TECNOMEN'S FINANCIAL REPORT 1 JANUARY - 31 DECEMBER 2008 (unaudited)
Tecnomen Corporation FINANCIAL REPORT
6 February 2009 at 8.30 am
TECNOMEN'S FINANCIAL REPORT 1 JANUARY - 31 DECEMBER 2008 (unaudited)
Net sales in the fourth quarter of the year increased 13.3 per cent from the
corresponding period in the previous year to EUR 21.7 (19.2) million. The
operating cash flow was extremely strong, at EUR 6.0 (8.1) million. Net sales
for the whole year increased 10.1 per cent to EUR 77.2 (70.1) million and the
result improved 16.9 per cent to EUR 10.2 (8.7) million. The operating cash flow
was EUR 17.9 (2.9) million. The order book at the close of the period stood at
EUR 9.7 (17.5) million.
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| KEY FIGURES | | 10-12/08 | 10-12/07 | 2008 | 2007 |
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| Net sales, MEUR | | 21.7 | 19.2 | 77.2 | 70.1 |
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| Net sales, change % | | 13.3 | -4.7 | 10.1 | -2.4 |
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| Operating result, MEUR | | 5.0 | 1.8 | 11.5 | 8.9 |
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| % of net sales | | 23.1 | 9.3 | 14.9 | 12.7 |
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| Profit before taxes, | | 5.8 | 2.7 | 13.5 | 10.0 |
| MEUR | | | | | |
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| % of net sales | | 26.8 | 13.9 | 17.5 | 14.2 |
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| Result for the period | | 4.8 | 2.2 | 10.2 | 8.7 |
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| Earnings per share, | | 0.08 | 0.04 | 0.17 | 0.15 |
| basic, EUR | | | | | |
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| Earnings per share, | | 0.08 | 0.04 | 0.17 | 0.15 |
| diluted, EUR | | | | | |
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--------------------------------------------------------------------------------
| Order book, MEUR | | | | 9.7 | 17.5 |
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| Cash flow, MEUR | | 26.0 | 8.3 | 33.8 | -2.8 |
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| Operating cash flow, | | 6.0 | 8.1 | 17.9 | 2.9 |
| MEUR | | | | | |
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| Cash funds, MEUR | | | | 51.0 | 17.5 |
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| Equity ratio, % | | | | 70.3 | 83.7 |
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| Net gearing, % | | | | -37.2 | -22.4 |
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| Personnel at end of | | | | 354 | 355 |
| period | | | | | |
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President and CEO Jarmo Niemi:
“The fourth quarter result was excellent. The operating profit was EUR 5.0
million, 23% of net sales. The cash flow from operations in the quarter was also
excellent, at EUR 6 million.
Net sales in the year increased 10%, which is greater than market growth. I am
particularly satisfied with the ability of the organization to see projects
through to completion. This could be seen especially in the cash flow from
operations for the year, which was EUR 18 million.
The fourth quarter was a strong period for the Messaging business unit after a
slightly quieter third quarter. The unit supplied several NGM projects in all
market areas. Net sales exceeded EUR 11 million and the operating result was
clearly positive. Net sales for the whole year grew 5%. The operating profit was
22% of net sales.
For the Charging business unit the final quarter was good in terms of net sales
and result. Full year growth in net sales was 16%. The operating result was 15%
of net sales.
The agreement to acquire Lifetree signed towards the end of last year is
strategically important for Tecnomen. With this transaction we add to our
product range, expand our customer base in growing markets, and improve our
cost-efficiency. This lays the foundations for future growth.
Tecnomen's financial position is excellent.”
Unless otherwise stated, all figures presented below are for the review period
1-12/2008 and the figures for comparison are for the corresponding period
1-12/2007.
SALES AND NET SALES
Tecnomen's net sales in the review period increased by 10.1 per cent to EUR 77.2
(70.1) million.
EUR 46.9 million of the sales in the review period has been recognised in
accordance with IAS 11 (Construction contracts) and EUR 30.4 million in
accordance with IAS 18 (Revenues).
Net sales by geographical area were: Americas 53.9 per cent (53.8 %), EMEA 35.7
per cent (38.0 %) and APAC 10.4 per cent (8.2 %).
Net sales by product line were: Messaging 52.3 per cent (54.7 %) and Charging
47.7 per cent (45.3 %).
Sales through global partners totalled EUR 14.5 (20.3) million or 18.7 per cent
(28.9 %) of net sales.
Maintenance and service sales totalled EUR 18.5 (15.1) million or 24.0 per cent
(21.5 %) of net sales.
The order book stood at EUR 9.7 (17.5) million at the end of the review period.
Americas accounted for 45.2 per cent of the order book, EMEA for 39.9 per cent
and APAC for 14.9 per cent.
OPERATING RESULT
Net sales in the review period totalled EUR 77.2 (70.1) million and the
operating result EUR 11.5 (8.9) million.
