SYSOPEN PLC?S INTERIM REPORT FOR Q1/ 200

STOCK EXCHANGE RELEASE 8 May 2003 9:00 a.m.

SYSOPEN PLC’S INTERIM REPORT FOR Q1/ 2003

- Business profitability was higher than in Q1/2002, being
still among the highest within the IT sector.
- Consolidated turnover came to EUR 7.0 million, down 8 per
cent on a year earlier.
- Earnings before interest, taxes and goodwill amortisation
(EBITA) accounted for 12.1 per cent of turnover, or EUR 0.8
million, up EUR 0.2 million.
- Profit before extraordinary items and taxes came to EUR
0.7 million, up EUR 1.2 million.
- Earnings per share were EUR 0.06, up EUR 0.13.
- The period-end number of employees totalled 305, showing a
staff reduction of 8 per cent.
- The sluggish economy and the persistently mild demand for
IT services will slightly add to the degree of uncertainty
in the prospects for SysOpen’s near-term profits and demand
for its products and services.

MARKETS AND SYSOPEN’S BUSINESS

The worldwide economic and political situation remained
uncertain during the report period, the corporate sector
continuing to restrain its investments towards the end of
the period, with increasingly weaker demand for IT services.
In particular, this downward trend was manifested in the
software solutions sector.

SysOpen offers its customers software and expert services
that enhance their electronic business operations. Its
business consists of enterprise application solutions and
software and the supporting consulting and technology
development services.

During the report period, SysOpen strengthened its position
as an integrator of high-value-added electronic business
solutions for large and mid-sized customers. With healthy
profitability, demand remained steady for enterprise
application solutions and consulting services in the
Helsinki Metropolitan Area, whereas an increasingly
uncertain market eroded demand for software solutions and
products and services provided by some of SysOpen’s regional
units in Finland. Despite the weaker market conditions and
the fall in turnover, SysOpen succeeded in markedly
improving its profitability over the previous year.

The report period saw new customers and contracts, including
Fortum Corporation, Patria, the Central Chamber of Commerce
and Telia Mobile Finland AB. For example, SysOpen concluded
a contract for implementing the Alli membership register
system for the Central Chamber of Commerce during the autumn
of 2003, demonstrating the system’s excellent suitability
for a wide variety of associations and organisations. The
report period also saw agreements on a number of further
development projects with existing customers.

REPORTED TURNOVER YEAR-ON-YEAR

Consolidated turnover for the period reached EUR 7.0 million
(EUR 7.6 million in Q1/2002), showing a fall of 8 per cent
over the previous year, due mainly to the sale of an 85 per
cent holding in its Accessibility Software business (CallCom
Oy) in early 2003 and other divestments of unprofitable
businesses carried out last year. This was also partly due
to the postponement of customer project launches caused by
the general economic uncertainty.

International operations accounted for 3.0 per cent (3.5 per
cent).

The enterprise application solutions business units based in
the Helsinki Metropolitan Area either slightly improved
their year-on-year turnover, or maintained it at almost the
previous year’s level, whereas the turnover generated by the
regional units and software solutions was lower than last
year’s.

Turnover by business area in Q1/2003:

Enterprise Application Solutions	93.6%
Software Solutions			6.4%
                                                            
Q1/2003 TURNOVER COMPARED WITH Q4/2002 TURNOVER

Consolidated turnover of EUR 7.7 million for Q4/2002 was 9
per cent higher than that reported for Q1/2003, due not only
to seasonal fluctuations, but also to the sale of the
Accessibility Software business and subdued market demand
for IT services in general.

REPORTED OPERATING PROFIT AND FINANCIAL 
PERFORMANCE YEAR-ON-YEAR

During the past twelve months, SysOpen has systematically
focused on its core businesses, i.e. high value-added
enterprise application solutions and consulting services,
resulting in among-the-highest business profitability within
the IT sector.

