BASWARE INTERIM REPORT JANUARY 1 - JUNE 30, 2007 (IFRS)
SUMMARY
January-June (H1):
- Net sales EUR 34 814 thousand (EUR 30 083 thousand in H1/2006) - growth 16
percent
- Operating profit EUR 4 182 thousand (EUR 3 776 thousand) - growth 11 percent
- Operating profit 12 percent of net sales (13%)
- Share of international operations 45 percent of net sales (42%) - growth 24
percent
- Earnings per share EUR 0.22 (EUR 0.25)
April-June (Q2):
- Net sales EUR 17 776 thousand (EUR 14 651 thousand in Q2/2006) - growth 21
percent
- Operating profit EUR 2 773 thousand (EUR 1 247 thousand) - growth 122 percent
- Operating profit 16 percent of net sales (9%)
- Share of international operations 45 percent of net sales (44%) - growth 24
percent
- Earnings per share EUR 0.14 (EUR 0.07)
Outlook for 2007: BasWare expects the growth of net sales for the financial year
to be from 15 to 20 percent compared with the Group's net sales in the previous
year. Operating profit (EBIT) is expected to be from 10 to 15 percent of net
sales.
The 2006 figures have been restated to comply with the adjusted accounting
principles regarding license sales recognition. The Financial Statements have
been prepared according to International Financial Reporting Standards (IFRS).
GROUP KEY FIGURES
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| EUR | 4-6/2 | 4-6/20 | Change, | 1-6/20 | 1-6/20 | Change, | 1-12/20 |
| thousand | 007 | 06 | % | 07 | 06 | % | 06 |
--------------------------------------------------------------------------------
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| Net sales | 17 | 14 651 | 21.3% | 34 814 | 30 083 | 15.7% | 59 954 |
| | 776 | | | | | | |
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| Operating | 2 773 | 1 247 | 122.3% | 4 182 | 3 776 | 10.7% | 8 078 |
| profit | | | | | | | |
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| % of net | 15.6% | 8.5% | | 12.0 % | 12.6 % | | 13.5% |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Profit | 2 840 | 1 287 | 120.6% | 4 299 | 3 894 | 10.4% | 8 287 |
| before tax | | | | | | | |
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| Profit for | 1 584 | 801 | 97.7% | 2 468 | 2 795 | -11.7% | 4 986 |
| the period | | | | | | | |
--------------------------------------------------------------------------------
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| Return on | 14.2% | 7.8% | | 11.0% | 17.8% | | 15.1% |
| equity, % | | | | | | | |
--------------------------------------------------------------------------------
| Return on | 25.2% | 12.4% | | 18.9% | 24.3% | | 24.7% |
| investment, | | | | | | | |
| % | | | | | | | |
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| Cash and | 14 | 11 312 | 29.8% | 14 683 | 11 312 | 29.8% | 8 975 |
| cash | 683 | | | | | | |
| equivalents | | | | | | | |
| *) | | | | | | | |
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| Gearing, % | -31.0 | -24.8% | | -31.0% | -24.8% | | -18.4% |
| | % | | | | | | |
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| Equity | 71.6% | 71.1% | | 71.6% | 71.1% | | 77.5% |
| ratio, % | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings | 0.14 | 0.07 | 97.2% | 0.22 | 0.26 | -15.5% | 0.45 |
| per share, | | | | | | | |
| EUR | | | | | | | |
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| Earnings | 0.14 | 0.07 | 98.8% | 0.22 | 0.25 | -14.7% | 0.44 |
| per share | | | | | | | |
| (diluted), | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| Equity per | 3.97 | 3.67 | 8.0% | 3.97 | 3.67 | 8.0% | 3.88 |
| share, EUR | | | | | | | |
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*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss
BasWare's CEO Ilkka Sihvo comments in conjunction with the Interim Report:
"As a whole, BasWare succeeded well in the second quarter of 2007. Both net
sales and operating profit developed favorably. License sales development was
excellent and the growth of international operations strong. Consulting and
services revenue growth was however modest at three percent, due to lack of
resources."
"In BasWare's international operations, both the company's own operations as
well as the reseller operations grew well; the Europe segment growth was 90
percent and that of other areas 79 percent. BasWare signed three partnership
agreements in Russia during the quarter and sales and marketing operations were
initiated with DICOM Group in Asia. Additionally, we signed five reseller
agreements in North America."
REPORTING
BasWare Group adjusted the revenue recognition principles regarding license
sales as well as the valuation principles regarding accounts receivables. The
company published the restated figures for 2005 and 2006 on February 1, 2007.
The audited Financial Statements prepared according to the adjusted accounting
principles were published on February 8, 2007. BasWare assesses that the
adjusted accounting principles have no effect on the Group's financial
performance in the future.
In the first quarter, a formal bad debt reservation of EUR 1.3 million was
realized in sales receivables. The formal debt reservation amounts to EUR 880
thousand at the end of the second quarter.
In the future, BasWare reports it Software as a Service (SaaS) revenue
separately in the second segment. Software as a Service revenue includes
license, maintenance and services revenue that are invoiced monthly based on an
agreement. Software as a Service agreements typically span several years. In the
future, the Group will also report the backlog of orders not recognized as
income. The Company's SaaS sales are growing and this dilutes license sales
growth in short term.
NET SALES
BasWare Group's net sales grew during the financial period by 16 percent and
were EUR 34 814 thousand (EUR 30 083 thousand). During the second quarter, net
sales grew by 21 percent and were EUR 17 776 thousand (EUR 14 651 thousand).
The Company's product sales grew by 32 percent in the period and were 36 percent
(32%) of net sales. Maintenance revenue and support services related to
maintenance grew by 10 percent and represented 29 percent (31%) of net sales.
Consulting and services revenue grew by 3 percent and represented 33 percent of
net sales. In the financial period SaaS sales represented 2 percent of net
sales. The backlog of SaaS orders not recognized as income was EUR 943 thousand
at the end of the period.
In April-June, 34 percent (29%) of net sales came from own product sales and
license sales growth was 42 percent. Maintenance revenue represented 30 percent
(32%) of net sales and grew by 14 percent. Consulting and services revenue
represented 34 percent (39%) of net sales and grew by 7 percent. SaaS sales
represented 2 percent of net sales in the second quarter.
Value added resellers provided a net share of 15 percent (16%) or EUR 1 913
thousand of product sales in January-June. In April-June value added resellers
provided a net share of 13 percent (7%) or EUR 799 thousand of product sales
which is 10 percent (5%) of international operations' total net sales.
The international share of BasWare's net sales was 45 percent (42%) in the
period. International operations grew by 24 percent.
