2012-02-16 08:15:00 CET
2012-02-16 08:15:23 CET
REGULATED INFORMATION
Stonesoft - Financial Statement Release
Stonesoft Oyj :STONESOFT CORPORATION FINANCIAL STATEMENT RELEASE FOR JANUARY-DECEMBER 2011
Stonesoft Corporation Stock Exchange Release 16 February 2012 at 9:15 a.m.
Product sales grew by 39% and made all-time record
Stonesoft Corporation's net sales in the fourth quarter of 2011 grew by almost a
million Euros compared to the corresponding period in the previous year and were
MEUR 0.3. The company's product sales developed positively and were MEUR 6.1,
growth 39%, whereby net sales were MEUR 9.5.
The comparable figures from the corresponding period in the previous years are
in brackets:
October-December 2011 (2010, 2009)
- Net sales MEUR 9.5 (7.5 and 6.5), growth 27%
- Product sales MEUR 6.1 (4.4 and 3.7), growth 39%
- Operating result MEUR 0.3 (-0.7 and 0.1)
- Operating result as percentage of net sales 3 (-9 and 1)%
- Earnings per share EUR 0.01 (-0.01 and 0.00)
- Operative cash flow MEUR 0.6 (-2.5 and 0.7)
- Liquid cash funds at the end of the reporting period MEUR 7.7 (8.0 and 6.2).
The corporate had no interest-bearing debts.
January-December 2011 (2010, 2009)
- Net sales MEUR 30.6 (24.3 and 23.6), growth 26%
- Product sales MEUR 17.7 (12.7 and 12.6), growth 39%
- Operating result MEUR -1.1 (-2.7 and -1.0)
- Operating result as percentage of net sales -4 (-11 and -4)%
- Earnings per share EUR -0.01 (-0.04 and -0.02)
- Operative cash flow MEUR -0.3 (-2.8 and -0.8)
CEO ILKKA HIIDENHEIMO
During the fourth quarter of the year 2011, Stonesoft product sales grew by
approximately 40% and net sales by approximately 25%. Once again, our product
sales reached an all time high compared to the previous corresponding period.
The net sales for the whole year was over MEUR 30.
We are pleased with this strong growth and the fact that we have been able to
increase our market share in spite of the general economic insecurity. We will
continue to raise our investment in customer acquisition, marketing and sales
promotion. The interest in Stonesoft and its solutions from customers and
partners demonstrates there is a growing need for our technology in the market.
During the reporting period Stonesoft delivered 163 new samples of Advanced
Evasion Techniques AETs) to CERT-FI. Our most recent test results have shown
that network security solutions still do not offer protection against security
breaches as the new evasion techniques were able to bypass all generally known
security solutions on the market. As stated previously; Stonesoft is the only
security vendor who is able to offer comprehensive protection against all known
evasion techniques.
Based on these findings, we recommend all organizations who are not willing to
risk their critical data capital and business assets to re-evaluate their
network security.
Stonesoft offers dynamic security solutions to protect organizations against
today's rapidly evolving security threats. We estimate strong organic growth in
this area in the future.
NET SALES AND RESULT
October-December 2011 (hereinafter 'reporting period')
The Group's net sales in the reporting period were MEUR 9.5 (7.5 and 6.5).
Increase compared to the corresponding period in the previous year was MEUR
2.0, or 27%. The operating result (EBIT) was MEUR 0.3 (-0.7 and 0.1) and the
result after taxes was MEUR 0.4 (-0.9 and 0.0).
Product sales were MEUR 6.1 (4.4 and 3.7), growth by 39% compared to the
corresponding quarter in the previous year.
The Group has changed its management reporting during the fiscal year 2011: in
the North America segment, USA and Canada are reported. Additionally, Latin
America, which has previously been reported under the North and South America
segment, has been transferred to the Emerging Markets segment and Russia, which
has previously been reported under the Emerging Markets segment, has been
transferred to the Europe segment. The comparative figures of the operating
segment report from the fiscal years 2010 and 2009 have been changed according
to the changes in reporting.
The geographical distribution of net sales was as follows: Europe 72 (71 and
72) %, Emerging Markets (North Africa, Middle East and Latin America) 11 (15 and
7) %, North America) 13 (11 and 18) % and APAC (Asia-Pacific) 4 (3 and 3) %.
January-December 2011 (hereinafter 'fiscal period')
The Group's net sales in the fiscal period were MEUR 30.6 (24.3 and 23.6).
Increase compared to the corresponding period in the previous year was MEUR
6.3, or 26%. The operating result (EBIT) was MEUR -1.1 (-2.7 and -1.0) and the
result after taxes was MEUR -0.9 (-2.7 and -1.0). The development of the
company's net sales and operating result correspond to the future estimates and
targets announced by the company during the fiscal year 2011.
Product sales were MEUR 17.7 (12.7 and 12.6), growth by 39% compared to the
corresponding period in the previous year.
The geographical distribution of net sales was as follows: Europe 69 (65 and
67) %, Emerging Markets (North Africa, Middle East and Latin America) 13 (16 and
12) %, North America) 15 (15 and 18) % and APAC (Asia-Pacific) 3 (4 and 3) %.
