SYSOPEN PLC S FINANCIAL STATEMENTS FOR 1 JANUARY 31 DECEMBER 2001

Transcription

1 SysOpen Plc STOCK EXCHANGE RELEASE 14 February 2002 SYSOPEN PLC S FINANCIAL STATEMENTS FOR 1 JANUARY 31 DECEMBER Turnover and operating profit rose as planned - Turnover amounted to EUR 30.8 million, up 33.7 per cent year on year - Operating profit before goodwill amortisation (EBITA) accounted for 13.4 per cent of consolidated turnover, totalling EUR 4.1 million, up 27.9 per cent on the previous year - Profit before taxes and reserves reached EUR 3.7 million, up 22.3 per cent on the previous year - The period-end number of employees totalled 355, up 17.2 per cent year on year - Earnings per share rose to EUR 0.26, up 23.8 per cent year on year - The Board of Directors proposes a dividend of EUR 0.22 per share for Good profitability is expected throughout 2002 YEAR-ON-YEAR TURNOVER Consolidated turnover for 2001 totalled EUR 30.8 million (EUR 23 million in 2000), showing a yearon-year growth of 33.7 per cent, based mainly on organic growth. International business accounted for 2,1 per cent of consolidated turnover. Consolidated pro-forma turnover, including the turnover of SysOpen UK Ltd (former Intellectech Ltd) for 1 January 31 October 2001, rose to EUR 31.1 million (EUR 25 million in 2000). Turnover by business area remained almost unchanged and was as follows (the previous year s figure shown in brackets): Turnover by business area in 2001: - Enterprise Application Solutions 74.0% (74%) - Software Solutions 15.6% (15%) - Consulting Services 10.4% (11%) REPORTED TURNOVER FOR THE FOURTH QUARTER YEAR ON YEAR Consolidated turnover for the fourth quarter (Oct. Dec. 2001) amounted to EUR 8.8 million (EUR 7.0 million in Oct. Dec. 2000), showing an increase of 25.7 per cent on the previous year. REPORTED OPERATING PROFIT AND FINANCIAL PERFORMANCE YEAR ON YEAR Consolidated operating profit and net profit improved and were at healthy levels according to plans, thanks to the high utilisation rate of the service business and successful cost-control measures. Consolidated operating profit before goodwill amortisation (EBITA) improved by 27.9 per cent despite the non-recurring direct expenses (EUR 0.24 million) related to the unmaterialised company acquisition in the first quarter. Operating profit before goodwill amortisation amounted to EUR 4.1 million, accounting for 13.4 per cent of consolidated turnover for the financial year. Financial income showed a loss of EUR 155,000, including the EUR 296,000 write-down calculated on the loss reserve in unit trusts. Nevertheless, profit before extraordinary items and taxes increased by 22.3 per cent to EUR 3.7 million.

