2009-08-07 07:00:00 CEST
2009-08-07 07:01:21 CEST
REGULATED INFORMATION
Elektrobit Oyj - Interim report (Q1 and Q3)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY TO JUNE 2009
STOCK EXCHANGE RELEASE
Free for publication on August 7, 2009 at 8.00 am. (CEST+1)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY TO JUNE 2009
1H 2009 OPERATING RESULT WITHOUT NON-RECURRING ITEMS WAS POSITIVE
DESPITE OF SLIGHTLY NEGATIVE 2Q 2009
SUMMARY 2Q 2009
- Net sales amounted to EUR 37.4 million (EUR 41.0 million, 2Q 2008),
representing -8.8 per cent decrease year-on-year.
- Operating loss from business operations amounted to EUR -0.4
million and the non-recurring restructuring costs totaled to EUR -0.7
million, resulting in a total operating loss of EUR -1.1 million (EUR
-13.3 million, 2Q 2008)
- Operating cash flow amounted to EUR -1.0 million (EUR -9.0 million,
2Q 2008). The net cash flow amounted to EUR -2.5 million (EUR -10.9
million, 2Q 2008)
- Cash and other liquid assets totaled to EUR 60.3 million (74.8
million, 2Q 2008)
- Equity ratio remained at a high level of 69.2% (69.9%, 2Q 2008)
- Earnings per share were EUR -0.02 (EUR -0.16, 2Q 2008)
The market environment prevailed challenging reflecting to EB's net
sales, which decreased by -12.7 per cent compared to the first
quarter 2009. Operating loss from business operations without
non-recurring costs in 2Q 2009 amounted to EUR -0.4 million (EUR 0.9
million in 1Q 2009).
In June EB appointed M.Sc (Eng.), M.Sc (Econ.) Jukka Harju as CEO of
the Company. Along with the assignment, Harju resigned from the
membership of the EB Board of Directors and from the chairmanship of
the Board's committee for Automotive Segment. Jorma Halonen, member
of EB Board of Directors, was elected as the new Chairman of the
Automotive committee. EB's former CEO Pertti Korhonen resigned as of
June 3, 2009.
EB's Board of Directors approved EB's strategic guidelines during the
second quarter of 2009. EB continues to focus on two Business
Segments - Automotive and Wireless, with the long-term target of
being a global leading provider of solutions, products and services
in its selected businesses. Along with its long-term objective, EB's
most important short-term objective is to further improve the
profitability.
EB's profit improvement and cost structure adjustment program
launched in fourth quarter 2008 targeting in total for EUR 40 million
annual cost savings in comparison to the cost level of the first half
of 2008 has been executed in full.
EB'S CEO JUKKA HARJU:"Our operating profit during January - June 2009 improved
significantly from July - December 2008 but is still not at a
satisfactory level. Our most important objective continues to be to
improve profitability further and to achieve positive operating
profit development. "
FINANCIAL PERFORMANCE DURING JANUARY - JUNE 2009
(Comparisons are given to January - June 2008, unless otherwise
indicated)
EB's net sales during January - June 2009 decreased -9.2 per cent to
EUR 80.2 million (EUR 88.3 million). Operating profit from business
operations amounted to EUR 0.5 million and the non-recurring costs
totaled to EUR -1.6 million, resulting to the operating loss of EUR
-1.1 million (EUR -21.4 million).
The Automotive Business Segment's net sales during January - June
2009 amounted to EUR 29.9 million (EUR 28.7 million) representing a
growth of 4.1 per cent. The operating loss reduced to EUR -3.1
million (EUR -5.7 million). The net sales and operating profit were
lower than expected mainly due to the automotive market situation
where EB's customers decreased their R&D investments.
The Wireless Business Segment's net sales during January - June 2009
amounted to EUR 50.0 million (EUR 59.4 million including
extraordinary low-margin through-licensing revenues of approximately
EUR 3 million), representing a decline of -15.7 per cent compared to
January - June 2008. The operating profit, including non-recurring
costs of EUR 1.2 million, was EUR 1.4 million (EUR -15.6 million).
The significant improvement of operating result with lower turnover
year-on-year was mainly due to the execution of the earlier announced
profitability improvement program.