FINANCE AND INVESTMENTS
At the end of the fiscal year, Stonesoft's total assets were MEUR 21.2 (19.9 and
16.0). The equity ratio was 40 (49 and 40) % and gearing (the ratio of net debt
to shareholders' equity) was -1.99 (-1.75 and -2.31).
The comparable cash flow during the fiscal year was MEUR -0.3 (-2.8 and -0.8).
The Group has no interest-bearing debt. The consolidated liquid assets at the
end of the fiscal year totaled MEUR 7.7 (8.0 and 6.2).
At the end of the fiscal year the group had a considerable amount of fiscal
losses, for which no deferred tax receivables have been entered into the balance
sheet. The total amount of these deferred tax receivables is MEUR 18.1, of which
MEUR 17.7 is accrued in Finland and MEUR 0.4 in the United States. MEUR 0.6 of
the tax receivables expired in the tax year 2011. The tax receivables have been
calculated based on the new tax rate 24.5 %. The company activates a part of its
research and development expenses in the Finnish taxation (as of 1 January
2008). The company has not activated research and development expenses in
bookkeeping. The company has tax receivables from the activation of its research
and development expenses in total of MEUR 4.4, which it can deduct later in its
taxation. As a result of these issues, the Finnish calculated tax receivables
have decreased from the previous year.
Investments in tangible and intangible assets totaled MEUR 0.6 (0.6 and 0.3).
DEVELOPMENT OF BUSINESS OPERATIONS AND STRATEGY
During the past years Stonesoft has carried out a number of significant
operational changes as well as extended its product offering. Despite the global
financial insecurity the company has demonstrated strong commitment in
strengthening its product offering, competitiveness and customer base.
Stonesoft's organization and sales processes are at the level required by the
targets set for the year 2012. Stonesoft aims to continue its decisive and
persistent efforts according to its selected growth strategy to increase its net
sales and result.
MAIN BUSINESS EVENTS
Main business events in 2011
In January, Stonesoft announced its predictions regarding the most significant
security threats in 2011.
In January, Stonesoft announced its StoneGate(TM) IPS-1205 and IPS-3205
intrusion prevention system (IPS) appliances were rated excellent in quality-
price ratio according to the latest Network Intrusion Prevention System
Comparative Test Report from NSS Labs, Inc. Both appliances ranked in the top
three in their respective performance categories for best price per Mbps
protected and total cost of ownership (TCO) per real world throughput.
In February, Stonesoft announced it has discovered 124 new advanced evasion
techniques (AETs).
In March, Stonesoft published advice for organizations to protect themselves
against Advanced Evasion Techniques.
In March, Stonesoft announced the availability of its new StoneGate
Authentication solution for secure remote access to the cloud services. The
solution combines multiple authentication methods, providing secure remote
access to cloud services.
In April, Stonesoft announced it had expanded its partnered offering with
Optimesys, a Finnish specialist company focused on producing information
security services.
In May, Stonesoft introduced two new firewall appliances specifically designed
to meet the security needs of high-capacity environments. The new StoneGate(TM)
FW-5201 and FW-5205 appliances are the latest addition to Stonesoft's family of
modular network security appliances.
In June, Stonesoft introduced the world's first Anti-Evasion Readiness Test(TM)
service. This service tests how well an organization's critical digital assets
are protected against advanced evasion techniques (AETs). The service will be
provided by selected, independent IT service organizations around the world.
In June, Stonesoft made its public website www.stonesoft.com and corporate blog
StoneBlog http://stoneblog.stonesoft.com available over IPv6 to demonstrate its
readiness to help customers migrate securely into IPv6. Both web services are
IPv6 enabled and protected by StoneGate Firewall/VPN.
In June, Stonesoft introduced a new solution for the mass deployment of network
security. The StoneGate Mass Security solution has been designed to meet the
security needs of small branch and remote offices such as retail and hotel
chains as well as unattended locations, for example ATMs.
In June, Stonesoft announced its StoneGate network security solutions had
received Common Event Format (CEF) Certification from ArcSight, Inc., an HP
company and a leading global provider of security and compliance management
solutions that protect enterprises and government agencies. Stonesoft is one of
the first security vendors worldwide to offer full support for CEF.
In June, Stonesoft encouraged organizations to re-evaluate their existing risk
management and security architecture. Recent phenomena such as Wikileaks,
Stuxnet, Advanced Evasion Techniques and the latest security breaches have
changed the security landscape permanently and acted as wake-up calls also in
the strategic aspect.
In June, Stonesoft introduced new StoneGate Firewall/VPN 5.3 and StoneGate
Management Center 5.3 versions. The new version offers enhanced access control,
authentication and mass security as well as a broad range of additional features
and improvements.
In August, Stonesoft announced it has entered a partnership with ECCT, a leading
US-based managed security services provider (MSSP), whereby 50 regional and
community banks and credit unions will deploy the StoneGate IPS by end of year.
In August, Stonesoft introduced the StoneGate FW-315 firewall/VPN appliance,
which has been designed for small networks and branch offices.
In August, Stonesoft announced that Perket Technologies will begin to provide
the Anti- Evasion Readiness Test service to its customers.