The geographical division of net sales by the location of assets (primary
segment):
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| Net sales | 4-6/2 | 4-6/2 | Change | 1-6/20 | 1-6/20 | Change, | 1-12/20 |
| (EUR | 007 | 006 | , % | 07 | 06 | % | 06 |
| thousand) | | | | | | | |
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| Finland | 12 | 9 732 | 26.1 | 24 333 | 20 734 | 17.4 | 41 028 |
| | 276 | | | | | | |
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| Scandinavia | 3 859 | 4 393 | -12.2 | 7 889 | 7 672 | 2.8 | 14 698 |
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| Europe | 3 153 | 1 656 | 90.3 | 5 952 | 3 940 | 51.1 | 8 985 |
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| Other | 921 | 515 | 79.0 | 1 673 | 1 087 | 53.8 | 3 512 |
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| Sales between | -2 | -1 | | -5 033 | -3 351 | | -8 269 |
| segments | 432 | 645 | | | | | |
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| Group total | 17 | 14 | 21.3 | 34 814 | 30 083 | 15.7 | 59 954 |
| | 776 | 651 | | | | | |
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The geographical division of net sales by the location of customers:
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| Net sales | 4-6/2 | 4-6/2 | Change | 1-6/20 | 1-6/20 | Change, | 1-12/20 |
| (EUR | 007 | 006 | , % | 07 | 06 | % | 06 |
| thousand) | | | | | | | |
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| Finland | 9 827 | 8 211 | 19.7 | 19 187 | 17 386 | 10.4 | 32 557 |
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| Scandinavia | 3 614 | 3 910 | -7.6 | 7 543 | 7 111 | 6.1 | 14 129 |
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| Europe | 3 161 | 2 105 | 50.2 | 5 992 | 4 666 | 28.4 | 9 421 |
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| Other | 1 174 | 425 | 176.5 | 2 092 | 920 | 127.3 | 3 848 |
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| Group total | 17 | 14 | 21.3 | 34 814 | 30 083 | 15.7 | 59 954 |
| | 776 | 651 | | | | | |
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FINANCIAL PERFORMANCE
BasWare's operating profit grew by 11 percent in the financial period and
totaled EUR 4 182 thousand (EUR 3 776 thousand). Operating profit represented 12
percent (13%). In the second quarter, BasWare's operating profit grew by 122
percent and was EUR 2 773 thousand (EUR 1 247 thousand). Operating profit
represented 16 percent (9%) of net sales.
The division of operating profit geographically by the location of assets
(primary segment):
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| Operating | 4-6/2 | 4-6/2 | Change | 1-6/20 | 1-6/20 | Change, | 1-12/20 |
| profit | 007 | 006 | , % | 07 | 06 | % | 06 |
| (EUR | | | | | | | |
| thousand) | | | | | | | |
| | | | | | | | |
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| Finland | 3 837 | 2 071 | 85.3 | 7 152 | 5 557 | 28.7 | 12 314 |
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| Scandinavia | -207 | 305 | -167.7 | -436 | 146 | -399.0 | -45 |
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| Europe | -347 | -848 | 59.0 | -1 526 | -1 342 | -13.8 | -2 831 |
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| Other areas | -495 | -265 | -87.1 | -978 | -554 | -76.5 | -1 297 |
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| Operating | -15 | -16 | | -31 | -31 | | -62 |
| profit | | | | | | | |
| between | | | | | | | |
| segments | | | | | | | |
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| Group total | 2 773 | 1 247 | 122.3 | 4 182 | 3 776 | 10.7 | 8 078 |
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The Company's fixed costs were EUR 28 750 thousand (EUR 24 001 thousand) in the
period and have grown by 20 percent compared with the same period last year.
Fixed costs include the bad debt reservation of EUR 880 thousand realized in
sales receivables. Personnel costs made up 67 percent or EUR 19 203 thousand
(EUR 16 969 thousand) of the fixed costs. In the second quarter, fixed costs
totaled EUR 14 496 thousand (EUR 12 288 thousand).
Research and development costs totaled EUR 6 344 thousand (EUR 5 445 thousand)
of which EUR
1 013 thousand (EUR 1 117 thousand) or 16 percent (21%) were
capitalized during the period. Amortization of capitalized research and
development costs totaled EUR 453 thousand (EUR 161 thousand). In the second
quarter, research and development costs totaled EUR 3 252 thousand (EUR 2 806
thousand).
The Company's finance income and finance expenses were EUR 117 thousand. The
Company's profit before tax was EUR 4 299 thousand (EUR 3 894 thousand) and
profit for the period was EUR 2 468 thousand (EUR 2 795 thousand). Undiluted
earnings per share were EUR 0.22 (EUR 0.26).
In the second quarter, profit before tax was EUR 2 840 thousand (EUR 1 287
thousand) and profit for the period was EUR 1 584 thousand (EUR 801 thousand).
Earnings per share were EUR 0.14 (EUR 0.07).
The sales of business premises have a EUR 439 thousand one off improvement on
the quarterly result of BasWare Group.
FINANCE AND INVESTMENTS
BasWare Group's total assets on the balance sheet at the end of the financial
period were EUR 63 593 thousand (EUR 58 655 thousand). The Company's cash and
liquid assets were EUR 14 683 thousand (EUR 11 312 thousand), of which cash and
cash equivalents were EUR 7 805 thousand (EUR 5 439 thousand) and financial
assets at fair value through profit or loss were EUR 6 878 thousand (EUR 5 873
thousand).
Equity ratio was 71.6 percent (71.1%) and gearing was -31.0% (-24.8%). The
Company had a total of EUR 552 thousand (EUR 990 thousand) interest-bearing
liabilities, of which current liabilities accounted for EUR 422 thousand (EUR
445 thousand). Return on investment was 18.9 percent and return on equity 11.0
percent.
Cash flows from operating activities were EUR 6 090 thousand (EUR 6 568
thousand). Cash flows from investments were EUR 1 409 thousand (EUR -4 766
thousand).
The Company's capital expenditure, resulting from regular, additional and
replacement, investments resulting from growth, was EUR 368 thousand (EUR 450
thousand) in the period. Gross investments which include, in addition to the
previously mentioned, the capitalized research and development costs totaled EUR
1 649 thousand (EUR 23 501 thousand, includes the acquisition of Analyste).
Amortizations of intangible assets were EUR 921 thousand (EUR 670 thousand).
There are no indications of impairments of assets.
RESEARCH, DEVELOPMENT AND NEW PRODUCTS
BasWare's research and development costs were EUR 6 344 thousand (EUR 5 445
thousand) in the period and made up 18 percent (18 %) of net sales. Research and
development costs grew by 17 percent (76%) compared with the same period last
year.
Research and development is centralized in the Software Production business
unit. Altogether 140 people (136) worked in the unit at the end of June 2007.
Strong development of the BasWare product suite continued according to plan in
the second quarter. New versions of the value-added modules, BasWare Order
Matching and BasWare Contract Matching were launched during the quarter as well
as new version of the BasWare KPI Reporting Tool solution. New versions of
BasWare Purchase Management and BasWare Travel & Expense Management were also
launched during the period.
During the quarter, BasWare RFx Management, a sourcing solution to be launched
in the second half of the year, was delivered to a pilot customer. The first
deliveries of BasWare Mobile Client and BasWare Portal were realized during the
quarter.
The first versions of BasWare Invoice Processing and BasWare Purchase Management
including the Unicode support for the Asia Pacific market were launched during
the quarter.
