IXONOS PLC STOCK EXCHANGE RELEASE 13 FEBRUARY 2008
FINANCIAL STATEMENT BULLETIN FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2007
IXONOS TURNOVER GREW STRONGLY
- Turnover for the financial period was EUR 59.2 million (2006: EUR 39.2
million, turnover increase was 51.2 percent. Organic turnover growth was
34.7 percent.
- Operating profit was EUR 4.7 million (2006: 3.9 MEUR), 7.9 percent of
turnover, operating profit growth was 18.7 percent.
- Operating profit excluding name change and depreciation of intangible
rights of corporate acquisitions was EUR 6.0 million (2006: EUR 4.3
million), 10.2 percent of turnover, operating profit growth excluding name
change expenses and depreciation of intangible rights of corporate
acquisitions was 39.2 percent.
- Net profit was EUR 3.1 million (2006: EUR 2.9 million), 5.3 percent of
turnover, net profit growth was 8.1 percent.
- Earnings per share were EUR 0.41 (2006: EUR 0.39).
- Diluted earnings per share were EUR 0.40 (2006: EUR 0.38).
- Turnover of the Systems Services Business Unit for the financial period was
EUR 24.4 million (2006: EUR 14.6 million), turnover increase was 67.4
percent. Operating profit of the Business Unit was EUR 1.4 million (2006:
EUR 1.6 million), 5.7 per cent of turnover, operating profit growth was -
14.6 percent. Operating profit excluding depreciation of intangible rights
of corporate acquisitions was EUR 2.1 million (2006: EUR 1.7 million), 8.7
percent of turnover, operating profit growth was 24.3 percent.
- Turnover of the Telecommunications Business Unit for the financial period
was EUR 35.3 million (2006: EUR 24.9 million), turnover increase was 41.9
percent. Operating profit of the Unit was EUR 5.8 million (2006: EUR 3.6
million), 16.4 per cent of turnover, operating profit growth was 61.2 per
cent. Operating profit before depreciation of intangible rights of
corporate acquisitions was EUR 5.8 million (2006: EUR 3.7 million), 16.5
percent of turnover, operating profit growth was 56.6 percent.
- The Board of Directors proposes a dividend of EUR 0.18 per share for the
year 2007.
- Judging from the company's order backlogs and tender prospects, the
company's turnover will increase significantly in the first quarter of 2008
compared to the same period in 2007, and the turnover for the whole fiscal
year will be significantly higher than in the previous fiscal year.
- The Group's first-quarter operating profit percentage, excluding intangible
rights of corporate acquisitions, is expected to fall slightly short of
that of the previous year, due to heavy upfront recruitment. However, the
operating profit percentage, excluding intangible rights of corporate
acquisitions, for the fiscal year is expected to be on the level of the
previous year, and the operating profit is thus expected to be clearly higher
than in the previous year.
President and CEO, Kari Happonen:
The company's turnover continued to grow strongly in the last quarter of 2007.
The turnover for the financial year exceeded that of the previous year by more
than 50 percent. The growth of both Business Units clearly outpaced market
growth in the financial period, and we managed to win market share from our
competitors and strengthen significant customer relations. The strong organic
growth of almost 35 percent was boosted by two corporate acquisitions.
As expected, our operating profit percentage for the review period fell slightly
short of that of the previous year, due to the EUR 0.55 million expenses related
to the change of the company name and the revamping of the corporate identity in
the first quarter, and the EUR 0.80 million depreciation, in the third quarter,
of intangible rights of corporate acquisitions. However, excluding name change
expenses and depreciation of intangible rights of corporate acquisitions, the
relative profitability of our business operations was almost on the level of the
previous year.
The last-quarter profitability was slightly weaker than expected, which was due
to the late launch of a few customer projects, as well as strong upfront
recruitment.
In support of our strategy, we acquired Mermit Business Applications Oy in May.
Founded in 1999, Mermit is a widely valued expert company producing
business-critical information system solutions and services. The acquisition
significantly strengthened Ixonos' capability to deliver demanding
specification, design, architecture and integration services.
In September we acquired the entire share capital of Cidercone Life Cycle
Solutions Oy (LCS), a company producing business-critical mobile and Internet
services. The company delivers customer-specific software solutions as a
comprehensive service where the customer uses the ordered solution over the
Internet from LCS's servers. LCS is responsible for the maintenance of the
servers and software, and for further development of the software. The
acquisition strengthens Ixonos' readiness and capacity to deliver and maintain
software and information systems projects and complements Ixonos' service
provision with hosting services.
Both acquired companies make extensive use of open source code components in
their solutions. The completed corporate acquisitions reflect Ixonos' commitment
to open standards. Ixonos has chosen open source code as one of the strategic
technology platforms for the production of services covering the entire life
cycle of software. The communal character of open source code boosts the number
of potential developers of devices, subscriber connections and services, and
thus speeds up the development and adoption of new features. By utilizing open
source code we can offer the customers more efficient tools for managing the
risks of product development and improving competitiveness, as well as
cost-efficient flexibility for changing business needs. Acting in the Open
Source development community is part of Ixonos' strategic skills development,
and provides a communication channel to communities developing open source code
and to customers utilizing it.
As part of our Open Source strategy, we launched in spring a large software
platform development project for smartphones and mobile computers. The platform
is based on Linux operating system and open source code tools and components.
The software platform comprises a large number of software and tools utilized in
mobile device product development. The basic functions integrated into to the
platform include, e.g. phone features and a touch screen.
One of the main aims of the project is to develop an intuitive, easy-to-use and
easy-to-modify touch-screen user interface for a device that integrates the
functions of a mobile phone and a palmtop computer. The platform solution
contains, in addition to user interface software and phone functions, calendar,
web browser and email, as well as a reference device for development and test
use.
We believe that open source code and Linux-based solutions offer a clear and
reliable platform for mobile device product development. The convergence of open
source software and development environments facilitates that the tools used in
software development can also be utilized to create products, services and
features for traditional web environments, PC hardware and mobile terminals.
During the review period we already managed to utilize the experience we had
drawn from the development project in several customer projects.
As another manifestation of our Open Source strategy, we launched an internal
Ixonos Flow development project to develop our service production processes and
methods. Ixonos Flow combines Ixonos' best practices and methods into a uniform
way of operating when servicing customers. It consists of processes, methods and
tools as well as reusable software components and service models. According to
our strategy, the software components of Ixonos Flow make extensive use of open
source code solutions.
With Ixonos Flow we are able to harmonize our service production processes and
practices also in our new subsidiaries, and we can guarantee that the customers
get high-quality and cost-efficient services in systems architecture design,
mobile software implementation or maintenance based on service level agreements
for business-critical systems.
According to the annual customer satisfaction survey published in June, the
customers value Ixonos' reliability and capability to carry the agreed
responsibilities, business segment know-how, as well as customer-specific
flexibility. The customers' satisfaction with our service as a whole is on a
high level and exceeds the maximum value of the reference base of the survey
company, Market Visio. Our customers also expressed a stronger interest in
expanding their cooperation with Ixonos.
According to the survey, the customers have taken the change of the company name
in February 2007 positively. Our other interest groups have also given us very
positive feedback. The company's new name and new corporate identity have
already had a positive impact on the company's image, facilitated recruitment
and strengthened the commitment of the personnel, which can be seen, e.g. as a
decrease of personnel turnover.
At the end of the financial period, we launched a reorganization with the aim to
enhance business growth, efficiency and profitability, internationalization,
development of the skills of the personnel, as well as well-fare at work.
In the new organization the operational functions are divided into Business
Operations and Service Production and the supporting administration and
communication services. Business Operations is responsible for selling the
Group's products, management and development of customer relations, as well as
running customer-specific services. The business operations are divided into
three units: Mobile terminals and software, Operators and ICT, as well as
Industry and Services.