2 Net profit for 2001 totalled EUR 2.4 million, showing a year-on-year growth of 23.3 per cent. Earnings per share improved to EUR 0.26 (EUR 0.21), showing an increase of 23.8 per cent. REPORTED OPERATING PROFIT AND FINANCIAL PERFORMANCE FOR THE FOURTH QUARTER YEAR ON YEAR Consolidated operating profit before goodwill amortisation (EBITA) for the fourth quarter totalled EUR 1.1 million (EUR 1.3 million in Oct. Dec. 2001), representing 12.5 per cent of consolidated turnover for the period, i.e. relative profitability year on year was lower than in the previous year (18.4 per cent). The fall was due to the non-recurring expenses incurred during the fourth quarter related to the removal of the head office. HUMAN RESOURCES AND ADMINISTRATION Human-resource development focused on enhancing new-technology expertise and improving special skills required by integration projects. By investing in premises and infrastructure, SysOpen contributed to improved employee satisfaction and the working environment. Investments in employee well-being and working capacity also played a major role in maintaining employee satisfaction. The year-end number of employees grew to 355 (303), showing an increase of 17.2 per cent on the previous year. The number of staff for the period averaged 341 (267). Employee turnover rate was 12.2 per cent (11.8 per cent). SysOpen Plc s Board of Directors appointed Arto Sahla as the Group s Managing Director from 1 October Sahla has acted as Deputy Managing Director in charge of SysOpen s domestic business operations since the spring of Jorma Kylätie acted as Managing Directors until 30 September Jorma Kylätie was elected Chairman of the Board of Directors from 1 October Until 30 September 2001, Matti Savolainen chaired the Board of Directors. Kylätie, as a full-time Board Chairman, will be in charge of SysOpen s investor relations and company and business arrangements. Kari Karvinen, who is in charge of corporate governance, continues to act as the Vice-Chairman of the Board of Directors. Matti Savolainen continues as a Board member responsible for administration and human resources. Timo Tiihonen, who is in charge of industry restructuring issues, and Risto Linturi, who is in charge of analysing the effects of societal and technological changes, also continue to sit on the Board. During the financial year, KPMG Wideri Oy Ab, Authorised Public Accountants, acted as the Group s auditor, Ari Ahti, Authorised Public Accountant, as the principal auditor. Employees by function in 2001: - Enterprise Application Solutions 57% - Software Solutions 17% - Consulting Services 11% - Administration and management 11% - International operations 4% The Group moved into new premises, SysOpen Tower, in Pitäjänmäki, Helsinki, in September. The leased premises were occupied by a total of 200 employees from three offices.

3 FINANCING AND CAPITAL EXPENDITURE The Group s financial position remained healthy throughout the report period. Balance sheet total was EUR 18.1 million (EUR 16.8 million in 2000) and equity ratio was 76 per cent (76 per cent). The ratio of net liabilities to shareholders equity, or net gearing, was -39 per cent (-49 per cent). Liquid assets totalled EUR 5.3 million (EUR 6.3 million). The Group s gross capital expenditure amounted to EUR 1.7 million (EUR 1.1 million). This increase in gross capital expenditure was mainly due to the removal of the head office to SysOpen Tower. In addition to the gross capital expenditure, the Group continued to spend on service development and software component engineering. These investments were directly expensed as incurred, excluding the product development expenses of EUR 0.03 million capitalised in the first quarter. SHARE CAPITAL AND SHARES Pursuant to the authorisation given by the Extraordinary General Meeting of 23 November 2000, the Board of Directors decided to increase the company s share capital from EUR to EUR 836,785 on non-cash contribution terms. The nominal value of a share is EUR The number of shares is 9,362,914. The Group bought back own shares, and the number of treasury shares held by the Group at the end of the financial year totalled 100,000, their average purchase price being EUR 6.10 per share. SysOpen Plc s Board of Directors has approved the subscription rights related to the share-option scheme for in accordance with the terms and conditions of the share-option scheme. All the 400,000 option rights were exercised. The share subscription period with all warrants will expire on 31 May The share subscription price for E warrants is set at EUR 8.30 per share and for F warrants at EUR 5.36 per share. On 26 October 2001, SysOpen Partners Oy, the Group s wholly owned subsidiary, held a total of 151,908 option rights in accordance with the share-option scheme for A total of 369,000 share options in accordance with SysOpen Plc s share-option scheme for has been issued, and all of them have been subscribed. The share subscription period for all warrants will expire on 31 October The share subscription price for A, B and C warrants is EUR 6.40, EUR 9.30 and EUR 6.55 per share, respectively. On 5 November 2001, SysOpen Partners Oy, the Group s wholly owned subsidiary, held a total of 12,310 option rights in accordance with the share-option scheme for Ten major shareholders, as of 31 December 2001 Proportion (%) of shares and voting rights Kari Karvinen 16.9% Matti Savolainen 16.8% Jorma Kylätie 16.2% LEL Employment Pension 2.9% Mutual Insurance Company Eläke-Fennia 2.3% Olli Ahonen 2.0% Suomi Insurance Company Ltd 1.6% Sampo Suomi Osake 1.5% Seppo Sneck 1.4% Mandatum Suomi Kasvuosake 1.2% Holding by the number of shares held, as of 31 December 2001

