NRC Group — Interim / Quarterly Report 2009

Feb 26, 2010

BLOM

IMAGING THE WORLD

Report for 4th quarter 2009

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Report for 4th quarter 2009

Weaker revenue and profit due to significant adjustments in the financial accounts in Spain

Irregularities were identified in connection with the final audit of the group's operations in Spain. These irregularities have affected the company's revenue in 2008 and 2009, and subsequently led to additional adjustments to the valuation of a number of the items on the Spanish company's balance sheet. This has resulted in significant adjustments to both the quarterly and annual accounts.

The company reported revenue of NOK 159 million in the 4th quarter, compared with NOK 219 million for the same quarter in 2008. EBITDA for the quarter was NOK 23 million, compared with NOK 33 million for the 4th quarter of 2008. This corresponds to an EBITDA margin of 14.4 per cent for the 4th quarter of 2009, compared with 14.9 per cent for the 4th quarter of 2008. The operating profit for the quarter was NOK - 59 million, compared with NOK 8 million for the 4th quarter of 2008. This includes NOK 44 million in write-down of goodwill in Spain together with NOK 6 million in provision for future loss of intangible assets in Spain.

The operating revenues for the respective segments was NOK 123 million for Geo Engineering and NOK 37 million for Information Services in the 4th quarter. The comparable figures for the 4th quarter of 2008 were NOK 170 million for Geo Engineering and NOK 49 million for Information services.

For the full year 2009, the company delivered revenues of NOK 737 million, compared with NOK 867 million in 2008. EBITDA for 2009 was NOK 92 million, compared with NOK 155 million in 2008. This corresponds to an EBITDA margin of 12.5 per cent in 2009, compared with 17.9 per cent in 2008.

The operating revenue for the respective segments was NOK 618 million for Geo Engineering and NOK 119 million for Information Services in 2009. The comparable figures for 2008 were NOK 656 million for Geo Engineering and NOK 211 million for Information services.

The adjustments in the group's accounts related to Spain at EBITDA level, amounts to NOK 41 million for 2008 and NOK 29 million for 2009.

The board of directors of Blom ASA has appointed an investigation-committee headed by PwC Forensic Services in Madrid. The managing director of the Spanish subsidiary has with immediate effect resigned his position.

In the short-term perspective, the Blom has faced challenges in the market that have entailed revenues and margins that are lower than budgeted for the year. This can also affect the first quarter of 2010, but it is not expected to have an impact on the long-term creation of value that is taking place within the company's operative activities.

Blom has completed the development of its new online distribution channel BlomURBEX, which enables us to give customers immediate access to the company's databases. The company is confident that this will form a foundation for good earnings over time through licenses-based revenue streams.

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Blom has entered into strategically important cooperation agreements that will strengthen the company as a supplier of services to major international companies and the respective local markets. Blom will gain competence through such cooperation, and it will improve our access to markets at the same time. Blom will continue its efforts to develop existing agreements and seek the establishment of new agreements.

Results

| IFRS
(Amounts in NOK 1000) | 4^{th} quarter | | As at 31/12 | | |
| --- | --- | --- | --- | --- | --- |
| | 2009 | 2008 | 2009 | 2008 | Justert 2008 |
| Operating revenues | 159 482 | 218 902 | 736 901 | 867 209 | 826 083 |
| EBITDA | 22 902 | 32 523 | 92 306 | 154 833 | 113 707 |
| EBIT | -58 821 | 7 912 | -53 833 | 73 493 | 32 367 |
| EBT | -74 467 | 5 559 | -93 960 | 63 293 | 22 167 |

This report has been prepared in accordance with IAS 34 on interim accounts. The interim accounts do not contain all the information that is required for complete annual accounts, and they should be read in conjunction with the consolidated accounts for 2008. Blom has implemented the following IFRS standards effective 1 January 2009:

• IFRS 8: Operating Segments.
  The segment information that is presented in accordance with IFRS 8 is based on a management approach and is presented in the same manner as the internal reporting. Prior periods have been restated. Segment information is disclosed in a separate statement.

• Revised IAS 1: Presentation of the Financial Accounts.
  The implementation entails the disclosure of recognised income and expenses that are not ownership related in a separate statement.

The interim accounts have been prepared otherwise in accordance with the same principles that are used in the annual accounts for 2008. The report has not been audited.

Operations

Information Services has been marked to a great extent by the general decline in the economy. The company's partners have postponed the launch of products and experienced lower sales for their products in general, which has in turn resulted in lower navigation solution sales than expected.

