2008-10-21 07:00:00 CEST
2008-10-21 07:01:11 CEST
REGULATED INFORMATION
Elektrobit Oyj - Interim report (Q1 and Q3)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY TO SEPTEMBER 2008
STOCK EXCHANGE RELEASE
Free for publication on October 21, 2008 at 8.00 am. (CEST+1)
EB, ELEKTROBIT CORPORATION, INTERIM REPORT, JANUARY TO SEPTEMBER 2008
EB LOWERS THE OPERATING PROFIT GUIDANCE AND IS PREPARING FOR FURTHER
COST SAVING MEASURES
SUMMARY 3Q 2008
- Net sales amounted to EUR 34.5 million (EUR 35.3 million, 3Q 2007),
representing a 2.4 per cent decrease year-on-year.
- Operating loss from business operations amounted to EUR -11.3
million and the non-recurring restructuring costs and bad debt
reserves totaled to EUR -1.6 million, resulting in a total operating
loss of EUR -12.9 million (EUR -4.0 million, 3Q 2007).
- Operating cash flow amounted to EUR -7.7 million (EUR -6.7 million,
3Q 2007). The net cash flow amounted to EUR -7.6 million (EUR -16.1
million, 3Q 2007).
- Equity ratio remained at a high level of 69.5% (72.1%, 3Q 2007).
EB expects the net sales of the second half to be lower than in the
first half of 2008 and the operating loss from business operations
for the second half of 2008 (without the non-recurring costs) to be
approximately at the level of the operating loss from business
operations from the first half of 2008 (EUR -15.1 million without the
non-recurring costs). Earlier, EB expected the net sales to be lower
than in the first half of 2008 and the operating loss from business
operations without non-recurring costs to be better compared to the
first half of 2008 (EUR -15.1 million).
The company has announced actions to improve its profitability and to
adjust its cost structure. The target is to achieve annual cost
savings of approximately EUR 30 million in comparison to the cost
level of the first half of 2008. Due to the current rapidly changing
and turbulent business environment, the earlier announced actions
will not be sufficient, and the company needs to take further
measures in order to ensure the profitability. Further actions will
be informed later once the respected plan is completed.
EB is changing the business model in the Mobile WiMAX by shifting
from investing upfront in the development of radio base station
module products to the development of demanding, customer-financed
WiMAX solutions. The business model change will reduce significantly
EB's own R&D investment going forward, while maintaining the
opportunity to develop and implement demanding Mobile WiMAX solutions
for customers.
EB also continued to adjust downwards its other R&D investments,
streamline the support functions, increase further the resource
utilization and reduce subcontracting. Due to financial and
production related reasons, EB started personnel negotiations in
support functions with the goal of reducing approximately 40 people.
EB'S CEO PERTTI KORHONEN:"Our main focus is to significantly improve our profitability. Due to
the current rapidly changing and turbulent business environment, the
earlier announced cost saving actions will not be sufficient, and we
need to take further measures in order to ensure our profitability."
FINANCIAL PERFORMANCE DURING JANUARY - SEPTEMBER 2008
(Comparisons are given to January-September 2007, unless otherwise
indicated)
EB's net sales during January - September 2008 increased 23.1 per
cent to EUR 122.8 million, compared with EUR 99.7 million in January
- September 2007. Operating loss, including the non-recurring costs
and bad debt reserves of EUR -7.9 million, for January - September
2008 amounted to EUR -34.2 million (EUR -17.8 million).
The non-recurring costs of EUR 7.9 million include:
- restructuring costs of EUR 2.9 million, as announced in March, due
to the rearrangements in the Wireless Business Segment and a capital
loss and a write-off from the sale of the shares of the Swiss
subsidiary, Elektrobit AG,
- a write-off of EUR 2.8 million, as announced in June, due to review
of EB's goodwill valuations of the RFID reader system business
belonging to the Wireless Business Segment,
- a write-off of EUR 0.6 million of an activated R&D investment,
- restructuring cost of EUR 0.6 million due to the rearrangements in
support functions, and
- a bad debt reserve totaling to EUR 1.0 million.
The Automotive Business Segment's net sales during January -
September 2008 amounted to EUR 44.6 million (EUR 36.4 million)
representing a growth of 22.5 per cent compared to January -
September 2007. The operating loss, including the aforementioned bad
debt reserve of EUR 1.0 million, was EUR -9.8 million (EUR -0.3
million). This has been caused by weak profitability of some large
customer projects, continued long-term investments into leading
automotive infotainment (navigation and HMI) and ECU (basic software
and tooling) software products, and expansion of the geographical
footprint in France, USA and China. Through these ongoing
investments, EB is building the fundaments to play globally as a
leading automotive software vendor.
The Wireless Business Segment's net sales during January - September
2008 amounted to EUR 77.9 million (EUR 62.6 million), representing a
growth of 24.3 per cent compared to January - September 2007. The net
sales included extraordinary low-margin through-licensing revenues of
approximately EUR 3 million. The operating loss, including the
aforementioned non-recurring costs of EUR 6.3 million, was EUR -23,6
million (EUR -18.7 million) reflecting:
- significant and larger than originally anticipated
investments in the R&D of Mobile WiMAX base station module products,
- the delay of the accumulation of net sales of WiMAX base
station module products,
- rapid deceleration of the market and therefore the sales
of wireless communications emulation and design tools,
- weaker demand and stronger than expected price competition
in radio network solutions' R&D services in the first half 2008,
- heavy investment and lack of demand in RFID reader systems
in the first half 2008,
- slower than expected demand in mobile terminals R&D
services in the third quarter of 2008.
