SYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 SEPTEMBER 2007
SYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 SEPTEMBER 2007
Key figures in summary
January-September 2007
- Consolidated net sales: EUR 74.8 million, up 28.2 per cent year on year
- Pro forma growth in reported net sales: 3.5 per cent
- Consolidated operating profit: EUR 6.9 million, up 27.9 per cent year on year
- Profitability (EBIT): 9.2 per cent
- Profitability before one-off expenses: 10.4 per cent. The profit for the
reporting period includes approximately EUR 1 million of one-off expenses.
- Product business accounted for 17.9 per cent of net sales, up 81 per cent
- Earnings per share: EUR 0.16 (1-9/2006: EUR 0.17)
For the full-year 2007, the company estimates its net sales to amount to
approximately EUR 101-103 million and profitability (EBIT) to 9-11 per cent.
July-September 2007
- Consolidated turnover: EUR 22.6 million, up 4.5 per cent year on year
- Pro forma growth in reported net sales: 3.4 per cent
- Consolidated operating profit: EUR 1.5 million, down 44.0 per cent year on
year
- Profitability (EBIT): 6.7 per cent
- Profitability before one-off expenses: 10.9 per cent. The profit for the
reporting period includes approximately EUR 1 million of one-off expenses.
- Product business accounted for 18.7 per cent of net sales, up 8 per cent
- Earnings per share: EUR 0.03 (7-9/2006: EUR 0.08)
BRIEFING FOR MEDIA AND ANALYSTS
SYSOPENDIGIA will hold a briefing for analysts and the media at the Scandic
Grand Marina hotel, Katajanokanlaituri 7, FI-00160 Helsinki, on 30 October 2007,
starting at 11:00 a.m., which will be broadcast live on the Internet. A link to
the live broadcast will be available on SYSOPENDIGIA Plc's website at
www.sysopendigia.com.
REVIEW BY INTERIM CEO JUHA SIHVONEN
“SYSOPENDIGIA's business continued to make good progress throughout the
reporting period. However, the period's overall profitability was burdened by
the exceptionally large one-off cost items relating to top management changes
and provisions relating to two customer projects, both recorded in its third
quarter results. Furthermore, in deviation from the previous year, the company
organised extensive marketing and communications events during the reporting
period, these straining its third quarter results. However, the changes that
have taken place in the company's management have not affected the progress of
strategic and operative development measures. For the year 2008, the company
aims to achieve strong organic growth while continuing its internationalisation
in a controlled manner in line with the corporate strategy. Alongside these, the
goal is to maintain profitability at a level of over 10 per cent.”
OVERVIEW OF THE REPORTING PERIOD
During the reporting period, SYSOPENDIGIA carried out an acquisition in support
of its strategy and internationalisation by acquiring Capital C AB, a Swedish
financial software company. With this acquisition, SYSOPENDIGIA strengthens its
operations as well as product and solution offerings in the financial sector for
the Nordic market. Capital C's product portfolio consists of the Claes product
and the Moonray product family. The Claes back-office system is used by some of
the largest financial players in the Nordic region.
SYSOPENDIGIA announced several new projects and customer relationships during
the third quarter. For example, the company will participate in a co-operation
project to supply Kela (the Social Insurance Institution of Finland) with a
nationwide electronic patient record system and the information systems needed
in the implementation of electronic prescription transmission. The information
systems will be built over two years. During the first stage, systems related to
the implementation of electronic prescription transmission will be built,
enabling the transmission of the first electronic prescriptions in the autumn of
2008. In the second stage, an electronic patient record will be built, with
implementation scheduled to begin at the end of 2008.
Successful investments in customer relationships and offerings, as well as
excellent project delivery capacity, enabled strong organic growth in
Telecommunications. In addition to this, the reporting period saw the company
secure several new customer relationships in the field of enterprise resource
planning systems for industry and trade. All in all, SYSOPENDIGIA achieved
organic growth of 3.5 per cent, with Telecommunications reporting growth of 7.3
per cent and Industry and Trade reporting growth of 4.4 per cent. Finance and
Services' reported net sales were approximately 2.6 per cent down from a year
ago.
Overall, however, the company's net sales fell short of targets set for the
third quarter. This was mainly due to slower-than-expected progress in the value
chain of trade projects and weaker-than-expected growth in sales of consulting
services. However, the company made good progress in developing and offering the
Group's entire portfolio to existing customers. This work will continue in the
future, and the company believes that it still has a lot of untapped potential
in terms of utilising the offering of the entire Group in all of its key
customer segments. The Group will also continue to implement its strong
recruitment policy. For example, Telecommunications needs to increase its
capacity due to strong demand by hiring around 50 people towards the end of
2007, while the other divisions will also continue their active recruitment
measures.
Although SYSOPENDIGIA's overall profitability during the third quarter fell
short of targets due to one-off expenses, the normal operative profitability was
at a healthy level in almost every business. In the future, the company will
further enhance its profitability by, for instance, implementing total
resourcing management, utilising its total product range in sales activities and
focusing on solutions that provide higher added value. In order to ensure
continuous development of operations, the business units have already
implemented a number of organisational changes, the effects of which will start
to show as early as during the fourth quarter.
On 19 September 2007, SYSOPENDIGIA published its revised strategy and confirmed
its net sales and profitability targets for the years to come. The company will
focus on organic growth that is clearly above the market average. As part of
this, it is seeking to internationalise its operations and find new markets for
its products and services. The company has excellent prerequisites to achieve
its growth targets in the years to come.
SYSOPENDIGIA PLC'S INTERIM REPORT FOR 1 JANUARY-30 SEPTEMBER 2007
GROUP KEY FIGURES AND RATIOS
--------------------------------------------------------------------------------
| | Q3/200 | Q3/200 | Change | 1-9/200 | 1-9/200 | Change | 2006 |
| | 7 | 6 | , % | 7 | 6 | , % | |
--------------------------------------------------------------------------------
| Net sales | 22,645 | 21,661 | 5% | 74,827 | 58,347 | 28% | 84,968 |
--------------------------------------------------------------------------------
| Operating | 1,524 | 2,720 | -44% | 6,868 | 5,369 | 28% | 8,354 |
| profit | | | | | | | |
--------------------------------------------------------------------------------
| - % of net | 7% | 13% | | 9% | 9% | | 10% |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | 546 | 1,595 | -66% | 3,216 | 3,242 | -1% | 4,867 |
--------------------------------------------------------------------------------
| - % of net | 2% | 7% | | 4% | 6% | | 6% |
| sales | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Return on | 3% | 11% | | 7% | 8% | | 8% |
| equity | | | | | | | |
--------------------------------------------------------------------------------
| Return on | 5% | 9% | | 8% | 8% | | 9% |
| investment | | | | | | | |
--------------------------------------------------------------------------------
| Interest-be | 56,522 | 61,724 | -8% | 56,522 | 61,724 | -8% | 56,664 |
| aring | | | | | | | |
| liabilities | | | | | | | |
--------------------------------------------------------------------------------
| Cash and | 10,807 | 13,778 | -22% | 10,807 | 13,778 | -22% | 11,506 |
| cash | | | | | | | |
| equivalents | | | | | | | |
--------------------------------------------------------------------------------
| Gearing, % | 71% | 78% | | 71% | 78% | | 72% |
--------------------------------------------------------------------------------
| Equity | 45% | 42% | | 45% | 42% | | 44% |
| ratio | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Earnings | 0.03 | 0.08 | -63% | 0.16 | 0.17 | -6% | 0.25 |
| per share, | | | | | | | |
| EUR, basic | | | | | | | |
--------------------------------------------------------------------------------
| Earnings | 0.03 | 0.08 | -63 % | 0.16 | 0.17 | -6% | 0.25 |
| per share, | | | | | | | |
| EUR, | | | | | | | |
| diluted | | | | | | | |
--------------------------------------------------------------------------------
OVERVIEW OF BUSINESS SEGMENTS
Telecommunications
Telecommunications recorded a marked year-on-year improvement in its net sales
for the third quarter and its profitability remained at a healthy level. The
business division achieved strong organic growth attributable to successful
investments in customer relationships and offerings as well as the division's
excellent project delivery capacity during the period.
