Proha's financial statement January 1 - December 31, 2000

PROHA PLC STOCK EXCHANGE BULLETIN February 22,2001 at 9.05 am PROHA'S FINANCIAL STATEMENT JANUARY 1 - DECEMBER 31, 2000 - Net sales EUR 36.15 million (FIM 215.1 million), growth compared to previous year (10 months) 597%. - Operating profit EUR 2.54 million (FIM 15.1 million), growth compared to previous year 331%. - Profit before extraordinary items EUR 2.14 million (FIM 12.8 million), growth compared to previous year 402%. - Proforma net sales EUR 82.2 million and proforma operating profit EUR 6.6 million - Number of personnel at the end of the financial year 634, growth 806% - In the Project Management business area, Proha grew to be a leading software company through international acquisitions. - Proha's Financial Management business area developed Finland's leading financial management service based on new technology. - Company signed several strategic cooperation agreements to complement its product and service portfolio. - Because of the uncertain situation in the American and Japanese markets the organic growth target for 2001 is lowered to 20%. Profitability target (EBITDA) for 2001 remains at the level of 10%. According to the President and CEO, Pekka Pere, the profit target of 10% was missed by three percentage units. Slight decrease in profitability was due to decline of economic growth in the United States during the fourth quarter of 2000, unexpectedly slow development of the Japanese economy and the exceptional weight of concluding acquisitions and consolidating the companies purchased. The consolidation of companies acquired has, however, advanced mainly as planned. For 2001, Proha has set the target for organic growth to 20% and the operating profit to over 10%. In addition to organic growth, the company will continue active operations as a promoter of structural changes in the market by making acquisitions that strengthen the company's position in its own markets. The financial statement includes items from exceptionally large acquisitions that require changes in the accounting methods. Goodwill created by Artemis acquisition, a total of EUR 16.1 million, has been entered as extraordinary expense. Profits made from selling the Company shares have not been registered into the profit and loss account. Proha Group proforma net sales for January 1 - December 31, 2000, including all the companies acquired during 2000 and the new subsidiaries in Singapore and South Korea, totaled EUR 82.2 million. Proforma operating profit amounted to EUR 6.6 million. 29% of the Proha Group proforma net sales originated from the United States, 21% from Finland and 50% from the rest of the world. Software products accounted for 34% of Group's proforma net sales, maintenance 21%, and services 45%. NET SALES AND RESULT Proha Group's net sales for January 1, 2000 - December 31, 2000 financial year was EUR 36.15 million, compared to EUR 5.19 million in the 10-month-period in 1999. Net sales grew by 597%. The key ratios below are reviewed without the expense entered into extraordinary items from goodwill. Operating profit grew to EUR 2.5 million, compared to EUR 0.6 million in the corresponding period last year. The absolute growth of the operating profit was 330%. Profit before appropriations and taxes totaled EUR 2.1 million (5.9% of net sales), compared to EUR 0.4 million in the previous year. Earnings per share amounted to EUR 0.05, compared to EUR 0.02 in the previous ten-month accounting period in 1999 (the shares are split adjusted). Proha's personnel grew substantially. At the end of the year, the number of employees in the Proha Group totaled 623 (70). The average number of personnel was 249 (61). FINANCING AND INVESTMENTS The Group's financial position is satisfactory. The balance sheet total at the end of the year was EUR 39.8 million, compared to EUR 8.7 million in 1999. Current assets amounted to EUR 6.1 million, against EUR 5.5 million in 1999. Quick Ratio declined from 3.87 to 1.11. The most significant investment was the purchase of Artemis Acquisition Corporation (AAC) through a share exchange. In accordance with the terms of the purchase, the sellers gave a commitment to the amount of capital and reserves and result development. When preparing this financial statement bulletin, the audit of AAC is not yet completed. This may result in changes in the amount of goodwill in the audited financial statement. Other important investments were the acquisitions made in line with the Company's growth strategy and mainly conducted as a share exchange as well as the ASP center opened in the summer of 2000. Liabilities with interest was equivalent to 21% of the Group's total capital. PRODUCT DEVELOPMENT Proha's product development was partly consolidated with Artemis' international product development organization. The global product development employs 52 people. During 2000, the organisation introduced 20 new software releases. In addition to global products, the organization develops local products in Japan, France and Finland. The product development of the virtual management service, ProCountor.Com continued and the system was taken into pilot use in November. The production use will commence in the spring of 2001. ACQUISITIONS AND CHANGES IN ASSOCIATED COMPANIES In the Project Management business area, the precontracts on acquisition of the entire share capital of CM-Systems Oy and Planman Oy made during 1999 were concluded at the beginnig of 2000. Proha acquired 60% of Safran Software Solutions AS, a leading IT project management solution provider in Norway. In addition, Proha has an option to purchase the remaining shares of the company. The acquisition was concluded on April 1, 2000. Proha acquired 100% of the share capital of Artemis Acquisition Corporation, the parent company of Artemis Management Systems Inc. The acquisition took the form of an exchange of shares in which the sellers