Free for publication on May 9, 2007 at 8.00 am.
ELEKTROBIT CORPORATION'S INTERIM REPORT JANUARY - MARCH 2007
(unaudited)
SUMMARY
During the first quarter of 2007 Elektrobit continued to increase its
investments in product research and development. The company's net
sales for the first quarter stood at EUR 39.5 million (EUR 42.1
million in the first quarter of 2006). The operating loss amounted to
EUR -8.8 million (EUR -1.9 million).
According to the IFRS5 standard, Elektrobit reports its financial
results divided between Continuing Operations and Discontinued
Operations (Network Test in 2006).
CONSOLIDATED INCOME STATEMENT (MEUR) 1-3/2007 1-3/2006
3 months 3 months
Continuing Operations
NET SALES 39.5 42.1
OPERATING PROFIT (LOSS) -8.8 -1.9
Financial income and expenses 0.7 0.1
RESULT BEFORE TAXES -8.1 -1.9
RESULT FOR THE PERIOD FROM CONTINUING OPERATIONS -8.1 -1.6
Result after taxes for the period from discontinued
operations 1.7
RESULT FOR THE PERIOD -8.1 0.1
Comparisons between the Continuing Operations figures for the first
quarter of 2007 and the corresponding period in 2006.
- The net sales amounted to EUR 39.5 million (EUR 42.1 million; a
decrease of EUR 2.6 million or 6.1 %). The net sales of the
Automotive Software Business Segment were EUR 10.6 million (EUR 8.7
million; an increase of EUR 1.9 million or 22.3 %). The net sales of
the Wireless Communications Solutions Business Segment were EUR 15.5
million (EUR 17.2 million; a decrease of EUR 1.7 million or 10.0 %)
and the net sales of the Test and Automation Business Segment were
EUR 13.2 million (EUR 16.2 million; an decrease of EUR 3.0 million or
18.6 %).
- Operating loss totalled EUR -8.8 million (EUR -1.9 million) and was
distributed as follows: the Automotive Software Business Segment EUR
-0.6 million (EUR 0.5 million), the Wireless Communications Solutions
Business Segment EUR -6.1 million (EUR -0.3 million), the Test and
Automation Business Segment EUR -1.9 million (EUR -1.7 million) and
the other businesses EUR -0.2 million (EUR -0.4 million).
- Net cash flow from operations amounted to EUR -5.5 million (EUR 1.0
million).
QUARTERLY FIGURES, CONTINUING OPERATIONS
The quarterly distribution of the Corporation's Continuing Operations
overall net sales and profit:
+-------------------------------------------------------------------+
| MEUR | 1-3/07 | 10-12/06 | 7-9/06 | 4-6/06 | 1-3/06 |
|--------------------+--------+----------+--------+--------+--------|
| Net sales | 39.5 | 45.6 | 44.0 | 49.8 | 42.1 |
|--------------------+--------+----------+--------+--------+--------|
| Operating profit | -8.8 | -5.6 | -0.4 | 4.9 | -1.9 |
| (loss) | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Result before | -8.1 | -5.4 | -0.4 | 4.1 | -1.9 |
| taxes | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Result for the | -8.1 | -5.0 | -0.4 | 3.0 | -1.6 |
| period | | | | | |
+-------------------------------------------------------------------+
The distribution of the Continuing Operations net sales by Business
Segment:
+-------------------------------------------------------------------+
| MEUR | 1-3/07 | 10-12/06 | 7-9/06 | 4-6/06 | 1-3/06 |
|--------------------+--------+----------+--------+--------+--------|
| Automotive | 10.6 | 11.3 | 10.1 | 8.8 | 8.7 |
| Software | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Wireless | 15.5 | 17.7 | 13.4 | 17.9 | 17.2 |
| Communications | | | | | |
| Solutions | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Test and | 13.2 | 16.5 | 20.4 | 23.1 | 16.2 |
| Automation | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Corporation Total | 39.5 | 45.6 | 44.0 | 49.8 | 42.1 |
+-------------------------------------------------------------------+
The distribution of the Continuing Operations net sales by market
area:
+-------------------------------------------------------------------+
| MEUR (%) | 1-3/07 | 10-12/06 | 7-9/06 | 4-6/06 | 1-3/06 |
|----------+----------+------------+----------+----------+----------|
| Asia | 5.2 | 5.2 (11%) | 8.1 | 9.4 | 4.8 |
| | (13%) | | (18%) | (19%) | (11%) |
|----------+----------+------------+----------+----------+----------|
| Americas | 5.3 | 5.9 (13%) | 4.7 | 6.1 | 6.4 (15 |
| | (13%) | | (11%) | (12%) | %) |
|----------+----------+------------+----------+----------+----------|
| Europe | 29.1 | 34.6 (76%) | 31.1 | 34.3 | 30.9 |
| | (74%) | | (71%) | (69%) | (74%) |
+-------------------------------------------------------------------+
Net sales (external) and operating profit development by Business
Segment and Other businesses of the Continuing Operations were as
follows:
+-------------------------------------------------------------------+
| MEUR | 1-3/07 | 10-12/06 | 7-9/06 | 4-6/06 | 1-3/06 |
|-------------------+--------+----------+---------+--------+--------|
| Automotive | | | | | |
| Software | 10.6 | 11.3 | 10.1 | 8.8 | 8.7 |
| Net sales | -0.6 | 0.9 | 0.5 | 0.2 | 0.5 |
| Operating profit | | | | | |
| (loss) | | | | | |
|-------------------+--------+----------+---------+--------+--------|
| Wireless | | | | | |
| Communications | | | | | |
| Solutions | 15.5 | 17.7 | 13.4 | 17.9 | 17.2 |
| Net sales | -6.1 | -5.8 | -3.6 | 0.6 | -0.3 |
| Operating profit | | | | | |
| (loss) | | | | | |
|-------------------+--------+----------+---------+--------+--------|
| Test and | | | | | |
| Automation | 13.2 | 16.5 | 20.4 | 23.1 | 16.2 |
| Net sales | -1.9 | -0.6 | 2.8 | 3.5 | -1.7 |
| Operating profit | | | | | |
| (loss) | | | | | |
|-------------------+--------+----------+---------+--------+--------|
| Other businesses | | | | | |
| Net sales | 0.3 | 0.1 | 0.0 | 0.0 | 0.0 |
| Operating profit | -0.2 | 0.0 | -0.0 | 0.6 | -0.4 |
| (loss) | | | | | |
