STOCK EXCHANGE RELEASE
Free for publication on November 1, 2011, at 8.00 a.m. (CET+1)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY-SEPTEMBER 2011
THE THIRD QUARTER NET SALES GREW YEAR-ON-YEAR. NET SALES IN JANUARY-SEPTEMBER
DECREASED SLIGHTLY FROM PREVIOUS YEAR AND OPERATING RESULT WAS NEGATIVE.
SUMMARY 3Q 2011
- Net sales for the period was EUR 37.0 million (EUR 33.7 million, 3Q 2010),
representing an increase of 9.7 % year-on-year. Net sales of the Automotive
Business Segment grew to EUR 23.9 million (EUR 19.9 million, 3Q 2010),
representing a 20.0% growth year-on-year. The Wireless Business Segment's net
sales fell slightly, 4.8 %, to EUR 13.0 million (EUR 13.7 million, 3Q 2010).
- Operating loss was EUR -3.1 million (EUR -11.5 million, including EUR 8.3
million impairment of accounts receivable from TerreStar, 3Q 2010). Operating
loss of the Automotive Business Segment was EUR -1.4 million (operating profit
of EUR 0.1 million, 3Q 2010). The Wireless Business Segment's operating loss was
EUR -1.7 million (EUR -11.7 million, including EUR 8.3 million impairment of
accounts receivable from TerreStar, 3Q 2010).
- EBITDA was EUR -1.2 million (EUR -9.3 million, 3Q 2010).
- Cash flow from operating activities was EUR -6.6 million (EUR 0.2 million,
3Q 2010). The net cash flow was EUR -10.6 million (EUR -30.1 million, including
the distribution of EUR 25.9 million from the share premium fund, 3Q 2010).
- Earnings per share were EUR -0.02 (EUR -0.07, 3Q 2010).
- On August 1, 2011 EB announced the appointment of Mr. Alexander Kocher (M.
Sc., Electrical Engineering), 50, as the President of the Automotive Business
Segment and Managing Director of Elektrobit Automotive GmbH, effective on
November 1, 2011. Mr. Kocher will transfer to EB from Wind River GmbH, a
subsidiary of Intel Inc, where he has worked as Vice President and General
Manager of Automotive Business Unit.
SUMMARY JANUARY-SEPTEMBER 2011
- Net sales of the period amounted to EUR 113.1 million (EUR 119.9 million,
1-9 2010), representing a decrease of 5.7 % year-on-year. Net sales of the
Automotive Business Segment grew to EUR 70.2 million (EUR 57.0 million,
1-9 2010), representing a 23.1 % growth year-on-year. The Wireless Business
Segment's net sales fell by 31.2 % to EUR 42.9 million (EUR 62.4 million,
1-9 2010).
- Operating loss was EUR -7.5 million (EUR -9.7 million, including EUR 8.3
million impairment of accounts receivable from TerreStar, 1-9 2010). The
operating loss of Automotive Business Segment was EUR -1.3 million (operating
profit of EUR 0.8 million, 1-9 2010) and the operating loss of Wireless Business
Segment was EUR -6.1 million (EUR -10.4 million, including EUR 8.3
million impairment of accounts receivable from TerreStar, 1-9 2010).
- EBITDA was EUR -0.6 million (EUR -3.2 million, 1-9 2010)
- Cash flow from operating activities was EUR -1.8 million (EUR 6.3 million,
1-9 2010). The net cash flow was EUR -13.3 million (EUR -29.2 million,
1-9 2010).
- Cash and other liquid assets totaled EUR 7.2 million (EUR 29.8 million,
1-9 2010).
- Equity ratio remained strong at 63.6% (66.9%, 1-9 2010).
- Earnings per share were EUR -0.06 (EUR -0.08, 1-9 2010).
- Earlier on October 19, 2010, EB's customer TerreStar Networks Inc. filed for
voluntary petition for reorganization, and its parent company TerreStar
Corporation filed for voluntary petition for reorganization on February
16, 2011. Under the review period there were no changes in valuation in EB's
receivables from these companies.
EB'S CEO JUKKA HARJU:
"EB's net sales grew during the third quarter, representing an increase of 9.7 %
year-on-year, due to the continued strong growth of the Automotive Business
Segment. Net sales of Wireless Business Segment almost reached the net sales
level of the last year. During 2011 EB has succeeded to grow its Wireless
business especially in defence and mobile infrastructure markets to replace the
strongly reduced net sales in the satellite terminal business.
During the third quarter operating result was lower than expected in both
Business Segments - in Automotive Business Segment due to the higher than
expected project costs, and in Wireless Business Segment due to the decreased
net sales caused by the delays in the customer projects. Compared to the second
quarter, the operating result was lower also due to the seasonality of EB's
business and holiday period.
In the Automotive Business Segment, the demand for EB's software products and
services remained good. The carmakers invest into new infotainment systems, in-
car navigation systems, driver assistance solutions and ECU (Electrical Control
Unit) software development for their new car models.
In the Wireless Business Segment, EB proceeded in strengthening its offering to
the defence and security markets by releasing an Android-based mobile platform
for both security and defence markets and three products targeted to defence
markets. EB also announced the agreement to develop and deliver a tactical
wireless IP network for Finnish Defence Forces.
Improving the profitability remains our main short term objective. During the
fourth quarter both Business Segments have a good opportunity to improve their
profitability from the third quarter."
OUTLOOK FOR THE SECOND HALF OF 2011
The demand for software products and services is estimated to grow in the
automotive industry and EB's net sales is expected to increase in the Automotive
Business Segment. Due to the strengthened demand, the net sales of EB's Wireless
Business Segment is expected grow.
EB expects for the second half of 2011 that net sales will be higher than in the
second half of 2010 (EUR 75.6 million, 2H 2010) and that the operating result
will be positive (operating loss of EUR -19.2 million, 2H 2010). Due to the
seasonality of EB's business and due to the holiday period during the third
quarter, the net sales and operating result in the fourth quarter are expected
to be higher than in the third quarter of 2011.
The profit outlook for the second half of 2011 is based on the assumption that
there will be no further bookings of impairments of EB's accounts receivable
from TerreStar Networks Inc. and TerreStar Corporation. It is possible that,
based on later information related to reorganizations of TerreStar Networks and
TerreStar Corporation, this outlook may need to be reconsidered. Due to the
uncertainties related to the outcome of reorganization processes of TerreStar
Networks and TerreStar Corporation, the credit risk may still grow during the
second half of 2011. More specific market outlook is presented under the
"Business Segments' development during July-September 2011 and market outlook"
section, and uncertainties regarding the filings for reorganization of TerreStar
Networks and TerreStar Corporation, the amount of receivables and collecting the
receivables as well as other uncertainties regarding the outlook under "Risks
and Uncertainties" section.
