Proha Plc Stock Exchange Bulletin March 16, 2006 at 9.00 a.m.
PROHA PLC FINANCIAL STATEMENTS (IFRS) JANUARY 1, - DECEMBER 31, 2005
Financial year 2005:
- The Proha Group net sales were EUR 64.5 million (EUR 65.7 million 2004).
- The net sales of Artemis sub-group were EUR 38.1 (EUR 41.9) million.
- The net sales of Norwegian subsidiaries were EUR 25.8 (EUR 22.4) million.
- The Group' s operating result was EUR -3.6 (-2.0) million.
- The operating result of Artemis sub-group was EUR -2.6 (-1.6) million.
- The operating result of Artemis sub-group includes EUR 0.6 (2.2) million in
non-recurring items.
- The operating profit of the Norwegian subsidiaries was EUR 1.0 (1.1) million.
- The Group's cash flow from operations was EUR 0.2 (-8.7) million.
October - December 2005:
- The Group' s net sales for the period were EUR 17.9 million (17.3 million for
the period October 1, - December 31, 2004).
- The Group' s operating result was EUR -0.8 (-0.1) million.
- The Group' s operating result did not include any non-recurring items.
- Proha Board of Directors accepted the offer to buy the share capital of its
subsidiary Artemis. The completion of the sale is anticipated to have a
material impact on Proha Group' s year 2006 result and shareholders' equity. The
transaction is described in a separate bulletin on March 13, 2006.
- After the closing of the sale Proha will continue to focus on the growth and
international expansion of the project management business in the oil and gas
sector as well as on development and sales of Proha' s other project management
software. Proha' s business concentrates on project management services and
software that are offered and sold to customers worldwide.
- Proha Board of Directors adjusted their previous interpretation of the
accounting treatment of software development costs at Artemis sub-group. The
software development costs at Artemis sub-group have been recognized as
expenses in the year end financial statements of 2005. Due to the change of
accounting treatment the 2005 operating result of Proha was negative unlike
previously forecasted. Without the change in accounting treatment the operating
result for 2005 would have been as anticipated in previous estimates. On
February 16, 2006 a separate bulletin was published on the change.
KEY RATIOS OF THE PROHA GROUP (EUR million)
10-12 10-12 Change 1-12 1-12 Change
EUR 2005 2004 % 2005 2004 %
Net Sales 17.9 17.3 3.4 % 64.5 65.7 -1.8 %
Operating Result -0.8 -0.1 -599.5 % -3.6 -2.0 -79.5 %
% of Net Sales -4.7 % -0.7 % -5.5 % -3.0 %
Profit/loss
before taxes -1.2 0.1 -999.2 % -5.0 -2.0 -153.1 %
Profit/loss -1.6 -0.2 -884.9 % -6.0 -2.9 -109.9 %
Return on
Equity % -125.6 % -6.1 % -86.0 % -29.3 %
Return on
Investment % -14.6 % 12.0 % -13.4 % -1.9 %
Cash and cash
equivalents 7.3 5.1 43.9 % 7.3 5.1 43.9 %
Debt-equity
ratio % 47.0 % 40.2 % 47.0 % 40.2 %
Equity-ratio % 11.0 % 23.4 % 11.0 % 23.4 %
Gross Investments 0.1 0.1 46.0 % 0.3 4.4 -93.7 %
% of Net Sales 0.8 % 0.6 % 0.4 % 6.7 %
Research and
development
costs 2.1 1.6 37.9 % 7.3 6.8 7.3 %
% of Net Sales 12.0 % 9.0 % 11.3 % 10.4 %
Capitalized
development costs 0.1 0.1 12.8 % 0.1 0.1 12.8 %
Personnel average
for the period 524 532 -1.5 % 525 569 -7.7 %
Personnel at the
end of the period 531 525 1.1 % 531 525 1.1 %
Basic earnings
per share, EUR -0.027 -0.003 -884.9 % -0.098 -0.050 -96.5 %
Equity per
share, EUR 0.07 0.15 -53.6 % 0.07 0.15 -53.6 %
Diluted earnings
per share, EUR -0.027 -0.003 -884.9 % -0.098 -0.049 -100.5 %
Cash flows from
operating
activities 3.7 -1.9 300.9 % 0.2 -8.7 101.9 %
EVENTS AFTER THE FINANCIAL YEAR
In March 2006 the Boards of Directors of Proha Plc and its sub-group Artemis
International Solutions Corporation (Artemis) accepted the offer to buy
Artemis' entire share capital made by the subsidiary of US based software
company Trilogy, Inc. Trilogy became Artemis shareholder through the financing
arrangement in 2004.
The transaction is made as a merger where Trilogy will pay Artemis shareholders
USD 1.60 per share of common stock and USD 2.20 per preferred share resulting
in total price of approximately USD 27 million. Proha' s ownership at Artemis is
7,977,062 shares corresponding to approximately 53.3% of the total share
capital of Artemis. In closing the sale Proha will get approximately USD 12.7
million for its share in Artemis.
The closing of the sale requires approval by Artemis shareholders. The majority
of Artemis shareholders required for the approval has agreed to vote for the
decision unless a superior offer is made for the shares before the shareholders
meeting. According to the agreement Proha has the right to make an agreement
with more favorable terms with other parties until March 31, 2006. Such
negotiations are underway and Proha is also negotiating on alternatives where
it would continue to have a minority interest in Artemis. The described
arrangements also aim at delisting of Artemis. Furthermore, non solicited
competing offers may be received until the Annual Meeting of Artemis
stockholders. According to Artemis management the annual meeting will be held
in May 2006.
In 2005 Proha Group' s net sales were EUR 64.5 million with Artemis accounting
for EUR 38.1 million i.e. 59.1% of the total. In 2005 the Group' s operating
result was EUR -3.6 million with Artemis accounting for EUR -2.6 million of the
total amount.
The following estimates on the impacts of the sale are based on the assumption
that the sale is closed on the terms agreed with Trilogy.
On closing the sale will increase the parent company cash assets by USD 12.7
million i.e. approximately EUR 10.7 million calculated at the exchange rate of
the date of acceptance of the purchase offer. The sale is estimated to have a
positive but not material impact on the year 2006 result and shareholders'
equity of Proha Plc. The sale is estimated to have a material positive impact
on the year 2006 result and shareholders' equity of Proha Group.
The result of the disposal of Artemis will be defined by the difference between
the sale price of approximately USD 12.7 and the amount of net assets at the
closing of the sale. The closing of the sale is anticipated to take place in
the second quarter of 2006. In the 2005 year end financial statements of Proha
Group the assets of Artemis sub-group were approximately EUR 26.3 in total
including goodwill of approximately EUR 7.8 million and the liabilities were
approximately EUR 27.2 million resulting in negative net assets of
approximately EUR 0.9 million. However, the impact on result will be determined
by the net assets at the closing of the sale. The items of Artemis sub-group
income statement will be consolidated in the Proha financial statements until
the closing of the sale.
Proha will continue the growth and international expansion of the project
management business in the oil and gas sector as well as on development and
sales of Proha' s other project management software. Proha' s business is
composed of project management services and software that are offered and sold
to customers worldwide. After closing the sale approximately 75% of Proha' s
business comes from oil and gas sector and approximately 25% from other project
management calculating from the division of net sales in 2005.
