2008-02-13 08:00:00 CET

2008-02-13 08:03:04 CET


REGULATED INFORMATION

English
SSH Communications Security - Financial Statement Release

SSH'S FINANCIAL STATEMENT BULLETIN, 1 JANUARY - 31 DECEMBER 2007


SSH COMMUNICATIONS SECURITY CORP STOCK EXCHANGE RELEASE
February 13th, 2008, at 9:00 a.m.

STRONG GROWTH, GOOD PROFITABILITY

- Net sales for 2007 totaled EUR 14.1 million, up 49.4 percent year
on year (EUR 9.5 million in 2006).
- Operating profit for 2007 amounted to EUR 2.2 million (EUR -0.9
million in 2006), profit EUR 3.0 million (EUR -0.2 million).
- Fourth-quarter net sales came to EUR 2.2 million, operating loss
was EUR -1.0 million and net loss EUR -0.8 million. The largest
deliveries in 2007 took place in the 1st and 3rd quarters.
- Profit per share EUR 0.11 (-0.01). The Board of Directors requests
authorization to distribute to shareholders max EUR 0.15 per share.
- During 2007, significant new breakthrough orders in new large
customer segments such as retail and manufacturing. The three largest
orders of the year came from three leading US retail chains.



KEY FIGURES
                                                                1-12/
                             10-12/ 2007 10-12/ 2006 1-12/ 2007  2006

Net sales (MEUR)             2.2         3.3         14.1       9.5
Net sales, change %          -32.7       -19.2       49.4       1.7
Operating profit/loss (MEUR) -1.0        0.5         2.2        -0.9
  % of net sales             -46.6       15.2        15.3       -9.7
Operating profit/loss,
change %                     -293.1      -51.5       343.4      65.2
Profit/loss before taxes
(MEUR)                       -0.8        0.7         3.0        -0.2
  % of net sales             -34.8       20.4        21.5       -2.4
Number of employees
at period end                83          80          83         80

Earnings per share (EUR)                             0.11       -0.01
Earnings per share,
diluted(EUR)                                         0.11       -0.01
Shareholders' equity per
share (EUR)                                          0.73       0.64


SSH Communications Security is a world-leading provider of enterprise
security solutions and end-to-end communications security, and the
original developer of the Secure Shell protocol. The company's SSH
Tectia solution addresses the most critical needs of large
enterprises, financial institutions and government agencies.

NET SALES

Consolidated net sales for 2007 totaled EUR 14.1 million (EUR 9.5
million), up by 49.4 % percent, year on year. Net sales for the
fourth quarter totaled EUR 2.2 million (3.3 million).
For a system-level IT product, such as SSH Tectia, the sales process
is often long. With major customers, the timing of large orders will
cause fluctuations in sales from quarter to quarter.

The majority of SSH's invoicing is based on the U.S. dollar. During
the report period, the U.S. dollar's average exchange rate was
approximately 9 percent weaker than during the same period for 2006.

RESULTS AND EXPENSES

Operating profit for 2007 amounted to EUR 2.2 million (in 2006 a loss
of EUR -0.9 million), with net profit totaling EUR 3.0 million (a
loss of EUR -0.2 million). Operating loss for the fourth quarter
totaled EUR -1.0 million (a profit of EUR 0.5 million), with net loss
amounting to EUR -0.8 million (a profit of EUR 0.7 million).

SSH's fixed costs reported for the period increased EUR 1.4 million.
Research and development expenses for the report period totaled EUR
3.7 million (EUR 3.4 million). The cost increases of R&D were mainly
caused by development of test automation and technical customer
services.

Sales and marketing expenses came to EUR 6.5 million (EUR 5.7
million). The difference was caused by expenses linked to the strong
growth of sales, such as sales commissions, as well as additional
marketing activities.

Administrative expenses were EUR 1.9 million (EUR 1.6 million). The
cost increase was mainly due to a reservation, about 0.2 million, for
the re-structuring of SSH's Asian sales organization. The purpose of
the arrangements is to sharpen the geographic focus of the sales
operations, emphasize the role of the re-sellers, as well as reduce
running rate expenses.