The total R&D investments during the reporting period were EUR 6.9
million (EUR 21.6 million), equaling 8.7 per cent of the net sales
(24.5 per cent in 2008). The significant reduction of the R&D
investments was mostly due to the change of the business model (and
consequent exit from developing own products) in Mobile WiMAX in
October 2008 and exit from RFID technology business in February 2009.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 1H 2009 1H 2008
(MEUR)
6 months 6 months
NET SALES 80.2 88.3
OPERATING PROFIT (LOSS) -1.1 -21.4
Financial income and expenses -0.5 0.2
RESULT BEFORE TAX -1.6 -21.2
RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS -2.6 -21.2
Result after tax for the year from discontinued 0.0
operations 0.1
RESULT FOR THE PERIOD -2.6 -21.0
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD -2.8 -21.4
Result for the period attributable to:
Equity holders of the parent -2.6 -21.0
Total comprehensive income for the period
attributable to:
Equity holders of the parent -2.8 -21.4
Earnings per share EUR continuing operations -0.02 -0.16
Earnings per share EUR discontinued operations 0.00 0.00
Earnings per share EUR continuing and discontinued
operations -0.02 -0.16
- Cash flow from Business Operations amounted to EUR -3.7 million
(EUR -16.5 million)
- Equity ratio was 69.2% (69.9%)
- Net gearing was -35.9% (-30.3%)
QUARTERLY FIGURES
The distribution of the Group's overall net sales and profit, MEUR:
+-------------------------------------------------------------------+
| | 2Q 09 | 1Q 09 | 4Q 08 | 3Q 08 | 2Q 08 |
|---------------------------+-------+-------+-------+-------+-------|
| Net sales | 37.4 | 42.8 | 49.5 | 34.5 | 41.0 |
|---------------------------+-------+-------+-------+-------+-------|
| Operating profit (loss) | -1.1 | 0.0 | -8.5 | -12.9 | -13.3 |
|---------------------------+-------+-------+-------+-------+-------|
| Operating profit (loss) | -0.4 | 0.9 | -2.8 | -11.3 | -9.9 |
| without non-recurring | | | | | |
| costs | | | | | |
|---------------------------+-------+-------+-------+-------+-------|
| Result before taxes | -0.7 | -0.9 | -11.8 | -14.4 | -13.6 |
|---------------------------+-------+-------+-------+-------+-------|
| Result for the period | -1.6 | -1.1 | -14.0 | -14.6 | -13.5 |
+-------------------------------------------------------------------+
The distribution of the net sales by Business Segment, MEUR:
+-----------------------------------------------------------+
| | 2Q 09 | 1Q 09 | 4Q 08 | 3Q 08 | 2Q 08 |
|-------------------+-------+-------+-------+-------+-------|
| Automotive | 13.5 | 16.4 | 18.7 | 15.9 | 13.2 |
|-------------------+-------+-------+-------+-------+-------|
| Wireless | 23.7 | 26.3 | 30.7 | 18.5 | 27.7 |
|-------------------+-------+-------+-------+-------+-------|
| Corporation total | 37.4 | 42.8 | 49.5 | 34.5 | 41.0 |
+-----------------------------------------------------------+
The distribution of the net sales by market area, MEUR and %:
+--------------------------------------------------+
| | 2Q 09 | 1Q 09 | 4Q 08 | 3Q 08 | 2Q 08 |
|----------+-------+-------+-------+-------+-------|
| Asia | 2.5 | 4.4 | 3.1 | 0.9 | 2.1 |
| | 6.8% | 10.3% | 6.2% | 2.6% | 5.2% |
|----------+-------+-------+-------+-------+-------|
| Americas | 12.5 | 11.9 | 10.9 | 7.1 | 12.7 |
| | 33.5% | 27.7% | 22.0% | 20.7% | 31.0% |
|----------+-------+-------+-------+-------+-------|
| Europe | 22.3 | 26.6 | 35.5 | 26.4 | 26.2 |
| | 59.7% | 62.1% | 71.8% | 76.7% | 63.8% |
+--------------------------------------------------+
Net sales (external) and operating profit development by Business
Segments and Other businesses, MEUR:
+-----------------------------------------------------------------+
| | 2Q 09 | 1Q 09 | 4Q 08 | 3Q 08 | 2Q 08 |
|-------------------------+-------+-------+-------+-------+-------|
| Automotive | | | | | |
| Net sales | 13.5 | 16.4 | 18.7 | 15.9 | 13.2 |
| Operating profit (loss) | -2.5 | -0.7 | -2.3 | -4.1 | -4.1 |
|-------------------------+-------+-------+-------+-------+-------|
| Wireless | | | | | |
| Net sales | 23.7 | 26.3 | 30.7 | 18.5 | 27.7 |
| Operating profit (loss) | 0.9 | 0.5 | -4.9 | -8.1 | -9.1 |
|-------------------------+-------+-------+-------+-------+-------|
| Other businesses | | | | | |
| Net sales | 0.2 | 0.1 | 0.1 | 0.1 | 0.1 |
| Operating profit (loss) | 0.4 | 0.2 | -1.3 | -0.7 | -0.2 |
|-------------------------+-------+-------+-------+-------+-------|
| Total | | | | | |
| Net sales | 37.4 | 42.8 | 49.5 | 34.5 | 41.0 |
| Operating profit (loss) | -1.1 | 0.0 | -8.5 | -12.9 | -13.3 |
+-----------------------------------------------------------------+
BUSINESS SEGMENTS' MAIN EVENTS DURING 2Q 2009
EB's reporting as from January 1, 2008 has been based on the
Automotive and Wireless Business Segments.
AUTOMOTIVE
The Automotive Business Segment consists of in-car software products,
navigation software for after market devices (PND, personal
navigation devices) and R&D services for the automotive industry with
leading car manufacturers, car electronics suppliers (Tier 1) and
automotive chipset suppliers as customers. By combining its software
products and engineering services EB is creating unique, customized
solutions for its automotive customers.
