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2007-08-07 08:11:40 CEST 2007-08-07 08:11:40 CEST REGULATED INFORMATION SYSOPENDIGIA Oyj - Quarterly reportSYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 JUNE 2007Key figures in summary January-June 2007 - Consolidated net sales: EUR 52.2 million, up 42 per cent year on year - Pro forma growth in reported net sales: 3 per cent - Consolidated operating profit: EUR 5.3 million, up 102 per cent year on year - Pro forma growth in reported operating profit: 46 per cent - Profitability (EBIT): 10.2 per cent - Product business net sales accounted for 17.5 per cent, up 165 per cent - Earnings per share: EUR 0.13 (Q1/2006: EUR 0.09) - For the full-year 2007, the company continues to estimate its net sales to amount to approximately EUR 100-105 million and profitability (EBIT) to 10-12 per cent. April-June 2007 - Consolidated turnover: EUR 25.9 million, up 31 per cent year on year - Pro forma growth in reported net sales: 3 per cent - Consolidated operating profit: EUR 2.5 million, up 143 per cent year on year - Pro forma growth in reported operating profit: 109 per cent - Profitability (EBIT): 9.5 per cent - Product business net sales accounted for 17.3 per cent, up 119 per cent - Earnings per share: EUR 0.06 (Q2/2006: EUR 0.03) BRIEFING FOR MEDIA AND ANALYSTS SYSOPENDIGIA will hold a briefing for analysts and the media at the Scandic Grand Marina hotel, Katajanokanlaituri 7, FI-00160 Helsinki, on 7 August 2007, starting at 11:00 a.m., which will be broadcast live on the internet. A link to the live broadcast will be available on SYSOPENDIGIA Plc's website at www.sysopendigia.com. CEO'S REVIEW SYSOPENDIGIA'S employees have done a very good job throughout the reporting period. Year on year, consolidated net sales for the period rose by 42 per cent and, as a result of high operational efficiency, consolidated operating profit improved by 102 per cent, or 10 per cent of net sales. Gearing was 68 per cent and equity ratio stood at 44 per cent. Cash flow from operating activities was positive by EUR 4.3 million. Diluted earnings per share were EUR 0.13. Growth in earnings per share has been satisfactory, although the Group's financing costs are having an impact on this. The Telecommunications division reported a six per cent increase in net sales and a 69 per cent improvement in operating profit. The Finance and Services division posted a 40 per cent improvement in net sales but its profitability weakened by 36 per cent. The Industry and Trade division showed an increase of 228 per cent in net sales and profitability improved markedly year on year. We achieved our organic growth target for the period: our pro forma growth in consolidated net sales was 3 per cent. Telecommunications recorded pro forma growth of 6 per cent while that of Industry and Trade was 5 per cent. Finance and Services' pro forma growth rate was 3 per cent in the red. Our organic growth and profitability improved markedly during the first half of the year, particularly in the Telecommunications and Industry and Trade divisions. Thanks to the new customer project agreements signed during the second quarter, the Finance and Services business is also expected to increase its net sales and profitability during the second half of the year. Due to the holiday season, second and third quarter net sales will be typically weaker than the other quarters of the year. During the reporting period, the product business accounted for 17.5 per cent of consolidated net sales, a considerable increase year on year providing the company with an excellent opportunity to assume total responsibility as the supplier of systems supporting the customers' core processes. SYSOPENDIGIA's customer relationships have developed very positively, and we have achieved our goal of becoming a strategic partner for an increasing number of customers in a number of major projects. In addition to this comprehensive partnership strategy, our average project volume has increased, indicating our capability of becoming a comprehensive supplier cooperating with strong partners. SYSOPENDIGIA is steadily evolving into a uniform company after the corporate and organisational restructurings completed during the past two financial years. Our operational efficiency has increased according to plan and the implementation of shared operating policies and processes in all of the Group divisions will further improve our operational efficiency during the second half of the year. The percentage share of international operations has gradually grown in tandem with Group growth, its volume already indicating a significant shift towards an increasingly international business. Internationalisation is one of our key goals in line with Group strategy. With respect to the near future, cost and price pressures will continue in the market. In this respect, it is of the utmost importance that we continuously safeguard operational efficiency by implementing uniform operating models. In accordance with our growth strategy for 2007, SYSOPENDIGIA's aim is to be the number-one partner for its strategic customers in the supply of information systems guiding their core processes and to establish significant new business activities in the area of real-time information systems for companies. SYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 JUNE 2007 GROUP KEY FIGURES AND RATIOS -------------------------------------------------------------------------------- | | Q2/200 | Q2/200 | Change | H1/2007 | H1/2006 | Change | 2006 | | | 7 | 6 | ,% | | | ,% | | -------------------------------------------------------------------------------- | Net sales | 25,903 | 19,760 | 31% | 52,182 | 36,686 | 42% | 84,968 | -------------------------------------------------------------------------------- | Operating | 2,468 | 1,015 | 143% | 5,344 | 2,648 | 102% | 8,354 | | profit | | | | | | | | -------------------------------------------------------------------------------- | -% of net | 10% | 5% | | 10% | 7% | | 10% | | sales | | | | | | | | -------------------------------------------------------------------------------- | Net profit | 1,268 | 485 | 161% | 2,670 | 1,647 | 62% | 4,867 | -------------------------------------------------------------------------------- | -% of net | 5% | 2% | | 5% | 4% | | 6% | | sales | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Return on | 8% | 3% | | 8% | 6% | | 8% | | equity | | | | | | | | -------------------------------------------------------------------------------- | Return on | 9% | 5% | | 9% | 6% | | 9% | | investment | | | | | | | | -------------------------------------------------------------------------------- | Interest-be | 56,416 | 62,291 | -9% | 56,416 | 62,291 | -9% | 56,664 | | aring | | | | | | | | | liabilities | | | | | | | | -------------------------------------------------------------------------------- | Cash and | 12,843 | 16,334 | -21% | 12,843 | 16,334 | -21% | 11,506 | | cash | | | | | | | | | equivalents | | | | | | | | -------------------------------------------------------------------------------- | Gearing,% | 68% | 77% | | 68% | 77% | | 72% | -------------------------------------------------------------------------------- | Equity | 44% | 41% | | 44% | 41% | | 44% | | ratio | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Earnings | 0.06 | 0.03 | 100% | 0.13 | 0.09 | 44% | 0.25 | | per share, | | | | | | | | | EUR, basic | | | | | | | | -------------------------------------------------------------------------------- | Earnings | 0.06 | 0.02 | 200% | 0.13 | 0.08 | 63% | 0.25 | | per share, | | | | | | | | | EUR, | | | | | | | | | diluted | | | | | | | | -------------------------------------------------------------------------------- OVERVIEW OF BUSINESS SEGMENTS Telecommunications Telecommunications recorded a marked year-on-year improvement in its net sales and profitability. This was attributable to successful investments in customer relationships and offerings as well as the division's excellent project delivery capacity during the period. Market conditions were good for both the operator and smartphone business. Customers' confidence in the company generated new projects, and its market position remained strong. Markets are also expected to remain active during the third quarter. The activeness of operator customers in developing their operations and offerings has provided Telecommunications with a number of major projects, thus ensuring excellent prospects for the future too. The lively demand for smartphones, combined with the offerings of the Telecommunications division, provide excellent opportunities for a continued positive performance in this business. Finance and Services Finance and Services reported a year-on-year