2009-01-22 08:13:16 CET
2009-01-22 08:14:32 CET
REGULATED INFORMATION
BasWare - Financial Statement Release
BASWARE FINANCIAL STATEMENTS 2008
Basware Stock Exchange release 2008
Basware fourth quarter and year 2008
SUMMARY (last year's corresponding period in parentheses, unless
otherwise stated)
Financial year 2008
- Net sales EUR 86 098 thousand (EUR 73 270 thousand) - growth
17.5 percent
- Operating profit EUR 8 679 thousand (EUR 7 512 thousand) -
growth 15.5 percent
- Operating profit 10.1 percent of net sales (10.3%)
- International operations accounted for 51.8 percent of net
sales (48.2%) - growth 26.6 percent
- Backlog of SaaS orders not recognized as income EUR 10 519
thousand (EUR 11 112 thousand) at the end of the period
- Earnings per share EUR 0.56 (0.36)
- Dividend proposal for 2008: EUR 0.23 per share (2007: EUR
0.15)
October-December Q4
- Net sales EUR 26 294 thousand (EUR 23 187 thousand) - growth
13.4 percent
- Operating profit EUR 4 122 thousand (EUR 1 924 thousand) -
growth 114.2 percent
- Operating profit 15.7 percent of net sales (8.3%)
- Operating profit excluding one-off items EUR 4 858 thousand -
growth 152.5 percent
- Operating profit 18.5 percent of net sales excluding one-off
items
- International operations accounted for 51.4 percent of net
sales (53.2%) - growth 9.6 percent
- Earnings per share EUR 0.28 (0.09)
Basware expects its net sales to develop positively on the level of
2008. Operating profit (EBIT) for 2009 is expected to be from 10 to
15 percent of net sales.
The Financial Statements have been prepared according to
International Financial Reporting Standards (IFRS).
GROUP KEY FIGURES
10-12/ 10-12/ 1-12/ 1-12/ Change,
EUR thousand 2008 2007 Change, % 2008 2007 %
Net sales 26 294 23 187 13.4% 86 098 73 270 17.5%
Operating profit 4 122 1 924 114.2% 8 679 7 512 15.5%
% of net sales 15.7% 8.3% 10.1% 10.3%
Profit before tax 3 862 1 888 104.6% 8 410 7 704 9.2%
Profit for the period 3 294 1 113 196.0% 6 585 4 112 60.1%
Return on equity, % 26.5% 9.5% 13.7% 8.9%
Return on investment,
% 30.4% 15.6% 16.6% 16.2%
Liquid assets* 8 777 7 041 24.7% 8 777 7 041 24.7%
Gearing, % 9.3% -5.7% 9.3% -5.7%
Equity ratio, % 59.5% 70.0% 59.5% 70.0%
Earnings per share,
EUR 0.28 0.09 206.5% 0.56 0.36 58.1%
Earnings per share
(diluted), EUR 0.28 0.09 206.5% 0.56 0.36 58.1%
Equity per share, EUR 4.23 4.12 2.6% 4.23 4.12 2.6%
*) Includes cash, cash equivalents and financial assets at fair value
through profit or loss
Basware's business operations consist of product sales, maintenance
and support, consulting and services, Software as a Service (SaaS)
sales and other operations. The core of Basware's product sales
consists of the Basware Enterprise Purchase to Pay product suite and
the Basware Financial Management (FIMA) suite. The Group's reported
market areas are Finland, Scandinavia, Europe and North America.
Record-high result in challenging market conditions
Basware's CEO Ilkka Sihvo: "Profitability in the fourth quarter was
record high. Considering the significantly softened market
conditions, we succeeded excellently. Our net sales increased by 13.4
percent and profitability went up as much as 114.2 percent on the
corresponding period the previous year. Excluding one-off items, our
operating profit for the fourth quarter grew by 152.5 percent and
amounted to EUR 4 858 thousand. Of the units, Finland, North America
and the Netherlands exceeded their objectives. France and Norway
achieved their goals.
The integration of Contempus was completed successfully. With regard
to business operations, consulting continued its growth at a rate of
nearly 30 percent during the fourth quarter. Software as a Service
business increased by 36.2 percent. Basware succeeded well during the
quarter in securing large international customer accounts,
particularly in North America and Europe.
The financial objectives set for 2008 as a whole were achieved in
terms of net sales in extremely challenging market conditions.
Operating profit for the full year was record-high and was within the
guidance. Excluding one-off items, operating profit for 2008 as a
whole amounted to EUR 9 415 thousand, or 10.9 percent of net sales.
For the year as a whole, the Norwegian, Finnish, German and North
American Enterprise Purchase to Pay units exceeded their objectives.
The French unit met its goals, while Sweden and the Financial
Management business fell slightly short of their objectives. Of the
2008 net sales, 51.8% came from outside of Finland and the growth of
international net sales was 26.2%. We have succeeded in entering into
agreements with even larger organizations, and in 2008 both our
invoice automation and procurement solutions did extremely well in
the competition."
REPORTING
Basware acquired Contempus AS from Affecto Plc on September 30, 2008.
Contempus has been included in the consolidated financial statements
for October 1 - December 31, 2008. The preliminary balance sheet of
Contempus Group was included in the Basware's Q3 consolidated balance
sheet because the acquisition was confirmed on September 30, 2008.
This interim report also presents unaudited pro forma income
statement data for net sales and operating profit for 2008 as
comparison data. The figures have been calculated to illustrate what
the Group's net sales and operating profit for 2008 would have been
had the income statement data for Contempus been consolidated for the
entire period.
Basware's primary reporting segment is based upon geography as
follows: Finland, Scandinavia, Europe and North America.
Basware reports its Software as a Service (SaaS) revenue separately
in the second segment. Software as a Service revenue includes
license, maintenance and services revenue invoiced monthly based on
an agreement. Software as a Service agreements typically span several
years. The Group also reports the backlog of SaaS orders not
recognized as income. The Company's SaaS sales are growing and this
dilutes net sales growth in the short term.
As of January 1, 2008, the capital structure of Basware Corporation's
foreign subsidiaries has been changed to the extent that the majority
of the long-outstanding intercompany trade receivables in the parent
company have been converted to a long-term net investment in a
foreign operation. The purpose of the loan arrangement is to fund a
long-term strategic investment. Foreign currency gains and losses
from a net investment in a foreign operation are recorded in a
separate component of equity in the consolidated financial
statements.
FOURTH QUARTER OCTOBER 1 - DECEMBER 31, 2008
NET SALES OCTOBER-DECEMBER 2008
Basware Group's net sales increased by 13.4 percent in
October-December and were EUR 26 294 thousand (EUR 23 187
thousand).With comparable currency exchange rates, net sales for
October-December increased by 17.6 percent.
In the fourth quarter, 29.3 percent (32.3%) of net sales consisted of
own product sales and the product sales grew by 2.7 percent. SaaS
sales accounted for 1.9 percent (1.6%) of net sales in the fourth
quarter, up 36.2 percent. Maintenance revenue accounted for 26.0
percent (28.7%) of net sales and grew by 3.0 percent. Consulting and
services revenue represented 42.8 percent (37.4%) of net sales and
grew by 29.6 percent.
Value added resellers provided a net share of 15.3 percent (14.0%) or
EUR 1 179 thousand of product sales in October-December,
corresponding to 8.7 percent (8.5%) of international operations'
total net sales.
The international share of Basware's net sales was 51.4 percent
(53.2%) in October-December. International operations grew by 9.6
percent.
FINANCIAL PERFORMANCE OCTOBER-DECEMBER 2008
Basware Group's operating profit increased by 114.2 percent in
October-December and was EUR 4 122 thousand (EUR 1 924 thousand).