Information on TerreStar Networks' and TerreStar Corporation's reorganizations
are presented in the October 20 and 25, November 20, December 30, 2010, and
February 17, 2011, stock exchange releases as well as in EB's interim reports
and financial statement at www.elektrobit.com.
INVITATION TO A PRESS CONFERENCE
EB will hold a press conference on the January-September interim report 2011 for
media, analysts and institutional investors in Finland, Espoo, Keilasatama 5,
meeting room Laine on Tuesday, November 1, 2011, at 11.00 a.m. (CEST+1). The
conference will also be held as a conference call and the presentation will be
shown simultaneously in the Internet through WebEx. The conference will be held
in English. For more information on joining the conference please go to
www.elektrobit.com/investors.
EB, Elektrobit Corporation
EB creates advanced technology and turns it into enriching end-user experiences.
EB is specialized in demanding embedded software and hardware solutions for
wireless and automotive industries. The net sales for the year 2010 totaled MEUR
161.8. Elektrobit Corporation is listed on NASDAQ OMX Helsinki.
www.elektrobit.com
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY-SEPTEMBER 2011
FINANCIAL PERFORMANCE DURING JANUARY-SEPTEMBER 2011
(Corresponding figures are for January-September 2010 unless otherwise
indicated)
EB's net sales during January-September 2011 decreased by 5.7 per cent to EUR
113.1 million (EUR 119.9 million). Operating loss was EUR -7.5 million (EUR -9.7
million, including EUR 8.3 million impairment of accounts receivable
from TerreStar).
Net sales of the Automotive Business Segment grew strongly in January-September
2011 to EUR 70.2 million (EUR 57.0 million), representing a 23.1% growth year-
on-year. The operating loss was EUR -1.3 million (operating profit of EUR 0.8
million). During the first quarter the operating result of the Automotive
Business Segment developed as planned, but was lower than expected during the
second and third quarters due to the higher than estimated project costs.
The Wireless Business Segment's net sales in January-September 2011 fell by
31.2% year-on-year to EUR 42.9 million (EUR 62.4 million). The significant
decrease in net sales was mainly due to the remarkable decline in the volume of
the satellite terminal business. Wireless Business Segment's net sales in the
third quarter 2011 was almost at the same level as in the third quarter of 2010.
The operating loss of the Wireless Business Segment was EUR -6.1 million (EUR
-10.4 million, including EUR 8.3 million impairment of accounts receivable
from TerreStar). The operating loss in the reporting period mainly resulted from
the first quarter of 2011, as the order book development in the new satellite
communication solution business, to replace the discontinued satellite terminal
business for TerreStar at the end of 2010, was slower than expected. In
addition, the operating result was affected by the increased competition in the
area of smart phone related R&D services. During the third quarter the operating
result weakened due to the seasonality of EB's business and delays in the
customer projects.
The total R&D investments during the reporting period grew to EUR 18.0 million
(EUR 15.5 million), representing 15.9 % of the net sales (12.9 %). EUR 4.9
million of R&D investments were capitalized (EUR 3.3 million).
+----------------------------------------------------------+--------+--------+
|CONSOLIDATED INCOME STATEMENT (MEUR) |1-9 2011|1-9 2010|
+----------------------------------------------------------+--------+--------+
| |9 months|9 months|
+----------------------------------------------------------+--------+--------+
|NET SALES | 113.1| 119.9|
+----------------------------------------------------------+--------+--------+
|OPERATING PROFIT (LOSS) | -7.5| -9.7|
+----------------------------------------------------------+--------+--------+
|Financial income and expenses | -0.7| -0.9|
+----------------------------------------------------------+--------+--------+
|RESULT BEFORE TAX | -8.2| -10.6|
+----------------------------------------------------------+--------+--------+
|RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS | -8.2| -10.2|
+----------------------------------------------------------+--------+--------+
|TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | -8.4| -9.8|
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
|Result for the period attributable to: | | |
+----------------------------------------------------------+--------+--------+
| Equity holders of the parent | -8.4| -10.6|
+----------------------------------------------------------+--------+--------+
| Non-controlling interests | 0.1| 0.3|
+----------------------------------------------------------+--------+--------+
|Total comprehensive income for the period attributable to:| | |
+----------------------------------------------------------+--------+--------+
| Equity holder of the parent | -8.6| -10.1|
+----------------------------------------------------------+--------+--------+
| Non-controlling interests | 0.1| 0.3|
+----------------------------------------------------------+--------+--------+
| | | |
+----------------------------------------------------------+--------+--------+
|Earnings per share EUR continuing operations | -0.06| -0.08|
+----------------------------------------------------------+--------+--------+
- Cash flow from operating activities was EUR -1.8 million (EUR 6.3 million).
- Equity ratio was 63.6% (66.9%).
- Net gearing was 3.0% (-20.7%).
QUARTERLY FIGURES
The distribution of the Group's overall net sales and profit, MEUR:
+--------------------------------------------------+-----+-----+----+----+-----+
| |3Q 11|2Q 11|1Q11|4Q10| 3Q10|
+--------------------------------------------------+-----+-----+----+----+-----+
|Net sales | 37.0| 39.7|36.5|41.8| 33.7|
+--------------------------------------------------+-----+-----+----+----+-----+
|Operating profit (loss) | -3.1| -0.5|-3.9|-7.7|-11.5|
+--------------------------------------------------+-----+-----+----+----+-----+
|Operating profit (loss) without non-recurring | -3.1| -0.5|-3.9|-3.2| -3.2|
|costs | | | | | |
+--------------------------------------------------+-----+-----+----+----+-----+
|Result before taxes | -3.1| -0.8|-4.3|-8.0|-10.6|
+--------------------------------------------------+-----+-----+----+----+-----+
|Result for the period | -3.1| -0.8|-4.3|-5.4| -9.0|
+--------------------------------------------------+-----+-----+----+----+-----+
Non-recurring items are exceptional gains and costs that are not related to
normal business operations and occur only seldom. These items include capital
gains or losses, significant changes in asset values such as write-downs or
reversals of write-downs, significant restructuring costs, or other items that
the management considers to be non-recurring. When evaluating a non-recurring
item, the euro translation value of the item is considered, and in case of a
change in an asset value, it is measured against the total value of the asset.