Service production is divided into Regional Units, two Service Product Units, as
well as support functions. The Regional Units are responsible for customer
project resourcing, as well as service production in cooperation with the
Business Units. The Service Product Units are responsible for developing and
productizing services, and for developing and harmonizing processes and methods
related to service production.
Once more, it's time for me to congratulate and thank all Ixonos people for a
great performance! The success of the financial period of 2007 was yet another
indication of the commitment of our personnel to profitable and responsible
work.
FUTURE PROSPECTS
Market analysts estimate that the growth of the Finnish ICT service market will
be 4-6 per cent in 2008. Ixonos aims to continue its strong organic growth at a
clearly faster rate than market growth, and to improve profitability, if
feasible.
Judging from the company's order backlogs and tender prospects, the company's
turnover will increase significantly in the first quarter of 2008 compared to
the same period in 2007, and the turnover for the whole fiscal year will be
significantly higher than in the previous fiscal year.
The Group's first-quarter operating profit percentage, excluding depreciation of
intangible rights of corporate acquisitions, is expected to fall slightly short
of that of the previous year, due to heavy upfront recruitment. However, the
operating profit percentage, excluding intangible rights of corporate
acquisitions, for the fiscal year is expected to be on the level of the previous
year, and the operating profit is thus expected to be clearly higher than in the
previous year.
BUSINESS OPERATIONS
Ixonos is an information and communication technology service company providing
customer-specific technology consulting, project management and software
production services that promote the customers' competitiveness and risk
management. Ixonos' clientele comprises leading mobile and smartphone
manufacturers, mobile network suppliers and telecom carriers operating on
international markets, as well as Finland-based finance, industry and service
sector companies as well as public administration organizations.
During the review period, before the start of the reorganization at the turn of
the year, the operational business of Ixonos was organized into two Business
Units: Systems Services and Telecommunications. During the review period the
Systems Services Unit developed and maintained software that where part of its
customer companies' information systems, and produced technology consulting and
project management services. The Unit's most significant customers operate in
the telecommunications, finance and public administration sectors.
During the review period, the Telecommunications Unit produced hardware and
software development, software integration and testing services for the
telecommunications sector. The Unit's clientele comprised leading international
mobile and smartphone manufacturers, mobile network suppliers and telecom
carriers.
The Ixonos Group comprises the following subsidiaries: Vega Technologies Oy,
Ixonos Project Management Services Ltd; Ixonos Technology Consulting Ltd
(formerly Mermit Business Applications Oy); Ixonos Outsourcing Services Ltd
(formerly Cidercone Life Cycle Solutions Oy); Ixonos Slovakia s.r.o, which is
located in Kosice, Slovakia; and Ixonos Testhouse Oy, and its subsidiary, Ixonos
Testhouse Estonia OÜ, which is located in Tallinn, Estonia.
Systems Services
During the period under review, the turnover of Systems Services Unit grew by
67.4 percent, amounting to EUR 24.4 million (2006: EUR 14.6 million). The Unit's
turnover was boosted by new customer projects launched during the review period,
the strong growth of Service 4 Mobile Oy (now Ixonos Project Management Service
Ltd.), acquired in June 2006, a company producing project management services,
and the turnover of acquisition of Mermit Business Applications Oy (now Ixonos
Technology Consulting Ltd), a company that was acquired in June. The turnover of
Mermit was included in the Unit's turnover from 1 June. The turnover of
Cidercone Life Cycle Solutions Oy (now Ixonos Outsourcing Services Ltd) was
included in the Unit's turnover from 1 September.
The operating profit of the Unit for the review period grew by - 14.6 percent,
amounting to EUR 1.4 million (2006: EUR 1.6 million). Operating profit excluding
depreciation of intangible rights of corporate acquisitions was EUR 2.1 million
(2006: EUR 1.7 million), 8.7 percent of turnover.
The Unit made strong efforts to develop its project delivery capabilities, open
architecture solutions, security services for Open Source applications, as well
as agile software development methods. The acquisition of Mermit Business
Applications Oy further strengthened the Unit's skills and delivery capacity,
especially in specification, design and architecture services, and it enhances
Ixonos' competitiveness, e.g. in future projects to renew the systems of public
administration organizations. The acquisition of Cidercone Life Cycle Solutions
Oy strengthened the Unit's readiness and capacity in software and information
system project deliveries and maintenance, and it added hosting services to the
Unit's service offering.
The integration of the software production capacity of the Slovakia-based
subsidiary into the Unit's software production services with total
responsibility was launched in early 2007. The resources of the Slovakian
subsidiary were also utilized in the Unit's internal software and methods
development.
Throughout the year, market competition was fierce in Systems Services business
segment.
Telecommunications
During the period under review, the turnover of Telecommunications Unit grew by
41.9 percent, amounting to EUR 35.3 million (2006: EUR 24.9 million). The Unit
succeeded in further increasing its markets share among its key customers. The
Unit continued to design several large customer projects that are delivered with
total responsibility, and it launched a new extensive total-responsibility
project to develop an entire wireless device for a key customer.
Relative profitability of the Telecommunications Unit improved compared to the
previous year, and operating profit grew by 61.2 percent to EUR 5.8 million
(2006: EUR 3.6 million). Operating profit excluding depreciation of intangible
rights of corporate acquisitions was EUR 5.8 million (2006: EUR 3.7 million),
16.5 percent of turnover.
The Unit's strong smartphone competence and the lower-price services in Estonia
and Slovakia supported the Unit's competitiveness in its efforts to acquire
large total-responsibility customer projects and win market share on the
international smartphone market.
During the review period, the subsidiary Ixonos Testhouse Ltd, providing
software testing and quality assurance services for smartphones, and its
subsidiary Ixonos Testhouse Estonia OÜ together grew into an entity employing
more than 60 people.
The operations of the Telecommunications Unit's subsidiary in Kosice, Slovakia
were launched during the review period, as planned. The Kosice unit carried out
subprojects in software ventures for the Telecommunications Unit's key
customers. At the end of the review period, over 50 experts worked in Kosice,
most of them in Telecommunications Unit customer projects.
In spring, the Telecommunications Unit initiated an extensive project for
developing a smartphone and mobile PC software platform, based on the Linux
operating system and on open source code tools and components. The know-how
acquired in this project helped the unit win new Linux-based customer projects
as early as during this review period.
The global competition for the software ventures of the leading international
mobile and smartphone manufacturers remained fierce.
NEAR-FUTURE UNCERTAINTY FACTORS
The aim of Ixonos Plc's risk management is to ensure undisturbed and continuous
business operations and development, and to support the implementation of the
company's operational targets and to increase the company's value. The risk
management organization, process and recognized risks are explained on the
company's website, at http://www.ixonos.com/en/investors/risk_management.
Presently the biggest uncertainty factors relate to the world economy prospects
and to growing international competition. Any downswing in the global economy
would be likely to affect also the European and Finnish economies, and might
lead to companies reducing their investments in information systems development.
Still, such a weakening is not considered likely to significantly affect Ixonos'
operations in developing mobile terminal and mobile software products.
International competition, especially Indian and Chinese, has proliferated
faster than anticipated. This may further tighten the price competition of the
business and thus cut the profit margins of Finnish companies Ixonos has
prepared itself for the tightening price competition by establishing offices in
lower-price areas.
TURNOVER
Consolidated turnover was EUR 59.2 million (2006: EUR 39.2 million), or 51.2
percent more than in the previous year. Of the turnover, 59 percent was accrued
by the Telecommunications Unit and 41 percent by the Systems Services Unit.