Consolidated earnings before interest, taxes and goodwill
amortisation (EBITA) came to EUR 0.8 million (EUR 0.6
million, up 39 per cent), accounting for 12.1 per cent (8.0
per cent) of reported consolidated turnover (8.0 per cent).
This substantial improvement in operating profit was due not
only to the focus of operations, but also cost-savings
achieved through more efficient operations.

Profit before extraordinary items and taxes totalled EUR 0.7
million (a loss of EUR 0.5 million) and earnings per share
came to EUR 0.06 (EUR –0.07). In the previous year, the
profit was burdened by non-recurring write-downs related to
a loss-making subsidiary and associated companies’ share
capital, and loans in terms of equity and receivables.

Q1/2003 OPERATING PROFIT AND FINANCIAL 
PERFORMANCE COMPARED WITH Q4/2002

Q4/2002 earnings of EUR 1.1 million before interest, taxes
and goodwill amortisation (EBITA) were 24 per cent higher
than those reported for Q1/2003, due to the lower turnover.

Reported EBITA accounted for 12.1 per cent of turnover (14.5
per cent in Q4/2002).

FINANCING AND CAPITAL EXPENDITURE

With a positive cashflow, the Group’s financial position
remained at a healthy level throughout the report period.

The balance sheet total came to EUR 14.9 million (EUR 18.2
million) and equity ratio was 73 per cent (62 per cent). The
ratio of net liabilities to shareholders’ equity, or net
gearing, was –56 per cent (–57 per cent) while liquid assets
totalled EUR 5.9 million (EUR 6.3 million). Based on the
AGM’s decision, the EUR 3.5 million dividends became payable
to shareholders on 31 March 2003, which has been taken into
account in the company’s key figures and ratios for the
report period (whereas 2001’s dividends of EUR 2.0 million
did not become payable until the second quarter of 2002.).

The Group’s gross capital expenditure amounted to EUR 20,000
(EUR 150,000). The Group continued to spend on service
development and in-house software component engineering.
These development costs were expensed as incurred.

ROI AND ROE

Reported return on investment (ROI) was 24 per cent (-17 per
cent), while return on equity (ROE) reached 20 per cent (–19
per cent).

HUMAN RESOURCES AND ADMINISTRATION

The period-end number of employees totalled 305 (331), down
8 per cent year-on-year, while the average number of
employees for the period totalled 306 (348), down 12 per
cent. The reduction in staff from Q4/2002 (323) to Q1/2003
was due mainly to the outsourcing of SysOpen’s IT support
functions and the sale of the Accessibility Software
business.

Reported employee turnover came to 3.9 per cent (2.9 per
cent).

Employees by function:

Enterprise Application Solutions	72%
Software Solutions			9%
Administration and management	15%
International operations		4%

The employment of Kari Karvinen and Jorma Kylätie at SysOpen
terminated on 20 March 2003, at the Annual General Meeting,
the latter continuing to chair the Board of Directors on a
full-time basis and the former continuing as a Board member
in a position of trust.

GROUP STRUCTURE AND ORGANISATION

In January 2003, SysOpen Plc sold 85 per cent of its
majority holding in CallCom Oy, a SysOpen subsidiary
specialising in accessibility software for PABXs, to the
employees and management (5) of the company. As a result,
SysOpen now holds 10 per cent of the company’s shares, but,
as specified in the terms of the sale, it will sell the
remaining holding to the buyers by the end of 2004.

SysOpen Plc is the SysOpen Group’s parent company running
the following three subsidiaries at the end of the report
period, engaged in business operations: SysOpen Object Team
Oy (with a 90 per cent holding on 31 March), SysOpen Limited
(100 per cent) and SysOpen UK Limited (51 per cent).

Based on its modernised Group structure, SysOpen aims to
operate on an increasingly customer-driven basis and target
its marketing and sales efforts on a customer industry
basis. The SysOpen Group’s business units are as follows, as
of 2003: Commerce and Services, Telecoms and Industry,
Financing, Organisations and Business Development, Domestic
Regions and SysOpen Object Team Oy.