|-------------------+--------+----------+---------+--------+--------|
| Total | | | | | |
| Net sales | 39.5 | 45.6 | 44.0 | 49.8 | 42.1 |
| Operating profit | -8.8 | -5.6 | | 4.9 | -1.9 |
| (loss) | | | -0.4 | | |
+-------------------------------------------------------------------+
QUARTERLY FIGURES, DISCONTINUED OPERATIONS
Discontinued Operations (Network Test business in 2006) figures were
as follows:
+-------------------------------------------------------------------+
| MEUR | 1-3/07 | 10-12/06 | 7-9/06 | 4-6/06 | 1-3/06 |
|--------------------+--------+----------+--------+--------+--------|
| Operative business | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Net sales | | 3.6 | 4.8 | 4.8 | 5.6 |
|--------------------+--------+----------+--------+--------+--------|
| Operating profit | | 1.2 | 1.6 | 1.7 | 2.2 |
| (loss) | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Result before | | 1.1 | 1.6 | 1.7 | 2.2 |
| taxes | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Income taxes | | -0.3 | -0.4 | -0.4 | -0.5 |
|--------------------+--------+----------+--------+--------+--------|
| Result for the | | 0.8 | 1.1 | 1.3 | 1.7 |
| period | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Disposal gain | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Profit of the | | 73.7 | | | |
| Discontinued | | | | | |
| Operations | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Income taxes | | -0.5 | | | |
|--------------------+--------+----------+--------+--------+--------|
| Profit after taxes | | 73.2 | | | |
| of the | | | | | |
| Discontinued | | | | | |
| Operations | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| | | | | | |
|--------------------+--------+----------+--------+--------+--------|
| Result for the | | 74.0 | 1.1 | 1.3 | 1.7 |
| period | | | | | |
+-------------------------------------------------------------------+
The selling price of the Network Test business was EUR 85 million.
Further details concerning the transaction were provided in a stock
exchange release on November 3, 2006.
AUTOMOTIVE SOFTWARE BUSINESS SEGMENT FROM JANUARY TO MARCH 2007
The Automotive Software Business Segment consists of in-car software
products and R&D services for the automotive industry, with car
equipment (Tier 1) suppliers and leading car manufacturers as well as
automotive chipset suppliers as customers.
During the first quarter, the Automotive Software Business Segment
continued to grow confirming the potential of this market. Elektrobit
continued to invest considerably in the development of new software
platform based products.
Automotive Software Business Unit from January to March 2007
The Automotive Software Business Unit consists of software products
and R&D services for the needs of the automotive industry.
The R&D services business covers in-car infotainment and body control
applications. The products include the TresosTM product family of HMI
(Human Machine Interface) design tools, software components used for
the development of electronic control units (ECU) for passenger cars,
and StreetDirector, which is a hybrid navigation software for
smartphones, Personal Navigation Devices (PND), Personal Digital
Assistants (PDA) and in-car navigation.
In February Automotive Software presented its tresos® ECU AUTOSAR
Suite 2007 for the AUTOSAR specification 2.0. The new software suite
has been delivered to major OEM's and Tier1's for several evaluation
projects to be used for the development of AUTOSAR-conforming
applications.
Net sales during the period under review amounted to EUR 10.6 million
(EUR 8.7 million), which represents a growth of 22.3 per cent and the
operating loss was EUR -0.6 million (EUR 0.5 million) due to
continued strong investments in the R&D of automotive software
platform products.
WIRELESS COMMUNICATIONS SOLUTIONS BUSINESS SEGMENT FROM JANUARY TO
MARCH 2007
The Wireless Communications Solutions Business Segment consists of
the Mobile Terminal Solutions Business Unit, which is responsible for
mobile terminal R&D services and design business, and the Radio
Network Solutions Business Unit, which is responsible for radio
network infrastructure-related R&D services and standard-based
products that are sold to telecommunications infrastructure
suppliers. Under the Wireless Communications Solutions' other
businesses, Elektrobit also introduced a line of RFID (Radio
Frequency Identification) products in November 2006.
The net sales of the Wireless Communications Solutions Business
Segment from January to March 2007 amounted to EUR 15.5 million
(EUR 17.2 million) and the operating loss was EUR -6.1 million
(EUR -0.3 million). Compared to the corresponding period in 2006, the
decline in profitability was due to significantly higher investments
in product development of mobile WiMAX products and weaker than
expected demand of mobile terminal solutions R&D services.
Mobile Terminals Solutions Business Unit from January to March 2007
The Mobile Terminal Solutions Business Unit delivers R&D services for
mobile terminals, security, defence, industry and other applications.
The business environment for the mobile terminals business was
turbulent and under intense competition during the reporting period.
The Mobile Terminal Solutions Business Unit continued to retune the
project portfolio towards less risky business models and allocated
the released manpower to R&D service projects. The reallocation could
not fully be accomplished which, consequently, caused lower than
planned resource utilization and revenue for the period under review.
The volume and share of sales associated with the application area of
professional mobile radios increased over the reporting period.
