STOCKHOLM, Sweden, Feb. 12, 2002 (PRIMEZONE) -- Trio AB:
-- Q4 net sales rose 73% to SEK 54.0 million (SEK 31.3m)
-- Q4 profit was SEK 0.5 million (-SEK 158.2m)
-- Net sales rose 59 % during the year to SEK 165.2 million
(SEK 104.0m)
-- Net profit for the year improved by SEK 246.6 million to
-SEK 25.0 million (-SEK 271.6m)
-- Order inflows for the year climbed 50 % to SEK 157 million
(SEK 105m)
-- Agreement signed in Q4 with Telia for Trio Mobile Office for
14,000 employees
-- Continued organic growth and an expected operating profit in 2002.
SEK million Q 4 2001 Q 4 2000 Full Year Full Year
2001 2000
Inflow of orders 42 39 157 105
Net sales 54.0 31.3 165.2 104.0
Total expenses* -52.3 -56.7 -194.5 -214.1
Profit and loss prior
to goodwill
depreciation 0.6 -35.0 -24.6 -124.6
Profit and loss for
the period 0.5 -158.2 -25.0 -271.6
*Items affecting comparability are not included
The Operations
Trio develops software and systems for call management in companies that enhance internal efficiency and improve customer service. 2001 was a breakthrough year for Trio's convergence solutions and Trio Mobile Office with Telia and Telenor Mobile as key customers, among others.
Trio's convergence solutions are developed within the business areas System Products and Operator Solutions. These solutions enable the integration of fixed, mobile and IP telephony in virtual solutions, providing the same range of services and functions as the traditional fixed corporate telephony. Trio's convergence solutions are sold via retailers, service providers and mobile operators mainly to medium-sized and large companies and organisations.
Trio Mobile Office is developed within the business areas System Products and Operator Solutions. Trio Mobile Office enables a changeover from fixed to mobile telephony in mainly small companies. The solutions are installed in mobile operators' networks, and switch functionality is available from these as a subscription service.
Trio's customer care solutions are developed within the business area Customized Systems and cover contact and call centre solutions as well as interactive voice response systems. The business area sells and installs the solutions at the customers' premises, which are mainly large companies and organisations.
The Fourth Quarter 2001
The Group's net sales rose by 73 per cent in the fourth quarter to SEK 54.0 million (SEK 31.3m). The background to this positive trend is the initiative undertaken in the last few years, the goal of which was partly to develop the Group's solutions for convergence between fixed, mobile and IP telephony, and partly to develop the Group's mobile office solution, Trio Mobile Office, for a full or partial changeover from fixed to mobile telephony. In 2001, this development work resulted in a portfolio of advanced and easy-to-use products that have generated a number of strategic orders.
In the third quarter 2001, Trio reached break-even with a net profit of SEK 0.9 million (-SEK 42.0m). The favourable trend was confirmed in the fourth quarter with a net profit of SEK 0.5 million (-SEK 158.2m).
Despite a dramatic increase in sales, costs fell mainly in the System Products business area. The Group's overhead expenses fell during the quarter by 16 per cent to SEK 33.4 million (SEK 40.0m).
System Products' net sales rose by 150 per cent to SEK 31.7 million (SEK 12.7m). Operating profit before goodwill improved from -SEK 27.4 million to SEK 2.9 million. Customized Systems' net sales fell from SEK 9.7 million to SEK 6.2 million, while operating profit went from SEK 0.8 million to a loss of SEK 1.5 million. Operator Solutions' net sales increased by 81 per cent to SEK 16.1 million (8.9 m), and its operating profit improved from -SEK 4.5 million to SEK 0.3 million.
An order was received during the quarter that confirms Trio's leading position. Telia Mobile signed an agreement for Trio Mobile Office for 14,000 employees. These employees will therefore become fully mobile and can always be reached via a single telephone number. The total order inflow in the fourth quarter was SEK 42 million.
Trio Makes Bid for Netwise
On 25 October, Trio submitted a public bid to the shareholders of Netwise with a view to acquiring all outstanding shares and warrants in the company. On 4 December, the bid was raised from 2.5 new shares in Trio for each class A and B share in Netwise to 3.5 shares in Trio for Netwise class B shares and 3.7 shares in Trio for Netwise class A shares.
The background to the bid was Trio's assessment that the market for convergence solutions within telephony will grow substantially in both the Nordic region and the rest of Europe during the next few years. Trio and Netwise both develop switch-neutral call handling systems for fixed telephony with around 1,000 installations altogether. The proposed acquisition is intended to make Trio better equipped to face this challenge thanks to a stronger position in the company's home market in the Nordic region.
Full Year 2001
Key events during the year Strategic orders. 2001 was a breakthrough year for Trio's convergence solutions and its mobile office solution, Trio Mobile Office. During the year, Telia Mobile signed an agreement for Trio Mobile Office that covers sales to corporate customers in Sweden starting in 2002 and also for internal use within the Group as above. Telenor Mobile signed an agreement for Trio Mobile Office for sales to corporate customers in Norway and also for a convergence solution that covers the integration of fixed, mobile and IP telephony for 15,000 employees within Telenor. Trio also signed an agreement with Vodafone in Sweden during the year for Wireless Attendant Terminal (WAT), a flexible telephone operator workplace for the service provider's concept, "The Wireless Office". The year also saw the signing of nine agreements for pure IP solutions in Sweden, Denmark and Norway.