ANNUAL GENERAL MEETING

SysOpen Plc’s Annual General Meeting (AGM) convened on 20
March 2003.

The AGM adopted the financial statements for 2002 and
discharged Board members and the Managing Director from
liability. Pursuant to the Board’s proposal, the AGM
confirmed the profit distribution for 2002, according to
which a per-share dividend of EUR 0.38, or a total of EUR
3,519,907.32, was distributed to shareholders (excluding
treasury shares held by the company). On 1 April 2003, the
dividend was paid to shareholders registered as the
company’s shareholders on the record date of 25 March 2003.

The AGM approved the following Board proposals:

- The AGM decided on issuing new 2003A–2003D stock options.
- The AGM authorised the Board to decide to issue one or
several convertible bonds, issue stock options and/or
increase the share capital through one or several rights
issues. The Board of Directors has not exercised this
authorisation.
- The AGM authorised the Board to buy back own shares. The
Board has not exercised this authorisation.
- The AGM authorised the Board to dispose of the company’s
own shares (treasury shares). The Board has not exercised
this authorisation.

The AGM decided that Board members be entitled to a monthly
emolument of EUR 1,500 and the Chairman a monthly emolument
of EUR 6,500 in such a way, however, that if the member is
employed by the company on a permanent basis, (s)he is not
entitled to a separate Board emolument during his/her
employment. It also decided that Risto Linturi and Timo
Tiihonen, members of the Board of Directors who are entitled
to stock options under the terms and conditions of the stock
option scheme, be each granted 6,000 2003B stock options
based on the new stock option scheme.

The AGM re-elected Kari Karvinen, Jorma Kylätie, Risto
Linturi, Matti Savolainen and Timo Tiihonen as Board
members. At its meeting held after the AGM, the Board of
Directors re-elected Kari Karvinen as Board Chairman on a
full-time basis and Matti Savolainen as Vice Chairman.

SHARE CAPITAL AND SHARES

The nominal share value was EUR 0.1, the number of shares
totalling 9,362,914. At the end of the period, SysOpen had a
total of 100,000 treasury shares.

The Group´s shares are quoted on the Main List of the
Helsinki Exchanges under the telecommunications and
electronics business sector. One trading lot includes 50
shares and the trading code is SYS1V. The lowest reported
share quotation was EUR 2.95 and the highest EUR 3.79. The
Group’s share closed at EUR 2.95. The trade weighted average
amounted to EUR 3.44. The Group’s market capitalisation
totalled EUR 27,620,596 at the end of the period. SysOpen
reported a total of 2,879 shareholders on 16 April 2003.

STOCK-OPTION SCHEMES

A total of 369,000 stock options have been issued in
accordance with SysOpen Plc’s stock-option scheme for
1999–2004, all of which have been exercised. The share
subscription period for all warrants will expire on 31
October 2004. The share subscription price for A, B, C and D
warrants is EUR 6.40, EUR 9.30, EUR 6.55 and EUR 4.43 per
share, respectively. On 31 March 2003, SysOpen Partners Oy,
the Group´s wholly owned subsidiary, held a total of 57,017
stock options, in accordance with the stock-option scheme
for 1999–2004.

A total of 400,000 stock options have been issued in
accordance with SysOpen Plc’s stock-option scheme for
2000–2005, all of which have been exercised. The share
subscription period for all warrants will expire on 31 May
2005 and the share subscription price for E warrants is set
at EUR 8.30 per share, for F warrants at EUR 5.36 per share
and for G warrants at EUR 3.28. On 31 March 2003, SysOpen
Partners Oy, the Group´s wholly owned subsidiary, held a
total of 59,590 stock options, in accordance with the stock-
option scheme for 2000–2005.