In September, Stonesoft announced it has joined Secured by RSA ® Certified
Partner Program to allow the integration of StoneGate Firewall/VPN, IPS and SSL
VPN with the RSA enVision® platform.
In September, Stonesoft announced the new Stonesoft a2Cloud solution for
authentication and access management. The solution makes cloud services more
secure and easier to use with minimized TCA (Total Cost of Administration) and
TCO (Total Cost of Ownership).
In October, Stonesoft announced its partnership with the University of Glamorgan
in United Kingdom to conduct research into AETs.
In October, Stonesoft announced the discovery that Advanced Evasion Techniques
are deliverable across the port-80, HTTP protocol, making them a very real and
credible threat to the security of organizations worldwide.
In October, Stonesoft announced that its StoneGate IPS device has received
excellent results in a network intrusion prevention systems (IPS) test conducted
by ICSA Labs.
In October, Stonesoft announced it has delivered 163 new advanced evasion
technique (AET) samples for global vulnerability coordination. The new samples
include AETs over a number of various protocols, including IPv4, IPv6, TCP and
HTTP.
In November Stonesoft announced the availability of a new MSSP (Managed Security
Service Provider) program, offering its network of resellers the opportunity to
host and operate its network security solutions without risks.
In November Stonesoft announced that it has been nominated for the annual GOVTek
awards in the following categories: Best Security Solution and Top Solution
Providers to Watch For in 2012.
In December, Stonesoft summed up the incidents in of the past year and predicted
some of the key security trends in 2012.
In December Stonesoft announced that its Firewall/VPN 5.3 solution had passed
the VPN Consortium's (VPNC) Internet Protocol version 6 (IPv6) testing criteria.
Main events after the fiscal period
In January, Stonesoft's firewall solution obtained the CSPN certification
delivered by the French security agency ANSSI.
In January, the Board of Directors of Stonesoft decided on a new stock option
plan 2012.
In January, Stonesoft introduced the new Stonesoft(TM) IPS-1302 intrusion
prevention system for protecting data centers and modern corporate network
environments.
In February, Stonesoft announced its Firewall/VPN product family has received
the Common Criteria Evaluation Assurance Level 4+ (EAL4+) certification, an
international security standard for IT Security products.
Estimate
Stonesoft estimates the above-mentioned operations and achievements to secure
the company's competitiveness in the future.
RESALES CHANNEL
The company sales are mainly conducted through an international resales channel.
RESEARCH AND DEVELOPMENT
Stonesoft's R&D operations are located in Finland, France and Poland. At the end
of the year 2011, R&D employed in total 85 (75 and 63) persons.
The company's R&D investments during the fiscal period totaled MEUR 6.1 (5.6 and
4.9). R&D costs represented 22 (23 and 22) % of all expenses. R&D costs
represented 20 (23 and 21) % of net sales.
Advanced Evasion Techniques
Stonesoft continued its research on Advanced Evasion Techniques (AETs) during
2011. In February, Stonesoft delivered the Finnish Computer Emergency Response
Team (CERT-FI) 124 samples of new advanced evasion techniques and in October
163 more. Stonesoft also entered a partnership with the Computer Forensics team
of the University of Glamorgan in the UK to carry out research into AETs.
In June, Stonesoft delivered the world's first Anti-Evasion Readiness Test(TM)
service. Among others, the US-based service provider Perket Technologies started
offering the service to its customers.
Product tests, certifications and patents
During the year 2011 Stonesoft products passed several tests with excellent
results and received many significant certifications. Stonesoft products
excelled in the tests of the US-based research companies NSS Labs and ICSA Labs.
In addition, Stonesoft's Firewall/VPN solution passed VPN Consortium's (VPNC)
Internet Protocol version 6 (IPv6) testing criteria and received the IPv6
certificate. Stonesoft solutions were also granted the HP Arcsight CEF
certificate. Stonesoft is one of the first security vendors in the world to
offer full CEF support. Stonesoft joined the Secured by RSA Certified Partner
Program by the US-based security company RSA to allow the integration of
Stonesoft Firewall/VPN, IPS and SSL VPN with the RSA enVision® platform.
Stonesoft was granted three (3) patents during the year. The patents were
related to security policy updates, management of centralized VPN and management
of remote connections.
Most significant product launches
In March Stonesoft launched the new Stonesoft Authentication solution. Unlike
RSA's SecurID and other static solutions, Stonesoft Authentication is dynamic.
In September, Stonesoft introduced the a2Cloud solution, which comprises of the
Authentication Server and SSL VPN solution. Both are centrally managed by the
Management Center tool.
In May Stonesoft introduced the new FW-5201 and FW-5205 solutions for data
centers, large network central sites and managed service provider environments.
The solutions are the latest addition to Stonesoft's product family of modular
network security solutions.
In June, Stonesoft introduced the Mass Security solution with new features
including Plug & Play installation. This makes the solution very easy to use for
distributed organizations with several small locations. As part of the Mass
Security solution Stonesoft introduced also the new Express Firewall FW-105
product family.
In July Stonesoft introduced the new 5.3 version of the Stonesoft product
family, which features new dynamic methods for firewall access control, among
others. The network administrator can allow or deny access directly based on
users, user groups, domain names, applications, TLS matches, URL categories and
security zone data.
