TECNOMEN'S INTERIM REPORT 1 JANUARY - 30 JUNE 2008 (unaudited)
Tecnomen Corporation INTERIM REPORT
13 August 2008 at 8.30 am
TECNOMEN'S INTERIM REPORT 1 JANUARY - 30 JUNE 2008 (unaudited)
Net sales in the second quarter of the year increased 6.4 per cent to EUR 22.2
(20.8) million. The operating cash flow was EUR 3.6 (-1.0) million. Net sales
for the first half of the year increased 17.1 per cent to EUR 37.3 (31.9)
million and the result was EUR 2.3 (2.1) million. The operating cash flow was
EUR 2.1 (-8.1) million. The order book at the close of the period stood at EUR
25.1 (20.5) million.
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| KEY FIGURES | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 2007 |
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| Net sales, MEUR | 22.2 | 20.8 | 37.3 | 31.9 | 70.1 |
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| Net sales, change % | 6.4 | 6.2 | 17.1 | -8.4 | -2.4 |
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| Operating result, MEUR | 3.6 | 3.9 | 3.2 | 1.9 | 8.9 |
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| % of net sales | 16.3 | 18.6 | 8.6 | 6.0 | 12.7 |
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| Profit before taxes, | 3.9 | 4.2 | 3.5 | 2.5 | 10.0 |
| MEUR | | | | | |
--------------------------------------------------------------------------------
| % of net sales | 17.4 | 20.0 | 9.3 | 7.8 | 14.2 |
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| Result for the period | 3.5 | 3.6 | 2.3 | 2.1 | 8.7 |
--------------------------------------------------------------------------------
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| Earnings per share, | 0.06 | 0.06 | 0.04 | 0.03 | 0.15 |
| basic, EUR | | | | | |
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| Earnings per share, | 0.06 | 0.06 | 0.04 | 0.03 | 0.15 |
| diluted, EUR | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book, MEUR | | | 25.1 | 20.5 | 17.5 |
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| Cash flow, MEUR | 3.6 | -1.0 | -2.0 | -14.0 | -2.8 |
--------------------------------------------------------------------------------
| Operating cash flow, | 3.6 | -1.0 | 2.1 | -8.1 | 2.9 |
| MEUR | | | | | |
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| Cash funds, MEUR | | | 15.5 | 6.3 | 17.5 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Equity ratio, % | | | 82.5 | 81.9 | 83.7 |
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| Gearing, % | | | -20.4 | -8.9 | -22.4 |
--------------------------------------------------------------------------------
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| Personnel at end of | 359 | 347 | 359 | 347 | 355 |
| period | | | | | |
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President and CEO Jarmo Niemi:
“Like last year, second quarter net sales in 2008 again rose to a high level.
The order intake, more than EUR 30 million, was one of the best ever, so the
order book was strong at the end of June.
The cash flow from operations in the second quarter was good, at EUR 3.6
million, and as a result the operating cash flow for the full six month period
rose to EUR 2.1 million.
The result for the second quarter showed improvement on the corresponding period
in the previous year. Although the first quarter was weak, the result for the
full six month period rose to the same level as the previous year. The result
for the review period was weakened by the decline of the US dollar against the
euro.
The net sales of the Messaging business unit increased 30 % during the review
period. Particularly encouraging was the growth in the mature European market.
Despite this growth, costs were kept well under control, and as a result the
unit's operating profit improved and rose to well over 20 % of net sales.
The Charging business unit had a strong second quarter that was clearly better
than the first quarter. The major order for a system expansion received at the
end of the second quarter ensured that the unit had a strong order book at the
end of June. The unit's operating result in the second quarter was about 14 % of
net sales. This was not sufficient to make up fully for the weak first quarter,
so the unit's operating result for the January - June period was a loss.”
Unless otherwise stated, all figures presented below are for the review period
1-6/2008 and the figures for comparison are for the corresponding period
1-6/2007.
SALES AND NET SALES
Tecnomen's net sales in the review period increased by 17.1 per cent to EUR 37.3
(31.9) million.
EUR 24.7 million of the sales in the review period has been recognised in
accordance with IAS 11 (Construction contracts) and EUR 12.6 million in
accordance with IAS 18 (Revenues).
Net sales by geographical area were: Americas 42.7 per cent (50.2 %), EMEA 41.3
per cent (40.2 %) and APAC 16.0 per cent (9.5 %).