4 Number of shares Holding Proportion of shares % 0.8% 101 1, % 5.7% 1,001 10, % 6.0% 10, , % 21.1% 100,001 1,000, % 16.4% 1,000,001 3,000, % 50.0% Holding by sector, as of 31 December 2001 Proportion (%) of holdings Proportion (%) of shares Companies 7.4% 4.0% Financing and insurance 0.8% 10.6% Government sector 0.1% 5.2% Non-profit organisations 0.3% 0.5% Households 91% 79.5% The Group s share performance on the Helsinki Exchanges during 2001 The lowest reported share quotation was EUR 4.10 and the highest was EUR The Group s share closed at EUR 4.85 on the final trading day in The weighted average price was EUR The Group s market capitalisation totalled EUR 44,925,000 at the end of the financial year. SysOpen had a total of 2,630 shareholders at the end of the year. Group shares have been quoted on the Main List of the Helsinki Exchanges under the telecommunications and electronics business sector since 3 September Previously, the shares had been quoted on the NM List on the Helsinki Exchanges as of 29 September The latest trading day for the shares on the NM List was 31 August The lot includes 50 shares. Shareholders meetings SysOpen Plc s Annual General Meeting was held on 29 March The AGM adopted the Financial Statements for 2001 and discharged those accountable from liability. In accordance with the Board s proposal, the AGM confirmed profit distribution for 2000, according to which a pershare dividend of EUR 0.11, or EUR 1,073,994 in total (52.4 per cent of the Group s profit), was distributed to shareholders. On 10 April, the dividend was paid to shareholders registered as the company s shareholders on the record date of 3 April Kari Karvinen, Jorma Kylätie, Risto Linturi, Matti Savolainen and Timo Tiihonen were re-elected members of the Board of Directors. The AGM also approved the Board proposals for the alterations of Chapters 6 and 11 of the Articles of Associations. In accordance with Chapter 6, the Board of Directors may include from 3 to 7 regular members. In accordance with the alteration of Chapter 11, the Notice of the Annual General Meeting shall reach shareholders not later than 17 days prior to the meeting. COMPANY ACQUISITIONS In November 2001, based on a share-swap agreement, SysOpen agreed to buy 51 per cent of the share capital of Intellectech Ltd, specialising in information systems for passenger traffic and goods transport. SysOpen is entitled to redeem the remaining 49 per cent of the company s share capital from its key personnel.