Radio Network Solutions Business Unit from January to March 2007
The Radio Network Solutions Business Unit provides radio network
infrastructure-related R&D services and develops standard-based
products sold to telecommunications infrastructure suppliers. An
important investment area for Elektrobit under this business unit is
the development of mobile WiMAX (IEEE 802.16e) base station modules.
The R&D services business comprises design services (software,
digital & analogue HW, mechanics, ASIC, FPGA, RF and PCB design) for
wireless base stations.
The business environment for R&D services has been somewhat volatile
and the revenue from R&D services has grown slightly in comparison
with the corresponding period in 2006 despite of the fact that a
significant part of the R&D resources have been allocated to the
development of Elektrobit's own mobile WiMAX base station module
products, which are expected to start generating revenue from the end
of 2007 or early 2008. Product development investments associated
with mobile WiMAX base stations modules increased over the period
under review and were on a slightly higher level than planned.
TEST AND AUTOMATION BUSINESS SEGMENT FROM JANUARY TO MARCH 2007
The Test and Automation Business Segment includes products and
solutions for system testing, production testing and automation. They
are sold to the manufacturers of mobile terminals and networks,
network operators, chipset providers, electronics contract
manufacturers and research organisations.
The Test and Automation Business Segment has consisted of the
Production Solutions and System Test Business Units since December
2006. In spring 2006, Elektrobit decided to develop each of these
businesses separately and to continue to make efforts to ensure their
performance according to the objectives. At the same time, Elektrobit
announced that it is seeking for industrial partners or arrangements
to further strengthen the long-term competitiveness of these business
units.
The net sales of the Test and Automation Business Segment amounted to
EUR 13.2 million (EUR 16.2. million), and its operating loss stood at
EUR -1.9 million (EUR -1.7 million).
Production Solutions Business Unit from January to March 2007
The products and solutions of the Production Solutions Business Unit
are mainly sold to mobile terminal, mobile infrastructure and
electronics contract manufacturers. The Production Solutions Business
Unit consists of production testing equipment for the different
stages of manufacturing, as well as automation equipment for
processing electronic products on production lines. The product range
also covers final assembly systems for mobile terminals.
The sales of production solutions declined in comparison with the
corresponding period in 2006 mostly due to a low season in the
deliveries of production automation projects, heavy price reduction
pressures and shift of the business towards intensively competed
Asian markets.
Product development investments to strengthen the competitiveness of
the product portfolio were clearly higher than in the corresponding
period in 2006. A new product for automation of R&D testing of mobile
phones was launched in March.
System Test Business Unit from January to March 2007
The products of the System Test Business Unit include mainly radio
channel emulators and measurement instruments (the Propsim and
Propsound products) sold to chipset manufacturers, mobile terminal
and infrastructure equipment suppliers, wireless network operators
and military communications companies.
The high demand of MIMO-capable radio channel emulation solutions for
both cellular and non-cellular applications continued. Deliveries for
the pre-deployment test of new radio networks continued on a strong
level at the wireless operator segment.
The total sales of the System Test Business Unit grew from the
corresponding period of 2006. The sales organisation in China was
reinforced by adding own resources to complement the channel sales.
The sales footprint in the US was enhanced with new distributors.
R&D investments expanding the application domain and the product
portfolio of the Propsim radio channel emulator product family
continued. In February, a scalable single-box handset testing
solution based on the Propsim FE product was released, and the first
delivery took place. In March, a Propsim C2 -based turnkey solution
for 2 x 2 MIMO fading testing for multiple systems, like WCDMA, HSPA,
mobile WiMAX, 3G LTE (Long Term Evolution) and 4G, was introduced,
and the sales of the solution started.
RESEARCH AND DEVELOPMENT FROM JANUARY TO MARCH 2007
The R&D investments were continued especially in the following areas:
- The development of software platform based products in the
Automotive Software Business Unit.
- The development of mobile WiMAX radio base station module products
in the Radio Network
Solutions Business Unit.
- Product development in the Production Solutions Business Unit to
strengthen the competitiveness
of the product portfolio.
- Expanding the application domain and the product portfolio in the
System Test Business Unit.
- The technical core competence areas as defined in the strategy.
The total R&D investments during the period under review were EUR 7.6
million and EUR 0.8 million of them have been capitalized.
BUSINESS ENVIRONMENT
It is expected that the share of electronics and software in cars, as
well as the use of wireless technologies and the number of
infotainment applications, will continue to grow. For reference, the
market for automotive software solutions grew more than 15 per cent
in 2006 (Mercer study 2005, The Impact of AUTOSAR on the Auto
Software and Tools Market). An additional growth factor for the
Automotive Software Business Segment is the growth in the Personal
Navigation Device (PND) market, in which the number of mobile GPS
navigation solutions is expected to grow with more than 62 per cent
of CAGR during 2005-2009 (Canalys).
The delivery volume of mobile devices in 2007 is expected to increase
by some 10 per cent (Strategy Analytics). In the wireless network
equipment market, operators are expected to continue to invest in
network capacity and in new cellular network technologies (WCDMA,
HSPA). The mobile WiMAX infrastructure equipment market is expected
to start in the end of 2007 or early 2008, major operators and OEMs
having their mobile WiMAX implementations planned for late 2007 and
for 2008.
The need for production automation solutions is still growing due to
high delivery volumes of mobile devices, but this is offset by price
erosion in the market and partly by productivity improvements in
mobile device production. Delivery lead times in production-related
test and automation markets are expected to shorten and cost
efficiency is expected to continue to be an essential competitive
factor.
The system test market is predicted to expand moderately in 2007, as
the development of new cellular technologies, enhancements to
existing technologies (HSDPA, HSUPA, 3GPP LTE, MIMO) and new
non-cellular technologies (mobile WiMAX, WiBRO) are generating demand
for test system replacements and for new test systems.