Net sales by product line were: Messaging 62.5 per cent (56.4 %) and Charging
37.5 per cent (43.6 %).
Sales through global partners totalled EUR 6.0 (10.2) million or 16.1 per cent
(32.0 %) of net sales.
Maintenance and service sales totalled EUR 8.6 (7.1) million or 23.0 per cent
(22.4 %) of net sales.
The order book stood at EUR 25.1 (20.5) million at the end of the review period.
Americas accounted for 66.8 per cent of the order book, EMEA for 24.1 per cent
and APAC for 9.1 per cent.
OPERATING RESULT
The operating result for the review period was EUR 3.2 (1.9) million. The
improvement in the operating result was mainly due to the growth in net sales of
the Messaging business unit in the EMEA and APAC areas.
The result for the period before taxes was EUR 3.5 (2.5) million.
Earnings per share were EUR 0.04 (0.03). Equity per share at the end of the
period was EUR 1.29 (1.21).
FINANCING AND INVESTMENTS
Tecnomen's liquid assets totalled EUR 15.5 (6.3) million. The cash flow for the
six month review period was EUR -2.0 million, which includes dividends of EUR
4.1 million paid in the first quarter.
The balance sheet total on 30 June 2008 stood at EUR 92.4 (86.9) million.
Interest-bearing liabilities amounted to EUR 0.0 (0.0) million. The debt to
equity ratio (gearing) was -20.4 per cent (-8.9 %). The balance sheet structure
remained strong and the equity ratio on 30 June 2008 was 82.5 per cent (81.9 %).
Tecnomen's gross capital expenditure during the review period, excluding the
capitalisation of development costs, was EUR 0.6 (0.9) million or 1.7 per cent
(2.7 %) of net sales.
Financial income and expenses (net) during the review period totalled EUR 0.3
(0.6) million. This comprised mainly interest income on short-term investments.
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| CHANGE IN WORKING CAPITAL, MEUR (increase - / | 1-6/08 | 1-6/07 |
| decrease +) | | |
--------------------------------------------------------------------------------
| Change in accounts receivable | 3.2 | -5.7 |
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| Change in other short-term receivables | -3.0 | -4.3 |
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| Change in inventories | 0.6 | -0.9 |
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| Change in accounts payable | -1.4 | -0.9 |
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| Change in other current liabilities | 2.3 | 3.9 |
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| CHANGE IN WORKING CAPITAL, TOTAL | 1.8 | -7.8 |
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MARKETS
Messaging
Messaging sales remained at a good level. Tecnomen supplied a large Next
Generation Messaging system to a new customer in Asia Pacific and expansions to
existing customers in its main markets. A visual voicemail application for
Apple iPhone was delivered to Swisscom. Maintenance sales were also strong in
all areas.
Charging
The growth in subscriber numbers continued encouragingly in South and Central
America and in Africa. During the second quarter Tecnomen received major
expansion orders for its Convergent Charging solution and renewed maintenance
contracts.
RESEARCH AND DEVELOPMENT
Research and development costs during the review period totalled EUR 8.7 (7.9)
million, corresponding to 23.2 per cent (24.6 %) of net sales. EUR 4.1 (3.3)
million of development costs were capitalised during the review period and will
be amortised over 3-5 years from the start of commercial use. R&D costs of EUR
1.7 (1.0) million were amortised during the review period.
PERSONNEL
At the end of June 2008 Tecnomen employed 359 (347) persons, of whom 90 (87)
worked in Finland and 269 (260) elsewhere. The company employed on average
362(356) people during the review period. Personnel by geographical area were as
follows:
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| | 1-6/2008 | 1-6/2007 | 2007 |
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| Personnel, at end of period | 359 | 347 | 355 |
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| Americas | 65 | 64 | 67 |
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| EMEA | 268 | 257 | 261 |
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| APAC | 26 | 26 | 27 |
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| Personnel, average | 362 | 356 | 354 |
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| Personnel expenses before R&D | 13.6 | 12.4 | 25.3 |
| capitalisation (MEUR) | | | |
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TECNOMEN SHARES AND SHARE CAPITAL
At the end of June 2008 the shareholders' equity of Tecnomen Corporation stood
at EUR 76.2 (71.2) 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 1.29 (1.21).
A total of 12,732,933 Tecnomen shares (EUR 13,679,055) were traded on the
Helsinki Exchanges during the period 2 January - 30 June 2008, representing
21.48 per cent of the total number of shares.
