2010-10-27 08:45:00 CEST
2010-10-27 08:45:03 CEST
REGULATED INFORMATION
Ixonos - Interim report (Q1 and Q3)
Interim report for the period 1 January - 30 September 2010
Ixonos Plc Interim report 27 October 2010 at 9:45 Interim report for the period 1 January - 30 September 2010 IXONOS' TURNOVER AND PROFIT CONTINUED TO GROW The review period in brief - Turnover for the review period was EUR 61.8 million (2009: EUR 47.6 million), a change of 29.8 per cent. - Operating profit was EUR 3.5 million (2009: EUR -5.7 million, including EUR 7.2 million goodwill impairment), 5.6 per cent of turnover. - Non-recurring expenses of EUR 0.4 million (2009: EUR 7.2 million) were allocated to the review period. - Net profit was EUR 2.0 million (2009: EUR -6.7 million), 3.3 per cent of turnover. - Earnings per share were EUR 0.16 (2009: EUR -0.57). - Diluted earnings per share were EUR 0.16 (2009: EUR -0.57). - Net cash flow from operating activities was EUR 0.8 million (2009: EUR 1.9 million). Q3/2010 in brief - Turnover for the third quarter was EUR 19.4 million (2009: EUR 13.8 million), a change of 39.9 per cent. - Operating profit was EUR 1.7 million (2009: EUR -6.7 million, including EUR 7.2 million goodwill impairment), 8.5 per cent of turnover. - Net profit was EUR 1.1 million (2009: EUR -7.1 million), 5.8 per cent of turnover. - Earnings per share were EUR 0.08 (2009: EUR -0.60). - Diluted earnings per share were EUR 0.08 (2009: EUR -0.60). Future prospects in brief - Turnover in the final quarter of this year is forecast to exceed substantially turnover for the corresponding period last year. Operating profit in the final quarter is expected to be at least at the level of operating profit for the previous year. - Turnover for the entire year is predicted clearly to surpass that of the previous year. Operating profit for the entire year is anticipated distinctly to exceed operating profit for the previous year (before the goodwill impairment in 2009). Kari Happonen, President and CEO: Since early this year, Ixonos' operations and profitability have developed as planned. During the third quarter, the growth in service demand and in turnover has continued to outperform the market. With the overall growth of our business, our operating profit has also improved. The company's profitability continued to be weakened by the tight market situation in Finland, by our investments in new regions and by the one-off arbitration costs. Profitability has not yet risen to its normal level. The Mobile Terminals & Software business area, which provides R&D services for mobile terminal devices and software, has strongly increased its turnover this year and has been able to maintain fair profitability. The turnkey projects in smartphone design that were carried out in the Device Creation Centre have supported the growth of the segment's operations. The unit is expected to continue developing positively during the remainder of the year. The turnover of the Media & Communities business area, which develops device-independent Internet services related to the delivery of digital media as well as to web communities, has continued its vigorous growth compared to 2009. Already during the previous review period, the turnover of the Media & Communities unit clearly exceeded the unit's turnover for the entire year 2009. Due to strong investments, for example into the development of the international sales network and of partnerships, the unit's profitability remains low. We anticipate that the segment will continue its positive development and that profitability will improve. The Business Solutions area, which provides development and implementation of online services to Finnish organisations in telecommunication and finance as well as in public administration, continues to suffer from the difficult market situation in Finland. The unit's turnover fell short of the previous year's level, and operations continued to show a loss in the third quarter. However, the rate of decline in operations has slowed down distinctly and the rationalisation programme is expected to improve the unit's profitability during the last part of the year. Clear improvements in the order book are detectable, and this is expected to have a positive effect on the unit's turnover and profitability. As research institutes had forecast, Finland's ICT market has seen an upswing this year and the growth is expected to continue in 2011. The market of international customers is anticipated to increase clearly faster than the Finnish market. We expect that the business volume of the entire Group will keep growing and that profitability will continue to develop positively. OPERATIONS Ixonos is an ICT service company providing innovative solutions for mobile communications, social media and digital services. Together with its customers, the company develops products and services that inspire the digital experience regardless of place and time. The company's client organisations benefit from new business opportunities and new productivity. By offering services that range from concept design, consulting and project management to software production and maintenance, Ixonos strives to be a strategic partner to leading innovators. One of Ixonos' strategic objectives has been to expand the company's solutions and services to span the entire life cycle of mobile Internet services, from concept development to maintenance. Ixonos' solutions also encompass all sectors of the user experience, from terminal devices and user interfaces to back end systems for mobile Internet services. Ixonos' Device Creation Centre provides R&D services for mobile devices. In addition to software development, these services also cover mechanical engineering and electronics design. With the centre, Ixonos can provide increasingly comprehensive next generation smartphone R&D services to existing international device-manufacturer and operator customers as well as to new ones. The unit develops smartphones based on new, powerful chipsets from the world's leading technology suppliers and on the Android and Symbian operating systems. The company's clientele comprises globally leading mobile and smartphone manufacturers, network suppliers and telecom carriers as well as Finnish finance, industrial and service companies and public administration organisations. Ixonos has offices in Finland, China, Denmark, Estonia, Germany, Great Britain, Slovakia and the U.S. SEGMENTS Ixonos' business operations are organised into three segments: Mobile Terminals & Software; Media & Communities and Business Solutions. The Mobile Terminals & Software business area involves product development services for mobile terminal devices and their software. The Media & Communities area comprises device-independent Internet services related to the delivery of digital content and to social network communication. The