BASWARE FOURTH QUARTER AND YEAR 2006
BASWARE CORP. STOCK EXCHANGE RELEASE FABRUARY 1, 2007
SUMMARY
Financial year 2006:
. Net sales EUR 59 954 thousand (EUR 41 666 thousand)
. Operating profit EUR 8 078 thousand (EUR 3 611 thousand)
. Operating profit 13.5 percent (8.7%) of net sales
. International business operations' share of net sales 46 percent (52%)
. Earnings per share EUR 0.45 (EUR 0.24)
October-December 2006:
. Net sales EUR 16 508 thousand (EUR 10 823 thousand)
. Operating profit EUR 1 807 thousand (EUR 97 thousand)
. Operating profit 10.9 percent (0.9%) of net sales
Comparative figures are according to BasWare's restated 2005 Financial Statements
for the respective periods. The Financial Statements have been prepared according
to International Financial Reporting Standards (IFRS).
The data is unaudited.
The 2006 audited Financial Statements will be published on February 8, 2007.
GROUP KEY FIGURES
10-12/ 10-12/0 Change 1-12/ 1-12/0 Change
5 5
EUR thousand 2006 Restate % 2006 Restat %
d ed
Net sales 16 508 10 823 52.5% 59 954 41 666 43.9%
Operating profit 1 807 97 1758.8 8 078 3 611 123.7%
%
% of net sales 10.9% 0.9% 13.5% 8.7%
Profit before tax 1 831 101 1710.5 8 287 3 647 127.2%
%
Profit for the period 526 -361 4 986 2 229 123.7%
Return on equity, % 4.8% -6.9% 15.1% 13.9%
Return on investment, % 16.6% 2.5% 24.7% 21.4%
Cash and cash 8 975 9 987 -10.1% 8 975 9 987 -10.1%
equivalents *)
Gearing, % -18.4% -41.1% -18.4% -41.1%
Equity ratio, % 77.5% 68.2% 77.5% 68.2%
Earnings per share, EUR 0.05 -0.04 0.45 0.24 89.3%
Earnings per share 0.05 -0.04 0.44 0.23 91.0%
(diluted), EUR
Equity per share, EUR 3.88 2.16 80.0% 3.88 2.16 80.0%
*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss
BasWare's CEO Ilkka Sihvo comments on the year 2006:
"As a whole, BasWare succeeded well in the last quarter of 2006. Especially the
units in Scandinavia, United Kingdom, the Netherlands and the United States as
well as the Finnish Financial Management unit developed favorably. Profitability
of the entire Group has developed positively."
"Key success factors in 2006 were the growth in Europe and United States. 46
percent of net sales came from outside of Finland and the growth of international
net sales was 26 percent compared with 2005. The indirect sales channel was
strengthened in Europe, the United States as well as in the Asia Pacific. There
were a total of 54 resellers at the end of the year. The business operations in
Scandinavia and Finland continued to develop favorably and grew faster than the
average growth of the software market."
REPORTING
The accounting principles applied in the figures of this release have been
adjusted compared with the previously published 2005 Financial Statements.
BasWare has adjusted the revenue recognition principles regarding license sales
as well as the valuation principles regarding accounts receivables, as
recommended by the new auditor. Additionally, BasWare has previously in some
cases at the end of the quarters entered license sales as revenue based on
agreements where the actual license delivery has been delayed by some days. As a
result, license sales have been recognized as revenue a month beforehand.
The 2006 Financial Statements will be prepared according to the adjusted
accounting principles. Part of the agreements signed at the end of 2006 will be
recognized as revenue in the first quarter of 2007 as a result of the adjusted
revenue recognition principles. The value of these agreements totals over EUR 3
million. BasWare assesses that the adjusted accounting principles have no effect
on the Company's financial performance in the future.
BasWare issued a profit warning on January 15, 2006. Net sales have decreased by
EUR 0.8 million compared with the preliminary information given on that date. The
change results from the increase in the number of revenues to be recognized in
2007. Operating profit has decreased by EUR 0.9 million compared with the
preliminary figure of EUR 9.0 million.
The Company has previously estimated that net sales compared with the previous
year would grow by approximately 45%, corresponding to approximately EUR 62.0
million. Operating profit was estimated to represent over 15% of net sales,
corresponding to an operating profit of EUR 9.3 million euros.
Falling below the official guidance is due to slightly weaker product sales. In
addition, part of the 2006 deals have been realized as Software as a Service
(SaaS) deliveries instead of one-off items. Net sales accumulate then gradually
due to monthly revenue recognition.
BasWare acquired Analyste Corporation on January 30, 2006. Analyste's financial
statements are consolidated in the Group financial statements from January 1,
2006 to July 31, 2006. The merger of Analyste to BasWare Corporation took place
on August 1, 2006.
FOURTH QUARTER OCTOBER 1 - DECEMBER 31, 2006
NET SALES OCTOBER-DECEMBER 2006
BasWare Group's net sales grew by 53 percent in October-December and were EUR 16
508 thousand (EUR 10 823 thousand).
In the fourth quarter, 32 percent (26%) of net sales consisted of own software
product sales and 32 percent (24%) of product related maintenance revenue.
Product sales grew by 87 percent (-12%) compared with the same period last year.
Maintenance revenue grew by 98 percent. Services revenue grew by 12 percent and
accounted for 36 percent (50%) of net sales.
In the fourth quarter, indirect sales operations accounted for 24 percent (17%)
of product sales or EUR
1 249 thousand.
The international share of the Company's net sales was 50 percent (55%) in
October-December. International business operations grew by 41 percent.
FINANCIAL PERFORMANCE OCTOBER-DECEMBER 2006
BasWare Group's operating profit grew by 1 759 percent in October-December and
was EUR 1 807 thousand (EUR 97 thousand). Operating profit represented 11 percent
(1%) of net sales.
The Company's fixed costs were EUR 13 521 thousand (EUR 9 794 thousand) in the
quarter. The costs have grown by 38 percent compared with the previous year and
by 37 percent compared with the previous quarter. The growth of costs was mainly
influenced by the growth of personnel resulting mostly from the acquisition.
In the fourth quarter, product development costs were EUR 3 284 thousand (EUR
1 833 thousand), of which EUR 912 thousand or 28 percent have been capitalized.
The amortization on development costs was EUR 170 thousand (EUR 70 thousand).
The Company's profit before taxes was EUR 1 831 thousand (EUR 101 thousand) in
the quarter and profit for the period was EUR 533 thousand (EUR -361 thousand).
BUSINESS OPERATIONS OCTOBER-DECEMBER 2006
There were no significant changes in the general economic situation during the
last quarter of 2006. Typically the fourth quarter is the strongest for BasWare
regarding net sales and operating profit. The competitiveness of BasWare's
software solutions has remained good and no substantial changes in the
competitive situation have taken place.