The highest share price quoted in the period was EUR 1.27 and the lowest EUR
0.95. The average quoted price was EUR 1.08 and the closing price on 30 June
2008 was EUR 0.99. The market capitalisation of the share stock at the end of
the period was EUR 58,684,307.
SEGMENT INFORMATION
Tecnomen Group's primary 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 OMX Nordic Exchange 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 June 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 Tecnomenin 2,001,000 stock options remain on 30 June 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 3.28 % of the
Company's shares and the votes carried by the shares after any increase in share
capital. On 30 June 2008 the Company still held 1,030,000 of all the current
stock options. The issued stock options had a maximum diluting effect on 30 June
2008 of 1.62 %.
RISK MANAGEMENT AND UNCERTAIN FACTORS
The greatest risks in Tecnomen's operations are related to major customer and
partner relationships, to agreements made with these, and to the correct timing
and success of its product development.
Tecnomen's largest customers are much bigger businesses than the company itself
and the five largest customers account for more than half of net sales. The
relationship between the company and its major customers is one of
interdependence, which poses a potential risk but also offers significant new
business opportunities.
Certain commitments are associated with the project and maintenance agreements
made by the company, and unforeseen costs may arise in the future from these
agreements. The company aims to limit these liabilities with limitation of
liability clauses in customer contracts. In addition the company has a current
global liability insurance to cover any liabilities that may materialise in
connection with customer projects.
Project deliveries result in large accounts receivable. The payment record of
customers and the situation concerning receivables are actively monitored and
credit rating checks are made on new customers before confirming an offer.
Changes in exchange rates create risks especially in sales activities. A
significant part of the company's net sales is in US dollars. The company hedges
its currency denominated net position for a maximum period of 12 months, using
currency forward contracts and currency options. Liquid funds are invested,
avoiding credit and liquidity risks, in money-market deposits and short-term
interest funds with a good credit rating.
Carrying out projects creates risks. They are contained for example in projects
that require new product development, where creating new product features may
prove more difficult than anticipated. Another problem with project sales arises
from variations in net sales and profit during the different quarters of the
year. Forecasting these variations is often difficult.
Tecnomen operates in a rapidly changing sector. When making R&D decisions there
is the risk that the choice made may not bring the expected returns.
Tecnomen's risks and uncertainties in the near future relate to major projects
that are under negotiation and to their timing.
SALE OF PROPERTY
Tecnomen announced in a stock exchange release on 25 January 2008 that it was
examining the possibility of selling the headquarters property it owns. On 10
March 2008 the Group signed a letter of intent for selling the property. The
asset, which was classified as held for sale, was shown in the balance sheet of
31 March 2008 as a separate item under ‘Non-current assets held for sale',
EUR 4.1 million. However, the letter of intent did not result in the sale of the
property. Due to the downturn in the property market in the first half of the
year the sale is no longer considered probable. The property has therefore been
put back in long-term tangible assets in the balance sheet of 30 June 2008.
EVENTS AFTER THE END OF THE PERIOD
No significant events have occurred after the end of period.
PROSPECTS FOR 2008
The total market for Messaging and Charging is expected to remain unchanged in
2008 from the previous year. The market for conventional proprietary systems is
declining but for IP-based solutions the market is growing. The global economy
remains uncertain and making forecasts is difficult even in the short term.
Net sales in 2008 are expected to be higher than in 2007. To safeguard its
growth potential in the coming years and through this a better financial
performance, Tecnomen is, however, putting much effort into the new convergent
charging products of its Charging business and its markets.
Despite the improvement in net sales, because of these major efforts and the
weakening of the US dollar, it is estimated that the 2008 operating profit will
be smaller than the 2007 figure.
Variations between quarterly figures are expected to be considerable.
FINANCIAL INFORMATION
Tecnomen will publish its third quarter interim report 1-9/2008
on Wednesday, 22 October 2008.