Of the Financial Management product suite, a new international version of the
value-added module IFRS Package, complementing the BasWare Group Consolidation
software, was launched. The demand for the new version has been the strongest in
Russia, where the solution is sold under the name of BasWare IFRS Consolidation.
PERSONNEL
BasWare employed 550 (506) people in average and 559 (507) people at the end of
the period. The number of personnel grew by 10 percent compared with the same
period last year and grew by almost 5 percent compared with the previous
quarter.
The share of personnel working in foreign units has slightly increased compared
with the same period last year. At the end of the period, 35 percent (33%) of
the BasWare personnel worked outside of Finland and 65 percent (67%) in Finland.
The average age of the employees is 35.5 (35.4) years. Of them 35 percent hold a
Master's degree and 42 percent a Bachelor's degree. 29 percent of the personnel
are women and 71 percent men.
For incentive purposes, the Company has a bonus program that covers the whole
personnel. During the financial period, the Company also had two on-going
warrant programs for the Group's key personnel as well as a share-based
incentive program directed to the top management.
Geographical distribution of personnel:
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| Personnel | 4-6/ | 4-6/ | Change | 1-6/ | 1-6/ | Change | 1-12/ |
| (employed, in | 2007 | 2006 | , % | 2007 | 2006 | , % | 2006 |
| average) | | | | | | | |
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| Finland | 361 | 343 | 5.3 | 357 | 348 | 2.6 | 346 |
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| Scandinavia | 97 | 87 | 10.7 | 95 | 87 | 8.8 | 89 |
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| Europe | 69 | 61 | 14.3 | 67 | 59 | 14.5 | 62 |
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| Other areas | 23 | 15 | 47.8 | 22 | 15 | 54.0 | 17 |
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| Group total | 550 | 506 | 8.6 | 541 | 509 | 6.3 | 513 |
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BUSINESS OPERATIONS
General economic situation in the main market areas of BasWare remains
relatively good. Research institutions predict that the annual growth of the IT
market will be approximately 5-7 percent in the Nordic countries, Western Europe
and United States. The competitiveness of the BasWare software is estimated to
have slightly improved. BasWare is named strong newcomer in the international
eProcurement solutions market in a report by the independent research firm
Forrester Research, Inc. and ranked among five leading vendors globally.
According to Forrester, BasWare is a leading electronic invoice and presentment
and payment (EIPP) vendor with the most revenues and largest installed base.
BasWare Enterprise Purchase to Pay operations grew by 15 percent in the
financial period and represents 87 percent (88%) of total net sales. In the
second quarter the growth was 21 percent. The Company estimates that the demand
for procurement solutions continues to increase. The demand for automated
invoice processing solutions and travel and expense management solutions has
remained steady.
In Enterprise Purchase to Pay units, new customers include The City of Espoo,
Raskone Oy, Suomen Terveystalo Oyj and Tapiola Bank in Finland, DW Beton GmbH
and Keramag - Keramische Werke Aktiengesellschaft in Germany, Martinair in the
Netherlands, Rolls-Royce Marine AS in Norway and Gannett Co in the United
States. Additionally, BasWare further extended its cooperation with Neste Oil by
entering in to a significant agreement of the delivery of a solution to the
company's Shared Service Center.
The Financial Management operations grew by 22 percent in the period and
represented 13 percent (12%) of net sales. In the second quarter the growth was
23 percent. BasWare announced on June 6, 2007 that it incorporates its Financial
Management unit. The demand for Financial Management software has been moderate
especially for the planning and analyzing solutions. The unit's new customers
include Suomen Terveystalo Oyj and The City of Espoo in Finland. The Financial
Management unit also made a market opening to Russia in the second quarter. The
first customer for the Financial Management solutions in Russia is the St.
Petersburg-based LSR Group.
The invoice volume of BasWare Einvoices Oy, operating in the Nordic countries,
grew by 42 percent and came mostly from Finland. A total of 1.7 million invoices
were transmitted through the eInvoicing service in the second quarter and the
invoice volume grew by 39 percent compared with the same period last year and by
6 percent from the previous quarter. In the second quarter, 62 new customer
agreements were signed, of which international operations represented 27
percent. New operator agreements were signed with Handelsbanken, Ålandsbanken
and WM-Data A/S for the transmission of electronic invoices. In addition,
BasWare Einvoices Oy became a founding member of the Norwegian B2B connect
operator forum.
Reseller Channel and Partners
Reseller operations through business partners are an important part of
international operations. The main focus of the partner operations in the second
quarter was on signing new customer agreements, recruiting new business partners
and strengthening partner marketing.
The development of the indirect reseller channel continues also in Russia and
Asia. In Russia, the new business partners for the Enterprise Purchase to Pay
solutions are Manzana Group and Xerox Russia and Navicon for the Financial
Management solutions. In Asia, DICOM Group started as a reseller for the
Enterprise Purchase to Pay solutions.
During the second quarter, the organization responsible for partner operations
was re-organized. The aim is to strengthen the deployment of global sales and
partnership programs in the country units and to focus BasWare's own channel
resources to work with the key partners.
Nine new reseller agreements were signed during the quarter, of which Itesoft in
France, RR Donnelley in Switzerland, Manzana Group and XEROX Russia in Russia as
well as XEROX USA, XEROX Canada, Velocity Technology Solutions, RPI Consultants
and Tallega in North America.
BasWare has entered into a global reseller agreement with DICOM Group, the
global market leader of Information Capture & Exchange solutions. Through the
partnership, BasWare Enterprise Purchase to Pay suite is completed by the
Ascent® Capture and Ascent® Xtrata Pro capture solutions. DICOM Group also
distributed BasWare Enterprise Purchase to Pay solutions. During the quarter,
Kofax in the United States and DICOM in Asia initiated the sales of BasWare
product.
BasWare had a total of 63 international resellers at the end of the period,
operating in 33 countries. Outside the Nordic countries, BasWare has 40 partners
in Europe. BasWare also has an extensive reseller network in Finland.
Value added resellers provided a net share of 15 percent (16%) or EUR 1 913
thousand of product sales in January-June. In April-June value added resellers
provided a net share of 13 percent (7%) or EUR 799 thousand.
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 payment solutions which are currently sold only in
Finland.
Sales and other business operations are mainly handled by the own organization.
There are altogether 28 resellers and 17 application service providers selling
payment solutions in Finland. There are two Enterprise Purchase to Pay business
partners in Sweden and one Enterprise Purchase to Pay partner in Iceland.
As a whole, BasWare's Nordic operations exceeded its objectives for the second
quarter. The units in Finland and Scandinavia exceeded the objective. Also the
Financial Management unit exceeded its objective. The growth of net sales in the
Finland segment was 26 percent. In the Scandinavia segment, the quarter's net
sales decreased by 12 percent but the net sales for the financial period grew by
three percent.
Europe
Outside of Scandinavia, BasWare has European subsidiaries in the Netherlands,
Germany, the United Kingdom and France. In addition, there are partner
operations in 10 other countries. Four new reseller agreements were signed
during the quarter. There are altogether 40 resellers in the area.