During the second quarter of 2009, the net sales of the Automotive
Business Segment amounted to EUR 13.5 million (EUR 13.2 million, 2Q
2008), representing a year-on-year growth of 1.9 per cent. Operating
loss of EUR -2.5 million (EUR -4.1 million, 2Q 2008) was not
satisfactory even under the challenging market conditions, where EB's
customers decreased their R&D investments.
Automotive Business Segment continued the execution of its announced
strategy including investments into EB's automotive software products
and progressed globally having now customers in Europe, USA, Japan
and China.
In April EB announced that the ClarionMiND (Mobile Internet
Navigation Device) is based on EB street director navigation
solution. This combines the navigation solution with the latest
browser technology resulting in a next-generation mobile computer
with an easy to use navigation system and an always-on connection.
In May EB announced that EB street director is supporting Microsoft
Live Search for Devices on Microsoft Auto. Microsoft Live Search for
Devices enables Internet-based searches and EB street director
navigation technology converts search results into routable
destinations that are plotted directly onto a navigation map.
In June EB announced its joint venture with AEV (Audi Electronics
Venture GmbH). The joint venture will concentrate on the development
of a software framework and control system for in-vehicle
infotainment systems.
WIRELESS
The Wireless Business Segment comprises the following businesses:
- Wireless Solutions provides customized solutions and R&D services
for wireless industry and other industries utilizing wireless
technologies.
- Wireless Communications Tools provides test tools for measuring,
modeling and emulating radio channel environments.
During the second quarter of 2009, the net sales of the Wireless
Business Segment amounted to EUR 23.7 million (EUR 27.7 million, 2Q
2008), representing a decrease of -14.3 per cent. The operating
profit was EUR 0.9 million including non-recurring costs of EUR 0.5
million (EUR -9.1 million in 2Q 2008, including non-recurring costs
of EUR 3.4 million). The significant improvement of operating result
with lower turnover year-on-year was mainly due to the execution of
the earlier announced profitability improvement program.
EB continued to further develop its offering towards customized
solutions by integrating own and 3rd party technologies and providing
own R&D services. Even though the challenging economic situation
prevailed in the mobile communication R&D services market, Wireless
Solutions business managed to keep the volumes of R&D services at
satisfactory level. The demand for satellite-terrestrial network
device solutions continued to be strong during the quarter.
The sales of wireless communications emulation and design tools
continued to be driven mainly by development of LTE systems.
In April EB announced that it has decided to close its site in Turku
in October 2009 and focus the Wireless Segment's R&D activities in
Finland to the other existing sites in Oulu, Kajaani, Tampere and
Espoo. The personnel negotiations were concluded on April 7, 2009.
In April EB delivered the industry's first multi-antenna Over-the-Air
(OTA) performance testing solution. This tester allows testing of
full mobile device functionality and performance in realistic radio
channel environments without any compromises to the performance
verification.
In June EB announced a new Mobile Internet Device (MID) reference
design that offers EB's customers the ability to introduce a
customized MID product to market faster and with lower development
costs. The reference device can be tailored to customers' brand and
target market requirements. This strengthens EB's position as an
innovative solution provider to its customers in the wireless and
other industries utilizing wireless technologies.
MARKET OUTLOOK
As a consequence of the general economic environment, both automotive
and wireless communication market growth is unlikely before the
global economic environment starts to improve.
The share of electronics and software in cars has grown significantly
during the past years and it is expected that the trend of increased
use of software in automotive continues to prevail in the market. The
majority of the innovation and differentiation in the automotive
industry is brought about by software and electronics. In order to
enable faster innovation, to improve quality and development
efficiency and to reduce complexity related to software, the use of
standard software solutions is expected to increase. The estimated
automotive software general market growth rate of some 15 per cent
(Frost & Sullivan) is negatively affected by the current downturn of
the automotive industry. According to Strategy Analytics the global
market for automotive electronic systems fell by 3 per cent in 2008
and is forecasted to fall by a further 15 per cent in 2009, due to
the global recession. However, the underlying growth of the
automotive software market is expected to continue past the crisis
and the cost pressures of the automotive industry are expected to
accelerate the need of productized, efficient software solutions EB
is offering. EB's net sales cumulating from the automotive industry
is currently driven by the development of new cars and platforms and
is not directly dependent on production volumes of the car industry.
Nevertheless, cost savings among customers imply cuts in their
short-term R&D spend and therefore their R&D spend is estimated not
to increase in short-term from 1H 2009 which impacts negatively the
relevant market of EB.
The global mobile infrastructure market is decreasing and the
consolidation of the industry is expected to continue. LTE standard
is gaining strength while the momentum of Mobile WiMAX standard has
been decreasing. Going forward, EB's business driven by LTE is
increasing while EB's future sales revenues are not materially
dependent on Mobile WiMAX technology. The global mobile phone market
is leveling off and it is expected to decrease in volume in
short-term. The value share is expected to move towards higher-end
due to the increased demand for new features and services. New open
software architectures and platforms are creating opportunities for
companies such as EB with strong integration capabilities.
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.