Tecnomen is holding a conference to announce its half year results at 10.00 am
on 13 August 2008 in the Tapiola 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
OMX Nordic Exchange Helsinki Oy
Main media
www.tecnomen.com
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| CONSOLIDATED INCOME | Note | 4-6/08 | 4-6/07 | 1-6/08 | 1-6/07 | 2007 |
| STATEMENT, MEUR | | | | | | |
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| NET SALES | 2 | 22.2 | 20.8 | 37.3 | 31.9 | 70.1 |
--------------------------------------------------------------------------------
| Other operating | | 0.0 | 0.1 | 0.0 | 0.1 | 0.2 |
| income | | | | | | |
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| Materials and | | -4.5 | -5.4 | -8.9 | -7.0 | -15.2 |
| services | | | | | | |
--------------------------------------------------------------------------------
| Employee benefit | | -6.4 | -5.4 | -11.9 | -11.5 | -23.3 |
| expenses | | | | | | |
--------------------------------------------------------------------------------
| Depreciation | | -1.4 | -1.0 | -2.7 | -2.1 | -4.6 |
--------------------------------------------------------------------------------
| Other operating | | -6.2 | -5.3 | -10.6 | -9.6 | -18.4 |
| expenses | | | | | | |
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| OPERATING RESULT | | 3.6 | 3.9 | 3.2 | 1.9 | 8.9 |
--------------------------------------------------------------------------------
| Financial income | | 0.2 | 0.6 | 0.4 | 1.3 | 1.5 |
--------------------------------------------------------------------------------
| Financial expenses | | 0.0 | -0.3 | -0.2 | -0.7 | -0.5 |
--------------------------------------------------------------------------------
| RESULT BEFORE TAXES | | 3.9 | 4.2 | 3.5 | 2.5 | 10.0 |
--------------------------------------------------------------------------------
| Income taxes | | -0.3 | -0.6 | -1.2 | -0.4 | -1.3 |
--------------------------------------------------------------------------------
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| RESULT FOR THE PERIOD | | 3.5 | 3.6 | 2.3 | 2.1 | 8.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | | 0.06 | 0.06 | 0.04 | 0.03 | 0.15 |
| basic, EUR | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | | 0.06 | 0.06 | 0.04 | 0.03 | 0.15 |
| diluted, EUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED BALANCE | Note | 30.6.2008 | 31.12.2007 | 30.06.2007 |
| SHEET, | | | | |
| MEUR | | | | |
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| Assets | | | | |
--------------------------------------------------------------------------------
| Goodwill | | 0.7 | 0.7 | 0.7 |
--------------------------------------------------------------------------------
| Other intangible assets | 3 | 18.3 | 15.8 | 13.0 |
--------------------------------------------------------------------------------
| Tangible assets | 4 | 7.6 | 8.1 | 8.5 |
--------------------------------------------------------------------------------
| Long-term trade and | | 0.5 | 0.2 | 0.3 |
| other receivables | | | | |
--------------------------------------------------------------------------------
| Current assets | | | | |
--------------------------------------------------------------------------------
| Inventories | 5 | 1.8 | 2.4 | 2.8 |
--------------------------------------------------------------------------------
| Trade receivables | | 20.5 | 25.8 | 31.7 |
--------------------------------------------------------------------------------
| Other receivables | | 27.4 | 24.8 | 23.6 |
--------------------------------------------------------------------------------
| Cash and cash | | 15.5 | 17.5 | 6.3 |
| equivalents | | | | |
--------------------------------------------------------------------------------
| TOTAL ASSETS | | 92.4 | 95.2 | 86.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Shareholders' equity | | 76.2 | 78.0 | 71.2 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Non-current liabilities | | | | |
--------------------------------------------------------------------------------
| Long-term non-interest | | 0.0 | 0.0 | 0.1 |
| bearing liabilities | | | | |
--------------------------------------------------------------------------------
| Deferred tax | | 4.2 | 3.4 | 3.0 |
| liabilities | | | | |
--------------------------------------------------------------------------------
| Current liabilities | | | | |
--------------------------------------------------------------------------------
| Short-term non-interest | | 12.0 | 13.8 | 12.7 |
| bearing liabilities | | | | |
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| EQUITY AND LIABILITIES, | | 92.4 | 95.2 | 86.9 |
