenses 0.0 0.3 0.8 0.3 0.1
RESULT BEFORE TAXES -4.0 -6.3 -6.4 -4.9 -2.4
Income taxes 0.0 -0.1 0.1 0.3 0.2
RESULT FOR THE PERIOD
FROM
CONTINUING OPERATIONS -4.0 -6.4 -6.3 -4.6 -2.2
Result after taxes for
the period from
discontinued
operations -0.0 14.5 -1.8 73.7 2.9
RESULT FOR THE PERIOD -4.0 8.1 -8.1 69.0 0.8
Attributable to
Equity holders of
the parent -4.0 8.1 -8.1 68.9 0.7
Minority interest 0.0 0.0 -0.0 0.2 0.1
BALANCE SHEET BY Sept. 30, June 30, March 31, Dec. 31, Sept.
QUARTER 30,
(MEUR) 2007 2007 2007 2006 2006
ASSETS
Non-current assets
Property, plant and
equipment 35.3 35.0 34.6 32.5 32.2
Goodwill 21.7 21.1 16.2 8.2 9.2
Intangible assets 17.5 16.8 10.6 10.6 11.3
Financial assets at
fair value
through profit or
loss 10.9 10.9 10.8 10.7 10.5
Other financial
assets 0.3 0.4 0.1 0.1 0.1
Receivables 0.2 0.1 0.2 1.6 1.7
Deferred tax assets 4.2 3.5 3.5 2.7 2.7
Non-current assets
total 90.1 87.7 76.0 66.3 67.8
Current assets
Inventories 8.7 8.8 16.3 13.9 14.8
Trade and other
receivables 53.8 53.8 52.7 57.5 57.7
Cash and short term
deposits 82.7 98.7 96.6 125.1 45.6
Current assets total 145.2 161.3 165.6 196.5 118.1
TOTAL ASSETS 235.3 249.1 241.6 262.8 185.9
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 -0.3 -0.1 -0.2 -0.2 -0.1
Retained earnings 91.1 94.9 87.0 109.2 38.8
Minority interest 0.0 0.0 0.0 2.1 1.9
Total equity 168.4 172.3 164.3 188.6 118.1
Non-current
liabilities
Deferred tax
liabilities 5.2 5.6 6.3 6.2 6.9
Interest-bearing
liabilities 23.8 28.0 22.3 17.2 17.2
Other liabilities 0.7 0.7 0.3 0.3 0.1
Non-current
liabilities total 29.7 34.3 28.9 23.7 24.1
Current liablities
Trade and other
payables 27.2 30.8 34.1 34.5 30.3
Pension obligations 1.1 0.9 0.8 0.8 0.8
Interest-bearing
loans and
borrowings
(non-current) 8.9 10.7 13.6 15.2 12.6
Current liabilities
total 37.2 42.4 48.5 50.5 43.6
Total liablities 66.9 76.8 77.3 74.2 67.7
TOTAL EQUITY AND
LIABILITIES 235.3 249.1 241.6 262.8 185.9
FINANCIAL PERFORMANCE RELATED RATIOS 1-9/2007 1-9/2006 1-12/2006
9 months 9 months 12 months
INCOME STATEMENT (MEUR)
Net sales 99.7 87.1 120.5
Operating profit (loss) -17.8 -0.8 -6.0
Operating profit (loss), % of net
sales -17.9 -0.9 -5.0
Result before taxes -16.7 -1.1 -6.1
Result before taxes, % of net sales -16.8 -1.3 -5.0
Result for the period -16.7 -1.5 -6.1
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities,
(MEUR) -50.0 -15.8 -92.7
Net gearing, % -29.7 -13.4 -49.2
Equity ratio, % 72.1 64.3 72.2
Gross investments, (MEUR) 38.1 9.7 16.4
Average personnel during the period 1673 1360 1424
Personnel at the period end 1766 1473 1621
AMOUNT OF SHARE ISSUE ADJUSTMENT Sept. 30, Sept. 30, Dec. 31,
(1,000 pcs) 2007 2006 2006
At the end of period 129 413 129 413 129 413
Average for the period 129 413 129 413 129 413
Average for the period diluted with
stock options 129 413 129 413 129 413
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-9/2007 1-9/2006 1-12/2006
9 months 9 months 12 months
Basic earnings per share -0.13 -0.01 -0.05
Diluted earnings per share -0.13 -0.01 -0.05
Equity *) per share 1.30 0.90 1.44
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES 1-9/2007 1-9/2006 1-12/2006
(EUR)
Highest 2.48 2.56 2.56
Lowest 1.51 1.89 1.82
Average 1.95 2.23 2.18
At the end of period 1.85 2.07 2.06
Market value of the
stock, (MEUR) 239.4 267.9 266.6
Trading value of shares,
(MEUR) 47.7 53.3 72.4
Number of shares traded,
(1,000 pcs) 24 444 23 918 33 206
Related to average number
of shares % 18.9 18.5 25.7
SECURITIES AND CONTINGENT Sept. 30, Sept. 30, Dec. 31,
LIABILITIES
(MEUR) *) 2007 2006 2006
AGAINST OWN LIABILITIES
Floating charges 3.1 3.0 3.0
Mortgages 18.0 18.0 18.0
Pledges 7.9 7.2 7.1
Mortgages are pledged for
liabilities totalled 17.8 13.7 13.4
OTHER DIRECT AND
CONTINGENT LIABILITIES
Rental liabilities
Falling due in the
next year 2.9 2.7 3.1
Falling due after one
year 4.1 3.3 3.7
*) The comparison data
does not include
contingent
liabilities relating
to discontinued
operations
NOMINAL VALUE OF CURRENCY Sept. 30, 2007 Sept. 30, 2006 Dec. 31, 2006
DERIVATIVES (MEUR)
Foreign exchange forward
contracts
Market value 0.1 -0.0 -0.0
Nominal value 22.6 8.9 9.5
Purchased currency
options
Market value 0.1 0.0
Nominal value 6.5 2.5
Sold currency options
Market value -0.1 -0.0
Nominal value 13.0 5.0