The operating result improved from the previous year especially because of the
EUR 7.1 million increase in net sales. Net sales for the Charging business unit
increased EUR 5.0 million and for Messaging EUR 2.1 million. Net sales for
maintenance and service rose EUR 3.4 million and product net sales EUR 3.7
million. By market area net sales increased as follows: Americas EUR 3.9
million, EMEA EUR 0.9 million and APAC EUR 2.3 million.
Capitalisation of research and development costs and amortisation of these had
the net impact of weakening the result by EUR 1.7 million compared to the
previous year. The operating result in the review period was 14.9% (12.7%) of
net sales.
Tecnomen's business operations are based on project sales. The income and costs
recorded for these vary considerably from one quarter to another. For this
reason it is important to base an examination of the profitability of the
company on the result for more then one quarter.
The result for the period before taxes was EUR 13.5 (10.0) million.
Taxes for the period totalled EUR 3.3 (1.3) million, including a change in the
deferred tax liability recorded on the basis of the capitalization of R&D costs
(EUR 1.1 million), withholding taxes recognised as parent company expenses (EUR
1.1 million), and income taxes recognised based on the results of Group
companies (EUR 1.1 million).
Earnings per share were EUR 0.17 (0.15). Equity per share at the end of the
period was EUR 1.41 (1.32).
FINANCING AND INVESTMENTS
Tecnomen's liquid funds totalled EUR 51.0 (17.5) million. The cash flow for the
review period was EUR 33.8 million, which includes dividends of EUR 4.1 million
paid in the first quarter and the EUR 20.0 million loan taken in the fourth
quarter to finance the acquisition announced on 15 December 2008. The cash flow
in the fourth quarter was EUR 26.0 million.
One factor that made a positive impact on the cash flow for the year, in
addition to the excellent result, was the efficient carrying through of
projects. One consequence of this was that the volume of trade receivables fell
by EUR 11.4 million.
The balance sheet total on 31 December 2008 stood at EUR 118.9 (95.2) million.
Interest-bearing liabilities were EUR 20.0 (0.0) million. The net debt to equity
ratio (net gearing) was -37.2 per cent (-22.4 %). The balance sheet structure
remained strong and the equity ratio on 31 December 2008 was 70.3 per cent (83.7
%).
Tecnomen's gross capital expenditure during the review period, excluding the
capitalisation of development costs, was EUR 1.3 (1.2) million or 1.7 per cent
(1.8 %) of net sales.
Financial income and expenses (net) during the year totalled EUR 1.9 (1.1)
million. The increase in financial income was due especially to realised foreign
exchange gains.
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| CHANGE IN WORKING CAPITAL, MEUR (increase - / | 2008 | 2007 |
| decrease +) | | |
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| Change in trade receivables | 11.8 | 2.3 |
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| Change in other short-term receivables | -0.6 | -5.4 |
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| Change in inventories | 1.3 | -0.4 |
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| Change in trade payables | -1.8 | 0.5 |
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| Change in other current liabilities | -1.6 | 2.1 |
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| CHANGE IN WORKING CAPITAL, TOTAL | 9.1 | -1.0 |
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BUSINESS UNITS
Messaging
During the year Tecnomen supplied several Next Generation Messaging (NGM)
systems in Europe, Asia, the Middle East, Africa and Latin America, to existing
and new customers. Sales of Ezoner systems fell as had been expected, especially
in the second half of the year, but maintenance sales remained strong. The cash
flow was excellent throughout the year.
The Messaging business unit had net sales of EUR 40.4 (38.3) and operating
profit of EUR 8.8 (10.0) million.
Charging
The growth in subscriber numbers continued encouragingly in South and Central
America and in Africa and as a result demand for Charging products was strong.
During 2008 Tecnomen received several expansion orders and obtained a major new
charging customer in Latin America. The completion percentage of current
projects improved well and the cash flow was clearly positive.
The Charging business unit had net sales of EUR 36.8 (31.8) million and
operating profit of EUR 5.5 (1.4) million.
RESEARCH AND DEVELOPMENT
Research and development costs during the year totalled EUR 15.5 (16.1) million,
corresponding to 20.0 per cent (22.9 %) of net sales. EUR 6.9 (7.6) million of
development costs were capitalised during the year and will be amortised over
3-5 years from the start of commercial use. R&D costs of EUR 3.4 (2.4) million
were amortised during the review period.
PERSONNEL
At the end of December 2008 Tecnomen employed 354 (355) persons, of whom 89 (89)
worked in Finland and 265 (266) elsewhere. The company employed on average 358
(354) people during the year. Personnel by geographical area were as follows:
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| | | 2008 | 2007 |
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| Personnel, at end of period | | 354 | 355 |
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| Americas | | 65 | 67 |
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| EMEA | | 264 | 261 |
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| APAC | | 25 | 27 |
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| Personnel, average | | 358 | 354 |
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| Personnel expenses before R&D | | 27.4 | 25.3 |
| capitalisation (MEUR) | | | |
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TECNOMEN SHARES AND SHARE CAPITAL
At the end of 2008 the shareholders' equity of Tecnomen Corporation stood at EUR
83.5 (78.0) million and the share capital was EUR 4,720,446.24, divided into
59,277,078 shares. The company held 134,800 of these shares, which represents
0.23 per cent of the company's share capital and votes. Equity per share was EUR
1.41 (1.32).