OUTLOOK FOR THE FIRST HALF OF 2007
Elektrobit expects the revenue during the first half of 2007 to be on
the same level compared to the second half of 2006 (MEUR 89.6). The
company will continue to invest in:
- Software platform based products in the Automotive Software
Business Unit.
- Development of mobile WiMAX radio base station module products in
the Radio Network Solutions
Business Unit.
- Improving the price competitiveness and updating the product
portfolio in the Production Solutions
Business Unit.
- Expanding the application domain and the product portfolio in the
System Test Business Unit.
- The technical core competence areas defined in the strategy.
- Developing the Sales and Marketing organisation.
- Building up efficient and unified support functions and platforms
to enable global business
operations according to the strategy.
Mainly due to these continued considerable investments, Elektrobit
expects the operating loss in the first half of 2007 to be more than
double compared to the operating loss of the second half of 2006
(MEUR -5.9).
RISKS AND UNCERTAINTIES
Elektrobit follows a risk management policy with the objective of
covering risks related to business operations, property, agreements,
competence, currencies, financing and strategy. The company has
identified risks and uncertainties related to such issues as
strategy, business operations, personnel, product development,
product liability, property and financing. Among others, the
following risks are related to the company's business operations.
In R&D services businesses the risks are mainly related to
uncertainties of customers' product program decisions, their make or
buy decisions, ramping up of project resources, timing of the most
important technology components, competitive situation in the market,
and to typical industry warranty and liability risks involved in
selling R&D services. In the near term, additional risks emanate from
ongoing restructuring of the telecommunications infrastructure
industry.
In the technology product businesses the risks are related to
potential market delays, short visibility to customer orders, timely
closing of customer contracts, delays in R&D projects, activations
based on customer contracts, obsolescence of inventories and
technology risks in product development causing higher than planned
R&D cost. Revenues expected to come from new products for existing
and new customers include normal timing risks.
More information on the risks and uncertainties affecting Elektrobit
can be found on the company website at
www.elektrobit.com/aboutelektrobit.
BALANCE SHEET AND FINANCING
The figures presented in the balance sheet of March 31, 2007, have
been compared with the balance sheet of December 31, 2006
(EUR 1,000).
03/2007 12/2006
Non-current assets 76.026 66.315
Inventories 16.257 13.878
Accounts and other receivables 52.718 57.518
Financing securities, cash and bank deposits 96.628 125.091
Current assets total 165.604 196.487
Total assets 241.630 262.803
Share capital 12.941 12.941
Other equity 151.354 173.513
Minority interest 2.107
Total shareholders' equity 164.295 188.562
Long-term liabilities 28.875 23.728
Short-term liabilities 48.460 50.513
Total shareholders' equity and liabilities 241.630 262.803
Net cash flow from operations during the period under review:
+ net profit +/- adjustment of accrual basis items EUR -6.3 million
- increase in net working capital EUR +0.1 million
- interest, taxes and dividends EUR +0.8 million
= cash generated from operations EUR -5.5 million
- net cash used in investment activities EUR -11.7 million
- net cash used in financing EUR -11.3 million
= net change in cash and cash equivalents EUR -28.5 million
The amount of accounts and other receivables, booked in current
receivables, was EUR 52.7 million (EUR 57.5 million on December 31,
2006), while accounts and other payables, booked in interest-free
current liabilities, were at EUR 34.9 million (EUR 35.3 million on
December 31, 2006).
The amount of non-depreciated consolidation goodwill at the end of
the period under review was EUR 16.2 million (EUR 8.2 million on
December 31, 2006) and depreciation on business acquisitions during
the reporting period amounted to a total of EUR 0.4 million (EUR 0.5
million during the comparable period in 2006).
The amount of net investments in the period under review was EUR 13.7
million, consisting replacement investments and business value of EUR
8.1 million, which was created by the purchase of minority shares of
Elektrobit Automotive GmbH. The total amount of depreciation during
the period under review was EUR 2.5 million, including EUR 0.4
million of depreciation owing to business acquisitions.
Elektrobit's other long-term investments include an investment
portfolio with a book value of approximately EUR 10.8 million, which
mainly consists of long-term bonds. The portfolio is valued at market
value on March 31, 2007.
The amount of interest-bearing debt at the end of the reporting
period was EUR 35.8 million. The distribution of net financing
expenses on the income statement was as follows:
interest, dividend and other financial income EUR +1.2 million
interest expenses EUR -0.5 million
foreign exchange gains and losses EUR -0.0 million
Elektrobit's equity ratio at the end of the period was 68.6 per cent
(compared with 72.2 per cent at the end of 2006).
The figures from the period under review do not include any of the
statutory reserves stipulated in Chapter 5, section 14 of the
Accounting Act.
Elektrobit follows a currency strategy, the objective of which is to
ensure the margins of business operations in changing market
circumstances by minimising the influence of exchange rates. In
accordance with the principles of the currency strategy, the upcoming
12-month net cash flow of the currency in question is hedged. The net
cash flow is determined on the basis of sales receivables, payables,
the order book and the budgeted net currency cash flow. The hedged
foreign currency exposure at the end of the review period was
equivalent to EUR 13.5 million.
PERSONNEL
Elektrobit employed an average of 1993 people between January and
March 2007. At the end of March, Elektrobit had 1998 employees (2005
at the end of 2006). Product development engineers constitute the
most significant part of Elektrobit's personnel.
OPTION RIGHTS
I. The Annual General Meeting of March 17, 2005 decided to authorise
the Board of Directors to issue option rights. By virtue of the
authorisation the Board of Directors granted 4,500,000 option rights
to the company's management and Elektrobit's fully owned subsidiary
serving as a reserve company in the stock option scheme Subscriptions
made by virtue of the 2005 option rights may increase the share
capital of Elektrobit Corporation by a maximum of EUR 450,000 and the
number of shares by a maximum of 4,500,000.