The total R&D investments during the reporting period were EUR 30.5
million (EUR 25.1 million), equaling 24.8 per cent of the net sales
(25.2% in 2007). EUR 1.0 million of them were capitalized. According
to earlier announced actions, EB is in progress to adjust its R&D
investments to a sustainable level.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-9 2008 1-9 2007
9 months 9 months
NET SALES 122.8 99.7
OPERATING PROFIT (LOSS) -34.2 -17.8
Financial income and expenses -1.4 1.1
PROFIT BEFORE TAX -35.6 -16.7
PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS -35.8 -16.7
Profit after tax for the year from discontinued 0.1
operations 12.7
PROFIT FOR THE YEAR -35.6 -4.0
Attributable to
Equity holders of the parent -35.6 -4.0
Minority interest 0.0 0.0
Earnings per share EUR continuing operations -0.28 -0.13
Earnings per share EUR discontinued operations 0.00 0.10
Earnings per share EUR continuing and discontinued -0.28
operations -0.03
- Cash flow from Business Operations amounted to EUR -24.1 million
(EUR -18.4 million).
- Equity ratio was 69.5% (72.1%).
- Net gearing was -32.2% (-29.7%).
QUARTERLY FIGURES
The quarterly distribution of the Group's overall net sales and
profit, MEUR:
+-----------------------------------------------------------------+
| | 3Q 08 | 2Q 08 | 1Q 08 | 4Q 07 | 3Q 07 |
|-------------------------+-------+-------+-------+-------+-------|
| Net sales | 34.5 | 41.0 | 47.3 | 44.6 | 35.3 |
|-------------------------+-------+-------+-------+-------+-------|
| Operating profit (loss) | -12.9 | -13.3 | -8.0 | -2.4 | -4.0 |
|-------------------------+-------+-------+-------+-------+-------|
| Result before taxes | -14.4 | -13.6 | -7.7 | -3.3 | -4.0 |
|-------------------------+-------+-------+-------+-------+-------|
| Result for the period | -14.6 | -13.5 | -7.7 | -3.3 | -4.0 |
+-----------------------------------------------------------------+
The distribution of the net sales by Business Segment, MEUR:
+-----------------------------------------------------------+
| | 3Q 08 | 2Q 08 | 1Q 08 | 4Q 07 | 3Q 07 |
|-------------------+-------+-------+-------+-------+-------|
| Automotive | 15.9 | 13.2 | 15.5 | 16.2 | 14.5 |
|-------------------+-------+-------+-------+-------+-------|
| Wireless | 18.5 | 27.7 | 31.7 | 28.2 | 20.4 |
|-------------------+-------+-------+-------+-------+-------|
| Corporation total | 34.5 | 41.0 | 47.3 | 44.6 | 35.3 |
+-----------------------------------------------------------+
The distribution of the net sales by market area, MEUR and %:
+--------------------------------------------------+
| | 3Q 08 | 2Q 08 | 1Q 08 | 4Q 07 | 3Q 07 |
|----------+-------+-------+-------+-------+-------|
| Asia | 0.9 | 2.1 | 2.0 | 2.0 | 4.4 |
| | 2.6% | 5.2% | 4.3% | 4.5% | 12.5% |
|----------+-------+-------+-------+-------+-------|
| Americas | 7.1 | 12.7 | 18.5 | 14.5 | 7.4 |
| | 20.7% | 31.0% | 39.2% | 32.5% | 20.9% |
|----------+-------+-------+-------+-------+-------|
| Europe | 26.4 | 26.2 | 26.8 | 28.1 | 23.5 |
| | 76.7% | 63.8% | 56.5% | 63.0% | 66.5% |
+--------------------------------------------------+
Net sales (external) and operating profit development by Business
Segments and Other businesses were as follows, MEUR:
+------------------------------------------------------------------+
| | 3Q 08 | 2Q 08 | 1Q 08 | 4Q 07 | 3Q 07 |
|-------------------------+-------+-------+-------+-------+--------|
| Automotive | | | | | |
| Net sales | 15.9 | 13.2 | 15.5 | 16.2 | 14.5 |
| Operating profit (loss) | -4.1 | -4.1 | -1.6 | 1.0 | 0.5 |
|-------------------------+-------+-------+-------+-------+--------|
| Wireless | | | | | |
| Net sales | 18.5 | 27.7 | 31.7 | 28.2 | 20.4 |
| Operating profit (loss) | -8.1 | -9.1 | -6.5 | -4.1 | -5.2 |
|-------------------------+-------+-------+-------+-------+--------|
| Other businesses | | | | | |
| Net sales | 0.1 | 0.1 | 0.1 | 0.1 | 0.3 |
| Operating profit (loss) | -0.7 | -0.2 | 0.1 | 0.7 | 0.7 |
|-------------------------+-------+-------+-------+-------+--------|
| Total | | | | | |
| Net sales | 34.5 | 41.0 | 47.3 | 44.6 | 35.3 |
| Operating profit (loss) | -12.9 | -13.3 | -8.0 | -2.4 | -4.0 |
+------------------------------------------------------------------+
BUSINESS SEGMENTS' MAIN EVENTS DURING 3Q 2008
EB's reporting as from January 1, 2008 is 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 for its automotive
customers unique, customized solutions.