BALANCE SHEET AND FINANCIAL POSITION

The financial position of SSH remained at a healthy level during the
report period. The consolidated balance sheet total on December 31,
2007 stood at EUR 25.5 million (EUR 21.3 million), of which liquid
assets accounted for EUR 22.0 million (EUR 16.7 million), or 86.2
percent of the balance sheet total. The company has no interest
bearing liabilities. On December 31, 2007, gearing, or the ratio of
net liabilities to shareholders' equity, was -105.8% (-92.9%) and the
equity ratio stood at 91.4 percent (92.5 percent).

The reported gross capital expenditure for the period totaled EUR 0.1
million (EUR 0.1 million). Reported financial income came mainly from
capital gains on fund shares and interests on bank deposits.
Financial income and expenses totaled EUR +0.9 million, compared to
EUR +0.7 million a year ago.

During 2007, SSH reported a positive cash flow of EUR 5.1 million
from business operations, whereas investments showed a cash flow of
EUR -5.0 million. Cash flow from financing was EUR 0.0 million.
Liquid assets at period end were at the previous year's level.

MARKET DEVELOPMENTS

Large enterprise, financial, and public sector organizations have a
growing need for improved data security in several ways. New and
existing data security risks, continuously evolving regulations, and
increasing security standards and models continue to create new
needs, to which we can respond with our versatile product offerings.

Demand for products that secure internal information transfers in
large listed enterprises and public sector organizations has
continued growing in USA. A similar demand growth trend is expected
to spread in the next phase to the largest European and Asian
enterprises.

Regulations that currently influence the demand of our company's
products are, for instance, the U.S. Sarbanes-Oxley Act (SOX), the
PCI DSS standards of the major credit card companies, as well as
HIPAA for the patient data in the health care industry. These
regulations set standards for data security and include audits, which
drive now our customers to implement security upgrade programs for
their IT infrastructure against internal and external threats in a
timely manner.

SSH is confident that legislative reforms, new data security
standards, as well as many industry and company level data security
development programs will continue to drive demand favorably for SSH
Tectia.


SALES PERFORMANCE

SSH'S NET
SALES
EUR million    10-12/    7-9/   4-6/   1-3/   1-12/   10-12/   1-12/
               2007      2007   2007   2007   2007    2006     2006

BY SEGMENT
  AMER         1.4       7.3    1.0    1.8    11.5    2.0      5.7
  APAC         0.2       0.2    0.2    0.2    0.8     0.2      0.9
  EROW         0.6       0.3    0.3    0.5    1.8     1.2      2.8
  SSH Group
total          2.2       7.8    1.5    2.6    14.1    3.3      9.5

BY OPERATION
  License
sales          1.1       6.8    0.6    1.6    10.1    2.4      5.8
  Maintenance  1.1       1.0    0.9    0.9    4.0     0.9      3.6
  Total        2.2       7.8    1.5    2.6    14.1    3.3      9.5

The Americas, the Asia Pacific region, and the 'Europe and Rest of
the World' market area accounted for 82 percent (61 percent), 6
percent 10 percent) and 13 percent (30 percent)of reported net sales,
respectively.

During the report period, SSH concluded eight new license agreements
that were worth more than EUR 100,000. The ten largest customers
accounted for 61 percent of reported net sales, with the largest
single customer accounting for approximately 30 percent.

PRODUCTS AND MARKETING

During the report period, SSH focused its sales and marketing efforts
on large enterprises, financial institutions, and government agencies
in the USA, Europe, and Asia, in line with its long-term strategy.
The company continued also developing its partner network in the same
focus markets.

The marketing focus was on the company's new Tectia security
solutions for the IBM mainframe environment and SSH Tectia's enhanced
file transfer security applications for large internal enterprise
networks. The company continued the development of the new third
generation architecture-based products. The company also further
developed the product structure to provide higher value, add new
features, expand application uses, as well as enable easier
purchasing for the customers.

New applications, support of all essential enterprise OS platforms
including IBM mainframes, increased technical support, versatile
integration capabilities, and centralized management have made SSH
Tectia the most extensive and highest performance integrated
end-to-end communications security solution in the market.

RESEARCH AND DEVELOPMENT

Research and development expenses for January-September totaled EUR
3.7 million (EUR 3.4 million), the equivalent of 26.0 percent of net
sales (35.6 percent). During the report period SSH did not capitalize
any research and development expenses.

At the end of December SSH had 13 granted patents and 13 patent
applications.

HUMAN RESOURCES AND ORGANIZATION

At the end of December, the Group had 83 employees on its payroll, up
by 3 from the previous year, an increase of 3.8 percent.