New management. After Sverker Hannervall was appointed President and CEO in January 2001, Trio got a new executive team. In the spring, Thomas Doyon was appointed Vice President of Sales in charge of System Products, while Jan Gustavsson became the new President and CEO of Objecta Systems AB. During the third quarter, Per Gronwall took over as new Chief Financial Officer, Magnus Hakansson was appointed Vice President in charge of the Operator Solutions business area, and Mats Plahn became Chief Technology Officer, whose job it is to co-ordinate developments in the System Products and Operator Solutions business areas.
Agreement with Nexus. In June, Trio signed a co-operation and outsourcing agreement with Technology Nexus concerning the development of Trio PresentOffice. The agreement involves the transfer of employees of the Trio subsidiary Trio Business Technology to Technology Nexus. They will, however, continue to work mainly for Trio during the three- year term of the agreement. The background is that larger deals relating to Trio's Mobile Office, among other things, are based on a high degree of customer-financed development and adaptation. The collaboration will enable Trio to quickly broaden its expertise and offer the services of more development professionals in projects conducted in close collaboration with customers. The agreement will also lead to a considerable reduction in the development costs of the System Products business area.
Net Sales
The Group's net sales amounted to SEK 165.2 million (SEK 104.0m), an increase of 59 per cent.
For business area System Products, net sales for 2001 climbed 64 per cent to SEK 90.6 million (SEK 55.1m). The business area's sales rose dramatically in all markets in the Nordic region. In Sweden, net sales rose 53 per cent to SEK 65.1 million (SEK 42.5m). The increase in Norway was 103 per cent to SEK 19.3 million (SEK 9.5m), while net sales in Denmark increased 107 per cent to SEK 6.2 million (SEK 3.0m). The positive trend for System Products is mainly due to a number of successful product launches but is also attributable to a significantly increased market presence.
For business area Customized Systems, net sales totalled SEK 26.3 million (SEK 26.5m)
For business area Operator Solutions, net sales increased in 2001 by 116 per cent to SEK 48.3 million (SEK 22.4m). This increase is explained by the successful sales of Trio Mobile Office to several leading mobile operators in the Nordic region.
Gross Profit
The Group's gross profit rose by 154 per cent to SEK 98.2 million (SEK 38.6m), which gives a gross margin of 59.4 (37.1) per cent. This dramatically improved gross margin is due to increased net sales and reduced costs.
In the consolidated accounts, a principle is applied whereby the cost for products sold, in addition to covering material and product costs, includes costs for installation staff, support staff and training staff.
Operating Expenses
Operating expenses fell by 16.7 per cent to SEK 127.4 million (SEK 148.7m), which was a result of the action plan initiated at the end of 2000 and which led to substantial cost reductions in the System Products business area in 2001.
Items Affecting Comparability
Items affecting comparability include SEK 6.6 million for capital gains from the sale of operations in the subsidiary Trio Business Technology to Technology Nexus and -SEK 2.1 million for the write-down of shares in BVRP.
Operating Loss
The full-year operating loss before goodwill amortisation was SEK 24.6 million (-SEK 124.6m). The significant improvement in this result is due to a substantial improvement in the results of business areas System Products and Operator Solutions.
Staff
The number of employees in the Group at the end of the year was 109 (150). The reduction in the number of staff is mainly due to the sale of operations in the subsidiary Trio Technology Business till Technology Nexus. 27 people went over to Technology Nexus during the year.
Investments
Investments in equipment and computers totalled SEK 1.9 million (SEK 3.2m) during the year. The planned depreciation including goodwill was SEK 5.8 million (SEK 36.5m). A subsidiary was established in Denmark in December 2001. Financial position and liquidity Liquid assets as of 31 December 2001 totalled SEK 61.7 million (SEK 131.6m). The Group's shareholders' equity as of 31 December 2001 amounted to SEK 103.7 million (SEK 127.6m) while the equity/assets ratio was 68 (62) per cent.
Outlook for 2002
Demand in the Nordic region dropped sharply in 2000, mainly in the System Products business area. In 2001, however, demand rose despite a considerable weakening of the economic climate. It is Trio's assessment that this rise in demand is mainly due to the Group now having a highly competitive product portfolio.
At Group level, organic growth is seen continuing, and an operating profit is also expected in 2002, despite what is expected to be a weak start to the year due to a lower inflow of orders in the fourth quarter 2001. Interest in Trio's convergence solution between fixed, mobile and IP telephony is increasing steadily and is expected to contribute strongly to the company's growth in 2002.
A higher proportion of major orders, however, will lead to larger fluctuations on a quarterly basis as regards signed orders, net sales, profit/loss and cash flow. The cash flow is expected to be positive for the full year.
Most of the growth is expected to come from the business areas Operator Solutions and System Products. All the company's business areas are expected to show improved results in 2002.
The Board of Directors is continuously evaluating possible structural deals as well as opportunities for initiating working partnerships with other companies.
Events after the end of the period Trio proceeded with its offer to Netwise's shareholders and extended the bid. On 25 January, the bid was accepted by the shareholders of Netwise with around 31 per cent of the shares and around 26 per cent of the votes.
Trio signed a number of orders in January for Trio PresentOffice for call handling and convergence. One of these was with Den Norske Bank, which is linking up its branches in Norway with the help of Trio PresentOffice. The agreement covers 12,000 licences.
Dividend
The Board of Directors has proposed to the annual general meeting of shareholders that no dividend be paid
Dates for future financial information
The Annual Report will be available at the company's office on 10 April. It will also be distributed to the company's shareholders.
The Annual General Meeting will be held on 25 April. The Q1 Interim Report will be published on 25 April. The Q2 Interim Report will be published on 25 July. The Q3 Interim Report will be published on 24 October.
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