Operating profit amounted to 15.7 percent of net sales. Excluding
one-off items, operating profit increased by 152.5 percent to EUR 4
858 thousand. Operating profit margin was correspondingly 18.5
percent.
The Company's fixed costs were EUR 19 911 thousand (EUR 18 546
thousand) in the quarter, up 7.4 percent on the corresponding period
the previous year. Personnel costs made up 75.8 percent (73.2%) or
EUR 15 093 thousand (EUR 13 569 thousand) of the fixed costs. The
increased costs reflect the increase in the number of personnel due
to the acquisition and one-off items associated with the integration
of Contempus.
Basware's consolidated financial statements include one-off costs of
EUR 736 thousand associated with the integration of Contempus. They
consist of benefits paid in connection with terminating employment
relationships (EUR 504 thousand), expert fees (EUR 48 thousand) and
costs resulting from the adoption of shared infrastructure and
premises (EUR 185 thousand).
Of the Contempus acquisition purchase price, EUR 3 758 thousand was
allocated to customer relationships and products, of which EUR 268
thousand has been amortized during the fourth quarter of 2008. The
allocation of the acquisition purchase price is preliminary.
Research and development costs totaled EUR 4 385 thousand (EUR 4 532
thousand), of which EUR 846 thousand (EUR 1 217 thousand) or 19.3
percent (27.0%) were capitalized during the period. Amortization of
capitalized research and development costs totaled EUR 312 thousand
(EUR 264 thousand).
Profit before tax for Q4 was EUR 3 862 thousand (EUR 1 888 thousand)
and profit for the period was EUR 3 294 thousand (EUR 1 113
thousand). Undiluted earnings per share were EUR 0.28 (EUR 0.09).
BUSINESS OPERATIONS OCTOBER-DECEMBER 2008
Finland
The Finland segment includes operations in Finland, Russia, Asia,
Australia and the Financial Management business. The company has
branches in India and Singapore and a representative office in
Russia. Net sales for the fourth quarter increased by 7.4 percent to
EUR 15 329 thousand (EUR 14 278 thousand).
Net sales of the Finnish Enterprise Purchase to Pay unit grew by 18.3
percent in the fourth quarter. Net sales of the Financial Management
operations (Basware FIMA Oy) increased by 12.0 percent, accounting
for 9.5 percent (9.7%) of Basware Group's business operations.
In October-December, a total of approximately 2.3 million invoices
were transmitted through the eInvoicing service of Basware Einvoices
Oy. The invoice volume grew by approximately 16.8 percent during the
quarter compared with the same quarter last year. A total of 38 new
customer agreements were signed during the period. Of the agreements,
10.5 percents were international agreements.
The Enterprise Purchase to Pay and Financial Management solutions are
sold in Russia. Currently there are 5 resellers in the area.
There are 6 resellers in the Asia Pacific region. New customers in
the quarter include Flight Centre Ltd and Svitzer Australia Pty Ltd.
In the Finland segment, new customers include Huhtamäki Oyj, Lumon
Oy, Instru Optiikka Oy, Cargotec Corporation, Tehy Ry and Publicis
Oy.
There are currently 17 resellers in all in the area and the number of
personnel averaged 426 (383) during the fourth quarter.
Scandinavia
Basware's Nordic organization consists of a centrally directed
Scandinavian (Sweden, Denmark and Norway) unit. All the Basware
Enterprise Purchase to Pay and Financial Management products are sold
in the Nordic countries, apart from the payment solutions which are
currently sold only in Finland.
Net sales of the area grew by 14.6 percent in the fourth quarter to
EUR 6 627 thousand (EUR 5 782 thousand). The profitability of
operations decreased by -102.4 percent and operating profit was EUR
-21 thousand (EUR 873 thousand). Excluding one-off items, the
operating profit would have been EUR 695 thousand, i.e. profitability
excluding one-off items decreased by -20.4 percent.
New customers include Zalaris HR Services As, HMR Group AS, Nycomed
AB, Dagbladet Borsen A/S and Cleanosol AB. Business operations are
mainly handled by the own organization and there were 146 (98)
employees on average in the area.
Europe
Basware's European business operations consist of the units in
Germany, France, The Netherlands, United Kingdom and Southern Europe.
Additionally, the reseller network covers the eastern part of Central
Europe. All Enterprise Purchase to Pay solutions are sold in Europe,
apart from the payment and travel & expense management solutions.
Net sales of the Europe segment decreased by 6.9 percent in the
fourth quarter and totaled EUR 5 264 thousand (EUR 5 652 thousand).
The profitability of the operations improved by 95.5 percent and
operating profit was EUR -48 thousand (EUR -1 078 thousand). At the
end of 2008, Basware UK implemented a rationalization program and
reorganization of operations, facilitating profitable growth in the
unit.
The UK data capture operations developed according to plan and were
profitable.
New customers include ABB Schweiz AG, Warnaco BV, Gemeentelijk
Havenbedrift Antwerpen, OCMS and Groupe Arrivée.
There are 35 resellers in Europe, and Basware personnel averaged 127
(142) during the fourth quarter.
North America
Basware's North American unit sells the Enterprise Purchase to Pay
solutions in the United States and Canada.
Net sales of the area increased by 27.3 percent in the fourth quarter
and totaled EUR 1 311 thousand (EUR 1 030 thousand). The
profitability of the operations improved by 174.0 percent and
operating profit was EUR 118 thousand (EUR -160 thousand).
New customers include Alcon Laboratories Inc and Brookfield
Properties Management LLC.
At the end of the period, there were 10 resellers in North America.
The number of personnel in the area averaged 29 (28) during the
fourth quarter.
FINANCIAL PERIOD JANUARY 1 - DECEMBER 31, 2008
NET SALES
Basware Group's net sales increased by 17.5 percent during the period
(January-December) and were EUR 86 098 thousand (EUR 73 270
thousand). With comparable currency exchange rates, net sales
increased by 20.1 percent in 2008. Pro forma net sales for the
financial period would have been EUR 93 300 thousand had the
Contempus net sales been consolidated for the entire period.
The Company's product sales decreased by 0.8 percent during the
period to 27.7 percent (32.8%) of net sales. Due to an adjustment of
revenue recognition principles for product sales, some of the
agreements signed at the end of 2006 were recognized in the first
quarter of 2007. The value of these agreements amounts to over EUR 3
million. The growth of product sales without these components would
have been 15.5 percent.
Maintenance revenue and support services related to maintenance
increased by 13.1 percent in the period and accounted for 29.0
percent (30.1%) of net sales. Consulting and services revenue grew by
37.1 percent and accounted for 41.3 percent (35.4%) of net sales.
SaaS sales increased by 41.5 percent in the period and accounted for
2.0 percent (1.7%) of net sales. The backlog of SaaS orders not
recognized as income was EUR 10 519 thousand (EUR 11 112 thousand) at
the end of the period.
Value added resellers provided a net share of 16.3 percent (14.9%) or
EUR 3 901 thousand of product sales in the financial period,
corresponding to 8.7 percent (10.1%) of international operations'
total net sales.
International operations accounted for 51.8 percent (48.2%) of
Basware's net sales for the period, increasing by 26.2 percent.