The company's Enterprise Purchase to Pay operations grew by 61 percent in the
fourth quarter compared with the same period last year and represented 90 percent
(86%) of net sales. Financial Management operations grew by 5 percent in the
quarter and were 10 percent (14%) of net sales.
In October-December the Enterprise Purchase to Pay unit signed altogether 53 new
Invoice Processing, Purchase Management and Travel and Expence Management
agreements in eight countries. The Financial Management unit signed 31 new
agreements for its main products in Finland and Scandinavia. In addition, several
dozens of new agreements for the value added products were signed by both units.
Part of the aforementioned agreements will be recognized as revenue in the first
quarter of 2007, totaling over EUR 3 million.
Reseller Channel
In the fourth quarter, the focus was on developing the prospective customer base,
reaching agreements with business partners' end customers and drawing up common
partnership plans for 2007. Also the country-specific actions to identify new
business partners continued according to plan.
Extending the reseller network continued strong in the quarter. During the
quarter, partnership agreements were signed with two new resellers. These are
Klever in Italy and Fuji Xerox Global Services, covering Eastern and Southeastern
Asia. Partnership agreement was terminated with one partner (Datrix) during the
fourth quarter.
In October-December, a net share of 24 percent (17%) of product sales has been
achieved through partners, which represents 15 percent (8%) of international
operations' net sales.
Nordic
BasWare's Nordic organization includes the Enterprise Purchase to Pay and
Financial Management units in Finland, as part of the parent company, as well as
the Scandinavian (Sweden, Denmark and Norway) unit. All the BasWare Enterprise
Purchase to Pay and Financial Management products are sold in the Nordic
countries.
Sales and other business operations are mainly handled by the own organization in
the Nordic countries. There are altogether 28 active resellers and 17 application
service providers selling Analyste's products in Finland. There are two
Enterprise Purchase to Pay business partners in Sweden, one Enterprise Purchase
to Pay partner in Iceland and one Financial Management partner in Denmark.
As a whole, BasWare's Nordic operations achieved its sales objective for the
quarter moderately. The Norwegian subsidiary achieved its objective whereas the
Swedish subsidiary achieved its objective moderately. The Danish subsidiary fell
behind its objective. The Finnish Enterprise Purchase to Pay unit achieved its
objective. The Financial Management unit exceeded its objective for the quarter.
In October-December, the invoice volume of the BasWare Business Transactions
service grew by 50 percent (117%) compared with the same quarter in 2005 and by
23 percent (35%) compared with the previous quarter. More than a million invoices
were transmitted through the service in October-December. BasWare Business
Transactions clientele is mainly Finnish but the service has been expanded also
to other Nordic countries.
Europe
Outside of Scandinavia, BasWare has European subsidiaries in the Netherlands,
Germany, the United Kingdom and France. Additionally, there are partner
operations in several countries in Central and Southern Europe. One new reseller
began operations during the quarter.
The European business area as a whole fell slightly behind its sales objective
for the quarter. The Dutch subsidiary exceeded its sales objective. The
subsidiary in United Kingdom achieved its objective moderately. The French and
German subsidiaries fell behind their objectives.
Other areas
Outside of Europe, BasWare has a subsidiary in the United Stated focusing on the
sales of the Enterprise Purchase to Pay solutions in the United States and
Canada.
In addition to own sales efforts, there are currently eight resellers in the area
of which two started during the quarter. The purpose is to further strengthen the
indirect channel during 2007. The North American area fell behind its sales
objective in the last quarter.
Sales to other areas outside Europe are handled through value added resellers.
Their net sales are entered as a part of the Finnish parent company's operations
in segment reporting. There are currently four resellers in the Asia Pacific
area. A partnership agreement was signed with Fuji Xerox Global Services. The
agreement covers Eastern and Southeastern Asia in addition to Australia and New
Zealand. The partnership is expected to generate net sales for BasWare in the
beginning of 2007, at the earliest.
FINANCIAL PERIOD JANUARY 1 - DECEMBER 31, 2006
NET SALES
BasWare Group's net sales grew by 44 percent during the financial year and were
EUR 59 954 thousand (EUR 41 666 thousand).
The sales of the Company's own products grew by 38 percent and were 32 percent
(34%) of total net sales. Maintenance revenue and support services related to
maintenance grew by 93 percent and were 31 percent (23%) of net sales. Consulting
and service revenue grew by 20 percent and represented 34 percent (40%) of net
sales. Other operations which consist mainly of license sales and maintenance
revenues from third party hardware and software were 3 percent (3%) of net sales.
Reseller partners' net share of product sales was 18 percent (16%) or EUR 3 465
thousand (EUR 2 257 thousand) in the financial year.
The international share of net sales was 46 percent (52%) in the financial year.
International business operations grew by 26 percent in the financial year.
Domestic operations grew by 64 percent.
The division of net sales geographically (primary segment by the location of
assets):
Net sales 10-12/ 10-12/0 Change, 1-12/ 1-12/05 Change,
(EUR thousand) 2006 5 % 2006 %
Restate Restate
d d
Finland 10 918 6 349 72.0 41 028 26 111 57.1
Scandinavia 4 354 3 964 9.8 14 698 13 024 12.9
Europe 2 714 1 441 88.3 8 985 6 497 38.3
Other areas 1 119 553 102.5 3 512 2 077 69.1
Sales between -2 598 -1 484 -8 269 -6 043
segments
Group total 16 508 10 823 52.5 59 954 41 666 43.9
FINANCIAL PERFORMANCE
In 2006, BasWare Group's operating profit grew by 124 percent and was EUR 8 078
thousand (EUR
3 611 thousand). Operating profit represented 14 percent (9%) of net sales.
The Company's fixed costs were EUR 47 427 (EUR 33 865 thousand). Growth compared
with the previous year was 40 percent. A significant part of the growth in costs
was attributed by the growing personnel due to the acquisition costs that totaled
EUR 32 953 thousand (EUR 22 569 thousand).
BasWare's research and development costs were EUR 10 925 thousand (EUR 6 204
thousand) or which EUR 2 454 thousand or 23 percent (19) were capitalized during
the period. The amortization on development costs was EUR 462 thousand (EUR 239
thousand). Research and development costs made 18 percent (15%) of net sales.
Costs grew by 76 percent (35%) during the year. The growth results mainly from
the acquisition.
The division of operating profit geographically (primary segment by the location
of assets):
Operating profit 10-12/ 10-12/0 Change, 1-12/ 1-12/05 Change,
(EUR thousand) 2006 5 % 2006 Restate %
Restate d
d
Finland 3 243 1 140 184.5 12 314 7 130 72.7
Scandinavia 20 160 -87.8 -45 -116 60.7
Europe -910 -972 6.4 -2 831 -2 379 -19.0
Other areas -531 -253 -109.5 -1 297 -976 -32.9
Operating profit -15 23 -62 -47
between segments
Group total 1 807 97 1758.8 8 078 3 611 123.7
The Company's profit before taxes was EUR 8 287 thousand (EUR 3 647 thousand).