IFRS REPORTING
At the beginning of 2005, the Proha Group adopted the IFRS reporting standards.
The effective date was January 1, 2004. Prior to that, the Group followed the
Finnish Accounting Standards (FAS). All comparative data for 2004 has been
adjusted according to IFRS.
For Proha Group adoption of IFRS standards has the most material impacts on
treatment of goodwill and business combinations (IFRS 3, IAS 27 and IAS 36),
share based payments (IFRS 2) and defined benefit plans (IAS 19). The IFRS
standards differ significantly from the Finnish Accounting Standards (FAS)
applied by Proha in the interim reports and the financial statements for 2004.
The comparative IFRS data were published in stock exchange bulletins on March
3, 2005, August 11, 2005 and February 16, 2006. In the tables of this bulletin
there are the reconciliations of shareholders' equity on January 1, 2004 and
December 31, 2004, as well as reconciliation of Group result for January 1, -
December 31, 2004.
On February 16, 2006 Proha Board of Directors decided to adjust their previous
interpretation of the accounting treatment of software development costs at
Artemis sub-group. The software development of Proha group is mainly done in
the Artemis sub-group. The control systems at Artemis are not built to follow
the specific point in time at which the technical feasibility of the software
is established, which is required by IAS 38 standard. Also for this reason,
Artemis does not have a mechanism that would appropriately track the costs
incurred from the time at which technical feasibility is established and the
point in time each software product is available for release. Therefore the
software development costs at Artemis have been recognized as expense in 2004
and 2005, also the software development costs prior the effective date have not
been retroactively capitalized.
Adjusting the accounting treatment of software development cost has a material
negative impact on both the year end and interim results for 2005 and 2004 as
well as on intangible assets and shareholders' equity. The adjustments also
impact the statements of changes in shareholders' equity, cash flow statements
and key figures. The changes were explained in a separate stock exchange
bulletin on February 16, 2006
The information by segment is presented primarily by business area based on the
Group's management structure and internal reporting system. The segments
reported are Artemis sub-group and Norwegian subsidiaries. The unallocated
items consist mainly of the Group's administrative expenses. Artemis sub-group
is classified as discontinued operation as per IFRS 5.
GROUP STRUCTURE
The key business areas of Proha Group are the Artemis sub-group and the
Norwegian subsidiaries, Dovre International AS and Safran Software Solutions
AS, fully owned by Proha.
At the end of 2005 Proha's ownership at Artemis was 53.3%. On December
31.12.2004 the ownership was 56.7%. The change in the ownership is mainly due
to exercise of warrants entitling to 456,853 shares that were granted for a
group of investors led by Emancipation Capital and partial conversion of the
convertible loan of Laurus Master Fund, Ltd. into Artemis shares.
During the first quarter of 2005 Laurus converted a portion of USD 242,000 of
the total loan of USD 1.5 million into 166,700 Artemis shares. During the
second quarter Laurus further converted USD 393,000 worth of its loan
receivable into 219,278 shares. The remaining portion of the convertible loan
Laurus may convert into maximum of 336,576 Artemis shares representing 2.2% of
the total number of Artemis shares. Additionally, as part of its financial
arrangements Artemis has granted warrants to the group of investors led by
Emancipation Capital entitling to 409,092 shares. Artemis has an incentive plan
for personnel and management that includes options entitling to company shares.
The shares subscribed for with these options have in their part reduced Proha' s
ownership at Artemis.
The Annual General Meeting of 2005 cancelled the decision of the Extraordinary
General Meeting of Proha on October 23, 2002 to continue the strategy of owning
Artemis International Solutions Corporation shares through Proha and
discontinue implementing other structure alternatives. The Board of Directors
is enabled to evaluate and carry out all strategic alternatives, which the
Board of Directors considers to serve the interests of the shareholders in the
changed circumstances. Proha has continued to prepare strategic alternatives.
After the period the Boards of Directors of Proha Plc and its sub-group Artemis
International Solutions Corporation (Artemis) accepted the offer to buy
Artemis' entire share capital made by the US based software company Trilogy,
Inc. In closing of the sale Proha will sell its entire ownership of Artemis.
According to the agreement Proha has the right to make an agreement with more
favorable terms with other parties until March 31, 2006. Such negotiations are
underway and Proha is also negotiating on alternatives where it would continue
to have a minority interest in Artemis. The described arrangements also aim at
delisting of Artemis.
BUSINESS PERFORMANCE
In 2005 Artemis sub-group accounted for approximately 59.1% (63.7% in 2004) of
the net sales of the Group, and project management operations in Norway, which
mainly serve the oil and gas sector represented approximately 39.9% (34.0%) of
the net sales of the Group.
Artemis sub-group
The new generation Artemis 7 solutions cover extensively the whole range of
portfolio management. Artemis solutions cover the following fields of
applications: New Product Development (NPD), IT Management and Governance
(ITM), Public Investment Management (PIM), Strategic Asset Optimization (SAO)
and Aerospace and Defense Program Management (ADPM). Locally Artemis provides
solutions also for project management in other business areas such as
construction.
In 2005 a total of 41,017 Artemis end-user licenses were sold (50,231 in 2004)
with Artemis 7 licenses accounting for approximately half of them. The total
number of Artemis licenses sold worldwide is over 646,935.
In 2005 the unit sales of strategically important Artemis 7 solutions grew by
40.9% compared to the corresponding period in 2004. Artemis sub-group gained
significant new Artemis 7 customers in 2005 and the existing customers expanded
their use of the systems and implemented completely new systems. For Artemis
the variety of both its customer industries and fields of application reduce
the business risk and prove the versatility and functionality of Artemis 7
solutions in the global markets. The solutions have been implemented e.g. in
pharmaceutical industry, electronics industry, transportation and in
manufacturing as well as in insurance, finance and banking sectors, consulting,
retail and telecommunication sectors.
In spite of the increased sales of Artemis 7 the Artemis sub-group lagged its
sales and profit targets.
Norwegian subsidiaries
The Norwegian subsidiaries Dovre International AS and Safran Software Solutions
AS are reported as a business segment. The business of the Norwegian
subsidiaries is composed of project management services and software that are
offered and sold to customers worldwide. Approximately 75% of the business of
the Norwegian subsidiaries came from oil and gas sector and approximately 25%
from other project management sales. Dovre accounted for approximately 94.3%
(94.1% in 2004) and Safran 5.7% (5.9%) of the net sales of the Norwegian
subsidiaries.
The demand in the oil and gas sector has continued strong. The optimism in the
oil and gas industry investments following the high oil prices has continued.
The level of investments in the Norwegian oil and gas industry is higher than
ever before.
In 2005 the net sales of Dovre were record high. Long term frame agreements
secure stability for Dovre' s business but they slowed down the increased demand
to be shown in prices. Consequently the development of Dovre' s profitability
lagged the set targets. The long term agreements accounted for approximately
80% of Dovre' s net sales in 2005.
The business for Dovre's subsidiary in the USA expanded. The US-operations
brought approximately 11.5% of the total net sales of Dovre in 2005. The
subsidiary' s net sales more than doubled compared to 2004, when the subsidiary
brought approx. 6.1% of Dovre' s net sales.
In June the Norwegian Ministry of Finance selected Dovre as one of five
independent consultants to evaluate publicly funded projects. The duration of
the frame agreement is until the end of 2006 with the option to continue it
twice until the end of 2010. The agreement is strategically important for Dovre
and strengthens Dovre's solid position in the Norwegian project consulting
markets.