Market conditions were good for both the operator and smartphone businesses.
Customers' confidence in the company generated new projects, and its market
position remained strong. Markets are expected to remain active during the year
end, and the outlook for the first quarter of 2008 is also good.
Telecommunications intends to substantially strengthen its delivery capacity by
continuing the active recruitment measures it initiated during the third
quarter.
The activeness of operator customers in developing their operations and
offerings has provided the company with a number of major projects, thus
ensuring excellent prospects for the future too. The lively demand for
smartphones and the recent news of key market players' investing in Symbian and
Linux smartphone development, combined with the offerings of the
Telecommunications division, provide excellent opportunities for a continued
positive performance in this business. On 15 October 2007, SYSOPENDIGIA launched
a Linux based 3G Smartphone at Qtopia Mobile Communications Summit. The results
of this work can be utilised in the development of commercial Linux-based mobile
devices.
Finance and Services
During the third quarter, Finance and Services restructured its organisation in
order to increase its operational efficiency. Although the full effect of these
changes will not materialise until during the fourth quarter of 2007, several
positive effects were already identified at the end of the reporting period.
Finance and Services has launched new projects which it secured during H1
according to plan. These will help in increasing business volumes and the
resource utilisation rate.
During the third quarter, Finance and Services concluded the acquisition of
Capital C AB. This acquisition will strengthen the investment operations of
SYSOPENDIGIA's Finance division. The company's product range includes post-trade
management and custodian solutions which it provides to Nordic customers
involved in the securities industry. These products complement SYSOPENDIGIA's
existing product portfolio. Capital C AB employs approximately 30 staff; these
staff have transferred to SYSOPENDIGIA and maintained their previous employment
rights and privileges. The acquisition will significantly enhance SYSOPENDIGIA's
industry expertise in the Nordic securities trading business, strengthen its
position on the Swedish market in particular, and bring excellent new customers.
The Services division concluded a major co-operation agreement with Fujitsu
Services Oy regarding the Kanto project for Kela (the Social Insurance
Institution of Finland). In this project, SYSOPENDIGIA will be responsible for
the provision of messaging services for a national electronic patient record
system and the information systems needed in the implementation of electronic
prescription transmission.
Industry and Trade
In the field of e-business solutions, the company has invested in the
development of Microsoft-based enterprise content management (ECM) solutions. In
the ECM market, SYSOPENDIGIA will focus on providing portal solutions, e-service
solutions and document management solutions while commercialising
industry-driven concepts for these areas. During the third quarter, the company
secured several new ECM orders with existing and new customers. The company
believes in the strong growth of the ECM market in the future and is striving to
enhance this growth by strengthening its delivery capacity through additional
resourcing and by increasing the productisation rate of its deliveries and,
thereby, its operational efficiency and competitiveness.
Positive development has continued in the enterprise resource planning (ERP)
business, which accounts for a constantly increasing share of Industry and
Trade's total net sales. Launched in early 2007 in order to achieve new growth
in the small and medium-sized enterprises sector, the Enterprise RAPID concept
(ERP) has proceeded according to plan. During the third quarter, the company
obtained several new projects based on this concept. The Dynamics AX business
has also seen brisk growth, and the company will continue to outperform the
average market growth in this field. Towards the end of the year, the company
expects to secure a number of new contracts for its ERP business and expects to
exceed its full—year targets in this field.
In the field of Industry and Trade integration solutions, the company
successfully continued to expand its customers' integration solutions in various
solution areas during the third quarter. Integration solutions function as key
facilitators and provide a basis for the implementation of real-time enterprise
systems. By developing solutions enabling the networking of business processes,
SYSOPENDIGIA aims to increase the efficiency of its customers' business
operations and to facilitate, for instance, business reorganisations. The
company is seeking strong growth by providing solutions that link business
processes and information systems as well as by developing continuous services.
SYSOPENDIGIA is also actively participating in the building of integration
business evolving around growing technologies such as RFID.
MARKETS AND PROSPECTS
The annual growth estimate for the consulting and system integration market
varies between 2.3 and 6.4 per cent, depending on the market analyst (Gartner
2007, EITO and IDC 2006).
Customers require a reliable strategic partner capable of supplying
sophisticated solution packages and managing services throughout the lifecycle
of the customer's applications. The consolidation of various sectors, the
networking of value chains, the harmonisation of processes and the strengthening
of core partnerships to develop customer relationships will guide business
decisions.
ICT market demand is anticipated to focus on outsourcing, contract engineering,
extensive turnkey deliveries and the integration of standard software products.
Key value creators in near-future information system deliveries include business
focus‑ and industry expertise‑, usability and the user interface, scalability
and the system's lifecycle as well as productivity and quality. Self-service and
service-chain digitisation and mobilisation will be emphasised in business
development.
Existing systems will be developed through portals, eBusiness solutions,
business intelligence and mobile solutions as well as RFID technology and
payment cards. Strategic development projects increasingly involve wireless and
mobile solutions based on the product platform architecture. The higher
penetration rate and maturement of smartphone and wireless technologies will
open up new, interesting business opportunities while the product development
market for smartphones will develop through consolidation, operating models
based on a full-responsibility concept, and alliances. SYSOPENDIGIA leads the
way as a supplier of wireless and mobile solutions integrated as part of
information systems related to its customers' core business.
The company aims to attain a significantly better position by 2010 as a supplier
of information technology systems and an outsourcing partner in Finland, and to
expand its domestic market to cover Northern Europe. SYSOPENDIGIA operates
globally in selected business areas and, during the strategy period, has the
goal of bolstering its offerings in the field of real‑time enterprise
information systems.
The Group adheres to its long-term target for average net sales growth of 25 per
cent. The Group regards growth as fundamental to strengthening its market
position, developing a sufficient range of products and services, and providing
services throughout the customer lifecycle. For the full-year 2007, SYSOPENDIGIA
continues to estimate its net sales to amount to approximately EUR 101-103
million and profitability (EBIT rate) to 9-11 per cent. For the year 2008, the
company aims to achieve strong organic growth while continuing its
internationalisation in a controlled manner in line with the corporate strategy.
Alongside these, the goal is to maintain profitability at a level of over 10 per
cent.
NET SALES
SYSOPENDIGIA's consolidated net sales for the period rose to EUR 74.8 million,
up by 28.2 per cent (1-9/2006: EUR 58.3 million).
Net sales posted by Telecommunications improved to EUR 34.0 million, up by 7.3
per cent year on year (1-9/2006: EUR 31.7 million), while net sales by Finance
and Services totalled EUR 19.9 million, up by 22.8 per cent (1-9/2006: EUR 16.2
million). Industry and Trade recorded net sales of EUR 20.9 million, up by 100.4
per cent (1-9/2006: EUR 10.4 million).