Profit for the financial year was 8 percent (5%) of net sales or EUR 4 993
thousand (EUR 2 229 thousand).
Taxes for the financial year were EUR 3 301 thousand (EUR 1 417 thousand) and tax
rate was 40 percent (39%). Taxes for the period have been adjusted by a total of
EUR 765 thousand (EUR 985 thousand) resulting from subsidiaries' losses and IFRS
adjustments as well as from tax assets and liabilities resulting from other
accrual differences.
The Company's earnings per share were EUR 0.45 (EUR 0.24).
FINANCE AND INVESTMENTS
BasWare Group's total assets of the balance sheet at the end of the financial
period were EUR 57 558 thousand (EUR 31 228 thousand). A significant part of the
growth resulted from the acquisition. The Group's cash and bank balances totaled
EUR 8 975 thousand (EUR 9 987 thousand). Cash flows from operating activities
were EUR 5 657 thousand (EUR 4 thousand) in the period.
Equity ratio was 77.5 percent (68.2%) at the end of the financial year and
gearing was -18.4 percent
(-41.1%). The Company had a total of EUR 758 thousand (EUR 1 230 thousand)
interest-bearing liabilities, of which current liabilities accounted for EUR 428
thousand (EUR 474 thousand).
Return on investment was 24.7 percent (21.4%) and return on equity 15.2 percent
(13.9%) in the financial year.
The Company's capital expenditure was EUR 597 thousand (EUR 794 thousand) in the
period. This consisted of regular new and replacement investments resulting from
growth. Gross investments which include, in addition to the previously mentioned,
the capitalized research and development costs as well as the acquisition of
Analyste, totaled EUR 25 318 thousand (EUR 6 925 thousand).
As a result of financial reporting according to IFRS, regular goodwill
amortizations have been ceased. According to the impairment tests conducted there
are no indications of impairments of assets. The amortization on intangible
assets was EUR 1 469 thousand (EUR 610 thousand), of which the amortization on
the acquisition was EUR 660 thousand (EUR 84 thousand).
RESEARCH AND DEVELOPMENT AND NEW PRODUCTS
Altogether 138 (79) people worked in R&D at the end of 2006. This equals to 26
percent of the total personnel.
New BasWare products were delivered to the market in 2006. As a result of the
acquisition of Analyste, BasWare extended its Enterprise Purchase to Pay
portfolio with, for example, payment software. The products were launched under
the BasWare brand in spring 2006.
During 2006, the development of both the BasWare Enterprise Purchase to Pay and
the BasWare Financial Management product suites continued. The usability and
compliance of the BasWare Invoice Processing solution was improved and a new
version was launched during the year. The user interface of BasWare Purchase
Management solution, part of the Enterprise Purchase to Pay portfolio, was
renewed and new versions of the product were launched during the year. New
versions of the value-added modules, BasWare Contract Matching, BasWare Order
Matching and BasWare Document Archiving were also launched during the year.
New versions of BasWare Travel & Expense Management were launched during the
year. The solution has a new web-based user interface and its usability was
further improved. It now enables creating expense claims unrelated to travel.
New versions of BasWare Group Consolidation, part of the BasWare Financial
Management portfolio, and the related value-added modules, BasWare IFRS Package
and BasWare Cash Flow, were launched during the year.
A new value-added module, BasWare Business Transactions Monitor, was launched on
the market. The eInvoicing solution platform was upgraded during the year.
New value-added product, BasWare Key Performance Indicator (KPI) Reporting Tool
was launched in the last quarter. The tool enables measuring purchase to pay
process efficiency with various business indicators. The product is integrated
with BasWare Purchase Management, BasWare Invoice Automation and BasWare Travel &
Expense Management solutions, enabling automatic data import directly to the
reporting tool.
During the year, the development of the new BasWare Contract Lifecycle Management
value-added product was initiated. It integrates with the BasWare Enterprise
Purchase to Pay solutions and automates the processing of contract-based orders
and purchase invoices.
PERSONNEL
BasWare employed on average 514 (362) people during the period and 528 (395) at
the end of the year. The number of personnel grew by 34 percent compared with the
end of the previous year and by 3 percent compared with previous quarter end.
The number of personnel working in Finland has slightly increased mostly due to
the acquisition compared with the situation in the previous year. Altogether 66
percent (60%) of personnel work in Finland and 34 percent (40%) outside of
Finland.
The average age of the employees is 35.4 (34.8) years. Of them 34 percent hold a
Master's degree and 41 percent a Bachelor's degree. 28 percent of employees are
women; 72 percent are men.
For incentive purposes, the Company has a bonus program that covers the whole
personnel. In the end of the period there was additionally one on-going warrant
program and a long-term incentive program for the top management was introduced.
Based on the program, warrants can be granted to the members of the top
management.
Geographical distribution of personnel:
Personnel 10-12/ 10-12/ Change 1-12/ 1-2/ Change
(employed, in 2006 2005 , % 2006 2005 , %
average)
Finland 345 237 45.6 346 223 55.2
Scandinavia 93 88 5.6 89 75 18.7
Europe 66 55 20.0 62 50 24.0
Other areas 21 15 40.0 17 14 21.4
Group total 524 395 32.7 514 362 42.0
BUSINESS OPERATIONS
The general economic outlook remained fairly good during the year. BasWare's
software generates cost savings to the customers and thus demand is not heavily
dependant on the current economic situation.
In an independent evaluation by Forrester Research published in August 2005,
BasWare was named a leading electronic invoice presentment and payment vendor
globally. BasWare is also estimated to have the largest market share of all
vendors. BasWare estimates that the integrated concept formed by its products has
a positive impact on the company's competitiveness. The company's strengths
include long-term software development, fast implementation of ready-made
solutions and worldwide distribution and support services.
According to the world's leading industry analysts, BasWare also became a major
player in procurement solutions during 2006. Market analysts like Gartner
estimate that the purchase management market as a whole is transferring into a
productivity phase where the demand is expected to grow.
International share of BasWare's net sales was 46 percent (52%) in the period and
international operations grew by 26 percent. In the end of the period the Company
had software installations in over 20 countries.
Enterprise Purchase to Pay operations grew by 48 percent during the year and
represented 88 percent (86%) of net sales. A total of 51 percent (61%) of net
sales came from outside of Finland.
Altogether 155 (135) new invoice processing and purchase management agreements
were signed in Enterprise Purchase to Pay units in eight countries. The sales of
BasWare Purchase Management picked up during the year and new customers include
the City of Helsinki in Finland, Ernst & Young in the United Kingdom and
ThiemeMeulenhoff in the Netherlands. The first agreements for BasWare KPI
Reporting Tool, launched in December, were signed with Monster and Chenaga
Corporation in the United States. Other new customers include IKEA Russia, Sonic
Corporation, Endemol Netherlands, Adecco UK, Catepillar Belgium, Maxygen ApS, M-
real Corporation and Pöyry Group.