II. The Annual General Meeting held on March 15, 2006 decided that
option rights with a commitment to shareholding be granted to
Elektrobit Corporation's new directors. The number of option rights
granted totals 1,750,000, of which 750,000 were granted to the
Chairman of the Board and 1,000,000 were granted to the CEO.
Subscriptions made by virtue of the said option rights might increase
the share capital of Elektrobit Corporation by a maximum of
EUR 175,000 and the number of shares by a maximum of 1,750,000 new
shares.
THE AUTHORISATIONS OF THE BOARD OF DIRECTORS AT THE END OF THE
REPORTING PERIOD
The Annual Shareholders' Meeting held on March 14, 2007 resolved to
authorize the Board of Directors to repurchase shares of the company
as follows: The amount of the repurchased own shares shall not be
more than 12,500,000 shares, which represents approximately 9.66 per
cent of all the shares of the company. Only the unrestricted equity
of the company can be used to repurchase own shares on the basis of
the authorization. Own shares can be repurchased at a price
determined in public trading on the date of repurchase or otherwise
on the market. The Board of Directors shall resolve on how the
repurchase of shares is carried out. The repurchase can be carried
out by using, among others, derivatives. Shares may be repurchased
also otherwise than in proportion to the shares owned by the
shareholders of the company (directed repurchase of shares). The
authorization is effective until 30 June 2008.
The Annual Shareholders' Meeting held on March 14, 2007 authorized
the Board of Directors to resolve on the issuance of shares and stock
options and other special rights entitling to shares subject to
chapter 10, section 1 of the Companies Act as follows: The aggregate
number of shares issued on the basis of the authorization may not
exceed 25,000,000 shares, which represents approximately 19.3 per
cent of all the shares of the company. The Board of Directors is
authorized to resolve on all the terms and conditions concerning the
issue of shares and stock options and other special rights entitling
to shares. The authorization concerns both the issuance of new shares
and transfer of the company's own shares. Issuance of shares and
other special rights entitling to shares can be carried out as a
directed issue.
NOTIFICATIONS IN ACCORDANCE WITH CHAPTER 2, SECTION 9 OF THE
SECURITIES MARKET ACT
There were no changes in ownership during the period under review
that would have caused an obligation of disclosure in accordance with
Chapter 2, section 9 of the Securities Market Act.
BOARD OF DIRECTORS AND AUDITOR
The Annual General Shareholders Meeting held on March 14, 2007 fixed
the number of the Board members to six (6). Mr. J.T. Bergqvist, Mr.
Jukka Harju, Mr. Juha Hulkko, Mr. Matti Lainema, Mr. Juha Sipilä and
Mr. Tapio Tammi were elected as Board members. The term of office of
the Board members will end at the next Annual General Shareholders'
Meeting. At its assembly meeting held on March 14, 2007 the Board of
Directors elected J.T. Bergqvist as the Chairman of the Board.
The Shareholders' Meeting elected Ernst & Young Oy, an auditing
entity authorized by the Central Chamber of Commerce, as the auditor
of the company.
DIVIDEND FROM 2006
The Annual Shareholders' Meeting of March 14, 2007 approved the Board
of Directors' proposal to pay dividend of EUR 0.11 per share, a total
of EUR 14,235,395.90, for the financial period from January 1 to
December 31, 2006. The payment date of the dividend was March 26,
2007.
AMENDMENT OF THE ARTICLES OF ASSOCIATION AND THE COMPANY NAME CHANGE
The Shareholders' Meeting held of March 14, 2007 approved the Board
of Directors' proposal to amend the Articles of Association mainly
due to the new Companies Act, which entered into force on September
1, 2006. Simultaneously the company name was changed into Elektrobit
Oyj, in English Elektrobit Corporation. By virtue of the registration
of the changes, the amendments of the Articles of Association and the
company's new name became effective on March 23, 2007.
Oulunsalo, May 9, 2007
Elektrobit Corporation
The Board of Directors
Further Information:
Pertti Korhonen
CEO
Elektrobit Corporation
Tel. +358 40 344 3889
Maija-Liisa Fors
Director, Investor Relations
Elektrobit Corporation
Tel. +358 40 344 2875
Seppo Laine
CFO
Elektrobit Corporation
Tel. +358 40 344 2250
Distribution:
OMX Helsinki
Principal media
INVITATION TO PRESS CONFERENCE
Elektrobit will hold a press conference for media, analysts and
institutional investors concerning the Interim Report Q1 2007 on May
9, 2007 as follows:
In Helsinki at 3.30 - 4.30 pm. (EET)
Restaurant Savoy
Eteläesplanadi 14
Cabinet Banquet, 7th floor
The conference will be audio webcast and published live on the
Internet on
http://194.100.179.98:80/wip/directlink.do?newbrowser=1&pid=1435712.
There will be a possibility to present questions in place as well as
by calling to the conference call number +358 (0)9 2313 9202. An
on-demand version of the audio webcast will be available after the
conference on Elektrobit's website www.elektrobit.com/investors.
The presentation material will be available after the publication of
the Interim Report on the address above.
CONSENSUS ESTIMATE
Elektrobit consensus estimates made by the analysts who observe the
company is updated approximately two weeks before the release of the
next financial report. The recent estimate is available on the
company website www.elektrobit.com/investors
FINANCIAL REPORTING IN 2007
In 2007, the results of the second quarter will be published on
August 2, and the third quarter results on November 7.