Within the framework of the new stock option scheme for
2003, SysOpen Plc’s Board of Directors has offered stock
options to the holders of 1999 and 2000 stock options who
are still employed by SysOpen Plc or still sit on SysOpen
Plc’s Board. These new stock options were granted to option
holders in exchange for the 1999 and 2000 stock options in a
proportion determined by the Board of Directors and the
majority of those entitled to the exchange of options have
accepted the offer. This offer required that the option
holder swap all of his/her stock options, based on the 1999
and 2000 stock option schemes, for the 2003A and 2003B stock
options now issued. As a result of the swap, the number of
stock options held by option holders other than SysOpen will
substantially decrease, leading to a major decline in the
total dilution of SysOpen’s stock option schemes.

EVENTS AFTER Q1/2003

SysOpen Plc has taken up its right of option included in a
contract concluded in the autumn of 2001 by increasing its
holding in SysOpen UK Limited, a subsidiary, from 51 per
cent to 83.11 per cent.

NEAR-TERM PROSPECTS

General economic uncertainty and the subdued demand for the
products and services provided by several of SysOpen’s
business units have lowered SysOpen’s expectations for near-
term demand for its IT services and products. While a number
of industries and customers are undergoing a business
restructuring process, the uncertain economic environment
and market situation will protract investment decisions and
restrain business growth.

SysOpen maintained its position among its customers in
relation to other industry incumbents, while attracting new
customers with major growth potential. We expect Enterprise
Application Solutions to remain profitable, despite
increasing price pressures, and Software Solutions to show
growing delivery volumes, both at home and abroad, towards
the end of the year. Demand for consulting and technology
development services will remain steady, especially in
relation to object-based technology and IT architecture
projects.

Cost control will remain high on the company’s agenda, while
focusing on strengthening profitable and expanding business
areas in its strategy implementation. SysOpen will be ready
to respond quickly to any market downbeat.

According to our forecast, second-quarter demand for
SysOpen’s services and products will be slightly lower than
in the first quarter. We estimate that consolidated earnings
before interest, taxes and goodwill amortisation for Q1 and
Q2/2003 will remain at the previous year’s level (EBITA 10
per cent).

SysOpen’s target for 2003 as a whole is to improve its year-
on-year turnover and profitability, although, in the face of
the general deterioration in the markets (and excluding
company acquisitions), this will require that the economy
turn rapidly for the better, providing scope for the launch
of IT investments. Strategic fit and the promotion of
factors critical to shareholder value will be given a
special emphasis when it comes to potential company
acquisitions and alliances.

BRIEFING

SysOpen will hold a briefing on its Interim Report for
Q1/2003 for analysts and the press at the World Trade
Centre, in the Marskinsali (on the 2nd floor),
Aleksanterinkatu 17, FIN–00100 Helsinki, starting at 12:00
p.m. on 8 May 2003. All are welcome.

The Q1+Q2/2003 Interim Report will be released on Thursday,
7 August 2003.



Helsinki, 8 May 2003

Sysopen Plc

Board of Directors



FOR FURTHER INFORMATION, PLEASE CONTACT

Arto Sahla, Managing Director
Tel. +358 424 2020 339, gsm +358 400 442 986, email:
arto.sahla@sysopen.fi

The Interim Report and the related slide show will also be
presented to Investors on the Group´s website at
www.sysopen.fi from 1:00 p.m.


DISTRIBUTION
Helsinki Exchanges

Consolidated Income Statement for 1 January–31 March 2003,
EUR 1,000
                		1        	1 Jan.	1–31
EUR 1,000		Jan.–31  Jan.–31	Dec.
                            	March    March       2002
                             	2003     2002
                                                     
TURNOVER		6,991	7,635	28,997
Other operating income	57	59	166
Materials and services	–145 	–248	–902
Personnel expenses	–4,124	–4,615	–16,863
Depreciation and write                               
downs			–162	–191	–882
Other operating                                      
expenses		–1,769	–2,031	–7,278
EBITA                                                
 			848	609	3,237
Goodwill amortisation	–68	–88	–342
OPERATING PROFIT	780	521	2895
Financial income and	–47	–1,027	–699
expenses
Profit before                                        
extraordinary items and	733	-506	2,196
taxes
Direct taxes		–127 	–81	–284
Minority interest		–20	18	–26
PROFIT/LOSS FOR THE	586	–569	1,886
PERIOD