As a whole, the European business area fell slightly behind the objective for
the quarter. The net sales of the area grew by 90 percent in April-June compared
with the same quarter last year. The sales consisted mainly of the BasWare
Invoice Processing solution. The Dutch unit clearly exceeded its objective for
the quarter. The units in United Kingdom and France fell behind their
objectives. The German unit fell slightly behind the objective.
Other Areas
Other areas segment grew in April-June by 79 percent compared with the same
quarter last year.
Outside of Europe, BasWare has a U.S. subsidiary which focuses on the sales of
the Enterprise Purchase to Pay solutions in the United States and Canada. Five
new resellers started partner operations during the quarter. The operations of
BasWare, Inc. fell behind the objective for the quarter.
The sales in other areas outside Europe, mainly in Australia, are handled
through value added resellers. Their net sales, that are entered as a part of
the Finnish parent company's sales in segment reporting, fell behind the
objective for the period.
SHARE AND SHAREHOLDERS
BasWare Corporation's share capital totaled EUR 3 440 437.20 at the end of the
period and the number of shares was 11 468 124. The book counter value of the
shares is EUR 0.30 per share.
Board's Authorizations given by the Annual General Meeting of Shareholders on
February 26, 2007
Authorization to resolve on share issue
The Annual General Meeting authorized the Board to resolve on the issuance of a
maximum of
2 293 624 shares and on the conveying of a maximum of 1 146 812 shares in
possession of the Company in one or more installments, either against pay or
free of charge.
The new shares can be issued and the Company's own shares conveyed either
against payment or for free to the Company's shareholders in proportion to their
holding or by means of a directed issue, deviating from the pre-emptive rights
of the shareholders provided that from the Company's perspective there are
important financial grounds for it, such as enabling business arrangements and
company acquisitions, company's capital management, personnel incentive program
or other reasons for developing the Company's business activities.
The authorization also includes the right to grant warrants and other special
rights to receive new shares in the company or BasWare shares held by the
company against payment such that either the share subscription price will be
paid in cash or the subscriber's receivables will be offset against the
subscription price.
The authorization also includes the right to resolve on a free issue to the
Company itself. The amount of the shares issued to the Company can be a maximum
of 1 146 812 shares, including shares acquired based on the authorization or the
previously acquired own shares of the Company.
The subscription prices of new shares and the sum paid for the own shares will
be recorded in the fund for invested non-restricted equity.
The authorization is valid until March 31, 2008.
Authorization to resolve on acquiring the Company's own shares
The Board is authorized to resolve on the acquisition of a maximum of 1 146 812
own shares. The new shares are acquired at the Helsinki Stock Exchange and can
either be held by the Company, nullified or conveyed further. The authorization
for acquisition is valid until March 31, 2008.
Authorization to resolve on an extraordinary dividend distribution
The Board is authorized to resolve on an extraordinary dividend distribution
totaling a maximum of EUR 1 000 000, distributed from the Company's
distributable funds.
The authorization is in effect until the start of the following Annual General
Meeting.
Warrant Programs
Warrant Program 2006
Based on the Warrant Program 2006, 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: April 1, 2008-March
31, 2009, April 1, 2009-March 31, 2010 and 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, 2007 and 2008.
Warrant Program 2007
The warrants shall, by deviation from the shareholders' pre-emptive right to
subscription, be issued to key personnel identified by the Board of Directors,
employed by the group for the present and not part-time, to increase their
commitment and work motivation. Part of the warrants shall be issued to the
wholly owned subsidiary of BasWare Corporation to be issued later to persons
employed by the Group or to persons who are recruited to the Group.
The shareholders' pre-emptive right to subscription is being deviated from,
since the warrants are intended to form a part of the Group's incentive program
and, thus, from the Company's perspective, there are considerable financial
grounds for it.
The warrants are granted free of charge. The Board of Directors shall decide
upon the procedure and schedule of the approval of warrants. The warrants will
be granted to the Group's personnel and management according to the resolution
of the Board.
BasWare Corporation shall issue a maximum of 200 000 warrants, whereof 100 000
shall be marked with the letter D and 100 000 with the letter E. The warrants
will be issued in the book-entry system. Each warrant entitles its holder to
subscribe one (1) share in BasWare Corporation.
The subscription price of the share will be recorded to EUR 0.30 in the share
capital of Company and for the remainder in the fund for invested non-restricted
equity. BasWare's share capital can increase by a maximum of 200.000 new shares
or EUR 60 000 based on the subscriptions.
The subscription period is
- warrant D April 1, 2009 - March 31, 2010,
- warrant E April 1, 2010 - March 31, 2011
The subscription prices correspond to
- for warrant D, the volume-weighted average share price of the Company in
January-March of 2007
- for warrant E, the volume-weighted average share price of the Company in
January-March of 2008
The portion of shares subscribed based on the now issued warrants totals a
maximum of 1.71% of the Company's shares and votes after the possible increase
in share capital.
Share price and trade
In the second quarter, the highest price of the share was EUR 14.00 (EUR 15.25),
lowest price was EUR 10.48 (EUR 11.21) and closing price was EUR 12.25 (EUR
13.75). The average price of the share was EUR 12.19 (EUR 13.35).
A total of 1 597 569 (3 628 803) shares were traded during the financial period
which is the equivalent of 14 percent (33%) of the average number of shares.
Market capitalization with the period's closing price on June 30, 2007 was EUR
140 485 thousand (EUR 156 039 thousand).
Shareholders
BasWare had 18 459 (20 651) shareholders at the end of the financial period,
including nominee-registered holdings (10). Nominee-registered holdings
accounted for 14.4 percent of the total number of shares.
The Company received no notices of change in ownership during the financial
period.
THE COMPANY'S NEAR FUTURE RISKS AND BUSINESS UNCERTAINTIES
A more in-depth account of the Company's operating risks has been published in
conjunction with the 2006 Financial Statements. BasWare has divided the risks
into six categories: risks related to business operations, products, personnel
as well as legal, financial and data security risks. BasWare takes risks that
are a natural part of the strategy and objectives. These risks are managed and
reduced in various ways.
As part of BasWare's risks and business uncertainties in the near future, the
lack of consulting resources may slow down the growth of services operations. In
addition, Software as a Service (SaaS) based services instead of license
agreements may affect the Company's short term net sales growth.
There have been no other significant changes in BasWare's risks and
uncertainties during the financial period.
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. 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.
Document management, scanning and workflow solution developers compete with
BasWare especially in invoice processing. 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. A leading research
company, Forrester Research, Inc. names the leading provider of invoice
automation solutions and in procurement one of the top five vendors in the
world.
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 portfolio. 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 Group'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, July 12, 2007
BASWARE CORPORATION
Board of Directors
For more information, please contact
CEO Ilkka Sihvo, BasWare Corp.,
Tel. +358 9 8791 7251 or +358 40 501 8251
Analyst and Press Briefing
BasWare arranges today, July 12, 2007 a briefing on the Interim Report for the
press and analysts at 10:30 in Hotel Kämp, Paavo Nurmi conference room in
Helsinki, Finland. During this briefing CEO Ilkka Sihvo will comment the
operations and financial performance of the quarter. Welcome.