The geographical division of net sales by the location of assets
(primary segment):
Net sales 10-12/ 10-12/ 1-12/ 1-12/ Change,
(EUR thousand) 2008 2007 Change, % 2008 2007 %
Finland 15 329 14 278 7.4 49 517 48 849 1.4
Scandinavia 6 627 5 782 14.6 18 805 16 797 12.0
Europe 5 264 5 652 -6.9 19 454 15 081 29.0
North America 1 311 1 030 27.3 5 004 3 460 44.6
Sales between
segments -2 238 -3 554 37.0 -6 682 -10 917 38.8
Group total 26 294 23 187 13.4 86 098 73 270 17.5
The geographical division of net sales by the location of customers:
Net sales 10-12/ 10-12/ 1-12/ 1-12/ Change,
(EUR thousand) 2008 2007 Change, % 2008 2007 %
Finland 12 769 10 851 17.7 41 514 37 969 9.3
Scandinavia 6 411 5 549 15.5 18 309 15 911 15.1
Europe 5 143 5 422 -5.1 19 191 14 785 29.8
Others 1 971 1 366 44.3 7 083 4 604 53.8
Group total 26 294 23 187 13.4 86 098 73 270 17.5
FINANCIAL PERFORMANCE
Basware's operating profit for the period increased by 15.5 percent
to EUR 8 679 thousand (EUR 7 512 thousand). Operating profit
represented 10.1 percent (10.3%) of net sales. Excluding one-off
items, operating profit for 2008 grew by 25.3 percent and amounted to
EUR 9 415 thousand, or 10.9 percent of net sales. Pro forma operating
profit for the financial period would have been EUR 8 897 thousand
had the Contempus operating profit sales been consolidated for the
entire period.
The geographical division of net sales by the location of assets
(primary segment):
Operating profit 10-12/ 10-12/ 1-12/ 1-12/ Change,
(EUR thousand) 2008 2007 Change, % 2008 2007 %
Finland 4 385 2 335 87.8 7 898 12 706 -37.8
Scandinavia -21 873 -102.4 1 017 333 205.6
Europe -48 -1 078 95.5 -74 -3 662 98.0
North America 118 -160 174.0 289 -1 751 116.5
Operating profit
between segments -312 -47 -565.8 -452 -114 -295.7
Group total 4 122 1 924 114.2 8 679 7 512 15.5
The Company's fixed costs were EUR 69 900 thousand (EUR 59 543
thousand) in the period, up 17.4 percent on the corresponding period
the previous year. Personnel costs made up 72.1 percent (68.2 %) or
EUR 50,399 thousand (EUR 40,600 thousand) of the fixed costs. The
increase in personnel costs arising form the Contempus acquisition
totaled EUR 1 745 thousand. Bad debt and movement in bad debt
accruals are included in fixed costs. Bad debt reservations at the
end of the fourth quarter amounted to EUR 845 thousand (EUR 789
thousand).
Basware's consolidated financial statements include one-off costs of
EUR 736 thousand associated with the integration of Contempus. They
consist of benefits paid in connection with terminating employment
relationships (EUR 504 thousand), expert fees (EUR 48 thousand) and
costs resulting from the adoption of shared infrastructure and
premises (EUR 185 thousand).
Research and development costs totaled EUR 15 518 thousand (EUR 13
172 thousand), of which EUR 2 739 thousand (EUR 3 061 thousand) or
17.6 percent (23.2%) were capitalized during the period. Amortization
of capitalized research and development costs totaled EUR 1 183
thousand (EUR 983 thousand). Research and development costs equaled
18.0 percent (18.0%) of net sales. The costs increased 17.8 percent
(20.6%) during the financial year.
The Company's finance income and finance expenses were EUR -269
thousand (EUR +191 thousand). The Company's profit before tax was EUR
8 410 thousand (EUR 7 704 thousand). Taxes for the period totaled EUR
1 825 thousand (EUR 3 591 thousand). Profit for the period was 7.6
percent (5.6%) of net sales, or EUR 6 585 thousand (EUR 4 112
thousand). Undiluted earnings per share were EUR 0.56 (EUR 0.36).
FINANCE AND INVESTMENTS
Basware Group's total assets on the balance sheet at the end of the
financial period were EUR 81 909 thousand (EUR 67 722 thousand). The
Company's cash and liquid assets were EUR 8 777 thousand (EUR 7 041
thousand), of which cash and cash equivalents were EUR 8 745 thousand
(EUR 7 010 thousand) and financial assets at fair value through
profit or loss were EUR 31 thousand (EUR 31 thousand).
During the period under review, the Company withdrew a 3-year loan of
EUR 10.7 million to finance the acquisition of Contempus AS. The loan
is hedged by a 2-year interest cap agreement, setting a cap of 5.4%
for the base rate of interest.
Cash flow from operating activities was EUR 8 331 thousand (EUR 4 387
thousand). Cash flow from investments was EUR -12 303 thousand (EUR
-7 969 thousand).
Equity ratio was 59.5 percent (70.0%) and gearing was 9.3 percent
(-5.7%). The Company's interest-bearing liabilities totaled EUR 13
283 thousand (EUR 4 334 thousand), of which current liabilities
accounted for EUR 5 555 thousand (EUR 4 314 thousand). Return on
investment was 16.6 percent and return on equity 13.7 percent.
The acquisition price of Contempus AS was NOK 83.6 million
(approximately EUR 10.1 million at the exchange rate on the date of
the acquisition). In the financial statements, EUR 3 758 thousand
associated with customer relationships and products has been
allocated to intangible assets, taking deferred tax liabilities into
consideration. The purchase price includes EUR 4 264 thousand of
goodwill. The allocation of the acquisition purchase price is
preliminary.
The Company's capital expenditure, resulting from regular additional
and replacement investments required for growth, was EUR 1 007
thousand (EUR 817 thousand) in the period. Gross investments which
include, in addition to those mentioned above, the capitalized
research and development costs and acquisitions (Contempus) totaled
EUR 12 476 thousand (EUR 12 220 thousand).
Impairment tests indicate no impairments of assets. Amortization of
intangible assets totaled EUR 2 398 thousand (EUR 2 050 thousand), of
which amortization associated with business acquisitions amounted to
EUR 993 thousand (EUR 712 thousand).
RESEARCH, DEVELOPMENT AND NEW PRODUCTS
Research and development costs were EUR 15 518 thousand (EUR 13 172
thousand) in the period, corresponding to 18.0 percent (18.0%) of net
sales. Research and development costs increased by 17.8 percent
(20.6%) compared with the same period last year. Of the research and
development costs, EUR 2 739 thousand (EUR 3 061 thousand) or 17.6
percent (23.2%) were capitalized during the period. Amortization of
capitalized research and development costs totaled EUR 1 183 thousand
(EUR 983 thousand).
A total of 171 (152) people worked in Software Production at the end
of 2008. The Software Production unit is expanding in India, where
there are currently 26 employees.
In 2008, Basware introduced two significant new products: the RFx
Management sourcing solution and Basware Contract Lifecycle
Management solution piloted in 2007. In addition, Basware piloted its
Supplier Portal, which supplements the procurement offering.
In 2008, Basware tightened its customer cooperation in product
development even further by changing product development work with
customers from individual projects to a continuous operating model.
Therefore, the customer is central throughout the product development
process from beginning to end.
In the longer term, changes in the industry that will have an effect
on Basware's product development include the increasing popularity of
the Software as a Service model. Software as a Service (SaaS)
increases the probability of successful software acquisitions by
centralizing technological competence in a single place, and it
highlights the idea of selling the best practices - something that
Basware already cherishes.
PERSONNEL
Basware employed 689 (580) people on average and 731 (658) people at
the end of the period. The number of personnel increased by 73
persons and by 11.1 percent compared with the same period the
previous year. As a result of the Contempus acquisition, the number
of personnel increased by 41 people.
The share of personnel working in foreign units has increased
compared with the previous year. At the end of the period, 46.1
percent (40.9%) of Basware personnel worked outside of Finland and
53.9 percent (59.1%) in Finland. 18.9 percent of the personnel work
in sales and marketing, 48.7 in consulting and services, 23.4 percent
in Software Production, and 9.0 percent in administration.