SYSOPENDIGIA's consolidated net sales for the third quarter rose to EUR 22.6
million, up by 4.5 per cent (Q3/2006: EUR 21.7 million).
Net sales of the Telecommunications division for the third quarter rose to EUR
10.2 million, up by 10.8 per cent year on year (Q3/2006: EUR 9.2 million), while
net sales by Finance and Services totalled EUR 6.4 million, down by 2.8 per cent
(Q3/2006: EUR 6.6 million). Industry and Trade recorded net sales of EUR 6.1
million for the third quarter, up by 3.0 per cent (Q3/2006: EUR 5.9 million).
During the reporting period, the product business accounted for EUR 13.4 million
(1-9/2006: EUR 7.4 million) of consolidated net sales, or 17.9 per cent
(1-9/2006: 12.6 per cent). During the third quarter, the product business
accounted for EUR 4.2 million (Q3/2006: EUR 3.9 million) of consolidated net
sales, or 18.7 per cent (Q3/2006: 18.1 per cent).
During this reporting period, the pro forma figures include the net sales and
operating profit of Capital C AB as of 1 January 2007. During the period of
comparison, the pro forma figures include the net sales and operating profit of
Sentera Oyj, Samstock Oy and Capital C AB as of 1 January 2006. Consolidated pro
forma net sales of the reporting period were EUR 77.2 million and comparable
consolidated pro forma net sales in 1-9/2006 were EUR 74.6 million, showing
year-on-year growth of 3.5 per cent reported for 1-9/2007. Pro forma net sales
by Telecommunications in 1-9/2006 were EUR 31.7 million, showing year-on-year
growth of 7.3 per cent reported for 1-9/2007. Pro forma net sales by Finance and
Services for the reporting period came to EUR 22.4 million and in 1-9/2006 to
EUR 23.0 million, showing year-on-year negative growth of 2.6 per cent. Pro
forma net sales by Industry and Trade in 1-9/2006 amounted to EUR 20.0 million,
showing year-on-year growth of 4.4 per cent for 1-9/2007.
Consolidated pro forma net sales of the third quarter were EUR 23.2 million and
comparable consolidated pro forma net sales in 7-9/2006 were EUR 22.4 million,
showing year-on-year growth of 3.4 per cent reported for 7-9/2007. Pro forma net
sales by Telecommunications in Q3/2006 were EUR 9.2 million, showing
year-on-year growth of 10.8 per cent reported for Q3/2007. Pro forma net sales
by Finance and Services in Q3/2007 came to EUR 6.9 million and in Q3/2006 to EUR
7.3 million, showing year-on-year negative growth of 5.5 per cent reported for
Q3/2007. Pro forma net sales by Industry and Trade in Q3/2006 amounted to EUR
5.9 million, showing year-on-year growth of 3.0 per cent for Q3/2007.
International operations accounted for 8.1 per cent of consolidated net sales
(1-9/2006: 6.5 per cent).
PROFIT PERFORMANCE AND PROFITABILITY
SYSOPENDIGIA's consolidated operating profit (EBIT) for the reporting period
amounted to EUR 6.9 million, up 27.9 per cent on a year earlier (1-9/2006: EUR
5.4 million).
Telecommunications reported an operating profit of EUR 3.9 million, representing
a year-on-year increase of 58.8 per cent (1-9/2006: EUR 2.5 million). Finance
and Services showed an operating profit of EUR 1.2 million, down by 34.4 per
cent (1-9/2006: EUR 1.8 million). Industry and Trade posted an operating profit
of EUR 2.5 million, representing a year-on-year increase of 131.5 per cent
(1-9/2006: EUR 1.1 million).
SYSOPENDIGIA's consolidated operating profit (EBIT) for the third quarter
amounted to EUR 1.5 million, down 44.0 per cent on a year earlier (7-9/2006: EUR
2.7 million). The third quarter 2007 results include one-off expenses of EUR 0.7
million relating to top management changes as well as slightly over EUR 0.2
million of project provisions allocated to segments.
Telecommunications reported an operating profit of EUR 1.0 million, representing
a year-on-year increase of 42.7 per cent (Q3/2006: EUR 0.7 million). Finance and
Services showed an operating profit of EUR 0.7 million, down by 35.8 per cent
(Q3/2006: EUR 1.1 million). Industry and Trade posted an operating profit of EUR
0.5 million, representing a year-on-year decrease of 42.9 per cent (Q3/2006: EUR
0.9 million).
Reported earnings before tax were EUR 4.5 million (1-9/2006: EUR 4.4 million)
and net profit totalled EUR 3.2 million (1-9/2006: EUR 3.2 million).
The pro forma operating profit for the reporting period before one-off expenses
unallocated to segments was EUR 7.9 million and the like-for-like pro forma
operating profit for 1-9/2006 was EUR 6.8 million, showing year-on-year growth
of 16.3 per cent. Pro forma operating profit by Telecommunications in 1-9/2006
was EUR 2.5 million, showing year-on-year growth of 58.8 per cent reported for
1-9/2007. Pro forma operating profit by Finance and Services came to EUR 1.5
million in 1-9/2007 and to EUR 2.1 million in 1-9/2006, down by 26.1 per cent
reported for 1-9/2007. Pro forma operating profit by Industry and Trade in
1-9/2006 amounted to EUR 2.3 million, up by 9.0 per cent reported for 1-9/2007.
Consolidated pro forma operating profit of the third quarter before one-off
expenses unallocated to segments was EUR 2.2 million and comparable consolidated
pro forma operating profit in 7-9/2006 was EUR 2.8 million, showing negative
year-on-year growth of 22.0 per cent reported for 7-9/2007. Pro forma operating
profit by Telecommunications in Q3/2006 was EUR 0.7 million, showing
year-on-year growth of 42.7 per cent reported for Q3/2007. Pro forma operating
profit by Finance and Services came to EUR 0.6 million in 7-9/2007 and to EUR
1.2 million in 7-9/2006, down by 45.1 per cent. Pro forma operating profit by
Industry and Trade in Q3/2006 amounted to EUR 0.9 million, down by 42.9 per cent
for Q3/2007.
Earnings per share were EUR 0.16 (1-9/2006: EUR 0.17). Earnings per share in
Q3/2007 were EUR 0.03 (Q3/2006: EUR 0.08).
The Group's net financial expenses totalled EUR 2.3 million (1-9/2006: EUR 1.0
million).
FINANCIAL POSITION AND CAPITAL EXPENDITURE
On 30 September 2007, SYSOPENDIGIA's consolidated balance sheet total stood at
EUR 145.4 million (31 December 2006: EUR 146.3 million) and equity ratio was 45
per cent (31 December 2006: 44 per cent). Gearing stood at 71 per cent (31
December 2006: 72 per cent). The period-end cash and cash equivalents totalled
EUR 10.8 million (31 December 2006: EUR 11.5 million) and interest-bearing
liabilities amounted to EUR 56.5 million (31 December 2006: EUR 56.7 million).
The Group carries out annual impairment tests for goodwill and intangible assets
with an indefinite useful life in accordance with the IAS 36 standard. Goodwill
has not been subject to amortisation since 1 January 2004, and residual value is
tested annually.