At the end of the period, 51.8 percent of the employees worked in
R&D, 37.4 percent in sales and marketing, and 10.8 percent in
corporate administration.

BOARD AND AUDITORS

The Annual General Meeting (AGM) on March 29, 2007 re-elected Tapio
Kallioja, Tomi Laamanen, Timo Ritakallio and Tatu Ylönen to SSH
Communications Security Corp.'s Board of Directors, with Laamanen
re-elected as chairman.

The AGM again elected to have PricewaterhouseCoopers Oy, authorized
public accountants, as the company's auditor, with Henrik Sormunen,
authorized public accountant, acting as the principal auditor.

SHARES, SHAREHOLDING AND CHANGES IN GROUP STRUCTURE

The reported trading volume of SSH Communications Security Corp.
shares totaled 15,020,468 (valued at EUR 24,462,255). The highest
quotation was EUR 2.39 and the lowest EUR 1.12. The trade-weighted
average share price for the period was EUR 1.63, and the share closed
at EUR 1.61 (December 28, 2007).

In February, SSH Communications Security Corp received a notification
in accordance with the Securities Market Act 2:9, according to which
the total of Assetman Oy's shares in SSH Communications Security Corp
has on February 13, 2007 risen above one tenth part (1/10) of the
total of all shares and related voting rights. Assetman OY held 14.0
percent of the company's shares at the end of the financial year.
There were no other substantial changes in SSH Communications
Security Corp.'s shareholding during the report period. Tatu Ylönen
holds, directly and through his company, Tatu Ylönen Oy, 52.9 percent
of the company's shares, and Tero Kivinen holds 5.5 percent. More
information about the shareholding can be obtained from the company's
Web site.

There were no changes in the group structure during the period.

SHARE CAPITAL AND BOARD AUTHORIZATIONS

The company's registered share capital on December 31, 2007 was EUR
856,083.36, consisting of 28,536,112 shares. During 2007, SSH
increased its share capital three times, based on subscription to
the new shares under SSH's stock-option plan. In total, 3,550 new
SSH shares were subscribed to under the I/1999 stock-option plan and
100,667 shares under the I/2003 stock-option plan, and 8,000 shares
under the II/2003 stock-option plan, respectively. With these
subscriptions the company's share capital was increased by EUR
3,366.51.

On March 29, 2007, the Annual General Meeting decided, in accordance
with the proposal made by the Board of Directors to authorize the
Board of Directors to decide on issuing the maximum of 5.500.000
shares in one or more new share issues or on issuing special rights
to share subscription as defined in the Finnish Companies Act Chapter
10,
section 1, with or without subscription rights to shareholders.
This authorization is effective until the next Annual General
Meeting, but will expire June 30, 2008, at the latest. The Board has
not exercised this authorization.

CORPORATE GOVERNANCE

The company complies with the corporate governance recommendations
for listed companies issued by the OMX Nordic Exchange Helsinki, the
Central Chamber of Commerce of Finland, and the Confederation of
Finnish Industry and Employers. More information on corporate
governance is available on the company's Web site (www.ssh.com).


PROSPECTS

New data security regulations and risks continue driving our
customers in all target markets to long-term development programs for
the security of the IT infrastructure.

During 2007 SSH received significant new orders that diversified its
customer base, as well as expanded the ways of use and applications
of the company's products. Large, successful deliveries of our
software products have reinforced our major customer reference base
both technically and commercially. These and many other positive
factors make us expect good sales results also in the near term.

The US dollar exchange rate and speculations about the US economy
contain some factors of uncertainty that are hard to estimate.
However, our active sales prospect base is at a historically high
level, especially in the US markets. We expect to be in a good
position to leverage the trends of enterprise data security,
spreading from the USA and creating growing demand for our products
also in Europe and Asia.

SSH will pursue clearly profitable results also in 2008.

Due to the large size of individual orders and depending on the
timing of customer projects, significant variation of the quarterly
revenue may occur.

DIVIDEND AND OTHER DISTRIBUTION OF ASSETS

The Board of Directors will propose to the Annual General Meeting
that the Board of Directors would be authorized to decide on the
dividend distribution and/or distribution of assets from the invested
unrestricted equity fund to shareholders so that by virtue of the
authorization assets can be distributed in total a maximum of 0.15
euros per share. The Board of Directors proposes that the maximum
amount of the distribution according to the authorization would be in
total 4,350,000.00 euros and that the authorization would be valid
until December 31st, 2008.