The distribution of net sales by Business Segments, MEUR:
+-----------------+-----+-----+----+----+----+
| |3Q 11|2Q 11|1Q11|4Q10|3Q10|
+-----------------+-----+-----+----+----+----+
|Automotive | 23.9| 22.7|23.6|23.1|19.9|
+-----------------+-----+-----+----+----+----+
|Wireless | 13.0| 17.1|12.7|18.6|13.7|
+-----------------+-----+-----+----+----+----+
|Corporation total| 37.0| 39.7|36.5|41.8|33.7|
+-----------------+-----+-----+----+----+----+
The distribution of net sales by market areas, MEUR and %:
+--------+-----+-----+-----+---------+-----+
| |3Q 11|2Q 11| 1Q11| 4Q10| 3Q10|
+--------+-----+-----+-----+---------+-----+
|Asia | 3.3| 4.0| 2.7|4.4 10.6%| 1.8|
| | | | | | |
| | 8.8%|10.2%| 7.4%| | 5.4%|
+--------+-----+-----+-----+---------+-----+
|Americas| 4.9| 5.5| 5.1| 10.8| 9.4|
| | | | | | |
| |13.4%|14.0%|13.9%| 25.8%|27.7%|
+--------+-----+-----+-----+---------+-----+
|Europe | 28.8| 30.1| 28.7| 26.6| 22.5|
| | | | | | |
| |77.8%|75.9%|78.7%| 63.6%|66.8%|
+--------+-----+-----+-----+---------+-----+
Net sales and operating profit development by Business Segments and Other
businesses, MEUR:
+-------------------------------+-----+-----+----+----+-----+
| |3Q 11|2Q 11|1Q11|4Q10| 3Q10|
+-------------------------------+-----+-----+----+----+-----+
|Automotive | | | | | |
| | | | | | |
|Net sales to external customers| 23.9| 22.7|23.6|23.1| 19.9|
| | | | | | |
|Net sales to other segments | 0.0| 0.0| 0.0| 0.0| 0.0|
| | | | | | |
|Operating profit (loss) | -1.4| -0.5| 0.6| 1.1| 0.1|
+-------------------------------+-----+-----+----+----+-----+
|Wireless | | | | | |
| | | | | | |
|Net sales to external customers| 12.9| 16.9|12.7|18.6| 13.7|
| | | | | | |
|Net sales to other segments | 0.1| 0.2| 0.0| 0.0| 0.0|
| | | | | | |
|Operating profit (loss) | -1.7| 0.1|-4.6|-8.8|-11.7|
+-------------------------------+-----+-----+----+----+-----+
|Other businesses | | | | | |
| | | | | | |
|Net sales to external customers| 0.2| 0.0| 0.1| 0.2| 0.2|
| | | | | | |
|Operating profit (loss) | -0.1| -0.1| 0.1| 0.1| 0.1|
+-------------------------------+-----+-----+----+----+-----+
|Total | | | | | |
| | | | | | |
|Net sales | 37.0| 39.7|36.5|41.8| 33.7|
| | | | | | |
|Operating profit (loss) | -3.1| -0.5|-3.9|-7.7|-11.5|
+-------------------------------+-----+-----+----+----+-----+
BUSINESS SEGMENTS' DEVELOPMENT DURING JULY-SEPTEMBER 2011 AND MARKET OUTLOOK
(Corresponding figures are for July-September 2010 unless otherwise indicated)
EB's reporting is based on two segments which are the Automotive and Wireless
Business Segments.
AUTOMOTIVE
The Automotive Business Segment's offering consists of in-car software products,
navigation software for aftermarket devices and development services for the
automotive industry with leading car manufacturers, car electronics suppliers
and automotive chipset suppliers as customers. By combining its software
products and R&D services EB is creating unique, customized solutions for its
automotive customers.
During the third quarter of 2011 the net sales of the Automotive Business
Segment amounted to EUR 23.9 million (EUR 19.9 million), representing a strong
20.0% growth year-on-year. The operating loss was EUR -1.4 million (operating
profit of EUR 0.1 million). The operating result was lower than anticipated due
to the higher than expected project costs.
Solid overall market demand continued for EB's services and own automotive grade
software products adapted and integrated to the customer specific requirements.
EB continued to grow during the third quarter in the infotainment, driver
assistance and ECU (Electronic Control Unit) software markets.
EB continued its R&D investments in the automotive software products and tools,
and released new product updates during the third quarter. As the first company
to deliver a compliant software stack according to BMW requirements, EB
introduced the production ready software development toolset supporting Autosar
4.0 standard to the automotive industry.
On August 1, 2011 EB announced the appointment of Mr. Alexander Kocher (M. Sc.,
Electrical Engineering), 50, as the President of the Automotive Business Segment
and Managing Director of Elektrobit Automotive GmbH, effective on November
1, 2011. Mr. Kocher will transfer to EB from Wind River GmbH, a subsidiary of
Intel Inc, where he has worked as Vice President and General Manager of
Automotive Business Unit.
Automotive Market Outlook
The majority of the innovation and differentiation in the automotive industry is
brought about by software and electronics. The share of electronics and software
in cars has grown significantly during the past years. It is expected that the
use of software in automotives continues to increase. The estimated annual
automotive software market long-term growth rate in passenger cars is some 15%
(Frost & Sullivan). The underlying world automotive market is also expected to
grow steadily with a yearly rate of about 6% between 2010 and 2015 (CSM).
The increasingly sophisticated and networked features and growing performance
foster the complexity of automotive electronics. At the same time consumers
expect the same richness of features and user experience they know from the
internet and mobile devices also from within the car. These development trends
are driving the industry towards gradual separation of software and hardware in
electronics solutions. Hence it is necessary for managing the architectural
software layer appropriately and to aim for efficiency in innovation and
implementation. The use of standard software solutions is expected to increase
in the automotive industry. This enables faster innovation, improves quality and
development efficiency and reduces complexity related to deployment of software.
The fundamental industry migration and consequent growth of the automotive
software market will continue. Cost pressures of the automotive industry are
expected to accelerate the need of productized and efficient software solutions
EB is offering.
EB's net sales cumulating from the automotive industry are currently primarily
driven by the development of software and software platforms for new cars. Hence
the dependency of EB's net sales on car production volumes is currently limited,
however, the direct dependency is expected to increase as a result of the EB's
transition towards software product business models over the forthcoming years.
WIRELESS
The Wireless Business Segment offers development services, customized solutions
and radio channel emulator products for industries and authorities utilizing
wireless technologies.
Net sales of the Wireless Business Segment during the third quarter of 2011 was
EUR 13.0 million (EUR 13.7 million), representing a decline of 4.8% year-on-
year. The operating loss was EUR -1.7 million (EUR -11.7 million, including EUR
8.3 million impairment of accounts receivable from TerreStar).