growth of 40 per cent in net sales. However, its profitability was weaker than a year earlier and pro forma growth was negative during the reporting period. The division successfully completed several sales projects initiated during the first quarter. However, the major part of the work related to these projects will not start until the end of the holiday season, due to which the related positive effect is not reflected in the period's results. The growth in the volume of new projects was also noteworthy. With respect to Investment and Asset Management operations, net sales development and operative profitability remained healthy. Co-operation was initiated with Oy Samlink Ab on a service concept relating to systems that support investment operations. As part of this cooperation, SYSOPENDIGIA will replace Samlink's existing investment service systems with solutions representing the Samstock by SYSOPENDIGIA product family. The Finance and Services division signed a major three-year agreement with Arek Oy on the supply of maintenance services for its earnings information system. The agreement period commenced on 1 June 2007. In the public sector segment, SYSOPENDIGIA participated in competitive bidding for a framework agreement in technical consultancy for the Finnish Government and was selected as the supplier in six of the eight possible sub-areas. This will significantly improve our position as the supplier of consultancy services for the state administration. Industry and Trade Industry and Trade reported year-on-year growth of 228 per cent, due not only to the division's major restructuring measures but also to its positive business performance. The division's operating profit also improved compared with the same period a year ago. The division finalised several enterprise resource planning (ERP) system projects during the period, which was reflected in higher licensing income, among other things. New projects were also initiated in this field. Overall, the ERP business has continued to grow and accounts for an increasing proportion of the entire Industry and Trade business. Business for other solutions continued to grow steadily even though major new projects were not initiated during the reporting period. The ERP business continues to achieve the highest organic growth rate and we are confident that this positive trend will continue in the latter part of the year. The development of Web and integration solutions is also expected to boost growth in these areas towards the end of the year. MARKETS AND PROSPECTS The annual growth estimate for the consulting and system integration market varies between 2.3 and 6.4 per cent, depending on the market analyst (Gartner 2007, EITO and IDC 2006). Customers require a reliable strategic partner capable of supplying sophisticated solution packages and managing services throughout the lifecycle of the customer's applications. The consolidation of various sectors, the networking of value chains, the harmonisation of processes and the strengthening of core partnerships to develop customer relationships will guide business decisions. ICT market demand is anticipated to focus on outsourcing, contract engineering, extensive turnkey deliveries and the integration of standard software products. Key value creators in near-future information system deliveries include business focus and industry expertise, usability and the user interface, scalability and the system's lifecycle as well as productivity and quality. Self-service and service-chain digitisation and mobilisation will be emphasised in business development. Existing systems will be developed through portals, eBusiness solutions, business intelligence and mobile solutions as well as RFID technology and payment cards. Strategic development projects increasingly involve wireless and mobile solutions based on the product platform architecture. The higher penetration rate and maturement of smartphone and wireless technologies will open up new, interesting business opportunities while the product development market for smartphones will develop through consolidation, operating models based on a full-responsibility concept, and alliances. SYSOPENDIGIA leads the way as a supplier of wireless and mobile solutions integrated as part of information systems related to its customers' core business. The company aims to attain a significantly better position by 2010 as a supplier of information technology systems and an outsourcing partner in Finland, and to expand its domestic market to cover Northern Europe. SYSOPENDIGIA operates globally in selected business areas and, during the strategy period, has the goal of bolstering its offerings in the field of real‑time enterprise information systems. The Group adheres to its long-term target for average net sales growth of 25 per cent. In 2007, the Group aims to continue its organic growth, and maintain profitability at a healthy level. The Group regards growth as fundamental to strengthening its market position, developing a sufficient range of products and services, and providing services throughout the customer lifecycle. For the full-year 2007, SYSOPENDIGIA continues to estimate its net sales to amount to approximately EUR 100-105 million and profitability (EBIT rate) to 10-12 per cent. NET SALES SYSOPENDIGIA's consolidated net sales for the period rose to EUR 52.2 million, up by 42 per cent over the same period a year ago (H1/2006: EUR 36.7 million). Net sales posted by Telecommunications improved to EUR 23.8 million, up by 6 per cent year on year (H1/2006: EUR 22.5 million), while those by Finance and Services totalled EUR 13.6 million, up by 40 per cent (H1/2006: EUR 9.7 million). Industry and Trade recorded net sales of EUR 14.8 million, up by 228 per cent (H1/2006: EUR 4.5 million). SYSOPENDIGIA's consolidated net sales for the second quarter rose to EUR 25.9 million, up by 31 per cent year on year (Q2/2006: EUR 19.8 million). Net sales of the Telecommunications division for the second quarter rose to EUR 12.0 million, up by 9 per cent year on year (Q2/2006: EUR 11.0 million), while those by Finance and Services totalled EUR 6.7 million, up by 19 per cent (Q2/2006: EUR 5.6 million). Industry and Trade recorded net sales of EUR 7.2 million for the second quarter, up by 130 per cent (Q2/2006: EUR 3.1 million). During the reporting period, the product business accounted for EUR 9.1 million (H1/2006: EUR 3.5 million) of consolidated net sales, or 17.5 per cent (H1/2006: 9.4 per cent). During the second quarter, the product business accounted for EUR 4.5 million (Q2/2006: EUR 2.0 million) of consolidated net sales, or 17.3 per cent (Q2/2006: 10.4 per cent). The pro forma figures include the net sales and operating profit of Sentera Oyj and Samstock Oy as of 1 January 2006. Comparable consolidated pro forma net sales in H1/2006 were EUR 50.6 million, showing year-on-year growth of 3 per cent reported for H1/2007. Pro forma net sales by Telecommunications in H1/2006 were EUR 22.5 million, showing year-on-year growth of 6 per cent reported for H1/2007. Pro forma net sales by Finance and Services in H1/2006 came to EUR 14.0 million, showing a year-on-year improvement of 3 per cent reported for H1/2007. Pro forma net sales by Trade and Industry in H1/2006 amounted to EUR 14.1 million, showing year-on-year growth of 5 per cent for H1/2007. Comparable consolidated pro forma net sales in Q2/2006 were EUR 25.3 million, showing year-on-year growth of 3 per cent reported for Q2/2007. Pro forma net sales by Telecommunications in Q2/2006 were EUR 11.0 million, showing year-on-year growth of 9 per cent reported for Q2/2007. Pro forma net sales by Finance and Services in Q2/2006 came to EUR 7.2 million, showing a year-on-year decline of 7 per cent reported for Q2/2007. Pro forma net sales by Industry and Trade in Q2/2006 amounted to EUR 7.0 million, showing year-on-year growth of 2 per cent for Q2/2007. International operations accounted for 9.1 per cent of consolidated net sales (H1/2006: 6.9 per cent). PROFIT PERFORMANCE AND PROFITABILITY SYSOPENDIGIA's consolidated operating profit (EBIT) for the reporting period amounted to EUR 5.3 million, up 102 per cent on a year earlier (H1/2006: EUR 2.6 million). Telecommunications reported an operating profit of EUR 2.9 million, representing a year-on-year increase of 69 per cent (H1/2006: EUR 1.7 million). The business segment's operating profit was burdened by a total of EUR 0.7 million in amortisation on allocated goodwill resulting from the merger of SysOpen Plc and Digia Inc. (H1/2006: EUR 0.7 million). Finance and Services showed an operating profit of EUR 0.5 million, down by 36 per cent (H1/2006: EUR 0.8 million). Industry and Trade posted an operating profit of