Business Solutions area encompasses development services for corporate business software and systems as well as for e-government facilities. As the Business Solutions area was incorporated, some of its customer projects were transferred to the Media & Communities business area during the review period. The turnover of those projects was EUR 1.6 million (2009: EUR 1.8 million) and their operating profit was EUR 0.3 million (2009: EUR 0.5 million). The change has been taken into account in the presented segment figures for 2010 as well as in their comparative figures. Mobile Terminals & Software The Mobile Terminals & Software business area provides its customers with R&D services for mobile terminal devices and software. The Mobile Terminals & Software business area managed to boost its market share further as well as to increase turnover and operating profit for the review period compared to the previous year. Turnover increased by 39.4 per cent to EUR 37.0 million (2009: EUR 26.5 million). Operating profit increased by 30.9 per cent to EUR 5.2 million (2009: EUR 4.0 million), 14.1 per cent of turnover. During the review period, the first customer projects related to design of complete mobile devices were carried out in the Device Creation Centre. In addition to actively using the offering of the Group's international sites in Tallinn, Košice, Beijing and Chengdu, the Mobile Terminals & Software segment kept up its strong efforts to develop international sales. The unit is expected also to continue its positive development during the remainder of the year. Media & Communities The Media & Communities business area provides its customers with device-independent Internet services related to the delivery of digital media, entertainment and information as well as to social network communication. During the review period, the segment's turnover increased by 83.2 per cent to EUR 15.4 million (2009: EUR 8.4 million). Operating profit increased by 11.5 per cent to EUR 0.8 million (2009: EUR 0.8 million), 5.5 per cent of turnover. Strong investments in the construction of an international operations network as well as in the development of partnerships continued to weaken the segment's profitability. The Media & Communities area has actively used the offering of the Group's lower-cost sites such as the one in Košice. Investments in Internet distribution and sales of digital media as well as in social media services on the Internet are expected to grow globally, notably faster than traditional ICT investments. The unique and comprehensive service package Ixonos offers its customers enables agile and cost-efficient creation of new Internet services; implementation of a smooth user experience in services and mobile terminals; and flexible further development and maintenance - including business critical hosting - of services. The turnover of the Media & Communities business area is expected to increase forcefully this year. Profitability is anticipated to remain at its present level, but the unit's operating profit for this year is forecast to be lower than in the previous year. Business Solutions The Business Solutions area provides development services for corporate business software and systems as well as for e-government facilities. The turnover of the Business Solutions segment decreased by 6.3 per cent to EUR 11.8 million (2009: EUR 12.6 million) during the review period. Although operating profit remained negative, EUR -0.7 million, the losses were clearly reduced in comparison to the previous year (2009: EUR -9.1 million). Weak demand for ICT services in Finland continued to reduce turnover and operating profit. A goodwill impairment of EUR 7.2 million decreased the operating profit for the reference period. The segment's rationalisation programme, which has continued since early 2010, is expected to improve the unit's profitability during the last part of the year. The Business Solutions area focuses on acceleration of business processes, on document and event management, on e-commerce and e-government solutions and on specialist services in project management. As all the Group's units do, Business Solutions vigorously uses open source solutions and, in chosen areas, product platforms of technology partners. The unit aims, among other objectives, to diversify its solution delivery according to the SaaS (software as a service) business model by using the Group's advanced business-critical hosting services. The Business Solutions unit also aspires to improve its operating efficiency by concentrating maintenance and further development of certain product platforms so that such work is performed at the Group's site in Košice. The unit's e-commerce and e-government solutions have been well received, especially by customers in the public sector. According to research institutes such as Market-Visio, Finland's ICT market has seen moderate growth this year. Due to the continuously weak market situation in Finland, the Business Solutions area is expected still to develop slower than the company's other operations. TURNOVER Consolidated turnover for the review period was EUR 61.8 million (2009: EUR 47.6 million), which is 29.8 per cent more than in the previous year. Of the total turnover of all segments, before elimination of inter-segment revenue, the Mobile Terminals & Software segment accrued 57.6 per cent (2009: 55.8 per cent), the Media & Communities segment accrued 24.0 per cent (2009: 17.7 per cent) and the Business Solutions segment accrued 18.4 per cent (2009: 26.5 per cent). Turnover in the third quarter was EUR 19.4 million (2009: EUR 13.8 million), which is 39.9 per cent more than in the previous year. Turnover by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1-9 2010 | 1-9 2009 | 1-12 2009 | -------------------------------------------------------------------------------- | Mobile Terminals & | 36,999 | 26,544 | 37,310 | | Software | | | | -------------------------------------------------------------------------------- | Media & Communities | 15,449 | 8,433 | 12,716 | -------------------------------------------------------------------------------- | Business Solutions | 11,818 | 12,610 | 17,033 | -------------------------------------------------------------------------------- | Eliminations | -2,479 | 0 | 0 | -------------------------------------------------------------------------------- | Group total | 61,787 | 47,587 | 67,059 | -------------------------------------------------------------------------------- FINANCIAL RESULT Consolidated operating profit was EUR 3.5 million (2009: EUR -5.7 million). Profit before taxes was EUR 2.8 million (2009: EUR -6.5 million). Profit for the review period was EUR 2.0 million (2009: EUR -6.7 million). Diluted earnings per share were EUR 0.16 (2009: EUR -0.57). Diluted cash flow from operating activities was EUR 0.07 (2009: EUR 0.16) per share. The improved operating profit was due to increased turnover as well as to rationalisation measures in the company. To improve the operating profit, particularly in the Business Solutions area, a rationalisation programme has been carried out during 2010; this programme is expected to enhance the unit's profitability. The Group's administrative expenses have increased in particular due to rising costs connected to internationalisation management as well as due to non-recurring costs. The EUR 0.4 million arbitration expenses relating to the acquisition of Cidercone Life-Cycle Solutions Oy had a one-off impact on operating costs, and they were expensed in the second quarter. Operating profit for the third quarter was EUR 1.7 million (2009: EUR -6.7 million); profit before taxes was EUR 1.6 million (2009: EUR -7.0 million). Profit for the third quarter was EUR 1.1 million (2009: EUR -7.1 million). Diluted third-quarter earnings per share were EUR 0.08 (2009: EUR -0.6). Diluted cash flow from operating activities in the third quarter was EUR -0.06 per share (2009: EUR 0.10). Operating profit by segment -------------------------------------------------------------------------------- | EUR 1,000 | 1-9 2010 | 1-9 2009 | 1-12 2009 | -------------------------------------------------------------------------------- | Mobile Terminals & | 5,208 | 3,979 | 5,667 | | Software | | | | -------------------------------------------------------------------------------- | Media & Communities | 846 | 759 | 1,555 | -------------------------------------------------------------------------------- | Business Solutions | -655 | -9,080 | -9,224 | -------------------------------------------------------------------------------- | Administration | -1,937 | -1,367 | -1,990 | -------------------------------------------------------------------------------- | Group total | 3,462 | -5,708 | -3,993 | -------------------------------------------------------------------------------- The EUR 7.2 million goodwill impairment allocated to the Business Solutions unit has been taken into account in the segment's operating profit for the financial period 2009. RETURN ON CAPITAL Consolidated return on equity (ROE) was 11.8 per cent (2009: -41.0 per cent). Return on investment (ROI) was 11.9 per cent (2009: -18.1 per cent). BALANCE SHEET AND FINANCING The balance sheet total was EUR 58.0 million (2009: EUR 48.4 million). Equity was EUR 27.0 million (2009: EUR 18.5 million). The equity ratio was 46.5 per cent (2009: 38.2 per cent). The Group's liquid assets at the end of the review period amounted to EUR 1.3 million (2009: EUR 2.2 million). At the end of the review period, the company's balance sheet showed EUR 12.0 million (2009: EUR 15.7 million) in bank loans. This amount includes overdraft in use. The bank loans have covenants attached to them. The covenants are based on the company's equity ratio and on the proportion of interest-bearing bank loans (partly interest-bearing net liabilities) to the 12-month rolling operating profit. The share issue that was carried out in the second quarter significantly affected the company's balance sheet structure. The net effect of the share issue amounted to some EUR 5.6 million in equity financing raised from shareholders. The company's bank loans have decreased by EUR 3.3 million during the review period. GOODWILL On 30 September 2010, the consolidated balance sheet included EUR 23.6 million in goodwill. In the third quarter of 2009, the company wrote EUR 7.2 million off the goodwill allocated to the Business Solutions area. The company performed impairment testing of goodwill in the Business Solutions area and concluded that due to the effects of rationalisation measures as well as to improved market outlook, no goodwill impairment is required in connection with the unit. Pursuant to the arbitral decision of 5 May 2010, Ixonos was to raise by EUR 1.1 million the additional acquisition price of EUR 7.8 million that Ixonos had paid to the sellers of Cidercone Life-Cycle Solutions Oy. The entire additional acquisition price of EUR 1.1 million was recorded as an addition to goodwill. Of this addition, EUR 0.8 million was allocated to the previous review period. The arbitration caused the company some EUR 0.4 million in costs, which were entirely expensed in the second quarter. CASH FLOW During the review period, consolidated cash flow from operating activities was EUR 0.8 million (2009: EUR 1.9 million). Increased turnover and, particularly, customers' extended payment terms resulted in a change in working capital, and this change contributed to the reduction in cash flow from operating activities. At 30 September 2010, the company had sold EUR 1.5 million in accounts receivable. The company's trade receivables do not include any significant amount of high-risk receivables. PERSONNEL The number of personnel averaged 1,115 (2009: 966) during the review period and was 1,134 (2009: 969) at the end of the period. The staff increase focused on companies outside Finland. At the end of the review period, the Group had 738 employees (2009: 724) in Finnish companies, and Group companies in other countries had 396 employees (2009: 245). SHARES AND SHARE CAPITAL Share turnover and price During the review period, the highest price of the company's share was EUR 2.99 (2009: EUR 3.50), and the lowest price was EUR 1.84 (2009: EUR 1.70). The closing price on 30 September 2010 was EUR 2.24 (2009: EUR 3.01). The average price over the review period was EUR 2.30 (2009: EUR 2.06). The number of shares traded during the review period was 1,953,877 (2009: 3,389,744), which corresponds to 13.4 per cent (2009: 36.4 per cent) of the total number of shares at the end of the review period. According to the closing price on 30 September 2010, the market value of the company's shares was EUR 32,782,073 (2009: EUR 28,032,389). Share capital At the beginning of 2010, the company's registered share capital was EUR 372,523.56 and the number of shares was 9,313,089. At the end of the review period, Ixonos' registered share capital was EUR 585,394.16 and the total number of shares was 14,634,854. As a result of the rights issue in June 2010, the number of Ixonos shares increased by 5,321,765 to 14,634,854 and the share capital increased by EUR 212,870.60 to EUR 585,394.16. The changes became effective on 1 July 2010, when they were entered into the Trade Register. Option plan 2006 Under the 2006 stock option plan, 140,000 options have been granted under AI; 140,000 options under AII; 60,000 options under BI and 60,000 options under BII. Of the series A options, 15,000 AI options and 25,000 AII options have been returned to the company pursuant to the terms and conditions of the option plan. A total of 30,000 returned series A options have been converted to series B options, in accordance