| TOTAL | | | | |
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CHANGE IN SHAREHOLDERS' EQUITY, MEUR
--------------------------------------------------------------------------------
| MEUR | Share | Shar | Own | Trans- | Invested | Other | Other | Total |
| | capi- | e | share | lation | non-rest | re-se | re-ser | |
| | tal | prem | s | differ | rict-ed | rves | ves | |
| | | -ium | | ence | equity | | | |
| | | fund | | | reserve | | | |
--------------------------------------------------------------------------------
| Sharehol | 4.7 | 0.8 | -0.1 | 0.2 | 0.3 | 54.7 | 17.4 | 78.0 |
| -ders' | | | | | | | | |
| e | | | | | | | | |
| quity | | | | | | | | |
| 1 Jan. | | | | | | | | |
| 2008 | | | | | | | | |
--------------------------------------------------------------------------------
| Translat | | | | 0.0 | | | | 0.0 |
| ion | | | | | | | | |
| differen | | | | | | | | |
| ce | | | | | | | | |
--------------------------------------------------------------------------------
| Net gain | | | | 0.0 | | | | 0.0 |
| recognis | | | | | | | | |
| ed | | | | | | | | |
| directly | | | | | | | | |
| in | | | | | | | | |
| sharehol | | | | | | | | |
| ders' | | | | | | | | |
| equity | | | | | | | | |
--------------------------------------------------------------------------------
| Result | | | | | | | 2.3 | 2.3 |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | 0.0 | | | 2.3 | 2.3 |
| profits | | | | | | | | |
| and | | | | | | | | |
| losses | | | | | | | | |
| recognis | | | | | | | | |
| ed | | | | | | | | |
| during | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Dividend | | | | | | -4.1 | | -4.1 |
| paid | | | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 0.0 | | | 0.0 |
| exercise | | | | | | | | |
| d | | | | | | | | |
--------------------------------------------------------------------------------
| Share-ba | | | | | | | 0.1 | 0.1 |
| sed | | | | | | | | |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | -0.1 | -0.4 |
| adjustme | | | | | | | | |
| nts | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehol | 4.7 | 0.8 | -0.1 | 0.2 | 0.3 | 50.6 | 19.8 | 76.2 |
| ders' | | | | | | | | |
| equity | | | | | | | | |
| 30 June | | | | | | | | |
| 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.
--------------------------------------------------------------------------------
| 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 | | | | | | | 2.1 | 2.1 |
| for the | | | | | | | | |
| period | | | | | | | | |
--------------------------------------------------------------------------------
| Total | | | | 0.0 | | | 2.1 | 2.1 |
| profits | | | | | | | | |
| and | | | | | | | | |
| losses | | | | | | | | |
| recognise | | | | | | | | |
| d | | | | | | | | |
| during | | | | | | | | |
| pe | | | | | | | | |
| riod | | | | | | | | |
--------------------------------------------------------------------------------
| Capital | | | | | | -5.9 | | -5.9 |
| repayment | | | | | | | | |
--------------------------------------------------------------------------------
| Options | | | | | 0.0 | | | 0.0 |
| exercised | | | | | | | | |
--------------------------------------------------------------------------------
| Share-bas | | | | | | | 0.1 | 0.1 |
| ed | | | | | | | | |
| payments | | | | | | | | |
--------------------------------------------------------------------------------
| Other | | | | | | | 0.2 | 0.2 |
| adjustmen | | | | | | | | |
| ts | | | | | | | | |
--------------------------------------------------------------------------------
| Sharehold | 4.7 | 0.8 | -0.1 | 0.2 | 0.1 | 54.7 | 10.8 | 71.2 |
| ers' | | | | | | | | |
| equity | | | | | | | | |
| 30 June | | | | | | | | |
| 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 | 1-6/2008 | 1-6/2007 |
--------------------------------------------------------------------------------
| Cash flow from operating activities | | |
--------------------------------------------------------------------------------
| Result for the period | 2.3 | 2.1 |
--------------------------------------------------------------------------------
| Adjustments | 1.7 | 1.4 |
--------------------------------------------------------------------------------
| Interest income | -0.5 | -0.6 |
--------------------------------------------------------------------------------
| Interest expense | 0.3 | 0.5 |
--------------------------------------------------------------------------------
| Income taxes | 1.2 | 0.2 |
--------------------------------------------------------------------------------
| Other adjustments | 0.2 | 0.0 |