Financial Management operations grew by 18 percent in the period and represented
12 percent (15%) of net sales. A total of 3 percent (3%) of net sales came from
outside of Finland. The unit signed 39 (34) new customer agreements in three
countries related to the main products. New customers include FIM Group,
Puukeskus Oy and Capman Oyj in Finland, Red Cross in Norway and DHL in Denmark.
During the year, the competitiveness of the total offering was increased with new
value added products, especially the BasWare Analyzer analysis tool that was sold
to 16 customers during the year as well as the new public sector package solution
that was sold to seven Finnish municipalities towards the end of 2006. The
package is used by for example the cities of Espoo, Oulu and Turku in Finland.
Reseller channel
Reseller operations through business partners were a significant part of
international operations in 2006. Strong reseller network ensures as wide as
possible distribution of the Company's products as well as needed service and
support functions for customers. The partners are responsible for sales,
marketing as well as for the service and support functions needed by the
customers.
The subsidiaries in Germany, the Netherlands, France, United Kingdom and the
United States as well as the global functions in the parent company have channel
sales units that support existing partners and strengthen the indirect sales
channel. The reseller channel organization was further strengthened during the
financial period by appointing a new Vice President to the Global Operations
unit, responsible for managing international reseller operations.
At the end of 2006, BasWare had a total of 54 business partners. Of these 46 were
international resellers, operating in altogether 29 countries. Additionally
BasWare has diverse marketing and sales partnerships in Europe and the United
States.
In January-December, a net share of 18 percent (16%) of product sales has been
achieved through the partner network which represents 13 percent (10%) of
international operations' net sales.
Nordic
BasWare's Nordic organization includes the Enterprise Purchase to Pay and
Financial Management units in Finland, as part of the parent company, as well as
the Scandinavian (Sweden, Denmark and Norway) unit. All the BasWare Enterprise
Purchase to Pay and Financial Management products are sold in the Nordic
countries, apart from the Analyste-based products which are currently sold only
in Finland. Marketing and sales activities of the Financial Management products
were initiated in Sweden and Norway in the beginning of 2005 and later that year
in the spring in Denmark.
Sales and other business operations are mainly handled by the own organization.
There are altogether 28 resellers and 17 application service providers selling
Analyste's products in Finland. There are two Enterprise Purchase to Pay business
partners in Sweden, one Enterprise Purchase to Pay partner in Iceland and one
Financial Management partner in Denmark.
As a whole, BasWare's business units in Finland and Scandinavia achieved the
sales objective for the financial year. The Finnish Financial Management unit
exceeded its objective. The Swedish and Danish subsidiaries achieved their
objective moderately and the Norwegian unit exceeded its objective.
Over 5 million invoices were transmitted through the BasWare Business
Transactions service during the financial year. The service is sold in the Nordic
countries. The invoice volume of the service grew by 70 percent during the
financial year compared with 2005.
Europe
Outside of Scandinavia, BasWare has European subsidiaries in the Netherlands,
Germany, the United Kingdom and France. At the end of the year, there were
altogether 31 partners that sold BasWare's products in the area. Additionally,
the Company has three partners in Southern Europe.
The European business area as a whole fell slightly behind the objective. All
BasWare Enterprise Purchase to Pay products are sold in the area, including the
BasWare Business Transactions service and electronic invoicing solutions.
The Dutch subsidiary exceeded its objective for the financial year. The
operations of the subsidiary in the United Kingdom developed favorably during the
year but fell slightly behind the objective. Also the German unit took a positive
turn during the year but fell behind the objective. The French subsidiary signed
several agreements towards the end of 2006, but fell behind the full year
objective due to weak sales at the beginning of the year.
Other areas
Outside of Europe, BasWare has a subsidiary in the United Stated which focuses on
the sales of the Enterprise Purchase to Pay solutions in the United States and
Canada. Additionally there are eight resellers in the area.
Of all the units, lisence sales of BasWare, Inc. developed the most favorably
although the year end sales fell behind the objective and as a whole the unit
fell slightly behind the objective. The objective for the unit is significantly
higher than for other units.
The sales to other areas outside Europe, mainly to Australia, are handled through
value added resellers. There are currently three resellers in the area. Their net
sales are entered as a part of the Finnish parent company's operations in segment
reporting. The reseller operations in the area exceeded their objective in 2006.
Operating risks
BasWare takes risks that are a natural part of the strategy and objectives. These
risks are managed and reduced in various ways. The Company is not ready to take
risks that might endanger the continuity of operations or that are uncontrollable
or would significantly harm the Company's operations.
The goal of risk management is to systematically and extensively identify and
acknowledge the risk involved in the operations as well as to make sure that the
risks are appropriately managed when making business decisions. The company's
risk management supports the attainment of strategic goals and ensures the
continuity of business operations.
In the process of risk management, the goal is to identify and evaluate the
risks, after which a risk-specific plan is drawn up and concrete action is taken.
These actions may include, for example, avoidance of the risk, diminishment of
the risk by different means or transference of the risk by insurance or
agreements.
BasWare has divided the risks into six categories: risks related to business
operations, products, personnel as well as legal, financial and data security
risks. Each group has a designated person in charge. The essential risks have
been recognized and measures for preparing for them undertaken. In 2006, the
Board monitored the progress regularly.
Company's international operations generate normal risks related to financing.
The goal of financial risk management is to cost effectively ensure the Company
to have sufficient financing as well as to monitor and if necessary limit the
risks by certain measures. Risk management is centralized in the Group's finance
department. The department reports to the Company's Board of Directors at least
once a year according to the risk management policy. The Company did not realize
hedging during the period.
The Board of Directors receives annually a report of the most significant risks
discovered during risk mapping. At the same time, the Board reviews the risks
from the shareholder value's perspective. Risk management does not have a
separate organization within the Company but its responsibilities follow the
distribution of liability throughout the organization and operations.
ACQUISITIONS AND CHANGES IN GROUP STRUCTURE
On January 31, 2006 BasWare announced that it was to acquire the entire share
capital of Analyste Corporation. The acquisition price was EUR 27.92 million of
which EUR 9.45 million was paid in cash and EUR 18.19 million in BasWare's shares
with two directed offerings to the shareholders of Analyste. The acquisition
strengthened BasWare's position in Finland and extended the Company's portfolio
to cover, for example, payment software.
BasWare resolved on August 14, 2006 to centralize its Scandinavian operations
into one unit. Odd Roar Trapnes was appointed Managing Director of the unit and
he will report to CEO Ilkka Sihvo. The change improves the service level for
Scandinavian customers as well as streamlines the cost structure of the area
thanks to common administration and marketing operations.