A total of 23,159,187 Tecnomen shares (EUR 23,179,392) were traded on the
Helsinki Exchanges during the period 2 January - 31 December 2008, representing
39.2 per cent of the total number of shares.
The highest share price quoted in the period was EUR 1.27 and the lowest EUR
0.75. The average quoted price was EUR 1.00 and the closing price on 31 December
2008 was EUR 0.84. The market capitalisation of the share stock at the end of
the period was EUR 49,792,746.
SEGMENT INFORMATION
Tecnomen Group's primary reporting segment is the business segment. The business
segment includes developing and delivering Messaging and Charging solutions. The
Messaging and Charging product lines are reported as business segments and these
together with support functions form the Group's organisation. This is because
these two are clearly distinct businesses and they are also monitored in the
company's internal financial reporting as separate business units.
CURRENT AUTHORISATIONS
Tecnomen's Annual General Meeting held on 12 March 2008 authorized the Board of
Directors to decide on acquiring a maximum of 5,790,000 of the Company's own
shares. Own shares may be acquired with unrestricted shareholders' equity
otherwise than in proportion to the holdings of the shareholders through public
trading of the securities arranged by NASDAQ OMX Helsinki Oy at the market price
of the shares in public trading at the time of the acquisition. The shares can
be acquired for the purpose of developing the capital structure of the Company,
carrying out corporate acquisitions or other business arrangements to develop
the business of the Company, financing capital expenditure, to be used as part
of the Company's incentive schemes, or to be otherwise retained in the
possession of the Company, disposed of or nullified in the extent and manner
decided by the Board of Directors. The Board of Directors has the right to
decide on other terms of the share acquisition. This authorisation is valid for
one year from the decision of the Annual General Meeting. The authorization has
not been exercised during the review period.
The AGM also authorised the Board to decide on issuing and/or conveying a
maximum of 17,800,000 new shares and/or the Company's own shares held by the
Company either against payment or for free. The AGM authorized the Board of
Directors to grant the special rights referred to in Chapter 10, Section 1 of
the Companies Act. The Board was authorized to decide on how to use the shares,
and the authorization includes the right to decide on a free share issue to the
Company itself. The number of shares to be issued to the Company together with
the shares repurchased to the Company on the basis of the repurchase
authorisation shall be a maximum of one tenth (1/10) of all the Company's
shares. These authorisations are valid for two years from the decision of the
Annual General Meeting. The authorisations have not been exercised during the
review period.
STOCK OPTION PROGRAMMES
During the review period the company had in force a 2002 stock option programme
and a 2006 stock option programme.
In the 2002 stock option scheme, the only current series were the 2002D stock
options. The subscription period for these was 1 April 2006 - 30 April 2008. The
share subscription price for the 2002D stock option was EUR 1.04. The
subscription price for the 2002D stock option was reduced by the amount of the
dividend paid per share (EUR 0.07).
During the review period 25,000 new company shares were subscribed with the
2002D stock options. At the end of December 2008 the company had 59,277,078
shares registered in the Trade Register.
Since the subscription period for the 2002D stock options ended on 30 April
2008, the 2002 stock options have been removed from the book-entry securities
system and the option has been nullified.
The 2006 stock option programme is divided into three series: the 2006A, 2006B
and 2006C stock options. A maximum of 2,001,000 stock options may be issued,
which entitle holders to subscribe for altogether 2,001,000 Tecnomen shares. The
subscription period for the 2006A stock option is 1 April 2007 - 30 April 2010,
for the 2006B stock option 1 April 2008 - 30 April 2011 and for the 2006C stock
option 1 April 2009 - 30 April 2012. The share subscription price for 2006A
stock options is EUR 2.54, for 2006B stock options EUR 1.39, and for 2006C stock
options EUR 1.05. The subscription prices for the 2006A, 2006B and 2006C stock
options have been reduced by the amount of the dividend paid per share (EUR
0.07). Tecnomen's Board of Directors has issued 304,000 2006A stock options and
667,000 2006B stock options to key personnel of Tecnomen Group. The remaining
2006 stock options have been issued to Tecnomen Japan Oy, a wholly owned
Tecnomen subsidiary, for issuing at a later date to current or future key Group
personnel.
Altogether 2,001,000 stock options remain on 31 December 2008 of all Tecnomen's
stock options in circulation. The shares that can be subscribed on the basis of
these stock options account for a maximum of 3.27 % of the Company's shares and
the votes carried by the shares after any increase in share capital. On 30
September 2008 the Company still held 1,030,000 of all the current stock
options. The issued stock options had a maximum diluting effect on 31 December
September 2008 of 1.61 %.
