Aspiro AB (publ): Interim Report, January-September 2001

Aspiro AB (publ) Interim report January-September 2001 - Net sales amounted to SEK 36.2 m (SEK 7.6 m). - The result after financial items amounted to SEK -132.5 m (SEK -145.9 m). The result has been affected by a one-off write-down of SEK 16.4 m (SEK 0 m) and restructuring costs of SEK 22.8 m (SEK 19.3 m). - The company's liquid funds amounted to SEK 47.3 m (SEK 213.5 m) at the end of the period. - During the period, Aspiro signed 69 (9) new sales agreements with customers in Europe and the USA, including 27 during the third quarter period. After the end of the period, Aspiro has signed a further six agreements. - Aspiro's portfolio of services contained 178 (23) different products and concepts at the end of the period. - During the third quarter Aspiro implemented a series of measures aimed at securing annual cost savings of SEK 50-60 m. The company's business activities have also been reorganized to bring them in line with Aspiro's goal of becoming one of Europe's leading software developers for mobile services. - Negotiations are in progress with other parties regarding a merger aimed at achieving a consolidation in the sector. Net sales and result Group net sales for the nine-month period amounted to SEK 36,2 m (SEK 7.6 m). Third-quarter net sales amounted to SEK 11.0 m (SEK 3.3 m). Of the period's total net sales, 41 percent was attributable to sales in Sweden, 55 percent in Europe, and 4 percent in the rest of the world. Net sales for 2000 as a whole amounted to SEK 15.2 m. The result after net financial items amounted to SEK -132.5 m (SEK - 145.9 m). The period's result has been affected by a one-off write-down of goodwill totaling SEK 16.4 m (SEK 0 m) and restructuring costs of SEK 22.8 m (SEK 19.3 m). The operational result improved by approximately SEK 30 m. The third-quarter result after net financial items amounted to SEK -48.0 m (SEK -63.2 m), including restructuring costs of SEK 25.7 m (SEK 19.3 m). The difference in restructuring costs between the nine- month period and the third quarter is attributable to the first quarter's dissolvation of SEK 2.9 m in previous provisions. Earnings per share for the nine-month period amounted to SEK -2.09 (SEK -2.57). Third-quarter earnings per share amounted to SEK -0.74 (SEK - 1.11). Outstanding option rights have no dilutive effect. Parent Company The Parent Company's net sales over the nine-month period amounted to SEK 31.9 m (SEK 2.7 m). The result after financial items amounted to SEK -127.7 m (SEK -118.3 m). The result was affected by one-off write-downs of participations in subsidiary companies amounting to SEK 15.9 m (SEK 9.1 m) and restructuring costs of SEK 10.4 m (SEK 14.8 m). Investments The Group's total investments during the period amounted to SEK 9.5 m (SEK 107.8 m, of which SEK 90.9 was goodwill), including investments in tangible assets of SEK 5.6 m (SEK 13.9 m). Of total investments, SEK 4.6 m (SEK 11.5 m) was attributable to finance leasing agreements. Liquidity Liquid assets at the end of the period amounted to SEK 47.3 m (SEK 213.5 m). Aspiro's stock Aspiro's stock was listed on the O-list of the Stockholm Exchange on June 6, 2001. The number of outstanding shares at the end of the period amounted to 50,023,843. If all outstanding option rights are exercised to subscribe for shares, the number of additional shares will amount to 3,447,734, which would create a total of 53,471,577 shares and potential shares. The lowest redemption price for outstanding options is SEK 1.80. New focus and restructuring of business activities Aspiro's goal is to become one of Europe's leading software developers and providers in the mobile services sector. To achieve this business activities have been focused and organized into five business areas, each responsible for its own sales, development, deliveries and result. Research and development has mainly been concentrated in the business area Technology/Platform. The company's business activities are now centered in Malmö and Stockholm. Aspiro's personnel have been reduced from 125 to 67 employees as a result of the cost-savings program implemented during the third quarter. The market Usage of advanced mobile services has not grown at the pace originally expected by the market and telecom industries. Mobile operators are currently taking a longer time before making their final purchasing decisions. Consumer services for mobile operators and other customer groups The current trend indicates an increase in the usage of SMS-based services. Aspiro today offers SMS applications both for operators and branding campaigns as well as applications adapted for improving customer relations. Media and advertising agencies have been quick to express interest in the latter. Aspiro offers 82 different SMS-based services. The most popular of these are Ring Tones and Pick-Up Lines. Aspiro's services function seamlessly with GPRS technology. This means Aspiro can retain its position as a provider of online services to mobile phone users who upgrade from GSM to GPRS terminals and that the company can supply such services to operators as and when they begin launching their GPRS networks. The trend among operators of using an increasingly smaller number of suppliers favors Aspiro whose strategy is to sell its products through large global telecom companies. Aspiro strengthens its position among larger operators by selling products via global