received the purchase price USD 50 million in the shape of Proha shares. The acquisition was concluded on August 24, 2000. As a result of the acquisition, Proha achieved substantial synergies in product development, international distribution, internationalization potential, and service to global customers. The consolidation of Proha's and Artemis' operations has mainly advanced as planned. During the fourth quarter, Proha grew to be the leading project management software and service supplier in Europe after acquiring the Artemis International companies in Germany, France, and Italy. The acquisitions were concluded on December 1, 2000. Proha agreed to acquire PMsoft Asia Pte Ltd., a project management software supplier and management consulting group based in Singapore and South Korea, and its subsidiary PMsoftKorea Ltd. Proha subsidiary Artemis already had a 49% holding in PMsoft. Following the acquisitions, Proha became the leading high-end project management software supplier in Singapore, Hong Kong, and South Korea. The acquisitions were concluded in January 2001, and therefore the financial results of the companies are not included in Proha's financial statement for 2000. In the Financial Management business area, Proha acquired Accountor Oy Ab Ltd and Profitmaster Oy (formerly Tuloshallinto Oy), both providers of financial management services. In addition, Proha acquired minority interests in Tietokate Ta-Tilit Oy and Tilitoimisto A. Karppinen Oy. Both companies are ISO 9002 certified accounting companies that offer financial management services to small and medium sized enterprises. Proha also has an option to purchase the remaining shares of the companies. In the Internet technologies business area, Proha acquired Ari Hovi Oy, an IT training and consulting company, and its subsidiary Vidac Oy, a data warehouse systems specialist. In addition, Proha acquired Brossco Systems Oy whose Voyant product family can be used in project and financial management. Proha also acquired Datamar Oy's entire share capital. Proha's Brossco Systems Oy span off its localization business and sold 51% of it to Italian Opera Mutimedia S.p.A. COOPERATION AGREEMENTS Proha expanded its operations to the Professional Service Automation (PSA) markets in France and Germany, after Artemis Management Systems' local associated companies and Canadian-based Changepoint Corporation founded a joint venture in France and Germany. US-based Primavera Systems Inc terminated its dealership agreement with Proha's CM-Systems Oy subsidiary as of October 7, 2000. Israeli-based Mercury Interactive cancelled its agreement with Proha as of December 31, 2000. Proha signed an agreement with ECInet of Sweden to provide document management services as part of Proha's ASP service. ECInet will also include Proha's products in its own service range. Proha and Single Source Oy agreed on worldwide sales of Kronodoc technology and the development of Artemis products based on Kronodoc technology. Kronodoc software solutions are designed for project communications and document management. Proha and QPR Software Plc signed a cooperation agreement covering the global development and distribution of Artemis products based on QPR technology. In the Financial Management business area, Proha signed a contract with Swedish Jeeves Information Systems Ab covering ASP service and sales of the Jeeves Enterprise system in Finland. Proha also signed an agreement with OpusCapita Oyj to enable OpusCapita's products to be offered worldwide as part of Proha's ASP and Internet Accounting Partner (IAP) services. Opus Capita Oy provides financial management and electronic banking software applications. Proha signed an agreement with ColumbusEiS Finland Oy to enable the ColumbusEiS system to be offered worldwide as part of Proha's ASP and Internet Accounting Partner (IAP) services. ColumbusEis is an executive information system for cash flow-based future accounting. With Posten Sverige AB, Proha signed an agreement enabling the offering of BREVe - an electronic system for handling purchase invoices - on an exclusive basis in Finland. Proha also signed a letter of intent on offering the service outside Finland. BREVe enables the paperless handling of purchase invoices for businesses of all sizes without any additional investments. OTHER EVENTS OF THE FOURTH QUARTER In November 2000, Proha Plc and Eficor Oyj made a seed capital investment in an IT field growth company Widene Oy. Widene Oy is a start-up specializing in the development of outsourced software and programming solutions for companies worldwide using resources from Russia and the Middle East. In December 2000, the number of Proha shares was changed by splitting each Proha share into five shares. As a result, the book parity of each share fell from EUR 1.30 to EUR 0.26. In June 2000, Proha started a new ASP service (Application Service Provider) complementing all of the Company's three business areas. The service offers customers a mix of Proha's own applications and those of its partners. The ASP service will be particularly important in expanding the Company's Financial Management business area. An IT systems testing unit started operations in Savonlinna, Finland. The unit will focus on testing e-commerce and mobile communications systems and on automated performance monitoring. PRESS CONFERENCE Proha Plc will hold a press conference for the financial analysts and the media at the World Trade Center, 3th floor, rooms 7-8, at the address Aleksanterinkatu 7, Helsinki, on February 22, 2001 at 1 pm. For more information please contact: PROHA PLC CEO Pekka Pere, tel. +358-20 4362 000 pekka.pere@proha.fi http://www.proha.fi DISTRIBUTION: Helsinki Stock Exchange Major Media ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/22/20010222BIT00110/bit0001.doc The full year-end report http://www.bit.se/bitonline/2001/02/22/20010222BIT00110/bit0001.pdf The full year-end report