Oulunsalo, May 2, 2007
Elektrobit Corporation
Corporate Communications
ELEKTROBIT CORPORATION'S INTERIM REPORT JANUARY - MARCH 2007
(unaudited)
The Interim Report has been prepared in accordance with IAS 34
Interim Financial Reporting.
CONSOLIDATED INCOME STATEMENT 1-3/2007 1-3/2006 1-12/2006
(MEUR)
3 months 3 months 12 months
Continuing operations
NET SALES 39.5 42.1 181.5
Other operating income 0.6 0.5 3.7
Change in work in progress
and finished goods 1.9 -0.1 1.5
Work performed by the
undertaking for its own
purpose and capitalized 0.0 0.1 0.3
Raw materials -6.3 -8.3 -37.2
Personnel expenses -26.7 -21.9 -93.7
Depreciation -2.5 -2.3 -9.2
Other operating expenses -15.3 -12.1 -49.9
OPERATING PROFIT (LOSS) -8.8 -1.9 -3.0
Financial income and expenses 0.7 0.1 -0.4
RESULT BEFORE TAXES -8.1 -1.9 -3.4
Income taxes 0.0 0.3 -0.5
RESULT FOR THE PERIOD FROM
CONTINUING OPERATIONS -8.1 -1.6 -3.9
Result after taxes for the
period from discontinued
operations 1.7 78.2
RESULT FOR THE PERIOD -8.1 0.1 74.2
Attributable to
Equity holders of the
parent -8.1 0.1 73.9
Minority interest -0.0 0.1 0.3
Earnings per share EUR
continuing operations
Basic earnings per share -0.06 -0.01 -0.03
Diluted earnings per share -0.06 -0.01 -0.03
Earnings per share EUR
discontinued operations
Basic earnings per share 0.01 0.60
Diluted earnings per share 0.01 0.60
Earnings per share EUR
continuing and discontinued
operations
Basic earnings per share -0.06 0.00 0.57
Diluted earnings per share -0.06 0.00 0.57
Average number of shares,
1000 pcs 129 413 129 413 129 413
CONSOLIDATED BALANCE SHEET March 31, 2007 March 31, 2006 Dec. 31,
(MEUR) 2006
ASSETS
Non-current assets
Property, plant and
equipment 34.6 32.0 32.5
Goodwill 16.2 9.2 8.2
Intangible assets 10.6 12.6 10.6
Financial assets at fair
value through profit or loss 10.8 10.5 10.7
Other financial assets 0.1 0.2 0.1
Receivables 0.2 1.6 1.6
Deferred tax assets 3.5 4.0 2.7
Non-current assets total 76.0 70.0 66.3
Current assets
Inventories 16.3 13.9 13.9
Trade and other receivables 52.7 48.0 57.5
Cash and short term
deposits 96.6 51.6 125.1
Current assets total 165.6 113.4 196.5
TOTAL ASSETS 241.6 183.4 262.8
EQUITY AND LIABILITIES
Equity attributable to equity
holders of the parent
Share capital 12.9 12.9 12.9
Share premium 64.6 64.6 64.6
Translation difference -0.2 0.1 -0.2
Retained earnings 87.0 33.5 109.2
Minority interest 0.0 1.9 2.1
Total equity 164.3 113.0 188.6
Non-current liabilities
Deferred tax liabilities 6.3 8.3 6.2
Interest-bearing
liabilities 22.3 17.8 17.2
Other liabilities 0.3 0.1 0.3
Non-current liabilities total 28.9 26.2 23.7
Current liablities
Trade and other payables 34.1 32.2 32.8
Pension obligations 0.8 0.7 0.8
Current tax liabilities 0.0 0.0 1.7
Interest-bearing loans and
borrowings (non-current) 13.6 11.4 15.2
Current liabilities total 48.6 44.2 50.5
Total liablities 77.3 70.4 74.2
TOTAL EQUITY AND LIABILITIES 241.6 183.4 262.8
CONSOLIDATED CASH FLOW STATEMENT (MEUR) 1-3/2007 1-3/2006 1-12/2006
3 months 3 months 12 months
CASH FLOW FROM OPERATING ACTIVITIES
Result for the period -8.1 0.1 73.9
Adjustment of accrual basis items 1.8 2.7 -63.7
Change in net working capital 0.1 -0.3 -7.4
Interest paid on operating activities -0.5 -0.2 -1.9
Interest received from operating
activities 1.2 0.6 1.8
Other financial income and expenses, net
received 0.0 0.0 0.0
Income taxes paid -0.0 -1.9 -4.1
NET CASH FROM OPERATING ACTIVITIES -5.5 1.0 -1.4
CASH FLOW FROM INVESTING ACTIVITIES
Acquisition of business unit -0.3
Acquisition of minority interest -10.2
Disposal of business unit, net of cash
acquired 0.7 81.1
Purchase of property, plant and equipment -1.6 -0.5 -2.8
Purchase of intangible assets -1.0 -0.1 -1.8
Purchase of other investments -1.2 -1.5 -6.1
Sale of property, plant and equipment 0.1 0.0 2.9
Sale of intangible assets 0.4 0.0 0.0
Proceeds from sale of investments 1.1 1.7 5.6
NET CASH FROM INVESTING ACTIVITIES -11.7 -0.4 78.5
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from borrowing 3.0 4.2
Repayment of borrowing -1.1 -1.1 -4.4
Payment of finance liabilities -1.1 -0.8 -3.4
Dividends paid -12.1 -7.7 -9.1
NET CASH FROM FINANCING ACTIVITIES -11.3 -9.6 -12.6
NET CHANGE IN CASH AND CASH EQUIVALENTS -28.5 -9.0 64.5
Cash and cash equivalents at beginning of
period 125.1 60.6 60.6
Cash and cash equivalents at end of
period 96.6 51.6 125.1
CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY (MEUR)
A = Share capital
B = Share premium
C = Retained earnings
D = Net profit for the period
E = Minority interest
F = Total equity
A B C D E F
Equity on January 1, 2006 12.9 64.6 42.7 1.8 122.0
Result for the period 0.1 0.1
Dividend distribution -9.1 -9.1
Share-related compensation 0.1 0.1
Translation difference -0.1 0.1 -0.1
Others 0.0 0.0
Equity on March 31, 2006 12.9 64.6 33.6 0.1 1.9 113.0
Equity on January 1, 2007 12.9 64.6 108.9 2.1 188.6
Result for the period -8.1 -8.1
Dividend distribution -14.2 -14.2
Share-related compensation 0.3 0.3
Translation difference -0.0 -2.1 -2.1
Others -0.1 -0.1
Equity on March 31, 2007 12.9 64.6 94.9 -8.1 0.0 164.3
NOTES TO THE INTERIM REPORT
Accounting Principles for the Interim Report:
The same accounting policies and methods of computation are followed
in the interim financial statements as compared with the most recent
annual financial statements.