The average age of employees is 35.9 (35.6) years. Of the employees,
34.1 percent have a Master's degree and 44.0 percent have a
Bachelor's degree. Women account for 27.5 percent of employees, men
for 72.5 percent.
For incentive purposes, the Company has a bonus program that covers
all employees. During the financial period, the Company also had two
outstanding warrant programs, one for the management and the other
for the Group's key personnel.
Geographical distribution of personnel (primary segment):
Personnel (employed, on 10-12/ 10-12/ 1-12/ 1-12/ Change,
average) 2008 2007 Change, % 2008 2007 %
Finland 426 383 11.2 421 367 14.9
Scandinavia 146 98 49.3 112 96 16.8
Europe 127 142 -10.3 129 93 38.9
North America 29 28 3.6 26 25 5.7
Group total 729 651 11.9 689 580 18.7
BUSINESS OPERATIONS
Finland
The Finland segment includes operations in Finland, Russia, Asia,
Australia and the Financial Management business. The company has
branches in India and Singapore and a representative office in
Russia. Net sales for the financial period increased by 1.4 percent
to EUR 49 517 thousand (EUR 48 849 thousand).
Net sales of the Finnish Enterprise Purchase to Pay unit increased by
10.6 percent in 2008. Net sales of the Financial Management
operations (Basware FIMA Oy) increased by 3.9 percent and accounted
for 10.2 percent (11.5%) of Basware Group's business operations.
A total of approximately 8.3 million invoices were transmitted
through the Einvoicing service of Basware Einvoices Oy in 2008. The
invoice volume increased by approximately 21.1 percent during the
year compared with the same previous year. A total of 133 new
customer agreements were signed in 2008. Of the agreements, 29.0
percent were international agreements.
The Enterprise Purchase to Pay and Financial Management solutions are
sold in Russia. Currently there are 5 resellers in the area.
There are 6 resellers in the Asia Pacific region. New customers in
2008 included ABB in Japan, Malaysian Airlines, UnitingCare Health,
Challenger Group Services, Bureau VERITAS, Datacom, Flinders
University, BGC Contracting Pty Ltd, Flight Centre Ltd, and Svitzer
Australia Pty Ltd.
In the Finland segment, new customers during the reporting period
included A-Lehdet Oy, Gasum Oy, Konecranes Plc, Suomen Liikunta ja
Urheilu (SLU), Tampereen Messut, Rautaruukki Oyj, Finpro ry, CPS
Color Oy, American Express Service Europe, NCC Group, Sesca Group,
Thermo Fisher, Skanska Oy, Backman-Trummer Oy Ab, AS Paulig Baltic,
Viking Line Abp, Sisu Diesel Oy, Oy HYY-Yhtiöt AB, Toyota Motor
Finland Oy, Tampereen seurakuntayhtymä, Tschelkovskiy Vitami and
Stockmann ZAO.
There are currently 17 resellers in all in the area and the number of
personnel averaged 421 (367).
Scandinavia
Basware's Nordic organization consists of a centrally directed
Scandinavian (Sweden, Denmark and Norway) unit. All the Basware
Enterprise Purchase to Pay and Financial Management products are sold
in the Nordic countries, apart from the payment solutions which are
currently sold only in Finland.
Net sales of the area increased by 12.0 percent in the financial
period EUR 18 805 thousand (EUR 16 797 thousand). The profitability
of the operations improved by 205.6 percent and operating profit was
EUR 1,017 thousand (EUR 333 thousand). One-off items associated with
Contempus acquisition totaled EUR 716 thousand. Operating profit
excluding one-off items totaled EUR 1 733 thousand.
New customers include SKTF, HSB Umeå, Villa Organic, GS-Hydro Norge
AS, Terra Gruppen AS, Apokjeden AS, G4S Security Systems AS,
Tollpost, ODIM AS, Sandefjord Kommune, Storebrand Livsforsikring AS,
Tamro AB, NORDUnet A/S, Scandic Hotels AB, and Norstedts Juridik AB.
Business operations are mainly handled by the own organization and
there were 112 (96) employees on average in the area.
Europe
Basware's European business operations consist of the units in
Germany, France, The Netherlands, United Kingdom and Southern Europe.
Additionally, the reseller network covers the eastern part of Central
Europe. All Enterprise Purchase to Pay solutions are sold in Europe,
apart from the payment and travel & expense management solutions.
Net sales in the Europe segment increased by 29.0 percent to EUR 19
454 thousand (EUR 15 081 thousand). The profitability of the
operations improved by 98.0 percent and operating profit was EUR -74
thousand (EUR -3 662 thousand).
The UK data capture operations developed according to plan and were
profitable.
New customers included Nutrixo, Romande Energie, Societe de Figaro in
France, PowerPacker in the Netherlands, Pension Regulator, Signet in
the UK, Europe Arab Bank, Transavia.com, AkzoNobel Functional
Chemicals, Ballast Nedam 4th environmen Axapta, Ovako Steel, Rentokil
Initial, Norsk Aller AS, Nor-Lines, Sector Alarm, AKVA Group.Hertel,
ENCI, ERAM, Prinovis Liverpool Ltd, Barmenia, Autoliv, Friesland
Hungaria zRt., Contitrade Ireland, and CHEP.
There are 35 resellers in Europe, and the number of Basware personnel
was 129 (93) at year's end.
North America
Basware's North American unit sells the Enterprise Purchase to Pay
solutions in the United States and Canada.
Net sales of the area for the financial year increased by 44.6
percent and totaled EUR 5 004 thousand (EUR 3 460 thousand). The
profitability of the operations improved by 116.5 percent and
operating profit was EUR 289 thousand (EUR -1 751 thousand).
New customers include Allied Tube & Conduit Corporation, Howard
Hughes Medical Institute, Protection One Alarm Monitoring Inc.,
Allied Building Products, ING Direct in Canada, Natixis, and General
Growth Properties.
There were 10 resellers in North America at the end of the period. On
average, there were 26 (25) employees in the area.
OTHER EVENTS OF THE FINANCIAL PERIOD
Basware established a representative office in Moscow at the
beginning of 2008.
Basware Corporation was one of Forrester's choices in the Forrester
Wave survey published on June 18. The survey report consists of three
parts: strategy, current product offering and market position.
According to the survey, Basware is number one in all these areas,
and according to the report, Basware has the highest market share,
best functionality and a solid vision. The results of the survey
reflect the company's success in combining solid strategic outlook
with a functional product offering.
In fall 2008, Forrester Research's market analysis of more than 100
companies in the industry found that Basware was among the five
largest suppliers of electronic procurement solutions in the world.
According to the same report, the electronic procurement solution
market is growing, and there is demand for electronic solutions that
cover the entire procurement process and closer new supplier
integrations in large companies.
The Basware Executive Team has expanded as a result of organizational
changes in the Software Production unit. Pekka Rehn has been
appointed as the head of the new Products unit. Olli Hyppänen, former
head of the Software Production unit, was appointed as Senior Vice
President, Strategy and Development, to lead the new Strategy and
Development unit that was founded on October 1.
Additionally, Steve Muddiman has been appointed as Senior Vice
President, Global Marketing. Ari Salonen took up his post as General
Manager, North America for Basware's North American operations on
September 1, 2008.
SHARE AND SHAREHOLDERS
Basware Corporation's share capital totaled EUR 3 440 437.20 at the
end of the period and the number of shares was 11 468 124.
Share price and trade
During the reporting period, the highest price of the share was EUR
10.45 (EUR 14.00), the lowest was EUR 6.00 (EUR 9.50) and the closing
price was EUR 6.59 (EUR 10.00). The average price of the share was
EUR 7.53 (EUR 12.03) during the period.