with the terms and conditions of the option plan, and redistributed. Of the series B options, 5,000 BI options and 10,000 BII options have been returned to the company pursuant to the terms and conditions of the option plan. The maximum number of shares that can be subscribed for with outstanding options under option plan 2006 is 366,500, which is equivalent to 3.9 per cent of the company's total shares. The subscription period for the 2006 AI options began on 1 October 2007. The subscription period for the AII and BI options began on 1 October 2008. The subscription period for the BII options began on 1 October 2009. At 30 June 2010, the subscription price is EUR 4.13 with AI and AII options and EUR 4.92 with BI and BII options. The subscription period for the 2006 options ends on 31 December 2011. Because of the rights issue, the company's Board of Directors decided on 1 June 2010 to modify the subscription ratio and exercise price associated with the option rights. The change is intended to ensure equal treatment of option holders and shareholders. Under the new subscription ratio, each 2006A and 2006B option right entitles its holder to subscribe for 1.57 shares. The exercise price is based on the market price of the company's share at NASDAQ OMX Helsinki Ltd from January to March 2006 and 2007. However, the exercise price per share is at least EUR 3.0464 with option right 2006A and at least EUR 3.5491 with option right 2006B. On exercise, the total number of shares for which the option holder subscribes is rounded down to the nearest integer. The total exercise price is calculated using the rounded number of shares and is rounded to the nearest cent. After the change, the maximum number of shares that can be subscribed for with option rights is 575,405, which equals 3.9 per cent of the number of shares after the rights issue. The changes became effective on 1 July 2010, when they were entered in the Trade Register. Shareholders The company had 2,945 shareholders on 30 September 2010 (2009: 3,070). Private persons owned 53.7 per cent (2009: 56.8 per cent) and institutions 46.3 per cent (2009: 43.2 per cent) of the shares. Foreign ownership was 7.2 per cent (2009: 8.0 per cent) of the total number of shares. Board authorisations At the end of the review period, the Board of Directors held an authorisation, granted by the Extraordinary General Meeting on 1 June 2010, to issue 3,991,324 shares. The authorisation states that such shares as well as special rights entitling to shares may also be issued in a way that deviates from the pre-emptive rights of shareholders, if a weighty financial reason for this exists as laid out in the Limited Liability Companies Act (624/2006). In such a case, the authorisation may be used to finance corporate acquisitions or other investments related to the company's operations; to reinforce the commitment of employees; and to maintain and improve the Group's solvency. The authorisation is effective until the company's next Annual General Meeting. EVENTS AFTER THE REVIEW PERIOD New incentive plan for the Group's management On 4 October 2010, a new management incentive plan, pursuant to a decision by the Board of Directors of Ixonos Plc, was announced. The purpose of the plan is to reinforce management commitment to the company by encouraging management to acquire and hold company shares, thereby increasing shareholder value in the long term. Through this incentive plan, President and CEO Kari Happonen and nine other members of Ixonos' management invest their personal funds in the company's shares, genuinely carrying the risk of their investment. The number of participants in the plan may later be increased with additional members of the company's management. For the purpose of share ownership, the participants establish the limited liability company Ixonos Management Invest Oy, whose entire share capital they own. On 26 October 2010, the Board of Directors approved Ixonos Management Invest Oy's subscription for 467,630 shares in accordance with the incentive plan and with the share issue directed at Ixonos Management Invest Oy. The shares will be subject to public trading together with the other shares in Ixonos Plc on approximately 15 November 2010. The number of shares in Ixonos Plc after the directed issue is 15,102,484. Export of an e-government service model to China in the DigiEcoCity project Ixonos will design and implement the architecture model for the e-government services of the model cities that will be founded in China as part of the DigiEcoCity project. DigiEcoCity Ltd, a Finnish company, chose Ixonos to establish uniform design principles for an ecosystem of digital solutions. Having a defined architecture model for e-government services will facilitate the construction of cities that conform to unified ecological and digital principles. The project will use e-government solutions developed in-house by Ixonos. Free use of these solutions was offered to public administrations and service developers as early as in 2009. The solutions have previously been applied, for example, to the citizens' portal solution for the city of Oulu. RISK MANAGEMENT AND NEAR-FUTURE UNCERTAINTY FACTORS Ixonos Plc's risk management aims to ensure undisturbed continuity and development of the company's operations, to back up the implementation of the commercial targets set by the company and to support increasing the company's value. Details on the risk management organisation and process as well as on recognised risks are presented on the company's website, at www.ixonos.com/en/investors/risk_management. The potential ramifications of the recession that afflicted the entire world in 2009 continue to influence corporate investments and propensity to invest, as does the prevailing economic uncertainty. The latter also affects the information systems development investments of Ixonos' customers: such investments may be put on hold, or decisions regarding them may be postponed. Changes in key customer relationships may have an adverse effect on Ixonos' operations, earning power and financial status. Should a major customer switch its purchases from Ixonos to its competitors, Ixonos would have limited ability to acquire, in the short term, new customer volume to compensate for the change. Ixonos' acquisitions, its rapid growth in 2006-2008 and 2010, the upswing in its project operations and the prolonged turnaround time of accounts receivable have increased the company's need for working capital. The company manages this need by creating, together with financiers, adequate buffers to ensure sufficient funds as well as by facilitating the circulation of working capital. The company's balance sheet also includes a significant amount of goodwill, which may be impaired should either internal or external factors reduce the profit expectations of the