BasWare announced on December 1, 2006 that it incorporates its eInvoicing unit to
an own company, called BasWare eInvoices. Petri Karjalainen acts as the Managing
Director. BasWare is a significant player in the Finnish eInvoicing market and
the aim is to strengthen the position also internationally.
ENVIRONMENT AND CORPORATE RESPONSIBILITY
The direct environmental impacts of BasWare's operations are fairly minimal.
BasWare's solutions promote paperless operations and financial management in the
customer organizations which in part can contribute to the decrease of office
waste.
The corporate headquarters in Espoo, Finland, follow an environmental management
system that has been granted a WWF Green Office Certificate. The Green Office
system aims at supporting everyday actions that save energy and raw material.
Within the framework of the system, energy consumption and material consumption
of the office is measured.
The Company continued its cooperation with Plan Finland as part of its social
responsibility program. Initiated in 2002, BasWare supports the living conditions
and education of 14 children in developing countries. Additionally the Company
has supported two development projects through the Plan Investor program.
OTHER EVENTS OF THE FINANCIAL PERIOD
BasWare Corporation's Annual General Meeting (AGM) on February 15, 2006 adopted
the Financial Statements of 2005 and discharged the members of the Board of
Directors and the CEO from liability. The AGM resolved, according to the Board's
proposition, to distribute a dividend of EUR 0.10 per share, a total of EUR 1
069 725.90 for 2005.
New strategy
On September 12, 2006 BasWare published its new growth strategy and strategic
goals for the years 2007-2010. The objective for the future BasWare growth of net
sales is 20-40 percent annually, with the operating profit margin of 10-20
percent.
According to its strategy, BasWare aims at growing in all of its markets. In the
Nordic area the focus will be more on profitability. More resources and focus
will be directed to the strategic markets of United States, Germany, United
Kingdom and France. In these areas growth will be high and profitability will be
reached in the mid-term. In distribution, focus is on transitioning more from
direct to the indirect channel where multiple channel partners will be acquired.
Expansion to selected new markets will take place according the following
schedule: Southern and Eastern Europe from 2006 onwards, Russia and Asia Pacific
from 2007 onwards. Indirect channel is widely used in these areas. BasWare's
global presence is further strengthened by several global alliances and by the
development of the channel program. The number of channel partners will be
multiplied by the year 2010.
BasWare Invoice Processing is still the volume product in most of the markets and
in the indirect channel. BasWare's growth will be supported by several new
products for direct and indirect global distribution. In BasWare Enterprise
Purchase to Pay portfolio this includes BasWare Purchase Management, BasWare
Travel & Expense Management and BasWare Payment. Other BasWare products will be
distributed in selected international markets.
BasWare has completed its organic growth with acquisitions. BasWare continues to
review possible acquisition targets. With the acquisitions, BasWare can extend
the sales channel and the product portfolio. They may also strengthen BasWare's
position in the electronic invoicing market.
BasWare's vision is that by 2010 the company is recognized as the leading
software company for Enterprise Purchase to Pay software solution suite in all of
its key markets. BasWare is known for high customer satisfaction and
innovativeness as well as being a credible and secure business partner for the
customers. BasWare has a focused and unique Enterprise Purchase to Pay software
solution suite for the global marketplace. BasWare's other products are
distributed and supported in selected markets. Its packaged software products are
easy to use, fast to implement and provide a rich end-to-end functionality.
BasWare has one million end users in fifty countries by 2010. Its presence covers
all major markets worldwide with more than ten subsidiaries and 150 reseller
partners. BasWare is an attractive employer with committed, result-driven
employees who have competence in international business.
BasWare's vision of future growth and profitability is realized with BasWare's
strong global presence with a clear focus on major markets and expansion to
selected new markets, excellent customer relationship management strengthened by
effective marketing actions, clear segmentation and customer benefits as well as
with the highly competitive product portfolio, committed international personnel
and everyday operational excellence.
According to its mission, BasWare provides value for financial processes with
leading-edge process automation software. BasWare is a forerunner constantly
meeting the needs of its customers.
MANAGEMENT AND AUDITOR
Ilkka Sihvo acted as the CEO of the Company in 2006. 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, as well as by the Companies Act.
The Annual General Meeting on February 15, 2006 elected six members to the Board
of Directors. Their term will last until the closing of the following AGM on
February 26, 2007. Kirsi Eräkangas, Ossi Pohjola, Antti Pöllänen and Hannu
Vaajoensuu were re-elected to the Board. Tom Bangemann and Asko Ahonen were
elected as new members to the Board. In its first meeting on February 15, 2006,
the Board elected Hannu Vaajoensuu as Chairman of the Board and Kirsi Eräkangas
as Vice Chairman.
In 2006, the auditor of BasWare was Deloitte & Touche, Authorized Public
Accountants, with APA Eero Lumme in charge and APA Teppo Rantanen as his deputy.
SHARE AND SHARE CAPITAL
In 2006, the Company's share capital was increased by a total of EUR 477 259.80
in two directed offerings and by share subscription based on warrants. At the end
of 2006, the Company's share capital was EUR 3 440 437.20 and the number of
shares 11 468 124.
Number of Share capital, EUR
shares
Share capital 1.1.2006 9 877 258 2 963 177.40
Directed offering 31.1. +820 001 246 000.30
Directed offering 8.3. +643 515 193 054.50
Share subscriptions based on +7 500 2 250
warrants 21.4.
Share subscriptions based on +119 850 35 955
warrants 20.7.
Share capital 31.12.2006 11 468 124 3 440 437.20
Warrant programs
In its meeting on April 7, 2006, BasWare Corporation's Board of Directors
resolved, based on the authorization given by the Annual General Meeting of
Shareholders on February 15, 2006, to establish a new warrant program. Based on
the warrant program, a maximum of 300 000 warrants can be granted
to the key personnel of BasWare Group, each warrant entitling to subscribe one
BasWare share. The warrants of the Warrant Program 2006 are divided into three
series, each having an own subscription period as follows: Series A on April 1,
2008-March, 31 2009, Series B on April 1, 2009-March 31, 2010 and Series C on
April 1, 2010-March 31, 2011. The subscription prices of the shares correspond to
the volume-weighted average share price of the Company in January-March of 2006
(series A), 2007 (series B) and 2008 (series C). The terms and conditions of the
program have been published as a stock exchange release on April 10, 2006.
The subscription period of BasWare Finland II 2002-2006 warrant program ended on
June 30, 2006. Atotal of 160 030 shares were subscribed with program of which
127 350 shares in 2006. A total number of 49 970 warrants were not given and were
therefore nullified.