Tecnomen announced on 15 December 2008 that it had signed an agreement to
purchase the shares of Lifetree Convergence Ltd. If the transaction takes place,
Tecnomen will establish a new stock option scheme. A more detailed explanation
of the matter is given later in this release under “Acquisition of Lifetree
Convergence Ltd”.
RISKS AND UNCERTAINTY FACTORS
The risks and uncertainty factors are explained in the report of the Board of
Directors. The risks and uncertainties to which the company is exposed in the
near future relate to major projects that are under negotiation and to their
timing, and to changes in currency exchange rates. No significant changes have
taken place in the company's risks and uncertainty factors compared to the
previous interim report.
ACQUISITON OF LIFETREE CONVERGENCE LTD
As stated in the release published on 15 December 2008, Tecnomen has signed
agreements under which the company will acquire up to 96.6% of the shares of
Lifetree Convergence Ltd (“Lifetree”). Lifetree is an India-based provider of
convergent billing and customer care, rating, and messaging platforms. In the
transaction, the agreed total consideration for these Lifetree shares is EUR
33.2 million, to be paid through a combination of cash and issuance of new
Tecnomen shares. For the financial period ending on 31 March 2008, according to
Indian GAAP and with 63.0 as the EUR/INR exchange rate, Lifetree's net sales
came to EUR 11.3 million; profit after taxes was EUR 3.4 million, and the
company had no debt and net assets of EUR 8.4 million. Lifetree had cash funds
of EUR 9.5 million as of 31 October 2008. This translates to an enterprise value
(for 100% of the shares) of EUR 24.9 million.
Of the consideration, EUR 21.4 million will be paid in cash and the remaining
EUR 11.8 million in new Tecnomen shares to be issued. In the transaction, the
issue price applied for Tecnomen's shares will be EUR 0.86 per share. The cash
portion will be financed in part with a long-term loan and partly from the cash
funds of Tecnomen. The shareholders of Lifetree will be paid partly in cash and
partly in new Tecnomen shares. The new Tecnomen shares issued to Management
Shareholders are subject to a three-year lock-up. Tecnomen will establish a new
option scheme which shall be a maximum of 8.5% of Tecnomen's fully diluted
shares, not however exceeding 6,840,036 options. After closing, International
Financne Corporation (IFC), as a current Lifetree shareholder, will become a
shareholder in Tecnomen holding about 6.17% shares and 5.65% on a fully diluted
basis.
The closing of the transaction is subject to certain approvals at the Tecnomen
shareholders' meeting and is subject to standard regulatory and statutory
approvals. The transaction is expected to be completed by the end of March 2009.
Upon completion of the transaction, Lifetree will become a subsidiary of
Tecnomen. Also prior to closure, a proposal to rename the company as “Tecnomen
Lifetree Plc” will be put for shareholder approval. In connection with the
listing of new shares, Tecnomen will publish a prospectus.
EVENTS AFTER THE END OF THE PERIOD
No significant events have occurred after the end of period.
PROSPECTS
Because of the overall economic situation, the state of the market in Tecnomen's
business sector, and the acquisition of Lifetree Convergence Ltd proposed by the
Board of Directors, the Company is not making any estimates for 2009 at this
stage.
Variations between quarterly figures are expected to be considerable.
PROPOSAL FOR DISTRIBUTION OF PROFITS
The disposable funds of the parent company are EUR 55.2 million, of which EUR
5.4 million is the profit for the period. Tecnomen's Board of Directors proposes
to the Annual General Meeting to be held on 19 March 2009 that a dividend of EUR
0.07 per share be paid for the financial year ended on 31 December 2008.
Because of the contract terms concerning the purchase of the shares of Lifetree
Convergence Ltd and the Board's proposal concerning approval of the acquisition,
the Board proposes that the dividend be paid not just to Tecnomen's current
shareholders but also to those who will become new Tecnomen shareholders as a
result of the acquisition.
The dividend will be paid to shareholders who are registered on the record date
of 24 March 2009 in the company's shareholder register maintained by the Finnish
Central Securities Depository Ltd. The Board proposes to the AGM that the
dividend is paid on 31 March 2009.
The company's liquidity is good and in the opinion of the Board the proposed
distribution of profit will not put the Company's liquidity at risk.
FINANCIAL INFORMATION
Tecnomen is holding a conference to announce its fiscal year 2008 results at
10:00 am on 6 February 2009 in the Pavilion conference room at the Scandic Hotel
Simonkenttä, Helsinki. The material presented at the press conference will be
available at www.tecnomen.com.