EUR 2.0 million, representing a marked increase over the same period a year ago (H1/2006: EUR 0.1 million). SYSOPENDIGIA's consolidated operating profit (EBIT) for the second quarter amounted to EUR 2.5 million, up 143 per cent on a year earlier (Q2/2006: EUR 1.0 million). Telecommunications reported an operating profit of EUR 1.4 million, representing a year-on-year increase of 121 per cent (Q2/2006: EUR 0.7 million). Finance and Services showed an operating profit of EUR 0.4 million, up by 172 per cent (Q2/2006: EUR 0.1 million). Finance and Services showed an operating profit of EUR 0.7 million, representing a year-on-year increase of 191 per cent (Q2/2006: EUR 0.2 million). Reported earnings before tax were EUR 3.8 million (H1/2006: EUR 2.3 million) and net profit totalled EUR 2.7 million (H1/2006: EUR 1.6 million). Like-for-like consolidated pro forma operating profit in H1/2006 was EUR 3.7 million, showing year-on-year growth of 46 per cent reported for H1/2007. Pro forma operating profit by Telecommunications in H1/2006 was EUR 1.7 million, showing year-on-year growth of 69 per cent reported for H1/2007. Pro forma operating profit by Finance and Services in H1/2006 came to EUR 0.6 million, down by 16 per cent reported for H1/2007. Pro forma operating profit by Industry and Trade in H1/2006 amounted to EUR 1.4 million, up by 44 per cent reported for H1/2007. Like-for-like consolidated pro forma operating profit in Q2/2006 was EUR 1.2 million, showing year-on-year growth of 109 per cent reported for Q2/2007. Pro forma operating profit by Telecommunications in Q2/2006 was EUR 0.6 million, showing year-on-year growth of 121 per cent reported for Q2/2007. Pro forma operating profit by Finance and Services in Q2/2006 came to EUR 42 thousand, showing a considerable increase of EUR 0.4 million reported for Q2/2007. Pro forma operating profit by Industry and Trade in Q2/2006 amounted to EUR 0.5 million, up by 36 per cent for Q2/2007. Earnings per share were EUR 0.13 (H1/2006: EUR 0.09). Earnings per share in Q2/2007 were EUR 0.06 (Q2/2006: EUR 0.03). The Group's net financial expenses totalled EUR 1.5 million (H1/2006: EUR 0.4 million). FINANCIAL POSITION AND CAPITAL EXPENDITURE On 30 June 2007, SYSOPENDIGIA's consolidated balance sheet total stood at EUR 146.7 million (31 December 2006: EUR 146.3 million) and equity ratio was 44 per cent (31 December 2006: 44 per cent). Gearing stood at 68 per cent (31 December 2006: 72 per cent). The period-end cash and cash equivalents totalled EUR 12.8 million (31 December 2006: EUR 11.5 million) and interest-bearing liabilities amounted to EUR 56.4 million (31 December 2006: EUR 56.7 million). The Group annually carries out impairment tests for goodwill and intangible assets with an indefinite useful life in accordance with the IAS 36 standard. Goodwill has not been subject to amortisation since 1 January 2004, and residual value is tested annually. The table below shows goodwill and values subject to testing by business segment: -------------------------------------------------------------------------------- | EUR 1,000 | Allocate | Depreciat | Unallocate | Other | Total value | | | d | ion | d goodwill | items | subject to | | | goodwill | during | | | testing | | | | the | | | | | | | reporting | | | | | | | period | | | | -------------------------------------------------------------------------------- | Telecommunicati | 8,724 | 569 | 46,829 | 3,913 | 59,466 | | ons | | | | | | -------------------------------------------------------------------------------- | Finance and | 1,190 | 80 | 12,709 | 3,003 | 16,902 | | Services | | | | | | -------------------------------------------------------------------------------- | Industry and | 4,221 | 268 | 26,461 | 3,121 | 33,803 | | Trade | | | | | | -------------------------------------------------------------------------------- | Group total | 14,135 | 917 | 85,999 | 10,037 | 110,172 | -------------------------------------------------------------------------------- Telecommunication's goodwill is mainly associated with the combination of Digia Inc. and SysOpen Plc and the acquisition of Yomi Software Ltd which took place in 2005. Finance and Services goodwill is mainly associated with the acquisitions of Sentera Plc and Samstock Ltd in 2006. Industry and Trade goodwill is mainly associated with the acquisitions of Sentera Plc and Yomi Software Ltd. The Group has defined its business segments as cash-generating units (CGU). Testing goodwill for any impairment loss is based on comparing the present value of the CGU's recoverable cash flows with the carrying amount. The present values of cash flows are based on the continuous use of an asset, as well as the financial plans and estimates of the CGU's future development approved by the relevant CGU management. Present values are determined on the basis of actual operating profit and five-year forecasts by the CGU, with growth varying between three and eight per cent and the operating margin between 10 and 13 per cent. Cash flows following the forecast period are estimated by extrapolating the cash flows using a steady net sales growth forecast of three per cent, with operating profit estimated at 10 per cent of net sales. Discount rates have been determined in view of the industry's general risk level, corresponding to an annual interest rate of 11 per cent in 2006. Net sales growth is reckoned to constitute the most critical factor in calculating the present values of cash flows. The amount of goodwill for Telecommunications requires average annual long-term growth of around two per cent in its net sales and an operating margin of 10 per cent before amortisation on allocated goodwill. The amount of goodwill for Finance and Services requires average annual growth of two per cent in its net sales and an operating margin of five per cent before amortisation on allocated goodwill. The amount of goodwill for Industry and Trade requires average annual long-term growth of two per cent in its net sales and an operating margin of nine per cent before amortisation on allocated goodwill. Based on a reasonable estimate, any change in key variables used in calculations during the reporting period would not lead to a situation in which the segment's carrying amount would exceed its recoverable amount. Consequently, in the management's view, there is no need to recognise impairment losses. Consolidated net cash flow from operating activities totalled EUR 4.3 million (H1/2006: EUR 1.2 million). Net investments in fixed assets came to EUR 1.0 million (H1/2006: EUR 0.7 million). Acquisitions of tangible fixed assets totalled EUR 0.6 million (H1/2006: EUR 0.6 million). Return on investment (ROI) stood at 9 per cent (H1/2006: 6 per cent) and return on equity (ROE) at 8 per cent (H1/2006: 6 per cent). RISK ASSESSMENT Customer, personnel, project, data security, integration and goodwill risks number among the key risks subject to monitoring in SYSOPENDIGIA's risk management. The company manages customer risks by actively developing its customer portfolio structure and avoiding any potential risk positions. The customer portfolio's structure and strategic customer relationships are expected to make progress in 2007 when the Group adopts shared customer relationship management processes and operating models. The Group assesses and manages personnel risks by carrying out quarterly performance reviews with key personnel. With a view to enhancing employee motivation and commitment, SYSOPENDIGIA has taken measures aimed at more systematised and effective internal communication by staging monthly personnel events and making the management more visible within the organisation. On the basis of the results of a job satisfaction survey, the Group will develop its internal policies and practices further, with the aim of improving working conditions and job satisfaction. In addition, the Group will implement a quarterly pulse method for job satisfaction measurement in all of its businesses, in order to identify areas in need of immediate improvement. The Group carries out project audits with a view to enhancing project risk management and securing the success of project deliveries to customers. In addition, the Group's certified quality management systems have undergone a re‑evaluation and approval, and the Group has streamlined its project delivery reporting procedures and plans further investments in order to ensure high project delivery capacity and error-free projects. In order to manage data-security risks, the Group carries out data-security audits and is continuously developing operating models as well as practices and processes that promote data security. The Management Group is tasked with managing risks associated with the