The third quarter net sales and operating result of Wireless Business Segment
were expectedly lower than in the previous quarter due to the seasonality of the
business and holiday period in the third quarter. However, the operating result
was slightly lower than anticipated mainly due to the lower net sales caused by
the delays in the customer projects.
The demand in the defence, security, mobile infrastructure and radio channel
emulator markets remained at a good level. EB continued its investments in radio
channel emulation products and next generation special terminals product
platforms.
During the third quarter EB announced an Android-based mobile platform for
defence and security markets and introduced three new products targeted to
defence markets. EB and Finnish Defence Forces released an agreement between the
parties, according to which Finnish Defence Forces will take EB-designed
tactical wireless IP network into use.
Wireless Market Outlook
In the mobile infrastructure market the use of LTE standard, which improves the
performance of radio channel and mobile phone networks, is expected to continue
to gain strength. EB's business driven by LTE is expected to increase. Mastering
of multi-radio technologies and end-to-end system architectures covering both
terminals and networks has gained importance in the complex wireless technology
industry. Fast implementation of LTE technology and a wide spectrum of bandwidth
needed are creating opportunities for EB.
The growth of demand for smart phones and transitions in the related software
architectures and platforms are expected to continue during 2011. The R&D
services market for smart phones continues to be challenging and the continuing
price pressure drives increasing off-shoring in the industry. The overall demand
for R&D services for smart phones is expected to decrease in the future due to
changes in the market environment. However, OEMs are expected to continue
utilizing outsourcing for their R&D flexibility, which can create new business
opportunities for EB.
The market for communications, interference and intelligence solutions targeted
for public authorities is estimated to remain stable. EB's competence and long
experience in software radio based solutions is expected to bring new business
opportunities. The trend of adopting commercial technologies, such as LTE, is
expected to continue on special verticals such as public safety. The networks
used by public authorities often utilize dedicated spectrum blocks outside the
commercial frequency bands, which generates the need for special user terminal
variants for these networks.
The mobile satellite communication service industry is introducing new data and
mobile communication services with new operators being formed and traditional
ones upgrading their solutions and offerings. The market demand has been
expected to move from the current reference design phase towards the launch of
commercial products and services during the next few years. The filing for
reorganization of TerreStar Networks Inc. has, however, delayed and brought
uncertainties to the market development. Based on the current understanding the
business relationship between EB and TerreStar will not continue.
The performance of radio channel is going to increase quickly when introducing
new LTE technologies. This will create demand for advanced development tools
during the next few years. The test tool market is expanding from the
performance testing of LTE base stations to LTE terminals, where the over-the-
air (OTA) technology will be widely used. EB provides world leading channel
emulation tools for the development of MIMO based LTE, LTE-Advanced and other
advanced radio technologies.
RESEARCH AND DEVELOPMENT
EB continued its investments in R&D in the automotive software products and
tools, in radio channel emulation products and in next generation special
terminals product platforms.
The total R&D investments during the third quarter of 2011 were EUR 5.7 million
(EUR 5.4 million, 3Q 2010), equaling 15.5% of the net sales (16.0%, 3Q 2010).
EUR 1.7 million of R&D investments were capitalized (EUR 1.6 million, 3Q 2010).
OUTLOOK FOR THE SECOND HALF OF 2011
The demand for software products and services is estimated to grow in the
automotive industry and EB's net sales is expected to increase in the Automotive
Business Segment. Due to the strengthened demand, the net sales of EB's Wireless
Business Segment is expected grow.
EB expects for the second half of 2011 that net sales will be higher than in the
second half of 2010 (EUR 75.6 million, 2H 2010) and that the operating result
will be positive (operating loss of EUR -19.2 million, 2H 2010). Due to the
seasonality of EB's business and due to the holiday period during the third
quarter, the net sales and operating result in the fourth quarter are expected
to be higher than in the third quarter of 2011.
The profit outlook for the second half of 2011 is based on the assumption that
there will be no further bookings of impairments of EB's accounts receivable
from TerreStar Networks Inc. and TerreStar Corporation. It is possible that,
based on later information related to reorganizations of TerreStar Networks and
TerreStar Corporation, this outlook may need to be reconsidered. Due to the
uncertainties related to the outcome of reorganization processes of TerreStar
Networks and TerreStar Corporation, the credit risk may still grow during the
second half of 2011. More specific market outlook is presented under the
"Business Segments' development during July-September 2011 and market outlook"
section, and uncertainties regarding the filings for reorganization of TerreStar
Networks and TerreStar Corporation, the amount of receivables and collecting the
receivables as well as other uncertainties regarding the outlook under "Risks
and Uncertainties" section.
Information on TerreStar Networks' and TerreStar Corporation's reorganizations
are presented in the October 20 and 25, November 20, December 30, 2010, and
February 17, 2011, stock exchange releases as well as in EB's interim reports
and financial statement at www.elektrobit.com.
RISKS AND UNCERTAINTIES
EB has identified a number of business, market and finance related risk factors
and uncertainties that can affect the level of sales and profits. Those of the
greatest significance on a short term are those affecting the utilization and
chargeability levels and average hourly prices of R&D services. On the ongoing
financial period the global economic uncertainty may affect the demand for EB's
services, solutions and products and provide pressure on e.g. volumes and
pricing. It may also increase the risk for credit losses and weaken the
availability and terms of financing.
On November 1, 2011, EB's receivables from TerreStar amounted to approximately
USD 25.8 million (EUR 18.4 million as per exchange rate of October 31, 2011),
which it has claimed in the Chapter 11 cases of both TerreStar Networks and
TerreStar Corporation. In addition to the booked receivables, EB has also
claimed additional costs in the amount of approximately USD 2.1 million (EUR
1.5 million as per exchange rate of October 31, 2011) and resulting mainly from
the ramp down of the business operations between the parties. Thus, EB has
asserted claims against each of the TerreStar entities in amounts totaling USD
27.9 million (EUR 20.0 million as per exchange rate of October 31, 2011). Due
to uncertainties related to the accounts receivable, EB booked an impairment of
the accounts receivable in the amount of EUR 8.3 million during the second half
of 2010.
On October 19, 2010, TerreStar Networks and certain other affiliates of
TerreStar Corporation and on February 16, 2011, the parent company TerreStar
Corporation filed voluntary petitions for reorganization under Chapter 11 of the
United States Bankruptcy Code to strengthen their financial position.