Mastering of multi-radio technologies and end-to-end system
architectures covering both terminal and network technologies, has
gained importance in the complex wireless technology industry. The
demand for EB's satellite-terrestrial device solutions is expected to
continue.
The mobile communication R&D services market continues to be
challenging and the continuing price pressure drives increasingoff-shoring in the industry. However, attractive niches continue to
exist (OVUM). Because of the economical slowdown, companies will
review their R&D costs and project portfolios resulting in reduction
of the overall R&D expenditures and activities during the next couple
of years, resulting in less demand for external R&D services.
However, OEMs need to reduce their fixed costs and increase
flexibility. This can create new opportunities for partnering for
companies such as EB.
The overall wireless communications tools market was weak following
the current economic downturn. However there is a need for advanced
development tools for 3GPP LTE development projects and that is
expected to remain as a driver for the demand in the medium and long
term. EB provides world leading channel emulation tools for the
development of MIMO based 3GPP LTE and other advanced radio
technologies.
RESEARCH AND DEVELOPMENT DURING 2Q 2009
EB continued to invest in R&D in the automotive software products and
tools and radio channel emulation products.
The total R&D investments during the second quarter of 2009 were EUR
3.5 million (EUR 10.0 million, 2Q 2008), equaling 9.4 per cent of the
net sales (24.4 % in 2008). The reduction was mostly due to the
change of the business model (and consequent exit from developing own
products) in Mobile WiMAX in October 2008 and exit from RFID
technology business in February 2009.
ACTIONS TO IMPROVE PROFITABILITY
EB launched its profit improvement and cost structure adjustment
program in fourth quarter of 2008 targeting a total of EUR 40 million
annual cost savings in comparison to the cost level of the first half
of 2008. The cost saving measures totaling to EUR 30 million gained
their full impact from the beginning of 2009. The additional measures
targeting to EUR 10 million savings were implemented in full during
2Q 2009.
The cost saving measures included i.e. changing the business model in
Mobile WiMAX, adjusting R&D investments downwards, increasing further
the resource utilization, reducing high cost subcontracting,
reorganizing and adjusting support functions, structural and
organizational restructuring activities, reducing the personnel
globally and temporarily dismissals of employees.
OUTLOOK FOR THE SECOND HALF OF 2009
The more general market outlook by the businesses is presented under
the Market Outlook section.
Improving the profitability further continues to be the main focus of
EB during the second half of 2009.
EB expects the net sales during the second half of 2009 to be lower
than during the first half of 2009 (EUR 80.2 million). The operating
result in the second half of 2009 is expected to be at the level of
or lower than the operating profit from business operations without
non-recurring items in the first half of 2009 (EUR 0.5 million).
Due to the holiday period and the nature of R&D services business the
third quarter of 2009 will be weaker than the latter part of the
half.
RISKS AND UNCERTAINTIES
EB has identified a number of business, market and finance related
factors 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
slowdown may affect the demand for the EB's services, solutions and
products and provide pressure on e.g. volumes and pricing. It may
also increase the risk for credit losses. 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.
The more general market outlook by the businesses is presented under
the 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, 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 involved in selling EB's services, solutions and
products. Revenues expected to come from new products for existing
and new customers include normal timing risks.
More information on the risks and uncertainties affecting EB can be
found on the Company website at www.elektrobit.com
STATEMENT OF FINANCIAL POSITION AND FINANCING
The figures presented in the statement of financial position of June
30, 2009, are compared with the statement of financial position of
December 31, 2008 (EUR 1,000).
6/2009 12/2008
Non-current assets 42,748 46,724
Current assets 123,196 133,797
Total assets 165,944 180,520
Share capital 12,941 12,941
Other equity 99,725 102,181
Total shareholders' equity 112,667 115,123
Non-current liabilities 17,604 19,690
Current liabilities 35,673 45,708
Total shareholders' equity and liabilities 165,944 180,520
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR +3.6 million
+ increase in net working capital EUR -7.1 million
+ interest, taxes and dividends EUR -0.1 million
= cash generated from operations EUR -3.7 million
- net cash used in investment activities EUR -2.1 million
- net cash used in financing EUR -2.5 million
= net change in cash and cash equivalents EUR -8.3 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 60.4 million (EUR 61.9 million on December 31,
2008). Accounts and other payables, booked in interest-free current
liabilities, were EUR 29.4 million (EUR 38.7 million on December 31,
2008).
The amount of non-depreciated consolidation goodwill at the end of
the period under review was EUR 18.5 million (EUR 18.3 million on
December 31, 2008).
The amount of gross investments in the period under review was EUR
1.7 million, consisting of replacement investments. Net investments
for the reporting period totaled EUR 1.3 million. The total amount of
depreciation during the period under review was EUR 5.1 million,
including EUR 1.1 million of depreciation owing to business
acquisitions.
The amount of interest-bearing debt at the end of the reporting
period was EUR 19.8 million. The distribution of net financing
expenses on the income statement was as follows:
interest, dividend and other financial income EUR 0.5 million
interest expenses and other financial expenses EUR -0.5 million
foreign exchange gains and losses EUR -0.5 million
EB's equity ratio at the end of the period was 69.2 per cent (64.9
per cent at the end of 2008).