During the third quarter, the net sales of the Automotive Business
Segment amounted to EUR 15.9 million (EUR 14.5 million, 3Q 2007),
which represents a year-on-year growth of 9.0 per cent. The operating
loss, including the bad debt reserve of EUR 1.0 million, was EUR -4.1
million (EUR 0.5 million, 3Q 2007). The loss was due to significant
investment in product development and geographical expansion, weak
profitability of some large customer projects and postponement of
certain customer orders to the fourth quarter. The business continued
to grow during the period but growth was slower than anticipated.
During the third quarter, EB extended its capability to conduct
automotive business in the global market. EB acquired in July a
French company Net Consulting & Services S.A.R.L, which now
constitutes the base for EB's automotive business in France. In
August, EB launched its automotive activities in China in Shanghai
and Beijing. In the US EB has been working since the beginning of
2008 for Ford in developing the next versions of Ford's successful
car connectivity and entertainment platform called Sync.
WIRELESS
The Wireless Business Segment comprises the following businesses:
- Wireless Solutions that covers both mobile devices and radio
network infrastructure
- Wireless Communications Tools
- Wireless Sensor Solutions.
During the third quarter of 2008, the net sales of the Wireless
Business Segment amounted to EUR 18.5 million (EUR 20.4 million, 3Q
2007), representing a decrease of 9.3 per cent .The operating loss
was EUR -8.1 million (EUR -5.2 million, 3Q 2007). These were due to
an anticipated decrease in the revenues of the TerreStar project,
slower than expected sales of wireless communications emulation
tools, slower than expected demand in mobile terminals R&D services
and significant investments in the R&D of Mobile WiMAX base station
module products.
EB has announced 1st of October that it has changed the business
model in the mobile WiMAX by shifting from investing upfront in the
development of radio base station module products to the development
of demanding, customer-financed Mobile WiMAX solutions. EB sold its
Mobile WiMAX baseband software asset to Nokia Siemens Networks. The
parties have agreed to continue the WiMAX baseband software related
product development together, with Nokia Siemens Networks purchasing
WiMAX product development from EB as a service. According to the
agreement, EB will in the future have the license to use the WiMAX
baseband software and its subsequent versions when developing
demanding customer solutions. The business model change will reduce
significantly EB's own R&D investment going forward, while
maintaining the opportunity to develop and implement demanding Mobile
WiMAX solutions for customers.
From the beginning of the third quarter EB initiated a change into
the operational mode in the Wireless Business Segment by combining
mobile terminal solutions and radio network solutions businesses into
a single Wireless Solutions (WS) business. With this change EB is
able to execute a number of profitability improvement actions and to
serve its current customers in a more flexible manner as well as to
penetrate into new market domains and customers in a need of a strong
wireless solution partner. EB intends to continue creating new and
reusable intellectual property (IP) through partnering with customers
and with well focused own investments. Services are important part of
the solution offering, and EB continues providing its customers with
development services, integration services and reference designs.
Further, EB will focus on leveraging its unique end-to-end
capabilities in terminals and infrastructure.
The sales of wireless communications emulation and design tools were
low especially in the USA and Asia, in comparison with the
corresponding period in 2007. The low sales resulted from the
repeated delays of test tool investments in the LTE standard research
and development programs and of large scale Mobile WiMAX network
deployments. To strengthen its market leadership, EB launched the new
radio emulation platform for WiMAX, LTE and 4G testing and introduced
the first product based on the new platform.
The product development of UHF RFID reader systems progressed, and
turn key solutions were delivered to automotive manufacturing
applications. The size of the individual deployment programs remained
small, as the market consists mostly of pilot and trial cases.
MARKET OUTLOOK
The share of electronics and software in cars has grown and it is
expected that the trend of increased use of software continues to
prevail in the market. The majority of the innovation and
differentiation in the automotive industry is brought about by
software and electronics and the use of standard software solutions
is expected to increase. The automotive software market is expected
to enjoy a 15 per cent Compound Annual Growth Rate (CAGR) during
2007-2012 in Europe (Frost & Sullivan). Software integration, HMI and
the capability of vehicle-devices connectivity products to support an
ever growing list of devices and device functions is a critical cost
challenge (Strategy Analytics) and addressing these challenges
requires new innovative solutions. The turbulent global economy is
currently affecting significantly the demand of cars and impacting
the financial performance of car manufactures. Additionally, the
increased fuel prices and strong focus on CO2 emissions shift demand
for more energy-efficient cars. The consequent uncertainties in the
industry may have an impact on the timing and extent of the
automotive software projects.