It is somewhat uncertain how the market for navigation and handheld terminals will develop in the first half of 2010, but it is expected that the supply and use of navigation solutions and location-based services (LBS) will increase in 2010. Blom still has great confidence in this segment and is working actively on the further development of the

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sales and production of the company's solutions, images and 3D models online through the BlomURBEX database.

Geo Engineering experienced a lower level of activity and requests for tenders during most of 2009. The company has, however, maintained and increased its market share in certain markets.

Due to a cold winter, some of the laser scanning (LiDAR) projects have been postponed, which entailed somewhat lower than expected revenue in the 4th quarter. The company has entered into a number of important contracts for deliveries in 2010 and expects thus that the decline that has marked 2009 will not continue into 2010.

Net cash flow from operational activities is increased with NOK 58 million mainly due reduction in stocks of finished goods and work in progress. Investments in 4th quarter amounts to NOK 25 million mainly due to updates of databases and development related to BlomURBEX.

Net cash flow from investment activities is negative with NOK 6 million due to repayment of debt.

The following agreements were entered into in the 4th quarter:

Blom awarded significant and strategically important contract in Italy through Telaer STA consortium

Blom CGR, Blom's subsidiary in Italy, has formed a new consortium, Telaer STA, with two daughter companies of the Finmeccanica Group, E-Geos and Galileo Avionica, for the purpose of providing geospatial and airborne geo referenced data and services to the Italian Governmental Agency (AGEA).

Telaer STA has now been awarded a EURO 15 million contract for a survey related to the provision of remote sensing services, and any other new and additional services for spatial information, required by AGEA, both to support the mission of the national agriculture as well as the regional forestry in Italy. The duration of the contract is three years.

Blom awarded NOK 34 million contract in Finland for National LiDAR survey

Blom has been awarded a contract to provide LiDAR (laser) data for the National Land Survey of Finland (NLSF). The total contract value is app. NOK 34 million over a period of four years. The contract is expected to be started at the beginning of second quarter of 2010.

NLSF is responsible for production and maintenance of geographic- and real estate information in Finland. The purpose of the project is to create a new and accurate national height model covering an area of app. 120 000 sq.km. The dataset will also provide valuable information for applications related to Forest Management, Defense, Urban infrastructure and planning, and analysis and risk assessment related to climate and environment, such as flood monitoring.

Blom has signed significant contract with Infoterra

Blom and Infoterra agreed in December to form a partnership with the aim to create a unique European owned high quality geospatial database to support professional users and service customers that require reliable, homogenous and independent geospatial services. The agreement offers the opportunity to establish a consolidated European and global dataset of unrivalled coverage and professional accuracy, bringing satellite imagery from Infoterra together with Blom's extensive archive of airborne imagery and 3D city models. The parties will build on Infoterra expertise in value added geospatial

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services and make full use of the proven BlomURBEX server capabilities to offer a wide range of user friendly market specific service applications for professional users.

Blom expects the commercial value in the initial 5 year period to be in the range of EUR 15-25 million, making a significant contribution to its long term strategic ambitions. In addition to this, a further future expansion of the partnership may significantly enhance the revenue potential.

Blom awarded contract in Italy worth NOK 38 million

Blom CGR, the Italian subsidiary of Blom, has been awarded a NOK 38 million contract by the Italian Ministry of Environment, for a new LiDAR project in Italy. The project is expected to be completed within 3rd quarter 2011.

The project includes laser scanning, using LiDAR technology, to create a terrain and surface model of an area in Italy totaling 15.650 km². In addition, the project includes implementation of a data management system. The collected data and model will be used to monitor environmental impact of environmental crimes. The information will be utilized by the Italian Ministry of Environment, the Italian Ministry of Defense and several local Italian governments.

Blom awarded NOK 23 million contract by Italian Ministry of Environment

Blom CGR S.p.A., the Italian subsidiary of Blom ASA, has been awarded a NOK 23 million contract by Italian Ministry of Environment to deliver historical and new orthophotos covering the entire Italy. The project is expected to be completed within 2nd quarter 2010.

The new project includes Inventory Land Use of Italy for the implementation of the Community Action Plan as required by the United Nations Framework Convention on Climate Change (UNFCCC) and Kyoto Protocol. The agreement underlines Blom's success within the important focus area, Environmental Services.

Organisation and personnel

The company's goal is to strengthen the financial reporting and controller function between the subsidiaries and the group. As a consequence Blom have strengthened the financial reporting section at the head office in Oslo with 3 employees and implemented actions in the operative companies.