integration of businesses, shared operating models and best practices, as well as their integrated development. The integration of the corporate culture is an ongoing process and its successful implementation requires sustained and determined efforts at all organisational levels. With respect to IFRS‑compliant accounting policies, the Group actively monitors goodwill and the related impairment tests as part of prudent and proactive risk management practices within financial management. PERSONNEL, MANAGEMENT AND ADMINISTRATION On 30 June 2007, the number of Group employees totalled 1,122, up by 35, or 3.2 per cent, from the staff number on 31 December 2006 (2006: 1,087). During the reporting period, the number of employees averaged 1,099, showing an increase of 118, or 12.0 per cent (2006: 981) over the same period a year ago. Reported cumulative employee turnover came to 5.7 per cent (H1/2006: 3.2 per cent). Employees by function on 30 June 2007: -------------------------------------------------------------------------------- | Telecommunications | 48% | -------------------------------------------------------------------------------- | Finance and Services | 25% | -------------------------------------------------------------------------------- | Industry and Trade | 22% | -------------------------------------------------------------------------------- | Administration and management | 5% | -------------------------------------------------------------------------------- On 30 June 2007, one per cent of SYSOPENDIGIA's personnel worked abroad. The Annual General Meeting (AGM) of 28 February 2007 elected the following Board members: Pekka Sivonen (Chairman), Pertti Kyttälä (Vice Chairman), Kari Karvinen, Matti Mujunen, Mikko Terho, Eero Makkonen and Martti Mehtälä. Jari Mielonen acts as the Group's CEO and Seppo Laaksonen is his deputy. On 21 March 2007, Mikko Terho resigned from SYSOPENDIGIA Plc's Board of Directors for personal reasons. The AGM re-elected KPMG Oy Ab, a firm of authorised public accountants, as the Group's auditor, with Ari Ahti, Authorised Public Accountant, as the chief auditor. CORPORATE AND BUSINESS ACQUISITIONS The reporting period saw neither corporate nor business acquisitions. The arbitral tribunal appointed by the Redemption Committee of the Central Chamber of Commerce confirmed in its arbitration award rendered on 30 April 2007 that the fair price of the shares in SYSOPENDIGIA Plc's subsidiary SysOpen Digia Industry and Trade Ltd (former Sentera Plc) referred to in Chapter 14, Section 19 of the Finnish Companies Act (29.9.1978/734), i.e. the redemption price, is EUR 3.20 per share. This was also SYSOPENDIGIA's voluntary redemption offer. The arbitral tribunal confirmed in the arbitration award that the interest to be paid on the redemption price is an annual interest of 6.0 per cent from 26 September 2006 until the redemption price has been finally determined. On 23 July 2007, the redemption price was paid to those entitled to it. GROUP STRUCTURE AND ORGANISATION On 31 March 2007, SYSOPENDIGIA Group consisted of SYSOPENDIGIA Plc, the parent company, and the following active subsidiaries: SysOpen Digia Integration Ltd (parent company holding: 100 per cent), SysOpen Digia Smartphone Ltd (100 per cent), SysOpen Digia Industry and Trade Ltd (100 per cent), SYSOPENDIGIA Financial Software Ltd (100 per cent) and SysOpen Digia Object Team Ltd (100 per cent). In addition, SysOpen Digia Integration Ltd has a wholly owned active subsidiary, SysOpen Digia Service Ltd. SYSOPENDIGIA has begun to simplify its Group structure. Its active subsidiaries SysOpen Digia Integration Ltd, SysOpen Digia Smartphone Ltd, SYSOPENDIGIA Financial Software Ltd and SysOpen Digia Object Team Ltd will merge with SysOpen Digia Industry and Trade Ltd. With the merger process underway, the companies should merge on 31 October 2007. In addition, based on voluntary liquidation, SYSOPENDIGIA has dissolved the following inactive subsidiaries: SysOpen Digia Design Ltd, SysOpen Digia Tools Ltd, Digivision Ltd and SysOpen Digia Project Ltd. SYSOPENDIGIA has a common Group administration and the Group's business is divided into the following three business divisions: Telecommunications, Finance and Services, and Trade and Industry. EVENTS AFTER THE BALANCE SHEET DATE No significant events. ANNUAL GENERAL MEETING Annual General Meeting on 28 February 2007 Convened on 28 February 2007, SYSOPENDIGIA Plc's Annual General Meeting (AGM) adopted the financial statements for 2006, discharged Board members and the CEO from liability and, as proposed by the Board of Directors, approved the profit distribution for 2006, determined Board emoluments and elected the company's Board of Directors for a new term. In addition, the AGM decided to alter the Articles of Association throughout, which also resulted in a new company name, SYSOPENDIGIA Plc. The AGM also decided on the following Board authorisations: 1. The AGM authorised the Board of Directors to decide on a rights issue or a capitalisation issue on the following terms and conditions: - The authorisation is valid for 18 months from the issue date of the authorisation, or until 28 August 2008; - On the basis of the share issue authorisation and/or the authorisation for an issue of special rights, as proposed below, the Company may, in one or several tranches, issue shares or dispose of treasury shares held by the Company, their combined number not exceeding 4,000,000, which accounts for roughly twenty percent of the Company's issued and outstanding shares; and - The Board of Directors is otherwise authorised to decide on all terms and conditions of the share issue, including the right to decide on a private placement and to exercise the authorisation for the purpose of motivating and incentivising Group key employees. 2. The AGM authorised the Board to decide on issuing special rights, entitling their holders to receive against payment new Company shares or any treasury shares held by the Company, on the following terms and conditions: - The authorisation is valid for 18 months from the issue date of the authorisation, or until 28 August 2008; - On the basis of this authorisation, the Company may, in one or several tranches, issue special rights not exceeding the number of shares as stated above with respect to the share issue authorisation; and - The Board of Directors is otherwise authorised to decide on other terms and conditions of the special rights, including the right to decide on issuing said special rights on a private placement basis and to exercise the authorisation for the purpose of motivating and incentivising Group key employees. 3. The AGM authorised the Board to decide on buying back own shares on the following terms and conditions: - The authorisation is valid for 18 months from the issue date of the authorisation, or until 28 August 2008; - On the basis of the authorisation, the Company may, in one or several tranches, buy back a maximum of 2,000,000 own shares; - The shares shall be bought back for the value determined by the Board of Directors, based on the fair value quoted in public trading on the buyback date; - Only unrestricted equity may be used to buy back own shares; and - The Board of Directors is otherwise authorised to decide on other terms and conditions of the buyback of own shares, including the right to decide on buying back own shares in a proportion other than that of the shares held by Company shareholders. BOARD COMMITTEES SYSOPENDIGIA's Board of Directors comprises two committees: the Compensation Committee and the Audit Committee. Tasked with preparing remuneration schemes and monitoring their effectiveness in meeting Group targets, safeguarding objective decision-making and securing transparent and systematic remuneration schemes, the Compensation Committee comprises Pekka Sivonen (Chairman), Kari Karvinen and Martti Mehtälä. It held three meetings during the reporting period. The Audit Committee assists the Board of Directors in ensuring that the company's financial reporting, accounting methods, financial statements and other financial information provided by the company are balanced, transparent and unambiguous. Comprising the non-executive Board members Pertti Kyttälä (Chairman), Matti Mujunen and Eero Makkonen, the Audit Committee held two meetings during the reporting period. SHARE CAPITAL AND SHARES On 30 June 2007, the number of company shares totalled 20,319,351 and the number of shareholders 3,365. The ten largest shareholders: -------------------------------------------------------------------------------- | Shareholder | Shareholding and votes | -------------------------------------------------------------------------------- | Pekka Sivonen | 