TURNOVER BY SEGMENT
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| K EURO | 1-12 2007 | 1-12 2006 |
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| Telecommunications | 35,296 | 24,879 |
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| Systems Services | 24,442 | 14,604 |
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| Eliminations | - 509 | - 299 |
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| Group total | 59,229 | 39,184 |
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FINANCIAL RESULT
Consolidated operating profit was EUR 4.7 million (2006: EUR 3.9 million), and
profit before taxes was EUR 4.4 million (2006: EUR 3.8 million). Profit for the
financial period was EUR 3.1 million (2006: EUR 2.9 million), which is 5.3 per
cent of turnover. Diluted earnings per share were EUR 0.40 (2006: EUR 0.38).
Diluted cash flow from business operations was EUR 0.43 per share (2006: EUR
0.33).
The Group's result was burdened by EUR 0.55 million (2006: EUR 0.16 million
reorganization expenses) name change expenses that were related to the change of
the company name and the revamping of the corporate identity, as well as a EUR
0.80 million (2006: EUR 0.23 million) depreciation of intangible assets from
integration of operations. Excluding the aforementioned items the consolidated
operating profit was EUR 6.0 million or 10.2 percent of turnover (2006: EUR 4.3
million, 11.1 percent of turnover).
OPERATING PROFIT BY SEGMENT
--------------------------------------------------------------------------------
| K EURO | 1-12 2007 | 1-12 2006 |
--------------------------------------------------------------------------------
| Telecommunications | 5,775 | 3,583 |
--------------------------------------------------------------------------------
| Systems Services | 1,390 | 1,629 |
--------------------------------------------------------------------------------
| Administration | - 2,487 | - 1,271 |
--------------------------------------------------------------------------------
| Group total | 4,679 | 3,941 |
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The administrative costs include name change expenses of EUR 0.55 million (2006:
EUR 0.16 million reorganization expenses).
The operating profit of the Systems Services Unit includes a EUR 0.74 million
(2006: EUR 0.09 million) depreciation of intangible assets acquired thorough
integration of operations.
The operating profit of the Telecommunications Unit includes a EUR 0.06 million
(2006: EUR 0.14 million) depreciation of intangible assets acquired thorough
integration of operations.
RETURN ON CAPITAL INVESTMENT
Consolidated return on equity (ROE) was 19.4 per cent (2006: 29.8) and return on
investment (ROI) was 19.4 per cent (2006: 28.2).
BALANCE SHEET AND FINANCING
The balance sheet total was EUR 46.7 million (2006: EUR 25.4 million).
Shareholders' equity was EUR 21.5 million (2006: EUR 10.9 million). Equity ratio
was 46.1 percent (2006: 42.7). The Group's liquid assets stood at EUR 2.3
million (2006: EUR 2.7 million) at the end of the financial period.
INVESTMENTS
Investments during the financial period totalled EUR 15.8 million. Of the
investments EUR 14.4 million were allocated to acquisition of subsidiaries, and
EUR 1.4 million to intangible and tangible assets.
INTEREST-BEARING LIABILITIES
The Group's interest-bearing liabilities amounted to EUR 10.0 million (2006: EUR
5.4 million). Of the interest-bearing liabilities EUR 8.2 million consisted of
loans from financial institutions and EUR 1.8 million consisted of liabilities
related to acquisition debts.
CASH FLOW
Consolidated cash flow from business operations for the review period was EUR
3.4 million (2006: EUR 2.5 million).
PERSONNEL
The number of personnel averaged 726 (2006: 503) during the financial period and
was 874 (2006: 579) at the end of the period. The number of personnel working
abroad averaged 65 (2006: 17) and was 106 (2006: 30) at the end of the period.
SHARES AND SHARE CAPITAL
Share turnover and price
During the review period the company's highest share price quoted was EUR 8.08
(2006: EUR 5.07), the lowest EUR 4.55 (2006: EUR 3.75) and the last share price
quoted on 28 December 2007 was EUR 5.97 (2006: EUR 4.63). The average quotation
of the review period was EUR 5.96 (2006: EUR 4.44). The number of shares traded
during the review period was 6,125,199 (2006: 3,663,151), which corresponds to
69 percent (2006: 50 percent) of the total number of shares at the end of the
review period. The market value of the share capital at the final quotation on
28 December 2007 was EUR 53,056,166 (2006: EUR 34,255,981).
Share capital
At the beginning of the year 2007 the company's registered share capital was EUR
296,948.00, and the number of shares was 7,423,700. During 2007, 10,000 shares
have been subscribed with option rights of the 2003 stock options plan BI,
11,000 shares with option rights of CI, 18,000 shares with option rights of CII,
55,000 shares with option rights of DI, and 15,500 shares with option rights of
DII. The Board of Directors of Ixonos Plc decided on 7 May 2007 on a directed
share issue in which 112,300 new Ixonos Plc shares were issued for subscription
by the previous principal owner and present Chief Executive Officer of Ixonos
Project Management Services Ltd as payment for the additional acquisition price
of the share capital of Ixonos Project Management Services Ltd. With the
authorization granted by the Annual General Meeting held on 22 March 2007, the
Board of Directors of Ixonos Plc decided on 20 June 2007 on a directed share
issue in which 391,630 new Ixonos Plc shares were issued for subscription by the
owners of Mermit Business Applications Oy as payment for the acquisition price
of the share capital of Mermit Business Applications Oy. With the authorization
granted by the Annual General Meeting held on 22 March 2007, the Board of
Directors of Ixonos Plc decided on 4 September 2007 on a directed share issue in
which 850,000 new Ixonos Plc shares were issued for subscription by the owners
of Cidercone Life-Cycle Solutions Oy (now Ixonos Outsourcing Services Ltd) as
payment for the acquisition price of the share capital of Cidercone Life-Cycle
Solutions Oy.
Ixonos' share capital was EUR 355,485.20 at the end of the review period, and
the total number of shares was 8,887,130.
Stock options plans 2003 and 2006
Under the 2003 stock options plan, 10,000 options have been released under AI,
10,000 options under AII, 82,500 options under BI, 22,500 options under BII,
100,000 options under CI, 35,000 options under CII, 127,500 options under DI,
and 112,500 options under DII. Under the 2003 options plan, 45,000 shares have
been subscribed with options BI, 5,000 shares with options BII, 23,500 shares
with options CI, 25,500 shares with options CII, 65,000 shares with options DI,
and 15,500 shares with options DII. The maximum number of shares that can be
subscribed with outstanding options under options plan 2003 is 270,000, which is
equivalent to 3.0 percent of the company's total shares. The subscription price
is EUR 1.88 for AI and AII options, EUR 1.56 for BI and BII options, EUR 3.32
for CI and CII options, and EUR 3.22 for DI and DII options. The subscription
period for the 2003 options ends on 31 December 2008.
Under the 2006 stock options plan, 140,000 options have been released under AI,
140,000 options have been released under AII, 60,000 options have been released
under BI, and 60,000 options have been released under BII. Of the options of
series A, 15,000 AI options and 15,000 AII options have been returned to the
company based on the terms of the options. These options have been converted to
options of series B in accordance with the terms of options, and they have been
redistributed. The maximum number of shares that can be subscribed with
outstanding options under options plan 2006 is 391,500, which is equivalent to
4.4 percent of the company's total shares. The share subscription period for
2006 options AI started on 1 October 2007.The subscription period for options
AII and BI will begin on 1 October 2008, and for options BII on 1 October
2009.The subscription price is EUR 4.13 for options AI and AII and EUR 5.10 for
options BI and BII. The subscription period for the 2006 options ends on 31
December 2011.
Shareholders
There were 2,937 shareholders on 28 December 2007 (2006: 2,190). Private persons
owned 58 per cent (2006: 65) and institutions 42 per cent (2006: 35) of the
company's shares. Foreign ownership was 5 per cent (2006: 5).