In August, Stonesoft introduced the new firewall appliance FW-315 for efficient
protection of branch office networks.
DEVELOPMENT OF SHARE PRICES AND TURNOVER
Stonesoft's share value at the beginning of the fiscal year on January 1, 2011
was EUR 0.58 (0.70 and 0.32). At the end of the fiscal year on December
31, 2011, the share price was EUR 0.86 (0.58 and 0.70). The highest share price
was EUR 0.97 (1.19 and 0.78), and the lowest EUR 0.41 (0.54 and 0.31). During
the year, the total turnover of Stonesoft shares amounted to MEUR 11.1 (23.9 and
5.8) and 16.8 (29.1 and 11.1) million shares, which is 26.5 (46.0 and 19.4) % of
the total amount of shares. Based on the share price on December 31, 2011,
Stonesoft's market capitalization was MEUR 54.6 (36.7 and 40.1).
Stonesoft has evaluated the possibility to establish an ADR (American Depository
Receipt) program to make ADR-trading possible in the OTC-markets in the USA.
Based on the evaluations, the company does currently not plan to begin trading
in these markets.
SHARE CAPITAL AND STOCK OPTION PROGRAMS
At the end of the fiscal year on December 31, 2011, Stonesoft's share capital
recorded in the Trade Register totaled EUR 1,150,574.64 (1,150,574.64 and
1,146,054.64). The number of shares at the end of the fiscal year corrected by
share issue was 64 328 315 (64 283 238 and 57 727 732). The weighted average
value of the numbers of shares corrected by share issue was 63 316 427 (61
855 279 and 57 723 942). There is one class of shares and every share has one
vote. The shares have no limitations on voting rights. The shares have no
nominal value and no bookkeeping equivalent value. There are no redemption or
approval clauses related to the shares, or securities entitling to the shares,
and no other limitations of transfer. Furthermore, the shares and securities
entitling to the shares have no special rights related to the decision making of
the company.
The shares of the company have been connected to the book-entry securities
system maintained by Euroclear Finland Ltd, which maintains the official
shareholder register of the company. The shares of the company are rated on the
small company list with the trade identification SFT1V in the NASDAQ OMX
Helsinki Ltd.
The company has one valid stock option program, Stock Option Program 2008-2014,
under which the subscription price is EUR 0.30 and the total number of stock
options to be granted based on this program is 3 000 000 at the maximum. The
subscription period of the shares is graded and will end for all stock options
on December 31, 2014. At the end of the year 2011 in total 2 086 250 stock
options had been granted under this program, of which in total 263 750 have been
subscribed as shares. In total 913 750 stock option rights have not been granted
yet. At the end of the fiscal year in total 797 500 shares could be subscribed
based on that program, which represents 1.26% of the current number of shares
and votes in the company. During the fiscal year, 180 000 subscriptions were
made on the basis of the stock option programs targeted for key persons in the
company.
SHAREHOLDERS
At the end of 2011, the company had 6 091 (6 646 and 5 862) shareholders.
Nominee registered holdings represented 6.0% of the share capital in 2011.
The company gave no notices of change of ownership during the fiscal year.
SHAREHOLDINGS OF THE BOARD OF DIRECTORS AND THE CEO
On December 31, 2011, the members of the Board of Directors, the CEO and the
entities under their control held a total of 22 135 608 shares of the company,
which represented 34.9% of the shares and the voting rights. The stock option
rights held by the members of the Board of Directors on December 31, 2011
entitled them to a subscription of
45 000 shares.
PROPOSAL BY THE BOARD OF DIRECTORS FOR DISTRIBUTION OF PROFIT
The operating result of the parent company was MEUR -0.7. At the end of the
fiscal year the parent company had no distributable equity in its shareholders'
equity. The Board of Directors proposes that the company pay no dividend and
that the loss be debited to the Profit/Loss account.
AUTHORIZATIONS OF THE BOARD OF DIRECTORS
The Annual General Meeting of Shareholders (AGM) held on April 13, 2011 decided
to authorize the Board of Directors of the company to decide about one or more
share issues as well as the issuance of option and other special rights so that
the total number of new shares may be 12 600 000 at the maximum, which
corresponds to 19.8% of the shares and votes recorded in the Trade Register.
Based on the authorization the Board of Directors may decide on issuance of
shares to the shareholders according to the shareholders' pre-emptive
subscription rights as well as in a directed issuance of shares or stock options
or other special rights in deviation from the shareholders' pre-emptive
subscription rights in case the deviation is justified by a weighty financial
reason for the company, such as financing of an acquisition, other arrangement
concerning the business of the company or development of its capital structure,
or incentive to the company's personnel.
The Board of Directors was authorized to decide on other terms and conditions
related to the share issues and to the issuance of option or other special
rights.
The authorization is in force until the end of the 2012 AGM.
The company does not have its own shares and the Board of Directors is not
authorized to purchase the company's own shares.