13.9% | -------------------------------------------------------------------------------- | Evli Bank Plc | 7.8% | -------------------------------------------------------------------------------- | Kari Karvinen | 7.8% | -------------------------------------------------------------------------------- | Matti Savolainen | 6.5% | -------------------------------------------------------------------------------- | OP-Suomi Pienyhtiöt mutual fund | 5.3% | -------------------------------------------------------------------------------- | Nordea Bank Finland Plc | 4.3% | -------------------------------------------------------------------------------- | Varma Mutual Pension Insurance Company | 3.7% | -------------------------------------------------------------------------------- | Veikko Laine Oy | 2.9% | -------------------------------------------------------------------------------- | Skandinaviska Enskilda Banken | 2.5% | -------------------------------------------------------------------------------- | Jorma Kylätie's estate | 2.2% | -------------------------------------------------------------------------------- Shareholding by number of shares held on 30 June 2007 -------------------------------------------------------------------------------- | Number of shares | Percentage of | Shareholding and | | | holdings | votes | -------------------------------------------------------------------------------- | 1 - 100 | 23.5% | 0.3% | -------------------------------------------------------------------------------- | 101 - 1,000 | 53.3% | 4.2% | -------------------------------------------------------------------------------- | 1,001 - 10,000 | 19.9% | 9.5% | -------------------------------------------------------------------------------- | 10,001 - 100,000 | 2.6% | 13.0% | -------------------------------------------------------------------------------- | 100,001 - 1,000,000 | 0.6% | 31.7% | -------------------------------------------------------------------------------- | 1,000,001 - 3,000,000 | 0.1% | 41.3% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total number of shares: 20,319,351 | | | -------------------------------------------------------------------------------- Shareholding by sector on 30 June 2007 -------------------------------------------------------------------------------- | | Percentage of | Percentage of | | | holdings | shares | -------------------------------------------------------------------------------- | Non-banking corporate sector | 6.3% | 10.8% | -------------------------------------------------------------------------------- | Financial institutions and | 0.6% | 27.3% | | insurance companies | | | -------------------------------------------------------------------------------- | Public-sector entities | 0.1% | 3.8% | -------------------------------------------------------------------------------- | Non-profit organisations | 0.4% | 0.6% | -------------------------------------------------------------------------------- | Households | 92.1% | 56.1% | -------------------------------------------------------------------------------- | Foreign holding | 0.5% | 1.4% | -------------------------------------------------------------------------------- REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE SYSOPENDIGIA Plc shares are listed on the Nordic Exchange under Information Technology IT Services. The company's short name is SYS1V. During the reporting period, the company's share registered a low of EUR 3.37, a high of EUR 4.26 and closed at EUR 4.20 on the period's last trading day. The share's trade weighted average price amounted to EUR 3.82. On 30 June 2007, the company's market capitalisation totalled EUR 83,309,339. During the reporting period, the following notification in accordance with Chapter 2, Section 10 of the Securities Market Act was brought to the company's attention: Osuuspankkikeskus Osk ("OPK") informed SYSOPENDIGIA on 11 May 2007 that the ownership share of SYSOPENDIGIA Plc's votes and share capital by investment funds of OPK's subsidiaries has increased to over one twentieth (1/20). Altogether, OPK and the entities OPK has control over 1,101,958 shares of SYSOPENDIGIA, corresponding to 5.43 per cent of SYSOPENDIGIA's shares and votes. STOCK OPTION SCHEMES Stock option scheme 2003 Under the 2003 stock option scheme, the number of warrants originally issued totals 670,000 as follows: 210,000 warrants under 2003A, 160,000 warrants under 2003B, 150,000 warrants under 2003C and 150,000 warrants under 2003D. All of the warrants have been exercised for subscription. The share subscription period for the 2003A warrants was between 2 May 2004 and 31 October 2005 (expired), and for the 2003B warrants between 1 November 2004 and 31 October 2006 (expired), and the share subscription period for the 2003C warrants is between 1 November 2005 and 31 October 2007 and for the 2003D warrants between 1 November 2006 and 31 October 2008. The current dividend‑adjusted share subscription price for 2003C is EUR 3.62 per share, and for 2003D EUR 4.19 per share. Dividends paid will be deducted from the subscription prices in accordance with the terms and conditions of the scheme. On 30 June 2007, SysOpen Partners Oy, a SYSOPENDIGIA Plc wholly owned subsidiary, held a total of 47,582 stock options under the 2003 stock option scheme. Warrants within the 2003C scheme have been listed on the Helsinki Stock Exchange since 1 November 2005 and those within 2003D since 15 November 2006. By 30 June 2007, 316,429 new shares had been subscribed for under the 2003 stock option scheme. The shares were subscribed for using 172,515 of now already expired 2003A warrants, 143,114 of the now expired 2003B warrants, and 800 of the 2003C warrants. Stock option scheme 2005K Under the 2005K stock option scheme, the number of warrants originally issued totals 663,049, 105,408 of which were marked with 2005K1 and 557,641 with 2005K2. All of the warrants have been exercised for subscription. The warrants entitle their holders to subscribe for a maximum total of 663,049 SYSOPENDIGIA Plc shares. The share subscription price for 2005K1 warrants was EUR 1.21 and, for 2005K2 warrants, it is EUR 2.28 (dividend‑adjusted). On each dividend record date, the share subscription price based on the stock options will be deducted by the amount of dividends decided after 1 June 2005 and before the share subscription. The share subscription period for the 2005K1 warrants began on 12 August 2005, when the 2005K warrants were registered in the Trade Register, and will end on 31 December 2007. The share subscription period for the 2005K2 warrants began on 1 January 2006 and will end on 31 December 2007. The 2005K1 warrants entitle their holders to use them only for share subscriptions. On 30 June 2007, SysOpen Digia Partners Ltd, a SYSOPENDIGIA Plc wholly owned subsidiary, held a total of 5,657 warrants under the 2005K2 stock option scheme. All of the 2005K1 warrants (105,408 warrants) have been exercised to subscribe for shares. By 30 June 2007, 16,312 new shares had been subscribed for under the 2005K2 stock option scheme. Warrants within the 2005K2 stock option scheme have been quoted on the Helsinki Stock Exchange since 2 January 2006. Stock option scheme 2005 The number of warrants under the 2005 stock option scheme totals 900,000, 300,000 of which are marked with 2005A, 300,000 with 2005B and 300,000 with 2005C. The warrants entitle their holders to subscribe for a maximum total of 900,000 SYSOPENDIGIA Plc shares. The share subscription price for the 2005A warrants is EUR 4.20 (dividend‑adjusted) and for the 2005B warrants it is EUR 3.90. The share subscription price for the 2005C warrants is determined by the trade‑weighted average price of a SYSOPENDIGIA Plc share quoted on the Helsinki Stock Exchange during the 20 trading days following the release of the Q1/2007 Interim Report. On each dividend record date, the share subscription price based on the stock options will be deducted by the amount of dividends for which the decision to distribute has been made between the beginning of the share price determination period and the date of share subscription. The share subscription period for the 2005A warrants will be between 1 November 2007 and 30 November 2009, for the 2005B warrants between 1 November 2008 and 30 November 2010 and for the 2005C warrants between 1 November 2009 and 30 November 2011. As a result of the share subscriptions based on the 2005A, 2005B and 2005C warrants, SYSOPENDIGIA Plc's share capital may increase by a maximum of EUR 90,000, and the number of shares by a maximum of EUR 900,000 new shares. On 30 June 2007, SysOpen Digia Partners Ltd, a SYSOPENDIGIA Plc wholly owned subsidiary, held a total of 534,000 warrants under the 2005 