The commercial market start of Mobile WiMAX has delayed, however, the
main operator services market in America has started in the first
cities in the USA.
The volume share of smartphones is expected to continue to grow
during the next years due to the rapid increase in demand for new
features and services (Canalys). The R&D services market is facing a
price pressure that tightens the margins. This has created a need for
increased off-shoring in the industry. However, attractive niches
continue to exist (OVUM). Mastering of multi-radio technologies and
end-to-end system architectures covering both terminal and network
technologies, have gained mounting importance in the complex wireless
technology industry.
The wireless communications tools market has been weak as the
development of cellular technologies (HSDPA, HSUPA, 3GPP LTE, MIMO)
and non-cellular technologies (Mobile WiMAX, WiBRO) have not yet
generated demand for advanced development tools to the expected
extent. In the long run a growing demand is expected to be driven by
the LTE development activities.
The UHF RFID reader system market growth has been delayed. The market
has however started to move gradually from pilot and trial projects
to commercial deployments. The global RFID reader market was earlier
estimated to grow with a CAGR of over 20 per cent for the period of
2006 to 2011 (VDC), also likely to be dampened down somewhat by the
current economical slow-down.
RESEARCH AND DEVELOPMENT DURING 3Q 2008
EB continued to invest in R&D in the following areas:
- Automotive software products and tools
- Mobile WiMAX radio base station module products
- Radio channel emulation product portfolio
The total R&D investments during the third quarter were EUR 8.9
million (EUR 9.4 million, 3Q 2007), equaling 25.7 per cent of the net
sales (26.6 % in 2007).
EVENTS AFTER THE REPORTING PERIOD
- EB and Nokia Siemens Networks announced on the 1st of October upon
the co-operation on the further development of WiMAX technology.
According to the agreement, EB sells its WiMAX baseband software
asset to Nokia Siemens Networks. The parties have agreed to continue
the WiMAX baseband software related product development together,
with Nokia Siemens Networks purchasing WiMAX product development work
from EB as a service. EB will in the future have the license to use
WiMAX baseband software and its subsequent versions when developing
demanding customer solutions based on WiMAX technology.
- EB lowered the net sales and operating profit guidance in the
beginning of October and announced additional actions to improve the
profitability and adjust the cost structure. Due to the financial and
production related reasons, EB started personnel negotiations with
personnel working in support functions with the goal of reducing
approximately 40 people.
ACTIONS TO IMPROVE PROFITABILITY
EB launched on 1st of October actions to improve its profitability
and to adjust the cost structure. The target is to achieve annual
cost savings totaling approximately EUR 30 million in comparison with
the cost level of the first half of 2008.
The cost structure program consists of three major elements:
Increasing the chargeability and utilization, adjusting the R&D
investments to a sustainable level and streamlining support function
costs.
OUTLOOK FOR THE SECOND HALF OF 2008
Improvement of profitability is the main focus of EB during the
second half of 2008.
The above mentioned actions to improve the company's profitability
and to adjust the cost structure are estimated to start to have
effect during the last quarter of 2008. The current rapidly changing
and turbulent business environment is having an impact on the
company's outlook. The earlier announced actions will not be
sufficient, and the company needs to take further measures in order
to ensure the profitability. Further actions will be informed later
once the respected plan is completed.
The more general market outlook by the businesses is presented under
the Market Outlook section.
EB expects the net sales for the second half of 2008 to be lower than
in the first half of 2008 (EUR 88.3 million) and the operating loss
from business operations for the second half of 2008 (without the
non-recurring items) to be approximately at the level of the
operating loss from the first half of 2008 (EUR -15.1 million without
the non-recurring items). Earlier EB expected the net sales to be
lower than in the first half of 2008 and the operating loss from
business operations without non-recurring costs to be better compared
to the first half of 2008 (EUR -15.1 million).
RISKS AND UNCERTAINTIES
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. Further
the following risks are related to the company's business operations
in the ongoing financial period:
In R&D services businesses the risks are mainly related to
uncertainties of 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 of project
resources, timing of the most important technology components and,
competitive situation in the market, which all may affect the R&D
service demand and price levels. Further, there are typical industry
warranty and liability risks involved in selling R&D services.
Additional risks emanate from ongoing restructuring of the
telecommunications infrastructure industry.
In the technology product businesses the risks are related to
potential market delays (in particular in the areas of Mobile WiMAX
and RFID reader systems), to size, timing and short visibility of the
customers' product purchases and orders, timely closing of customer
contracts, 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. 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.
BALANCE SHEET AND FINANCING
The figures presented in the balance sheet of September 30, 2008,
have been compared with the balance sheet of December 31, 2007
(EUR 1,000).
9/2008 12/2007
Non-current assets 55,263 77,196
Current assets 133,238 158,918
Total assets 188,501 236,114
Share capital 12,941 12,941
Other equity 115,667 152,710
Minority interest 0 0
Total shareholders' equity 128,608 165,651
Non-current liabilities 20,840 28,937
Current liabilities 39,053 41,526
Total shareholders' equity and liabilities 188,501 236,114
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -19.7 million
- increase in net working capital EUR -3.6 million
+ interest, taxes and dividends EUR -0.9 million
= cash generated from operations EUR -24.1 million
- net cash used in investment activities EUR +26.1 million
- net cash used in financing EUR -6.7 million
= net change in cash and cash equivalents EUR -4.7 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 60.2 million (EUR 78.8 million on December 31,
2007). Accounts and other payables, booked in interest-free current
liabilities, were at EUR 29.1 million (EUR 33.2 million on December
31, 2007).