The figures from the period under review includes the statutory
reserves EUR 3.6 million.
EB follows a currency 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
principles of the currency strategy, the agreed customer commitments
net cash flow of the currency in question 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 10.5 million.
PERSONNEL
EB employed an average of 1636 people between January and June 2009.
At the end of June, EB had 1606 employees (1735 at the end of 2008).
A significant part of EB's personnel are product development
engineers.
CHANGES IN COMPANY'S MANAGEMENT
EB appointed M.Sc (Eng.), M.Sc (Econ.) Jukka Harju as CEO of the
Company as of June 4, 2009. Along with the appointment Harju resigned
from the membership of the EB's Board of Directors and from the
Chairmanship of the Board's committee for Automotive Segment. Jorma
Halonen, member of EB's Board of Directors, was elected as the new
Chairman of the Automotive committee. In addition to Halonen, Seppo
Laine, Staffan Simberg and Erkki Veikkolainen continued to serve as
EB Board members and Juha Hulkko continued as the Chairman of the
Board.
CEO Pertti Korhonen resigned from EB as of June 3, 2009.
EB's Board of Directors and Corporate Executive Board can be found
from the Company's Internet pages at:
www.elektrobit.com/corporate_governance.
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, August 7, 2009
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Jukka Harju
CEO
Tel. +358 40 344 5466
Panu Miettinen
CFO
Tel. +358 40 344 5338
Distribution:
NASDAQ OMX Helsinki
Principal media
INVITATION TO PRESS CONFERENCE ON EB'S 2Q 2009 RESULT
EB, Elektrobit Corporation will hold a press conference for media,
analysts and institutional investors concerning the Interim Report 2Q
2009 on
Friday, August 7, 2009 at 11.00 - 12.00 hours (CEST+1)
The conference call will be live audio webcast and it is accessed in
the Internet through WebEx. There will be possibility to present
questions calling to the following conference call number:
+ 358 20699101, PIN: 757344#.
The conference will be in English.
To join the online meeting
1. Go to
https://elektrobit.webex.com/elektrobit/j.php?ED=111509617&UID=1034101832&PW=338b084d8c665b276a25263f757a72
2. Enter your name and email address
3. Enter the meeting password: Kok!ous103
4. Click "Join Now"
In technical problems go to /www.elektrobit.com/webcast/instructions
or call number +358 40 344 5148.
A recording of the audio webcast will be available after the
conference on EB's website www.elektrobit.com/investors. The
presentation material will be available after the publication of the
Interim Report on the same address.
CONSENSUS ESTIMATE
The EB consensus estimate made by the analysts who observe the
company is updated approximately a week before the release of the
financial report. The latest estimate is available on the Company
website www.elektrobit.com/investors.
July 31, 2009
EB, Elektrobit Corporation
Corporate Communications
EB, ELEKTROBIT CORPORATION, INTERIM REPORT JANUARY - JUNE 2009
(unaudited)
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED STATEMENT OF 1-6/2009 1-6/2008 1-12/2008
COMPREHENSIVE INCOME (MEUR)
6 months 6 months 12 months
NET SALES 80.2 88.3 172.3
Other operating income 1.9 2.1 6.2
Change in work in progress
and finished goods -1.2 -0.7 -2.8
Work performed by the
undertaking for its own
purpose
and capitalized 0.4 0.1 0.1
Raw materials -3.7 -9.2 -18.0
Personnel expenses -47.3 -52.0 -104.0
Depreciation -5.1 -9.7 -16.4
Other operating expenses -26.2 -40.3 -80.1
OPERATING PROFIT (LOSS) -1.1 -21.4 -42.7
Financial income and
expenses -0.5 0.2 -4.7
RESULT BEFORE TAXES -1.6 -21.2 -47.4
Income taxes -1.0 0.0 -2.4
RESULT FOR THE PERIOD FROM
CONTINUING
OPERATIONS -2.6 -21.2 -49.8
Result after taxes for the
period from discontinued
operations 0.1 0.3
RESULT FOR THE PERIOD -2.6 -21.0 -49.5
Other comprehensive income:
Exchange differences on
translating foreign
operations -0.2 -0.4 0.6
Other comprehensive income
for the period total -0.2 -0.4 0.6
TOTAL COMPREHENSIVE INCOME
FOR THE PERIOD -2.8 -21.4 -48.9
Result for the period
attributable to
Equity holders of the
parent -2.6 -21.0 -49.5
Total comprehensive income
attributable to
Equity holders of the
parent -2.8 -21.4 -48.9
Earnings per share EUR
continuing operations
Basic earnings per share -0.02 -0.16 -0.38
Diluted earnings per
share -0.02 -0.16 -0.38
Earnings per share EUR
discontinued operations
Basic earnings per share 0.0 0.00
Diluted earnings per
share 0.0 0.00
Earnings per share EUR