Distribution
Helsinki Stock Exchange
Key media
www.basware.com
GROUP INCOME STATEMENT
--------------------------------------------------------------------------------
| EUR | 1.4.-30.6 | 1.4.-30. | Change, | 1.1.-30.6 | 1.1.- | Chan | 1.1.- |
| thousan | .2007 | 6.2006 | % | .2007 | 30.6. | ge, | 31.12 |
| d | | | | | 2006 | % | .2006 |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| NET | 17 776 | 14 651 | 21.3 | 34 814 | 30 | 15.7 | 59 |
| SALES | | | | | 083 | | 954 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other | 752 | 61 | 1 125.7 | 767 | 102 | 650. | 177 |
| operati | | | | | | 4 | |
| ng | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Materia | -662 | -689 | -3.9 | -1 482 | -1 | 1.0 | -2 |
| ls and | | | | | 467 | | 593 |
| service | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Employe | -9 961 | -8 710 | 14.4 | -19 203 | -16 | 13.2 | -32 |
| e | | | | | 969 | | 953 |
| benefit | | | | | | | |
| s | | | | | | | |
| expense | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Depreci | -597 | -488 | 22.2 | -1 168 | -942 | 24.1 | -2 |
| ation | | | | | | | 033 |
| and | | | | | | | |
| amortiz | | | | | | | |
| ation | | | | | | | |
--------------------------------------------------------------------------------
| Other | -4 536 | -3 578 | 26.8 | -9 546 | -7 | 35.8 | -14 |
| operati | | | | | 032 | | 474 |
| ng | | | | | | | |
| expense | | | | | | | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Operati | 2 773 | 1 247 | 122.3 | 4 182 | 3 776 | 10.7 | 8 078 |
| ng | | | | | | | |
| profit | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance | 79 | 48 | 63.8 | 140 | 186 | -24. | 308 |
| Income | | | | | | 8 | |
--------------------------------------------------------------------------------
| Finance | -12 | -8 | 37.6 | -23 | -69 | -67. | -99 |
| Expense | | | | | | 0 | |
| s | | | | | | | |
--------------------------------------------------------------------------------
| Profit | 2 840 | 1 287 | 120.6 | 4 299 | 3 894 | 10.4 | 8 287 |
| before | | | | | | | |
| tax | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Income | -1 256 | -486 | 158.5 | -1 831 | -1 | 66.7 | -3 |
| tax | | | | | 099 | | 301 |
| expense | | | | | | | |
--------------------------------------------------------------------------------
| PROFIT | 1 584 | 801 | 97.7 | 2 468 | 2 795 | -11. | 4 986 |
| FOR THE | | | | | | 7 | |
| PERIOD | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EPS | 0.14 | 0.07 | 97.2 | 0.22 | 0.26 | -15. | 0.45 |
| (undilu | | | | | | 5 | |
| ted), | | | | | | | |
| EUR | | | | | | | |
--------------------------------------------------------------------------------
| EPS | 0.14 | 0.07 | 98.8 | 0.22 | 0.25 | -14. | 0.44 |
| (dilute | | | | | | 7 | |
| d), EUR | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Average | | | | | | |
| share | | | | | | |
| number: | | | | | | |
--------------------------------------------------------------------------------
| - | 11 468 | 11 | | 11 468 | 10 | | 11 |
| undilut | 124 | 346 607 | | 124 | 889 3 | | 172 6 |
| ed | | | | | 44 | | 12 |
--------------------------------------------------------------------------------
| - | 11 | 11 | | 11 468 | 10 98 | | 11 22 |
| diluted | 468 124 | 442 664 | | 124 | 6 222 | | 1 052 |
--------------------------------------------------------------------------------
GROUP BALANCE SHEET
--------------------------------------------------------------------------------
| EUR thousand | 30.6.2007 | 30.6.2006 | Change, % | 31.12.2006 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
| ASSETS | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT ASSETS | | | | |
--------------------------------------------------------------------------------
| Intangible assets | 10 390 | 9 428 | 10.2 | 9 980 |
--------------------------------------------------------------------------------
| Goodwill | 18 529 | 18 350 | 1.0 | 18 477 |
--------------------------------------------------------------------------------
| Tangible assets | 875 | 962 | -9.1 | 784 |
--------------------------------------------------------------------------------
| Investments in associates | | 3 | -100.0 | |
--------------------------------------------------------------------------------
| Available-for-sale | 38 | 2 612 | -98.6 | 2 612 |
| investments | | | | |
--------------------------------------------------------------------------------
| Trade and other | 12 | 12 | -0.5 | 0 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Deferred tax assets | 2 854 | 3 588 | -20.4 | 3 501 |
--------------------------------------------------------------------------------
| Non-current assets | 32 698 | 34 952 | 6.5 | 35 354 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT ASSETS | | | | |
--------------------------------------------------------------------------------
| Inventories | 21 | 14 | 46.9 | 20 |
--------------------------------------------------------------------------------
| Trade and other | 15 993 | 12 262 | 30.4 | 13 018 |
| receivables | | | | |
--------------------------------------------------------------------------------
| Income tax receivables | 199 | 112 | 78.0 | 192 |
--------------------------------------------------------------------------------
| Financial assets at fair | 6 878 | 5 873 | 17.1 | 5 963 |
| value through profit or | | | | |
| loss | | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 7 805 | 5 439 | 43.5 | 3 012 |
--------------------------------------------------------------------------------
| Current assets | 30 895 | 23 700 | 30.4 | 22 204 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL ASSETS | 63 593 | 58 655 | 8.4 | 57 558 |
--------------------------------------------------------------------------------
| | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EQUITY AND LIABILITIES | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' EQUITY | | | | |
--------------------------------------------------------------------------------
| Share capital | 3 440 | 3 404 | 1.1 | 3 440 |
--------------------------------------------------------------------------------
| Share premium account | 33 127 | 32 444 | 2.1 | 33 127 |
--------------------------------------------------------------------------------
| Fair value reserve and | 540 | 540 | 0.0 | 540 |
| other reserves | | | | |
--------------------------------------------------------------------------------
| Translation differences | 355 | 381 | -7.0 | 235 |
--------------------------------------------------------------------------------
| Retained earnings | 8 015 | 4 915 | 63.1 | 7 176 |
--------------------------------------------------------------------------------
| Minority interest | 68 | | | 88 |
--------------------------------------------------------------------------------
| Shareholders' equity | 45 545 | 41 685 | 9.3 | 44 606 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| NON-CURRENT LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Deferred tax liability | 1 328 | 1 457 | 8.9 | 1 462 |
--------------------------------------------------------------------------------
| Interest-bearing | 130 | 545 | -76.2 | 329 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Non-current liabilities | 1 458 | 2 001 | 27.1 | 1 791 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CURRENT LIABILITIES | | | | |
--------------------------------------------------------------------------------
| Interest-bearing | 422 | 445 | -5.1 | 428 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Trade payables and other | 15 215 | 13 738 | 10.8 | 9 957 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Tax liability from income | 952 | 786 | 21.1 | 775 |
| tax | | | | |
--------------------------------------------------------------------------------
| Current liabilities | 16 590 | 14 969 | 10.8 | 11 160 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| TOTAL EQUITY AND | 63 593 | 58 655 | 8.4 | 57 558 |
| LIABILITIES | | | | |
--------------------------------------------------------------------------------
GROUP STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
--------------------------------------------------------------------------------