A total of 2 298 467 (2 761 995) shares were traded during the
financial period which is the equivalent of 20.1 percent (24.1%) of
the average number of shares. Market capitalization with the period's
closing price on December 31, 2008 was EUR 75 301 011 (EUR 114 681
240).
Shareholders
Basware had 17 120 (17 301) shareholders on December 31 including
nominee-registered holdings (8). Nominee-registered holdings
accounted for 9.1 percent of the total number of shares.
The company received one notice of change in ownership during the
financial period when Baillie Gifford Overseas Limited's and Baillie
Gifford & Co's holding in Basware Corporation decreased to be below
5%.
GOVERNANCE
The Annual General Meeting of Shareholders on February 14, 2008,
confirmed the number of Board members as five. The Annual General
Meeting resolved to agree on the proposal and elected Matti Copeland,
Sakari Perttunen, Ossi Pohjola, Ilkka Toivola and Hannu Vaajoensuu
members of the Board of Directors.
The Annual General Meeting further resolved to elect Ernst & Young
Oy, Authorized Public Accountants as the auditor, with APA Heikki
Ilkka in charge and APA Terhi Mäkinen as the deputy auditor.
The Board was authorized to resolve on share issue and share
repurchase.
A separate stock exchange release has been issued on the Board
authorizations and other resolutions of the Annual General Meeting of
Shareholders on February 14, 2008.
Share repurchase
The Board of Directors of Basware Corporation decided to start share
repurchase during the reporting period. A maximum of 400 000 shares
will be purchased, corresponding to approximately 3.49 percent of all
shares in the Company. The decision is based on the authorization
granted by the Annual General Meeting of Basware Corporation on
February 14, 2008, on the repurchase of a maximum of 1 146 812
shares. Share repurchase will end on March 31, 2009 at the latest.
Non-restricted equity will be used for acquiring the shares, so the
acquisitions will decrease the Company's distributable assets. The
shares will be purchased in public trading on NASDAQ OMX Helsinki Ltd
in compliance with the rules and guidelines of NASDAQ OMX Helsinki
Ltd and Finnish Central Securities Depository Ltd. concerning share
repurchases.
At the end of 2008, 41 567 shares had been acquired.
Decrease of Share Premium
The AGM authorized the company's share premium to be decreased by EUR
33 057 787.45 for the purpose of transferring the decreased amount to
the company's invested non-restricted equity. The decrease has been
carried out in accordance with the resolution of the National Board
of Patents and Registration of Finland on June 24, 2008.
SHORT-TERM RISKS AND RISK MANAGEMENT
In accordance with Basware's risk management policy, risks are
divided into six categories: risks related to business operations,
products, personnel as well as legal, financial and data security
risks. Basware takes risks that are a natural part of its strategy
and objectives. These risks are managed and decreased in various
ways. Short-term risks are considered to be risks in the current
reporting year.
The global crisis of the finance market, general economic uncertainty
and depression decrease companies' willingness to invest, which might
have an unfavorable impact on the development of the company's net
sales and profitability. In previous economic downturns, the demand
for the Company's products and services has remained more positive
than the general economic market as a whole as the company's software
solutions generate cost savings. The rapidly weakened global market
situation does however cause uncertainty.
The Group's main currency is Euro, accounting for approximately 67
percent of net sales in 2008 (approximately 66% in 2007). The Company
did not realize hedging for exchange rate fluctuations during the
financial year as the impact of currency risks on the Company's net
sales and result were not considered significant. The significance of
exchange rate fluctuations between the euro and other currencies will
increase hand in hand with the share of international operations. The
Group's exchange rate hedging principles will be defined during the
first quarter of 2009 as a part of the leading principles of finance
policy approved by the Board.
Goodwill has been tested during the last quarter of 2008. In
accordance with the testing for impairment of assets, no depreciation
of goodwill was made. At the end of 2008, Basware UK implemented a
rationalization program and reorganization of operations,
facilitating profitable growth in the unit. If the unit's
profitability does not improved as planned in the medium term despite
the streamlining program, it is likely that the goodwill allocated to
the unit will need to be impaired.
In other respects, no significant changes have taken place in
Basware's short-term risks and uncertainties during the financial
period.
ACQUISITIONS AND CHANGES IN GROUP STRUCTURE
Basware acquired the entire share capital of Contempus AS from
Affecto. The acquisition price was NOK 83.6 million (approximately
EUR 10.1 million, exchange rate EUR/NOK 8.27). Contempus was part of
Affecto's operations in Norway and produces software solutions for
procurement, invoice and document management.
The acquisition strengthens Basware's market position in Norway,
Sweden and the UK as well as brings valuable expertise to Basware to
improve competitiveness. In addition, Basware can extend its
distribution channel through existing Contempus' sales channel in the
United States and Benelux countries. Synergy benefits can be reached
by unifying the business operations as well as by adopting common
infrastructure and offices in Oslo, Stockholm and Manchester.
The cost savings will materialize starting from the beginning of 2009
and they will be approximately EUR 3 million by the end of 2009.
Basware's consolidated financial statements for 2008 include one-off
costs of EUR 736 thousand associated with the integration of
Contempus. The financial figures of Contempus have been integrated
into Basware for October 1 - December 31, 2008, and the profit of
Contempus for the fourth quarter of 2008 is slightly positive before
one-off-items.
ENVIRONMENTAL AND SOCIAL RESPONSIBILITY
Basware's software products reduce paper consumption in thousands of
offices around the world, leading the customer companies toward the
paperless office, which saves both the environment and money.
Profitability and financial stability are an integral part of
Basware's responsibility. Stability and trustworthiness yield added
value to all stakeholders.
Basware's head office in Espoo has held a Green Office certificate
issued by the World Wildlife Fund since 2003. The prerequisites for
being issued the certificate include a standing environmental
program, waste sorting and recycling, reduction of carbon dioxide
emissions and endeavors to constantly improve environmental issues.
Cooperation with the Plan Finland charity foundation has continued
since 2002. Basware has 14 sponsored children in developing
countries, and the company wants to build a better future for their
communities. The Art of Basware is an annual competition for young
visual artists, intended to support and encourage them to develop
their skills.
STRATEGY
Basware adopts updated strategy for the years 2009-2012. The long
term net sales growth objective remains in the range of 20-40 percent
with operating profit margin of 10-20 percent of net sales.
Basware will launch new EPP (Enterprise Purchase to Pay) Automation
Services offering during 2009 to target Software as a Service (SaaS)
application space and services market. The SaaS market is predicted
to see a remarkably higher growth than the software license market in
the business application space.
Due to the changed market situation, Basware updated its strategy
projects for 2009 by replacing two projects with new strategy
projects better suited to the current situation. The Dominating the
US and Joint Forces projects will advance as a part of daily business
operations. Instead of them, Basware will outlay on world-class
product development and even tighter networking with customers in
2009.
Updated strategy projects:
Must-have brand and thought leadership
Basware will invest considerably in strengthening its awareness and
brand in its strategic market areas.
Five global giants per year
Basware will pursue rapid and profitable growth in cooperation with
internationally-operating corporations.
Conquer the base
Basware will continue growth in mature markets, improving customer
satisfaction with the help of a comprehensive service concept.
World-class product development
Basware wants to be a global trailblazer, continuously responding to
its customers' changing needs with first-class products. Product
development takes place in cooperation with Basware's customers and
partners, taking the comments of industry analysts into
consideration. The company's product development is able to respond
and quickly adapt to changing product development requirements. The
functioning and quality of product development will be developed
further.
Automation of Purchase to Pay services
Basware will tighten its cooperation with customers by developing
various distribution and network models for increasingly efficient
distribution, support and updating of products. The company will
particularly pay attention to making the service perspective an
established part of tight-knit product development cooperation.