Generally in a Chapter 11 case, any distribution of cash or other assets by a
debtor to satisfy pre-bankruptcy claims of its creditors must be made under a
Chapter 11 plan of reorganization or liquidation. Such plans must be approved by
the United States Bankruptcy Court and (with limited exceptions) an affirmative
vote of all classes of creditors whose claims will not be paid fully and
immediately after the plan is approved by the court and becomes effective by its
terms.
Within the first four months of its Chapter 11 case, TerreStar Networks filed,
then withdrew, a proposed plan of reorganization. Subsequently, on July
7, 2011, the United States Bankruptcy Court approved the sale of substantially
all TerreStar Networks' assets to Gamma Acquisition L.L.C., an acquisition
subsidiary formed by Dish Network Corporation for about USD 1.375 billion. Based
upon filings made by TerreStar Networks with the Bankruptcy Court, USD 1.345
billion of the purchase price has been funded to date, with the remainder of the
purchase price payable at closing, and payments have been made to secured
creditors from the sale proceeds in the amount of about USD 1.128 billion.
However, the sale will not result in an immediate distribution to general
unsecured creditors. EB's share of the TerreStar Networks' sale proceeds, and
the timing of distribution, cannot be predicted with certainty at this time.
Any such distribution must be provided for under a Chapter 11 plan of
liquidation to be filed, voted on and submitted to the court for approval, which
to date has not occurred.
On July 22, 2011, TerreStar Corporation filed a reorganization plan with the
Bankruptcy Court. Its plan contains only incomplete information on how EB's
receivables will be treated in the reorganization. However, the plan suggests
that unsecured claims (such as EB's) may be exchanged for new notes to be issued
by a reorganized TerreStar Corporation in the face amount of each allowed
claim. It is also possible that some part of an allowed unsecured claim may be
exchanged for shares in a new class of preferred stock in the reorganized
entity. The terms of these new notes and preferred stock are not available at
this time. Further, it is premature to speculate regarding distributions to
creditors under this plan because the plan TerreStar Corporation filed may or
may not obtain the necessary approvals, and the terms of the plan may change
through negotiation with creditors. EB has objected to the disclosure statement
accompanying the proposed plan on the ground that it does not provide adequate
information of a kind, and in sufficient detail, to enable EB and other
creditors to make an informed judgment about the plan. EB has also formally
sought further information to evaluate the filed incomplete plan and preliminary
objected to the plan.
Recoveries by holders of claims against TerreStar Networks and TerreStar
Corporation are to be funded by separate pools or streams of assets. Timing or
amount of any payment either by TerreStar Networks or TerreStar Corporation
cannot be predicted with certainty at this time. However, subject to a great
number of assumptions, EB anticipates that creditors of TerreStar Networks may
expect to receive cash payment corresponding to a relatively small percentage of
their allowed claims. Under the plan proposed by TerreStar Corporation, its
general unsecured creditors are to receive new promissory notes and possibly
preferred stock, with a face value equivalent to their allowed claims. Payment
of the note obligations and any distributions to holders of preferred stock are
to be funded by future revenues and profits of reorganized TerreStar
Corporation. For the reasons noted in the previous paragraph, it is premature
to comment on the extent of EB's potential recovery. Additionally, as part of
the process of reconciling accounts in preparation for making distributions
under a plan, Chapter 11 debtors often challenge the amount or validity of some
creditor claims, and it is possible that either TerreStar Networks, TerreStar
Corporation or another party in interest may object to EB's claims filed in the
respective bankruptcy cases. EB expects to vigorously defend any such
objections to its claims, but speculation regarding the likely outcome of any
such future dispute is premature at this time. Further, it is possible that, as
part of the Chapter 11 process, either TerreStar Networks or TerreStar
Corporation may seek to recover payments previously made to their creditors
pursuant to various provisions of the Bankruptcy Code. The risk that TerreStar
Networks may attempt to recover payments from EB, or that such recovery actions,
if attempted, may be successful, cannot be ruled out at this time.
Based on EB's current understanding, there is no reason to believe that there
would be further impairment losses on EB's account receivable from TerreStar
Networks and TerreStar Corporation. EB aims to collect the amounts owed to it in
full through the Chapter 11 cases of TerreStar Networks and TerreStar
Corporation, and/or for example through selling of the earlier mentioned
accounts receivable. It is possible that based on later information related to
the TerreStar Networks' and TerreStar Corporation's Chapter 11 cases, the above
views may need to be reconsidered. Despite the TerreStar companies' efforts to
reorganize, it is possible that the credit risk may still grow during the second
half of 2011. At worst, the progress of the TerreStar Chapter 11 cases may
result in significant further credit losses for EB. Should the accounts
receivable not be collected at all, either from TerreStar Networks or TerreStar
Corporation, an impairment loss and costs related to the collection process
would additionally lower EB's operating result on a non-recurring basis by
approximately EUR 10 million, at maximum (USD-nominated items as per exchange
rate of October 31, 2011). However, this would not have any significant negative
effect on the EB's cash flow.
As the EB's customer base consists mainly of companies operating in the fields
of automotive and telecommunications, the company is exposed to market changes
in these industries. EB believes that expanding the customer base will reduce
dependence on individual companies and that the company will thereby be mainly
affected by the general business climate in automotive and telecommunication
industries. However, some parts of EB's business are more sensitive to customer
dependency than others. Respectively, this may translate as accumulation of risk
with respect to outstanding receivables and ultimately with respect to credit
losses. The more specific market outlook is presented under the "Business
Segments' development during the third quarter 2011 and market outlook" section.
EB's operative business risks are mainly related to following items:
uncertainties and short visibility on customers' product program decisions,
their make or buy decisions and on the other hand, their decisions to continue,
downsize or terminate current product programs, ramping up and down project
resources, availability of personnel in labour markets (in particular in Germany
and Finland), timing and on the other hand successful utilization of the most
important technologies and components, competitive situation and potential
delays in the markets, timely closing of customer and supplier contracts with
reasonable commercial terms, 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. In addition there are typical
industry warranty and liability risks as well as risks related to management of
intellectual property rights involved in selling EB's services, solutions and
products.
Product delivery business model includes such risks as high dependency on actual
product volumes, development of the cost of materials and production yields. The
above-mentioned risks may manifest themselves as higher cost of product
delivery, and ultimately, as lower profit. 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's website at www.elektrobit.com
STATEMENT OF FINANCIAL POSITION AND FINANCING
The figures presented in the statement of financial position of September
30, 2011, are compared with the statement of the financial position of December
31, 2010 (MEUR). The figures for the period under review contain provision of
EUR 1.3 million.