The table below shows goodwill and values subject to testing by business
segment:
--------------------------------------------------------------------------------
| EUR 1,000 | Allocate | Depreciati | Unallocated | Other | Total value |
| | d | on during | goodwill | items | subject to |
| | goodwill | the | | | testing |
| | | reporting | | | |
| | | period | | | |
--------------------------------------------------------------------------------
| Telecommunica | 8,440 | 853 | 46,829 | 3,867 | 59,135 |
| tions | | | | | |
--------------------------------------------------------------------------------
| Finance and | 1,960 | 135 | 15,845 | 2,930 | 20,735 |
| Services | | | | | |
--------------------------------------------------------------------------------
| Industry and | 3,690 | 388 | 24,369 | 2,922 | 30,982 |
| Trade | | | | | |
--------------------------------------------------------------------------------
| Group total | 14,090 | 1,376 | 87,043 | 9,719 | 110,852 |
--------------------------------------------------------------------------------
Telecommunications goodwill is mainly associated with the combination of Digia
Inc. and SysOpen Plc and the acquisition of Yomi Software Ltd which took place
in 2005. Finance and Services goodwill is mainly associated with the
acquisitions of Sentera Plc and Samstock Ltd in 2006 and the acquisition of
Capital C AB in 2007. Industry and Trade goodwill is mainly associated with the
acquisitions of Sentera Plc and Yomi Software Ltd.
The Group has defined its business segments as cash-generating units (CGU).
Testing goodwill for any impairment loss is based on comparing the present value
of the CGU's recoverable cash flows with the carrying amount. The present values
of cash flows are based on the continuous use of an asset as well as on the
financial plans and estimates of the CGU's future development approved by the
relevant CGU management.
Present values are determined on the basis of actual operating profit and
five-year forecasts by the CGU, with growth varying between three and eight per
cent and the operating margin between 10 and 13 per cent.
Cash flows following the forecast period are estimated by extrapolating the cash
flows using a steady net sales growth forecast of three per cent, with operating
profit estimated at 10 per cent of net sales. Discount rates have been
determined in view of the industry's general risk level, corresponding to an
annual interest rate of 11 per cent in 2006.
Net sales growth is reckoned to constitute the most critical factor in
calculating the present values of cash flows. The amount of goodwill for
Telecommunications requires average annual long-term growth of around two per
cent in its net sales and an operating margin of 10 per cent before amortisation
on allocated goodwill. The amount of goodwill for Finance and Services requires
average annual growth of two per cent for the business operations and five per
cent profitability before allocated goodwill amortisation. The amount of
goodwill for Industry and Trade requires average annual long-term growth of two
per cent in its net sales and an operating margin of nine per cent before
amortisation on allocated goodwill.
Based on a reasonable estimate, any change in key variables used in calculations
during the reporting period would not lead to a situation in which the segment's
carrying amount would exceed its recoverable amount. Consequently, in the
management's view, there is no need to recognise impairment losses.
Consolidated net cash flow from operating activities totalled EUR 4.3 million
(1-9/2006: EUR 2.5 million).
Net investments in fixed assets came to EUR 1.4 million (1-9/2006: EUR 1.2
million). Acquisitions of tangible fixed assets totalled EUR 1.0 million
(1-9/2006: EUR 1.0 million).
Return on investment (ROI) stood at 8 per cent (1-9/2006: 8 per cent) and return
on equity (ROE) at 7 per cent (1-9/2006: 8 per cent).
RISK ASSESSMENT
Customer, personnel, project, data security, integration and goodwill risks
number among the key risks subject to monitoring in SYSOPENDIGIA's risk
management.
The company manages customer risks by actively developing its customer portfolio
structure and avoiding any potential risk positions. The customer portfolio's
structure and strategic customer relationships are expected to make progress
when the Group adopts shared customer relationship management processes and
operating models.
The Group assesses and manages personnel risks by carrying out quarterly
performance reviews with key personnel. With a view to enhancing employee
motivation and commitment, SYSOPENDIGIA has taken measures aimed at more
systematic and effective internal communication by staging monthly personnel
events and making the management more visible within the organisation. On the
basis of the results of a job satisfaction survey, the Group will develop its
internal policies and practices further, with the aim of improving working
conditions and job satisfaction. In addition, the Group will implement a
quarterly pulse method for job satisfaction measurement in all of its
businesses, in order to identify ideas in need of immediate improvement.
The Group carries out project audits with a view to enhancing project risk
management and securing the success of project deliveries to customers. In
addition, the Group's certified quality management systems have undergone a
re‑evaluation and approval, and the Group has streamlined its project delivery
reporting procedures and plans further investments in order to ensure high
project delivery capacity and error-free projects.
In order to manage data-security risks, the Group carries out data-security
audits and is continuously developing operating models, practices and processes
that promote data security. The management group is tasked with managing risks
associated with the integration of businesses, shared operating models and best
practices, as well as their integrated development. The integration of the
corporate culture is an ongoing process, and its successful implementation
requires sustained and determined efforts at all organisational levels. With
respect to IFRS‑compliant accounting policies, the Group actively monitors
goodwill and the related impairment tests as part of prudent and proactive risk
management practices within financial management.
PERSONNEL, MANAGEMENT AND ADMINISTRATION
On 30 September 2007, the number of Group employees totalled 1,136, up by 49, or
4.5 per cent, from the staff number on 31 December 2006 (2006: 1,087). During
the reporting period, the number of employees averaged 1,106, showing an
increase of 125, or 12.7 per cent, (2006: 981) over the same period a year ago.
Reported cumulative employee turnover came to 9.3 per cent (1-9/2006: 6.3 per
cent).
Employees by function on 30 September 2007:
--------------------------------------------------------------------------------
| Telecommunications | 48% |
--------------------------------------------------------------------------------
| Finance and Services | 24% |
--------------------------------------------------------------------------------
| Industry and Trade | 22% |
--------------------------------------------------------------------------------
| Administration and management | 5% |
--------------------------------------------------------------------------------
As of 30 September 2007, 2.3 per cent of SYSOPENDIGIA's personnel were working
abroad.
The Annual General Meeting (AGM) of 28 February 2007 elected the following Board
members: Pekka Sivonen (Chairman), Pertti Kyttälä (Vice Chairman), Kari
Karvinen, Matti Mujunen, Mikko Terho, Eero Makkonen and Martti Mehtälä. On 21
March 2007, Mikko Terho resigned from SYSOPENDIGIA Plc's Board of Directors for
personal reasons. On 17 September 2007, the company's Executive Vice President
and Deputy CEO Seppo Laaksonen resigned. On 18 September 2007, the company's
previous President and CEO, Jari Mielonen, resigned due to personal reasons.
Juha Sihvonen has been the interim CEO of the company since the same day. The
company's Board of Directors has initiated the nomination process for a new CEO.
KPMG Oy Ab, a firm of authorised public accountants, is the Group's auditor,
with Ari Ahti, Authorised Public Accountant, as the chief auditor.
CORPORATE AND BUSINESS ACQUISITIONS
During the reporting period, SYSOPENDIGIA acquired the entire share capital of
Capital C AB from Carnegie Investment Bank AB. Capital C AB is a Swedish
financial software company. With this acquisition, SYSOPENDIGIA strengthens its
operations as well as product and solution offering in the financial sector for
the Nordic market.
Capital C produces and delivers post-trade management solutions for the
securities industry. The company was founded in 1998 and employs about 30 highly
skilled, experienced people. The company's offering includes development,
maintenance and support of software products targeted at the finance industry.
Capital C's product portfolio consists of the Claes product and Moonray product
family. The Claes back-office system is used by some of the largest financial
players in the Nordic region. Parallel to this, Capital C has recently launched
the first modules of the next-generation Moonray product family. The Moonray
products can be combined with and complement SYSOPENDIGIA's existing business
systems within the Nordic securities industry.