continuing and discontinued
Operations
Basic earnings per share -0.02 -0.16 -0.38
Diluted earnings per
share -0.02 -0.16 -0.38
Average number of shares,
1000 pcs 129 413 129 413 129 413
CONSOLIDATED STATEMENT OF June 30, 2009 June 30, 2008 Dec. 31, 2008
FINANCIAL POSITION (MEUR)
ASSETS
Non-current assets
Property, plant and
equipment 13.9 24.3 16.2
Goodwill 18.5 17.6 18.3
Intangible assets 9.2 16.3 11.0
Other financial assets 0.4 0.3 0.4
Receivables 0.8 0.9 0.8
Deferred tax assets 3.4 0.1
Non-current assets total 42.7 62.8 46.7
Current assets
Inventories 2.2 7.2 3.3
Trade and other
receivables 60.4 61.9 61.9
Financial assets at fair
value through profit or
loss 0.2 0.5
Cash and short term
deposits 60.3 74.8 68.6
Current assets total 123.2 144.4 133.8
TOTAL ASSETS 165.9 207.2 180.5
EQUITY AND LIABILITIES
Equity attributable to
equity holders of the
parent
Share capital 12.9 12.9 12.9
Share premium 64.6 64.6 64.6
Translation difference -0.0 -0.8 0.2
Retained earnings 35.2 65.6 37.4
Total equity 112.7 142.3 115.1
Non-current liabilities
Deferred tax liabilities 2.3 3.5 2.6
Provisions 1.7 1.0
Interest-bearing
liabilities 13.6 22.8 15.4
Other liabilities 0.1 0.6 0.7
Non-current liabilities
total 17.6 26.8 19.7
Current liabilities
Trade and other payables 26.3 28.0 35.1
Financial liabilities at
fair value through profit
or loss 0.1
Pension obligations 1.2 1.1 1.0
Provisions 1.9 2.5
Interest-bearing loans
and borrowings 6.3 8.9 7.0
Current liabilities total 35.7 38.0 45.7
Total liablities 53.3 64.8 65.4
TOTAL EQUITY AND
LIABILITIES 165.9 207.2 180.5
CONSOLIDATED STATEMENT OF CASH FLOWS 1-6/2009 1-6/2008 1-12/2008
(MEUR)
6 months 6 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -2.6 -21.0 -49.5
Adjustment of accrual basis items 6.2 12.0 27.0
Change in net working capital -7.1 -6.3 2.4
Interest paid on operating activities -0.9 -1.4 -7.3
Interest received from operating
activities 1.2 2.5 4.4
Other financial income and expenses, net
received 0.0 0.0
Income taxes paid -0.4 -2.2 -1.7
NET CASH FROM OPERATING ACTIVITIES -3.7 -16.5 -24.7
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit, net of cash
acquired -0.9
Disposal of business unit, net of cash
acquired -0.9 18.3 26.8
Purchase of property, plant and equipment -1.0 -0.5 -1.8
Purchase of intangible assets -0.4 -2.1 -2.6
Purchase of other investments -0.5 -0.5
Sale of property, plant and equipment 0.1 0.2
Sale of intangible assets 0.1
Proceeds from sale of investments 10.4 10.6
NET CASH FROM INVESTING ACTIVITIES -2.1 25.7 31.8
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowing 1.0 0.5 0.1
Repayment of borrowing -1.4 -1.1 -1.9
Payment of finance liabilities -2.1 -3.0 -6.0
Dividends paid -2.6 -2.6
NET CASH FROM FINANCING ACTIVITIES -2.5 -6.3 -10.5
NET CHANGE IN CASH AND CASH EQUIVALENTS -8.3 2.9 -3.3
Cash and cash equivalents at beginning of
period 68.6 71.9 71.9
Cash and cash equivalents at end of
period 60.3 74.8 68.6
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Total equity
A B C D
Equity on January 1, 2008 12.9 64.6 88.1 165.7
Dividend distribution -2.6 -2.6
Share-related compensation 0.5 0.5
Total comprehensive income for the period -21.4 -21.4
Other items 0.2 0.2
Equity on June 30, 2008 12.9 64.6 64.8 142.3
Equity on January 1, 2009 12.9 64.6 37.6 115.1
Share-related compensation 0.1 0.1
Total comprehensive income for the period -2.8 -2.8
Other items 0.3 0.3
Equity on June 30, 2009 12.9 64.6 35.1 112.7
NOTES TO THE INTERIM REPORT
Accounting principles for the Interim Report:
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting. The same accounting policies and methods
of computation are followed in the interim report as compared with
annual financial statements.
The Group has adopted following standards:
IAS 1 (Revised) Presentation of Financial Statements. The revision
mainly addresses the presentation in the income statement and the
statement of changes in equity.
IFRS 8 Operating Segments. The new standard replaces IAS 14 Segment
Reporting. Under IFRS 8, the reporting is based on the management's
internal reporting system and measurement principles. The new
standard doesn't have any impact on the comparative information. From
January 1, 2009 the reporting segments have been the same, Automotive
and Wireless, as they are according to the IAS 14 standard. Items not
allocated to segments are included under Other items.
Explanatory comments about the seasonality or cyclicality of
reporting period operations:
The Company operates in business areas which are subject to seasonal
fluctuations.