Consolidated Balance Sheet on 31 March 2003, EUR 1,000

ASSETS			31March  31March  31Dec.
			2003	2002	2002
FIXED AND OTHER NON-                                
CURRENT ASSETS
Development costs		0	112	37
                             
Intangible rights            	475	538	517
                                                    
Other non-current                                   
assets			130       	195       	147
Group goodwill               	552     	1 047	620
Intangible assets                                   
total			1,157   	1,892     	1,321
Tangible assets            	1,419     	1,854     	1,548
Long-term investments      	1,191     	1,198     	1,191
                                                    
INVENTORIES AND                                     
CURRENT ASSETS
                                                    
Current receivables        	5,273     6,976     5,205
Short-term investments     	1,456     1,827     1,524
Cash and bank              	4,435     4,481     6,894
receivables
ASSETS TOTAL              	14,930    18,227    17,683

LIABILITIES AND         	31 March  31 March   31 Dec.
SHAREHOLDERS´ EQUITY        2003      2002      2002
TOTAL
SHAREHOLDERS´ EQUITY                                
Share capital                	936       	787       	936
Share issue                    	0       	149         0
Issue premium fund         	7,091     	7,092     	7,091
Retained earnings		1,797     	3,430     	3,430
Profit/loss for the 		586      	-569     	1,886
period
Translation                   	11                  	11
difference,
unrestricted
shareholders’ equity
SHAREHOLDERS´ EQUITY	10,421    10,890    13,355
TOTAL
MINORITY INTEREST 	178       	142       	192
LIABILITIES                                         
Short-term liabilities	4,331     	7,195     	4,136
LIABILITIES AND		14,930    	18,227    	17,683
SHAREHOLDERS´ EQUITY
TOTAL

Consolidated cashflow statement for 1 January–31 March 2003,
incl. comparable data, EUR 1,000
			1 Jan.–31 1 Jan.–31  1 Jan.–31
                       		March 2003 March 2002 Dec. 2002
                                       
Cash flow from                	995     	1,108     	5,466
business operations
Cashflow from                  	–4      	–103      	–307
investments
Cashflow from                                        
financing:                                           
Dividends paid             	–3,516              	–2,038
Change in liabilities                                
Cashflow from                  	–3        	–2        	–7
financing total                                      
                           		–3,519	–2    	–2,045
Change in liquid		–2,527	1,003	3,114
assets
                                                     
Liquid assets at		8,418     	5,305 	5,305          
period-start                                    
Liquid assets at                              
period-end		5,890     	6,308   	8,418
Difference		–2,527   	1,003     	3,114

Group key figures and ratios (on a comparable basis)
                 	Q1/2003  Q1/2002  Q1–Q4/2002
Extent of                                 
business
                                          
Turnover 	          	6,991    	7,635   	28,997
- % of change,      	–8       	–2       	–6
year-on-year
Capital            	8,028    	8,028    	8,028
invested
Restricted         	8,028    	8,028    	8,028
capital
Gross capital        	20      	146      	477
expenditure
- % of turnover       	0        	2        	2
                                          
Personnel at         	305      	331      	323
period-end
Average              	306      	348      	328
personnel
                                          
Profitability                             
                                          
EBITA                	849      	609    	3,237
- % of turnover       12        	8       	11
Operating            	781      	521    	2,895
profit
- % of turnover       11        	7       	10
Profit before        	733     	–506    	2,196
extraordinary
items and taxes
- % of turnover       	10       	–7        	8
Profit/loss for      	586     	–569    	1,886
the period
% of turnover          8       	–7        	7
Return on             20      	–19       	14
equity, %
Return on             24      	-17       	16
investment, %
                                          