Capital C's whole personnel transferred to SYSOPENDIGIA Group and maintain their
existing employment rights and privileges. Capital C is a very important asset
in strengthening SYSOPENDIGIA's presence in Sweden and also from the entire
SYSOPENDIGIA Group perspective. The acquisition is in line with SYSOPENDIGIA's
internationalisation strategy to strengthen its market position in Northern
Europe. The deal significantly enhanced the company's product and solution
offerings in the financial sector, bringing it very important new customer
relationships in Sweden.
GROUP STRUCTURE AND ORGANISATION
On 30 September 2007, SYSOPENDIGIA Group consisted of SYSOPENDIGIA Plc, the
parent company, and the following active subsidiaries: SysOpen Digia Integration
Ltd (parent company holding: 100 per cent), SysOpen Digia Smartphone Ltd (100
per cent), SysOpen Digia Industry and Trade Ltd (100 per cent), SYSOPENDIGIA
Financial Solutions Ltd (100 per cent) and SysOpen Digia Object Team Ltd (100
per cent). In addition, SysOpen Digia Integration Ltd has a wholly-owned active
subsidiary, SysOpen Digia Service Ltd, while SysOpen Digia Solutions Ltd has an
active subsidiary, SYSOPENDIGIA Financial Software Oy.
SYSOPENDIGIA has begun to simplify its Group structure. Its active subsidiaries
SysOpen Digia Integration Ltd, SysOpen Digia Smartphone Ltd, SYSOPENDIGIA
Financial Solutions Ltd and SysOpen Digia Object Team Ltd will merge with
SysOpen Digia Industry and Trade Ltd. The merger will take place on 31 October
2007, when SysOpen Digia Industry and Trade Ltd will be renamed SYSOPENDIGIA
Finland Ltd. Thus, as of 1 November 2007, SYSOPENDIGIA Group's active
subsidiaries will include SYSOPENDIGIA Finland Ltd and its subsidiaries
SYSOPENDIGIA Service Ltd and SYSOPENDIGIA Financial Software Ltd.
EVENTS AFTER THE BALANCE SHEET DATE
No significant events.
ANNUAL GENERAL MEETING
Annual General Meeting on 28 February 2007
Convened on 28 February 2007, SYSOPENDIGIA Plc's Annual General Meeting (AGM)
adopted the financial statements for 2006, discharged Board members and the CEO
from liability and, as proposed by the Board of Directors, approved the profit
distribution for 2006, determined Board emoluments and elected the company's
Board of Directors for a new term. In addition, the AGM decided to alter the
Articles of Association throughout, which also resulted in a new company name,
SYSOPENDIGIA Plc. The AGM granted authorisations to the Board which it has not
exercised.
SHARE CAPITAL AND SHARES
On 30 September 2007, the number of company shares totalled 20,319,999
and the number of shareholders 3,252. The ten largest shareholders:
--------------------------------------------------------------------------------
| Shareholder | Shareholding and votes |
--------------------------------------------------------------------------------
| Pekka Sivonen | 13.9% |
--------------------------------------------------------------------------------
| Evli Bank Plc | 8.7% |
--------------------------------------------------------------------------------
| Kari Karvinen | 7.8% |
--------------------------------------------------------------------------------
| Matti Savolainen | 6.5% |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc | 5.7% |
--------------------------------------------------------------------------------
| OP-Suomi Pienyhtiöt mutual fund | 5.2% |
--------------------------------------------------------------------------------
| Varma Mutual Pension Insurance Company | 3.6% |
--------------------------------------------------------------------------------
| Veikko Laine Oy | 2.9% |
--------------------------------------------------------------------------------
| Skandinaviska Enskilda Banken | 2.8% |
--------------------------------------------------------------------------------
| Nordea Bank Finland Plc / Nominee-registered | 2.6% |
--------------------------------------------------------------------------------
Shareholding by number of shares held on 30 September 2007:
--------------------------------------------------------------------------------
| Number of shares | Percentage of | Shareholding and |
| | holdings | votes |
--------------------------------------------------------------------------------
| 1 - 100 | 23.7% | 0.3% |
--------------------------------------------------------------------------------
| 101 - 1,000 | 53.6% | 4.1% |
--------------------------------------------------------------------------------
| 1,001 - 10,000 | 19.5% | 9.1% |
--------------------------------------------------------------------------------
| 10,001 - 100,000 | 2.5% | 12.4% |
--------------------------------------------------------------------------------
| 100,001 - 1,000,000 | 0.5% | 26.3% |
--------------------------------------------------------------------------------
| 1,000,001 - 3,000,000 | 0.2% | 47.8% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Total number of shares: 20,319,999 | | |
--------------------------------------------------------------------------------
Shareholding by sector on 30 September 2007
--------------------------------------------------------------------------------
| | Percentage of | Percentage of |
| | holdings | shares |
--------------------------------------------------------------------------------
| Non-banking corporate sector | 6.1% | 9.5% |
--------------------------------------------------------------------------------
| Financial institutions and | 0.5% | 29.3% |
| insurance companies | | |
--------------------------------------------------------------------------------
| Public-sector entities | 0.1% | 3.8% |
--------------------------------------------------------------------------------
| Non-profit organisations | 0.4% | 0.4% |
--------------------------------------------------------------------------------
| Households | 92.4% | 55.7% |
--------------------------------------------------------------------------------
| Foreign holding | 0.5% | 1.3% |
--------------------------------------------------------------------------------
REPORTED SHARE PERFORMANCE ON THE HELSINKI STOCK EXCHANGE
SYSOPENDIGIA Plc shares are listed on the Nordic Exchange under Information
Technology IT Services. The company's short name is SYS1V. During the reporting
period, the company's share registered a low of EUR 3.37, a high of EUR 4.26,
and closed at EUR 3.73 on the period's last trading day. The share's trade
weighted average price amounted to EUR 3.84. On 30 September 2007, the company's
market capitalisation totalled EUR 75,793,596.
During the reporting period, the following two notifications in accordance with
Chapter 2, Section 10 of the Securities Market Act were brought to the company's
attention:
1. Osuuspankkikeskus Osk ("OPK") informed SYSOPENDIGIA on 11 May 2007 that the
ownership share of SYSOPENDIGIA Plc's votes and share capital by investment
funds of OPK's subsidiaries has increased to over one twentieth (1/20).
Altogether, OPK and the entities OPK has control over hold 1,101,958 shares of
SYSOPENDIGIA, corresponding to 5.43 per cent of SYSOPENDIGIA's shares and votes.
2. Nordea Bank AB (publ) informed SYSOPENDIGIA on 24 September 2007 that its
subsidiary Nordea Pankki Suomi Oyj has on 20 September 2007 purchased 105,100
shares of SYSOPENDIGIA against sale options it held earlier. After the
transaction, Nordea Pankki Suomi Oyj owned 1,091,797 shares in SYSOPENDIGIA, its
ownership share thus exceeding the 5 per cent limit of SYSOPENDIGIA's shares and
voting rights, at 5.37%.
In the same connection, Nordea Pankki Suomi Oyj announced that it has made
forward contracts so that the first will become due in December 2007, being
equal to 1,000 forwards (100,000 shares), and the second in February 2008, being
equal to 7,068 forwards (706,800 shares). After the forward contract becoming
due in December 2007, the ownership share of Nordea Pankki Suomi Oyj in
SYSOPENDIGIA's shares and votes shall decrease to under the 5 per cent limit.