5 In line with SysOpen s long-term strategy, the acquisition is a step towards achieving an international market position through selected software solutions especially in the field of mobile integration. The acquisition will strengthen the international market position of OpenID solutions targeted at passenger traffic and goods transport. At the end of the financial year, the new subsidiary was renamed SysOpen UK Ltd. On 9 January 2001, SysOpen signed a letter of intent with Stonesoft Corporation to buy Stonesoft e-solutions Oy by 12 February 2001, the targeted date for the acquisition. The negotiations over the acquisition produced no tangible results since no agreement was reached to satisfy both parties. At the end of the year, SysOpen raised its holding in its subsidiary Object Team Oy from 80 to 90 per cent. SysOpen s holding in Visy Oy, an associated company, decreased from 27.7 per cent to 25 per cent. No other changes in subsidiary and associated company holdings took place during the financial year. GROUP STRUCTURE As of the beginning of 2002, SysOpen s business units include the following functions: Trade and Services, Telecommunications and Industry, Financing, Domestic Region, SysOpen Object Team Oy, Software Solutions, and Business Development and International Business Operations. With the new Group structure, we aim to make more efficient use of our industry expertise and be closer to our customers. A total of five subsidiaries were merged into the parent company with a view to streamlining Group structure and increasing operational efficiency. These subsidiaries Benefect Oy, EP-Logistics Oy, SysOpen Development Oy, Tietovalmis Group Oy and Sypal Oy were merged into the parent company on 1 September 2001, which was registered with the Trade Register on 11 December BUSINESS AREAS SysOpen provides its customers with e-business supporting professional services and application software. The business areas are divided into Enterprise Application Solutions, Software Solutions and the supporting Consulting Services and Technology Development. During the report period, SysOpen further consolidated its position as an integrator of ebusiness solutions (Integrated esolutions) for large and mid-sized customers. With healthy profitability, demand for Enterprise Application Solutions and Consulting Services remained strong. Software Solutions still reported some loss due to R&D investments made using cash-flow financing. The business area placed heavy emphasis on the foreign sales of packaged software and partnerships. The Software Solutions division s primary focus is on system implementations based on proprietary components, such as OpenPort and OpenID. The software solutions based on these components designed for individual industries chiefly include integrated systems for the needs of passenger traffic and unions and associations. On the basis of the OpenID product frame, the company has implemented the egate system for Finnair and a host of related solutions. OpenID has also been developed further for extended use in passenger traffic.

6 The OpenZone software product, a result of our product development, offers basic services for regional management and serves as a basis for further customised implementation. The first OpenZone solutions were implemented for two customers. The Mobile Integration business area, which includes the OpenID and OpenZone businesses and part of the OpenPort business, is gathering momentum. The slackening PABX market has reduced the demand for the subsidiary CallCom s software solutions. The efficiency-enhancing measures started in the report period are expected to turn company performance profitable in the first half of During the financial year, CallCom, who showed a loss for the period, accounted for 2.4 per cent of consolidated turnover. During the year, SysOpen discontinued the dealership of Abalon, a product designed for CRM solutions. In future, SysOpen will operate in the field of CRM by providing product-independent consulting services. MAJOR AGREEMENTS FOR THE FINANCIAL YEAR CallCom Oy, a SysOpen company, will supply Siemens AG Austria with the Sinfo Forum accessibility solution for call services. This solution enables improvements in employee accessibility and faster customer service. The deal struck in October will foster the internationalisation of SysOpen s Software Solutions business and widen co-operation with Siemens. CallCom makes information and accessibility systems which Siemens sells under the Sinfo Forum brand name. In late May, SysOpen entered into a major agreement with the OAJ (Trade Union of Education in Finland), the largest affiliate of the AKAVA (The Confederation of Unions for Academic Professionals in Finland). The OAJ will be provided with new information systems, which will enable the union to further develop its membership services and to better look after its members interests. At the end of June, SysOpen entered into an agreement with the Finnish Sports Federation (SFS) on implementing a membership-information management system for sports organisations. The deal is a major step in SysOpen s effort to expand the Group s markets from trade unions to other associations. The system implemented for the SFS is based on SysOpen s proprietary componentbased OpenPort architecture. According to the agreement signed in June, SysOpen is defining a sophisticated Java/EJB-based application architecture for Elisa Communications and Radiolinja and is planning and adjusting the application development process. The process to be carried out is a method, which provides Elisa Communications and Radiolinja with an opportunity for the ever-flexible development of serverbased Java applications for a scalable environment. In June 2000, there was an agreement signed between SysOpen and Finnair on transforming egate, which was successfully pre-piloted last November, into the production phase. The wireless egate is an automatic passenger-boarding system to get busy passengers with an e-ticket onboard the aircraft faster. On the basis of the agreement, SysOpen will supply Finnair with 30 egates. Events after the report period In February 2002, SysOpen signed an agreement on selling its Consulting Services, Logistics business, to its management on an MBO basis. The buyers include five managers and consultants in the Consulting Services, Logistics business. SysOpen has a 10 per cent minority interest in the newly established company.