stock option scheme. On 30 June 2007, the number of all remaining stock options issued by SYSOPENDIGIA totalled 1,740,529. Shares to be subscribed using warrants account for a maximum of 7.89 per cent of company shares and voting rights, as a result of any possible increase of the company's share capital. On 30 June 2007, the number of warrants held by SysOpen Digia Partners totalled 587,239 of all valid warrants. On 30 June 2007, the maximum dilution effect of the issued warrants was 5.37 per cent. Helsinki, 7 August 2007 SYSOPENDIGIA PLC Board of Directors FOR FURTHER INFORMATION, PLEASE CONTACT: Jari Mielonen, President and CEO, tel. +358 40 703 8383, e-mail: jari.mielonen@sysopendigia.com The Interim Report will be available, and the related live briefing for the media and analysts will be held in Finnish, in the ‘Investors' section at www.sysopendigia.fi starting at 11.00 a.m. DISTRIBUTION Helsinki Stock Exchange Major media APPENDICES Consolidated income statement Consolidated balance sheet Consolidated cash flow statement Consolidated statement of changes in shareholders' equity Notes to the accounts This Interim Report has been prepared in accordance with the IAS 34 Interim Financial Reporting standard insofar as approved for implementation within the EU. This Interim Report is based on unaudited figures. CONSOLIDATED INCOME STATEMENT, EUR 1,000 -------------------------------------------------------------------------------- | | Q2/200 | Q2/200 | Chan | H1/2007 | H1/2006 | Chang | 2006 | | | 7 | 6 | ge,% | | | e,% | | -------------------------------------------------------------------------------- | Net sales | 25,903 | 19,760 | 31% | 52,182. | 36,686. | 42% | 84,968. | | | .1 | .4 | | 0 | 3 | | 1 | -------------------------------------------------------------------------------- | Other | 80.3 | 24.3 | 230% | 203.7 | 59.7 | 241% | 280.2 | | operating | | | | | | | | | income | | | | | | | | -------------------------------------------------------------------------------- | Materials and | -1,755 | -1,032 | 70% | -3,678. | -1,588. | 131% | -4,699. | | services | .9 | .9 | | 2 | 9 | | 6 | -------------------------------------------------------------------------------- | Depreciation, | -1,159 | -1,059 | 9% | -2,429. | -1,972. | 23% | -4,557. | | amortisation | .6 | .6 | | 7 | 2 | | 3 | | and | | | | | | | | | impairment | | | | | | | | | losses | | | | | | | | -------------------------------------------------------------------------------- | Other | -20,59 | -16,67 | 24% | -40,933 | -30,536 | 34% | -67,637 | | operating | 9.8 | 7.7 | | .6 | .5 | | .4 | | expenses | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Operating | 2,468. | 1,014. | 143% | 5,344.3 | 2,648.4 | 102% | 8,354.1 | | profit | 0 | 5 | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Financial | -733.8 | -355.9 | 106% | -1,524. | -393.8 | 287% | -1,659. | | expenses | | | | 2 | | | 3 | | (net) | | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Earnings | 1,734. | 658.6 | 163% | 3,820.1 | 2,254.6 | 69% | 6,694.8 | | before tax | 3 | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Income tax | -465.8 | -173.2 | 169% | -1,149. | -607.6 | 89% | -1,827. | | expense | | | | 9 | | | 6 | -------------------------------------------------------------------------------- | Net profit | 1,268. | 485.4 | 161% | 2,670.2 | 1,647.1 | 62% | 4,867.2 | | | 6 | | | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Attributable | | | | | | | | | to: | | | | | | | | -------------------------------------------------------------------------------- | Equity | 1,268. | 479.6 | 165% | 2,670.2 | 1,637.6 | 63% | 4,854.1 | | holders of | 6 | | | | | | | | the parent | | | | | | | | | company | | | | | | | | -------------------------------------------------------------------------------- | Minority | 0.0 | 5.8 | -100 | 0.0 | 9.5 | -100% | 13.1 | | interest | | | % | | | | | -------------------------------------------------------------------------------- | | | | | | | | | -------------------------------------------------------------------------------- | Basic | 0.06 | 0.03 | 100% | 0.13 | 0.09 | 44% | 0.25 | | earnings per | | | | | | | | | share (EUR) | | | | | | | | -------------------------------------------------------------------------------- | Earnings per | 0.06 | 0.02 | 200% | 0.13 | 0.08 | 63% | 0.25 | | share, | | | | | | | | | diluted (EUR) | | | | | | | | -------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET, EUR 1,000 -------------------------------------------------------------------------------- | Assets | 30 June 2007 | 31 Dec. 2006 | Change,% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Non-current assets | | | | -------------------------------------------------------------------------------- | Intangible assets | 102,005.2 | 103,210.0 | -1% | -------------------------------------------------------------------------------- | Property, plant and | 3,034.4 | 3,251.6 | -7% | | equipment | | | | -------------------------------------------------------------------------------- | Investments | 608.4 | 608.4 | 0% | -------------------------------------------------------------------------------- | Deferred tax assets | 4,053.0 | 2,909.9 | 39% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Total non-current assets | 109,701.0 | 109,979.9 | 0% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Current assets | | | | -------------------------------------------------------------------------------- | Current | 24,128.4 | 24,836.9 | -3% | -------------------------------------------------------------------------------- | Available-for-sale | 2,782.9 | 2,778.3 | 0% | | financial assets | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 10,060.0 | 8,727.3 | 15% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Total current assets | 36,971.3 | 36,342.5 | 2% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Total assets | 146,672.3 | 146,322.4 | 0% | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Shareholders' equity and | 30 June 2007 | 31 Dec. 2006 | Change,% | | liabilities | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Share capital | 2,031.9 | 2,031.2 | 0% | -------------------------------------------------------------------------------- | Share premium | 6,746.3 | 6,729.5 | 0% | -------------------------------------------------------------------------------- | Other reserves | 5,203.8 | 5,203.8 | 0% | -------------------------------------------------------------------------------- | Unrestricted invested | 39,735.5 | 39,735.5 | 0% | | shareholders' equity | | | | -------------------------------------------------------------------------------- | Fair value reserve | - | - | 0% | -------------------------------------------------------------------------------- | Translation difference | - | -6.6 | -100% | -------------------------------------------------------------------------------- | Retained earnings | 7,808.7 | 4,458.0 | 75% | -------------------------------------------------------------------------------- | Net profit | 2,670.2 | 4,854.1 | -45% | -------------------------------------------------------------------------------- | Capital and reserves | 64,196.4 | 63,005.6 | 2% | | attributable to equity | | | | | holders of the parent | | | | | company | | | | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 113.8 | -100% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Total shareholders' equity | 64,196.4 | 63,119.4 | 2% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Liabilities | | | | -------------------------------------------------------------------------------- | Non-current | 56,002.4 | 56,081.5 | 0% | | interest‑bearing | | | | | liabilities | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 3,596.8 | 3,822.3 | -6% | -------------------------------------------------------------------------------- | Total non-current | 59,599.2 | 59,903.8 | -1% | | liabilities | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Current interest-bearing | 414.0 | 582.6 | -29% | | liabilities | | | | -------------------------------------------------------------------------------- | Other current liabilities | 22,462.7 | 22,716.7 | -1% | -------------------------------------------------------------------------------- | Total current liabilities | 22,876.8 | 23,299.2 | -2% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Total liabilities | 82,475.9 | 83,203.0 | -1% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Shareholders' equity and | 146,672.3 | 146,322.4 | 0% | | liabilities | | | | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000 -------------------------------------------------------------------------------- | Cash flow from operating | 1 Jan. 2007 | 1 Jan. 2006 | 1 Jan. 2006 - | | activities: | - 30 June | - 30 June | 31 Dec. 2006 | | | 2007 | 2006 | | -------------------------------------------------------------------------------- | Net profit | 2,670 | 1,638 | 4,854 | -------------------------------------------------------------------------------- | Adjustments to net profit | 5,206 | 3,121 | 8,323 | -------------------------------------------------------------------------------- | Change in net working capital | -1,270 | -2,489 | -4,093 | -------------------------------------------------------------------------------- | Interest paid | -1,427 | -420 | -1,917 | -------------------------------------------------------------------------------- | Interest received | 90 | 75 | 271 | -------------------------------------------------------------------------------- | Income tax paid | -956 | -731 | -1,682 | -------------------------------------------------------------------------------- | Net cash flow from operating | 4,312 | 1,194 | 5,756 | | activities | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Cash flows from investing | | | | | activities: | | | | -------------------------------------------------------------------------------- | Purchases of intangible assets | -1,008 | -709 | -1,876 | | and property, plant and | | | | | equipment (PPE) | | | | -------------------------------------------------------------------------------- | Proceeds from sale of | 0 | 376 | 376 | | intangible assets and PPE | | | | -------------------------------------------------------------------------------- | Acquisition of subsidiary, net | -209 | -31,701 | -34,229 | | of cash acquired | | | | -------------------------------------------------------------------------------- | Proceeds of sale of other | 0 | | -1 | | investments | | | | -------------------------------------------------------------------------------- | Dividends received | 0 | | 12 | -------------------------------------------------------------------------------- | Net cash used in investing | -1,217 | -32,033 | -35,718 | | activities | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Cash flow from financing | | | | | activities: | | | | -------------------------------------------------------------------------------- | Proceeds from share issue | 17 | 26 | 320 | -------------------------------------------------------------------------------- | Repayment of current loans | 0 | | -41,208 | -------------------------------------------------------------------------------- | Repayments of non-current loans | -150 | -2,083 | -21,875 | -------------------------------------------------------------------------------- | Proceeds from current loans | 0 | 37,768 | 38,000 | -------------------------------------------------------------------------------- | Proceeds from non-current loans | 0 | | 55,000 | -------------------------------------------------------------------------------- | Dividends paid and other | -1,625 | -698 | -930 | | distribution of profit | | | | -------------------------------------------------------------------------------- | Net cash used in financing | -1,758 | 35,013 | 29,307 | | activities | | | | -------------------------------------------------------------------------------- | | 0 | | | -------------------------------------------------------------------------------- | Net change in cash and cash | 1,337 | 4,174 | -655 | | equivalents | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 11,505 | 12,326 | 12,326 | | period-start | | | | -------------------------------------------------------------------------------- | Change in fair value of cash | 0 | -166 | -166 | | and cash equivalents | | | | -------------------------------------------------------------------------------- | Net change in cash and cash | 1,337 | 4,174 | -655 | | equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 12,842 | 16,333 | 11,505 | | period-end | | | | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000 -------------------------------------------------------------------------------- | | a | b | c | d | e | f | g | h | -------------------------------------------------------------------------------- | Balance 1 | 1,84 | 39,7 | 5,204 | 23 | 166 | 5,128 | 111 | 52,189 | | Jan. 2006 | 0 | 18 | | | | | | | -------------------------------------------------------------------------------- | Available‑ | | | | | | | | 0 | | for‑sale | | | | | | | | | | investment | | | | | | | | | | s: | | | | | | | | | -------------------------------------------------------------------------------- | Fair value | | | | | -166 | | | -166 | | gains/loss | | | | | | | | | | es | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | 137 | 0 | 137 | -------------------------------------------------------------------------------- | Items | | 0 | 0 | 0 | -166 | 137 | 0 | -29 | | recognised | | | | | | | | | | directly | | | | | | | | | | in equity | | | | | | | | | -------------------------------------------------------------------------------- | Net profit | | | | | | 1,638 | 10 | 1,647 | -------------------------------------------------------------------------------- | Total | 0 | 0 | 0 | 0 | 0 | 1,638 | 10 | 1,647 | | recognised | | | | | | | | | | income and | | | | | | | | | | expenses | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Increase | 181 | 6,44 | | | | | | 6,622 | | of share | | 1 | | | | | | | | capital | | | | | | | | | -------------------------------------------------------------------------------- | Distributi | | | | | | -920 | -10 | -930 | | on of | | | | | | | | | | dividends | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | -23 | | -2 | | -25 | -------------------------------------------------------------------------------- | BALANCE 30 | 2,02 | 46,1 | 5,204 | 0 | 0 | 5,982 | 110 | 59,474 | | JUNE 2006 | 1 | 59 | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | | a | b | c | d | e | f | g | h | -------------------------------------------------------------------------------- | Balance 1 | 2,03 | 6,72 | 44,93 | 0 | 0 | 9,305 | 114 | 63,119 | | Jan. 2007 | 1 | 9 | 9 | | | | | | -------------------------------------------------------------------------------- | Available‑ | | | | | | | | 0 | | for‑sale | | | | | | | | | | investment | | | | | | | | | | s: | | | | | | | | | -------------------------------------------------------------------------------- | Fair value | | | | | | | | 0 | | gains/loss | | | | | | | | | | es | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | 103 | | 103 | -------------------------------------------------------------------------------- | Items | 0 | 0 | 0 | 0 | 0 | 103 | 0 | 103 | | recognised | | | | | | | | | | directly | | | | | | | | | | in equity | | | | | | | | | -------------------------------------------------------------------------------- | Net profit | | | | | | 2,670 | 0 | 2,670 | -------------------------------------------------------------------------------- | Total | 0 | 0 | 0 | 0 | 0 | 2,773 | 0 | 2,773 | | recognised | | | | | | | | | | income and | | | | | | | | | | expenses | | | | | | | | | | for the | | | | | | | | | | period | | | | | | | | | -------------------------------------------------------------------------------- | Increase | 0 | 17 | | | | | | 17 | | of share | | | | | | | | | | capital | | | | | | | | | -------------------------------------------------------------------------------- | Distributi | | | | | | - | | -1,625 | | on of | | | | | | 1,625 | | | | dividends | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | 25 | -114 | -88 | -------------------------------------------------------------------------------- | BALANCE 30 | 2,03 | 6,74 | 44,93 | 0 | 0 | 10,479 | 0 | 64,196 | | JUNE 2007 | 1 | 6 | 9 | | | | | | -------------------------------------------------------------------------------- a = Share capital b = Share premium c = Other reserves and invested unrestricted equity d = Currency translation differences e = Fair value reserve f = Retained earnings g = Minority interest h = Total shareholders' equity NOTES TO THE ACCOUNTS Accounting principles: The accounting principles and calculation methods used in the previous year-end accounts have been applied to this Interim Report. Seasonal nature of business: The Group's business is affected by the number of workdays each month as well as holiday seasons. Dividends paid: A per-share dividend of EUR 0.08, or a total of EUR 1,624,985.44, was paid based on the decision of the AGM of 28 February 2007. The dividend payment date was 9 March 2007. Segment information: -------------------------------------------------------------------------------- | NET SALES, EUR | Q2/20 | Q2/20 | Change | H1/200 | H1/200 | Change | 1-12/2 | | 1,000 | 07 | 06 | ,% | 7 | 6 | ,% | 006 | -------------------------------------------------------------------------------- | Telecommunicati | 12,02 | 11,00 | 9% | 23,823 | 22,492 | 6% | 43,618 | | ons | 5 | 1 | | | | | | -------------------------------------------------------------------------------- | Finance and | 6,710 | 5,643 | 19% | 13,572 | 9,689 | 40% | 23,633 | | Services | | | | | | | | -------------------------------------------------------------------------------- | Industry and | 7,168 | 3,116 | 130% | 14,787 | 4,505 | 228% | 17,717 | | Trade | | | | | | | | -------------------------------------------------------------------------------- | Group total | 25,90 | 19,76 | 31% | 52,182 | 36,686 | 42% | 84,968 | | | 3 | 0 | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | OPERATING | Q2/20 | Q2/20 | Change | H1/200 | H1/200 | Change | 1-12/2 | | PROFIT, EUR | 07 | 06 | ,% | 7 | 6 | ,% | 006 | | 1,000 | | | | | | | | -------------------------------------------------------------------------------- | Telecommunicati | 1,437 | 651 | 121% | 2,876 | 1,702 | 69% | 4,018 | | ons | | | | | | | | -------------------------------------------------------------------------------- | Finance and | 368 | 136 | 172% | 513 | 797 | -36% | 2,322 | | Services | | | | | | | | -------------------------------------------------------------------------------- | Industry and | 663 | 228 | 191% | 1,955 | 149 | 1216% | 2,014 | | Trade | | | | | | | | -------------------------------------------------------------------------------- | Group total | 2,468 | 1,014 | 143% | 5,344 | 2,648 | 102% | 8,354 | -------------------------------------------------------------------------------- Events after the balance sheet date: There have been no significant events after the end of the reporting period. Consolidated income statement by quarter: -------------------------------------------------------------------------------- | EUR 1,000 | Q2/2007 | Q1/2007 | Q4/2006 | Q3/2006 | Q2/2006 | -------------------------------------------------------------------------------- | Net sales | 25,903.1 | 26,278.9 | 26,620.8 | 21,661.0 | 19,760.4 | -------------------------------------------------------------------------------- | Other operating | 80.3 | 123.4 | 80.1 | 140.5 | 24.3 | | income | | | | | | -------------------------------------------------------------------------------- | Materials and | -1,755.9 | -1,922.2 | -1,939.8 | -1,170.9 | -1,032.9 | | services | | | | | | -------------------------------------------------------------------------------- | Depreciation, | -1,159.6 | -1,270.1 | -1,304.1 | -1,280.9 | -1,059.6 | | amortisation and | | | | | | | impairment losses | | | | | | -------------------------------------------------------------------------------- | Other operating | -20,599.8 | -20,333.8 | -20,471.5 | -16,629. | -16,677.7 | | expenses | | | | 4 | | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Operating profit | 2,468.0 | 2,876.2 | 2,985.4 | 2,720.3 | 1,014.5 | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Financial | -733.8 | -790.4 | -646.6 | -618.9 | -355.9 | | expenses (net) | | | | | | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Earnings before | 1,734.3 | 2,085.8 | 2,338.8 | 2,101.3 | 658.6 | | tax | | | | | | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Income tax | -465.8 | -684.1 | -713.5 | -506.6 | -173.2 | | expense | | | | | | -------------------------------------------------------------------------------- | Net profit | 1,268.6 | 1,401.6 | 1,625.3 | 1,594.8 | 485.4 | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Attributable to: | | | | | | -------------------------------------------------------------------------------- | Equity holders of | 1,268.6 | 1,401.6 | 1,629.8 | 1,586.7 | 479.6 | | the parent | | | | | | | company | | | | | | -------------------------------------------------------------------------------- | Minority interest | 0.0 | 0.0 | -4.5 | 8.0 | 5.8 | -------------------------------------------------------------------------------- | | | | | | | -------------------------------------------------------------------------------- | Basic earnings | 0.06 | 0.07 | 0.08 | 0.08 | 0.03 | | per share (EUR) | | | | | | -------------------------------------------------------------------------------- | Earnings per | 0.06 | 0.07 | 0.08 | 0.08 | 0.02 | | share, diluted | | | | | | | (EUR) | | | | | | -------------------------------------------------------------------------------- Group key figures and ratios: -------------------------------------------------------------------------------- | | H1/2007 | H1/2006 | 2006 | -------------------------------------------------------------------------------- | Scope of operations | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Net sales | 52,182.0 | 36,686 | 84,968 | -------------------------------------------------------------------------------- | - year-on-year change | 42% | 35% | 40% | -------------------------------------------------------------------------------- | Average capital invested | 119,007 | 55,832 | 119,783 | -------------------------------------------------------------------------------- | Personnel at period-end | 1,122 | 1,127 | 1,087 | -------------------------------------------------------------------------------- | Average personnel | 1,099 | 864 | 981 | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Profitability | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Operating profit | 5,344 | 2,648 | 8,354 | -------------------------------------------------------------------------------- | -% of net sales | 10% | 7% | 10% | -------------------------------------------------------------------------------- | Earnings before tax | 3,820 | 2,255 | 6,695 | -------------------------------------------------------------------------------- | -% of net sales | 7% | 6% | 8% | -------------------------------------------------------------------------------- | Net profit | 2,670 | 1,638 | 4,854 | -------------------------------------------------------------------------------- | -% of net sales | 5% | 4% | 6% | -------------------------------------------------------------------------------- | Return on equity | 8% | 6% | 8% | -------------------------------------------------------------------------------- | Return on investment | 9% | 6% | 9% | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Financing and financial position | | | | -------------------------------------------------------------------------------- | | | | | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 56,416 | 62,291 | 56,664 | -------------------------------------------------------------------------------- | Financial assets + cash and bank | 12,843 | 16,334 | 11,506 | | receivables | | | | -------------------------------------------------------------------------------- | Gearing | 68% | 77% | 72% | -------------------------------------------------------------------------------- | Equity ratio | 44% | 41% | 44% | -------------------------------------------------------------------------------- | Net cash flow from operating | 4,312 | 1,194 | 5,756 | | activities | | | | -------------------------------------------------------------------------------- | Basic earnings per share (EUR) | 0.13 | 0.09 | 0.25 | -------------------------------------------------------------------------------- | Earnings per share (EUR), diluted | 0.13 | 0.08 | 0.25 | -------------------------------------------------------------------------------- | Equity per share | 3.16 | 2.94 | 3.10 | -------------------------------------------------------------------------------- | Lowest share price | 3.37 | 3.38 | 3.00 | -------------------------------------------------------------------------------- | Highest share price | 4.26 | 4.97 | 4.97 | -------------------------------------------------------------------------------- | Average share price | 3.82 | 4.39 | 3.75 | -------------------------------------------------------------------------------- | Closing share price | 4.20 | 3.55 | 3.42 | -------------------------------------------------------------------------------- | Market capitalisation | 85,341 | 71,716 | 69,669 | -------------------------------------------------------------------------------- The formulae for the key figures and ratios are available in the financial statements section. These formulae remained unchanged during the reporting period. The weighted average number of shares during the reporting period, adjusted for share issues, totalled 20,313,529. The weighted average number of shares during the reporting period, adjusted for dilution, totalled 20,529,929. The number of shares outstanding at the end of the reporting period was 20,319,351. The company has no treasury shares. The Group does not have any liabilities arising from derivative contracts. |
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