TECNOMEN CORPORATION
Board of Directors
FURTHER INFORMATION
Mr Jarmo Niemi, President and CEO, tel. +358 (0)9 8047 8799
Mr Tuomas Wegelius, CFO, tel. +358 (0)9 8047 8650
DISTRIBUTION
NASDAQ OMX Helsinki Ltd
Main media
www.tecnomen.com
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| CONSOLIDATED INCOME | Note | 10-12/08 | 10-12/07 | 2008 | 2007 |
| STATEMENT, MEUR | | | | | |
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| NET SALES | 2 | 21.7 | 19.2 | 77.2 | 70.1 |
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| Other operating | | 0.0 | 0.0 | 0.0 | 0.2 |
| income | | | | | |
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| Materials and | | -3.8 | -4.6 | -16.7 | -15.2 |
| services | | | | | |
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| Employee benefit | | -6.9 | -6.7 | -24.0 | -23.3 |
| expenses | | | | | |
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| Depreciation | | -1.5 | -1.5 | -5.6 | -4.6 |
--------------------------------------------------------------------------------
| Other operating | | -4.6 | -4.6 | -19.4 | -18.4 |
| expenses | | | | | |
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| OPERATING RESULT | | 5.0 | 1.8 | 11.5 | 8.9 |
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| Financial income | | 1.5 | 0.5 | 3.0 | 1.5 |
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| Financial expenses | | -0.7 | 0.4 | -1.1 | -0.5 |
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| RESULT BEFORE TAXES | | 5.8 | 2.7 | 13.5 | 10.0 |
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| Income taxes | | -1.0 | -0.5 | -3.3 | -1.3 |
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| RESULT FOR THE PERIOD | | 4.8 | 2.2 | 10.2 | 8.7 |
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| Earnings per share, | | 0.08 | 0.04 | 0.17 | 0.15 |
| basic, EUR | | | | | |
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| Earnings per share, | | 0.08 | 0.04 | 0.17 | 0.15 |
| diluted, EUR | | | | | |
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| CONSOLIDATED BALANCE SHEET, | Note | 31.12.2008 | 31.12.2007 |
| MEUR | | | |
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| Assets | | | |
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| Goodwill | | 0.7 | 0.7 |
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| Other intangible assets | 3 | 19.3 | 15.8 |
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| Tangible assets | 4 | 7.0 | 8.1 |
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| Long-term trade and other | | 0.7 | 0.2 |
| receivables | | | |
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| Current assets | | | |
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| Inventories | 5 | 1.1 | 2.4 |
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| Trade receivables | | 14.4 | 25.8 |
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| Other receivables | | 24.6 | 24.8 |
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| Cash and cash equivalents | | 51.0 | 17.5 |
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| TOTAL ASSETS | | 118.9 | 95.2 |
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--------------------------------------------------------------------------------
| Shareholders' equity | | 83.5 | 78.0 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | |
--------------------------------------------------------------------------------
| Deferred tax liabilities | | 4.5 | 3.4 |
--------------------------------------------------------------------------------
| Long-term non-interest-bearing | | 0.0 | 0.0 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | |
--------------------------------------------------------------------------------
| Current interest-bearing | 6 | 20.0 | 0.0 |
| liabilities | | | |
--------------------------------------------------------------------------------
| Trade and other payables | | 10.8 | 13.8 |
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| EQUITY AND LIABILITIES, TOTAL | | 118.9 | 95.2 |
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Tecnomen announced in a stock exchange release on 25 January 2008 that it was
examining the possibility of selling the headquarters property it owns. Due to
the recent downturn in the property market the sale is no longer considered
probable.
CHANGE IN SHAREHOLDERS' EQUITY, MEUR
--------------------------------------------------------------------------------
| MEUR | Shar | Shar | Own | Trans- | Invested | Other | Retain | Total |
| | e | e | shar | lation | non-rest | re-se | -ed | |
| | capi | prem | es | differ | rict-ed | rves | earn-i | |
| | -tal | -ium | | ence | equity | | ngs | |
| | | fund | | | reserve | | | |
--------------------------------------------------------------------------------
| Sharehol-d | 4.7 | 0.8 | -0.1 | 0.2 | 0.3 | 54.7 | 17.4 | 78.0 |
| ers' | | | | | | | | |
| equit | | | | | | | | |
| y | | | | | | | | |
| 1 Jan. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
| Translatio | | | | -0.3 | | | -0.3 | -0.5 |
| n | | | | | | | | |
| difference | | | | | | | | |
--------------------------------------------------------------------------------
| Net gain | | | | -0.3 | | | -0.3 | -0.5 |
| recognised | | | | | | | | |
| directly | | | | | | | | |
| in | | | | | | | | |
| shareholde | | | | | | | | |
| rs' equity | | | | | | | | |
--------------------------------------------------------------------------------
| Result for | | | | | | | 10.2 | 10.2 |
| the period | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | -0.3 | | | 9.9 | 9.6 |
| gains and | | | | | | | | |
| losses | | | | | | | | |
| recognised | | | | | | | | |
| during | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -4.1 | | -4.1 |
| paid | | | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 0.0 | | | 0.0 |
| exercised | | | | | | | | |
--------------------------------------------------------------------------------
| Share-base | | | | | | | 0.0 | 0.0 |
| d payments | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -0.0 | -0.0 |
| adjustment | | | | | | | | |
| s | | | | | | | | |
--------------------------------------------------------------------------------
| Shareholde | 4.7 | 0.8 | -0.1 | -0.1 | 0.3 | 50.6 | 27.3 | 83.5 |
| rs' equity | | | | | | | | |
| 31 Dec. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
In March 2008 a total dividend of EUR 4,138,209.46 was paid, or EUR 0.07 per
share on 59,117,278 shares.