According to Nordea Pankki Suomi Oyj, it acquired the shares in SYSOPENDIGIA as
part of its market maker business.
STOCK OPTION SCHEMES
On 30 September 2007, the number of all remaining stock options issued by
SYSOPENDIGIA totalled 1,739,881. Shares to be subscribed using warrants account
for a maximum of 7.89 per cent of company shares and voting rights, as a result
of any possible increase of the company's share capital. On 30 September 2007,
the number of warrants held by SYSOPENDIGIA Partners totalled 685,239 of all
valid warrants. On 30 September 2007, the maximum dilution effect of the issued
warrants was 4.93 per cent. During the reporting period, a total of 648 warrants
were used for share subscription.
The share subscription period for the 2003C warrants will expire on 31 October
2007.
Helsinki, 30 October 2007
SYSOPENDIGIA PLC
Board of Directors
FOR FURTHER INFORMATION, PLEASE CONTACT:
Juha Sihvonen, Interim CEO,
tel. +358 400 735 134, e-mail: juha.sihvonen@sysopendigia.com
The Interim Report and access to the related live briefing for the media and
analysts (in English) will be available in the ‘Investors' section at
www.sysopendigia.com. The briefing starts at 11.00 a.m.
DISTRIBUTION
Helsinki Stock Exchange
Major media
APPENDICES
Consolidated income statement
Consolidated balance sheet
Consolidated cash flow statement
Consolidated statement of changes in shareholders' equity
Notes to the accounts
This Interim Report has been prepared in compliance with IFRS recording and
valuation principles. This Interim Report is based on unaudited figures.
CONSOLIDATED INCOME STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| | Q3/200 | Q3/200 | Chan | 1-9/200 | 1-9/200 | Chang | 2006 |
| | 7 | 6 | ge, | 7 | 6 | e, % | |
| | | | % | | | | |
--------------------------------------------------------------------------------
| Net sales | 22,645 | 21,661 | 5% | 74,826. | 58,347. | 28% | 84,968. |
| | .0 | .0 | | 9 | 3 | | 1 |
--------------------------------------------------------------------------------
| Other | 13.0 | 140.5 | -91% | 216.8 | 200.2 | 8% | 280.2 |
| operating | | | | | | | |
| income | | | | | | | |
--------------------------------------------------------------------------------
| Materials and | -1,978 | -1,170 | 69% | -5,656. | -2,759. | 105% | -4,699. |
| services | .7 | .9 | | 8 | 8 | | 6 |
--------------------------------------------------------------------------------
| Depreciation, | -1,178 | -1,280 | -8% | -3,607. | -3,253. | 11% | -4,557. |
| amortisation | .2 | .9 | | 9 | 1 | | 3 |
| and | | | | | | | |
| impairment | | | | | | | |
| losses | | | | | | | |
--------------------------------------------------------------------------------
| Other | -17,97 | -16,62 | 8% | -58,910 | -47,165 | 25% | -67,637 |
| operating | 7.2 | 9.4 | | .8 | .9 | | .4 |
| expenses | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Operating | 1,524. | 2,720. | -44% | 6,868.2 | 5,368.7 | 28% | 8,354.1 |
| profit | 0 | 3 | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Financial | -800.2 | -618.9 | 29% | -2,324. | -1,012. | 130% | -1,659. |
| expenses | | | | 3 | 7 | | 3 |
| (net) | | | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Earnings | 723.8 | 2,101. | -66% | 4,543.9 | 4,356.0 | 4% | 6,694.8 |
| before tax | | 3 | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Income tax | -177.5 | -506.6 | -65% | -1,327. | -1,114. | 19% | -1,827. |
| expense | | | | 4 | 1 | | 6 |
--------------------------------------------------------------------------------
| Net profit | 546.3 | 1,594. | -66% | 3,216.4 | 3,241.8 | -1% | 4,867.2 |
| | | 8 | | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Attributable | | | | | | | |
| to: | | | | | | | |
--------------------------------------------------------------------------------
| Equity | 546.3 | 1,586. | -66% | 3,216.4 | 3,224.3 | 0% | 4,854.1 |
| holders of | | 7 | | | | | |
| the parent | | | | | | | |
| company | | | | | | | |
--------------------------------------------------------------------------------
| Minority | 0.0 | 8.0 | -100 | 0.0 | 17.5 | -100% | 13.1 |
| interest | | | % | | | | |
--------------------------------------------------------------------------------
| | | | | | | | |
--------------------------------------------------------------------------------
| Basic | 0.03 | 0.08 | -63% | 0.16 | 0.17 | -6% | 0.25 |
| earnings per | | | | | | | |
| share (EUR) | | | | | | | |
--------------------------------------------------------------------------------
| Earnings per | 0.03 | 0.08 | -63% | 0.16 | 0.17 | -6% | 0.25 |
| share, | | | | | | | |
| diluted (EUR) | | | | | | | |
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET, EUR 1,000
--------------------------------------------------------------------------------
| Assets | 30 Sep. 2007 | 31 Dec. 2006 | Change, % |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Non-current assets | | | |
--------------------------------------------------------------------------------
| Intangible assets | 102,676.3 | 103,210.0 | -1% |
--------------------------------------------------------------------------------
| Property, plant and | 3,063.4 | 3,251.6 | -6% |
| equipment | | | |
--------------------------------------------------------------------------------
| Investments | 624.7 | 608.4 | 3% |
--------------------------------------------------------------------------------
| Deferred tax assets | 3,771.3 | 2,909.9 | 30% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total non-current assets | 110,135.8 | 109,979.9 | 0% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current assets | | | |
--------------------------------------------------------------------------------
| Current | 24,430.7 | 24,836.9 | -2% |
--------------------------------------------------------------------------------
| Available-for-sale | 2,784.9 | 2,778.3 | 0% |
| financial assets | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents | 8,022.5 | 8,727.3 | -8% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total current assets | 35,238.1 | 36,342.5 | -3% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total assets | 145,373.9 | 146,322.4 | -1% |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity and | 30 Sep. 2007 | 31 Dec. 2006 | Change, % |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Share capital | 2,032.0 | 2,031.2 | 0% |
--------------------------------------------------------------------------------
| Share premium | 6,747.7 | 6,729.5 | 0% |
--------------------------------------------------------------------------------
| Other reserves | 5,203.8 | 5,203.8 | 0% |
--------------------------------------------------------------------------------
| Unrestricted invested | 39,735.5 | 39,735.5 | 0% |
| shareholders' equity | | | |
--------------------------------------------------------------------------------
| Fair value reserve | - | - | 0% |
--------------------------------------------------------------------------------
| Translation difference | 28.3 | -6.6 | -529% |
--------------------------------------------------------------------------------
| Retained earnings | 7,840.9 | 4,458.0 | 76% |
--------------------------------------------------------------------------------
| Net profit | 3,216.4 | 4,854.1 | -34% |
--------------------------------------------------------------------------------
| Capital and reserves | 64,804.8 | 63,005.6 | 3% |
| attributable to equity | | | |
| holders of the parent | | | |
| company | | | |
--------------------------------------------------------------------------------
| Minority interest | 0.0 | 113.8 | -100% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total shareholders' equity | 64,804.8 | 63,119.4 | 3% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Liabilities | | | |
--------------------------------------------------------------------------------
| Non-current | 56,047.2 | 56,081.5 | 0% |
| interest‑bearing | | | |
| liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | 3,659.5 | 3,822.3 | -4% |
--------------------------------------------------------------------------------
| Total non-current | 59,706.7 | 59,903.8 | 0% |
| liabilities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | 474.6 | 582.6 | -19% |
| liabilities | | | |
--------------------------------------------------------------------------------
| Other current liabilities | 20,387.9 | 22,716.7 | -10% |