MANAGEMENT AND AUDITORS
In 2008, Ilkka Sihvo acted as the CEO of the Company. The CEO is in
charge of the day-to-day management of the Company in accordance with
the instructions and orders given by the Board. The Annual General
Meeting of Shareholders on February 14, 2008, confirmed the number of
Board members as five. Matti Copeland, Sakari Perttunen, Ossi
Pohjola, Ilkka Toivola and Hannu Vaajoensuu were elected to the
Board. In its first meeting, the Board elected Hannu Vaajoensuu as
Chairman of the Board and Sakari Perttunen as Vice Chairman.
The Annual General Meeting further resolved to elect Ernst & Young
Oy, Authorized Public Accountants as the auditor, with APA Heikki
Ilkka in charge and APA Terhi Mäkinen as the deputy auditor.
EVENTS AFTER THE FINANCIAL PERIOD
The Company's organization has been adjusted to match market changes,
and a new unit, Enterprise Purchase to Pay (EPP) Automation Services,
headed by Riku Roos, has been established. The EPP Automation
Services unit includes the subsidiary Basware Einvoices as well as
the Software as a Service functions.
The Finnish business unit, Basware's subsidiary FiMa, and the Russian
operations have been merged into a business unit called NorthEast,
headed by Jukka Virkkunen, currently the head of the Finnish business
unit.
As of January 1, 2009, members of the Basware Executive Team are
Ilkka Sihvo, CEO; Mika Harjuaho, CFO; Olli Hyppänen, Strategy and
Development; Steve Muddiman, Senior Vice President, Global Marketing;
Pekka Rehn, Senior Vice President, Products; Esa Tihilä, Senior Vice
President, Global Operations; Odd Roar Trapnes, Senior Vice President
Scandinavia; and Jukka Virkkunen, Senior Vice President NorthEast.
As of 2009 the duties of Hannu Vaajoensuu , the Chairman of the
Board, were redefined. In addition to chairman's standard duties
Hannu Vaajoensuu will continue as a member of the M&A Team and have
an advisory role in major M&A projects. He will also carry out
networking and industry influencer activities.
FUTURE OUTLOOK
General economic uncertainty has increased considerably. Basware
solutions generate cost savings and therefore the demand is not
heavily dependent on the economic situation.
Market forecasts published in January 2009, expect the entire IT
market to decrease in 2009 (-3%), while the software market remains
unchanged (+0%). However, the invoice automation and Enterprise
Purchase to Pay markets are forecast to grow moderately, beating the
overall IT market by approximately 6 to 8 percentage units (+3% -
+5%).
Western Europe and the United States combined account for
approximately three quarters of the enterprise software market. In
these markets, electronic invoice processing and procurement
solutions are still in their infancy. The procurement management and
electronic invoice processing markets are heterogeneous in terms of
the competitive situation. Growth could attract more competitors to
the market. The industry is consolidating, and this development could
go on in the future as well. Globally speaking, Basware is a
medium-sized software company in terms of net sales as well as number
of personnel.
Basware's direct competitors are mainly locally operating and often
smaller companies. In North America in particular, the company has
also larger competitors, especially in the field of procurement
management. Developers of document management, scanning and recycling
systems compete with Basware, particularly with regard to purchase
invoice management solutions. Competing solutions also include
customized solutions integrated into ERP (Enterprise Resource
Planning) systems.
The software products still offer a competitive edge, thanks to the
integrated offering consisting of new added value products and the
products. Automation services, a new concept in the portfolio, will
have a positive impact on the competitiveness.
EPP Automation Services will bring more predictability and
transparency over Basware's revenue stream and profitability
development. In 2008, revenue from continuous services (including
maintenance) accounted for approximately a third of the total
revenue. Basware predicts that EPP Automation Services revenue will
increase significantly in the strategy period. More detailed business
targets for EPP Automation Services will be released by the end of
2009.
The Company's international growth is based on efforts of its own
sales and marketing activity as well as the reseller channel.
Development of the indirect distribution channel continues in Europe,
Russia and Asia. In North America, the focus will be on developing
the Company's own sales channel for the time being. In Scandinavia,
the focus is on profitability, and moderate growth is supported by
the Company's expanded product portfolio and the development of the
service business. In Finland, the focus is on profitability, and
moderate growth will primarily be achieved from the fields of
procurement management and services.
Of the Company's EUR 10 519 thousand backlog of SaaS orders,
approximately EUR 1 million will be recognized as income in 2009.
Basware has complemented its organic growth with acquisitions. The
Company will continue to review possible acquisition targets during
2009. The aim of the acquisitions is to expand the Company's
distribution channel and product portfolio in international markets.
The Group will increase its number of personnel mainly in India
during the first quarter. Research and development costs are expected
to increase more moderately compared with the level of 2008.
Additional investments required by growth will not begin until during
the second quarter, provided that net sales for the first quarter
have realized in accordance with expectations.
The cost savings resulting from the synergy benefits of the Contempus
integration will materialize starting from the beginning of 2009 and
they will be approximately EUR 3 million by the end of 2009.
Basware expects its net sales to develop positively on the level of
2008. Operating profit (EBIT) for 2009 is expected to be from 10 to
15 percent of net sales.
BOARD'S DIVIDEND PROPOSAL
Basware is a growth company that aims at increased market
capitalization and moderate dividend yield. When preparing the
dividend proposal, the Board considers the Company's financial
position, profitability and prospects in the near future.
At the end of 2008, the Group parent company's distributable funds
are EUR 57 375 196.00.
Basware's Board of Directors proposes to the Annual General Meeting
that a dividend of EUR 0.23 per share (2007: EUR 0.15) be paid for
2008.
Espoo, Finland, January 21, 2009
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Ilkka Sihvo, Basware Corp.,
Tel. +358 9 8791 7251 or +358 40 501 8251
Analyst and Press Briefing
Basware arranges today, January 22, 2009 a briefing on the Interim
Report for the press and analysts at 11:00 a.m. in Hotel Kämp,
Pohjoisesplanadi 29, Helsinki, Finland. During this briefing CEO
Ilkka Sihvo will comment the operations and financial performance of
the quarter. Welcome.
FINANCIAL REPORTING IN 2009
Basware's Annual Report 2008, including the audited Financial
Statements, will be published on the Company's website during the
week of February 2, 2009. The Company publishes the Annual Report
also in print.
Release dates for interim reports:
- Interim Report January-March 2009 (Q1) on Thursday, April 16, 2009
- Interim Report January-June 2009 (Q2) on Friday, July 10, 2009
- Interim Report January-September 2009 (Q3) on Tuesday, October 13,
2009
Basware Corporation's Annual General Meeting of Shareholders will be
held on Thursday, February 12, 2009 starting at 1:00 PM at the Diana
auditorium (Erottajankatu 5) in Helsinki, Finland.
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
www.basware.com
SUMMARY OF FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS
The financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS). The same
Accounting Principles have been applied as in the 2007 Financial
Statements. Key indicator calculations remain unchanged and have been
presented in the 2007 Financial Statements.