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| Changes in working capital | 1.8 | -7.8 |
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| Interest paid | -0.0 | -0.0 |
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| Interest received | 0.3 | 0.4 |
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| Income taxes paid | -0.3 | -0.1 |
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| Net cash flow from operating activities | 6.9 | -3.9 |
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| Cash flow from investments | | |
--------------------------------------------------------------------------------
| Investments in intangible assets | -4.1 | -3.3 |
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| Investments in tangible assets | -0.6 | -0.9 |
--------------------------------------------------------------------------------
| Net cash flow from investments | -4.7 | -4.2 |
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| Cash flow from financing activities | | |
--------------------------------------------------------------------------------
| Shares subscribed with share options | 0.0 | 0.0 |
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| Dividend paid | -4.1 | |
--------------------------------------------------------------------------------
| Capital repayment | | -5.9 |
--------------------------------------------------------------------------------
| Net cash flow from financing | -4.1 | -5.9 |
--------------------------------------------------------------------------------
| Increase (+) and decrease (-) in liquid | -2.0 | -14.0 |
| funds | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Liquid funds on 1 Jan. | 17.5 | 20.4 |
--------------------------------------------------------------------------------
| Impact of changes in exchange rates | 0.0 | 0.0 |
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| Change in fair value of investments | -0.0 | -0.2 |
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| Liquid funds on 30 June | 15.5 | 6.3 |
--------------------------------------------------------------------------------
| Change | -2.0 | -14.0 |
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1. ACCOUNTING PRINCIPLES AND BASIS FOR PREPARING CONSOLIDATED FINANCIAL
STATEMENTS
The Group's interim 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 | 1-6/2008 | 1-6/2007 |
| (primary segment information) | | |
| NET SALES, MEUR | | |
--------------------------------------------------------------------------------
| Messaging | 23.3 | 18.0 |
--------------------------------------------------------------------------------
| Charging | 14.0 | 13.9 |
--------------------------------------------------------------------------------
| TOTAL | 37.3 | 31.9 |
--------------------------------------------------------------------------------
| OPERATING RESULT, MEUR | 1-6/2008 | 1-6/2007 |
--------------------------------------------------------------------------------
| Messaging | 6.1 | 3.8 |
--------------------------------------------------------------------------------
| Charging | -1.6 | -0.7 |
--------------------------------------------------------------------------------
| Unallocated items | -1.3 | -1.2 |
--------------------------------------------------------------------------------
| TOTAL | 3.2 | 1.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| GEOGRAPHICAL SEGMENTS | 1-6/2008 | 1-6/2007 |
| (secondary segment information) | | |
| NET SALES, MEUR | | |
--------------------------------------------------------------------------------
| Americas | 15.9 | 16.0 |
--------------------------------------------------------------------------------
| EMEA | 15.4 | 12.8 |
--------------------------------------------------------------------------------
| APAC | 6.0 | 3.0 |
--------------------------------------------------------------------------------
| TOTAL | 37.3 | 31.9 |
--------------------------------------------------------------------------------
3. INTANGIBLE ASSETS
During the review period EUR 4.1 million of development costs have been
capitalised (EUR 3.3 million during 1 Jan-30 June 2007) and will be amortised
over 3-5 years from the start of commercial use. Research and development costs
of EUR 1.7 were amortised during the review period (EUR 1.0 million during 1
Jan-30 June 2007).
4. TANGIBLE ASSETS
Acquisitions of tangible assets in the review period totalled EUR 0.6 million
(EUR 0.9 million during 1 Jan-30 June 2007). Disposals during the review period
were EUR 0.1 million (EUR 0.0 million during 1 Jan-30 June 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
during 1 Jan-30 June 2007).
