NeoNet’s Year-End Report, 1 January – 31 December 2006

The Fourth Quarter in Summary
·Operating revenues increased by 45% to SEK 114.2 m (78.7).
·Operating earnings before depreciation and net financial items (EBITDA) increased by 195% to SEK 28.9 m (9.8).
·Earnings before tax were SEK 17.8 m (0.5).
·Earnings after tax were SEK 11.9 m (-1.5).
·Earnings per share before dilution were SEK 0.22 (-0.03).
·Underlying cash flow was strengthened and amounted to SEK 22.4 m (5.5).

The Year in Summary
·Operating revenues increased by 54% to SEK 397.1 m (258.0).
·Operating earnings before depreciation and net financial items (EBITDA) increased by 119% to SEK 90.0 m (41.0).
·Earnings before tax were SEK 50.5 m (6.2).
·Earnings after tax were SEK 34.4 m. The equivalent figure for last year was SEK 4.2 m, excluding the one-off effect of a deferred tax asset (26.8 incl. tax asset).
·Earnings per share before dilution were SEK 0.66. The equivalent figure for last year was SEK 0.08, excluding the one-off effect of a deferred tax asset (0.53 incl. tax asset).
·Underlying cash flow was SEK 63.9 m (23.1).
·The debenture loan of SEK 50.6 m was repaid in December. During the year there was an inflow of SEK 65.3 m in shareholders’ equity in connection with exercise of warrants for new shares.

Significant Events
·Handelsbanken Capital Markets has signed a NeoNet XG agreement for a full-service electronic direct market access solution.
·The Board of Directors intends to propose a dividend of SEK 0.40 per share.
·New long-term financial targets state that NeoNet will double revenues to SEK 800 m by latest 2010, with earnings before tax of at least SEK 200 m.

NeoNet in 2006
2006 was a very strong year for NeoNet – revenues increased and there was a positive trend in earnings. Direct market access continues to grow, and there was also a breakthrough for NeoNet XG, our license-based system and software services. A recent example is the agreement with Handelsbanken to deliver a full-service electronic direct market access solution. NeoNet XG builds on NeoNet’s strengths, creating new business opportunities and a stronger and more comprehensive offering.

During the year clients have continued to increase their trading via NeoNet. This increase is in line with the long-term trend for ever-increasing shares of clients’ trading to be effected via direct market access trading. We have succeeded in attracting several new active clients during the year. In addition, an increasing number of NeoNet’s clients have recognized the advantage of fast and secure trading on multiple stock exchanges through one player – NeoNet. The volume increase has been further boosted by favorable market conditions, with high trading volumes on the exchanges where NeoNet offers trading.

With its advanced trading platform and sound industry expertise, NeoNet occupies a commanding position within electronic securities trading. Based on employees’ innovative capabilities and dedication, our effective organization has enabled us to achieve strong growth and handle increased volumes at the same time as developing our offering.

The offering is based on a powerful trading platform providing fast and effective trading on the major stock exchanges. Clients can currently trade on 20 leading exchanges in Europe and North America, and the number of accessible exchanges is being expanded on an ongoing basis. The next step is to add trading on leading Asiatic stock exchanges, the Eurex derivatives exchange and the Warsaw Stock Exchange.

By combining our strength as a direct market access broker with our new system and software services, we have created a unique offering, providing clients with an efficient means of gathering all their national and international trading in one place.

The use of direct market access is expected to continue to increase, and the potential for growth is good. At the same time, efforts to increase efficiency have remained a high priority. This rationalization work safeguards our ability to deliver at competitive prices.

To summarize, the prospects for the coming years are good, with a strong and comprehensive offering for electronic trading on a growing market. It is against this background and the very strong development in 2006 that the Board of Directors has decided to set more aggressive targets for revenues to double and earnings to quadruple over the next four years.
For more information please contact:

Simon Nathanson
President and CEO of NeoNet
Tel. +46 8-454 15 51

About Us

Neonet offers professional market participants flexible, independent and transparent execution services based on advanced trading software solutions. Neonet’s services include a comprehensive execution management system, advanced trading algorithms, smart order routing, market data services and a trading desk operated by qualified execution specialists. Neonet does not engage in proprietary trading or any other financial activity that could result in a potential conflict of interest. Neonet serves clients in over 20 countries. Clients include banks, brokerage firms, institutional investors, hedge funds and asset managers. Neonet Securities is an Orc Group company. Orc Group is owned by Nordic Capital Fund VII. For more information, please visit:


Documents & Links