9/2011 12/2010
Non-current assets 42.1 41.2
Current assets 64.0 83.0
Total assets 106.1 124.2
Share capital 12.9 12.9
Other equity 49.3 57.6
Non-controlling interests 1.4 1.3
Total shareholders' equity 63.6 71.8
Non-current liabilities 7.3 11.6
Current liabilities 35.2 40.7
Total shareholders' equity and liabilities 106.1 124.2
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -3.4 million
+ decrease in net working capital EUR -1.4 million
- interest, taxes and dividends EUR +3.0 million
= cash generated from operations EUR -1.8 million
- net cash used in investment activities EUR -7.4 million
- net cash used in financing EUR -4.1 million
= net change in cash and cash equivalents EUR -13.3million
The amount of accounts and other receivables, booked in current receivables, was
EUR 54.7 million (EUR 60.6 million on December 31. 2010). Accounts and other
payables, booked in interest-free current liabilities, were EUR 30.4 million
(EUR 35.6 million on December 31. 2010). The amount of non-depreciated
consolidation goodwill at the end of the period under review was EUR 19.2
million (EUR 18.5 million on December 31. 2010).
The amount of gross investments in the period under review was EUR 8.6 million
consisting of replacement investments. Net investments for the reporting period
totaled EUR 8.2 million. The total amount of depreciation during the period
under review was EUR 7.0 million, including EUR 1.3 million of depreciation
owing to business acquisitions.
The amount of interest-bearing debt at the end of the reporting period was EUR
9.2 million. The distribution of net financing expenses on the income statement
was as follows:
interest dividend and other financial income EUR 0.2 million
interest expenses and other financial expenses EUR -0.4 million
foreign exchange gains and losses EUR -0.4 million
EB's equity ratio at the end of the period was 63.6% (62.4% at the end of 2010).
Cash and other liquid assets at the end of the reporting period were EUR 7.2
million. EB has a binding overdraft credit facility agreement of EUR 10 million,
valid until mid 2012. At the end of the reporting period, this facility was not
used.
EB follows a hedging strategy, the objective of which is to ensure the margins
of business operations in changing market circumstances by minimizing the
influence of exchange rates. In accordance with the hedging strategy, the agreed
customer commitments 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 11.3 million.
PERSONNEL
EB employed an average of 1540 people between January and September 2011. At the
end of September, EB had 1560 employees (1539 at the end of 2010). A significant
part of EB's personnel are product development engineers.
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.
Oulu, November 1, 2011
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Jukka Harju
CEO
Tel. +358 40 344 5466
Distribution:
NASDAQ OMX Helsinki
Major media
EB, ELEKTROBIT CORPORATION,
CONDENSED FINANCIAL STATEMENTS AND NOTES JANUARY- SEPTEMBER 2011
(unaudited)
The Interim Report has been prepared in accordance with IAS 34 Interim Financial
Reporting.
CONSOLIDATED STATEMENT OF COMPREHENSIVE 1-9/2011 1-9/2010 1-12/2010
INCOME (MEUR)
9 months 9 months 12 months
NET SALES 113.1 119.9 161.8
Other operating income 2.0 1.8 2.4
Change in work in progress and finished
goods 0.4 0.3 -0.2
Work performed by the undertaking for its
own purpose
and capitalized 0.1 0.2 0.2
Raw materials -8.6 -9.3 -15.4
Personnel expenses -70.0 -71.6 -97.7
Depreciation -7.0 -6.4 -8.5
Other operating expenses -37.5 -44.5 -59.8
OPERATING PROFIT (LOSS) -7.5 -9.7 -17.3
Financial income and expenses -0.7 -0.9 -1.3
RESULT BEFORE TAXES -8.2 -10.6 -18.6
Income taxes -0.0 0.3 2.9
RESULT FOR THE PERIOD FROM CONTINUING
OPERATIONS -8.2 -10.2 -15.7
Other comprehensive income:
Exchange differences on translating
foreign operations -0.2 0.4 0.8
Other comprehensive income for the period
total -0.2 0.4 0.8
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -8.4 -9.8 -14.9
Result for the period attributable to
Equity holders of the parent -8.4 -10.6 -16.1
Non-controlling interests 0.1 0.3 0.5
Total comprehensive income attributable
to
Equity holders of the parent -8.6 -10.1 -15.4
Non-controlling interests 0.1 0.3 0.5
Earnings per share EUR continuing
operations
Basic earnings per share -0.06 -0.08 -0.12
Diluted earnings per share -0.06 -0.08 -0.12
Average number of shares, 1000 pcs 129 413 129 413 129 413
Average number of shares, diluted, 1000
pcs 130 088 130 376 130 277
CONSOLIDATED STATEMENT OF FINANCIAL Sept. 30, 2011 Sept. 30, Dec. 31, 2010
POSITION (MEUR)
2010
ASSETS
Non-current assets
Property, plant and equipment 8.4 10.6 10.5
Goodwill 19.2 18.5 18.5
Intangible assets 14.3 10.0 11.6
Other financial assets 0.1 0.1 0.2
Receivables 0.4 0.3
Deferred tax assets 0.1 0.1 0.1
Non-current assets total 42.1 39.7 41.2
Current assets
Inventories 2.1 2.9 1.9
Trade and other receivables 54.7 53.1 60.6
Financial assets at fair value through
profit or loss 15.8 7.7
Cash and short term deposits 7.2 15.0 12.9
Current assets total 64.0 86.8 83.0
TOTAL ASSETS 106.1 126.5 124.2
EQUITY AND LIABILITIES
Equity attributable to equity holders of
the parent
Share capital 12.9 12.9 12.9
Invested non-restricted equity fund 38.7 38.7 38.7
Translation difference 0.4 0.3 0.6
Retained earnings 10.2 23.6 18.3
Non-controlling interests 1.4 1.2 1.3
Total equity 63.6 76.7 71.8