Board authorizations
The Board of Directors authorization for share issue is in effect until February
14, 2007. According to the authorization, the share capital can be increased with
a maximum of EUR 641 835.30 and 2 139 451 new shares. Based on the authorization,
two directed offerings were carried out in March 2006 and a new warrant program
launched in April 2006. The share capital can still be increased by EUR
170 635.80 and 568 786 new shares.
BasWare Corporation does not own BasWare shares and the Board does not have the
authorization to purchase BasWare's shares.
Shareholders
At the end of 2006, BasWare had 19 759 (21 679) shareholders. Nominee registered
holdings represented 12.3 percent of the share capital. There were no notices in
change of ownership in 2006.
The Company applies the Guidelines for Insiders issued by the Board of Directors
of the Helsinki Stock Exchange as well as the Recommendation on Corporate
Governance with the exceptions mentioned in the Company's Corporate Governance
Statement. The statement can be found in the Investors section of the Company's
website.
Share price and trade
During 2006, the highest price of the share on the Helsinki Stock Exchange was
EUR 15.25 (EUR 13.00) and the lowest price EUR 11.21 (EUR 6.10). On the last day
of trading in 2006, BasWare's closing rate was EUR 13.05 (EUR 12.62). The average
price of the share in 2006 was EUR 13.09 (EUR 9.85). Market capitalization with
the period's closing price was EUR 149 659 018 (EUR 124 650 996).
A total number of 5 534 522 shares were traded during 2006 (3 666 939 in 2005)
which is the equivalent of 48 percent (39%) of the number of shares at the end of
2006.
FUTURE OUTLOOK
According to research institutions, the global enterprise software market will
grow by approximately 5-7 percent annually. However, regional growth may outstrip
this; for example in Asia Pacific annual growth is estimated at over 12 percent.
BasWare operates in the electronic procurement and purchase invoice area, which
is expected to grow more rapidly than the average for enterprise software.
Western Europe and the United States represent approximately three quarters of
overall demand for enterprise software. Since invoice processing and purchase
management software remain at the beginning of their lifecycles in these regions,
demand is estimated to be high.
The purchase management and invoice processing software markets are relatively
heterogeneous with regards to the competitive situation. However, strong growth
may attract more competitors to the market. The industry is consolidating rapidly
and this development is expected to continue in the future. Comparing
consolidation trends between industries, it can be seen that software companies
are small on average in international terms. BasWare is a medium sized software
company on a global scale, in terms of sales and number of personnel.
BasWare's direct competitors are mainly smaller companies that operate locally.
In invoice processing in particular, local competition is increasing due to
document management, scanning and workflow solution developers. Competing
solutions also include tailored software solutions that complement Enterprise
Resource Planning (ERP) systems and require extensive client-specific project
work.
The competitiveness of the software is still good due to new value added products
and the integrated concept that the products form.
The Company's international growth is based on the Company's own sales and
marketing efforts as well as on reseller operations. The development of the
indirect channel continues especially in Europe and North America, in Russia and
in Asia. In Scandinavia, the focus is on profitability, supported by the
extending product poftfolio. In Finland, the focus is on profitability and the
moderate growth is enabled by the success in the purchase management area.
BasWare has complemented its organic growth with acquisitions. The Company
continues to review possible acquisition targets during 2007. With the
acquisitions, the Company can extend the sales channel and the product portfolio.
They may also strengthen the Company's position in the electronic invoicing
market.
In 2007, BasWare expects the growth of net sales for the financial year to be
from 15 to 20 percent compared with the Company's net sales in the previous year.
Operating profit (EBIT) is expected to be from 10 to 15 percent of net sales.
In Espoo, Finland, February 1, 2007
Ilkka Sihvo, CEO
ANALYST AND PRESS BRIEFING
The Company arranges today, Thursday February 1, 2007, a briefing on the year
2006 for the press and analysts at 10:30 in Hotel Kämp, Paavo Nurmi conference
room in Helsinki. During this meeting CEO Ilkka Sihvo and CoB Hannu Vaajoensuu
will comment the Financial Period as well as the future outlook of the Company.
Welcome.
FINANCIAL REPORTING IN 2007
The audited 2006 Financial Statements will be published on February 8, 2007.
BasWare's Annual Report 2006 will be published on the Company's website on week 8
in February 2007. The Company publishes a general annual review in print.
Publishing dates of the interim reports
- Interim Report 1-3/2006 on Tuesday April 17, 2007
- Interim Report 1-6/2006 on Thursday July 12, 2007
- Interim Report 1-9/2006 on Thursday October 11, 2007
Annual General Meeting of Shareholders will be held on Monday, February 26, 2007,
starting at 1.30 PM at Kansallissali (Aleksanterinkatu 44) in Helsinki, Finland.
For further information, please contact:
Ilkka Sihvo, CEO, BasWare Corp.
Tel. +358 9 8791 7251 or +358 40 501 8251, E-mail ilkka.sihvo@basware.com
Distribution:
Helsinki Stock Exchange
Principal media
www.basware.com
GROUP INCOME STATEMENT
EUR thousand 1.10.-31.1 1.1.-3
1.10.-31 2.05 Change 1.1.- 1.12.0 Change
.12.06 Restated , 31.12.0 5 , %
% 6 Restat
ed
NET SALES 16 508 10 823 52.5 59 954 41 666 43.9