The amount of non-depreciated consolidation goodwill at the end of
the period under review was EUR 18.2 million (EUR 19.6 million on
December 31, 2007).
The amount of gross investments in the period under review was EUR
8.5 million, consisting of replacement investments and acquisition of
Net Consulting & Services S.A.R.L. Net investments for the reporting
period totaled to EUR -9.3 million including the aforementioned
items, the termination of a long-term investment portfolio and items
created by the sales of Elektrobit AG and Kiinteistö Oy Automaatiotie
1. The total amount of depreciation during the period under review
was EUR 12.6 million, including EUR 4.8 million of depreciation owing
to business acquisitions.
The amount of interest-bearing debt at the end of the reporting
period was EUR 25.8 million. The distribution of net financing
expenses on the income statement was as follows:
interest, dividend and other financial income EUR 3.0 million
interest expenses and other financial expenses EUR -2.5 million
foreign exchange gains and losses EUR -1.9 million
EB's equity ratio at the end of the period was 69.5 per cent (70.9
per cent at the end of 2007).
The figures from the period under review includes the statutory
reserves EUR 1.9 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 upcoming 12-month net cash
flow of the currency in question is hedged. The net cash flow is
determined on the basis of sales receivables, payables, the order
book and the budgeted net currency cash flow. The hedged foreign
currency exposure at the end of the review period was equivalent to
EUR 34.9 million.
PERSONNEL
EB employed an average of 1772 people between January and September
2008. At the end of September, EB had 1780 employees (1725 at the end
of 2007). A significant part of EB's personnel are product
development engineers.
FLAGGING NOTIFICATIONS
There were no changes in ownership during the period under review
that would have caused flagging notifications which are obligations
for disclosure in accordance with Chapter 2, section 9 of the
Securities Market Act.
Oulu, October 21, 2008
EB, Elektrobit Corporation
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Tel. +358 40 344 5148
Outi Torniainen
Director, Communications and Marketing
Tel. +358 40 512 1375
Distribution:
OMX Nordic Exchange Helsinki
Principal media
INVITATION TO PRESS CONFERENCE ON EB'S 3Q RESULT
EB, Elektrobit Corporation, will hold a press conference for media,
analysts and institutional investors concerning the Interim Report 3Q
2008 on
October 21, 2008 at 10.30 - 11.30 hours (CEST+1)
in Espoo, Keilasatama 5,
The conference will be audio webcast and published live on the
Internet through WebEx. The conference will be held 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 5476.
There will be a possibility to present questions in place as well as
by calling to the following conference call number: + 358 20699101,
PIN: 670560#.
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.
October 21, 2008
EB, Elektrobit Corporation
Corporate Communications
ELEKTROBIT CORPORATION, INTERIM REPORT JANUARY - SEPTEMBER 2008
(unaudited)
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED INCOME STATEMENT (MEUR) 1-9/2008 1-9/2007 1-12/2007
9 months 9 months 12 months
NET SALES 122.8 99.7 144.3
Other operating income 4.7 3.6 14.4
Change in work in progress and finished
goods -1.5 2.6 1.5
Work performed by the undertaking for
its own purpose
and capitalized 0.1 0.4 0.5
Raw materials -11.4 -7.0 -10.1
Personnel expenses -76.3 -69.9 -96.5
Depreciation -12.6 -8.4 -15.9
Other operating expenses -60.0 -39.0 -58.5
OPERATING PROFIT (LOSS) -34.2 -17.8 -20.3
Financial income and expenses -1.4 1.1 0.3
RESULT BEFORE TAXES -35.6 -16.7 -20.0
Income taxes -0.1 0.0 0.0
RESULT FOR THE PERIOD FROM CONTINUING
OPERATIONS -35.8 -16.7 -20.0
Result after taxes for the period from
discontinued
operations 0.1 12.7 13.1
RESULT FOR THE PERIOD -35.6 -4.0 -6.9
Attributable to
Equity holders of the parent -35.6 -4.0 -6.9
Minority interest 0.0 -0.0 0.0
Earnings per share EUR continuing
operations
Basic earnings per share -0.28 -0.13 -0.15
Diluted earnings per share -0.28 -0.13 -0.15
Earnings per share EUR discontinued
operations
Basic earnings per share 0.0 0.10 0.10
Diluted earnings per share 0.0 0.10 0.10
Earnings per share EUR continuing and
discontinued
Operations
Basic earnings per share -0.28 -0.03 -0.05
Diluted earnings per share -0.28 -0.03 -0.05
Average number of shares, 1000 pcs 129 413 129 413 129 413