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| MEUR | Shar | Share | Own | Transla- | Inves- | Other | Retai | Total |
| | e | premiu | shar | tion | ted | reser | ned | |
| | capi | m fund | es | differen | non-re | ves | ear-n | |
| | tal | | | ce | strict | | ings | |
| | | | | | ed | | | |
| | | | | | equity | | | |
| | | | | | reserv | | | |
| | | | | | e | | | |
--------------------------------------------------------------------------------
| Sharehold | 4.7 | 0.8 | -0.1 | 0.2 | 0.0 | 60.6 | 8.4 | 74.6 |
| ers' | | | | | | | | |
| equi | | | | | | | | |
| ty | | | | | | | | |
| 1 Jan. | | | | | | | | |
| 2007 | | | | | | | | |
--------------------------------------------------------------------------------
| Translati | | | | 0.0 | | | | 0.0 |
| on | | | | | | | | |
| differenc | | | | | | | | |
| e | | | | | | | | |
--------------------------------------------------------------------------------
| Net gain | | | | 0.0 | | | | 0.0 |
| recognise | | | | | | | | |
| d | | | | | | | | |
| directly | | | | | | | | |
| in | | | | | | | | |
| sharehold | | | | | | | | |
| ers' | | | | | | | | |
| equity | | | | | | | | |
--------------------------------------------------------------------------------
| Result | | | | | | | 8.7 | 8.7 |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | 0.0 | | | 8.7 | 8.7 |
| gains and | | | | | | | | |
| losses | | | | | | | | |
| recognise | | | | | | | | |
| d | | | | | | | | |
| during | | | | | | | | |
| pe | | | | | | | | |
| riod | | | | | | | | |
--------------------------------------------------------------------------------
| Capital | | | | | | -5.9 | | -5.9 |
| repayment | | | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 0.3 | | | 0.3 |
| exercised | | | | | | | | |
--------------------------------------------------------------------------------
| Share-bas | | | | | | | 0.2 | 0.2 |
| ed | | | | | | | | |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | 0.1 | 0.1 |
| adjustmen | | | | | | | | |
| ts | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehold | 4.7 | 0.8 | -0.1 | 0.2 | 0.3 | 54.7 | 17.4 | 78.0 |
| ers' | | | | | | | | |
| equity | | | | | | | | |
| 31 Dec. | | | | | | | | |
| 2007 | | | | | | | | |
--------------------------------------------------------------------------------
In March 2007 a capital repayment of altogether EUR 5,883,317.80, or EUR 0.10
per share, was made on 58,833,178 shares.
--------------------------------------------------------------------------------
| CONSOLIDATED CASH FLOW STATEMENT, MEUR | 2008 | 2007 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | |
--------------------------------------------------------------------------------
| Result for the period | 10.2 | 8.7 |
--------------------------------------------------------------------------------
| Adjustments | 5.0 | 3.3 |
--------------------------------------------------------------------------------
| Interest income | -0.7 | -0.8 |
--------------------------------------------------------------------------------
| Interest expense | 0.1 | 0.2 |
--------------------------------------------------------------------------------
| Income taxes | 3.3 | 1.3 |
--------------------------------------------------------------------------------
| Other adjustments | 0.0 | 0.1 |
--------------------------------------------------------------------------------
| Changes in working capital | 9.1 | -1.0 |
--------------------------------------------------------------------------------
| Interest paid | -0.0 | -0.0 |
--------------------------------------------------------------------------------
| Interest received | 0.7 | 0.6 |
--------------------------------------------------------------------------------
| Income taxes paid | -1.4 | -0.3 |
--------------------------------------------------------------------------------
| Net cash flow from operating activities | 26.1 | 12.1 |
--------------------------------------------------------------------------------
| Cash flow from investments | | |
--------------------------------------------------------------------------------
| Investments in intangible assets | -7.2 | -7.6 |
--------------------------------------------------------------------------------
| Investments in tangible assets | -1.0 | -1.6 |
--------------------------------------------------------------------------------
| Net cash flow from investments | -8.2 | -9.2 |
--------------------------------------------------------------------------------
| Cash flow from financing activities | | |
--------------------------------------------------------------------------------
| Shares subscribed with share options | 0.0 | 0.2 |
--------------------------------------------------------------------------------
| Proceeds from short-term borrowings | 20.0 | |
--------------------------------------------------------------------------------
| Dividend paid | -4.1 | |
--------------------------------------------------------------------------------
| Capital repayment | | -5.9 |
--------------------------------------------------------------------------------
| Net cash flow from financing | 15.9 | -5.7 |
--------------------------------------------------------------------------------
| Increase (+) and decrease (-) in liquid | 33.8 | -2.8 |
| funds | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid funds on 1 Jan. | 17.5 | 20.4 |
--------------------------------------------------------------------------------
| Impact of changes in exchange rates | -0.3 | 0.0 |
--------------------------------------------------------------------------------
| Change in fair value of investments | 0.0 | -0.2 |
--------------------------------------------------------------------------------
| Liquid funds on 31 Dec. | 51.0 | 17.5 |
--------------------------------------------------------------------------------
| Change | 33.8 | -2.8 |
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1. ACCOUNTING PRINCIPLES AND BASIS FOR PREPARING CONSOLIDATED FINANCIAL
STATEMENTS
The Group's financial report has been prepared in accordance with the
international financial reporting standard IAS 34 Interim Financial Reporting.