Other operating 50 13 272.5 177 60 193.1
income
Material and -658 -669 -1.7 -2 593 -3 172 -18.3
services
Employee benefits -9 042 -6 604 36.9 -32 953 -22 46.0
expenses 569
Depreciation and -572 -277 106.7 -2 033 -1 077 88.9
amortization
Other operating -4 479 -3 190 40.4 -14 474 -11 28.1
expenses 296
Operating profit 1 807 97 1 8 078 3 611 123.7
758.8
Finance income 66 44 51.4 308 146 110.8
Finance expenses -43 -40 6.7 -99 -111 -10.4
Profit before tax 1 831 101 1 8 287 3 647 127.2
710.5
Income tax -1 304 -462 182.4 -3 301 -1 417 132.9
expense
PROFIT FOR THE 526 -361 245.9 4 986 2 229 123.7
PERIOD
EPS (undiluted), 0.05 -0.04 0.45 0.24 89.6
EUR
EPS (diluted), 0.05 -0.04 0.44 0.23 91.3
EUR
GROUP BALANCE SHEET
EUR thousand 31.12.2006 31.12.2005
Change, %
Restated
ASSETS
NON-CURRENT ASSETS
Intangible assets 9 980 4 040 147.0
Goodwill 18 477 4 481 312.3
Tangible assets 784 729 7.5
Investments in associates 3
Available-for-sale investments 2 612
Trade and other receivables 24
Deferred tax assets 3 501 3 296 6.2
Non-current assets 35 354 12 573 181.2
CURRENT ASSETS
Inventories 20 9 125.1
Trade and other receivables 13 018 8 616 51.1
Income tax receivables 192 43 340.7
Financial assets at fair value 5 963
through profit and loss
Cash and cash equivalents 3 012 9 987 -69.8
Current assets 22 204 18 655 19.0
TOTAL ASSETS 57 558 31 228 84.3
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 3 440 2 963 16.1
Share premium account 33 127 15 010 120.7
Other reserves 540
Translation differences 235 -203 215.7
Retained earnings 7 176 3 527 103.5
Minority interest 88
Shareholders' equity 44 606 21 296 109.5
NON-CURRENT LIABILITIES
Deferred tax liability 1 462 283 416.2
Interest-bearing liabilities 329 757 -56.5
Non-current liabilities 1 791 1 040 72.2
CURRENT LIABILITIES
Interest-bearing liabilities 428 474 -9.6
Trade payables and other 9 957 8 066 23.4
liabilities
Tax liability from income tax 775 352 120.1
Current liabilities 11 160 8 892 25.5
TOTAL EQUITY AND LIABILITIES 57 558 31 228 84.3
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY 1.1.-31.12.2006
EUR thousand Share-ho Share Other Transla Retain Minori Share-holde
lders' premium reserve tion ed ty rs'
equity account s differe earnin intere equity
nces gs st
SHAREHOLDERS' 2 582 6 000 -70 3 647 12 159
EQUITY 1.1.2005
Restatement -1 264 -1 264
RESTATED 2 582 6 000 -70 2 383 10 895
SHAREHOLDERS'
EQUITY 1.1.2005
Restated change in -133 -129 -262
translation
difference
Share-related
compensation
Granted warrants 81 81
Restated net -133 -49 -181
profit/loss
recognized directly
in shareholders'
equity
Restated profit for 2 229 2 229
the period
RESTATED TOTAL -133 -49 -181
PROFITS AND LOSSES
Total profits and
losses (breakdown)
- previously -141 3 053 2 912
reported
- restatement 8 -872 -864
Restated total -133 2 181 2 048
profits and losses
Dividend -1 037 -1 037
distribution
Rights issue 272 272
Warrants used 109 2 073 2182
Share premium 7 058 7 058
Transaction costs -121 -121
for equity
RESTATED 2 963 15 010 -203 3 527 21 296
SHAREHOLDERS'
EQUITY 31.12.2005
EUR thousand Share-ho Share Other Transla Retain Share-holde
lders' premium reserve tion ed rs'
equity account s differe earnin equity
nces gs
SHAREHOLDERS' 2 963 15 010 -203 3 527 21 296
EQUITY 1.1.2006
Change in 438 -198 240
translation
difference
Granted warrants 32 32
Other changes 540 540
Net profit/loss 540 438 -274 704
recognized directly
in shareholders'
equity
Profit for the 4 993 -7 4 986
period
Total profits and 540 438 4 719 -7 5 690
losses
Dividend -1 070 -1 070
distribution
Rights issue 439 439
Warrants used 38 912 950
Share premium 17 211 17 211
Transaction costs -6 -6
for equity
Business transfer 95 95
SHAREHOLDERS' 3 440 33 127 540 235 7 176 88 44 606
EQUITY 31.12.2006
GROUP CASH FLOW STATEMENT JANUARY 1 - DECEMBER 31, 2006
EUR thousand 1.1. - 1.1.-31.12.
31.12.2006 2005
Cash flows from operating activities
Profit for the period 4 986 2 229
Adjustments for profit 5 235 2 528
Working capital changes -902 -1 648
Interest paid -41 -72
Interest received 70 140
Other financial items in operating 57 -41
activities
Income taxes paid -3 750 -3 133
Net cash from operating activities 5 657 4
Cash flows from investing activities
Purchase of tangible and intangible -3 021 -1 849
assets
Proceeds from sale of tangible and 64 11
intangible assets
Acquired subsidiaries -3 660 -1 445
Disposal of associated companies 23
Proceeds from other investments 457
Granted loans -1
Repayments of loan receivables 24
Net cash used in investing activities -6 114 -3 283
Cash flows from financing activities
Proceeds from issuance of share 760 9 056
capital
Minority's capital investment 95
Repayments of long-term borrowings -400 -511
Repayments of financial lease -75 -79
liabilities
Dividends paid -1 070 -1 037
Net cash used in financing activities -689 7 428
Net change in cash and cash -1 146 4 150
equivalents
Cash and cash equivalents at beginning 9 987 5 789
of period
Effects of exchange rate changes on -19 49
cash
and cash equivalents
Effects of fair value implementation 152
Cash and cash equivalents at end of 8 975 9 987
period
GROUP QUARTERLY INCOME STATEMENT
COMMITMENTS ON BEHALF OF SUBSIDIARIES 986 746
Guarantees, total 986 746
OWN CONTIGENT LIABILITIES
Lease liabilities
Current lease liabilities 544 541
Lease liabilities maturing in 1-5 years 567 513
Total 1 111 1 054
Rental liabilities
Current rental liabilities 1 334 1 341
Rental liabilities maturing in 1-5 years 3 193 1 618
Total 4 527 2 960
Own contingent liabilities, total 5 638 4 014
SEGMENT REPORTING
Geographical segments (primary segment)
Net sales 10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
(EUR thousand) 2006 05 2006 05
Restat % Restat %
ed ed
Finland 10 918 6 349 72.0 41 028 26 111 57.1
Scandinavia 4 354 3 964 9.8 14 698 13 024 12.9
Europe 2 714 1 441 88.3 8 985 6 497 38.3