In developing its business operations Dovre focuses in maintaining the leading
position in the Norwegian markets, improving profitability and in continuing
the growth in the USA and other foreign markets. Dovre is planning to increase
personnel to meet the increasing demand in the oil and gas industry.
Safran Software Solutions focused its marketing efforts on oil and gas industry
companies in close cooperation with its partners.
In September 2005 Proha started the new Mobile Business Unit that develops and
sells automatic workflow management software and provides the integration
services for the software. The Unit' s solutions communicate the information and
messages arising from the companies' ERP, project management and/or customer
processes safely and automatically between the systems and their users.
Mobile Business Unit strengthens Proha' s ability to operate in the expanding
project management and ERP markets. The first product Mobile Workflow Manager
with its service package was accomplished in September and piloting projects
were started in the fourth quarter 2005.
The new business does not have a material impact on Proha' s net sales or result
and unit' s operations are not currently reported separately. The first sales
are anticipated to be closed during the first half of 2006. Mobile Business
Unit is expected add significantly the functionalities of the Group' s existing
products and thus to create new business opportunities.
NET SALES
The Proha Group's net sales in 2005 were EUR 64.5 million (65.7 million in
2004), which is 1.8% less than in the previous year. The net sales for the
fourth quarter of 2005 were EUR 17.9 (17.3) million, which was 3.4% more than
in the corresponding quarter of 2004.
Distribution of net sales by revenue type:
(EUR million, % of net sales)
10-12 10-12 1-12 1-12
2005 % 2004 % 2005 % 2004 %
One time
license
revenue 3.1 17.4 3.5 20.3 9.7 15.0 11.1 16.9
Recurring
license
revenue 3.6 20.1 3.7 21.4 14.3 22.2 14.9 22.6
Services 11.2 62.5 10.1 58.4 40.5 62.8 39.7 60.4
Total 17.9 100.0 17.3 100.0 64.5 100.0 65.7 100.0
In 2005 the net sales continued to constitute mainly of services with EUR 40.5
(39.7) million or 62.8% (60.4%). For the three months period October 1, -
December 31, 2005 the service revenue was EUR 11.2 (10.1) million constituting
62.5% (58.4%) of the net sales. The services include Dovre's project management
consultancy and the consultancy, training, implementation and support services
of Artemis' software solutions.
In 2005 the license sales amounted to EUR 24.0 (26.0) million, accounting for
37.2% (39.6%) of the net sales. The share of one-time licenses was EUR 9.7
(11.1) million and that of recurring licenses EUR 14.3 (14.9) million.
For the three months period October 1, - December 31, 2005 the license sales
amounted to EUR 6.7 (7.2) million, accounting for 37.5% (41.6%) of the net
sales. The share of one-time licenses was EUR 3.1 (3.5) million and that of
recurring licenses EUR 3.6 (3.7) million.
Distribution of net sales by segment:
(EUR million)
10-12 10-12 Change 1-12 1-12 Change
2005 2004 % 2005 2004 %
Artemis sub-group 10.8 11.1 -2.1 38.1 41.9 -9.0
Norwegian
business operations 6.9 6.0 14.7 25.8 22.4 15.2
Unallocated items 0.3 0.3 -24.7 0.9 1.8 -51.1
Inter-segment
net sales 0.0 -0.1 44.6 -0.2 -0.3 29.8
Group total 17.9 17.3 3.4 64.5 65.7 -1.8
Distribution of net sales by country:
(EUR million)
10-12 10-12 1-12 1-12
2005 2004 2005 2004
Great Britain 1.7 1.2 5.9 5.8
Italy 1.4 1.7 5.8 6.0
Japan 1.4 1.1 4.9 4.1
Norway *) 6.9 6.0 25.8 22.4
France 2.1 2.0 6.7 6.6
Germany 0.6 0.5 1.8 2.8
Finland 1.5 1.6 5.2 7.2
United States 2.3 2.9 7.4 9.7
Others 0.1 0.2 0.9 1.2
Net sales
between countries 0.0 0.0 -0.1 -0.1
Total 17.9 17.3 64.5 65.7
Distribution of net sales by country:
(% of net sales)
10-12 10-12 1-12 1-12
2005 2004 2005 2004
% % % %
Great Britain 9.5 % 7.1 % 9.1 % 8.8 %
Italy 7.7 % 10.0 % 9.0 % 9.1 %
Japan 7.7 % 6.6 % 7.6 % 6.3 %
Norway *) 38.4 % 34.6 % 39.9 % 34.0 %
France 11.9 % 11.4 % 10.5 % 10.0 %
Germany 3.4 % 3.1 % 2.9 % 4.3 %
Finland 8.3 % 9.5 % 8.1 % 11.0 %
United States 12.8 % 16.5 % 11.5 % 14.7 %
Others 0.7 % 1.4 % 1.5 % 1.8 %
Net sales between
countries -0.2 % -0.3 % -0.1 % -0.1 %
Total 100.0 % 100.0 % 100.0 % 100.0 %
*) The net sales of Dovre's international operations outside Norway have been
listed under Norway.
Artemis sub-group
The net sales of the Artemis sub-group totaled EUR 38.1 (41.9) million and
accounted for 59.1% (63.7%) of the Group's net sales in 2005. The net sales of
Artemis declined by 9.0% compared to 2004.
For the three months period October 1, - December 31, 2005 the net sales of the
Artemis sub-group were EUR 10.8 (11.1) million accounting for 60.5% (63.9%) of
the Group's net sales. Compared to the corresponding period in 2004 the net
sales of Artemis decreased by 2.1%.
At Artemis sub-group the share of both one-time and recurring license revenue
increased. In 2005 the share of license revenue was 60.7% (57.5%) of the net
sales. Service revenue accounted for 39.3% (42.5%) of the net sales.
Norwegian subsidiaries
In 2005 the net sales of the Norwegian subsidiaries totaled EUR 25.8 (22.4)
million and accounted for 39.9% (34.0%) of the Group's net sales. The net sales
of Norwegian subsidiaries grew by 15.2% compared to 2004.
For the three months period October 1, - December 31, 2005 the net sales of the
Norwegian subsidiaries were EUR 6.9 (6.0) million accounting for 38.4% (34.6%)
of the Group' s net sales. The net sales of the Norwegian subsidiaries grew by
15.2% compared to the corresponding period in 2004. The net sales include the
revenue from the operations outside Norway.
PROFITABILITY
The Proha Group's operating result in 2005 totaled EUR -3.6 (-2.0) million. The
operating result includes EUR 0.6 (2.2) million in non-recurring items. The non-
recurring income was EUR 0.9 (4.0) million and the non-recurring charges were
EUR 0.3 (1.8) million. The non-recurring income includes EUR 0.6 million of
arbitration proceedings from Changepoint France settlement and EUR 0.3 million
from the partial disposals of Artemis. The operating result before non-
recurring items for the period was EUR -4.2 (-4.2) million.
The Group' s operating result for the fourth quarter of 2005 was EUR -0.8
(-0.1) million. The operating result for the fourth quarter of 2005 does not
include any non-recurring items.