| EUR thousand | Share | Share | Other | Transl | Retain | Minori | Share-h |
| | -hold | premi | reser | ation | ed | ty | olders' |
| | ers' | um | ves | differ | earnin | intere | equity |
| | equit | accou | | ences | gs | st | |
| | y | nt | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 2 963 | 15 01 | 0 | -203 | 3 527 | | 21 296 |
| EQUITY 1.1.2006 | | 0 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in | | | | 584 | -256 | | 328 |
| translation | | | | | | | |
| difference | | | | | | | |
--------------------------------------------------------------------------------
| Granted | | | | | -81 | | -81 |
| warrants | | | | | | | |
--------------------------------------------------------------------------------
| Net profit/loss | | | | 584 | -337 | | 247 |
| recognized | | | | | | | |
| directly in | | | | | | | |
| shareholders' | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the | | | | | 2 795 | | 2 795 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Total profits | | | | 584 | 2 458 | | 3 042 |
| and losses | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend | | | | | -1 070 | | -1 070 |
| distribution | | | | | | | |
--------------------------------------------------------------------------------
| Rights issue | 441 | | 540 | | | | 981 |
--------------------------------------------------------------------------------
| Warrants used | | 190 | | | | | 190 |
--------------------------------------------------------------------------------
| Share premium | | 17 | | | | | 17 250 |
| | | 250 | | | | | |
--------------------------------------------------------------------------------
| Transaction | | -6 | | | | | -6 |
| costs for | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 3 404 | 32 | 540 | 381 | 4 915 | | 41 685 |
| EQUITY | | 444 | | | | | |
| 30.6.2006 | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| EUR thousand | Share | Share | Other | Transl | Retain | Minori | Share-h |
| | -hold | premi | reser | ation | ed | ty | olders' |
| | ers' | um | ves | differ | earnin | intere | equity |
| | equit | accou | | ences | gs | st | |
| | y | nt | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 3 440 | 33 | 540 | 235 | 7 176 | 88 | 44 606 |
| EQUITY 1.1.2007 | | 127 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Change in | | | | 120 | | | 120 |
| translation | | | | | | | |
| difference | | | | | | | |
--------------------------------------------------------------------------------
| Granted | | | | | 69 | | 69 |
| warrants | | | | | | | |
--------------------------------------------------------------------------------
| Other changes | | | | | 1 | | 1 |
--------------------------------------------------------------------------------
| Net profit/loss | | | | 120 | 71 | | 190 |
| recognized | | | | | | | |
| directly in | | | | | | | |
| shareholders' | | | | | | | |
| equity | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the | | | | | 2 488 | -20 | 2 468 |
| period | | | | | | | |
--------------------------------------------------------------------------------
| Total profits | | | | 120 | 2 559 | -20 | 2 658 |
| and losses | | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Dividend | | | | | -1 720 | | -1 720 |
| distribution | | | | | | | |
--------------------------------------------------------------------------------
| SHAREHOLDERS' | 3 440 | 33 | 540 | 355 | 8 015 | 68 | 45 545 |
| EQUITY | | 127 | | | | | |
| 30.6.2007 | | | | | | | |
--------------------------------------------------------------------------------
GROUP CASH FLOW STATEMENT
--------------------------------------------------------------------------------
| EUR thousand | 1.1.-30.6.2 | 1.1.-30.6.2 | 1.1.-31.12.2 |
| | 007 | 006 | 006 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from operating | | | |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Profit for the period | 2 468 | 2 795 | 4 986 |
--------------------------------------------------------------------------------
| Adjustments for profit | 2 506 | 2 229 | 5 235 |
--------------------------------------------------------------------------------
| Working capital changes | 2 286 | 3 090 | -902 |
--------------------------------------------------------------------------------
| Interest paid | -13 | -24 | -41 |
--------------------------------------------------------------------------------
| Dividends received | | | -8 |
--------------------------------------------------------------------------------
| Interest received | 25 | 39 | 70 |
--------------------------------------------------------------------------------
| Other financial items in | -6 | 47 | 65 |
| operating activities | | | |
--------------------------------------------------------------------------------
| Income taxes paid | -1 177 | -1 608 | -3 750 |
--------------------------------------------------------------------------------
| Net cash from operating | 6 090 | 6 568 | 5 657 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Purchase of tangible and | -1 634 | -1 599 | -3 021 |
| intangible assets | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of tangible | 25 | 32 | 64 |
| and intangible assets | | | |
--------------------------------------------------------------------------------
| Acquired subsidiaries | 0 | -3 660 | -3 660 |
--------------------------------------------------------------------------------
| Disposal of associated companies | | | 23 |
--------------------------------------------------------------------------------
| Proceeds from other investments | 3 013 | 457 | 457 |
--------------------------------------------------------------------------------
| Granted loans | 0 | 0 | -1 |
--------------------------------------------------------------------------------
| Repayments of loan receivables | 6 | 4 | 24 |
--------------------------------------------------------------------------------
| Net cash used in investing | 1 409 | -4 766 | -6 114 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from financing | | | |
| activities | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Proceeds from issuance of share | 0 | 760 | 760 |
| capital | | | |
--------------------------------------------------------------------------------
| Minority's capital investment | 0 | 0 | 95 |
--------------------------------------------------------------------------------
| Repayments of long-term | -200 | -200 | -400 |
| borrowings | | | |
--------------------------------------------------------------------------------
| Repayments of financial lease | -6 | -41 | -75 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Dividends paid | -1 720 | -1 070 | -1 070 |
--------------------------------------------------------------------------------
| Net cash used in financing | -1 927 | -551 | -689 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Net change in cash and cash | 5 573 | 1 251 | -1 146 |
| equivalents according to cash | | | |
| flow statement | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 8 975 | 9 987 | 9 987 |
| beginning of period | | | |
--------------------------------------------------------------------------------
| Effects of exchange rate changes | 21 | 12 | -19 |
| on cash | | | |
| and cash equivalents | | | |
--------------------------------------------------------------------------------
| Effects of fair value | 115 | 62 | 152 |
| implementation | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at end | 14 683 | 11 312 | 8 975 |
| of period | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
GROUP QUARTERLY INCOME STATEMENT
--------------------------------------------------------------------------------
| EUR thousand | 1-3/20 | 1-3/200 | 4-6/200 | 4-6/200 | 7-9/200 | 10-12/20 |
| | 07 | 6 | 7 | 6 | 6 | 06 |
--------------------------------------------------------------------------------
| | | | | | | |
--------------------------------------------------------------------------------
| NET SALES | 17 038 | 15 432 | 17 776 | 14 651 | 13 363 | 16 508 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Other operating | 15 | 41 | 752 | 61 | 25 | 50 |