CONSOLIDATED BALANCE SHEET (MEUR) Sept. 30, Sept. 30, Dec. 31,
2008 2007 2007
ASSETS
Non-current assets
Property, plant and equipment 17.4 35.3 25.1
Goodwill 18.2 21.7 19.6
Intangible assets 15.8 17.5 18.0
Financial assets at fair value
through profit or loss 0.0 10.9 10.8
Other financial assets 0.3 0.3 0.3
Receivables 0.9 0.2 0.7
Deferred tax assets 2.6 4.2 2.8
Non-current assets total 55.3 90.1 77.2
Current assets
Inventories 5.8 8.7 7.6
Trade and other receivables 60.2 53.7 78,8
Financial assets at fair value
through profit or loss 0.0 70.8 50.9
Cash and short term deposits 67.2 12.0 21.6
Current assets total 133.2 145.2 158.9
TOTAL ASSETS 188.5 235.3 236.1
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 0.1 -0.3 -0.4
Retained earnings 51.0 91.1 88.5
Minority interest 0.0 0.0 0.0
Total equity 128,6 168.4 165.7
Non-current liabilities
Deferred tax liabilities 3.2 5.2 4.4
Provisions 1.2
Interest-bearing liabilities 15.9 23.8 23.9
Other liabilities 0.6 0.7 0.6
Non-current liabilities total 20.8 29.7 28.9
Current liabilities
Trade and other payables 26.2 27.2 31.1
Financial liabilities at fair value
through profit or loss 1.1
Pension obligations 1.1 1.1 0.9
Current tax liabilities 0.0 0.0 1.2
Provisions 0.7
Interest-bearing loans and borrowings 9.9 8.9 8.3
Current liabilities total 39.1 37.2 41.5
Total liablities 59.9 66.9 70.5
TOTAL EQUITY AND LIABILITIES 188.5 235.3 236.1
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-9/2008 1-9/2007 1-12/2007
9 months 9 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -35.6 -4.0 -6.9
Adjustment of accrual basis items 15.9 -7.9 -6.4
Change in net working capital -3.6 -6.7 -11.6
Interest paid on operating activities -1.9 -1.3 -1.8
Interest received from operating
activities 3.0 2.6 1.5
Other financial income and expenses, net
received 0.0 0.0 0.0
Income taxes paid -2.0 -1.1 -1.9
NET CASH FROM OPERATING ACTIVITIES -24.1 -18.4 -27.1
CASH FLOW FROM INVESTING ACTIVITIESAcquisition of business unit, net of cash
acquired -0.9 -5.3 -4.7
Acquisition of minority interest 0.0 -10.2 -10.2
Disposal of business unit, net of cash
acquired 20.4 14.9 16.9
Purchase of property, plant and equipment -1.2 -2.5 -3.9
Purchase of intangible assets -2.3 -4.1 -6.3
Purchase of other investments -0.5 -2.9 -3.9
Sale of property, plant and equipment 0.2 0.5 0.5
Sale of intangible assets 0.0 0.7 1.1
Proceeds from sale of investments 10.5 2.8 3.7
NET CASH FROM INVESTING ACTIVITIES 26.1 -6.1 -6.8
CASH FLOW FROM FINANCING ACTIVITIES
Loans granted -0.5
Proceeds from borrowing 2.1 4.2 8.2
Repayment of borrowing -1.6 -4.2 -7.6
Payment of finance liabilities -4.6 -3.7 -5.1
Dividends paid -2.6 -14.2 -14.2
NET CASH FROM FINANCING ACTIVITIES -6.7 -17.9 -19.3
NET CHANGE IN CASH AND CASH EQUIVALENTS -4.7 -42.4 -53.2
Cash and cash equivalents at beginning of
period 71.9 125.1 125.1
Cash and cash equivalents at end of
period 67.2 82.7 71.9
CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Result for the period
E = Minority interest
F = Total equity
A B C D E F
Equity on January 1, 2007 12.9 64.6 108.9 2.1 188.6
Result for the period -4.0 -4.0
Dividend distribution -14.2 -14.2
Share-related compensation 0.9 0.9
Translation difference 0.0 -2.1 -2.1
Others -0.6 -0.6
Equity on September 30, 2007 12.9 64.6 94.9 -4.0 0.0 168.4
Equity on January 1, 2008 12.9 64.6 88.1 165.7
Result for the period -35.6 -35.6
Dividend distribution -2.6 -2.6
Share-related compensation 0.7 0.7
Translation difference 0.5 0.5
Others 0.0 0.0
Equity on September 30, 2008 12.9 64.6 86.7 -35.6 0.0 128.6
NOTES TO THE INTERIM REPORT
Accounting principles for the Interim Report:
The same accounting policies and methods of computation are followed
in the interim report as compared with annual financial statements.
Explanatory comments about the seasonality or cyclicality of
reporting period operations:
The company operates in business areas which are subject to seasonal
fluctuations.
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 investment portfolio in the non-current assets worth of EUR 10.6
million was dissolved and the amount was transferred into assets
during the reporting period.
The cash flow from investments during the reporting period includes
the sale price payment of EUR 13.1 million from the property sales
transaction done in December 2007.
As a consequence of the property sales of Kiinteistö Oy Automaatiotie
1 non-current assets decreased EUR 6.0 million and interest-bearing
borrowings decreased EUR 6.0 million.