GROUP INCOME STATEMENT
1.10.- 1.10.- 1.1.- 1.1.-
31.12 31.12 Change, 31.12 31.12 Change,
EUR thousand 2008 2007 % 2008 2007 %
NET SALES 26 294 23 187 13.4 86 098 73 270 17.5
Other operating
income 62 44 40.0 250 834 -70.0
Materials and
services -1 333 -1 996 -33.2 -4 726 -4 459 6.0
Employee benefit
expenses -15 093 -13 569 11.2 -50 399 -40 600 24.1
Depreciation and
amortization -990 -765 29.5 -3 043 -2 590 17.5
Other operating
expenses -4 818 -4 977 -3.2 -19 500 -18 943 2.9
Operating profit 4 122 1 924 114.2 8 679 7 512 15.5
Finance income 637 73 770.6 734 344 113.6
Finance expenses -897 -109 721.3 -1 003 -152 559.2
Profit before tax 3 862 1 888 104.6 8 410 7 704 9.2
Income tax expense -567 -775 -26.8 -1 825 -3 591 -49.2
PROFIT FOR THE
PERIOD 3 294 1 113 196.0 6 585 4 112 60.1
Earnings per share
(undiluted), EUR 0.28 0.09 206.5 0.56 0.36 58.1
Earnings per share
(diluted), EUR 0.28 0.09 206.5 0.56 0.36 58.1
GROUP BALANCE SHEET
EUR thousand 31.12.2008 31.12.2007 Change, %
ASSETS
NON-CURRENT ASSETS
Intangible assets 17 022 12 210 39.4
Goodwill 29 212 25 702 13.7
Tangible assets 991 1 009 -1.8
Available-for-sale investments 38 38 0
Long-term trade and other
receivables 536 12 4 305.1
Deferred tax assets 2 208 2 489 -11.3
Non-current assets 50 006 41 460 20.6
CURRENT ASSETS
Inventories 48 42 15.1
Trade and other receivables 20 737 18 704 10.9
Income tax receivables 2 341 476 392.2
Financial assets at fair value
through profit or loss 31 31 0.7
Cash and cash equivalents 8 745 7 010 24.8
Current assets 31 902 26 263 21.5
TOTAL ASSETS 81 909 67 722 20.9
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 3 440 3 440 0
Share premium account 69 33 127 -99.8
Own shares -271 100
Fair value reserve and other
reserves 33 598 540 6 121.4
Translation differences -3 991 392 -1 118.4
Retained earnings 15 648 9 765 60.2
Minority interest 224 148 51.6
Shareholders' equity 48 717 47 413 2.8
NON-CURRENT LIABILITIES
Deferred tax liability 2 307 1 643 40.4
Interest-bearing liabilities 7 729 20 39 047.5
Non-current liabilities 10 036 1 663 503.4
CURRENT LIABILITIES
Interest-bearing liabilities 5 555 4 314 28.8
Trade payables and other
liabilities 16 683 14 000 19.2
Tax liability from income tax 918 333 175.9
Current liabilities 23 156 18 647 24.2
TOTAL EQUITY AND LIABILITIES 81 909 67 722 20.9
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Invested
Trea- non- Retain- Minor-
Share- Share sury restrict- Other ed rity
holders' premium sha- ed reser- Transl earn- inter-
EUR thousand equity acc res equity ves diff ings est Tot
SHARE-
HOLDERS'
EQUITY
44
Jan 1, 2007 3 440 33 127 0 0 540 235 7 176 88 606
Change in
translation
difference 157 13 170
Granted
warrants 204 204
Net
profit/loss
recognized
directly
in
shareholders'
equity 157 217 374
Profit for
4
the period 4 092 20 112
Total profits&
4
losses 157 4 310 20 486
New share
issue 40 40
Dividend
-1
distribution -1 720 720
SHARE-
HOLDERS'
EQUITY
47
Dec 31, 2007 3 440 33 127 0 0 540 392 9 765 148 413
Invested
Trea- non- Retain- Minor-
Share- Share sury restrict- Other ed rity
holders' premium sha- ed reser- Transl earn- inter-
EUR thousand equity acc res equity ves diff ings est Tot
SHARE-
HOLDERS'
EQUITY
47
Jan 1, 2008 3 440 33 127 0 0 540 392 9 765 148 413
Change in
translation
-3
difference -4 383 994 389
Granted
warrants 142 142
Transfers
-
between items 33 058 33 058 41 -41 0
Other changes -42 -42
Net
profit/loss
recognized
directly
in
shareholders'
-33 3
equity 058 33 058 -4 383 1 136 -41 288
Profit for
6
the period 6 467 118 585
Total profits&
3
losses -4 383 7 603 118 337
Dividend
-1
distribution -1 720 720
Share
repurchase -271 -271
SHARE-
HOLDERS'
EQUITY
48
Dec 31, 2008 3 440 69 -271 33 058 540 -3 991 15 648 224 717
GROUP CASH FLOW STATEMENT
EUR thousand 1.1.-31.12.2008 1.1.-31.12.2007
Net cash from operating activities
Profit for the period 6 585 4 112
Adjustments for profit 5 243 5 732
Working capital changes 125 -1 812
Interest paid -291 -124
Interest received 154 287
Other financial items in operating
activities -38 -7
Income taxes paid -3 447 -3 801
Net cash from operating activities 8 331 4 387
Cash flows from investing
activities
Purchase of tangible and intangible
assets -3 631 -2 869
Proceeds from sale of tangible and
intangible assets 47 48
Acquired subsidiaries -8 728 -8 180
Proceeds from other investments 0 3 013
Repayment of loan receivables 9 20
Net cash used in investing
activities -12 303 -7 969
Cash flows from financing
activities
Minority's capital investment 0 40
Proceeds from short-term borrowings 2 000 4 000
Repayments of short-term borrowings -4 000
Proceeds from long-term borrowings 10 650
Repayments of long-term borrowings -300 -562
Purchase of own shares -271 0
Repayments of financial lease
liabilities -1 -10
Dividends paid -1 720 -1 720
Net cash used in financing
activities 6 358 1 749
Net change in cash and cash
equivalents according to the cash
flow statement 2 386 -1 833
Cash and cash equivalents at
beginning of period 7 041 8 975
Effects of exchange rate changes on
cash and cash equivalents -650 -101
Cash and cash equivalents at end of
period 8 777 7 041
GROUP QUARTERLY INCOME STATEMENT
1-3/ 1-3/ 4-6/ 4-6/ 7-9/ 7-9/ 10-12/ 10-12
EUR thousand 2008 2007 2008 2007 2008 2007 2008 2007
17 15
NET SALES 18 233 038 22 312 17 776 19 259 268 26 294 23 187
Other
operating
income 69 15 62 752 58 23 62 44
Materials and
services -1 211 -819 -1 385 -662 -797 -981 -1 333 -1 996
Employee -9 -12 -10 -7 -13
benefit -11 765 243 608 -9 961 933 827 -15 093 569
expenses
Depreciation
and -671 -571 -693 -597 -690 -657 -990 -765
amortization
Other
operating
-5 -4
expenses -4 910 010 -5 257 -4 536 -4 516 419 -4 818 -4 977Operating
profit -254 1 409 2 431 2 773 2 381 1 406 4 122 1 924
% -1.4% 8.3% 10.9% 15.6% 12.4% 9.2% 15.7% 8.3%
Finance
income 39 61 18 79 39 130 637 73
Finance
expenses -35 -11 -21 -12 -50 -20 -897 -109
Profit before
tax -250 1 459 2 428 2 840 2 370 1 516 3 862 1 888
% -1.4% 8.6% 10.9% 16.0% 12.3% 9.9% 14.7% 8.1%
Income tax
expense -300 -575 -528 -1 256 -430 -985 -567 -775
PROFIT FOR
THE PERIOD -550 884 1 899 1 584 1 941 531 3 294 1 113
% -3.0% 5.2% 8.5% 8.9% 10.1% 3.5% 12.5% 4.8%
Material changes in liabilities
During the financial period, the Company withdrew a 3-year loan of
EUR 10.65 million to finance the acquisition of Contempus AS. The
loan is hedged by a 2-year interest cap agreement, setting a cap of
5.4% for the base rate of interest.
Consolidation of new acquisitions
The acquisition of Contempus AS was realized on September 30, 2008.