THE COMPANY'S BOARD OF DIRECTORS, EXECUTIVE MANAGEMENT AND AUDITORS
According to the Articles of Association of the company, the Board of Directors
is comprised of three to seven (3-7) ordinary members. The term of the member of
the Board of Directors starts at the end of the Annual General Meeting that
elects him/her and continues until the end of the next Annual General Meeting.
The Annual General Meeting held on April 13, 2011 elected five members to the
Board of Directors. Ilkka Hiidenheimo, Harri Koponen, Jukka Manner, Timo Syrjälä
and Hannu Turunen were elected as Board members. In its statutory meeting held
on April 13, 2011, the Board elected Hannu Turunen as Chairman of the Board and
Timo Syrjälä as Vice Chairman. In addition, the Board of Directors established
an Audit Committee and Hannu Turunen, Harri Koponen and Timo Syrjälä were
elected as its members.
According to the Articles of Association, the company has a Chief Executive
Officer (CEO), who is appointed and discharged by the Board of Directors. In
2011, Ilkka Hiidenheimo was 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 of Directors as well as the Companies Act.
The members of the company's Executive Management were Ilkka Hiidenheimo, Juha
Kivikoski, Kim Fagernäs, Mikael Nyberg, Mika Jalava and Ari Vänttinen.
In 2011, authorized public accountants Ernst & Young Oy acted as Stonesoft's
auditor and authorized public accountant Bengt Nyholm as the auditor in charge.
The compensation of the CEO
CEO Ilkka Hiidenheimo did not accept any salary or other compensation for his
services during 2011. There is no specific retirement age set forth for the CEO,
and the CEO's pension is the same as for all the company's employees, as defined
in Finland's Employee Pension Act (TYEL). The service contract for the CEO
provides for notice period of six (6) months prior to termination, with
compensation being equal to six months' salary and a further optional six (6)
months' fixed salary if the company terminates the contract without essential
breach of contract by the CEO.
ACQUISITIONS AND CHANGES IN GROUP STRUCTURE
No acquisitions were made during the fiscal year. A representative office was
opened in the Kingdom of Saudi Arabia in February. There were no other changes
in the group structure.
FOREIGN REPRESENTATIVE OFFICES
The Group has at the end of the fiscal year representative offices in Algeria,
China, Saudi Arabia and UAE.
PERSONNEL
At the end of the fiscal year, the Group's personnel totaled 222 (201 and 174)
people, of which 189 (174 and 154) were employees and 33 (27 and 20) had
contractual relationships as full-time sales representatives or consultants.
The geographical distribution of Stonesoft personnel based on the new segment
reporting at the end of the fiscal period was Europe, 176 (164 and 138),
Emerging markets (North Africa, Middle East and Latin America) 16 (14 and 12),
North America 21 (18 and 19) and APAC (Asia and Pacific) 9 (5 and 5).
The salaries and other remuneration paid to the employees, including social
security payments, were in total MEUR 16.7 (14.7 and 14.0).
The average number of personnel during the fiscal period was 207 (191 and 178).
ENVIRONMENT
Due to the nature of the company's business, the direct environmental impacts of
its business operations are fairly limited. The activities of the company
include internal software development and purchasing of external hardware
assembly services and related installation services from subcontractors.
Stonesoft is a member of PYR (The International Register of Packaging PYR ltd).
Stonesoft's products are compliant with RoHS and WEEE directives (directives for
restrictions of hazardous substances in electric appliances and recycling of
electric appliances).
CORPORATE GOVERNANCE STATEMENT
The Audit Committee of Stonesoft Corporation's Board of Directors will review
and approve the Corporate Governance Statement. Stonesoft Corporation's
Corporate Governance Statement will be issued separately from The Board of
Director's report and published in the Annual Report 2011.
Stonesoft Corporation applies the Corporate Governance Code recommendations for
listed companies prepared by the NASDAQ OMX Helsinki Ltd, the Central Chamber of
Commerce and the Confederation of Finnish Industries EK and published in June
2010, with the exemption of recommendation concerning Board composition. A more
detailed description of the Corporate Governance principles of Stonesoft
Corporation is available at the corporate website (www.stonesoft.com).
The Corporate Governance Statement contains the main features of internal
control and risk management in relation to the financial reporting systems as
well as information about the composition and duties of the Board of Directors
and information about the Chief Executive Officer.
RISKS AND BUSINESS UNCERTAINTIES
The biggest risk factors of the company's operations are related to operational
and financial risks and to securing and managing critical data and
infrastructure.
Operational risks
The company sets financial targets annually in connection with the budgeting and
the realization of the targets is monitored on a monthly basis. The guidance and
supervision of the business operations takes place with the means of a reporting
and forecasting system covering the entire group that the company strives to
develop on a continuous basis. The product sales and related services are made
mainly through global channel partners, using standardized Stonesoft agreements.The sales operations are supported by the company's legal unit seeking to reduce
the risks related to the global business operations through continuous
management and development of contracts. The company also uses insurance to
cover property, operational and liability risks.
Financial risks
Stonesoft does not normally provide financing to its customers, other than
generally accepted terms of payment. The company invoices mainly in Euros, the
US dollar being the other invoicing currency. The company's costs occur mostly
in Euros. Exchange rate fluctuations can affect the company's financial results.
The company uses matching as a main tool for offsetting the exchange rate risks.