Other areas 1 119 553 102.5 3 512 2 077 69.1
Sales between -2 598 -1 484 -8 269 -6 043
segments
Group total 16 508 10 823 52.5 59 954 41 666 43.9
Operating profit 10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
(EUR thousand) 2006 05 2006 05
Restat % Restat %
ed ed
Finland 3 243 1 140 184.5 12 314 7 130 72.7
Scandinavia 20 160 -87.8 -45 -116 60.7
Europe -910 -972 6.4 -2 831 -2 379 -19.0
Other areas -531 -253 -109.5 -1 297 -976 -32.9
Operating profit -15 23 -62 -47
between segments
Group total 1 807 97 1758.8 8 078 3 611 123.7
Personnel 10-12/ 10-12/ Change, 1-12/ 1-12/ Change,
(employed, in 2006 05 2006 05
average) Restat % Restat %
ed ed
Finland 345 237 45.6 346 223 55.2
Scandinavia 93 88 5.6 89 75 18.7
Europe 66 55 20.0 62 50 24.0
Other areas 21 15 40.0 17 14 21.4
Group total 524 395 32.7 514 362 42.0
Business segments (secondary segment)
Net sales 10-12/ 10-12/ Change 1-12/ 1-12/05 Change,
(EUR thousand) 2006 05 , 2006 %
Restat % Restate
ed d
Product sales 5 241 2 786 88.1 19 374 14 044 38.0
Maintenance and 5 283 2 630 99.2 18 776 9 714 93.3
support
Consulting and 5 380 4 805 12.0 20 106 16 725 20.2
services
Other operations 648 601 7.8 1 698 1 183 43.5
Group total 16 508 10 823 52.5 59 954 41 666 43.9
Net sales by the 10-12/ 10-12/ Change 1-12/ 1-12/ Change,
location of customer 2006 05 , 2006 05
(EUR thousand) Restat % Restat %
ed ed
Finland 8 147 4 896 66.4 32 557 19 830 64.2
Scandinavia 4 415 3 875 13.9 14 129 13 042 8.3
Europe 2 705 1 499 80.5 9 421 6 434 46.4
Other areas 1 241 553 124.5 3 848 2 360 63.1
Group total 16 508 10 823 52.5 59 954 41 666 43.9
GROUP KEY INDICATORS 2002-2006
Group Key Financial Performance Indicators
EUR thousand 2006 Restated 2004 2003 2002
2005
IFRS IFRS IFRS FAS FAS
Net sales 59 954 41 666 33 891 25 597 20 263
Growth of net 43.9% 26.3% 63.4%
sales, %
Operating profit 8 078 3 611 6 256 1 133 1 370
Growth of 123.7% -17.3% 252.4%
operating
profit, %
% of net 13.5% 8.7% 18.5% 4.4% 6.8%
sales
Profit before 8 287 3 647 6 119 1 031 1 505
tax
% of net 13.8% 8.8% 18.1% 4.0% 7.4%
sales
Profit for the 4 993 2 229 4 018 564 886
period
% of net 8.3% 5.4% 11.9% 2.2% 4.4%
sales
Return on 15.2% 13.9% 38.3% 5.6% 9.2%
equity, %
Return on 24.7% 21.4% 50.8% 10.2% 15.2%
investment, %
Interest bearing 758 1 230 1 645 2 075 282
liabilities
Cash and liquid 8 975 9 987 5 789 3 633 2 538
assets
Gearing, % -18.4% -41.1% -34.1% -15.4% -22.7%
Equity ratio, % 77.5% 68.2% 58.8% 63.0% 74.3%
Total assets 57 558 31 228 20 680 16 003 13 392
Gross 25 315 6 925 1 688 489 2 163
investments *)
% of net 42.2% 16.6% 5.0% 1.5% 10.7%
sales
Capital 597 749 626 489 2 163
expenditure
% of net 1.0% 1.8% 1.8% 1.5% 10.7%
sales
Research and 10 925 6 204 4 604 4 113 3 535
development
costs
% of net 18.2% 14.9% 13.6% 16.1% 17.4%
sales
R&D personnel at 138 86 65 59 59
end of period
Personnel 514 362 280 256 205
average for
period
Personnel at end 528 395 302 254 244
of period
Growth of 33.7% 30.8% 18.9% 4.1% 45.2%
personnel, %
*) Includes acquisitions and capitalized R&D costs.
Group Share Indicators
2006 2005 2004 2003 2002
Restated
IFRS IFRS IFRS FAS FAS
Earnings per share, EUR 0,45 0,24 0.47 0.07 0.10
Earnings per share, EUR 0,44 0,23 0.47 0.07 0.10
(diluted)
Equity per share, EUR 3,88 2,16 1.41 1.18 1.16
P/E ratio 29,2 53,54 16.58 92.55 43.44
Share price performance.
share issue adjusted
lowest share price, EUR 11,21 7,70 6.10 3.63 3.50
highest share price, 15,25 13,00 10.10 6.42 6.10
EUR
average share price, 13,09 9,85 7.83 4.83 5.14
EUR
closing share price, 13,05 12,62 7.78 6.10 4.50
EUR
Share issue adjusted 11 468 9 877 8 607 300 8 550 600 8 550 600
average share number 124 258
31.12.
Market value of shares 149 659 124 650 66 964 52 158 38 477
31.12., EUR 018 996 794 660 700
Number of traded shares 5 503 522 3 666 939 1 981 098 658 514 701 223
% of average share number 49.5% 38.8% 23.1% 7.7% 8.2%
Average share number:
- undiluted 11 172 9 458 460 8 560 967 8 550 600 8 550 600
612
- diluted 11 221 9 877 816 8 634 413 8 552 575 8 562 526
052
SHAREHOLDERS
Distribution of holdings by sector December 31, 2006
Number of Shares and votes
holdings % holdings
Private companies 746 6.46 740 902
Financial and insurance 45 14.55 1 668 650
institutions
Public-sector 6 2.00 229 750
organizations
Non-profit organizations 29 0.89 101 436
Households 18 882 63.48 7 279 711
Foreigners 51 0.31 35 693
19 750 87.69 10 056 142
Nominee-registered 9 12.31 1 411 982
Total 19 759 100 11 468 124
Distribution by number of shares December 31, 2006
Number of Shares and votes
Number of shares shareholders % Number
1 - 100 16 289 3.30 378 270
101 - 1 000 3 108 8.44 968 292
1 001 - 10 000 312 6.86 786 377
10 001 - 100 000 28 9.94 1 139 700
100 001 + 22 71.46 8 195 485
Total 19 759 100 11 468 124
MAJOR SHAREHOLDERS
December 31, 2006 Shares and votes
Number %
1. Sihvo, Ilkka 1 065 800 9.3
2. Vaajoensuu, Hannu (incl. a 1 045 800 9.1
controlled company and children
under guardianship)
3. Eräkangas, Kirsi (incl. children 1 031 800 9.0
under guardianship)
4. Pöllänen, Antti (incl. children 830 900 7.2
under guardianship)
5. Perttunen, Sakari 830 400 7.2
6. Nordea Small cap Fund 452 997 4.0
7. Ahonen, Asko 333 822 2.9
8. Perttunen, Meimi 215 400 1.9
9. Luoto, Matti 199 450 1.7
10 Royal Skandia Life Assurance 180 000 1.6
.
11 Veritas Pension Insurance Company 176 000 1.6
.
12 Henki-Sampo Insurance Company 155 000 1.4
.
13 Fondita Nordic Small Cap Fund 155 000 1.4
.
14 Evli-Select Fund 130 300 1.1
.
15 Sarvala, Vesa 122 741 1.0
.
16 OP Finland Small Firm Fund 106 600 0.9
.
17 Kaleva Mutual Insurance Company 93 800 0.8
.
18 Nordea Fennia Plus Fund 86 000 0.7
.
19 Fides Fund Management Company 76 100 0.7
.
20 Aktia Secura Fund 60 000 0.5
.
7 347 910 64.1
20 largest shareholders total
Nominee-registered shares total 1 411 982 12.3
Others 2 708 832 23.6
Total 11 468 124 100.0