In 2005 the cost level of the Group business operations was approximately 3.5%
lower compared to 2004. The cost level at Artemis was 11.2% lower due to more
cost effective performance. On the other hand the cost level at Norwegian
subsidiaries was 16.3% higher reflecting the growth in their business volume.
Distribution of operating result by segment:
(EUR million)
10-12 10-12 Change 1-12 1-12 Change
2005 2004 % 2005 2004 %
Artemis
sub-group -0.3 -0.2 -110.7 -2.6 -1.6 -69.2
Norway 0.1 0.4 -75.8 1.0 1.1 -6.0
Unallocated
items -0.5 -0.2 -189.1 -1.8 -1.3 -40.0
Inter-segment
operating result 0.0 -0.2 70.7 -0.2 -0.2 27.7
Group total -0.8 -0.1 -599.5 -3.6 -2.0 -79.5
Artemis sub-group
In 2005 the Artemis sub-group's operating result was EUR -2.6(-1.6) million,
which includes EUR 0.6 million of arbitration proceedings from Changepoint
France settlement. The operating result for 2004 includes EUR 4.0 million
income from the partial disposal of Artemis.
The operating result of Artemis for 2005 does not include any non-recurring
restructuring charges. The total EUR 1.8 million of non-recurring restructuring
charges in 2004 include employment termination costs of EUR 1.2 million and
other operating expenses of EUR 0.6 million at Artemis.
For the three month period October 1 - December 31, 2005 the Artemis sub-
group's operating result was EUR -0.3 (-0.2) million.
Norwegian subsidiaries
In 2005 the operating profit of the Norwegian subsidiaries was EUR 1.0 (1.1)
million. The extra costs aimed at business growth increased the cost level of
the Norwegian subsidiaries during the first quarter of 2005. However, the
business operations were profitable in 2005.
For the three month period October 1 - December 31, 2005 the operating profit
of the Norwegian operations was EUR 0.1 (0.4) million.
The Group's goodwill is not amortized but tested for impairment under IAS 36.
No indications of impairment of assets exist.
In 2005 the Group's research and development costs were EUR 7.3 (6.8) million
in total, of which a total of EUR 0.1 (0.1) million were capitalized.
In 2005 the Group's result before taxes was EUR -5.0 (-2.0) million. The net
result for the financial year was EUR -6.0 (-2.9) million. Earnings per share
amounted to EUR -0.098 (-0.050). Return on investment (ROI) was -13.4% (-1.9%)
and return on equity (ROE) was -86.0% (-29.3%).
CASH FLOW, FINANCING AND INVESTMENTS
The balance sheet total on December 31, 2005 was EUR 42.8 (43.0) million. At
the end of the year, cash and cash equivalents totaled EUR 7.3 (5.1) million,
growing EUR 2.2 million compared to the situation on December 31, 2004.
During the twelve months of 2005, cash flow from operating activities was
EUR 0.2 million (-8.7).
Total of EUR 0.3 million were used for investments. However, the total cash
flow of investments was EUR 1.2 million positive with EUR 0.6 million proceeds
from divestment of Changepoint France and EUR 0.6 million from the partial
disposals of Artemis increasing the cash flow with total EUR 1.2 million and
the loan receivables decreasing by EUR 0.2 million.
Total of EUR 5.3 million new loans were drawn and total of EUR 4.5 million
loans repaid, resulting in total EUR 0.7 million in cash flow of financing
activities.
Equity to assets ratio was 11.0% (23.4%) and gearing was 47.0% (40.2%). On
December 31, 2005 the interest-bearing liabilities amounted to EUR 9.4 (8.9)
million, accounting for 21.9% (20.7%) of the Group's shareholders' equity and
liabilities total. Of the interest-bearing liabilities, EUR 4.7 (4.7) million
were non-current liabilities and EUR 4.7 (4.2) million current liabilities. The
Group's Quick Ratio was 1.0 (1.2).
In 2005 the capital expenditures were EUR 0.3 (4.4) million.
STATEMENT ON THE ADEQUACY OF THE COMPANY'S ASSETS
On December 31, 2005 the Group's cash and cash equivalents amounted to EUR 7.3
(5.1) million. The amount of cash and cash equivalents grew by EUR 2.2 million
from January 1, 2005.
According to Proha's management, the liquid assets of the company are
sufficient for Proha to continue as a going concern during the following 12
months.
RESEARCH AND DEVELOPMENT
In 2005 the software development costs of strategic products were EUR 7.3 (6.8)
million, representing 11.3% (10.4%) of the year's net sales.
The software development of Proha group is mainly done in the Artemis sub-
group. In the end of June Artemis released a distinctly renewed version 6.1 of
Artemis 7 portfolio management solution. The new version of Artemis 7 includes
also project and program management modules as well as demand management and
detailed scheduling modules. In December new maintenance versions Artemis 7
v.6.1.3 and Artemis Views v.7.3 were released .
In the third quarter a new version 4.7 of the Value Point software for project
management, time reporting and invoicing of work intensive projects was
released for the Scandinavian markets. Likewise, a new version 6.1 of Planet
project management software was released in Scandinavia in the third quarter.
Safran released new versions of both its Safran Planner and Safran for
Microsoft Project software in 2005.
During the second half of 2005 Proha' s Mobile Business Unit has developed the
Mobile Workflow Manager application that enhances the customers' operative
workflow management and ERP. The product is developed in cooperation with
BookIT Oy and the work has been granted financing from Tekes (the National
Technology Agency of Finland).
On February 16, 2006 Proha Board of Directors decided to adjust their previous
interpretation of the accounting treatment of software development costs. The
impacts of the change in accounting treatment are presented before in chapter
IFRS Reporting.
PERSONNEL
On December 31, 2005 the Proha Group employed 531 (525) people worldwide.
Distribution of personnel by segment (average):
10-12 10-12 Change 1-12 1-12 Change
Personnel 2005 2004 % 2005 2004 %
Artemis
sub-group 302 319 -5.4 % 308 349 -11.8 %
Norwegian
subsidiaries 194 182 6.3 % 188 183 3.0 %
Other 28 30 -6.7 % 29 37 -21.1 %
Group total 524 532 -1.5 % 525 569 -7.7 %
At the end of the year, Artemis sub-group employed 301 (317) people and the
Norwegian subsidiaries 197 (178). The number of Proha personnel grew by 1.1%
compared to 2004. In 2005, the average number of Group personnel was 525 (569).
In 2005 the staff costs amounted to EUR 52.1 (51.8) million, constituting 80.8%
(78.8%) of net sales. During the three month period October 1, - December 31,
2005 the staff costs were EUR 14.1 (12.6) million, constituting 78.6% (72.7%)
of the net sales.
In 2005 the staff costs at Artemis decreased by 9.4% compared to 2004. The
proportion of staff cost to net sales was 71.2% (71.5%). In 2005 the increased
volume of the work intensive business of Dovre increased staff costs by 17.0%
at the Norwegian subsidiaries compared to 2004. The proportion of staff cost to
net sales was 90.2% (88.8%).
In 2005 EUR 0.5 (0.6) million of options were expensed. Majority of option
expenses are due to options granted by Artemis sub-group.
PROHA'S ANNUAL GENERAL MEETING ON APRIL 22, 2005
On April 22, 2005 the Annual General Meeting of Proha elected Birger Flaa as
the new member of the Board of Directors. Olof Ödman (Chairman), Pekka Pere,
Alec Gores, Carlo Boldi and Pekka Mäkelä were re-elected. Later Carlo Boldi
resigned from the board on June 28, 2005 and Alec Gores on August 17, 2005.