Board authorizations
The Annual General Meeting authorized the Board to decide on issuing up to
1,500,000 shares in one or more issues. The Board's decision may concern either
new shares or existing shares possibly held by the company. The maximum of the
authorization is equivalent to approximately 20.2 per cent of all company
shares. The authorization may be used to finance or implement corporate
acquisitions or other arrangements or for other purposes decided by the Board.
The authorization includes the right of the Board to decide on all terms and
conditions of the share issue, including the recipients of the shares and the
compensation to be paid. Thus the authorization also includes the right to
directed share issues, i.e. the right to deviate from the shareholders'
pre-emptive right, under conditions laid down by law. The authorization will be
effective until the next Annual General Meeting but not later than 30 June 2008.
The Board of Directors has used the above authorization and decided, by three
separate decisions, to issue a total of 1,353,930 shares to finance corporate
acquisitions.
The Annual General Meeting authorized the Board to decide on the acquisition of
up to 742,370 of the company's own shares, provided that the company and its
subsidiaries at no time hold more than 10 percent of the company's registered
shares altogether. The company may acquire its own shares to develop the capital
structure, to finance corporate acquisitions or other structural arrangements or
to be otherwise conveyed or cancelled. The minimum purchasing price for such
shares is the lowest market price quoted in public trading during the
authorization period and the maximum purchasing price is the highest price
quoted in public trading during the authorization period. The Board of Directors
will decide on the means of acquisition of such shares and on the other terms
and conditions. The acquisition may deviate from the shareholders' pre-emptive
rights to acquire the Company's shares (targeted acquisition), provided that
weighty financial grounds exist. Under this authorization, own shares may only
be acquired using non-restricted equity. Thus such share acquisitions will
reduce the company's distributable non-restricted equity. The authorization is
effective until the next Annual General Meeting, but no later than 30 June 2008.
The Board of Directors has not utilized the authorization to acquire the
company's own shares.
EXTRAORDINARY SHAREHOLDERS' MEETING
An Extraordinary Shareholders' Meeting of Tieto-X Plc on 25 January 2007
approved the proposal by the Board of Directors to change the company name and
the company's Articles of Association. The decision to change the company name
to Ixonos Plc was made upon conditions and provided that the Trade Register
registers the change of name. The Trade Register registered the change of name
on 12 February 2007.
ANNUAL GENERAL MEETING DECISIONS
The Annual General Meeting of Ixonos Plc held on 22 March 2007 adopted the
company's and Ixonos Group's financial statement for the financial period 1
January-31 December 2006 and granted discharge from liability to the Members of
the Board of Directors and the CEO.
The Annual General Meeting decided to distribute EUR 0.27 per share as dividend.
The dividend was paid on 4 April 2007 on the shares that were registered on the
balance date 27 March 2007 on the list of company shareholders maintained by the
Finnish Central Securities Depository Ltd.
The Annual General Meeting confirmed six as the number of Board members. Members
of the Board Eero Hurme, Seppo Jaatinen, Matti Järvinen, Tero Laaksonen, Matti
Makkonen and Esko Siik were re-elected.
At its meeting following the Annual General Meeting, the Board of Directors
elected Tero Laaksonen Chairman of the Board and Eero Hurme Deputy Chairman of
the Board.
The Annual General Meeting elected Peter Ramsey and Jari Kivihuhta to represent
shareholders on the Nomination Committee.
The Annual General Meeting authorized the Board to decide on issuing up to
1,500,000 shares in one or more issues. The Board's decision may concern either
new shares or existing shares possibly held by the company. The maximum of the
authorization is equivalent to approximately 20.2 per cent of all company
shares. The authorization may be used to finance or implement corporate
acquisitions or other arrangements or for other purposes decided by the Board.
The authorization includes the right of the Board to decide on all terms and
conditions of the share issue, including the recipients of the shares and the
compensation to be paid. Thus the authorization also includes the right to
directed share issues, i.e. the right to deviate from the shareholders'
pre-emptive right, under conditions laid down by law. The authorization will be
effective until the next Annual General Meeting but not later than 30 June 2008.
The Annual General Meeting authorized the Board to decide on the acquisition of
up to 742,370 of the company's own shares, provided that the company and its
subsidiaries at no time hold more than 10 percent of the company's registered
shares altogether. The company may acquire its own shares to develop the capital
structure, to finance corporate acquisitions or other structural arrangements or
to be otherwise conveyed or cancelled. The minimum purchasing price for such
shares is the lowest market price quoted in public trading during the
authorization period and the maximum purchasing price is the highest price
quoted in public trading during the authorization period. The Board of Directors
will decide on the means of acquisition of such shares and on the other terms
and conditions. The acquisition may deviate from the shareholders' pre-emptive
rights to acquire the Company's shares (targeted acquisition), provided that
weighty financial grounds exist. Under this authorization, own shares may only
be acquired using non-restricted equity. Thus such share acquisitions will
reduce the company's distributable non-restricted equity. The authorization is
effective until the next Annual General Meeting, but no later than 30 June 2008.
SUMMARY OF STOCK EXCHANGE RELEASES UNDER CHAPTER 2, SECTION 7 OF THE SECURITIES
MARKETS ACT
On 6 March 2007 the company published a release stating the company had set up a
subsidiary in Slovakia and opened a new office for it in Kosice. The
Slovakia-based subsidiary will produce testing services and software development
and maintenance services for customer projects run by the Group's two business
units and for the company's internal software development. The purpose of the
establishment of a new office is to secure the availability of skilled software
development and testing personnel in order to meet the needs of strong expansion
and ever-larger individual customer projects. At the same time the idea is to
boost the volume of lower-price services in the Group's overall service range.
On 12 March 2007 the company published a release stating that the company's
turnover for the first quarter would exceed the turnover for the same period in
2006 by more than 40 per cent, amounting to approximately EUR 13.5 million.
Excluding the approximately EUR 0.55 million expenses related to the name change
and the new corporate identity, the first quarter operating profit percentage
was expected to be about 11.5. Including the name change expenses, the operating
profit percentage was estimated at 7.5. The turnover for the entire year was
expected to increase by approximately 25 percent compared with 2006 and to reach
EUR 48-50 million. The operating profit percentage was expected to reach at
least its 2006 level.
On 9 May 2007 the company published a release stating that the company had
acquired the entire share capital of Mermit Business Applications Oy, a company
producing business-critical information systems solutions and services. The
acquisition strengthened Ixonos' capability to deliver information systems
projects significantly and enhanced its capacity to deliver demanding
specification, design, architecture and integration services.
On 23 August 2007 the company published a release stating that it was setting up
a subsidiary in Germany and would open a new office for it in Bochum. The
German-based subsidiary concentrates on developing multimedia features for
smartphones. The new office is geared to advance the expanding close cooperation
between Ixonos and the product development teams of its clients in Germany.
On 4 September 2007 the company published a release stating that the company had
acquired the entire share capital of Cidercone Life Cycle Solutions Oy:n (LCS),
a company producing business-critical mobile and Internet services. The
acquisition strengthens Ixonos' readiness and capacity to deliver and maintain
software and information systems projects and complement Ixonos' service
offering with hosting services. Services provided by LCS cover the entire
life-cycle of software and information systems from process modelling to
customer-specific software development, hosting services and systems maintenance
and support. In its software production, LCS makes extensive use of Open Source
software components.
On 16 November 2007 the company published a release on the decision of the Board
of Directors to specify the company's dividend payment policy so that Ixonos
strives to distribute as dividend half of the result for the financial period
whenever the demands related to growth and investments make this possible. This
specification has been considered necessary as Ixonos, in accordance with its
strategy, is focusing on highly refined services, which has increased
investments in a wider skills base, development of services and
internationalization.