The formulas for calculating the key figures presented and the accounting
principles for the interim report are the same as the principles published in
the 2007 Annual Report.
2. SEGMENT INFORMATION
Tecnomen Group reports on the Messaging and Charging business units as its
primary segments. The geographical areas are reported as secondary segments.
Tecnomen Group operates in three geographical areas: Americas (North, Central
and South America), EMEA (Europe, the Middle East and Africa) and APAC (Asia
Pacific). Unallocated items include taxes, financial items and corporate assets
and expenses. Net sales for the geographical segments are presented based on the
location of customers.
--------------------------------------------------------------------------------
| BUSINESS SEGMENTS | 2008 | 2007 |
| (primary segment information) | | |
| NET SALES, MEUR | | |
--------------------------------------------------------------------------------
| Messaging | 40.4 | 38.3 |
--------------------------------------------------------------------------------
| Charging | 36.8 | 31.8 |
--------------------------------------------------------------------------------
| TOTAL | 77.2 | 70.1 |
--------------------------------------------------------------------------------
| OPERATING RESULT, MEUR | | |
--------------------------------------------------------------------------------
| Messaging | 8.8 | 10.0 |
--------------------------------------------------------------------------------
| Charging | 5.5 | 1.4 |
--------------------------------------------------------------------------------
| Unallocated items | -2.8 | -2.5 |
--------------------------------------------------------------------------------
| TOTAL | 11.5 | 8.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GEOGRAPHICAL SEGMENTS | 2008 | 2007 |
| (secondary segment information) | | |
| NET SALES, MEUR | | |
--------------------------------------------------------------------------------
| Americas | 41.6 | 37.7 |
--------------------------------------------------------------------------------
| EMEA | 27.6 | 26.6 |
--------------------------------------------------------------------------------
| APAC | 8.0 | 5.8 |
--------------------------------------------------------------------------------
| TOTAL | 77.2 | 70.1 |
--------------------------------------------------------------------------------
3. INTANGIBLE ASSETS
During the review period EUR 6.9 million of development costs have been
capitalised (EUR 7.6 million 2007) and will be amortised over 3-5 years from the
start of commercial use. Research and development costs of EUR 3.4 were
amortised during the review period (EUR 2.4 million 2007).
4. TANGIBLE ASSETS
Acquisitions of tangible assets in the review period totalled EUR 1.0 million
(EUR 1.1 million 2007). Disposals during the review period were EUR 0.2 million
(EUR 0.3 million 2007).
5. INVENTORIES
An expense of EUR 0.2 million was recorded in the review period for writing down
the carrying value of inventories to their net realisable value (EUR 0.2 million
2007).
6. CURRENT INTEREST-BEARING LIABILITIES
During the year a five year bank loan was taken to finance the acquisition of
Lifetree Convergence Ltd. Under the agreement, the loan will be returned if the
transaction is not completed. Since this is the case, the Group does not have
the unconditional right to defer payment of the debt for at least 12 months from
the closing date, and for this reason the loan is classified as current.