6. OPERATING LEASES, MEUR
--------------------------------------------------------------------------------
| Operating leases | 1-6/2008 | 2007 |
--------------------------------------------------------------------------------
| Less than one year | 0.5 | 0.5 |
--------------------------------------------------------------------------------
| Between one and five years | 0.7 | 0.7 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 7. CONSOLIDATED CONTINGENT LIABILITIES, MEUR | 1-6/2008 | 2007 |
--------------------------------------------------------------------------------
| Pledges | | |
--------------------------------------------------------------------------------
| On own behalf | 0.0 | 0.0 |
--------------------------------------------------------------------------------
| Other liabilities | | |
--------------------------------------------------------------------------------
| Restriction related to real estate in Ireland | 0.4 | 0.4 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| 8. CONSOLIDATED KEY FINANCIAL | 1-6/2008 | 1-6/2007 | 2007 |
| FIGURES, MEUR | | | |
--------------------------------------------------------------------------------
| Return on investment, % | 9.5 | 8.7 | 13.6 |
--------------------------------------------------------------------------------
| Return on equity, % | 5.9 | 5.6 | 11.4 |
--------------------------------------------------------------------------------
| Equity ratio, % | 82.5 | 81.9 | 83.7 |
--------------------------------------------------------------------------------
| Debt/equity ratio (gearing), % | -20.4 | -8.9 | -22.4 |
--------------------------------------------------------------------------------
| Investments | 0.6 | 0.9 | 1.2 |
--------------------------------------------------------------------------------
| % of net sales | 1.7 | 2.7 | 1.8 |
--------------------------------------------------------------------------------
| Research and development | 8.7 | 7.9 | 16.1 |
--------------------------------------------------------------------------------
| % of net sales | 23.2 | 24.6 | 22.9 |
--------------------------------------------------------------------------------
| Order book | 25.1 | 20.5 | 17.5 |
--------------------------------------------------------------------------------
| Personnel, average | 362 | 356 | 354 |
--------------------------------------------------------------------------------
| Personnel, at end of period | 359 | 347 | 355 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| CONSOLIDATED KEY FIGURES PER | 1-6/2008 | 1-6/2007 | 2007 |
| SHARE, MEUR | | | |
--------------------------------------------------------------------------------
| Earnings per share, basic, EUR | 0.04 | 0.03 | 0.15 |
--------------------------------------------------------------------------------
| Earnings per share, diluted, | 0.04 | 0.03 | 0.15 |
| EUR | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.29 | 1.21 | 1.32 |
--------------------------------------------------------------------------------
| Number of shares at end of | 59,277 | 59,072 | 59,252 |
| period, x 1,000 | | | |
--------------------------------------------------------------------------------
| Number of shares on average, x | 59,117 | 58,904 | 58,965 |
| 1,000 | | | |
--------------------------------------------------------------------------------
| Share price, EUR | | | |
--------------------------------------------------------------------------------
| Average | 1.08 | 1.47 | 1.40 |
--------------------------------------------------------------------------------
| Lowest | 0.95 | 1.23 | 1.15 |
--------------------------------------------------------------------------------
| Highest | 1.27 | 1.83 | 1.83 |
--------------------------------------------------------------------------------
| Share price at end of period | 0.99 | 1.25 | 1.24 |
--------------------------------------------------------------------------------
| Market capitalisation of issued | 58.7 | 73.8 | 73.3 |
| stock at end of period, MEUR | | | |
--------------------------------------------------------------------------------
| Share turnover, million shares | 12.7 | 19.2 | 38.7 |
--------------------------------------------------------------------------------
| Share turnover, % of total | 21.5 | 32.5 | 65.4 |
--------------------------------------------------------------------------------
| Share turnover, MEUR | 13.7 | 28.1 | 53.9 |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| KEY FIGURES PER | 2Q/08 | 1Q/08 | 4Q/07 | 3Q/07 | 2Q/07 | 1Q/07 |
| QUARTER, MEUR | | | | | | |
--------------------------------------------------------------------------------
| Net sales, MEUR | 22.2 | 15.2 | 19.2 | 19.1 | 20.8 | 11.0 |
--------------------------------------------------------------------------------
| Net sales, change % | 6.4 | 37.4 | -4.7 | 12.9 | 6.2 | -27.3 |
--------------------------------------------------------------------------------
| Operating result, MEUR | 3.6 | -0.4 | 1.8 | 5.2 | 3.9 | -2.0 |
--------------------------------------------------------------------------------
| % of net sales | 16.3 | -2.6 | 9.3 | 27.2 | 18.6 | -17.7 |
--------------------------------------------------------------------------------
| Result before taxes, | 3.9 | -0.4 | 2.7 | 4.8 | 4.2 | -1.7 |
| MEUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Personnel at end of | 359 | 365 | 355 | 352 | 347 | 352 |
| period | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Earnings per share, | 0.06 | -0.02 | 0.04 | 0.08 | 0.06 | -0.03 |
| basic, EUR | | | | | | |
--------------------------------------------------------------------------------
| Earnings per share, | 0.06 | -0.02 | 0.04 | 0.07 | 0.06 | -0.03 |
| diluted, EUR | | | | | | |
--------------------------------------------------------------------------------
| Equity per share, EUR | 1.29 | 1.23 | 1.32 | 1.28 | 1.21 | 1.15 |
--------------------------------------------------------------------------------
| Net interest-bearing | -15.5 | -11.8 | -17.5 | -9.2 | -6.3 | -7.3 |
| liabilities, MEUR | | | | | | |
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
| Order book, MEUR | 25.1 | 16.8 | 17.5 | 17.1 | 20.5 | 15.9 |
--------------------------------------------------------------------------------
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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