Aspiro AB (publ): Year-end Report 2001

Year-end report January-December 2001 · Company revenues totaled SEK 45.5 m (SEK 15.7), of which net sales accounted for SEK 43.9 m (SEK 15.2 m). · The result after financial items amounted to SEK -220.0 m (SEK -190.6 m), of which one-off write-downs in goodwill and restructuring costs accounted for SEK 100.9 m (SEK 20.7 m). · The company's liquid funds amounted to SEK 95.9 m (SEK 159.0 m) at the end of the period. A cash share issue totaling SEK 82.5 m was carried out in December. · During 2001, Aspiro signed 87 (16) new sales agreements with customers in Europe and the USA, including 18 (7) agreements in the fourth quarter. After the end of the period, Aspiro signed a further three agreements. · Aspiro's portfolio of services contained 178 (106) different products and concepts at the end of the period. The acquisition of application company, Mgage Systems AB, broadens Aspiro's range of consumer applications and strengthens the company's customer base with the inclusion of D2 Vodafone. · Aspiro's stock was listed on the O-List of the Stockholm Exchange in June. · A restructuring program implemented in the third quarter resulted in annual cost savings of SEK 55 m. The number of employees was reduced during the year from 138 to 68. · After the end of the period, Ericsson has secured a number of test trials of Aspiro's MMS services with European and Asian operators.The distribution agreement with Ericsson has also resulted in a sales agreement with a major European operator. Net sales and result Group revenues in 2001 totaled SEK 45.5 m (SEK 15.7 m), of which net sales amounted to SEK 43.9 m (SEK 15.2 m) - a tripling of revenues compared with last year. The previously announced sales forecast estimated annual revenues of not quite SEK 50 m. Sales in the fourth quarter totaled SEK 8.7 m (SEK 7.6 m). Of the year's total net sales, 37 percent were attributable to sales in Sweden, 57 percent in Europe, and 6 percent in the rest of the world. This represents a far greater geographical distribution than 2000. The result after net financial items amounted to SEK -220.0 m (SEK - 190.6 m). The period's result has been affected by a one-off write-down in goodwill totaling SEK 74.6 m (SEK 0 m) and restructuring costs of SEK 26.3 m (SEK 20.7 m). The fourth-quarter result after net financial items amounted to SEK -87.5 m (SEK -44.6 m), including a one-off goodwill write-down of SEK 58.2 m (SEK 0 m) and restructuring costs of SEK 3.5 m (SEK 1.4 m). In 2001, Aspiro focused aggressively on selling SMS traffic to Internet portals. This strategy was successful during the first few months of the year. Thereafter, however, many customers began to be affected by falling advertising revenues and various financial problems. In the second half of the year, Aspiro broadened its customer base to include Internet Service Providers as well as media and advertising agencies. Earnings per share for the year amounted to SEK -3.50 (SEK -3.15). Fourth-quarter earnings per share totaled SEK -1.35 (SEK -0.60). Outstanding option rights have not diluted Aspiro's stock. Parent Company The revenues of the Parent Company totaled SEK 40.9 m (SEK 13,9 m), of which net sales amounted to SEK 39.0 m (SEK 13.5 m). The result after financial items was SEK -215.6 m (SEK -185.8 m). The result was affected by one-off write-downs of participations in subsidiary companies totaling SEK 71.9 m (SEK 9.1 m) and restructuring costs of SEK 14.3 m (SEK 16.0 m). Investments The Group's total investments during the year amounted to SEK 18.9 m (SEK 113.3 m), of which SEK 9.8 m (SEK 90.9 m) was Group goodwill and SEK 5.1 m (SEK 15.4 m) tangible assets. Of total investments, SEK 4.6 m (SEK 12.3 m) was attributable to finance leasing agreements. Liquidity and financing Liquid assets at the end of the period amounted to SEK 95.9 m (SEK159.0 m). In order to secure Aspiro's capital requirements, a cash share issue totaling SEK 82.5 m, or 30 million shares, was carried out directed at institutional investors. At the same time, a non-cash issue was also carried out totaling 5.8 million shares in connection with the acquisition of Mgage Systems AB. 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 85,823,843. If all outstanding option rights are exercised to subscribe for shares, the number of additional shares will amount to 1,673,516, which would create a total of 87,497,359 shares and potential shares. The lowest subscription price for outstanding options is SEK 26.90. The market Aspiro's goal is to become one of Europe's leading independent providers of mobile applications. In 2001, the company strengthened its market position by expanding its customer base and delivering mobile services to eight of Europe's leading mobile operators. Aspiro also entered a distribution agreement with Ericsson aimed at consolidating further Aspiro's market presence as well as facilitate operators' contacts with suppliers. The demand from mobile operators during the year was principally for SMS applications. At the end of 2001, Aspiro offered 82 different SMS-based services, of which Ring Tones and Pick-up-Lines were the most popular. Other companies expressed great interest in Aspiro's SMS applications for use in different branding campaigns. Moreover, the relationship between mobile services and strong brands outside the domain of operators grew more distinct. Today's capacity in existing mobile networks is better suited to handle data transmission now that some fifty GSM networks around the world have been upgraded to GPRS. Many mobile operators also upgraded their range of mobile services in 2001. The weak world economy combined with most mobile operators current financial position resulted in fewer new investments