The nature and amount of items affecting assets, liabilities, equity,
net income, or cash flows which are unusual because of their nature,
size or incidence:
The result of the reporting period comprises non-recurring
restructuring costs of EUR 1.6 million.
Dividends paid:
The General Meeting held on March 19, 2009 decided in accordance with
the proposal of the Board of Directors that no dividend shall be
distributed.
SEGMENT INFORMATION (MEUR)
OPERATING SEGMENTS 1-6/2009 1-6/2008 1-12/2008
6 months 6 months 12 months
Automotive
Net sales to external customers 29.9 28.7 63.3
Net sales to other segments 0.1 0.1
Net sales total 29.9 28.8 63.4
Operating profit (loss) -3.1 -5.7 -12.1
Wireless
Net sales to external customers 50.0 59.4 108.6
Net sales to other segments 0.2 0.1 0.1
Net sales total 50.2 59.4 108.6
Operating profit (loss) 1.4 -15.6 -28.5
OTHER ITEMS
Other items
Net sales to external customers 0.3 0.2 0.4
Operating profit (loss) 0.6 -0.1 -2.1
Eliminations
Net sales to other segments -0.2 -0.2 -0.2
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 80.2 88.3 172.3
Operating profit (loss) -1.1 -21.4 -42.7
Net sales of geographical areas (MEUR) 1-6/2009 1-6/2008 1-12/2008
6 months 6 months 12 months
Net sales
Europe 48.9 52.9 114.9
Americas 24.4 31.2 49.2
Asia 6.9 4.2 8.1
Net sales total 80.2 88.3 172.3
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.
The effect of changes in the composition of the group structure
during the interim period:
On February 2, 2009 EB exited from RFID technology business by
selling 7iD Technologies GmbH to the acting management of the said
company in Austria.
Related party transactions: 1-6/2009 1-6/2008 1-12/2008
Employee benefits for key management and
stock
option expenses total 1.2 1.3 2.7
CONSOLIDATED STATEMENT 4-6/ 1-3/ 10-12/ 7-9/ 4-6/
OF
COMPREHENSIVE INCOME 2009 2009 2008 2008 2008
BY QUARTER (MEUR) 3 months 3 months 3 months 3 months 3 months
NET SALES 37.4 42.8 49.5 34.5 41.0
Other operating income 1.3 0.6 1.5 2.6 0.7
Change in work in
progress and
finished goods -0.9 -0.3 -1.2 -0.8 -0.1
Work performed by the
undertaking
for its own purpose
and capitalized 0.3 0.1 0.0 -0.0 0.0
Raw materials -1.5 -2.2 -6.6 -2.3 -3.6
Personnel expenses -22.7 -24.6 -27.8 -24.3 -24.8
Depreciation -2.4 -2.7 -3.8 -2.9 -6.5
Other operating
expenses -12.6 -13.7 -20.1 -19.7 -20.1
OPERATING PROFIT
(LOSS) -1.1 0.0 -8.5 -12.9 -13.3
Financial income and
expenses 0.5 -0.9 -3.3 -1.6 -0.2
RESULT BEFORE TAXES -0.7 -0.9 -11.8 -14.4 -13.6
Income taxes -0.9 -0.2 -2.3 -0.1 0.0
RESULT FOR THE PERIOD
FROM
CONTINUING OPERATIONS -1.6 -1.1 -14.0 -14.6 -13.5
Result after taxes for
the period
from discontinued
operations 0.1 0.0 0.1
RESULT FOR THE PERIOD -1.6 -1.1 -13.9 -14.6 -13.4
Other comprehensive
income
for the period total -0.5 0.3 0.1 0.8 0.1
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD -2.1 -0.8 -13.8 -13.7 -13.3
Result for the period
attributable to:
Equity holders of
the parent -1.6 -1.1 -13.9 -14.6 -13.4
Total comprehensive
income
for the period
attributable to:
Equity holders of
the parent -2.1 -0.8 -13.8 -13.7 -13.3
CONSOLIDATED STATEMENT June 30, March 31, Dec. 31, Sept. 30, June 30,
OF
FINANCIAL POSITION 2009 2009 2008 2008 2008
(MEUR)
ASSETS
Non-current assets
Property, plant and
equipment 13.9 14.9 16.2 17.4 24.3
Goodwill 18.5 18.3 18.3 18.2 17.6
Intangible assets 9.2 10.0 11.0 15.8 16.3
Other financial
assets 0.4 0.4 0.4 0.3 0.3
Receivables 0.8 0.8 0.8 0.9 0.9
Deferred tax assets 0.1 2.6 3.4
Non-current assets
total 42.7 44.4 46.7 55.3 62.8
Current assets
Inventories 2.2 2.6 3.3 5.8 7.2
Trade and other
receivables 60.4 62.9 61.9 60.2 61.9
Financial assets at
fair value
through profit or
loss 0.2 0.2 0.5
Cash and short term