collaboration partners such as Ericsson and Nokia. SMS traffic Aspiro broadened its customer base for SMS traffic in the third quarter. In addition to Internet portals, which have represented the company's main customer group, Aspiro sells SMS traffic to other types of companies such as Internet Service Providers (ISPs) and media and advertising agencies. Mobile services for companies Aspiro offers two systems to companies with staff working in the field. Aspiro has noted a growing interest for these products in the third quarter. Platform and technology Aspiro's platform has aroused interest, particularly among operators and infrastructure providers. During the summer and fall, Aspiro has received inquires that are expected to result in sales. Sales Aspiro has signed 69 sales agreements during 2001. Of this total, 27 were signed in the third quarter. The majority of Aspiro's sales agreements are based on revenue sharing. - SMS traffic dominated Aspiro's sales during the first nine months of the year. Aspiro processed 66 million SMS messages in the period. Aspiro signed 48 new agreements in Europe involving SMS traffic during the year's nine-month period, including 23 in the third quarter. - Among Aspiro's extensive range of consumer services, SMS-based services have been the most popular. - Aspiro has sold corporate services to six companies during the year's first nine months. These have been installed or are in the process of being installed at all six companies. Aspiro has signed retailer agreements in Norway and Spain. Negotiations are in progress with other retailers. - Aspiro has agreements with several mobile operators including Europolitan Vodafone, Microcell i5, Proximus Vodafone and Telia Danmark. During the third quarter, Aspiro has also delivered services to Telecom Italia (TIM), Meteor in Eire and Voicestream in the USA. - Aspiro has a distribution agreement with Ericsson wherein Ericsson markets and sells Aspiro's services. Several of Aspiro's applications have been integrated into Ericsson's WISETM and are currently marketed by Ericsson. Personnel and organization The cost saving program Aspiro implemented in the third quarter resulted in 58 staff leaving the company. The company has also begun leasing out surplus office space and substantially cutting back administration. Aspiro currently employs 67 staff. Aspiro today comprises five business areas. These are: - Community Services - SMS traffic to portals and companies - Consumer Services - Aspiro's 178 applications for mobile operators - Corporate Services - Fleet Management system for companies - Mobile TextPhone - Aspiro's product for the deaf, hearing- and speech- impaired - Technology - Aspiro's technical platform The average number of employees during the period was 132 (124). Future prospects Usage of SMS messaging continued to rise during the first nine months of this year. The number of SMS messages sent in the world from mobile phones and computers is expected to exceed 200 billion in 2001 (forecast: GSM World Association) compared to some 100 billion in 2000. This underlines and strengthens Aspiro's opportunities to increase both its sales of SMS traffic and SMS-related services. Many European mobile operators have put their GPRS networks into operation and now require mobile Internet services in order to increase network data traffic. Aspiro's product portfolio offers an opportunity to launch customer-tailored services quickly through collaboration partners such as Ericsson and Nokia. Mobile operators' platforms for mobile Internet are becoming increasingly important as the demand for new SMS, WAP and GPRS services begins to rise. Negotiations are in progress with other parties regarding a merger aimed at achieving a consolidation in the sector. Total proceeds from sales for 2001 as a whole are calculated to amount to a little under SEK 50 m. This is a downward adjustment of SEK 10 m from previously announced forecast. Auditor's comments I have reviewed this interim report on behalf of Aspiro AB (publ) and in doing so followed the recommendation issued by the Swedish Institute of Authorized Public Accountants (FAR). A review is considerably more limited in scope compared to an audit. I have found nothing to indicate that this interim report contravenes the laws of the Annual Accounts Act. Ingvar Ganestam Authorized public accountant, Ernst & Young Report schedule Year-end report 2001 February 5, 2002 Interim report January-March 2002 April 25, 2002 Annual report April 2002 Annual general meeting 2002 4 p.m. April 25, 2002 For further information about Aspiro, please contact: Lena Wittbjer, CEO, tel +46 40 630 03 00. E-mail: lena.wittbjer@aspiro.com, or info@aspiro.com. On the 14th of November at 8:00 am (CET), CEO Lena Wittbjer and CFO Stefan Lindquist will present the company and comment on the interim report at an open financial hearing. Venue: Operaterrassen in Stockholm. The financial hearing can also be attended via telephone on number: +44 (0)20 82 40 82 40 To begin immediately receiving news and press releases from Aspiro, simply register yourself as an e-mail subscriber on the company's website at www.aspiro.com under the heading "news". The CEO's regular letter to stockholders can be ordered by contacting investor-relations@aspiro.com. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/11/13/20011113BIT00760/bit0002.doc http://www.waymaker.net/bitonline/2001/11/13/20011113BIT00760/bit0002.pdf