The result of the reporting period comprises non-recurring
restructuring costs of EUR 3.5 million, goodwill write-offs of EUR
2.8 million, a write-off of EUR 0.6 million of an activated R&D
investment and bad dept reserve of EUR 1.0 million.
Dividends paid:
According to the decision of the company's Annual Shareholders'
Meeting held on March 14, 2008, dividend of EUR 0.02 per share, a
total of EUR 2,588,253.80 was paid on March 28, 2008
SEGMENT INFORMATION (MEUR) 1-9/2008 1-9/2007 1-12/2007
9 months 9 months 12 months
Automotive
Net sales to external customers 44.6 36.4 52.6
Net sales to other segments 0.1 0.0 0.0
Net sales total 44.7 36.4 52.7
Operating profit (loss) -9.8 -0.3 0.7
Wireless
Net sales to external customers 77.9 62.6 90.9
Net sales to other segments 0.1 0.7 0.8
Net sales total 78.0 63.3 91.7
Operating profit (loss) -23.6 -18.7 -22.8
Other businesses
Net sales to external customers 0.3 0.7 0.8
Net sales to other segments 0.0 0.0 0.0
Net sales total 0.3 0.7 0.8
Operating profit (loss) -0.8 1.1 1.8
Eliminations
Net sales to external customers 0.0 0.0 0.0
Net sales to other segments -0.2 -0.7 -0.8
Net sales total -0.2 -0.7 -0.8
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 122.8 99.7 144.3
Operating profit (loss) -34.2 -17.8 -20.3
Net sales of geographical segments (MEUR) 1-9/2008 1-9/2007 1-12/2007
9 months 9 months 12 months
Net sales
Europe 79.4 73.5 101.6
Americas 38.4 18.8 33.3
Asia 5.1 7.5 9.5
Net sales total 122.8 99.7 144.3
Material events subsequent to the end of the interim period that have
not been reflected in the financial statements for the interim
period:
There were no material events subsequent to the end of the interim
period.
The effect of changes in the composition of the group structure
during the interim period:
During the reporting period, EB sold 100 per cent of the share
capital of Elektrobit AG and 100 per cent of share capital of
Kiinteistö Oy Automaatiotie 1.
During the reporting period, EB has acquired 100 per cent of the
share of Net Consulting & Services S.A.R.L in France. The acquisition
does not have a significant impact on EB's balance sheet or result.
Related party transactions: 1-9/2008 1-9/2007 1-12/2007
Employee benefits for key management and
stock
option expenses total 2.1 1.9 2.5
Loans and guarantees to related party
There have not been other transactions
between the
related parties
INCOME STATEMENT BY 7-9/ 4-6/ 1-3/ 10-12/ 7-9/
QUARTER (MEUR) 2008 2008 2008 2007 2007
3 months 3 months 3 months 3 months 3 months
NET SALES 34.5 41.0 47.3 44.6 35.3
Other operating income 2.6 0.7 1.4 10.7 0.9
Change in work in
progress and
finished goods -0.8 -0.1 -0.6 -1.1 0.1
Work performed by the
undertaking
for its own purpose
and capitalized -0.0 0.0 0.1 0.1 0.2
Raw materials -2.3 -3.6 -5.6 -3.1 -2.5
Personnel expenses -24.3 -24.8 -27.2 -26.6 -22.6
Depreciation -2.9 -6.5 -3.2 -7.6 -3.5
Other operating
expenses -19.7 -20.1 -20.2 -19.5 -11.8
OPERATING PROFIT
(LOSS) -12.9 -13.3 -8.0 -2.4 -4.0
Financial income and
expenses -1.6 -0.2 0.4 -0.9 0.0
RESULT BEFORE TAXES -14.4 -13.6 -7.7 -3.3 -4.0
Income taxes -0.1 0.0 -0.0 0.0 0.0
RESULT FOR THE PERIOD
FROM
CONTINUING OPERATIONS -14.6 -13.5 -7.7 -3.3 -4.0
Result after taxes for
the period from
discontinued
operations 0.0 0.1 0.0 0.4 -0.0
RESULT FOR THE PERIOD -14.6 -13.4 -7.7 -2.9 -4.0
Attributable to
Equity holders of
the parent -14.6 -13.4 -7.7 -2.9 -4.0
Minority interest 0.0 0.0 0.0 0.0 0.0
BALANCE SHEET BY Sept. 30, June 30, March 31, Dec. 31, Sept.