--------------------------------------------------------------------------------
| Total current liabilities | 20,862.5 | 23,299.2 | -10% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Total liabilities | 80,569.2 | 83,203.0 | -3% |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Shareholders' equity and | 145,373.9 | 146,322.4 | -1% |
| liabilities | | | |
--------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT, EUR 1,000
--------------------------------------------------------------------------------
| Cash flow from operating | 1 Jan. 2007 | 1 Jan. 2006 | 1 Jan. 2006 - |
| activities: | - 30 Sep. | - 30 Sep. | 31 Dec. 2006 |
| | 2007 | 2006 | |
--------------------------------------------------------------------------------
| Net profit | 3,216 | 3,224 | 4,854 |
--------------------------------------------------------------------------------
| Adjustments to net profit | 7,413 | 5,604 | 8,323 |
--------------------------------------------------------------------------------
| Change in net working capital | -2,709 | -4,522 | -4,093 |
--------------------------------------------------------------------------------
| Interest paid | -2,184 | -1,128 | -1,917 |
--------------------------------------------------------------------------------
| Interest received | 176 | 135 | 271 |
--------------------------------------------------------------------------------
| Income tax paid | -1,620 | -819 | -1,682 |
--------------------------------------------------------------------------------
| Net cash flow from operating | 4,294 | 2,494 | 5,756 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flows from investing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Purchases of intangible assets | -1,355 | -1,244 | -1,876 |
| and property, plant and | | | |
| equipment (PPE) | | | |
--------------------------------------------------------------------------------
| Proceeds from sale of | | 376 | 376 |
| intangible assets and PPE | | | |
--------------------------------------------------------------------------------
| Acquisition of subsidiary, net | -1,882 | -34,010 | -34,229 |
| of cash acquired | | | |
--------------------------------------------------------------------------------
| Proceeds of sale of other | | | -1 |
| investments | | | |
--------------------------------------------------------------------------------
| Dividends received | | | 12 |
--------------------------------------------------------------------------------
| Net cash used in investing | -3,236 | -34,878 | -35,718 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash flow from financing | | | |
| activities: | | | |
--------------------------------------------------------------------------------
| Proceeds from share issue | 19 | 57 | 320 |
--------------------------------------------------------------------------------
| Repayment of current loans | | | -41,208 |
--------------------------------------------------------------------------------
| Repayments of non-current loans | -150 | -3,125 | -21,875 |
--------------------------------------------------------------------------------
| Proceeds from current loans | | 37,768 | 38,000 |
--------------------------------------------------------------------------------
| Proceeds from non-current loans | | | 55,000 |
--------------------------------------------------------------------------------
| Dividends paid and other | -1,625 | -698 | -930 |
| distribution of profit | | | |
--------------------------------------------------------------------------------
| Net cash used in financing | -1,756 | 34,002 | 29,307 |
| activities | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Net change in cash and cash | -698 | 1,618 | -655 |
| equivalents | | | |
--------------------------------------------------------------------------------
| | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 11,505 | 12,326 | 12,326 |
| period-start | | | |
--------------------------------------------------------------------------------
| Change in fair value of cash | | -166 | -166 |
| and cash equivalents | | | |
--------------------------------------------------------------------------------
| Net change in cash and cash | -698 | 1,618 | -655 |
| equivalents | | | |
--------------------------------------------------------------------------------
| Cash and cash equivalents at | 10,807 | 13,778 | 11,505 |
| period-end | | | |
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY, EUR 1,000
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g | h |
--------------------------------------------------------------------------------
| Balance 1 | 1,84 | 39,7 | 5,204 | 23 | 166 | 5,128 | 111 | 52,189 |
| Jan. 2006 | 0 | 18 | | | | | | |
--------------------------------------------------------------------------------
| Available‑ | | | | | | | | 0 |
| for‑sale | | | | | | | | |
| investment | | | | | | | | |
| s: | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | | -166 | | | -166 |
| gains/loss | | | | | | | | |
| es | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 204 | 0 | 204 |
--------------------------------------------------------------------------------
| Items | | 0 | 0 | 0 | -166 | 204 | 0 | 38 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 3,224 | 18 | 3,242 |
--------------------------------------------------------------------------------
| Total | 0 | 0 | 0 | 0 | 0 | 3,224 | 18 | 3,242 |
| recognised | | | | | | | | |
| income and | | | | | | | | |
| expenses | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Increase | 181 | 6,44 | | | | | | 6,622 |
| of share | | 1 | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Distributi | | | | | | -920 | -10 | -930 |
| on of | | | | | | | | |
| dividends | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | -39, | 39,73 | -23 | | -1 | | |
| | | 712 | 6 | | | | | |
--------------------------------------------------------------------------------
| BALANCE 30 | 2,02 | 6,44 | 44,93 | 0 | 0 | 7,635 | 118 | 61,160 |
| SEP. 2006 | 1 | 7 | 9 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| | a | b | c | d | e | f | g | h |
--------------------------------------------------------------------------------
| Balance 1 | 2,03 | 6,72 | 44,93 | -7 | 0 | 9,312 | 114 | 63,119 |
| Jan. 2007 | 1 | 9 | 9 | | | | | |
--------------------------------------------------------------------------------
| Available‑ | | | | | | | | 0 |
| for‑sale | | | | | | | | |
| investment | | | | | | | | |
| s: | | | | | | | | |
--------------------------------------------------------------------------------
| Fair value | | | | | | | | 0 |
| gains/loss | | | | | | | | |
| es | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | 153 | | 153 |
--------------------------------------------------------------------------------
| Items | 0 | 0 | 0 | 0 | 0 | 153 | 0 | 153 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in equity | | | | | | | | |
--------------------------------------------------------------------------------
| Net profit | | | | | | 3,216 | 0 | 3,216 |
--------------------------------------------------------------------------------
| Total | 0 | 0 | 0 | 0 | 0 | 3,369 | 0 | 3,369 |
| recognised | | | | | | | | |
| income and | | | | | | | | |
| expenses | | | | | | | | |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Increase | 1 | 18 | | | | | | 19 |
| of share | | | | | | | | |
| capital | | | | | | | | |
--------------------------------------------------------------------------------
| Distributi | | | | | | - | | -1,625 |
| on of | | | | | | 1,625 | | |
| dividends | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | 35 | | | -114 | -78 |
--------------------------------------------------------------------------------
| BALANCE 30 | 2,03 | 6,74 | 44,93 | 28 | 0 | 11,057 | 0 | 64,805 |
| SEP. 2007 | 2 | 8 | 9 | | | | | |
--------------------------------------------------------------------------------
a = Share capital
b = Share premium
c = Other reserves and invested unrestricted equity
d = Currency translation differences
e = Fair value reserve
f = Retained earnings
g = Minority interest
h = Total shareholders' equity
NOTES TO THE ACCOUNTS
Accounting principles:
The accounting principles and calculation methods used in the previous year-end
accounts have been applied to this Interim Report.
The subsidiary Capital C AB acquired during the third quarter has been included
in the consolidated financial statements as of 1 September 2007.