| income | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Materials and | -819 | -778 | -662 | -689 | -468 | -658 |
| services | | | | | | |
--------------------------------------------------------------------------------
| Employee | -9 243 | -8 259 | -9 961 | -8 710 | -6 942 | -9 042 |
| benefits | | | | | | |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Depreciation and | -571 | -453 | -597 | -488 | -520 | -572 |
| amortization | | | | | | |
--------------------------------------------------------------------------------
| Other operating | -5 010 | -3 454 | -4 536 | -3 578 | -2 963 | -4 479 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 1 409 | 2 529 | 2 773 | 1 247 | 2 495 | 1 807 |
--------------------------------------------------------------------------------
| % | 8.3% | 16.4% | 15.6% | 8.5% | 18.7% | 10.9% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Finance income | 61 | 138 | 79 | 48 | 56 | 66 |
--------------------------------------------------------------------------------
| Finance expenses | -11 | -60 | -12 | -8 | 12 | -43 |
--------------------------------------------------------------------------------
| Profit before | 1 459 | 2 606 | 2 840 | 1 287 | 2 563 | 1 831 |
| tax | | | | | | |
--------------------------------------------------------------------------------
| % | 8.6% | 16.9% | 16.0% | 8.8% | 19.2% | 11.1% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Tax on income | -575 | -613 | -1 256 | -486 | -898 | -1 304 |
| from operations | | | | | | |
--------------------------------------------------------------------------------
| PROFIT FOR THE | 884 | 1 994 | 1 584 | 801 | 1 665 | 526 |
| PERIOD | | | | | | |
--------------------------------------------------------------------------------
| % | 5.2% | 12.9% | 8.9% | 5.5% | 12.5% | 3.2% |
--------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENT LIABILITIES
--------------------------------------------------------------------------------
| EUR thousand | 30.6.2007 | 30.6.2006 | 31.12.200 |
| | | | 6 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| GUARANTEES ON BEHALF OF SUBSIDIARIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Guarantees total | 1 075 | 740 | 986 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OWN CONTINGENT LIABILITIES | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Lease liabilities | | | |
--------------------------------------------------------------------------------
| Current lease liabilities | 586 | 503 | 544 |
--------------------------------------------------------------------------------
| Lease liabilities maturing in 1-5 years | 460 | 519 | 567 |
--------------------------------------------------------------------------------
| Total | 1 046 | 1 021 | 1 111 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Rental liabilities | | | |
--------------------------------------------------------------------------------
| Current rental liabilities | 1 766 | 1 271 | 1 334 |
--------------------------------------------------------------------------------
| Rental liabilities maturing in 1-5 years | 4 435 | 1 376 | 3 193 |
--------------------------------------------------------------------------------
| Rental liabilities maturing later | 321 | | |
--------------------------------------------------------------------------------
| Total | 6 522 | 2 646 | 4 527 |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Own contingent liabilities, total | 7 567 | 3 668 | 5 638 |
--------------------------------------------------------------------------------
SEGMENT REPORTING
Geographical segments (primary segment)
--------------------------------------------------------------------------------
| Net sales | 4-6/20 | 4-6/2 | Change | 1-6/2 | 1-6/200 | Change, | 1-12/20 |
| (EUR | 07 | 006 | , % | 007 | 6 | % | 06 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
| Finland | 12 276 | 9 732 | 26.1 | 24 | 20 734 | 17.4 | 41 028 |
| | | | | 333 | | | |
--------------------------------------------------------------------------------
| Scandinavia | 3 859 | 4 393 | -12.2 | 7 889 | 7 672 | 2.8 | 14 698 |
--------------------------------------------------------------------------------
| Europe | 3 153 | 1 656 | 90.3 | 5 952 | 3 940 | 51.1 | 8 985 |
--------------------------------------------------------------------------------
| Other areas | 921 | 515 | 79.0 | 1 673 | 1 087 | 53.8 | 3 512 |
--------------------------------------------------------------------------------
| Sales | -2 432 | -1 | | -5 | -3 351 | | -8 269 |
| between | | 645 | | 033 | | | |
| segments | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 17 776 | 14 | 21.3 | 34 | 30 083 | 15.7 | 59 954 |
| | | 651 | | 814 | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Operating | 4-6/20 | 4-6/2 | Change | 1-6/2 | 1-6/200 | Change, | 1-12/20 |
| profit | 07 | 006 | , % | 007 | 6 | % | 06 |
| (EUR | | | | | | | |
| thousand) | | | | | | | |
| | | | | | | | |
--------------------------------------------------------------------------------
| Finland | 3 837 | 2 071 | 85.3 | 7 152 | 5 557 | 28.7 | 12 314 |
--------------------------------------------------------------------------------
| Scandinavia | -207 | 305 | -167.7 | -436 | 146 | -399.0 | -45 |
--------------------------------------------------------------------------------
| Europe | -347 | -848 | 59.0 | -1 | -1 342 | -13.8 | -2 831 |
| | | | | 526 | | | |
--------------------------------------------------------------------------------
| Other areas | -495 | -265 | -87.1 | -978 | -554 | -76.5 | -1 297 |
--------------------------------------------------------------------------------
| Operating | -15 | -16 | | -31 | -31 | | -62 |
| profit | | | | | | | |
| between | | | | | | | |
| segments | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 2 773 | 1 247 | 122.3 | 4 182 | 3 776 | 10.7 | 8 078 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel | 4-6/20 | 4-6/2 | Change | 1-6/2 | 1-6/200 | Change, | 1-12/20 |
| (employed, | 07 | 006 | , % | 007 | 6 | % | 06 |
| in average) | | | | | | | |
--------------------------------------------------------------------------------
| Finland | 361 | 343 | 5.3 | 357 | 348 | 2.6 | 346 |
--------------------------------------------------------------------------------
| Scandinavia | 97 | 87 | 10.7 | 95 | 87 | 8.8 | 89 |
--------------------------------------------------------------------------------
| Europe | 69 | 61 | 14.3 | 67 | 59 | 14.5 | 62 |
--------------------------------------------------------------------------------
| Other areas | 23 | 15 | 47.8 | 22 | 15 | 54.0 | 17 |
--------------------------------------------------------------------------------
| Group total | 550 | 506 | 8.6 | 541 | 509 | 6.3 | 513 |
--------------------------------------------------------------------------------
Business segments (secondary segment)
--------------------------------------------------------------------------------
| Net sales | 4-6/20 | 4-6/2 | Change | 1-6/2 | 1-6/200 | Change, | 1-12/20 |
| (EUR | 07 | 006 | , % | 007 | 6 | % | 06 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
| Product | 6 152 | 4 192 | 46.7 | 12 | 9 633 | 31.0 | 19 374 |
| sales | | | | 618 | | | |
--------------------------------------------------------------------------------
| Maintenance | 5 141 | 4 740 | 8.5 | 10 | 9 210 | 9.7 | 18 776 |
| and support | | | | 099 | | | |
--------------------------------------------------------------------------------
| Consulting | 5 515 | 5 098 | 8.2 | 10 | 10 280 | 2.5 | 20 106 |
| and services | | | | 536 | | | |
--------------------------------------------------------------------------------
| SaaS | 291 | | | 541 | | | |
--------------------------------------------------------------------------------
| Other | 678 | 620 | 9.4 | 1 021 | 961 | 6.2 | 1 698 |
| operations | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 17 776 | 14 | 21.3 | 34 | 30 083 | 15.7 | 59 954 |
| | | 651 | | 814 | | | |
--------------------------------------------------------------------------------
Geographical division of net sales by the location of customer
--------------------------------------------------------------------------------