The task of Stonesoft's Corporate Treasury is to manage financial risks in
accordance with the Treasury Policy approved by Stonesoft's Board of Directors.
The main goals of the policy are
(i) to ensure the short-term liquidity of the company,
(ii) to guarantee efficient circulation of cash funds and
iii) to follow prudent and transparent investment policy for the cash reserves,
aiming at guaranteeing competitive return on a selected risk level.
The company's cash reserves are invested in interest bearing low risk
instruments. In addition, the company's profits and related costs are
continuously controlled.
Management and safeguard of critical business related information and assets
Stonesoft manages and safeguards its critical business information by stringent
internal policies and processes. The company constantly reviews and updates its
network infrastructure and actively utilizes its own products in order to
protect the network infrastructure of the company. The company has back-up
systems to ensure business continuity also in a state of emergency.
During the fiscal year 2012, Stonesoft's main risks and business uncertainties
relate to the realization timetable of the sales projects and possible
production disruption of our subcontractors and suppliers. In addition, the
recent political restlessness in North Africa and Middle East may have a
negative impact on the company's business operations in these markets. Also
insecurities related to public economies in the United States as well as in the
European Union may have a negative effect on the public sector projects in these
areas. A further scenario is that the Southern European crisis will spread to
cover the whole of Europe or become a global financing and bank crisis, in which
case it can be assumed that it would have a negative impact on Stonesoft's
growth and profitability.Stonesoft has no risks related to the order book,
because it normally can process incoming orders within a couple of work days.
Stonesoft's risk management and its principles are discussed more extensively at
the company website and in the Annual Report.
FUTURE OUTLOOK
In 2011, the network security market grew by approximately 5%, and based on
Stonesoft's estimate the growth of the total market will continue on the same
level also during the year 2012.
In 2011, a development started whereby Stonesoft and other companies specialized
in network security grew by 15-30%, whereas the growth of the network security
business of those companies for which network security is not core business was
significantly lower or even negative. Stonesoft assumes this development to be
the result of the rapid change into a more worrying direction of the threat
pictures linked to information security which companies have taken into
consideration in their decision making. This development is expected to continue
also during the year 2012.
Stonesoft's comprehensive product offering meets the rapidly developing and
changing security challenges, including the demands brought by cloud services,
virtualization and outsourcing of security.
Advanced Evasion Techniques
In 2011 Stonesoft continued to research Advanced Evasion Techniques (AETs) and
published additional findings to CERT-FI in charge of international
vulnerability coordination.
Due to incorrect technology choices, many competitors still seem to have great
difficulties in amending their solutions to provide protection against AETs.
Leading research institutes such as Gartner have confirmed that the best
protection against the threat posed by new, advanced evasion techniques is
provided by flexible, software based systems. Compared with the solutions
provided by most leading network security vendors such as Cisco, Juniper and
Fortinet, Stonesoft's software based systems are capable of detecting advanced
evasion techniques. The threat posed by advanced evasion techniques does not
concern only intrusion prevention system (IPS) appliances, but also UTM (Unified
Threat Management) and next generation firewall appliances.
The above mentioned issues have opened new business opportunities for Stonesoft
and had a strong impact on the growth of the company's product sales. The
improved awareness of the threat posed by advanced evasion techniques has
brought the company new customers and made contacting target customers
significantly easier.
Based on Stonesoft's view, these issues will continue to have a positive impact
on the company's net sales and profitability and will strengthen its
competitiveness and market position as the general understanding and knowledge
about advanced evasions techniques grow.
Stonesoft aims for at least 30% growth of net sales and a positive result for
the year 2012.
With regard to the development of the turnover and the operating result,
variation is expected between the quarters in comparison to the corresponding
quarter during the previous year as well as to the previous quarter as a
consequence of, among others, long sales cycles and the relatively big impact of
individual deals on the development of net sales and operating result.
SUMMARY OF FINANCIAL STATEMENTS AND NOTES JANUARY 1 - DECEMBER 31, 2011
ACCOUNTING PRINCIPLES
The company has adopted certain new or revised IFRS standards and IFRIC
interpretations at the beginning of the financial period as described in the
Financial Statements for 2010. However, the adoption of these new and amended
standards has not yet had an effect on the reported figures in practice. In
other respects, the same accounting policies have been followed as in the
Financial Statements for 2010. Key indicator calculations remain unchanged.
This Financial Statements Release has been prepared in accordance with IAS 34
standard. The figures presented in this release are audited.