Explanatory comments about the seasonality or cyclicality of interim
operations:
The company operates in business areas which are subject to seasonal
fluctuations.
The nature and amount fo items affecting assets, liabilities, equity,
net income, or cash flows that are unusual because of their nature,
size or incidence:
During the reporting period, the purchase of minority shares of
Elektrobit Automotive GmbH created a goodwill of EUR 8.1 million.
Dividends paid:
According to the decision of the company's Annual Shareholders'
Meeting held on March 14, 2007, dividend of EUR 0.11 per share, a
total of EUR 14,235,395,90 was paid on March 26, 2007
SEGMENT INFORMATION (MEUR) 1-3/2007 1-3/2006 1-12/2006
Continuing operations 3 months 3 months 12 months
Automotive Software
Net sales to external customers 10.6 8.7 38.9
Net sales to other segments 0.0 0.0 0.0
Net sales total 10.6 8.7 38.9
Operating profit (loss) -0.6 0.5 2.1
Wireless Communications Solutions
Net sales to external customers 15.5 17.2 66.2
Net sales to other segments 1.0 1.3 4.8
Net sales total 16.5 18.5 71.0
Operating profit (loss) -6.1 -0.3 -9.2
Test and Automation
Net sales to external customers 13.2 16.2 76.2
Net sales to other segments 0.4 0.2 0.8
Net sales total 13.6 16.4 77.0
Operating profit (loss) -1.9 -1.7 4.0
Common functions
Net sales to external customers 0.3 0.0 0.2
Net sales to other segments 0.0 1.5 9.4
Net sales total 0.3 1.6 9.6
Operating profit (loss) -0.2 -0.4 0.1
Eliminations
Net sales to external customers 0.0 0.0 0.0
Net sales to other segments -1.4 -3.0 -15.0
Net sales total -1.4 -3.0 -15.0
Operating profit (loss) 0.0 0.0 0.0
Group total
Net sales to external customers 39.5 42.1 181.5
Operating profit (loss) -8.8 -1.9 -3.0
Net sales of geographical segments (MEUR) 1-3/2007 1-3/2006 1-12/2006
3 months 3 months 12 months
Net sales
Europe 29.1 30.9 130.9
Americas 5.3 6.4 23.1
Asia 5.2 4.8 27.5
Net sales total 39.5 42.1 181.5
Material events subsequent to the end of the interim period that have
not been reflected in the financial statements for the interim
period:
There were no material events subsequent to the end of the interim
period.
The effect of changes in the composition of the group structure
during the interim period:
During the interim period Elektrobit Corporation acquired the
minority shares of Elektrobit Automotive GmbH. Elektrobit
Technologies (Beijing) Ltd.'s business divided into two different
companies: Elektrobit Technologies (Beijing) Ltd. and Elektrobit
Wireless (Beijing) Ltd. Elektrobit Technologies India Private Ltd.
was established.
Related party transactions:
1-3/2007 1-3/2006
Employee benefits for key management and stock
option expenses total 0.7 0.3
Loans and guarantees to related party
There have not been other transactions between the
related parties
INCOME STATEMENT BY 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
QUARTER (MEUR) 2007 2006 2006 2006 2006
3 months 3 months 3 months 3 months 3 months
NET SALES 39.5 45.6 44.0 49.8 42.1
Other operating income 0.6 2.3 0.5 0.4 0.5
Change in work in
progress and finished
goods 1.9 -0.2 0.4 1.3 -0.1
Work performed by the
undertaking for its own
purpose and capitalized 0.0 0.1 0.1 -0.0 0.1
Raw materials -6.3 -8.4 -9.7 -10.7 -8.3
Personnel expenses -26.7 -27.0 -21.7 -23.1 -21.9
Depreciation -2.5 -2.3 -2.3 -2.3 -2.3
Other operating
expenses -15.3 -15.6 -11.7 -10.5 -12.1
OPERATING PROFIT (LOSS) -8.8 -5.6 -0.4 4.9 -1.9
Financial income and
expenses 0.7 0.2 0.0 -0.7 0.1
RESULT BEFORE TAXES -8.1 -5.4 -0.4 4.1 -1.9
Income taxes 0.0 0.4 0.0 -1.1 0.3
RESULT FOR THE PERIOD
FROM CONTINUING
OPERATIONS -8.1 -5.0 -0.4 3.0 -1.6
Result after taxes for
the period from
discontinued operations 0.0 74.0 1.1 1.3 1.7
RESULT FOR THE PERIOD -8.1 69.0 0.8 4.3 0.1
Attributable to
Equity holders of the 68.9
parent -8.1 0.7 4.3 0.1
Minority interest 0.0 0.2 0.1 0.0 0.1
March 31, Dec. 31. Sept. March
BALANCE SHEET BY 2007 2006 30. June 30. 31.