Seasonal nature of business:
The Group's business is affected by the number of workdays each month as well as
by holiday seasons.
Dividends paid:
A per-share dividend of EUR 0.08, or a total of EUR 1,624,985.44, was paid based
on the decision of the AGM of 28 February 2007. The dividend payment date was 9
March 2007.
Segment information:
--------------------------------------------------------------------------------
| NET SALES, EUR | Q3/20 | Q3/20 | Chang | 1-9/20 | 1-9/20 | Change | 1-12/2 |
| 1,000 | 07 | 06 | e, % | 07 | 06 | , % | 006 |
--------------------------------------------------------------------------------
| Telecommunicatio | 10,18 | 9,190 | 11% | 34,007 | 31,686 | 7% | 43,618 |
| ns | 5 | | | | | | |
--------------------------------------------------------------------------------
| Finance and | 6,377 | 6,564 | -3% | 19,949 | 16,248 | 23% | 23,633 |
| Services | | | | | | | |
--------------------------------------------------------------------------------
| Industry and | 6,084 | 5,908 | 3% | 20,871 | 10,414 | 100% | 17,717 |
| Trade | | | | | | | |
--------------------------------------------------------------------------------
| Group total | 22,64 | 21,66 | 5% | 74,827 | 58,347 | 28% | 84,968 |
| | 5 | 1 | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| OPERATING | Q3/20 | Q3/20 | Chang | 1-9/20 | 1-9/20 | Change | 1-12/2 |
| PROFIT, EUR | 07 | 06 | e, % | 07 | 06 | , % | 006 |
| 1,000 | | | | | | | |
--------------------------------------------------------------------------------
| Telecommunicatio | 1,022 | 716 | 43% | 3,899 | 2,455 | 59% | 4,018 |
| ns | | | | | | | |
--------------------------------------------------------------------------------
| Finance and | 697 | 1,086 | -36% | 1,209 | 1,842 | -34% | 2,322 |
| Services | | | | | | | |
--------------------------------------------------------------------------------
| Industry and | 524 | 918 | -43% | 2,479 | 1,071 | 131% | 2,014 |
| Trade | | | | | | | |
--------------------------------------------------------------------------------
| One-off items | -719 | | | -719 | | | |
--------------------------------------------------------------------------------
| Group total | 1,524 | 2,720 | -44% | 6,868 | 5,369 | 28% | 8,354 |
--------------------------------------------------------------------------------
Events after the balance sheet date: There have been no significant events after
the end of the reporting period.
Consolidated income statement by quarter:
--------------------------------------------------------------------------------
| EUR 1,000 | Q3/2007 | Q2/2007 | Q1/2007 | Q4/2006 | Q3/2006 |
--------------------------------------------------------------------------------
| Net sales | 22,645.0 | 25,903.1 | 26,278.9 | 26,620.8 | 21,661.0 |
--------------------------------------------------------------------------------
| Other operating | 13.0 | 80.3 | 123.4 | 80.1 | 140.5 |
| income | | | | | |
--------------------------------------------------------------------------------
| Materials and | -1,978.7 | -1,755.9 | -1,922.2 | -1,939.8 | -1,170.9 |
| services | | | | | |
--------------------------------------------------------------------------------
| Depreciation, | -1,178.2 | -1,159.6 | -1,270.1 | -1,304.1 | -1,280.9 |
| amortisation and | | | | | |
| impairment losses | | | | | |
--------------------------------------------------------------------------------
| Other operating | -17,977.2 | -20,599.8 | -20,333.8 | -20,471. | -16,629.4 |
| expenses | | | | 5 | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Operating profit | 1,524.0 | 2,468.0 | 2,876.2 | 2,985.4 | 2,720.3 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Financial | -800.2 | -733.8 | -790.4 | -646.6 | -618.9 |
| expenses (net) | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Earnings before | 723.8 | 1,734.3 | 2,085.8 | 2,338.8 | 2,101.3 |
| tax | | | | | |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Income tax | -177.5 | -465.8 | -684.1 | -713.5 | -506.6 |
| expense | | | | | |
--------------------------------------------------------------------------------
| Net profit | 546.3 | 1,268.6 | 1,401.6 | 1,625.3 | 1,594.8 |
--------------------------------------------------------------------------------
| | | | | | |
--------------------------------------------------------------------------------
| Attributable to: | | | | | |
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| Equity holders of | 546.3 | 1,268.6 | 1,401.6 | 1,629.8 | 1,586.7 |
| the parent | | | | | |
| company | | | | | |
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| Minority interest | 0.0 | 0.0 | 0.0 | -4.5 | 8.0 |
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| | | | | | |
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| Basic earnings | 0.03 | 0.06 | 0.07 | 0.08 | 0.08 |
| per share (EUR) | | | | | |
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| Earnings per | 0.03 | 0.06 | 0.07 | 0.08 | 0.08 |
| share, diluted | | | | | |
| (EUR) | | | | | |
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Group key figures and ratios:
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| | 1-9/2007 | 1-9/2006 | 2006 |
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| Scope of operations | | | |
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| | | | |
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| Net sales | 74,827 | 58,347 | 84,968 |
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| - year-on-year change | 28% | 37% | 40% |
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| Average capital invested | 121,483 | 122,884 | 119,783 |
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| Personnel at period-end | 1,136 | 1,098 | 1,087 |
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| Average personnel | 1,106 | 945 | 981 |
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| | | | |
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| Profitability | | | |
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| | | | |
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| Operating profit | 6,868 | 5,369 | 8,354 |
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| - % of net sales | 9% | 9% | 10% |
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| Earnings before tax | 4,544 | 4,356 | 6,695 |
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| - % of net sales | 6% | 7% | 8% |
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| Net profit | 3,216 | 3,224 | 4,854 |
--------------------------------------------------------------------------------
| - % of net sales | 4% | 6% | 6% |
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| Return on equity | 7% | 8% | 8% |
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| Return on investment | 8% | 8% | 9% |
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| | | | |
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| Financing and financial position | | | |
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| | | | |
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| Interest-bearing liabilities | 56,522 | 61,724 | 56,664 |
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| Financial assets + cash and bank | 10,807 | 13,778 | 11,506 |
| receivables | | | |
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| Gearing | 71% | 78% | 72% |
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| Equity ratio | 45% | 42% | 44% |
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| Net cash flow from operating | 4,294 | 2,494 | 5,756 |
| activities | | | |
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| Basic earnings per share (EUR) | 0.16 | 0.17 | 0.25 |
--------------------------------------------------------------------------------
| Earnings per share (EUR), diluted | 0.16 | 0.17 | 0.25 |
--------------------------------------------------------------------------------
| Equity per share | 3.19 | 3.02 | 3.10 |
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| Lowest share price | 3.37 | 3.00 | 3.00 |
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| Highest share price | 4.26 | 4.97 | 4.97 |
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| Average share price | 3.84 | 4.08 | 3.75 |
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| Closing share price | 3.73 | 3.27 | 3.42 |
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| Market capitalisation | 75,794 | 65,665 | 69,669 |
--------------------------------------------------------------------------------
The formulae for the key figures and ratios are available in the financial
statements section. These formulae remained unchanged during the reporting
period.
The weighted average number of shares during the reporting period, adjusted for
share issues, totalled 20,315,500. The weighted average number of shares during
the reporting period, adjusted for dilution, totalled 20,534,208. The number of
shares outstanding at the end of the reporting period was 20,319,999.
The company has no treasury shares.
The Group does not have any liabilities arising from derivative contracts.