On 30 November 2007 Ixonos Plc published a release concerning the publication of
Ixonos Plc's listing particulars. According to the release, the Board of
Directors has decided on a directed share issue for the shareholders of Ixonos
Outsourcing Services Ltd (former Cidercone Life-Cycle Solutions Oy) as payment
of part of the base acquisition price for the entire share capital of Ixonos
Outsourcing Services Ltd. The company has prepared listing particulars for the
listing of the new shares, which the Financial Supervision Authority approved on
30 November 2007. The company has prepared the listing particulars only to apply
the shares subscribed in the issue for public trading. The listing particulars
document is not a prospectus or tender to subscribe or purchase the company's
shares.
EVENTS AFTER THE REVIEW PERIOD
On 29 January 2008 Ixonos published a stock exchange release stating that Timo
Leinonen, Master of Administrative Sciences, age 37, has been appointed Chief
Financial Officer and Vice President of Ixonos. Leinonen was also appointed
member of the Management Team of Ixonos Group.
On 7 February 2008 Ixonos announced that starting from the first interim report
in 2008 the company would report its consolidated business operations as two
segments: consulting services and software production services. The new segments
are based on the company's service products, and they illustrate more accurately
the character of the company's business operations and the efforts made to
develop them. The rearrangement of segment reporting is related to the ongoing
development of the company's organization.
On 11 February 2008 Ixonos announced that it had developed a software platform
for the development of smartphones and mobile computers. The platform is based
on Linux operating system and open source tools and components. The software
platform comprises a large number of software and tools for product development.
The basic functions integrated into to the platform include, for example, phone
features, touch screen and web browser. The platform solution also includes
calendar and email, as well as a reference device for development and test use.
BOARD OF DIRECTORS' DIVIDEND PAYMENT PROPOSAL TO THE ANNUAL GENERAL MEETING
The parent company's profit for the financial period was EUR 1,956,135.43, and
disposable funds on 31 December 2007 were EUR 12,321.411,74.
The Board proposes that the disposable funds be used in accordance with the
dividend policy specified on 16 November 2007 as follows:
- dividend distribution of EUR 0.18 per share
or totally EUR 1,599,683.40
- carried over in non-restricted equity EUR 10,721,728.34
The Board proposes that the dividend be paid on shares entered in the
shareholders' register kept by the Finnish Central Securities Depository on the
balancing date, 8 April 2008. The Board proposes that the dividend be paid on 16
April 2008.
IXONOS PLC
THE BOARD OF DIRECTORS
Annual General Meeting
The Annual General Meeting of Ixonos Plc shareholders will be held on Thursday 3
April 2008, 5.00 pm, at Opus Business Park 3, Auditorium, Hitsaajankatu 20,
00810 Helsinki.
The printed Annual Report of Ixonos for the period 1 January - 31 December 2007
will be published in week 15, and it can be ordered by filling a form on the
company's website or by emailing to reports@ixonos.com or by ground mail to
Ixonos Plc/Annual Report, P.O. Box 284, FI-00811 Helsinki. The Annual Report can
be read on the company's website under Investors at the address
www.ixonos.com/en/investors.
The next report
The Interim Report for the period 1-3/2008 will be published on Tuesday 29 April
2008.The other interim reports will be published, as was announced in the
bulletin of 17 January 2008, on Wednesday 13 August 2008 (report for 1 January -
30 June 2008) and Wednesday 20 October 2008 (report for 1 January - 30 September
2008).
ADDITIONAL INFORMATION
Ixonos Plc
President and CEO, Kari Happonen
phone +358 424 2231, mobile phone +358 400 700 761, kari.happonen@ixonos.com
DISTRIBUTION
OMX Nordic Exchange Helsinki
Main media
IXONOS GROUP
ABBREVIATED FINANCIAL STATEMENTS 1 JANUARY - 31 DECEMBER 2007
Accounting principles
This financial statement bulletin has been prepared following the same IFRS
recognition and valuation principles as in the financial statements of 2006.
This financial statement bulletin is not consistent with all standards of
Interim Report accounting principles of IAS 34. The Group adopted the IFRS 7
Financial Instruments and IAS 1 Standards from the beginning of the year 2007.
These standards do not have any effect on the data of this financial statement
bulletin, because this is an abbreviated financial statement.
The consolidated financial statements include the information of Mermit Business
Applications (acquired on 20 June 2007) starting from 1 June 2007, as well as
the information of Cidercone Life-Cycle Solutions Oy (acquired on 4 September
2007) starting from 1 September 2007.
The preparation of the financial statements in accordance with the IFRS
standards compels that the Ixonos management, when the balance sheet is
prepared, utilizes such estimates and assumptions that influence the amount of
assets and liabilities as well as income and expenses of the financial period.
In addition, when preparing the financial statements, the financial reporting
principles have to be applied with consideration. The actual figures may deviate
from the estimates and assumptions.
The interim report is unaudited.
The figures in the income statement and balance sheet have been consolidated.
All group companies are included in the consolidated balance sheet. The original
financial statement bulletin is in Finnish. The English version is a
translation.
CONSOLIDATED PROFIT AND LOSS ACCOUNT, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- | Change |
| | 31.12.2007 | 31.12.2006 | |
--------------------------------------------------------------------------------
| Turnover | 59,229 | 39,184 | 51.2 % |
--------------------------------------------------------------------------------
| Materials and services | - 7,230 | - 4,554 | 58.8 % |
--------------------------------------------------------------------------------
| Personnel costs | - 36,735 | - 24,676 | 48.9 % |
--------------------------------------------------------------------------------
| Depreciation and impairment | - 424 | - 186 | 128.6 % |
--------------------------------------------------------------------------------
| Other operating costs | - 8,806 | - 5,432 | 62.1 % |
--------------------------------------------------------------------------------
| OPERATING PROFIT BEFORE NAME | 6,033 | 4,335 | 39.2 % |
| CHANGE AND REORGANIZATION | | | |
| COSTS AND DEPRECIATION OF | | | |
| INTANGIBLE RIGHTS OF | | | |
| CORPORATE ACQUISITIONS | | | |
--------------------------------------------------------------------------------
| % of turnover | 10.2 | 11.1 | |
--------------------------------------------------------------------------------
| Name change and | - 553 | - 164 | 237.7 % |
| reorganization costs | | | |
--------------------------------------------------------------------------------
| Depreciation of intangible | - 802 | - 231 | 247.4 % |
| rights of corporate | | | |
| acquisitions | | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 4,679 | 3,941 | 18.7 % |
--------------------------------------------------------------------------------
| % of turnover | 7.9 | 10.1 | |
--------------------------------------------------------------------------------
| Financial income and expenses | - 303 | - 174 | 73.5 % |
--------------------------------------------------------------------------------
| Profit before taxes | 4,376 | 3,766 | 16.2 % |
--------------------------------------------------------------------------------
| Taxes | - 1,229 | - 855 | 43.7 % |
--------------------------------------------------------------------------------
| NET PROFIT FOR THE PERIOD | 3,147 | 2,911 | 8.1 % |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, K EURO
--------------------------------------------------------------------------------
| ASSETS | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| FIXED ASSETS | | |
--------------------------------------------------------------------------------
| Property, plant and equipment | 1,423 | 399 |
--------------------------------------------------------------------------------
| Goodwill | 21,067 | 11,190 |
--------------------------------------------------------------------------------
| Other intangible assets | 6,282 | 450 |
--------------------------------------------------------------------------------
| Deferred tax claim | 43 | 49 |
--------------------------------------------------------------------------------
| Long-term receivables | 12 | 12 |
--------------------------------------------------------------------------------
| Other financial assets | 19 | 19 |
--------------------------------------------------------------------------------
| FIXED ASSETS TOTAL | 28,846 | 12,120 |
--------------------------------------------------------------------------------
| CURRENT ASSETS | | |
--------------------------------------------------------------------------------
| Accounts receivable and other | 15,411 | 9,945 |
| receivables | | |
--------------------------------------------------------------------------------
| Financial assets | 151 | 695 |
--------------------------------------------------------------------------------
| Liquid assets | 2,331 | 2,689 |