Stonesoft Group
Income Statement 10-12/2011 10-12/2010 1-12/2011 1-12/2010
(1000 Euros)
Net sales 9 540 7 510 30 604 24 341
Other operating income 281 227 904 847
Materials and services -1 946 -1 310 -5 240 -3 640
Personnel expenses -4 598 -4 098 -16 665 -14 744
Depreciation -115 -112 -479 -437
Other operating expenses -2 910 -2 905 -10 262 -9 052
Operating result 251 -688 -1 137 -2 685
Financial income and expenses 97 -106 358 217
Result before taxes 348 -794 -779 -2 468
Taxes 16 -111 -138 -221
Result for the accounting period 364 -905 -917 -2 689
Other comprehensive income
Exchange differences on translating
foreign operations 7 0 -3 -15
Total other comprehensive income 7 0 -3 -15
Total comprehensive income 371 -905 -920 -2 704
Basic earnings per share (EUR),
continuing operations 0,01 -0,01 -0,01 -0,04
Diluted earnings per share (EUR),
continuing operations 0,01 -0,01 -0,01 -0,04
Stonesoft Group
Balance Sheet (1000 Euros) 31.12.2011 31.12.2010
ASSETS
Non-Current Assets
Tangible assets 700 649
Intangible assets 162 112
Other investments 10 10
Total 872 771
Current assets
Inventories 1 508 953
Trade and other receivables 10 847 10 106
Prepayments 220 69
Marketable securities 0 0
Cash and cash equivalents 7 710 8 016
Total 20 285 19 144
Total assets 21 157 19 915
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
company
Share capital 1 151 1 151
Issue of shares 0 0
Share premium account 76 602 76 603
Conversion differences -954 -951
Reserve for invested unrestricted equity fund 4 732 4 751
Retained earnings -77 659 -76 986
Total 3 873 4 567
Long-term liabilities
Prepayments *) 3 157 2 976
Total 3 157 2 976
Short-term liabilities
Trade and other payables 5 563 4 571
Prepayments *) 8 381 7 687
Tax liability 126 76
Provisions 58 37
Total 14 127 12 372
Total liabilities 17 285 15 348
Total equity and liabilities 21 157 19 915
*) Prepayments contain customers advance
payment of support and maintenance contracts 11 538 10 663
Stonesoft
Group
Statement of
changes in
equity
(1000 Euros)
Reserve
Issue for invested
Share of Share Conversion unrestricted Retained
capital shares premium differences equity fund earnings Total
Shareholders'
equity at
1.1.2010 1 146 0 76 821 -936 0 -74 346 2 685
Comprehensive -2
income 0 0 0 -15 0 -2 689 704
Reserve for
invested
unrestricted
equity fund
reduction 0 0 0 0 0 0 0
Share premium
termination 0 0 -338 0 338 0 0
Directed share
issue 0 0 0 0 4 560 0 4 560
Transaction
costs from
equity 0 0 -3 0 -172 0 -175
Stock options
exercised 5 0 122 0 25 0 152
Stock option
expenses 0 0 0 0 0 49 49
Shareholders'
equity at
31.12.2010 1 151 0 76 603 -951 4 751 -76 986 4 567
Reserve
Issue for invested
Share of Share Conversion unrestricted Retained
capital shares premium differences equity fund earnings Total
Shareholders'
equity at
1.1.2011 1 151 0 76 603 -951 4 751 -76 986 4 567
Comprehensive
income 0 0 0 -3 0 -917 -920
Reserve for
invested
unrestricted
equity fund
reduction 0 0 0 0 -71 71 0
Share premium
termination 0 0 0 0 0 0 0
Directed share
issue 0 0 0 0 0 0 0
Transaction
costs from
equity 0 0 0 0 -1 0 -1
Stock options
exercised 0 0 0 0 54 0 54
Stock option
expenses 0 0 0 0 0 173 173
Shareholders'
equity at
31.12.2011 1 151 0 76 602 -954 4 732 -77 659 3 873
Stonesoft Group
Cash flow statement (1000 Euros) 1.1.-31.12.2011 1.1.-31.12.2010
Cash flow from operating activities
Operating Result -1 137 -2 685
Adjustments
Non-cash transactions 334 58
Financial expenses -106 -96
Financial incomes 445 464
Change in net working capital 904 481
Taxes paid -218 -221
Total cash flow from operating activities 221 -1 999
Cash flow from investing activities
Investments in tangible assets -460 -537
Investments in intangible assets -120 -30
Total cash flow investing activities -581 -566
Cash flow from financing activities
Proceeds from issue of share capital 0 4 391
Stock options exercised 53 146
Total cash flow from financing activities 53 4 537
Change in cash and cash equivalents
Cash and cash equivalents at beginning of
period 8 016 6 210
Conversion differences 1 -17
Changes in the market value of investments 0 -148
Total cash and cash equivalents at end of period
*) 7 710 8 016
*) Total cash and cash equivalents at end of the
period
contains pledged securities 496 477
Stonesoft Group
Geographical segments 1.1.-31.12.2011 1.1.-31.12.2010
(1000 Euros)
Net sales
Europe 20 979 14 599
Emerging Markets 3 926 4 255
Americas 4 656 4 525
APAC 1 043 961
Total net sales 30 604 24 341
Operating profit
Europe 150 -661
Emerging Markets -352 -169
Americas -650 -1 479
APAC -286 -375
Total operating profit -1 137 -2 685
Stonesoft Group
Contingent liabilities 1.1.-31.12.2011 1.1.-31.12.2010
(1000 Euros)
Contingent off-balance sheet