| Net sales | 4-6/2 | 4-6/2 | Change | 1-6/20 | 1-6/20 | Change, | 1-12/20 |
| (EUR | 007 | 006 | , % | 07 | 06 | % | 06 |
| thousand) | | | | | | | |
--------------------------------------------------------------------------------
| Finland | 9 827 | 8 211 | 19.7 | 19 187 | 17 386 | 10.4 | 32 557 |
--------------------------------------------------------------------------------
| Scandinavia | 3 614 | 3 910 | -7.6 | 7 543 | 7 111 | 6.1 | 14 129 |
--------------------------------------------------------------------------------
| Europe | 3 161 | 2 105 | 50.2 | 5 992 | 4 666 | 28.4 | 9 421 |
--------------------------------------------------------------------------------
| Other areas | 1 174 | 425 | 176.5 | 2 092 | 920 | 127.3 | 3 848 |
--------------------------------------------------------------------------------
| Group total | 17 | 14 | 21.3 | 34 814 | 30 083 | 15.7 | 59 954 |
| | 776 | 651 | | | | | |
--------------------------------------------------------------------------------
GROUP KEY INDICATORS
--------------------------------------------------------------------------------
| EUR thousand | 1-6/2007 | 1-6/2006 | 1-12/2006 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Net sales | 34 814 | 30 083 | 59 954 |
--------------------------------------------------------------------------------
| Growth of net sales, % | 15.7% | 50.3% | 43.9% |
--------------------------------------------------------------------------------
| Operating profit | 4 182 | 3 776 | 8 078 |
--------------------------------------------------------------------------------
| Growth of operating profit, % | 10.7% | 168.1% | 123.7% |
--------------------------------------------------------------------------------
| % of net sales | 12.0% | 12.6% | 13.5% |
--------------------------------------------------------------------------------
| Profit before tax | 4 299 | 3 894 | 8 287 |
--------------------------------------------------------------------------------
| % of net sales | 12.3% | 12.9% | 13.8% |
--------------------------------------------------------------------------------
| Profit for the period | 2 468 | 2 795 | 4 986 |
--------------------------------------------------------------------------------
| % of net sales | 7.1% | 9.3% | 8.3% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Return on equity, % | 11.0% | 17.8% | 15.1% |
--------------------------------------------------------------------------------
| Return on investment, % | 18.9% | 24.3% | 24.7% |
--------------------------------------------------------------------------------
| Interest bearing liabilities | 552 | 990 | 758 |
--------------------------------------------------------------------------------
| Cash and liquid assets *) | 14 683 | 11 312 | 8 975 |
--------------------------------------------------------------------------------
| Gearing, % | -31.0% | -24.8% | -18.4% |
--------------------------------------------------------------------------------
| Equity ratio, % | 71.6% | 71.1% | 77.5% |
--------------------------------------------------------------------------------
| Total assets | 63 593 | 58 655 | 57 558 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Gross investments **) | 1 649 | 23 501 | 25 315 |
--------------------------------------------------------------------------------
| % of net sales | 4.7% | 78.1% | 42.2% |
--------------------------------------------------------------------------------
| Capital expenditure | 368 | 450 | 597 |
--------------------------------------------------------------------------------
| % of net sales | 1.1% | 1.5% | 1.0% |
--------------------------------------------------------------------------------
| Research and development costs | 6 344 | 5 445 | 10 925 |
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| % of net sales | 18.2% | 18.1% | 18.2% |
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| R&D personnel at end of period | 140 | 136 | 138 |
--------------------------------------------------------------------------------
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| Personnel average for period | 541 | 509 | 513 |
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| Personnel at end of period | 559 | 507 | 528 |
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| Growth of personnel, % | 10.3% | 38.5% | 33.7% |
--------------------------------------------------------------------------------
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| Earnings per share, EUR | 0.22 | 0.26 | 0.45 |
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| Earnings per share, EUR (diluted) | 0.22 | 0.25 | 0.44 |
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| Equity per share, EUR | 3.97 | 3.67 | 3.88 |
--------------------------------------------------------------------------------
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| Average share number: | | | |
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| - undiluted | 11 468 124 | 10 889 344 | 11 172 612 |
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| - diluted | 11 468 124 | 10 986 222 | 11 221 052 |
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*) Includes cash, cash equivalents and financial assets at fair value through
profit or loss
**) Includes capitalized R&D costs and acquisitions
MAJOR SHAREHOLDERS
--------------------------------------------------------------------------------
| | June 30, 2007 | Shares and | votes |
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| | | Number | % |
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| 1. | Sihvo, Ilkka | 1 065 800 | 9.3 |
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| 2. | Vaajoensuu, Hannu (incl. a controlled | 1 045 800 | 9.1 |
| | company and children under guardianship) | | |
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| 3. | Eräkangas, Kirsi (incl. children under | 1 031 800 | 9.0 |
| | guardianship) | | |
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| 4. | Perttunen, Sakari | 830 400 | 7.2 |
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| 5. | Pöllänen, Antti (incl. children under | 800 900 | 7.0 |
| | guardianship) | | |
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| 6. | Nordea Nordic Small Cap Fund | 465 997 | 4.1 |
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| 7. | Ahonen, Asko | 318 822 | 2.8 |
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| 8. | Veritas Pension Insurance Company | 216 000 | 1.9 |
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| 9. | Perttunen, Meimi | 215 400 | 1.9 |
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| 10. | Royal Skandia Life Assurance | 210 000 | 1.8 |
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| 11. | Fondita Nordic Small Cap Fund | 190 000 | 1.7 |
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| 12. | Henki-Sampo Insurance Company | 155 000 | 1.4 |
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| 13. | Fides Finland Focus Fund | 125 182 | 1.1 |
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| 14. | OP Finland Small Firm Fund | 106 000 | 0.9 |
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| 15. | Veritas Life Insurance Company Ltd | 100 000 | 0.9 |
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| 16. | Sarvala, Vesa | 95 241 | 0.8 |
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| 17. | Kaleva Mutual Insurance Company | 93 800 | 0.8 |
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| 18. | Nordea Fennia Plus Fund | 86 000 | 0.7 |
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| 19. | Luoto, Matti | 81 950 | 0.7 |
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| 20. | Fondita Nordic Micro Cap Fund | 60 000 | 0.5 |
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| | 20 largest shareholders total | 7 294 092 | 63.6 |
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| | Nominee-registered shares total | 1 655 861 | 14.4 |
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| | Others | 2 518 171 | 22.0 |
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| | Total | 11 468 124 | 100 |
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