The Annual General Meeting decided that each Board member, not employed by the
Proha Group or by such company which owns more than five percents of Proha's
share capital and who does not exercise dominant influence over such company,
to be paid EUR 18,000 per year as remuneration for board work.
Ernst & Young Oy was elected to continue as the Company's auditor, with Ulla
Nykky, APA, as the auditor in charge.
On April 22, 2005 the Annual General Meeting authorized the Board of Directors
to increase the company's share capital. Pursuant to this authorization, the
aggregate maximum number of new shares to be issued or offered for subscription
pursuant to stock options, option warrants and/or convertible bonds shall not
exceed 12,243,554 shares with an account equivalent value of EUR 0.26 each, and
the share capital of the Company may be increased by no more than EUR
3,183,324.04, which represented 20% of the registered share capital and of the
votes that can be cast in the General Meeting of Shareholders. The
authorization is valid until April 21, 2006.
The Annual General Meeting approved the Board of Directors' proposal to issue a
maximum of 585,000 option rights that were offered deviating from the
shareholders' pre-emptive subscription right to the management of the Group
companies. Options were not offered to the members of the Board of Directors or
to the CEO of Proha Plc.
The Annual General Meeting confirmed the Financial Statements of 2004 and
discharged the CEO and the Board of Directors from liability.
The Annual General Meeting approved the Board of Directors' proposal according
to which no dividend is paid and the result for the financial year is entered
in profit/loss brought forward.
The Annual General Meeting cancelled the decision of the Extraordinary General
Meeting of Proha on October 23, 2002 to continue the strategy of owning Artemis
International Solutions Corporation shares through Proha and discontinue
implementing other structure alternatives. The Board of Directors is now
enabled to evaluate and carry out all strategic alternatives, which the Board
of Directors considers to serve the interests of the shareholders in the
changed circumstances.
ANNUAL MEETING OF ARTEMIS INTERNATIONAL SOLUTIONS CORPORATION STOCKHOLDERS AND
THE BOARD OF DIRECTORS
The Annual Meeting of Stockholders of Artemis International Solutions
Corporation was held on July 27, 2005. The stockholders re-elected Pekka Pere,
Olof Ödman and Bengt-Åke Älgevik. In addition, Steve Yager, Mike Murphy, Joseph
Liemandt and David Cairns continue as Directors. On August 9, 2005 the Chairman
of Artemis Board of Directors changed as Steve Yager resigned and Pekka Pere
assumed the role of Chairman of the Board.
CORPORATE GOVERNANCE
Proha Plc follows the recommendations of the Helsinki Stock Exchange, the
Central Chamber of Commerce and the Confederation of Finnish Industries and
Employers regarding the corporate governance of publicly held companies. Proha
deviates from the recommendation in two respects. 1) Of the four members of the
Proha Board of Directors only one is currently independent of the company and
any of its significant owners. 2) A share-based bonus system may also be
applied to those members of the Board, who do not have an employment
relationship with the company. Additionally, due to changes in the Board of
Directors on June 28, 2005 and August 17, 2005, Proha currently does not meet
with the recommendation of minimum five Board members. Proha's corporate
governance principles can be found on the company's website at www.proha.com.
SHARE CAPITAL AND AUTHORIZATIONS TO ISSUE SHARES
Proha Plc has one class of shares. The book value of the shares is EUR 0.26 per
share. Each share entitles the shareholder to one vote. Proha Plc shares are
traded on the NM list of the Helsinki Stock Exchange.
On January 1, 2005, the subscribed capital of Proha Plc was EUR 15,916,620.20
and the total number of shares was 61,217,770. On October 12, 2005 a total of
900 new Proha Plc shares were registered in the Trade Register. The shares were
subscribed for by option rights of 2001. After the registration, the share
capital of Proha Plc is EUR 15,916,854.20 and the number of shares is
61,218,670.
The Board of Directors has the authorization by the Annual General Meeting
April 22, 2005 to increase the company's share capital. Pursuant to this
authorization, the aggregate maximum number of new shares to be issued shall
not exceed 12,243,554 shares with an account equivalent value of EUR 0.26 each,
and the share capital of the Company may be increased by no more than EUR
3,183,324.04. The authorization is valid until April 21, 2006.
On April 26, 2005, Proha Board of Directors approved the subscriptions of the
option issue for employees, in total 535,080 option rights. In it's meeting on
May 9, 2005 the Board approved the subscriptions of management options, in
total 585,000 option rights. Further in it' s meeting on September 21, 2005 the
Board approved the subscriptions of total 90,000 option rights, which were
issued due to changes in the management. All option rights entitle to
subscription of one share each.
The Board confirmed the subscription price for the shares subscribed on the
basis of both the management and personnel stock option plan 2005 as EUR 0.50
per share. The confirmed share subscription price for the options is the
weighted average price of the Company share from April 4, 2005 through April
22, 2005 and thus corresponds to the fair market price. The share subscription
price is the same for the options issued on September 21, 2005.
The terms and conditions of the 2005 option issues were published in the Stock
Exchange Bulletin on March 30, 2005.
At the end of the period the grand total of Proha Plc shares subscribable under
all Proha's option plans was 4,760,742.
TRADING ON THE HELSINKI STOCK EXCHANGE
The number of registered shareholders of Proha Plc totaled 3,626 on December
31, 2005. In 2005, the share price was EUR 0.33 at its lowest and EUR 0.56 at
its highest. The closing price on December 31, 2005 was EUR 0.36. Market
capitalization was approximately EUR 22.0 million at the end of the period. The
trading volume of the Proha share on the NM list of the Helsinki Stock Exchange
was approximately EUR 9.8 million in 2005.
PROSPECTS FOR 2006
The completion of sale of Artemis and the alternative through which it will be
achieved will have a significant impact on Proha Group' s operations in 2006. If
the sale is completed on terms now negotiated with Trilogy, Inc., the sale will
have a significant positive impact on Proha' s shareholders' equity and cash
assets.
The added investments in the oil and gas sector caused by the increased oil
prices have a significant impact on the development of Norwegian business. The
investments are anticipated to keep the demand strong also for 2006. The
challenge for Proha' s Norwegian operations is to respond to the demand, which
calls for successful recruiting. Improved profitability and increased share of
international business are additional goals.
PUBLICATION OF ARTEMIS' RESULT FOR THE FOURTH QUARTER OF 2005
The Artemis sub-group published its fourth quarter result of 2005
on March 15, 2006. The full report (FORM 10-K) is available on the SEC
website at
www.sec.gov/edgar/searchedgar/companysearch.html under the name
Artemis International.
PRESS CONFERENCE
Proha Plc will hold a press conference for the media and financial
analysts on March 16, 2006 at 12.00 a.m., at Cabinet 1,
World Trade Center, address Aleksanterinkatu 17, Helsinki.
More information
PROHA PLC
CEO Pekka Pere, tel +358 (0)20 4362 000
pekka.pere@proha.com
www.proha.com
DISTRIBUTION:
Helsinki Stock Exchange
Major Media
The figures are unaudited.