7 REVISED GROUP VISION On 4 November 2001, SysOpen Plc s Board of Directors approved new long-term corporate goals for , replacing the vision goals announced in the autumn of SysOpen s vision is to be the leading ebusiness solutions integrator in Finland and to also operate in global markets with selected software solutions. SysOpen will focus on business areas in which the Group s overall profitability and growth will remain at a healthy level and markedly exceed the market s average. The Group s business areas include Enterprise Application Solutions, Software Solutions and the supporting Consulting Services and Technology Development. NEAR-TERM PROSPECTS Despite the slower-than-expected economic recovery, SysOpen shows cautious optimism when it comes to the Group s business development in the near future. The factors behind this caution include the restructuring processes in a number of industries. The optimism, in turn, is based on the fact that demand for our services has remained strong and we have maintained our position among our customers and obtained new customer with great business potential. We expect the Customised Solutions expand profitably and estimate that our delivery volumes abroad and home will increase. Demand for Consulting Services and Technology Development will also remain robust especially when it comes to challenging object-technology projects and IT architecture projects. The successful cost-control measures and the focus on profitable and growing business areas will improve SysOpen s company performance in We estimate that the first-quarter results for 2002 will reach the targeted level as planned with healthy profitability. Our estimate is based on our perception of the current market situation, the achieved results in the first few months of 2002, and the backlog of orders. DIVIDEND The Group s unrestricted shareholders equity in the balance sheet on 31 December 2001 totalled EUR 5,467,872 of which distributable retained earnings were EUR 5,467,872. The parent company s unrestricted shareholders equity on 31 December 2001 amounted to EUR 5,376,857, of which distributable retained earnings were EUR 5,376,857. SysOpen Plc s Board of Directors proposes to the Annual General Meeting that a per-share dividend of EUR 0.22 (EUR 0.11), or EUR 2.0 million in total (EUR 1.0), be distributed to shareholders holding outstanding shares at the time of dividend distribution. This amount of dividend payable accounts for 84.1 per cent (52.4 per cent) of the Group s profit for the financial year. The Board of Directors proposes that the remainder of the profit for the period be entered in retained earnings in the shareholders equity. On 12 February 2002, the number of outstanding shares totalled 9,262,914 and the dividend payable amounts to EUR 2.0 million FINANCIAL INFORMATION As of 2002, SysOpen will, in line with its long-term plan, provide information on company performance in printed form by business area in line with its business strategies. The reports will

8 be based on cumulative and numberical information by business area, which include Enterprise Application Solutions and Software Solutions. As a result of SysOpen s business re-focus, Consulting Services no longer exists as a separate and independent reporting unit. Briefing on the Financial Statements on 14 February 2002 SysOpen will hold a briefing on the Financial Statements for analysts and the media at SysOpen Tower in Hiomotie 19, Pitäjänmäki, Helsinki, on Thursday, 14 February 2002, at 12:00 p.m. The bus(es) chartered for the briefing will start on Keskuskatu 2, at 11:30 a.m. Lunch will be served. All are welcome. Disclosures of financial statements and the AGM in 2002 The Annual Report of 2001 will be issued on 14 March SysOpen reports on its company performance on a quarterly basis. Interim Reports for 2002 will be released as follows: The first-quarter interim report on Wednesday, 8 May 2002 The second-quarter interim report on Thursday, 15 August 2002 The third-quarter interim report on Thursday, 7 November 2002 The Annual General Meeting will be held on Thursday, 21 March Helsinki, 14 February 2002 SysOpen Plc Board of Directors FOR FURTHER INFORMATION, PLEASE CONTACT - Jorma Kylätie, Chairman of the Board of Directors, tel , gsm , jorma.kylatie@sysopen.fi - Arto Sahla, Managing Director, tel , gsm , arto.sahla@sysopen.fi - Kirsi Lindroth, Director of Corporate Communications, tel , gsm , kirsi.lindroth@sysopen.fi The Financial Statements and the slide show will also be demonstrated to Investors on the Group s website at from 1:00 p.m. DISTRIBUTION Helsinki Exchanges Major media ATTACHMENTS Consolidated Income Statement Consolidated Balance Sheet Key figures and ratios Consolidated Income Statement for 1 January-31 December 2001 The earnings-per-share ratio is based on the average share-issue adjusted number of shares (9,191,756) for the financial year. The number of outstanding shares totalled 9,262,914 at the end of the year. The company held a total of 100,000 treasury shares at the end of the year. The Financial Statements have been audited.