being made and a cautious approach to marketing mobile portals. At the end of 2001 mobile phones and mobile services in color were launched that lived up to the image of the mobile Internet which the sector had previously visualized. New sales of Aspiro's systems to companies with personnel in the field, Transport & Logistics and the recently launched Field Service, were delayed during the latter part of 2001. Sales Aspiro signed 87 sales agreements in 2001 including 18 under in the fourth quarter. · Processing of SMS traffic dominated Aspiro's total sales in 2001. Over the period Aspiro processed 86 million SMS messages. Aspiro also signed 62 new agreements involving SMS traffic including 14 in the fourth quarter. · In 2001, Aspiro signed agreements involving mobile consumer services with several mobile operators including Telecom Italia (TIM), Europolitan Vodafone (Sweden), Voicestream (USA), Microcell i5 (Canada), Proximus Vodafone (Belgium), Meteor (Eire) and two further major European operators. Aspiro's client base also includes D2 Vodafone (Germany) and Telia Danmark. · Ericsson marketed Aspiro's mobile consumer services during the year. In the fourth quarter, this distribution arrangement resulted in Aspiro signing a sales agreement with a major European operator involving four mobile applications. · Of Aspiro's total annual revenues, approximately one third came from Internet portals while mobile operators accounted for almost a quarter. · Aspiro's Transport & Logistics system has been installed at one European transport company. Use of the system during the initial period has been lower than originally planned. Subsequently, this has affected projected revenues. At present, retailers market Corporate Services. Aspiro is currently in negotiations with a number of other retailers. Personnel and organization The average number of employees during the year was 121. At the end of 2001, the company employed 68 staff in 64 full-time positions. In the third quarter of 2001, Aspiro implemented a program of measures designed to achieve annual savings of around SEK 55 m. Fifty-eight employees left the company. In addition, Aspiro business activities have become more focused and reorganized into five business areas, each with its own responsibility for sales, development, deliveries and results. Aspiro's business areas: - Consumer Services - Aspiro's mobile consumer applications for mobile operators. - Technology - Aspiro's own developed technical platform and research and development. - Community Services - SMS traffic to portals and companies - Corporate Services - Cost-reducing systems for companies with large numbers of personnel working in the field. - Mobile TextPhone - Mobile telephony service for the deaf, hearing- and speech-impaired. In line with Aspiro's objective of focusing its business activities, Aspiro plans to sell this business area. Mgage Systems AB was acquired in December with the goal of strengthening Aspiro's position as a provider of mobile services in Europe. Mgage develops and sells chat applications and games to mobile operators. Founded in early 2000, the Stockholm-based company's largest current customer is German D2 Vodafone. Prospects for 2002 The availability of terminals and introduction of MMS (which allow the sending of multimedia messages such as text, graphics and images) coupled with mobile services strongly linked to well-known brands beyond the sphere of operators' control means that Aspiro believes we will see improved market conditions that will increase consumer use of advanced mobile services in the latter half of 2002. Revenues from mobile services among Europe's operators accounted for an average of twelve percent of total revenues during 2001(source: Yankee Group). This figure is expected to rise steeply in the next few years. Mobile operators have started to intensify their marketing of mobile Internet services. Combined with growing sales of new color-screen phones with MMS capabilities and consumer-friendly services, mobile Internet usage should increase towards the end of 2002. To strengthen Aspiro's position as a provider of mobile services, the company intends to take an active part in the consolidation process currently taking place in the mobile sector. At the same time, Aspiro will continue to refine its business activities. Events after the end of the period Through its collaboration with Ericsson, Aspiro has recently received a number of orders for its MMS services from European and Asian operators. Three new sales agreements involving SMS traffic have been signed as of January 31. Dividend The board of directors does not propose paying a dividend for the period. Annual report and annual general meeting The annual report for 2001 will be sent to stockholders in the beginning of April. After which it will be publicly available at Aspiro's head office and at www.aspiro.com. The annual general meeting of stockholders of Aspiro will take place at 4.00 p.m., April 25 2002, at the Scandic Hotel Sergel Plaza, Stockholm. Report schedule for 2002 Interim report January -March 2002 April 25, 2002 Interim report January-June 2002 August 23, 2002 Interim report January-September 2002 October 29, 2002 Auditor's comments I have reviewed this year-end 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 year-end report contravenes the laws of the Annual Accounts Act. Ingvar Ganestam Authorized public accountant Ernst & Young Malmö February 5, 2002 Lena Wittbjer CEO Aspiro AB (publ) Corporate identity number: 556519-9998 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/05/20020205BIT00690/bit0001.doc The Full Year-End Report http://www.waymaker.net/bitonline/2002/02/05/20020205BIT00690/bit0001.pdf The Full Year-End Report