Non-cancellable other leases 1 970 2 327
Contingent liabilities for the Company 223 94
Stonesoft Group
Quarterly development Q4 / Q3 / Q2 / Q1 / Q4 / Q3 / Q2 / Q1 /
(Euro Millions) 2011 2011 2011 2011 2011 2010 2010 2010 2010 2010
Software 0,8 0,4 0,4 0,4 2,1 0,5 0,4 0,3 0,3 1,5
Security appliances 5,3 4,2 2,9 3,2 15,6 3,9 2,5 1,9 2,9 11,2
Services 3,4 3,3 3,2 3,0 12,8 3,1 2,8 2,8 2,8 11,6
Other products 0,1 0,1 0,0 -0,1 0,1 0,0 -0,1 0,1 0,1 0,0
Net sales continuing
operations 9,5 8,0 6,5 6,5 30,6 7,5 5,6 5,1 6,2 24,3
Change-% from previous
year 27 43 29 6 26 15 -6 -16 21 3
Sales margin 7,6 6,7 5,6 5,4 25,4 6,2 4,7 4,4 5,3 20,7
Sales margin % 80 83 87 83 83 83 84 88 86 85
Operative expenses 7,6 6,7 6,7 6,4 27,3 7,1 5,4 5,9 5,7 24,2
Operating profit (EBITA) 0,3 0,2 -0,7 -0,8 -1,1 -0,7 -0,6 -1,2 -0,2 -2,7
% of net sales 3 2 -12 -13 -4 -9 -10 -25 -3 -11
Result before taxes 0,3 0,2 -0,7 -0,6 -0,8 -0,8 -0,4 -1,2 0,0 -2,5
% of net sales 4 3 -11 -10 -3 -11 -7 -24 -1 -10
Stonesoft Group
Key ratios 1.1.-31.12.2011 1.1.-31.12.2010
(1000 Euros)
Net sales 30 604 24 341
Net sales change-% 26 3
Operating result -1 137 -2 685
% of net sales -4 -11
Operating result before taxes -779 -2 468
% of net sales -3 -10
ROE - %, annualized -22 -74
ROI - %, annualized -16 -65
Equity ratio-% 40 49
Net gearing -1,99 -1,75
Total Assets 21 157 19 915
Capital expenditure 581 566
Capital disposals 0 0
R&D costs 6 131 5 639
% of net sales 20 23
Number of employees (weighted average) 207 191
Number of employees (end of the period) 222 201
Share Specific Ratios
Earnings per share -0,01 -0,04
Equity per share 0,06 0,07
Dividend 0,00 0,00
Dividend per share (EUR) 0,00 0,00
Dividend / Profit-% 0 0
Calculation of indicators
(Profit before taxes - income
Return on equity (ROE) % = taxes) x 100 /
Shareholders' equity + minority
interest (average)
(Profit before extraordinary
Return on invested capital items+interest and other financial
(ROI)% = expenses) x100 /
Balance sheet total - non-interest
bearing debt (average)
(Equity + minority interest) x 100
Equity ratio % = /
Balance sheet total - advances
received
Interest bearing net debt - cash in
hand and on deposit - marketable
Net gearing = securities /
Equity + minority interest
Profit before taxes - minority
Earning per share (EPS) = interest - income taxes / Average number of shares adjusted
for dilutive effect of options
Equity per share = Equity /
Number of shares at end of period
FORWARD-LOOKING STATEMENTS
This report contains statements concerning, among other things, Stonesoft's
financial condition and the results of operations that are forward-looking in
nature. Such statements are not historical facts, but rather represent
Stonesoft's future expectations for the upcoming development. The company
believes that the expectations reflected in these forward-looking statements are
based on reasonable assumptions. However, these forward-looking statements
involve inherent risks and uncertainties, which could cause actual results or
outcomes to differ materially from those anticipated in the statements. These
risks and uncertainties may include, among other things, (1) changes in our
market position or in the Firewall/VPN and Intrusion detection and protection
market in general; (2) the effects of competition; (3) the success, financial
condition, and performance of our collaboration partners, suppliers and
customers;(4) our ability to source quality components without interruption and
at acceptable prices;(5) our ability to recruit, retain and develop
appropriately skilled employees;(6) exchange rate fluctuations, including, in
particular, fluctuations between the Euro, which is our reporting currency, and
the US dollar;(7) other factors related to sale of products, economic situation,
business, competition or legislation affecting the business of Stonesoft or the
industry in general and (8) our ability to control the variety of factors
affecting our ability to reach our targets and give accurate forecasts.
PRESS CONFERENCE
A press conference for analysts and investors will be held on 16 February, 2012
at 10.30 am at the Stonesoft headquarters, street address Itälahdenkatu 22 A,
00210 Helsinki.
For additional information, please contact:
Ilkka Hiidenheimo, CEO, Stonesoft Corporation
Tel. +358 9 476 711
E-mail: ilkka.hiidenheimo@stonesoft.com
Mikael Nyberg, CFO, Stonesoft Corporation
Tel. +358 9 476 711
E-mail: mikael.nyberg@stonesoft.com
Stonesoft Corporation
Ilkka Hiidenheimo
CEO
This stock exchange release and the presentation material related to this report
are also available at the Stonesoft web site www.stonesoft.com.
Distribution:
NASDAQ OMX Helsinki Ltd
www.stonesoft.com
[HUG#1586242]
© 2024 Nasdaq, Inc. All Rights Reserved |