--------------------------------------------------------------------------------
| CURRENT ASSETS TOTAL | 17,893 | 13,330 |
--------------------------------------------------------------------------------
| TOTAL ASSETS | 46,740 | 25,449 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY | | |
--------------------------------------------------------------------------------
| Share capital | 355 | 297 |
--------------------------------------------------------------------------------
| Premium fund | 4,512 | 4,176 |
--------------------------------------------------------------------------------
| Share issue | 77 | 0 |
--------------------------------------------------------------------------------
| Invested non-restricted equity fund | 8,869 | 0 |
--------------------------------------------------------------------------------
| Retained earnings | 4,588 | 3,495 |
--------------------------------------------------------------------------------
| Net profit for the period | 3,147 | 2,911 |
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY TOTAL | 21,548 | 10,879 |
--------------------------------------------------------------------------------
| LIABILITIES | | |
--------------------------------------------------------------------------------
| Long-term liabilities | 8,681 | 4,733 |
--------------------------------------------------------------------------------
| Current liabilities | 16,511 | 9,837 |
--------------------------------------------------------------------------------
| TOTAL LIABILITIES | 25,192 | 14,570 |
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY AND LIABILITIES | 46,740 | 25,449 |
| TOTAL | | |
--------------------------------------------------------------------------------
CHANGES IN EQUITY, K EURO
--------------------------------------------------------------------------------
| | Share | Premium| Share | Inv. non- |Accumulated | Total |
| | capital| fund | issue | restricted | profit | |
| | | | | equity | funds | |
| | | | | fund | | |
--------------------------------------------------------------------------------
| Shareholders' | 292 | 3,746 | 0 | 0 | 4,604 | 8,643 |
| equity | | | | | | |
| 1.1.2006 | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 207 | 207 |
| expense | | | | | | |
| write-off | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 4 | 430 | | | | 434 |
--------------------------------------------------------------------------------
| Dividend | | | | | - 1,316 | - 1,316 |
--------------------------------------------------------------------------------
| Profit for | | | | | 2,911 | 2,911 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 297 | 4,176 | 0 | 0 | 6,406 | 10,879 |
| equity | | | | | | |
| 31.12.2006 | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 297 | 4,176 | 0 | 0 | 6,406 | 10,879 |
| equity | | | | | | |
| 1.1.2007 | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 186 | 186 |
| expense | | | | | | |
| write-off | | | | | | |
--------------------------------------------------------------------------------
| Share issue | 59 | 336 | 77 | 8,869 | | 9,340 |
--------------------------------------------------------------------------------
| Dividend | | | | | - 2,004 | - 2,004 |
--------------------------------------------------------------------------------
| Profit for | | | | | 3,147 | 3,147 |
| the period | | | | | | |
--------------------------------------------------------------------------------
| Shareholders' | 355 | 4,512 | 77 | 8,869 | 7,734 | 21,548 |
| equity | | | | | | |
| 31.12.2007 | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED SOURCES AND APPLICATION OF FUNDS, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- |
| | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Cash flow from business operations | | |
--------------------------------------------------------------------------------
| Net profit for the period | 3,147 | 2,911 |
--------------------------------------------------------------------------------
| Adjustments to cash flow from | | |
| operations | | |
--------------------------------------------------------------------------------
| Taxes | 1,229 | 855 |
--------------------------------------------------------------------------------
| Depreciation and impairment | 1,226 | 416 |
--------------------------------------------------------------------------------
| Financial income and expenses | 303 | 174 |
--------------------------------------------------------------------------------
| Other adjustments | 105 | 178 |
--------------------------------------------------------------------------------
| Income financing before change in net | 6,010 | 4,535 |
| working capital | | |
--------------------------------------------------------------------------------
| Change in net working capital | - 1,077 | - 803 |
--------------------------------------------------------------------------------
| Interest received | 68 | 61 |
--------------------------------------------------------------------------------
| Interest paid | - 332 | - 211 |
--------------------------------------------------------------------------------
| Transfer income from fixed assets | 0 | 1 |
--------------------------------------------------------------------------------
| Taxes paid | - 1,297 | - 1,049 |
--------------------------------------------------------------------------------
| Net cash flow from business | 3,371 | 2,532 |
| operations | | |
--------------------------------------------------------------------------------
| Cash flow from investments | | |
--------------------------------------------------------------------------------
| Investments in tangible and | - 1,357 | - 315 |
| intangible assets | | |
--------------------------------------------------------------------------------
| Change in financial assets | 544 | 1,298 |
--------------------------------------------------------------------------------
| Transfer income from fixed assets | 0 | 248 |
--------------------------------------------------------------------------------
| Acquisition of subsidiaries | - 4,136 | - 5,186 |
--------------------------------------------------------------------------------
| Net cash flow from invstments | - 4,949 | - 3,954 |
--------------------------------------------------------------------------------
| Net cash flow before financing | - 1,578 | - 1,422 |
--------------------------------------------------------------------------------
| Cash flow from financing | | |
--------------------------------------------------------------------------------
| Dividend paid | - 2,004 | - 1,316 |
--------------------------------------------------------------------------------
| Increase of long-term loans | 3,800 | 3,000 |
--------------------------------------------------------------------------------
| Repayment of long-term loans | - 993 | - 658 |
--------------------------------------------------------------------------------
| Share issue | 417 | 117 |
--------------------------------------------------------------------------------
| Net cash flow from financing | 1,220 | 1,144 |
--------------------------------------------------------------------------------
| Change in funds | - 359 | - 279 |
--------------------------------------------------------------------------------
| Liquid assets at start of period | 2,689 | 2,968 |
--------------------------------------------------------------------------------
| Liquid assets at end of period | 2,331 | 2,689 |
--------------------------------------------------------------------------------
CONSOLIDATED PROFIT AND LOSS ACCOUNT, QUARTERLY, K EURO
--------------------------------------------------------------------------------
| | Q4/2007 | Q3/2007 | Q2/2007 | Q1/2007 | Q4/2006 |
| | 1.10.07 | 1.7.07- | 1.4.07- | 1.1.07- | 1.10.06- |
| | 31.12.07| 30.9.07 | 30.6.07 | 31.3.07 | 31.12.06 |
| | | | | | |
| | | | | | |
--------------------------------------------------------------------------------
| Turnover | 18,011 | | 14,125 | 13,224 | 12,141 |
| | | 13,868 | | | |
--------------------------------------------------------------------------------
| Operating costs | - 16,515| - 12,349 | - 12,678 | - 11,654 | - 10,927 |
| | | | | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 1,497 | 1,520 | 1,447 | 1,570 | 1,215 |
| BEFORE NAME CHANGE | | | | | |
| AND REORGANIZATION | | | | | |
| COSTS AND | | | | | |
| DEPRECIATION OF | | | | | |
| INTANGIBLE RIGHTS | | | | | |
| OF CORPORATE | | | | | |
| ACQUISITIONS | | | | | |
--------------------------------------------------------------------------------
| % of turnover | 8.3 | 11.0 | 10.2 | 11.9 | 10.0 |
--------------------------------------------------------------------------------
| Name change costs | 0 | 0 | 0 | - 553 | 0 |
--------------------------------------------------------------------------------
| Depreciation of | - 417 | - 240 | - 91 | - 54 | - 37 |
| intangible rights | | | | | |
| of corporate | | | | | |
| acquisitions | | | | | |
--------------------------------------------------------------------------------
| OPERATING PROFIT | 1,080 | 1,280 | 1,356 | 963 | 1,178 |
--------------------------------------------------------------------------------
| % of turnover | 6.0 | 9.2 | 9.6 | 7.3 | 9.7 |
--------------------------------------------------------------------------------
| Financing income | - 173 | - 28 | - 50 | - 52 | 0 |
| and | | | | | |
| -expenses | | | | | |
--------------------------------------------------------------------------------
| Profit before | 908 | 1,252 | 1,305 | 911 | 1,178 |