INCOME STATEMENT
EUR million                  10-12/     10-12/     1-12/     1-12/
                             2007       2006       2007      2006

  Net sales                  2.2        3.3        14.1      9.5
  Purchasing and production
  costs                      0.0        0.0        0.0       -0.1
  Gross profit               2.2        3.3        14.1      9.4
  Other operating income     0.0        0.1        0.1       0.4
  Expenses
    Product development      -1.1       -0.9       -3.7      -3.4
    Sales and
    marketing                -1.5       -1.6       -6.5      -5.7
    Administration           -0.7       -0.4       -1.9      -1.6

  Operating profit/loss      -1.0       0.5        2.2       -0.9

  Financial income and
  expenses                   0.3        0.2        0.9       0.7

  Profit/loss before taxes   -0.8       0.7        3.0       -0.2
  Taxes                      0.0        0.0        0.0       0.0

  Net profit/loss for the
  period                     -0.8       0.7        3.0       -0.2


a)


EARNINGS PER SHARE                1-12/ 2007 1-12/ 2006

Earnings per share (EUR)          0.11             -0.01
Earnings per share, diluted (EUR) 0.11             -0.01



BALANCE SHEET
EUR million                                  12/31/ 12/31/
                                             2007   2006

  ASSETS

  Fixed and other non-current assets
    Tangible assets                          0.1    0.1
    Intangible assets                        0.1    0.3
    Deferred tax assets                      0.2    0.3
  Total fixed and other
  non-current assets                         0.5    0.7

  Inventories and current assets
    Short-term receivables                   3.0    3.9
    Short-term investments                   20.3   15.0
    Cash and cash equivalents                1.7    1.7
  Total inventories and current assets       25.1   20.7

  Total assets                               25.5   21.3

  LIABILITIES AND SHAREHOLDERS' EQUITY

  Shareholders' equity                       20.8   18.0
  Long-term liabilities
    Provisions                               0.2    0.0
    Long-term financial
    liabilities                              0.0    0.0
  Total long-term liabilities                0.2    0.1

  Short-term liabilities                     4.5    3.3

  Total liabilities and shareholders' equity 25.5   21.3



CASH FLOW STATEMENT
EUR million                             1-12/ 2007 1-12/ 2006

  Cash flow from business operations    5.1        0.9
  Cash flow from investments            -5.0       6.5
  Cash flow from financing              0.0        -7.0

  Change in liquid assets               0.1        0.4

  Liquid assets at period start         1.7        1.4
  Adjustment for translation difference -0.1       -0.1
  Liquid assets at period end           1.7        1.7



STATEMENT ON CHANGES IN
SHAREHOLDERS' EQUITY
EUR million   Share    Issue    Fair      Trans-lation Retained Total
              Capi-tal Premium  value     diff.        Earnings
                       fund     reser-ves              and free
                                                       reserves


Shareholders'
equity
Jan. 1, 2006  0.8      24.4     0.2       -0.7         0.6      25.4
Change        0.0      -13.0    -0.1      -0.1         5.7

Shareholders'
equity
Dec. 31, 2006 0.9      11.5     0.1       -0.8         6.3      18.0

Shareholders'
equity
Jan. 1, 2007  0.9      11.5     0.1       -0.8         6.3      18.0
Change        0.0      0.0      0.0       -0.2          0.0
Net profit                                             3.0

Shareholders'
equity
Dec. 31, 2007 0.9      11.5     0.1       -1.1         9.4      20.8




NET SALES BY SEGMENT
EUR million          10-12/ 2007 10-12/ 2006 1-12/ 2007 1-12/ 2006

AMER                 1.4         2.0         11.5       5.7
APAC                 0.2         0.2         0.8        0.9
EROW                 0.6         1.2         1.8        2.8
SSH Group total      2.2         3.3         14.1       9.5



OPERATING PROFIT/LOSS
BY SEGMENT
EUR million             10-12/ 2007 10-12/ 2006 1-12/ 2007 1-12/ 2006

AMER                    0.6         1.2         7.6        2.9
APAC                    0.0         0.0         0.3        0.4
EROW                    0.0         0.6         -0.1       0.6
Common Group expenses*  -1.6        -1.3        -5.6       -4.8
SSH Group total         -0.9        0.5         2.3        -0.9


* Common Group expenses include Group administration expenses (e.g.,
management and finance) and product management and R&D expenses for
corporate headquarters.