company or any of its cash-generating units. Goodwill is tested annually during the final quarter of the year and, if necessary, at other times. The company's financial agreements have covenants attached to them. A covenant violation may cause an increase in the company's financing costs or a call for swift partial or full repayment of non-equity loans. The main risks related to covenant violations are associated with operating profit fluctuation due to the market situation and with a potential need to increase the company's working capital through non-equity funding. The company manages these risks by negotiating with financiers and by maintaining readiness for various financing methods. Ixonos has in use the cash funds its normal operations require. FUTURE PROSPECTS Gartner research indicates that the total trade volume of the industry has started to increase in 2010. According to Market-Visio, Finland's ICT market has begun to grow moderately this year. Turnover in the final quarter of this year is forecast to exceed substantially turnover for the corresponding period last year. Operating profit in the final quarter is expected to be at least at the level of operating profit for the previous year. Turnover for the entire year is predicted clearly to surpass that of the previous year. Operating profit for the entire year is anticipated distinctly to exceed operating profit for the previous year (before the goodwill impairment in 2009). The company aims to continue rationalising its operations, developing its services, expanding its service production in lower-cost countries and strengthening the cash flow and profitability of its operations. NEXT REPORTS The publication time of the financial statement release for the period 1 January - 31 December 2010 will be announced later. IXONOS PLC Board of Directors For more information, please contact: Ixonos Plc Kari Happonen, President and CEO, tel. +358 400 700 761, kari.happonen@ixonos.com Timo Leinonen, CFO, tel. +358 400 793 073, timo.leinonen@ixonos.com Distribution: NASDAQ OMX Helsinki Main media THE IXONOS GROUP ABBREVIATED FINANCIAL STATEMENTS 1 JANUARY - 30 SEPTEMBER 2010 Accounting policies The interim report has been prepared in accordance with the recognition and valuation principles in the International Financial Reporting Standards (IFRS), but not all IAS 34 requirements have been complied with. Income tax expense is based on the performance-based taxes corresponding to the result for the review period. The same accounting policies and techniques as in the previous annual financial statement have been applied to this interim report. In addition, the new IAS and IFRS standards that have been introduced in 2010 have been applied. The most significant such standards are IFRS 3 (revised), Business Combinations and IAS 27 (revised), Consolidated and Separate Financial Statements. Preparing the financial statements in accordance with IFRS requires Ixonos' management to make estimates and assumptions that affect the amounts of assets and liabilities on the balance sheet date as well as the amounts of income and expenses for the financial period. In addition, judgment must be used in applying the accounting policies. As the estimates and assumptions are based on views at the time of the interim report, they involve risks and uncertainty factors. Actual results may differ from estimates and assumptions. The figures in the income statement and in the balance sheet are consolidated. The consolidated balance sheet includes all Group companies. The original interim report is in Finnish. The interim report in English is a translation of the original report. As the figures in the report have been rounded, sums of individual figures may differ from the sums presented. The interim report is unaudited. CONSOLIDATED INCOME STATEMENT, EUR 1,000 -------------------------------------------------------------------------------- | | 1.1.-30.9. | 1.1.-30.9.2 | Change, | 1.1.-31.12.20 | | | 2010 | 009 | per cent | 09 | -------------------------------------------------------------------------------- | Turnover | 61,787 | 47,587 | 29.8 | 67,059 | -------------------------------------------------------------------------------- | Operating expenses | -58,325 | -46,095 | 26.5 | -63,853 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 3,462 | 1,492 | 132.0 | 3,207 | | BEFORE GOODWILL | | | | | | IMPAIRMENT | | | | | -------------------------------------------------------------------------------- | GOODWILL IMPAIRMENT | | -7,200 | | -7,200 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 3,462 | -5,708 | | -3,993 | -------------------------------------------------------------------------------- | Financial income and | -628 | -817 | -23.1 | -1,471 | | expenses | | | | | -------------------------------------------------------------------------------- | Profit before tax | 2,834 | -6,525 | | -5,464 | -------------------------------------------------------------------------------- | Income tax | -794 | -175 | 352.7 | -523 | -------------------------------------------------------------------------------- | PROFIT FOR THE | 2,040 | -6,701 | | -5,987 | | PERIOD | | | | | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME, EUR 1,000 -------------------------------------------------------------------------------- | Profit for the period | 2,040 | -6,701 | | -5,987 | -------------------------------------------------------------------------------- | Other comprehensive | | | | | | income | | | | | -------------------------------------------------------------------------------- | Change in translation | 11 | 0 | | 5 | | difference | | | | | -------------------------------------------------------------------------------- | TOTAL COMPREHENSIVE | 2,050 | -6,701 | | -5,982 | | INCOME FOR THE PERIOD | | | | | -------------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF FINANCIAL POSITION, EUR 1,000 -------------------------------------------------------------------------------- | ASSETS | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | NON-CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Goodwill | 23,647 | 22,933 | 22,826 | -------------------------------------------------------------------------------- | Other intangible assets | 5,188 | 5,321 | 5,061 | -------------------------------------------------------------------------------- | Property, plant and equipment | 4,423 | 3,589 | 3,942 | -------------------------------------------------------------------------------- | Deferred tax assets | 87 | 219 | 233 | -------------------------------------------------------------------------------- | Available-for-sale investments | 110 | 110 | 110 | -------------------------------------------------------------------------------- | TOTAL NON-CURRENT ASSETS | 33,455 | 32,173 | 32,172 | -------------------------------------------------------------------------------- | CURRENT