| taxes | | | | | |
--------------------------------------------------------------------------------
| Taxes | - 294 | - 345 | -348 | - 242 | - 179 |
--------------------------------------------------------------------------------
| PROFIT FOR THE | 614 | 906 | 957 | 669 | 999 |
| PERIOD | | | | | |
--------------------------------------------------------------------------------
SEGMENT REPORTING, K EURO
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- |
| | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Turnover by segment | | |
--------------------------------------------------------------------------------
| Telecommunications | 35,296 | 24,879 |
--------------------------------------------------------------------------------
| Systems Services | 24,442 | 14,604 |
--------------------------------------------------------------------------------
| Eliminations | - 509 | - 299 |
--------------------------------------------------------------------------------
| Turnover total | 59,229 | 39,184 |
--------------------------------------------------------------------------------
| Operating profit before name change and | | |
| reorganization costs and depreciation of | | |
| intangible rights of corporate | | |
| acquisitions | | |
--------------------------------------------------------------------------------
| Telecommunications | 5,833 | 3,726 |
--------------------------------------------------------------------------------
| Systems Services | 2,135 | 1,717 |
--------------------------------------------------------------------------------
| Administration | -1,934 | - 1,108 |
--------------------------------------------------------------------------------
| Total | 6,033 | 4,335 |
--------------------------------------------------------------------------------
| % of turnover | 10.2 | 11.1 |
--------------------------------------------------------------------------------
| Operating profit by segment | | |
--------------------------------------------------------------------------------
| Telecommunications | 5,775 | 3,583 |
--------------------------------------------------------------------------------
| Systems Services | 1,390 | 1,629 |
--------------------------------------------------------------------------------
| Administration | - 2,487 | - 1,271 |
--------------------------------------------------------------------------------
| Total operating profit | 4,679 | 3,941 |
--------------------------------------------------------------------------------
| Operating profit of turnover % | 7.9 | 10.1 |
--------------------------------------------------------------------------------
| Interest and financial income | - 303 | - 174 |
--------------------------------------------------------------------------------
| Profit before taxes | 4,376 | 3,766 |
--------------------------------------------------------------------------------
| Taxes | - 1,229 | - 855 |
--------------------------------------------------------------------------------
| PROFIT FOR THE PERIOD | 3,147 | 2,911 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Assets by segment | | |
--------------------------------------------------------------------------------
| Telecommunications | 19,422 | 18,094 |
--------------------------------------------------------------------------------
| Systems Services | 25,642 | 6,984 |
--------------------------------------------------------------------------------
| Other | 1,675 | 371 |
--------------------------------------------------------------------------------
| Total assets | 46,740 | 25,449 |
--------------------------------------------------------------------------------
| Liabilities by segment | | |
--------------------------------------------------------------------------------
| Telecommunications | 8,825 | 8,592 |
--------------------------------------------------------------------------------
| Systems Services | 12,560 | 3,822 |
--------------------------------------------------------------------------------
| Other | 3,807 | 2,156 |
--------------------------------------------------------------------------------
| Total liabilities | 25,192 | 14,570 |
--------------------------------------------------------------------------------
| Depreciation by segment | | |
--------------------------------------------------------------------------------
| Telecommunications | 157 | 211 |
--------------------------------------------------------------------------------
| Systems Services | 934 | 97 |
--------------------------------------------------------------------------------
| Other | 136 | 109 |
--------------------------------------------------------------------------------
| Total depreciation | 1,226 | 416 |
--------------------------------------------------------------------------------
| Investments per segment | | |
--------------------------------------------------------------------------------
| Telecommunications | 683 | 131 |
--------------------------------------------------------------------------------
| Systems Services | 14,882 | 3,707 |
--------------------------------------------------------------------------------
| Administration | 201 | 210 |
--------------------------------------------------------------------------------
| Investments total | 15,766 | 4,048 |
--------------------------------------------------------------------------------
CHANGES IN FIXED ASSETS, K EURO
--------------------------------------------------------------------------------
| | Intan | Good | Real | Machinery | Other | Total |
| | gible | will | estate| and | tangible | |
| | assets | | | equipment | assets | |
--------------------------------------------------------------------------------
| Carrying amount | 473 | 8,621 | 91 | 149 | 35 | 9,369 |
| 1.1.2006 | | | | | | |
--------------------------------------------------------------------------------
| Additions | 105 | 2,568 | | 267 | 7 | 2,947 |
--------------------------------------------------------------------------------
| Additions from | 6 | | 237 | 12 | | 254 |
| corporate | | | | | | |
| acquisitions | | | | | | |
--------------------------------------------------------------------------------
| From corporate | 217 | | | | | 217 |
| acquisitions | | | | | | |
--------------------------------------------------------------------------------
| Disposals | 0 | | - 237 | - 65 | - 11 | - 312 |
--------------------------------------------------------------------------------
| Depreciation | - 350 | | | - 66 | | - 416 |
| during the | | | | | | |
| financial period | | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 450 | 11,190 | 91 | 297 | 31 | 12,059 |
| 31.12.2006 | | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 450 | 11,190 | 91 | 297 | 31 | 12,059 |
| 1.1.2007 | | | | | | |
--------------------------------------------------------------------------------
| Additions | 834 | 9,877 | | 523 | | 11,234 |
--------------------------------------------------------------------------------
| Additions from | 34 | | | 789 | | 823 |
| corporate | | | | | | |
| acquisitions | | | | | | |
--------------------------------------------------------------------------------
| From corporate | 5,901 | | | | | 5,901 |
| acquisitions | | | | | | |
--------------------------------------------------------------------------------
| Disposals | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | - 937 | | | - 289 | | - 1,226 |
| during the | | | | | | |
| financial period | | | | | | |
--------------------------------------------------------------------------------
| Carrying amount | 6,282 | 21,067 | 91 | 1,321 | 31 | 28,791 |
| 31.12.2007 | | | | | | |
--------------------------------------------------------------------------------
ACQUIRED BUSINESS OPERATIONS
When business operations are merged, tangible assets are measured at fair value
based on the market price of equivalent assets, taking their age, wear and other
similar factors into account. Tangible assets are depreciated based on the
management's estimation of their economic lifespan, taking the Groups'
depreciation principles into account.
Intangible assets acquired through business combinations are recognized separate
from goodwill based on their fair value at the time of acquisition, provided
that the fair value of the assets can be determined reliably. The business
operations that the Group has acquired comprise primarily customerships,
customer contracts, tender prospects and covenants in restraint of competition.
The fair value of customer contracts and the accompanying customerships, tender
prospects and covenants in restraint of competition have been defined using the
MEEM model (Multi-Earning-Excess model). Other intangible asset items are
depreciated based on the management's evaluation of their economic lifespan.
In addition to the skills of the personnel, the goodwill arising from business
combinations in 2007 comprises other intangible assets that cannot be identified
in accordance with IAS 38. Such items include the potential within an acquired
company for acquiring new customers, the development prospects of new services
and the strong geographical position of the acquired business operations. These
items do not fulfill the IAS 38 criteria in any respect: they are not
identifiable, they are not based on a contract or legal right, and it is not
possible to determine their value reliably. In addition, all business
combinations create synergy benefits that primarily consist of the cross-selling
of existing services and savings in fixed costs.