9 Consolidated Income Statement 1 January 31 December 2001 (12 months) (EUR 1,000) 1 Jan. 31 Dec Jan. 31 Dec TURNOVER 30,756 22,995 Other operating income Materials and services -1, Personnel expenses -16,936-13,065 Other operating expenses Depreciation and value adjustments OPERATING PROFIT GOODWILL AMORTISATION Amortisation on goodwill - 7,317-5, ,108 3, OPERATING PROFIT 3,816 2,911 Financial income and expenses Profit before appropriations and taxes 3,661 2,994 Direct taxes -1, Minority interest PROFIT FOR THE PERIOD 2,379 1,929

10 Consolidated Balance Sheet on 31 December 2001 (EUR 1,000) ASSETS 31 Dec Dec FIXED ASSETS Intangible assets Development costs Intangible rights Other non-current assets Group goodwill 1,135 1,100 Intangible assets total 2,008 1,909 Tangible assets 1,916 1,394 Long-term investments Other investments 1,227 1,219 INVENTORIES AND CURRENT ASSETS Inventories Current receivables 7,599 5,962 Short-term investments 1,827 1,968 Cash and bank receivables 3,478 4,317 ASSETS TOTAL 18,055 16,769 LIABILITIES AND SHAREHOLDERS EQUITY 31 Dec Dec SHAREHOLDERS EQUITY Share capital Issue premium fund 7,241 7,209 Retained earnings 3,089 2,774 Profit for the period 2,379 1,929 SHAREHOLDERS EQUITY TOTAL 13,496 12,689 MINORITY INTEREST LIABILITIES Long-term liabilities 77 Current liabilities 4,398 3,921 LIABILITIES AND SHAREHOLDERS EQUITY TOTAL 18,055 16,769

11 Key figures and ratios for the Group 1 January 31 December Jan. 31 Dec Jan. 31 Dec Group financial indicators (EUR 1,000) Turnover 30,756 22,995 Growth, % Operating profit before goodwill 4,108 3,215 amortisation % of turnover Operating profit 3,816 2,911 % of turnover Profit before appropriations and 3,661 2,994 taxes % of turnover Return on equity, % Return on capital invested, % Interest-bearing liabilities Short-term investments & cash and 5,304 6,285 bank receivables Net gearing, % Equity ratio, % Capital expenditure 1,690 1,117 % of turnover 5 5 Personnel at period-end Personnel on average Jan. 31 Dec Jan. 31 Dec Group s per-share ratios Earnings per share, EUR (Group) Equity per share, EUR Dividend per share(proposal 2001) Dividend per earnings, % Effective dividend yield % Price-earnings ratio(p/e) Lowest share quotation, EUR Highest share quotation, EUR Average share price Market capitalisation at the year-end Number of shares traded ,925 2,395, ,615 3,883,453

12 The earnings-per-share ratio is based on the average share-issue adjusted number of shares (9,191,756) for the financial year. The number of outstanding shares totalled 9,262,914 at the end of the year. The company held a total of 100,000 treasury shares at the end of the year. The Group has no liabilities associated with derivative contracts. Helsinki, 14 February 2002 SysOpen Plc Board of Directors