Non-current liabilities
Deferred tax liabilities 1.1 1.3 1.4
Pension obligations 1.3 1.2 1.2
Provisions 0.6 0.6 1.0
Interest-bearing liabilities 4.3 8.9 8.0
Non-current liabilities total 7.3 11.9 11.6
Current liabilities
Trade and other payables 29.1 32.0 33.3
Financial liabilities at fair value
through profit or loss 0.5
Provisions 0.7 0.8 2.4
Interest-bearing loans and borrowings 4.9 5.1 5.1
Current liabilities total 35.2 38.0 40.7
Total liabilities 42.5 49.9 52.4
106.1 126.5 124.2
TOTAL EQUITY AND LIABILITIES
CONSOLIDATED STATEMENT OF CASH FLOWS (MEUR) 1-9/2011 1-9/2010 1-12/2010
9 months 9 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -8.2 -10.2 -15.7
Adjustment of accrual basis items 4.8 17.0 17.5
Change in net working capital -1.4 3.7 3.5
Interest paid on operating activities -0.3 -2.9 -2.3
Interest received from operating activities 0.2 0.6 0.6
Other financial income and expenses, net received 0.0 0.0 0.0
Income taxes paid 3.1 -1.9 -2.2
NET CASH FROM OPERATING ACTIVITIES -1.8 6.3 1.5
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit, net of cash acquired -0.8 -0.3 -0.3
Purchase of property, plant and equipment -1.2 -1.2 -1.7
Purchase of intangible assets -5.5 -3.7 -6.2
Purchase of other investments -0.0 -0.0 -0.0
Sale of property, plant and equipment 0.1 0.1 0.1
Sale of intangible assets 0.0 0.0
Proceeds from sale of investments 0.0 0.2 0.1
NET CASH FROM INVESTING ACTIVITIES -7.4 -5.0 -7.9
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowing 0.2
Repayment of borrowing -2.2 -2.1 -2.8
Payment of finance liabilities -2.1 -2.6 -3.4
Distribution of funds from the share premium fund -25.9 -25.9
NET CASH FROM FINANCING ACTIVITIES -4.1 -30.6 -32.1
NET CHANGE IN CASH AND CASH EQUIVALENTS -13.3 -29.2 -38.5
Cash and cash equivalents at beginning of period 20.5 59.1 59.1
Cash and cash equivalents at end of period 7.2 29.8 20.5
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (MEUR)
A = Share capital
B = Share premium
C = Invested non-restricted equity fund
D = Retained earnings
E = Non-controlling interests
F = Total equity
A B C D E F
Equity on January 1, 2010 12.9 64.6 34.9 0.4 112.8
Distribution of funds from the share
premium fund -25.9 -25.9
Transfer from the share premium fund -38.7 38.7 0.0
Share-related compensation 0.5 0.5
Total comprehensive income for the period -10.1 -10.1
Other items -1.3 0.7 -0.6
Equity on September 30, 2010 12.9 0.0 38.7 23.9 1.2 76.7
Equity on January 1, 2011 12.9 38.7 19.6 1.3 72.5
Share-related compensation 0.3 0.3
Total comprehensive income for the period -8.6 -8.6
Other items -0.7 0.1 -0.6
Equity on September 30, 2011 12.9 38.7 10.6 1.4 63.6
NOTES TO THE FINANCIAL STATEMENT BULLETIN
Accounting principles for the Financial Statement Bulletin:
The same accounting policies and methods of computation are followed in the
financial statement bulletin as compared with annual financial statements.
Explanatory comments about the seasonality or cyclicality of reporting period
operations:
The Company operates in business areas which are subject to seasonal
fluctuations.
Prior period error
The current receivables have been corrected retrospectively. The correction
applies to the tax asset of a foreign subsidiary. In the interim report, the
corrections have been made to the reporting periods 3Q 2010 - 2Q 2011. The
corrections decreases the current receivables by EUR 0.7 million and retaining
earnings by EUR 0.7 million. The correction has no relevant effect on the
exchange differences on translating foreign operations, net gearing, equity
ratio or equity per share.
Payment of dividend:
The General Meeting held on March 31, 2011 decided in accordance with the
proposal of the Board of Directors that no dividend shall be distributed.
SEGMENT INFORMATION (MEUR)
OPERATING SEGMENTS 1-9/2011 1-9/2010 1-12/2010
9 months 9 months 12 months
Automotive
Net sales to external customers 70.2 57.0 80.1
Net sales to other segments 0.0 0.0
Net sales total 70.2 57.0 80.1
Operating profit (loss) -1.3 0.8 1.9
Wireless
Net sales to external customers 42.6 62.3 80.9
Net sales to other segments 0.3 0.0 0.0
Net sales total 42.9 62.4 81.0
Operating profit (loss) -6.1 -10.4 -19.3
OTHER ITEMS
Other items
Net sales to external customers 0.3 0.6 0.8
Operating profit (loss) -0.1 0.0 0.1
Eliminations
Net sales to other segments -0.3 -0.0 -0.0
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 113.1 119.9 161.8
Operating profit (loss) -7.5 -9.7 -17.3
Net sales of geographical areas (MEUR) 1-9/2011 1-9/2010 1-12/2010
9 months 9 months 12 months
Net sales
Europe 87.6 70.2 96.8
Americas 15.6 42.6 53.4
Asia 10.0 7.2 11.6
Net sales total 113.1 119.9 161.8
Material events subsequent to the end of the interim period not reflected in the
financial statements for the interim period:
There are no such material events subsequent to the end of the interim report
period that have not been reflected in this report.
Related party transactions: 1-9/2011 1-9/2010 1-12/2010
Employee benefits for key management and stock
option expenses total 1.2 1.8 2.2
CONSOLIDATED STATEMENT OF 7-9/ 4-6/ 1-3/ 10-12/ 7-9/
COMPREHENSIVE INCOME 2011 2011 2011 2010 2010
BY QUARTER (MEUR) 3 months 3 months 3 months 3 months 3 months
NET SALES 37.0 39.7 36.5 41.8 33.7
Other operating income 0.5 0.9 0.7 0.6 0.4
Change in work in progress and
finished goods 0.1 0.1 0.2 -0.5 0.2
Work performed by the
undertaking
for its own purpose and
capitalized 0.0 0.0 0.1 0.0 0.1