QUARTER (MEUR) 2006 2006 2006
ASSETS
Non-current assets
Property, plant and
equipment 34.6 32.5 32.2 32.2 32.0
Goodwill 16.2 8.2 9.2 9.2 9.2
Intangible assets 10.6 10.6 11.3 12.0 12.6
Financial assets atfair value
through profit or
loss 10.8 10.7 10.5 10.1 10.5
Other financial
assets 0.1 0.1 0.1 0.1 0.2
Receivables 0.2 1.6 1.7 1.7 1.6
Deferred tax assets 3.5 2.7 2.7 3.2 4.0
Non-current assets
total 76.0 66.3 67.8 68.5 70.0
Current assets
Inventories 16.3 13.9 14.8 14.5 13.9
Trade and other
receivables 52.7 57.5 57.7 58.6 48.0
Cash and short term
deposits 96.6 125.1 45.6 46.8 51.6
Current assets total 165.6 196.5 118.1 119.8 113.4
TOTAL ASSETS 241.6 262.8 185.9 188.3 183.4
EQUITY AND LIABILITIES
Equity attributable to
equity holders of the
parent
Share capital 12.9 12.9 12.9 12.9 12.9
Share premium 64.6 64.6 64.6 64.6 64.6
Translation
difference -0.2 -0.2 -0.1 -0.2 0.1
Retained earnings 87.0 109.2 38.8 38.0 33.5
Minority interest 0.0 2.1 1.9 1.9 1.9
Total equity 164.3 188.6 118.1 117.2 113.0
Non-current liabilities
Deferred tax
liabilities 6.3 6.2 6.9 7.8 8.3
Interest-bearing
liabilities 22.3 17.2 17.2 17.3 17.8
Other liabilities 0.3 0.3 0.1 0.1 0.1
Non-current liabilities
total 28.9 23.7 24.1 25.2 26.2
Current liablities
Trade and other
payables 34.1 34.5 30.3 32.0 32.2
Pension obligations 0.8 0.8 0.8 0.7 0.7
Interest-bearing
loans and
borrowings
(non-current) 13.6 15.2 12.6 13.2 11.4
Current liabilities
total 48.5 50.5 43.6 46.0 44.2
Total liablities 77.3 74.2 67.7 71.1 70.4
TOTAL EQUITY AND
LIABILITIES 241.6 262.8 185.9 188.3 183.4
FINANCIAL PERFORMANCE RELATED 1-3/2007 1-3/2006 1-12/2006
RATIOS
3 months 3 months 12 months
INCOME STATEMENT (MEUR)
Net sales 39.5 42.1 181.5
Operating profit (loss) -8.8 -1.9 -3.0
Operating profit (loss), -1.7
% of net sales -22.3 -4.5
Result before taxes -8.1 -1.9 -3.4
Result before taxes, % of -1.9
net sales -20.5 -4.4
Result for the period -8.1 -1.6 -3.9
PROFITABILITY AND OTHER KEY
FIGURES
Interest-bearing net -92.7
liabilities, (MEUR) -60.8 -22.4
Net gearing, % -37.0 -19.9 -49.2
Equity ratio, % 68.6 62.6 72.2
Gross investments, (MEUR) 15.2 3.1 16.4
Average personnel during the 1 847
period 1 993 1 688
Personnel at the period end 1 998 1706 2 005
AMOUNT OF SHARE ISSUE March 31, 2007 March 31, 2006 Dec. 31,
ADJUSTMENT (1,000 pcs) 2006
At the end of period 129 413 129 413 129 413
Average for the period 129 413 129 413 129 413
Average for the period 129 413
diluted with stock options 129 413 129 413
STOCK-RELATED FINANCIAL 1-3/2007 1-3/2006 1-12/2006
RATIOS (EUR)
3 months 3 months 12 months
Basic earnings per share -0.06 -0.01 -0.03
Diluted earnings per share -0.06 -0.01 -0.03
Equity *) per share 1.27 0.86 1.44
*) Equity attributable to
equity holders of the parent
MARKET VALUES OF SHARES (EUR) 1-3/2007 1-3/2006 1-12/2006
Highest 2.48 2.54 2.56
Lowest 1.61 1.89 1.82
Average 2.09 2.18 2.18
At the end of period 1.62 2.40 2.06
Market value of the stock, 266.6
(MEUR) 209.6 310.6
Trading value of shares, 72.4
(MEUR) 30.5 35.0
Number of shares traded, 33 206
(1,000 PCS) 14 616 16 067
Related to average number of
shares % 11.3 12.4 25.7
SECURITIES AND CONTINGENT March 31, 2007 March 31, 2006 Dec. 31,
LIABILITIES (MEUR) 2006
AGAINST OWN LIABILITIES
Floating charges 28.8 28.8 28.8
Mortgages 18.0 19.7 18.0
Pledges 7.5 7.2 7.1
Mortgages are pledged for
liabilities totalled 20.3 22.4 20.7
OTHER DIRECT AND CONTINGENT
LIABILITIES
Rental liabilities
Falling due in the next 4.0
year 3.5 2.7
Falling due after one year 4.7 4.7 4.4
Repurchase commitments 0.6 0.9 0.6
NOMINAL VALUE OF CURRENCY March 31, 2007 March 31. 2006 Dec. 31.
DERIVATIVES (MEUR) 2006
Foreign exchange forward
contracts
Market value 0.0 0.1 -0.0
Nominal value 13.5 17.3 9.5
Purchased currency options
Market value 0.0 0.0
Nominal value 2.5 2.5
Sold currency options
Market value -0.0 -0.0
Nominal value 5.0 5.0