PROHA GROUP CONSOLIDATED INCOME STATEMENT JANUARY 1-DECEMBER 31, 2005
Continued Discontinued
operations operations Total
1-12 1-12 1-12 1-12 1-12 1-12
(EUR 1000) 2005 2004 2005 2004 2005 2004
NET SALES 26 421 23 840 38 106 41 874 64 527 65 714
Other operating
income 160 439 1 396 3 994 1 555 4 433
Material and
services -97 -391 -3 349 -4 216 -3 447 -4 608
Employee
benefits expense -24 997 -21 838 -27 117 -29 930 -52 113 -51 768
Depreciation
and amortisation -346 -285 -325 -414 -670 -699
Other operating
expenses -2 529 -2 741 -10 883 -12 315 -13 412 -15 056
OPERATING RESULT -1 388 -977 -2 172 -1 007 -3 560 -1 984
Financing income 253 54 1 146 1 513 1 399 1 567
Financing
expenses -539 -438 -2 303 -1 202 -2 841 -1 640
Share of
profit/loss
in associates 0 80 0 80
RESULT BEFORE
TAX -1 674 -1 281 -3 329 -696 -5 003 -1 976
Tax on income
from operations -263 -175 -759 -502 -1 022 -677
RESULT FOR
THE PERIOD -1 937 -1 456 -4 088 -1 198 -6 025 -2 654
ALLOCATION OF
RESULT FOR
THE PERIOD
Result
attributable to
equity holders
of the parent -1 942 -1 674 -4 088 -1 198 -6 029 -2 872
Result
attributable
to minority
interest 4 218 0 4 218
Total -1 937 -1 456 -4 088 -1 198 -6 025 -2 654
Earnings/share
(undiluted), eur -0.032 -0.029 -0.067 -0.021 -0.098 -0.050
Earnings/share
(diluted), eur -0.032 -0.029 -0.067 -0.020 -0.098 -0.049
31.12. 31.12.
BALANCE SHEET 2005 2004 Change %
ASSETS (EUR 1000) (EUR 1000)
Non-current assets
Intangible assets 1 784 1 956 -8.8
Goodwill 11 225 11 645 -3.6
Tangible assets 629 817 -23.0
Investments in associates 966 967 0.0
Long term trade receivables
and other receivables 205 383 -46.3
Other long term
investments 81 76 5.7
Deferred tax asset 97 105 -7.9
Non-current assets total 14 987 15 950 -6.0
Current assets
Current receivables 20 439 21 703 -5.8
Tax receivable, income tax 117 262 -55.3
Cash and cash equivalents 7 293 5 069 43.9
Current assets total 27 850 27 035 3.0
ASSETS TOTAL 42 837 42 984 -0.3
SHAREHOLDERS' EQUITY AND
LIABILITIES
Shareholders' equity
Share capital 15 917 15 917 0.0
Share premium account 4 808 4 807 0.0
Revaluation reserve 430 467 -7.9
Translation differences 463 -545 185.0
Retained earnings -17 219 -11 171 -54.1
Equity attributable to equity
holders of the parent 4 400 9 475 -53.6
Minority interest 73 70 4.6
Shareholders' equity total 4 473 9 545 -53.1
Non current liabilities
Deferred tax liability 418 454 -7.8
Non-current
interest bearing
liabilities 4 656 4 701 -1.0
Non-current
non-interest bearing
liabilities 0 113 -100.0
Liabilities from defined
benefit plan 3 405 2 804 21.4
Non-current provisions 77 88 -12.8
Non current liabilities total 8 556 8 160 4.9
Current liabilities
Current interest
bearing liabilities 4 738 4 208 12.6
Trade Payables and
Other Liabilities 23 534 19 996 17.7
Tax liability. income tax 1 515 1 076 40.8
Current provisions 21 0 0.0
Current liabilities total 29 808 25 280 17.9
TOTAL EQUITY AND LIABILITIES 42 837 42 984 -0.3
RECONCILIATION OF SHAREHOLDERS' EQUITY 1-12/2005
Sub- Share Re-
scr- pre- valu- Profit/ Min-
ibed mium ation Trans- loss ority
(1000 EUR) capi- ac- re- lation brought inte-
tal count serve diff. forward Total rest Total
SHAREHOLDERS'
EQUITY 1.1.2005 15 917 4 807 467 -545 -11 171 9 475 70 9 545
Change in
translation
difference 15 1 009 -575 448 -1 447
Share based
payments 498 498 498
Transfers
between items -52 52
Other change 7 7 7
NET PROFIT/LOSS
RECOGNIZED
DIRECTLY TO
SHAREHOLDERS'
EQUITY -37 1 009 -19 953 -1 952
Profit/loss for
the period -6 029 -6 029 4 -6 025
TOTAL PROFITS
AND LOSSES -6 029 -6 029 4 -6 025
Share issue 0 1 1 1
SHAREHOLDERS'
EQUITY
31.12.2005 15 917 4 808 430 463 -17 219 4 400 73 4 473
RECONCILIATION OF SHAREHOLDERS' EQUITY 1-12/2004
Sub- Share Re-
scr- pre- valu- Profit/ Min-
ibed mium ation Trans- loss ority
capi- ac- re- lation brought inte-
tal count serve diff. forward Total rest Total
(1000 EUR)
SHAREHOLDERS'
EQUITY 1.1.2004 13 875 2 964 0 0 -8 945 7 894 682 8 576
Revaluation
of intangible
assets 496 496 496
Change in
translation
difference -545 102 -443 -443
Share based
payments 525 525 525
Transfers
between
items -28 28 0 0
Business
combinations -831 -831
Other change -41 -8 -49 -49
NET PROFIT/LOSS
RECOGNIZED
DIRECTLY TO
SHAREHOLDERS'
EQUITY 0 -41 467 -545 647 528 -831 -303
Profit/loss for
the period -2 872 -2 872 218 -2 654
TOTAL PROFITS 0 0 0 0 -2 872 -2 872 218 -2 654
AND LOSSES
Share issue 2 041 1 884 3 925 3 925
SHAREHOLDERS'
EQUITY
31.12.2004 15 917 4 807 467 -545 -11 171 9 475 70 9 545
CASH FLOW STATEMENT
1-12 1-12
2005 2004
Cash flow from operating activities
Operating result -3 560 -1 984
Adjustments
Other operating income -1 369 -4 032
Depreciation and amortization 670 699
Employee benefits expense 995 1 389
Other operating expenses 253 -376
Other adjustments 3 -143
Adjustments, total 553 -2 463
Change in net working capital
Increase (-) / decrease (+)
in short term receivables 16 1 130
Increase (+) / decrease (-)
in short term liabilities 3 626 -4 542
Change in provisions 21 103
Change in net working capital, total 3 663 -3 309
Interest paid -171 -860
Interest received 434 337
Other financial expenses paid -2 501 -280