QUARTER 30,
(MEUR) 2008 2008 2008 2007 2007
ASSETS
Non-current assets
Property, plant and
equipment 17.4 24.3 24.5 25.1 35.3
Goodwill 18.2 17.6 19.6 19.6 21.7
Intangible assets 15.8 16.3 18.2 18.0 17.5
Financial assets at
fair value
through profit or
loss 0.0 0.0 0.0 10.8 10.9
Other financial
assets 0.3 0.3 0.4 0.3 0.3
Receivables 0.9 0.9 0.7 0.7 0.2
Deferred tax assets 2.6 3.4 3.0 2.8 4.2
Non-current assets
total 55.3 62.8 66.4 77.2 90.1
Current assets
Inventories 5.8 7.2 7.4 7.6 8.7
Trade and other
receivables 60.2 61.9 64.9 78.8 53.7
Financial assets at
fair value
through profit or
loss 0.0 0.5 1.6 50.9 70.8
Cash and short term
deposits 67.2 74.8 85.7 21.6 12.0
Current assets total 133.2 144.4 159.6 158.9 145.2
TOTAL ASSETS 188.5 207.2 226.0 236.1 235.3
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 0.1 -0.8 -0.8 -0.4 -0.3
Retained earnings 51.0 65.6 78.6 88.5 91.1
Minority interest 0.0 0.0 0.0 0.0 0.0
Total equity 128.6 142.3 155.3 165.7 168.4
Non-current
liabilities
Deferred tax
liabilities 3.2 3.5 4.2 4.4 5.2
Provisions 1.2
Interest-bearing
liabilities 15.9 22.8 23.9 23.9 23.8
Other liabilities 0.6 0.6 0.6 0.6 0.7
Non-current
liabilities total 20.8 26.8 28.7 28.9 29.7
Current liablities
Trade and other
payables 26.2 28.0 33.4 32.3 27.2
Financial
liabilities at fair
value
through profit or
loss 1.1
Pension obligations 1.1 1.1 1.1 0.9 1.1
Provisions 0.7
Interest-bearing
loans and
borrowings
(non-current) 9.9 8.9 7.5 8.3 8.9
Current liabilities
total 39.1 38.0 42.0 41.5 37.2
Total liablities 59.9 64.8 70.7 70.5 66.9
TOTAL EQUITY AND
LIABILITIES 188.5 207.2 226.0 236.1 235.3
CONSOLIDATED CASH FLOW 7-9/ 4-6/ 1-3/ 10-12/ 7-9/
STATEMENT BY QUARTER 2008 2008 2008 2007 2007
3 months 3 months 3 months 3 months 3 months
Net cash from
operating activities -7.7 -9.0 -7.4 -8.6 -6.7
Net cash from
investing activities 0.5 -0.0 25.7 -0.7 -5.6
Net cash from
financing activities -0.4 -1.8 -4.5 -1.4 -3.8
Net change in cash and
cash
equivalents -7.6 -10.9 13.8 -10.8 -16.1
FINANCIAL PERFORMANCE RELATED RATIOS 1-9/2008 1-9/2007 1-12/2007
9 months 9 months 12 months
INCOME STATEMENT (MEUR)
Net sales 122.8 99.7 144.3
Operating profit (loss) -34.2 -17.8 -20.3
Operating profit (loss), % of net
sales -27.9 -17.9 -14.1
Result before taxes -35.6 -16.7 -20.0
Result before taxes, % of net sales -29.0 -16.8 -13.9
Result for the period -35.8 -16.7 -20.0
PROFITABILITY AND OTHER KEY FIGURES
Interest-bearing net liabilities,
(MEUR) -41.4 -50.0 -39.7
Net gearing, -% -32.2 -29.7 -24.0
Equity ratio, % 69.5 72.1 70.9
Gross investments, (MEUR) 8.5 38.1 44.1
Average personnel during the period 1772 1673 1695
Personnel at the period end 1780 1766 1725
AMOUNT OF SHARE ISSUE ADJUSTMENT Sept. 30, Sept. 30, Dec. 31,
(1,000 pcs) 2008 2007 2007
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) 1-9/2008 1-9/2007 1-12/2007
9 months 9 months 12 months
Basic earnings per share -0.28 -0.13 -0.15
Diluted earnings per share -0.28 -0.13 -0.15
Equity *) per share 0.99 1.30 1.28
*) Equity attributable to equity
holders of the parent
MARKET VALUES OF SHARES 1-9/2008 1-9/2007 1-12/2007
(EUR)
Highest 1.79 2.48 2.48
Lowest 0.63 1.51 1.51
Average 1.34 1.95 1.93
At the end of period 0.70 1.85 1.64
Market value of the
stock, (MEUR) 90.6 239.4 212.2
Trading value of shares,
(MEUR) 7.0 47.7 53.4
Number of shares traded,
(1,000 pcs) 5 230 24 444 27 656
Related to average number
of shares % 4.0 18.9 21.4
SECURITIES AND CONTINGENT Sept. 30, Sept. 30, Dec. 31,
LIABILITIES
(MEUR) 2008 2007 2007
AGAINST OWN LIABILITIES
Floating charges 3.1 3.1 3.1
Mortgages 0.0 18.0 7.0
Pledges 2.0 7.9 9.8
Guarantees 4.1 2.1
Mortgages are pledged for
liabilities totaled 12.1 17.8 17.3
OTHER DIRECT AND
CONTINGENT LIABILITIES
Rental liabilities
Falling due in the
next year 4.4 2.9 4.0
Falling due after one
year 4.9 4.1 4.9
NOMINAL VALUE OF CURRENCY Sept. 30, 2008 Sept. 30, 2007 Dec. 31, 2007
DERIVATIVES (MEUR)
Foreign exchange forward
contracts
Market value -1.1 0.1 0.7
Nominal value 34.9 22.6 26.4
© 2024 Nasdaq, Inc. All Rights Reserved |