deposits 60.3 62.8 68.6 67.2 74.8
Current assets total 123.2 128.5 133.8 133.2 144.4
TOTAL ASSETS 165.9 172.9 180.5 188.5 207.2
EQUITY AND LIABILITIES
Equity attributable to
equity holders
of the parent
Share capital 12.9 12.9 12.9 12.9 12.9
Share premium 64.6 64.6 64.6 64.6 64.6
Translation
difference -0.0 0.5 0.2 0.1 -0.8
Retained earnings 35.2 36.8 37.4 51.0 65.6
Total equity 112.7 114.8 115.1 128.6 142.3
Non-current
liabilities
Deferred tax
liabilities 2.3 2.5 2.6 3.2 3.5
Provisions 1.7 0.8 1.0 1.2
Interest-bearing
liabilities 13.6 14.2 15.4 15.9 22.8
Other liabilities 0.1 0.2 0.7 0.6 0.6
Non-current
liabilities total 17.6 17.7 19.7 20.8 26.8
Current liablities
Trade and other
payables 26.3 30.8 35.1 26.2 28.0
Financial
liabilities at fair
value
through profit or
loss 0.1 1.1
Pension obligations 1.2 1.2 1.0 1.1 1.1
Provisions 1.9 2.3 2.5 0.7
Interest-bearing
loans and
borrowings
(non-current) 6.3 6.2 7.0 9.9 8.9
Current liabilities
total 35.7 40.4 45.7 39.1 38.0
Total liablities 53.3 58.1 65.4 59.9 64.8
TOTAL EQUITY AND
LIABILITIES 165.9 172.9 180.5 188.5 207.2
CONSOLIDATED STATEMENT 4-6/ 1-3/ 10-12/ 7-9/ 4-6/
OF CASH FLOWS BY QUARTER 2009 2009 2008 2008 2008
3 months 3 months 3 months 3 months 3 months
Net cash from
operating activities -1.0 -2.7 -0.5 -7.7 -9.0
Net cash from
investing activities -0.7 -1.4 5.7 0.5 -0.0
Net cash from
financing activities -0.7 -1.7 -3.8 -0.4 -1.8
Net change in cash and
cash
equivalents -2.5 -5.8 1.4 -7.6 -10.9
FINANCIAL PERFORMANCE RELATED RATIOS 1-6/2009 1-6/2008 1-12/2008
6 months 6 months 12 months
STATEMENT OF COMPREHENIVE INCOME (MEUR)
Net sales 80.2 88.3 172.3
Operating profit (loss) -1.1 -21.4 -42.7
Operating profit (loss), % of net
sales -1.4 -24.2 -24.8
Result before taxes -1.6 -21.2 -47.4
Result before taxes, % of net sales -2.0 -24.0 -27.5
Result for the period -2.6 -21.2 -49.8
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities, (MEUR) -40.5 -43.2 -46.2
Net gearing, -% -35.9 -30.3 -40.2
Equity ratio, % 69.2 69.9 64.9
Gross investments, (MEUR) 1.7 6.2 9.8
Average personnel during the period 1636 1775 1768
Personnel at the period end 1606 1774 1735
AMOUNT OF SHARE ISSUE ADJUSTMENT June 30, June 30, Dec. 31,
(1,000 pcs) 2009 2008 2008
At the end of period 129 413 129 413 129 413
Average for the period 129 413 129 413 129 413
Average for the period diluted with stock
options 129 413 129 413 129 413
STOCK-RELATED FINANCIAL RATIOS (EUR) 1-6/2009 1-6/2008 1-12/2008
6 months 6 months 12 months
Basic earnings per share -0.02 -0.16 -0.38
Diluted earnings per share -0.02 -0.16 -0.38
Equity *) per share 0.87 1.10 0.89
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES (EUR) 1-6/2009 1-6/2008 1-12/2008
Highest 0.65 1.79 1.79
Lowest 0.33 0.86 0.29
Average 0.48 1.49 0.82
At the end of period 0.59 0.94 0.33
Market value of the stock, (MEUR) 76.4 121.6 42.7
Trading value of shares, (MEUR) 5.2 6.0 9.6
Number of shares traded, (1,000 pcs) 10 711 4 044 11 770
Related to average number of shares % 8.3 3.1 9.1
SECURITIES AND CONTINGENT LIABILITIES June 30, June 30, Dec. 31,
(MEUR) 2009 2008 2008
AGAINST OWN LIABILITIES
Floating charges 3.1 3.1 3.1
Mortgages 7.0
Pledges 0.2 9.8 1.1
Guarantees 2.8 2.1 4.1
Mortgages are pledged for liabilities
totaled 9.3 16.6 9.9
OTHER DIRECT AND CONTINGENT LIABILITIES
Rental liabilities
Falling due in the next year 3.8 4.1 4.2
Falling due after one year 4.1 5.9 5.1
NOMINAL VALUE OF CURRENCY DERIVATIVES June 30, June 30, Dec. 31,
(MEUR) 2009 2008 2008
Foreign exchange forward contracts
Market value 0.1 0.5 -0.1
Nominal value 2.0 41.4 11.9
Purchased currency options
Market value 0.3
Nominal value 8.5
Sold currency options
Market value -0.2
Nominal value 17.0
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