Other financial income received 2 188 1 039
Income taxes paid -442 -1 203
Cash flow from operating activities 163 -8 723
Cash flow from investing activities
Investments in tangible and intangible -279 -252
assets
Disposal of other investments 0 236
Disposals of associated companies 619 0
Partial disposals of subsidiary companies 629 7 404
Proceeds and repayments of loan receivables 186 292
Dividends received 20 7
Cash flow from investing activities 1 173 7 687
Cash flow from financing activities
Share issue 1 0
Proceeds from short-term loans 3 563 4 847
Repayments of short-term loans -3 740 -2 983
Proceeds from long-term loans 1 705 223
Repayments of long-term loans -782 -134
Proceeds and repayments of
long term receivables 0 -2 500
Dividends paid -9 -393
Cash flow from financing activities 738 -940
Change in cash and cash equivalents 2 075 -1 976
Cash and cash equivalents Jan. 1 -5 069 -7 058
Foreign exchange rate adjustment -150 13
Cash and cash equivalents Dec.1 7 293 5 069
Change in cash and cash equivalents 2 075 -1 976
INCOME STATEMENT BY QUARTER,
2005
Proha Group
1-3 4-6 7-9 10-12
(EUR 1000) 2005 2005 2005 2005
NET SALES 15 443 16 571 14 598 17 915
Other operating income 737 624 -24 219
Material and services -861 -980 -586 -1 019
Employee benefits expense -12 971 -13 112 -11 950 -14 080
Depreciation and
amortisation -134 -128 -241 -167
Other operating expenses -2 874 -3 585 -3 240 -3 713
OPERATING RESULT -660 -611 -1 444 -846
% -4.3 % -3.7 % -9.9 % -4.7 %
Financing income and
expenses -387 -333 -373 -349
PROFIT/LOSS BEFORE TAX AND
MINORITY INTEREST -1 047 -944 -1 817 -1 194
% -6.8 % -5.7 % -12.4 % -6.7 %
Tax on income from
operations -225 -260 -108 -429
PROFIT/LOSS FOR THE PERIOD -1 273 -1 204 -1 925 -1 623
% -8.2 % -7.3 % -13.2 % -9.1 %
INCOME STATEMENT BY QUARTER,
2004
Proha Group
1-3 4-6 7-9 10-12
(EUR 1000) 2004 2004 2004 2004
NET SALES 16 887 17 020 14 487 17 320
Other operating income 27 4 074 163 169
Material and services -1 401 -1 304 -846 -1 057
Employee benefits expense -13 483 -13 624 -12 063 -12 598
Depreciation and amortisation -123 -179 -200 -196
Other operating expenses -4 223 -3 684 -3 389 -3 760
OPERATING RESULT -2 317 2 303 -1 849 -121
% -13.7 % 13.5 % -12.8 % -0.7 %
Financing income and expenses 157 -196 -291 257
Share of profit/loss
in associates 28 11 45 -4
PROFIT/LOSS BEFORE TAX AND
MINORITY INTEREST -2 132 2 118 -2 095 133
% -12.6 % 12.4 % -14.5 % 0.8 %
Tax on income from operations -337 -89 27 -279
PROFIT/LOSS FOR THE PERIOD -2 469 2 029 -2 068 -146
% -14.6 % 11.9 % -14.3 % -0.8 %
CONTINGENT LIABILITIES
2005 2004
COLLARETAL FOR OWN COMMITENTS
Debts secured by corporate mortgages
Pension loans 86 100
Corporate mortgages given
as security of the loans 168 168
Debts secured by the assets of the company
Loans from financial institutions 3 276 1 101
Debts secured by the assets of Artemis
International Solutions Corporation
in USA and in Great Britain except for
intellectual property rights.
Debts secured by assets
Loans and checking
account credit lines used 1 927 1 810
Book value of trade receivables and
fixed assets given as security 6 880 6 035
Debts secured by shares
Loans from financial institutions 48 72
Book value of pledged shares 152 152
Minimum lease payments under
non-cancellable leases
Within a year 2 558 2 673
Within 1 - 5 years 4 867 6 162
Total 7 425 8 835
CONTINGENT LIABILITIES ON BEHALF OF
SUBSIDIARY COMPANIES
Debts secured by deposits
Loans from financial institutions 0 2 500
Book value of deposits 0 2 500
KEY RATIOS
IFRS IFRS FAS FAS FAS
EUR 1000 2005 2004 2003 2002 2001
Net sales 64 527 65 714 76 792 100 824 82 845
Change, % -1.8 % -14.4 % -23.8 % 21.7 % 129.2 %
Operating result -3 560 -1 984 -5 987 3 052 -6 098
% of net sales -5.5 % -3.0 % -7.8 % 3.0 % -7.4 %
Result before taxes -5 003 -1 976 -5 845 3 287 -7 246
% of net sales -7.8 % -3.0 % -7.6 % 3.3 % -8.8 %
Result for the period -6 029 -2 872 -6 187 1 765 -10 085
% of net sales -9.3 % -4.4 % -8.1 % 1.8 % -12.2 %
Return on equity, % -86.0 % -29.3 % -48.8 % 16.4 % -63.0 %
Return on
Investement, % -13.4 % -1.9 % -19.1 % 18.2 % -25.4 %
Equity-ratio, % 11.0 % 23.4 % 26.1 % 31.4 % 34.6 %
Gearing, % 47.0 % 40.2 % 5.3 % -31.8 % -11.9 %
Total equity
and liabilities 42 837 42 984 44 701 59 614 54 357
Gross investments 279 4 433 538 2 521 3 314
% of net sales 0.4 % 6.7 % 0.7 % 2.5 % 4.0 %
Research and development
costs 7 310 6 834 7 910 8 570 11 598
% of net sales 11.3 % 10.4 % 10.3 % 8.5 % 14.0 %
Personnel average for
the period 525 569 642 753 690
Personnel at the end of
the period 531 525 619 643 638
KEY RATIOS FOR SHARES
EUR
IFRS IFRS FAS FAS FAS
2005 2004 2003 2002 2001
Earnings
per share (EPS) -0.098 -0.050 -0.118 0.034 -0.198
Diluted EPS -0.098 -0.049 *) 0.034 *)
Equity per share 0.07 0.15 0.18 0.29 0.24
Average number
of shares:
-undiluted 61 217 970 57 313 830 52 615 215 51 798 227 51 049 618
-diluted 61 217 970 58 473 243 53 128 712 51 938 283 51 049 618
Number of
shares at the
end of the period 61 218 670 61 217 770 53 367 270 51 867 270 51 054 350
*) The diluted EPS is not presented because it would be better than the
undiluted figure.