Financing and                             
financial
position
                                          
Interest-              	0       	8	2
bearing
liabilities
Short-term         	5,891    	6,308    	8,418
investments +
cash and bank
receivables
Net Gearing, %	–56      	–57      	–62
Equity ratio, % 	73       	62       	77
Cashflow from	995	1,108    	5,463
business            
operations
Earning per         	0.06    	–0.07     	0.20
share, EUR
(Group)
Equity per          	1.13     	1.18     	1.44
share
Price-earnings      	46.6      	-74     	17.2
ratio (P/E)
Lowest share        	2.95     	5.11     	2.52
price
Highest share       	3.79     	6.35     	6.35
price
Average share       	3.44      	5.8     	4.51
price
Market            	27,621   	54,305   	29,868
capitalisation
at period-end

Group key figures and ratios (on a comparable basis)
                 Q1/2003 Q1–Q4/20  Q1–Q3/2 Q1–Q2/2  Q1/2002
                               02      002     002
Extent of                                                  
business
                                                           
Turnover           6,991   28,997   21,298  15,122    7,635
- % of change,        –8       –6       –3     0.8        2
year-on-year
Capital            8,028    8,028    8,028   8,028    8,028
invested
Restricted         8,028    8,028    8,028   8,028    8,028
capital
Gross capital         20      477      300     264      146
expenditure
- % of turnover        0        2        1       2        2
                                                           
Personnel at         305      323      317     319      331
period-end
Average              306      328      330     336      348
personnel
                                                           
Profitability                                              
                                                           
EBITA                849    3,237    2,122   1,515      609
- % of turnover       12       11       10      10        8
Operating            781      2,895  1,865   1,340    521
profit                     
- % of turnover       11       10        9       9        7
Profit before        734    2,196    1 334     140     –506
extraordinary
items and taxes
- % of turnover       10        8        6       1       –7
Profit/loss for      586    1,886    1,291      25     –569
the period
% of turnover          8        7        6       0       –7
Return on             20       14       13       0      –19
equity, %
Return on             24       16       14       2      -17
investment, %
                                                           
Financing and                                              
financial
position
                                                           
Interest-              0        2        4       6        8
bearing
liabilities
Short-term         5,891    8,418    6,456   5,263    6,308
investments +
cash and bank
receivables
Net Gearing, %     –56      –62      –50      –5      –57
Equity ratio, %       73       77       80      73       62
Cashflow from        995    5,463    3,356   2,121    1,108
business
operations
Earnings per        0.06     0.20     0.14    0.00      –0.07  
share, EUR                                            
(Group)
Equity per          1.13     1.44     1.38    1.24     1.18
share
Price-earnings      46.6     17.2     28.6    3568      -74
ratio (P/E)
Lowest share        2.95     2.52     2.52    3.50     5.11
price
Highest share        3.79     6.35     6.35    6.35     6.35
price               
Average share       3.44     4.51     4.71    5.24      5.8
price
Market            27,326   29,868   25,280  32,770   54,305
capitalisation
at period-end

The Group key figures and ratios are based on quarterly
data.

In our Interim Report for the second quarter of 2002, we
announced that we would adopt a new reversal procedure for
holiday pay provisions as of the beginning of 2003, to
better correspond to the actual holiday periods, affecting
the Q1+Q2/2002 figures on the table accordingly, with no
impact on other periods.

The earnings-per-share ratio is based on the average share-
issue adjusted number of shares (9,262,914) for the
financial period. The number of outstanding shares totalled
9,262,914 at the end of the period.

The figures for return on equity and return on investment
have been annualised. The company held a total of 100,000
treasury shares at the end of the period. The Group has no
liabilities associated with derivative contracts.

Helsinki, 8 May 2003

SysOpen Plc


About Us

Digia is a profitably growing IT service company that helps its customers harness digital opportunities As a visionary partner, Digia develops and innovates solutions that support business operations together with its customers. We adapt our expertise to their specific industries to help them develop digital services, manage operations and utilise information. We employ 750 experts in Finland and Sweden. We are expanding our international presence together with our customers. Digia’s continuing operations had net sales of EUR 81 million in 2015. The company is listed on NASDAQ Helsinki (DIG1V).

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