The goodwill/acquisition cost of acquired business operations may change based
on the contract terms relating to the acquisition price. Part of the acquisition
price is tied to short-term (under 12 months) future events and part to
long-term (over 12 months) future events. Apart from this, the allocation
calculations are final.
The consolidated turnover for 2007 would have been EUR 63.9 million and the
profit for the period EUR 3.0 million if the companies acquired during the
review period had been acquired on 1 January 2007.The above consolidated
turnover includes the actual turnovers of the acquired companies, and the
consolidated financial result includes the actual profits of the acquired
companies based on the interim financial statements at the time of the
acquisition. The intangible and tangible asset items in the merger have been
measured at fair value, and the depreciation on these items has been deducted
from the profit for the financial period. Synergy benefits have not been taken
into account.
EFFECT OF ACQUIRED BUSINESS OPERATIONS ON BALANCE SHEET ASSETS AND LIABILITIES,
K EURO
--------------------------------------------------------------------------------
| Mermit Business Applications Oy | Carrying | Change | Fair value |
| (now Ixonos Technology Consulting | amount | | |
| Ltd) | before | | |
| | merger | | |
| | | | |
--------------------------------------------------------------------------------
| Intangible fixed assets | 14 | 737 | 751 |
--------------------------------------------------------------------------------
| Tangible assets | 94 | 0 | 94 |
--------------------------------------------------------------------------------
| Receivables | 910 | 0 | 910 |
--------------------------------------------------------------------------------
| Liquid assets | 45 | 0 | 45 |
--------------------------------------------------------------------------------
| Total assets | 1,064 | 737 | 1,800 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liabilities | 1,019 | 0 | 1,019 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 0 | 191 | 191 |
--------------------------------------------------------------------------------
| Total liabilities | 1,019 | 191 | 1,210 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquired net assets | 45 | 545 | 590 |
--------------------------------------------------------------------------------
| Total payments | | | 4,489 |
--------------------------------------------------------------------------------
| Goodwill | | | 3,899 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Effect on cash flow: | | | |
--------------------------------------------------------------------------------
| Cash payments | | | - 107 |
--------------------------------------------------------------------------------
| Funds of acquired company | | | 45 |
--------------------------------------------------------------------------------
| Cash flow of acquisitions | | | - 62 |
--------------------------------------------------------------------------------
EUR 2,713,996 of the entire compensation was paid in Ixonos shares. The
estimated additional acquisition price payable (EUR 1,609,930), to be determined
on the basis of the future performance of the acquired company, is taken into
account under current liabilities. The accuracy of the estimation is reviewed
whenever there is indication that its has changed.
--------------------------------------------------------------------------------
| Cidercone Life-Cycle Solutions Oy | Carrying | Change | Fair value |
| (now Ixonos Outsourcing Services | amount | | |
| Ltd) | before | | |
| | merger | | |
| | | | |
--------------------------------------------------------------------------------
| Intangible fixed assets | 19 | 5,165 | 5,184 |
--------------------------------------------------------------------------------
| Tangible assets | 188 | 507 | 695 |
--------------------------------------------------------------------------------
| Receivables | 614 | 4 | 618 |
--------------------------------------------------------------------------------
| Liquid assets | 0 | 0 | 0 |
--------------------------------------------------------------------------------
| Total assets | 821 | 5,675 | 6,497 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other liabilities | 555 | 521 | 1,077 |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 0 | 1,343 | 1,343 |
--------------------------------------------------------------------------------
| Total liabilities | 555 | 1,864 | 2,419 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Acquired net assets | 266 | 3,811 | 4,077 |
--------------------------------------------------------------------------------
| Total payments | | | 9,880 |
--------------------------------------------------------------------------------
| Goodwill | | | 5,802 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Effect on cash flow: | | | |
--------------------------------------------------------------------------------
| Cash payments | | | - 3,861 |
--------------------------------------------------------------------------------
| Funds of acquired company | | | 0 |
--------------------------------------------------------------------------------
| Cash flow of acquisitions | | | - 3,861 |
--------------------------------------------------------------------------------
EUR 5,635,500 of the entire compensation was paid in Ixonos shares. The
estimated additional acquisition price payable (EUR 234,906), to be determined
on the basis of the future performance of the acquired company, is taken into
account under long-term liabilities. The accuracy of the estimation is reviewed
whenever there is indication that its has changed.
FINANCIAL RATIOS
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- |
| | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Earnings per share, EUR diluted | 0.40 | 0.38 |
--------------------------------------------------------------------------------
| Earnings per share, EUR | 0.41 | 0.39 |
--------------------------------------------------------------------------------
| Equity per share, EUR | 2.42 | 1.47 |
--------------------------------------------------------------------------------
| Operating cash flow per share, EUR diluted | 0.43 | 0.33 |
--------------------------------------------------------------------------------
| Return on investment, % | 19.4 | 28.2 |
--------------------------------------------------------------------------------
| Return on equity, % | 19.4 | 29.8 |
--------------------------------------------------------------------------------
| Operating profit/turnover % | 7.9 | 10.1 |
--------------------------------------------------------------------------------
| Net gearing | 33.8 | 18.1 |
--------------------------------------------------------------------------------
| Dividend per share | 0.18 | 0.27 |
--------------------------------------------------------------------------------
| Effective dividend yield, % | 3.02 | 5.83 |
--------------------------------------------------------------------------------
OTHER INFORMATION
--------------------------------------------------------------------------------
| | 1.1.- | 1.1.- |
| | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| PERSONNEL | 726 | 503 |
| Average number of personnel | | |
--------------------------------------------------------------------------------
| Personnel at the end of the period | 874 | 579 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| COMMITMENTS, k EUR | 31.12.2007 | 31.12.2006 |
--------------------------------------------------------------------------------
| Securities to guarantee own commitments | | |
--------------------------------------------------------------------------------
| Corporate mortgages | 9,800 | 6,000 |
--------------------------------------------------------------------------------
| Other securities | 273 | 148 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Leasing and other rental commitments | | |
--------------------------------------------------------------------------------
| Falling due within 1 year* | 3,283 | 1,605 |
--------------------------------------------------------------------------------
| Falling due within 1-5 years * | 7,490 | 1,640 |
--------------------------------------------------------------------------------
| Falling due within 5 years * | 616 | 0 |
--------------------------------------------------------------------------------
| Total | 11,390 | 3,245 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Nominal value of interest rate swap | | |
| agreement | | |
--------------------------------------------------------------------------------
| Falling due within 1 year | 1,400 | 857 |
--------------------------------------------------------------------------------
| Falling due within 1-5 year | 2,450 | 2,357 |
--------------------------------------------------------------------------------
| Falling due within 5 years | 0 | 0 |
--------------------------------------------------------------------------------
| Total | 3,850 | 3,214 |
--------------------------------------------------------------------------------
| Fair value | 26 | 14 |
--------------------------------------------------------------------------------
CALCULATION OF FINANCIAL RATIOS
Return on equity (ROE) = 100 x Net profit / Shareholders' equity (average)
Return on investment (ROI) =
100 x (profit before taxes + interest + other financial expenses) /
Balance sheet total - non-interest bearing liabilities (average)
Diluted result per share = Net profit for the period / Average number of
share-issue adjusted shares (adjusted with dilution effect)
Diluted result per share = Net profit for the period / Average number of
share-issue adjusted shares
Shareholders' equity per share = Shareholders' equity / Share-issue adjusted
number of shares on the balance sheet date
Gearing = Interest-bearing liabilities - Liquid assets / Shareholders' equity x
100
Effective dividend yield, % = Dividend per share / Last trading price of the
financial period x 100
FINANCIAL STATEMENT BULLETIN FOR THE PERIOD 1 JANUARY - 31 DECEMBER 2007
| Source: Digitalist Group Oyj
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