KEY FIGURES AND RATIOS
                                                         1-12/  1-12/
                                                         2007   2006

Net sales (MEUR)                                         14.1   9.5
Operating profit/loss (MEUR)                             2.2    -0.9
Operating profit/loss, as % of net sales                 15.3   -9.7
Profit/loss before extraordinary items and taxes (MEUR)  3.0    -0.2
Profit/loss before extraordinary items and taxes, as %
of net sales                                             21.5   -2.4
Profit/loss before taxes (MEUR)                          3.0    -0.2
Profit/loss before taxes, as
% of net sales                                           21.5   -2.4
Return on investment (%)                                 16.4   -1.0
Return on equity (%)                                     15.7   -1.0
Interest-bearing net liabilities (MEUR)                  -22.0  -16.7
Equity ratio (%)                                         91.4   92.5
Gearing (%)                                              -105.8 -92.9
Gross capital expenditure (MEUR)                         0.1    0.1
  % of net sales                                         0.8    1.2
R&D expenses (MEUR)                                      3.7    3.4
  % of net sales                                         26.0   35.6
Personnel, period average                                81     81
Personnel, period end                                    83     80



PER-SHARE DATA
                                             1-12/  1-12/
                                             2007   2006

Earnings per share, undiluted
(EUR)                                        0.11   -0.01
Earnings per share, diluted (EUR)            0.11   -0.01
Equity per share (EUR)                       0.73   0.64
No. of shares at period end
(thousands)                                  28 536 28 424
Share performance (EUR)
  Average price                              1.63   1.43
  Low                                        1.12   0.88
  High                                       2.39   2.40
Share price, period end                      1.61   1.15
Market capitalization, period end (MEUR)     45.9   32.7
Volume of shares traded
(in millions)                                15.0   13.9
Volume of shares traded, as
% of total                                   52.6   48.8
Value of shares traded, in millions of euros 24.5   19.9
Price-to-earnings ratio (P/E)                15.2   -
Price-to-earnings ratio (P/E), diluted       15.3   -



CONTINGENT LIABILITIES
EUR million                     12/31 12/31
                                2007  2006
  Rental liabilities            0.1   0.2
  Leasing commitments outside
  the balance sheet
     Maturing within 1 year     0.7   0.8
     Maturing between 1 and 5
     years                      1.1   1.3


This interim report has been compiled observing IAS 34 (Interim
Financial Reporting) accounting standard. The same accounting
principles have been used in the interim report as in the financial
statement for 2006. These data are based on unaudited figures.

DISCLAIMER

The content in this report is provided by SSH Communications Security
Corp ("SSH") and its third party content providers for your personal
information only, and does not constitute an offer or invitation to
purchase any securities. Nor does it provide any form of advice
(investment, tax, legal) amounting to investment advice, or make any
recommendations regarding particular investments or products. SSH
does not provide investment advice or recommendations to buy or sell
its shares or the shares of others. If you are interested in
investing in SSH, please contact your financial adviser for further
details and information. Past performance of SSH shares is not
indicative of future results. EXCEPT AS PROVIDED BY APPLICABLE
COMPULSORY LAW SSH EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESSED OR
IMPLIED, AS TO THE ACCURACY OF ANY OF THE CONTENT PROVIDED, OR AS TO
THE FITNESS OF THE INFORMATION FOR ANY PURPOSE.

FINANCIAL REPORTING

The company will hold a briefing on its interim report for equity
analysts and the media in Hotel Scandic Simonkenttä, 1st floor,
Cabinet Lönkka, address Simonkatu 9, 00100 Helsinki on Wednesday,
February 13, 2008, starting at 11:00 a.m.

SSH Communications Security Corp will release its next interim report
and financial statements for January 1-March 31, 2008 on April 23,
2008. Further information will be available on the company's website
in due course.

Helsinki, on February 13, 2008

SSH COMMUNICATIONS SECURITY CORP
Board of Directors


Arto Vainio
CEO


For further information, please contact:
Arto Vainio, CEO                  tel. +358 (0)20 500 7400
Mika Peuranen, CFO                tel. +358 (0)20 500 7419


Distribution:
OMX Nordic Exchange Helsinki
Major media
www.ssh.com