LARGEST SHAREHOLDERS ON DECEMBER 31, 2005
Shareholder Percentage
of all
shares and
Number of voting
shares rights
Dovregruppen A.S. 6 561 646 10.7
Alec E. Gores Trust 6 357 655 10.4
Etra-Invest Oy 6 100 000 9.9
Pekka Pere 4 241 105 6.9
Pekka Mäkelä 2 923 775 4.8
Lars Nyqvist 1 935 055 3.2
Thominvest Oy 1 043 500 1.7
FIM Pankkiiriliike Oy 1 036 300 1.7
Eero Ruokostenpohja 694 150 1.1
Risto Saikko 621 390 1.0
Patrick Ternier 550 087 0.9
Trivian Oy 505 000 0.8
Alexa Marie Gores 474 720 0.8
Eric B. Gores 474 720 0.8
Lauren C. Gores 474 720 0.8
Rochelle Francis Gores 474 720 0.8
BREAKDOWN OF SHARE OWNERSHIP ON DECEMBER 31, 2005
By number of shares owned
Percentage Total Percentage
Number of of all number of of all
shareholders shareholders shares shares
1-100 192 5.3 13 808 0.02
101-500 714 19.7 280 189 0.46
501-1 000 620 17.10 570 173 0.93
1 001-5 000 1 296 35.7 3 580 033 5.85
5 001-10 000 378 10.42 3 008 409 4.91
10 001-50 000 336 9.3 7 527 966 12.30
50 001-100 000 25 0.69 1 803 046 2.95
100.001-500 000 53 1.46 11 866 383 19.38
500 001- 12 0.33 32 568 663 53.20
Total 3 626 100.00 61 218 670 100.00
By shareholder category
Percentage
Number of of all Total Percentage
Share- Share- number of of all
holders holders shares shares
Private companies 233 6.4 12 186 063 19.9
Insurance and
Financial
institutions 4 0.2 6 785 646 11.1
Public corporations 1 0.0 800 0.0
Non-profit
organizations 3 0.1 4 550 0.0
Households 3 303 91.1 28 060 249 45.8
Foreign shareholders 77 2.1 13 822 420 22.6
Nominee registered 5 0.1 358 942 0.6
Total 3 626 100.0 61 218 670 100.0%
RECONCILIATION OF RESULT IN THE COMPARATIVE PERIOD,
JANUARY 1 - DECEMBER 31, 2004
Proha Group FAS IFRS
1000 EUR 1-12 IFRS 1-12
INCOME STATEMENT 2004 Adjustments 2004
NET SALES 65 714 0 65 714
Other operating income 783 3 650 4 433
Material and services -4 608 0 -4 608
Employee benefits expense -50 379 -1 389 -51 768
Depreciation and amortisation -2 667 1 968 -699
Other operating expenses -15 432 376 -15 056
Operating result -6 589 4 605 -1 984
Financing income and expenses -60 -13 -73
Share of profit/loss
in associates *) 80 0 80
PROFIT/LOSS BEFORE
TAX AND MINORITY INTEREST -6 569 4 592 -1 976
Tax on income from operations -684 6 -677
PROFIT/LOSS FOR THE PERIOD -7 252 4 598 -2 654
NET PROFIT/LOSS ATTRIBUTABLE:
To equity holders of the parent -7 464 4 592 -2 872
To minority interest 212 6 218
Total -7 252 4 598 -2 654
*) In FAS financial statements the Group' s share in results of the associated
companies was included in the operating result. In the table it has been
reclassified according to IFRS.
RECONCILIATION OF GROUP RESULT
1.1. - 31.12.2004
Profit/loss
for the period, FAS -7 464
Partial disposal of Artemis 4 014
Share based payments -573
Amortization of goodwill 2 066
Dovre acquisition -71
Pension liability -844
IFRS adjustments in total 4 592
Profit/loss
for the period, IFRS -2 872
GROUP BALANCE SHEET
JANUARY 1 - DECEMBER 31, 2004
Proha Group IFRS
FAS Adjustments IFRS
(1000 EUR) 31.12.2004 31.12.2004 31.12.2004
ASSETS **)
NON-CURRENT ASSETS
Intangible assets 336 1 620 1 956
Goodwill 13 227 -1 582 11 645
Tangible assets 817 0 817
Investments in associates 967 0 967
Long-term Receivables 52 0 52
Non-current trade and
other receivables 1 046 -714 331
Other Long-term Investments 76 0 76
Deferred tax asset 35 70 105
NON-CURRENT ASSETS 16 556 -606 15 950
CURRENT ASSETS
Trade receivables and
other receivables 21 703 0 21 703
Tax Receivable, income tax 262 0 262
Cash and bank 5 069 0 5 069
CURRENT ASSETS 27 035 0 27 035
ASSETS 43 591 -606 42 984
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY**)
Share capital 15 917 0 15 917
Share premium account 11 412 -6 605 4 807
Fair value reserve and
other reserves 0 467 467
Translation differences 2 181 -2 726 -545
Retained earnings -16 438 5 268 -11 171
Equity attributable to equity
holders of the parent 13 070 -3 596 9 475
Minority interest 70 0 70
SHAREHOLDERS' EQUITY 13 140 -3 596 9 545
LONG-TERM LIABILITIES**)
Deferred tax liability 0 454 454
Long-term liabilities,
interest-bearing 4 701 0 4 701
Non-current
interest-free liabilities 279 -166 113
Liabilities from
defined benefit plan 102 2 702 2 804
Non-current provisions 88 0 88
NON-CURRENT LIABILITIES 5 170 2 989 8 160
CURRENT LIABILITIES**)
Short-term
interest-bearing liabilities 4 208 0 4 208
Trade Payables and
Other Liabilities 19 996 0 19 996
Tax liability, income tax 1 076 0 1 076
CURRENT LIABILITIES 25 280 0 25 280
TOTAL EQUITY AND LIABILITIES 43 591 -606 42 984
**) In the table the FAS balance sheet items are reclassified according to IFRS
financial statements.
RECONCILIATION OF SHAREHOLDERS' EQUITY, JANUARY 1, 2004
Proha Group
IFRS
(EUR 1000) FAS Adjustments IFRS
31.12.2003 31.12.2004 1.1.2004
ASSETS**)
NON-CURRENT ASSETS
Intangible assets 381 0 381
Goodwill 12 166 0 12 166
Tangible assets 997 0 997
Investments in associates 1 173 0 1 173
Long-term Receivables 85 0 85
Non-current trade and
other receivables 1 282 -634 647
Other Long-term Investments 105 0 105
Deferred tax asset 0 94 94
NON-CURRENT ASSETS 16 189 -540 15 649
CURRENT ASSETS
Trade receivables and
other receivables 20 926 0 20 926
Tax Receivable, income tax 194 0 194
Cash equivalents 80 0 80
Cash and bank 7 058 0 7 058
CURRENT ASSETS 28 258 0 28 258
ASSETS 44 447 -540 43 907
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY**)
Share capital 13 875 0 13 875
Share premium account 2 964 0 2 964
Translation differences 1 681 -1 681 0
Retained earnings -8 664 -282 -8 945
Equity attributable to equity
holders of the parent 9 857 -1 963 7 894
Minority interest 1 081 -399 682
SHAREHOLDERS' EQUITY 10 938 -2 361 8 576
LONG-TERM LIABILITIES**)
Long-term liabilities,
interest-bearing 4 194 -95 4 099
Non-current
interest-free liabilities 123 -158 -35
Liabilities from
defined benefit plan 2 070 2 070
Non-current provisions 88 0 88
NON-CURRENT LIABILITIES 4 405 1 817 6 222
CURRENT LIABILITIES**)
Short-term
interest-bearing liabilities 3 407 -1 3 406
Trade Payables and
Other Liabilities 24 025 5 24 030
Tax liability, income tax 1 672 0 1 672
CURRENT LIABILITIES 29 104 4 29 108
TOTAL EQUITY AND LIABILITIES 44 447 -540 43 907
**) In the table the FAS balance sheet items are reclassified according to IFRS
financial statements.
Reconciliation of shareholders' equity
January 1, 2004
(EUR 1000)
Shareholders' equity, FAS 9 857
Pension liability -1 963
Shareholders' equity, IFRS 7 894
Reconciliation of shareholders' equity
December 31, 2004
(EUR 1000)
Shareholders' equity, FAS 13 070
Adjustments 4 592
Partial disposal of Artemis -7 396
Share based payments 573
Dovre acquisition 972
Pension liability -2 336
IFRS adjustments in total -3 596
Shareholders' equity, IFRS 9 475
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