--------------------------------------------------------------------------------
| 7. OPERATING LEASES, MEUR | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| Operating leases | | |
--------------------------------------------------------------------------------
| Less than one year | 0.6 | 0.5 |
--------------------------------------------------------------------------------
| Between one and five years | 0.4 | 0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8. CONSOLIDATED CONTINGENT LIABILITIES, MEUR | 31.12.2008 | 31.12.2007 |
--------------------------------------------------------------------------------
| Pledges given | 0.1 | 0.0 |
--------------------------------------------------------------------------------
| Guarantees | | |
--------------------------------------------------------------------------------
| On own behalf | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Other liabilities | | |
--------------------------------------------------------------------------------
| Restriction related to real estate in Ireland | 0.4 | 0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 9. CONSOLIDATED KEY FINANCIAL FIGURES, | | 2008 | 2007 |
| MEUR | | | |
--------------------------------------------------------------------------------
| Return on investment, % | | 16.0 | 13.6 |
--------------------------------------------------------------------------------
| Return on equity, % | | 12.6 | 11.4 |
--------------------------------------------------------------------------------
| Equity ratio, % | | 70.3 | 83.7 |
--------------------------------------------------------------------------------
| Net gearing, % | | -37.2 | -22.4 |
--------------------------------------------------------------------------------
| Investments | | 1.3 | 1.2 |
--------------------------------------------------------------------------------
| % of net sales | | 1.7 | 1.8 |
--------------------------------------------------------------------------------
| Research and development | | 15.5 | 16.1 |
--------------------------------------------------------------------------------
| % of net sales | | 20.0 | 22.9 |
--------------------------------------------------------------------------------
| Order book | | 9.7 | 17.5 |
--------------------------------------------------------------------------------
| Personnel, average | | 358 | 354 |
--------------------------------------------------------------------------------
| Personnel, at end of period | | 354 | 355 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED KEY FIGURES PER SHARE, MEUR | | 2008 | 2007 |
--------------------------------------------------------------------------------
| Earnings per share, basic, EUR | | 0.17 | 0.15 |
--------------------------------------------------------------------------------
| Earnings per share, diluted, EUR | | 0.17 | 0.15 |
--------------------------------------------------------------------------------
| Equity per share, EUR | | 1.41 | 1.32 |
--------------------------------------------------------------------------------
| Number of shares at end of period, x | | 59,142 | 59,117 |
| 1,000 | | | |
--------------------------------------------------------------------------------
| Number of shares on average, x 1,000 | | 59,134 | 58,965 |
--------------------------------------------------------------------------------
| Share price, EUR | | | |
--------------------------------------------------------------------------------
| Average | | 1.00 | 1.40 |
--------------------------------------------------------------------------------
| Lowest | | 0.75 | 1.15 |
--------------------------------------------------------------------------------
| Highest | | 1.27 | 1.83 |
--------------------------------------------------------------------------------
| Share price at end of period | | 0.84 | 1.24 |
--------------------------------------------------------------------------------
| Market capitalisation of issued stock at | | 49.8 | 73.3 |
| end of period, MEUR | | | |
--------------------------------------------------------------------------------
| Share turnover, million shares | | 23.2 | 38.7 |
--------------------------------------------------------------------------------
| Share turnover, % of total | | 39.2 | 65.4 |
--------------------------------------------------------------------------------
| Share turnover, MEUR | | 23.2 | 53.9 |
--------------------------------------------------------------------------------
| Dividend per share | | 0.07* | 0.07 |
--------------------------------------------------------------------------------
| Dividend per earnings, % | | 0.41 | 0.47 |
--------------------------------------------------------------------------------
| Effective dividend yield | | 0.08 | 0.06 |
--------------------------------------------------------------------------------
| Price/earnings ratio (P/E) | | 4.9 | 8.4 |
--------------------------------------------------------------------------------
*) Board proposal
--------------------------------------------------------------------------------
| KEY FIGURES PER | 4Q/08 | 3Q/08 | 2Q/08 | 1Q/08 | 4Q/07 | 3Q/07 |
| QUARTER, MEUR | | | | | | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 21.7 | 18.2 | 22.2 | 15.2 | 19.2 | 19.1 |
--------------------------------------------------------------------------------
| Net sales, change % | 13.3 | -4.8 | 6.4 | 37.4 | -4.7 | 12.9 |
--------------------------------------------------------------------------------
| Operating result, MEUR | 5.0 | 3.3 | 3.6 | -0.4 | 1.8 | 5.2 |
--------------------------------------------------------------------------------
| % of net sales | 23.1 | 18.2 | 16.3 | -2.6 | 9.3 | 27.2 |
--------------------------------------------------------------------------------
| Result before taxes, | 5.8 | 4.2 | 3.9 | -0.4 | 2.7 | 4.8 |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at end of | 354 | 354 | 359 | 365 | 355 | 352 |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | 0.08 | 0.05 | 0.06 | -0.02 | 0.04 | 0.08 |
| basic, EUR | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.08 | 0.05 | 0.06 | -0.02 | 0.04 | 0.07 |
| diluted, EUR | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.41 | 1.34 | 1.29 | 1.23 | 1.32 | 1.28 |
--------------------------------------------------------------------------------
| Net interest-bearing | -31.0 | -25.2 | -15.5 | -11.8 | -17.5 | -9.2 |
| liabilities, MEUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book, MEUR | 9.7 | 17.2 | 25.1 | 16.8 | 17.5 | 17.1 |
--------------------------------------------------------------------------------
The financial figures in the income statement, the balance sheet and key
indicators are presented in million euros. The figures shown here have been
calculated using exact values.
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