ASSETS | | | | -------------------------------------------------------------------------------- | Trade and other receivables | 23,200 | 13,991 | 17,691 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 1,317 | 2,214 | 2,278 | -------------------------------------------------------------------------------- | TOTAL CURRENT ASSETS | 24,517 | 16,205 | 19,968 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 57,972 | 48,379 | 52,140 | -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | SHAREHOLDERS' EQUITY | | | | -------------------------------------------------------------------------------- | Share capital | 585 | 373 | 373 | -------------------------------------------------------------------------------- | Share premium reserve | 219 | 219 | 219 | -------------------------------------------------------------------------------- | Share issue | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Invested non-restricted equity | 20,346 | 14,808 | 14,808 | | fund | | | | -------------------------------------------------------------------------------- | Retained earnings | 3,788 | 9,760 | 9,764 | -------------------------------------------------------------------------------- | Profit for the period | 2,040 | -6,701 | -5,987 | -------------------------------------------------------------------------------- | TOTAL SHAREHOLDERS' EQUITY | 26,978 | 18,459 | 19,177 | -------------------------------------------------------------------------------- | LIABILITIES | | | | -------------------------------------------------------------------------------- | Non-current liabilities | 8,981 | 11,799 | 10,543 | -------------------------------------------------------------------------------- | Current liabilities | 22,012 | 18,121 | 22,420 | -------------------------------------------------------------------------------- | TOTAL LIABILITIES | 30,994 | 29,920 | 32,963 | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 57,972 | 48,379 | 52,140 | -------------------------------------------------------------------------------- STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY, EUR 1,000 -------------------------------------------------------------------------------- | | | EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT | -------------------------------------------------------------------------------- | | Shar | Shar | Shar | Invest | Transla | Retai | Profi | Total | | | e | e | e | ed | tion | ned | t for | | | | capi | prem | issu | non-re | differe | earni | the | | | | tal | ium | e | strict | nce | ngs | perio | | | | | rese | | ed | | | d | | | | | rve | | equity | | | | | | | | | | fund | | | | | -------------------------------------------------------------------------------- | Shareholder | 370 | 121 | 100 | 14,808 | -16 | 9,751 | 0 | 25,135 | | s' equity | | | | | | | | | | at 1 | | | | | | | | | | January | | | | | | | | | | 2009 | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | | | -6,70 | -6,701 | | the period | | | | | | | 1 | | -------------------------------------------------------------------------------- | Other | | | | | | | | | | comprehensi | | | | | | | | | | ve income | | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | | | | 0 | | translation | | | | | | | | | | difference | | | | | | | | | -------------------------------------------------------------------------------- | Transaction | | | | | | | | | | s with | | | | | | | | | | shareholder | | | | | | | | | | s | | | | | | | | | -------------------------------------------------------------------------------- | Rights | 2 | 98 | -100 | | | | | 0 | | issue | | | | | | | | | -------------------------------------------------------------------------------- | Share-based | | | | | | 25 | | 25 | | remuneratio | | | | | | | | | | n expense | | | | | | | | | -------------------------------------------------------------------------------- | Shareholder | 373 | 219 | 0 | 14,808 | -16 | 9,776 | -6,70 | 18,459 | | s' equity | | | | | | | 1 | | | at 30 | | | | | | | | | | September | | | | | | | | | | 2009 | | | | | | | | | -------------------------------------------------------------------------------- | Shareholder | 373 | 219 | 0 | 14,808 | -11 | 3,789 | 0 | 19,177 | | s' equity | | | | | | | | | | at 1 | | | | | | | | | | January | | | | | | | | | | 2010 | | | | | | | | | -------------------------------------------------------------------------------- | Profit for | | | | | | | 2,040 | 2,040 | | the period | | | | | | | | | -------------------------------------------------------------------------------- | Other | | | | | | | | | | comprehensi | | | | | | | | | | ve income | | | | | | | | | -------------------------------------------------------------------------------- | Change in | | | | | 11 | | | 11 | | translation | | | | | | | | | | difference | | | | | | | | | -------------------------------------------------------------------------------- | Transaction | | | | | | | | | | s with | | | | | | | | | | shareholder | | | | | | | | | | s | | | | | | | | | -------------------------------------------------------------------------------- | Rights | 213 | | | 5,538 | | | | 5,751 | | issue | | | | | | | | | -------------------------------------------------------------------------------- | Shareholder | 585 | 219 | 0 | 20,346 | 0 | 3,789 | 2,040 | 26,978 | | s' equity | | | | | | | | | | at 30 | | | | | | | | | | September | | | | | | | | | | 2010 | | | | | | | | | -------------------------------------------------------------------------------- CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000 -------------------------------------------------------------------------------- | | 1.1.- | 1.1.- | 1.1.- | | | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Cash flow from operating activities | | | | -------------------------------------------------------------------------------- | Profit for the period | 2,040 | -6,701 | -5,987 | -------------------------------------------------------------------------------- | Adjustments to cash flow from | | | | | operating activities | | | | -------------------------------------------------------------------------------- | Tax | 794 | 175 | 523 | -------------------------------------------------------------------------------- | Depreciation and impairment | 2,434 | 2,362 | 3,158 | -------------------------------------------------------------------------------- | Financial income and expenses | 628 | 817 | 1,471 | -------------------------------------------------------------------------------- | Goodwill impairment | 0 | 7,200 | 7,200 | -------------------------------------------------------------------------------- | Other adjustments | -45 | 87 | 93 | -------------------------------------------------------------------------------- | Cash flow from operating activities | 5,851 | 3,940 | 6,457 | | before