The acquisition price of Contempus AS was NOK 83.6 million
(approximately EUR 10.1 million). Of this, EUR 3 758 thousand
associated with customer relationships and products has been
allocated to intangible assets, taking deferred tax liabilities into
consideration. The purchase price includes EUR 4 264 thousand of
goodwill. The allocation of the acquisition cost is preliminary.
COMMITMENTS AND CONTINGENT LIABILITIES
EUR thousand 31.12.2008 31.12.2007
OWN GUARANTEES
Floating charge 1 200 1 200
GUARANTEES ON BEHALF OF
SUBSIDIARIES
Guarantees 1 096 1 103
OTHER OWN GUARANTEES
Lease liabilities
Current lease liabilities 868 601
Lease liabilities
maturing in 1-5 years 838 685
Total 1 706 1 286
Other rental liabilities
Current rental
liabilities 2 385 1 827
Rental liabilities
maturing in 1-5 years 4 620 3 957
Rental liabilities
maturing later 1 196 172
Total 8 201 5 956
Other own contingent
liabilities, total 9 907 7 242
SEGMENT REPORTING
Geographical segments (primary segment)
Net sales 10-12/ 10-12/ 1-12/ 1-12/ Change,
(EUR thousand) 2008 2007 Change, % 2008 2007 %
Finland 15 329 14 278 7.4 49 517 48 849 1.4
Scandinavia 6 627 5 782 14.6 18 805 16 797 12.0
Europe 5 264 5 652 -6.9 19 454 15 081 29.0
North America 1 311 1 030 27.3 5 004 3 460 44.6
Sales between
segments -2 238 -3 554 37.0 -6 682 -10 917 38.8
Group total 26 294 23 187 13.4 86 098 73 270 17.5
Operating profit 10-12/ 10-12/ 1-12/ 1-12/ Change,
(EUR thousand) 2008 2007 Change, % 2008 2007 %
Finland 4 385 2 335 87.8 7 898 12 706 -37.8
Scandinavia -21 873 -102.4 1 017 333 205.6
Europe -48 -1 078 95.5 -74 -3 662 98.0
North America 118 -160 174.0 289 -1 751 116.5
Operating profit
between segments -312 -47 -565.8 -452 -114 -295.7
Group total 4 122 1 924 114.2 8 679 7 512 15.5
Personnel (employed, on 10-12/ 10-12/ 1-12/ 1-12/ Change,
average) 2008 2007 Change, % 2008 2007 %
Finland 426 383 11.2 421 367 14.9
Scandinavia 146 98 49.3 112 96 16.8
Europe 127 142 -10.3 129 93 38.9
North America 29 28 3.6 26 25 5.7
Group total 729 651 11.9 689 580 18.7
Business segments (secondary segment)
Net sales (EUR 10-12/ 10-12/ 1-12/ 1-127 Change,
thousand) 2008 2007 Change, % 2008 2007 %
Product sales 7 234 7 480 -3.3 23 871 24 117 -1.0
Maintenance and
support 6 539 6 632 -1.4 23 785 22 100 7.6
Consulting and
services 11 063 7 819 41.5 33 350 23 342 42.9
SaaS 495 369 34.2 1 760 1 250 40.9
Other operations 963 888 8.5 3 332 2 461 35.4
Group total 26 294 23 187 13.4 86 098 73 270 17.5
Geographical division of net sales by the location of customer
Net sales 10-12/ 10-12/ 1-12/ 1-12/ Change,
(EUR thousand) 2008 2007 Change, % 2008 2007 %
Finland 12 769 10 851 17.7 41 514 37 969 9.3
Scandinavia 6 411 5 549 15.5 18 309 15 911 15.1
Europe 5 143 5 422 -5.1 19 191 14 785 29.8
Others 1 971 1 366 44.3 7 083 4 604 53.8
Group total 26 294 23 187 13.4 86 098 73 270 17.5
GROUP KEY INDICATORS
EUR thousand 1-12/08 1-12/07 1-12/06
Net sales 86 098 73 270 59 954
Growth of net sales, % 17.5% 22.2% 43.9%
Operating profit 8 679 7 512 8 078
Growth of operating profit, % 15.5% -7.0% 123.7%
% of net sales 10.1% 10.3% 13.5%
Profit before tax 8 410 7 704 8 287
% of net sales 9.8% 10.5% 13.8%
Profit for the period 6 585 4 112 4 986
% of net sales 7.6% 5.6% 8.3%
Return on equity, % 13.7% 8.9% 15.1%
Return on investment, % 16.6% 16.2% 24.7%
Interest-bearing liabilities 13 283 4 334 758
Cash and liquid assets *) 8 777 7 041 8 975
Gearing, % 9.3% -5.7% -18.4%
Equity ratio, % 59.5% 70.0% 77.5%
Total assets 81 909 67 722 57 558
Gross investments **) 12 476 12 220 25 315
% of net sales 14.5% 16.7% 42.2%
Capital expenditure 1 007 817 597
% of net sales 1.2% 1.1% 1.0%
Research and development costs 15 518 13 172 10 925
% of net sales 18.0% 18.0% 18.2%
R&D personnel at end of period 171 152 138
Personnel on average during the
period 689 580 513
Personnel at end of period 731 658 528
Increase in personnel, % 11.1% 24.6% 33.7%
Earnings per share, EUR 0.56 0.36 0.45
Earnings per share (diluted), EUR 0.56 0.36 0.44
Equity per share, EUR 4.23 4.12 3.88
Dividend per profit, % 40.8% 42.0% 33.6%
P/E ratio 11.68 28.02 29.20
Share price performance
lowest share price 6.00 9.50 11.21
highest share price 10.45 14.00 15.25
average share price 7.53 12.03 13.09
closing share price 6.59 10.00 13.05
Market capitalization at end of
period 75 301 011 114 681 240 149 659 018
Number of traded shares 2 298 467 2 761 995 5 534 522
% of average number of shares 20.1% 24.1% 49.5%
Average number of shares
- during the period 11 463 307 11 468 124 11 172 612
- during the period, diluted 11 463 307 11 468 124 11 221 052
*) Includes cash, cash equivalents and financial assets at fair value
through profit or loss
**) Includes capitalized R&D costs and acquisitions
MAJOR SHAREHOLDERS, DECEMBER 31, 2008
Shares Votes
pcs %
1. Sihvo, Ilkka 1 065 800 9.3
2. Eräkangas, Kirsi (incl. children under
guardianship) 1 031 800 9.0
3. Vaajoensuu, Hannu (incl. a controlled
company and children under guardianship) 962 100 8.3
4. Perttunen, Sakari 830 400 7.2
5. Pöllänen, Antti (incl. children under
guardianship) 740 900 6.5
6. Nordea Bank Finland 617 305 5.4
7. Nordea Nordic Small Cap Investment fund 556 184 4.8
8. Mandatum Life Insurance 550 000 4.8
9. Ahonen, Asko 318 822 2.8
10. Royal Skandia Life Assurance Ltd 270 000 2.4
11. Veritas Pension Insurance Company 266 000 2.3
12. Kaleva Mutual Insurance Company 242 690 2.1
13. Northern Trust Global Services Ltd 228 696 2.0
14. Perttunen, Meimi 215 400 1.9
15. Fondita Nordic Micro Cap Investment Fund 200 000 1.7
16. Skandinaviska Enskilda Banken 193 155 1.7
17. Investment Fund Carnegie 175 900 1.5
18. Investment Fund Aktia Capital 118 213 1.0
19. Fondita Nordic Small Cap Investment Fund 106 000 0.9
20. Pavor Oy 75 052 0.7
20 largest shareholders total 8 764 417 76.4
Nominee registered shares 1 046 854 9.1
Others 1 656 853 14.5
Total 11 468 124 100.0
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