Raw materials -2.9 -3.0 -2.8 -6.1 -2.8
Personnel expenses -22.5 -23.3 -24.3 -26.1 -22.5
Depreciation -1.9 -2.7 -2.4 -2.1 -2.2
Other operating expenses -13.4 -12.2 -11.9 -15.3 -18.4
OPERATING PROFIT (LOSS) -3.1 -0.5 -3.9 -7.7 -11.5
Financial income and expenses 0.0 -0.3 -0.4 -0.3 0.9
RESULT BEFORE TAXES -3.1 -0.8 -4.3 -8.0 -10.6
Income taxes 0.0 -0.0 0.0 2.6 1.6
RESULT FOR THE PERIOD FROM
CONTINUING OPERATIONS -3.1 -0.8 -4.3 -5.4 -9.0
Other comprehensive income
for the period total -0.1 -0.0 -0.0 0.3 -1.4
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD -3.2 -0.9 -4.4 -5.1 -10.4
Result for the period
attributable to:
Equity holders of the parent -3.1 -0.8 -4.4 -5.5 -9.0
Non-controlling interests 0.0 0.0 0.1 0.1 0.0
Total comprehensive income
for the period attributable to:
Equity holders of the parent -3.2 -0.9 -4.5 -5.2 -10.5
Non-controlling interests 0.0 0.0 0.1 0.1 0.0
CONSOLIDATED STATEMENT OF Sept. 30, June 30, March 31, Dec. 31, Sept. 30,
FINANCIAL POSITION (MEUR) 2011 2011 2011 2010 2010
ASSETS
Non-current assets
Property, plant and equipment 8.4 9.2 9.8 10.5 10.6
Goodwill 19.2 18.5 18.5 18.5 18.5
Intangible assets 14.3 13.4 12.2 11.6 10.0
Other financial assets 0.1 0.1 0.1 0.2 0.1
Receivables 0.0 0.0 0.3 0.3 0.4
Deferred tax assets 0.1 0.1 0.1 0.1 0.1
Non-current assets total 42.1 41.3 40.9 41.2 39.7
Current assets
Inventories 2.1 2.2 1.6 1.9 2.9
Trade and other receivables 54.7 47.0 52.2 60.6 53.1
Financial assets at fair
value
through profit or loss 0.0 6.2 7.7 15.8
Cash and short term deposits 7.2 17.8 12.4 12.9 15.0
Current assets total 64.0 67.0 72.4 83.0 86.8
TOTAL ASSETS 106.1 108.3 113.4 124.2 126.5
EQUITY AND LIABILITIES
Equity attributable to equity
holders
of the parent
Share capital 12.9 12.9 12.9 12.9 12.9
Invested non-restricted equity
fund 38.7 38.7 38.7 38.7 38.7
Translation difference 0.4 0.5 0.6 0.6 0.3
Retained earnings 10.2 12.3 13.9 18.3 23.6
Non-controlling interests 1.4 1.4 1.3 1.3 1.2
Total equity 63.6 65.9 67.5 71.8 76.7
Non-current liabilities
Deferred tax liabilities 1.1 1.2 1.3 1.4 1.3
Pension obligations 1.3 1.2 1.2 1.2 1.2
Provisions 0.6 0.8 0.9 1.0 0.6
Interest-bearing liabilities 4.3 5.9 7.2 8.0 8.9
Non-current liabilities total 7.3 9.1 10.6 11.6 11.9
Current liabilities
Trade and other payables 29.1 27.6 29.0 33.3 32.0
Financial liabilities at fair
value
through profit or loss 0.5
Provisions 0.7 0.7 2.0 2.4 0.8
Interest-bearing loans and
Borrowings (non-current) 4.9 5.0 4.3 5.1 5.1
Current liabilities total 35.2 33.3 35.3 40.7 38.0
Total liabilities 42.5 42.4 45.9 52.4 49.9
TOTAL EQUITY AND LIABILITIES 106.1 108.3 113.4 124.2 126.5
7-9/ 4-6/ 1-3/ 10-12/ 7-9/
CONSOLIDATED STATEMENT
OF CASH FLOWS BY QUARTER 2011 2011 2011 2010 2010
3 months 3 months 3 months 3 months 3 months
Net cash from operating
activities -6.6 3.4 1.4 -4.9 0.2
Net cash from investing
activities -2.3 -2.8 -2.3 -2.9 -2.6
Net cash from financing
activities -1.7 -0.8 -1.6 -1.5 -27.8
Net change in cash and cash
-10.6 -0.3 -2.4 -9.3 -30.1
equivalents
FINANCIAL PERFORMANCE RELATED RATIOS 1-9/2011 1-9/2010 1-12/2010
6 months 9 months 12 months
STATEMENT OF COMPREHENSIVE INCOME (MEUR)
Net sales 113.1 119.9 161.8
Operating profit (loss) -7.5 -9.7 -17.3
Operating profit (loss), % of net sales -6.7 -8.0 -10.7
Result before taxes -8.2 -10.6 -18.6
Result before taxes, % of net sales -7.3 -8.8 -11.5
Result for the period -8.2 -10.2 -15.7
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities, (MEUR) 1.9 -15.9 -7.4
Net gearing, -% 3.0 -20.7 -10.3
Equity ratio, % 63.6 66.9 62.4
Gross investments, (MEUR) 8.6 7.0 10.7
Average personnel during the period 1540 1559 1561
Personnel at the period end 1560 1584 1539
AMOUNT OF SHARE ISSUE ADJUSTMENT Sept. 30, Sept. 30, Dec. 31,
(1,000 pcs) 2011 2010 2010
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 130 088 130 376 130 277
1-9/2011 1-9/2010 1-12/2010
STOCK-RELATED FINANCIAL RATIOS (EUR)
9 months 9 months 12 months
Basic earnings per share -0.06 -0.08 -0.12
Diluted earnings per share -0.06 -0.08 -0.12
Equity *) per share 0.48 0.58 0.54
*) Equity attributable to equity holders of the
parent
MARKET VALUES OF SHARES (EUR) 1-9/2011 1-9/2010 1-12/2010
9 months 9 months 12 months
Highest 0.76 1.25 1.25
Lowest 0.44 0.83 0.66
Average 0.61 1.05 0.92
At the end of period 0.47 0.84 0.67
Market value of the stock, (MEUR) 60.8 108.7 86.7
Trading value of shares, (MEUR) 3.5 10.6 16.8
Number of shares traded, (1,000 pcs) 5 736 10 091 18 190
Related to average number of shares % 4.4 7.8 14.1
SECURITIES AND CONTINGENT LIABILITIES Sept. 30, Sept. 30, Dec. 31,
(MEUR) 2011 2010 2010
AGAINST OWN LIABILITIES
Floating charges 11.4 3.1 3.1
Pledges 8.5 2.4 2.3
Mortgages are pledged for liabilities totaled 4.3 6.5 6.3
AGAINST OTHER LIABILITIES
Guarantees 2.6 4.5 2.0
Other liabilities 10.0 10.1 10.1
OTHER DIRECT AND CONTINGENT LIABILITIES
Rental liabilities
Falling due in the next year 6.2 5.6 6.0
Falling due after one year 13.5 17.2 15.0
Other contractual liabilities
Falling due in the next year 2.6 3.3 3.9
Falling due after one year 1.8 0.3 2.1
NOMINAL VALUE OF CURRENCY DERIVATIVES Sept. 30, Sept. 30, Dec. 31,
(MEUR) 2011 2010 2010
Foreign exchange forward contracts
Market value -0.4 0.7 -0.0
Nominal value 7.0 12.0 11.0
Purchased currency options
Market value 0.0 0.8 0.1
Nominal value 4.3 8.0 5.0
Sold currency options
Market value -0.2 -0.5 -0.1
8.6 16.0 10.0
Nominal value
[HUG#1559703]