change in working capital | | | | -------------------------------------------------------------------------------- | Change in working capital | -3,535 | -689 | -314 | -------------------------------------------------------------------------------- | Interest received | 6 | 6 | 25 | -------------------------------------------------------------------------------- | Interest paid | -721 | -561 | -1,360 | -------------------------------------------------------------------------------- | Gains from sales of fixed assets | 0 | 5 | 5 | -------------------------------------------------------------------------------- | Tax paid | -754 | -780 | -1,710 | -------------------------------------------------------------------------------- | Net cash flow from operating | 847 | 1,922 | 3,103 | | activities | | | | -------------------------------------------------------------------------------- | Cash flow from investing activities | | | | -------------------------------------------------------------------------------- | Investments in tangible and | -2,331 | -592 | -1,369 | | intangible assets | | | | -------------------------------------------------------------------------------- | Dividends received | 4 | 2 | 2 | -------------------------------------------------------------------------------- | Acquisition of subsidiaries | -1,052 | -7,836 | -7,486 | -------------------------------------------------------------------------------- | Net cash flow from investment | -3,379 | -8,426 | -8,853 | | activities | | | | -------------------------------------------------------------------------------- | Net cash flow before financing | -2,532 | -6,504 | -5,750 | -------------------------------------------------------------------------------- | Cash flow from financing activities | | | | -------------------------------------------------------------------------------- | Increase in long-term borrowings | 0 | 4,000 | 4,000 | -------------------------------------------------------------------------------- | Repayment of long-term borrowings | -1,966 | -1,519 | -2,425 | -------------------------------------------------------------------------------- | Increase in short-term borrowings | 2,681 | 4,149 | 4,563 | -------------------------------------------------------------------------------- | Repayment of short-term borrowings | -4,765 | -825 | -1,024 | -------------------------------------------------------------------------------- | Proceeds from share issue | 5,621 | 0 | 0 | -------------------------------------------------------------------------------- | Net cash flow from financing | 1,571 | 5,806 | 5,115 | | activities | | | | -------------------------------------------------------------------------------- | Change in cash and cash equivalents | -961 | -699 | -635 | -------------------------------------------------------------------------------- | Liquid assets at the beginning of | 2,278 | 2,913 | 2,913 | | the period | | | | -------------------------------------------------------------------------------- | Liquid assets at the end of the | 1,317 | 2,214 | 2,278 | | period | | | | -------------------------------------------------------------------------------- CONSOLIDATED INCOME STATEMENT, QUARTERLY, EUR 1,000 -------------------------------------------------------------------------------- | | Q3/201 | Q2/201 | Q1/2010 | Q4/2009 | Q3/2009 | | | 0 | 0 | 1.1.10 | 1.10.09 | 1.7.09 - | | | 1.7.10 | 1.4.10 | - | - | 30.9.09 | | | - | - | 31.3.10 | 31.12.09 | | | | | 30.6.1 | | | | | | 30.9.1 | 0 | | | | | | 0 | | | | | -------------------------------------------------------------------------------- | Turnover | 19,360 | 21,897 | 20,531 | 19,472 | 13,840 | -------------------------------------------------------------------------------- | Operating expenses | -17,70 | -20,64 | -19,974 | -17,758 | -13,382 | | | 6 | 4 | | | | -------------------------------------------------------------------------------- | OPERATING PROFIT BEFORE | 1,653 | 1,252 | 556 | 1,715 | 458 | | GOODWILL IMPAIRMENT | | | | | | -------------------------------------------------------------------------------- | GOODWILL IMPAIRMENT | 0 | 0 | 0 | 0 | -7,200 | -------------------------------------------------------------------------------- | OPERATING PROFIT | 1,653 | 1,252 | 556 | 1,715 | -6,742 | -------------------------------------------------------------------------------- | Financial income and | -103 | -307 | -218 | -654 | -266 | | expenses | | | | | | -------------------------------------------------------------------------------- | Profit before tax | 1,551 | 945 | 338 | 1,061 | -7,008 | -------------------------------------------------------------------------------- | Income tax | -435 | -288 | -71 | -347 | -50 | -------------------------------------------------------------------------------- | PROFIT FOR THE PERIOD | 1,115 | 657 | 268 | 714 | -7,058 | -------------------------------------------------------------------------------- SEGMENT REPORTING -------------------------------------------------------------------------------- | | 1.1.- | 1.1.- | 1.1.- | | | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Turnover by segment | | | | -------------------------------------------------------------------------------- | Mobile Terminals & Software | 36,999 | 26,544 | 37,310 | -------------------------------------------------------------------------------- | Media & Communities | 15,449 | 8,433 | 12,716 | -------------------------------------------------------------------------------- | Business Solutions | 11,818 | 12,610 | 17,033 | -------------------------------------------------------------------------------- | Eliminations | -2,479 | 0 | 0 | -------------------------------------------------------------------------------- | Total turnover | 61,787 | 47,587 | 67,059 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Operating profit by segment | | | | -------------------------------------------------------------------------------- | Mobile Terminals & Software | 5,208 | 3,979 | 5,667 | -------------------------------------------------------------------------------- | Media & Communities | 846 | 759 | 1,555 | -------------------------------------------------------------------------------- | Business Solutions | -655 | -9,080 | -9,224 | -------------------------------------------------------------------------------- | Administration | -1,937 | -1,367 | -1,990 | -------------------------------------------------------------------------------- | Total operating profit | 3,462 | -5,708 | -3,993 | -------------------------------------------------------------------------------- | Operating profit, per cent of | 5.6 | -12.0 | -6.0 | | turnover | | | | -------------------------------------------------------------------------------- | Financial income and expenses | -628 | -817 | -1,471 | -------------------------------------------------------------------------------- | Profit before tax | 2,834 | -6,525 | -5,464 | -------------------------------------------------------------------------------- | Tax | -794 | -175 | -523 | -------------------------------------------------------------------------------- | PROFIT FOR THE PERIOD | 2,040 | -6,701 | -5,987 | -------------------------------------------------------------------------------- CHANGES IN FIXED ASSETS, EUR 1,000 -------------------------------------------------------------------------------- | | Goodwi | Intangib | Property, | Available | Total | | | ll | le | plant and | -for-sale | | | | | assets | equipment | investmen | | | | | | | ts | | -------------------------------------------------------------------------------- | Book value at 1 | 32,195 | 6,632 | 3,147 | 110 | 42,084 | | January 2009 | | | | | | -------------------------------------------------------------------------------- | Additions | | 281 | 1,232 | | 1,512 | -------------------------------------------------------------------------------- | Disposals | -2,062 | | -19 | | -2,081 | -------------------------------------------------------------------------------- | Impairment | -7,200 | | | | -7,200 | -------------------------------------------------------------------------------- | Depreciation and | | -1,592 | -770 | | -2,362 | | amortisation during | | | | | | | the period | | | | | | -------------------------------------------------------------------------------- | Book value at 30 | 22,933 | 5,321 | 3,589 | 110 | 31,954 | | September 2009 | | | | | | -------------------------------------------------------------------------------- | Book value at 1 | 22,826 | 5,061 | 3,942 | 110 | 31,939 | | January 2010 | | | | | | -------------------------------------------------------------------------------- | Additions | | 1,561 | 1,493 | | 3,054 | -------------------------------------------------------------------------------- | Additions from | 821 | | | | 821 | | corporate acquisitions | | | | | | -------------------------------------------------------------------------------- | Disposals | | | -11 | | -11 | -------------------------------------------------------------------------------- | Depreciation and | | -1,434 | -1,000 | | -2,434 | | amortisation during | | | | | | | the period | | | | | | -------------------------------------------------------------------------------- | Book value at 30 | 23,647 | 5,188 | 4,423 | 110 | 33,368 | | September 2010 | | | | | | -------------------------------------------------------------------------------- FINANCIAL RATIOS -------------------------------------------------------------------------------- | | 1.1.- | 1.1.- | 1.1.- | | | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Earnings per share, diluted, EUR | 0.16 | -0.57 | -0.51 | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.16 | -0.57 | -0.51 | -------------------------------------------------------------------------------- | Equity per share, EUR | 1.84 | 1.98 | 2.06 | -------------------------------------------------------------------------------- | Operating cash flow per share, | 0.07 | 0.16 | 0.26 | | diluted, EUR | | | | -------------------------------------------------------------------------------- | Return on investment, per cent | 11.9 | -18.1 | -9.4 | -------------------------------------------------------------------------------- | Return on equity, per cent | 11.8 | -41.0 | -27.0 | -------------------------------------------------------------------------------- | Operating profit / turnover, per | 5.6 | -12.0 | -6.0 | | cent | | | | -------------------------------------------------------------------------------- | Net gearing, per cent | 52.6 | 88.6 | 81.4 | -------------------------------------------------------------------------------- OTHER INFORMATION -------------------------------------------------------------------------------- | | 1.1.- | 1.1.- | 1.1.- | | | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | PERSONNEL | 1,115 | 966 | 985 | | Number of employees, average | | | | -------------------------------------------------------------------------------- | Number of employees, at the end of | 1,134 | 969 | 1,063 | | the period | | | | -------------------------------------------------------------------------------- | COMMITMENTS, EUR 1,000 | 30.9.2010 | 30.9.2009 | 31.12.2009 | -------------------------------------------------------------------------------- | Collateral for own commitments | | | | -------------------------------------------------------------------------------- | Corporate mortgages | 9,900 | 9,900 | 9,900 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Leasing and other rental | | | | | commitments | | | | -------------------------------------------------------------------------------- | Falling due within 1 year | 4,845 | 3,891 | 4,130 | -------------------------------------------------------------------------------- | Falling due within 1-5 years | 6,478 | 7,482 | 7,515 | -------------------------------------------------------------------------------- | Falling due after 5 years | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Total | 11 323 | 11,373 | 11,645 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Nominal value of interest rate | | | | | swap agreement | | | | -------------------------------------------------------------------------------- | Falling due within 1 year | 0 | 2,714 | 2,579 | -------------------------------------------------------------------------------- | Falling due within 1-5 years | 4,893 | 3,321 | 3,321 | -------------------------------------------------------------------------------- | Falling due after 5 years | 0 | 0 | 0 | -------------------------------------------------------------------------------- | Total | 4,893 | 6,036 | 5,900 | -------------------------------------------------------------------------------- | Fair value | -125 | -200 | -172 | -------------------------------------------------------------------------------- CALCULATION OF KEY FIGURES Diluted earnings per share = profit for the period / number of shares, adjusted for issues and dilution, average Earnings per share = profit for the period / number of shares, adjusted for issues, average Shareholders' equity per share = shareholders' equity / number of shares, undiluted, on the closing date Cash flow from operating activities, per share, diluted = net cash flow from operating activities / number of shares, adjusted for issues and dilution, average Return on investment (ROI) = (profit before taxes + interest + other financial expenses) / balance sheet total − non-interest-bearing liabilities, average x 100 Return on equity (ROE) = net profit / shareholders' equity, average x 100 Gearing = interest-bearing liabilities - liquid assets / shareholders' equity x 100
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