The company is continuing with its restructuring measures that focus on reducing costs, improving productivity and strengthening synergies between the units. The merger of the companies in the Nordic region has shown lower costs through economies of scale, improved coordination, expanded responsibility and greater competence.

Continued restructuring of the group combined with better co-ordination and utilization of the company's recourses may, together with introduction of new technology, result in staff reduction in 2010.

The company has a staff of employees with a high level of competence. This represents the foundation for the company's future growth. As at 31 December 2009 there were a total of 599 employees in the operative companies, while there were a total of 589 employees at the production facilities in Indonesia and Eastern Europe. The group has a total of 1188 employees.

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Report for 4th quarter 2009

Shareholder matters

The total number of shareholders as at 31 December 2009 was 2,742, and foreign shareholders accounted for 46.4 per cent of the share capital. Blom owns a total of 1,100,000 of the company's own shares, which represents 2.64 per cent of the total number of outstanding shares.

Future outlook

Blom expects increased revenue and better margins in 2010 compared to 2009.

With a continued strong focus on earnings, cost control, reduction of working capital, and satisfactory order backlog, the company is positioned to achieve its goals for 2010.

Oslo, 25 February 2010

Gunnar Hirsti
Board Chairman

Per Kyllingstad
Board Member

Bente Loe
Board Member

Brita Eilertsen
Board Member

Dirk Blaauw
Managing Director and Board Member

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Report for 4th quarter 2009

Profit and Loss Account

OPERATING REVENUES AND EXPENSES

(Amounts in NOK 1000)

4. kvartal					Adjusted *
2009	2008		31.12.09	31.12.08	31.12.08
159 482	218 902	Operating revenues	736 901	867 209	826 083
27 156	63 839	Cost of materials	242 461	309 745	309 745
71 317	68 652	Salaries and personnel costs	297 554	273 925	273 925
81 722	24 611	Ordinary depreciation	146 138	81 340	81 340
		Other operating and
38 107	53 888	administrative expenses	104 580	128 706	128 706
218 302	210 990	Operating expenses	790 733	793 716	793 716
-58 821	7 912	Operating profit/loss	-53 833	73 493	32 367
73	0	Profit attributable to associated companies	-565	0	0
-15 719	-2 353	Net financial items	-39 562	-10 200	-10 200
-74 467	5 559	Profit/loss before tax	-93 960	63 293	22 167
5 445	-1 785	Tax charge	10 948	-18 124	-5 786
-69 023	3 774	Net profit/loss for the year	-83 013	45 169	16 381
		Attributable to:
-68 817	4 565	Shareholders	-82 506	45 802	17 014
-205	-791	Minority interests	-506	-633	-633
-69 023	3 774		-83 013	45 169	16 381
		Earnings and diluted earnings per share	-2,04	1,11	0,40**

Adjusted for correction in Spain for 2008
*The adjustment for earnings and diluted earnings per share amounts to 0,71

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Balance Sheet

ASSETS (Amounts in NOK 1000)

	31.12.2009	31.12.2008	Adjusted* 31.12.2008
Fixed assets
Patents, licences and similar rights	36 700	56 959	56 959
Deferred tax assets	49 903	25 891	38 229
Goodwill	270 579	367 496	367 496
Total intangible fixed assets	357 182	450 346	462 684
Tangible fixed assets	295 797	315 848	315 848
Long-term receivables	10 253	11 877	11 877
Investments in associated companies	45 246	45 811	45 811
Total fixed asset investments	55 498	57 688	57 688
Total fixed assets	708 477	823 882	836 220
Current assets
Stocks of finished goods	2 826	4 352	4 352
Work in progress	261 237	275 831	234 705
Total stocks	264 062	280 183	239 057
Receivables from customers	240 252	353 019	353 019
Other current receivables	35 404	36 319	36 319
Total receivables	275 656	389 338	389 338
Cash and cash equivalents	164 873	76 482	76 482
Total current assets	704 592	746 003	704 877
TOTAL ASSETS	1 413 069	1 569 885	1 541 097

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Balance Sheet

EQUITY AND LIABILITIES
		(Amounts in NOK 1000)
		Adjusted*
Equity	31.12.2009	31.12.2008	31.12.2008
Called-up and fully paid share capital
Share capital	4 170	4 170	4 170
Treasury shares	-110	-110	-110
Share premium reserve	129 581	129 581	129 581
Other reserves:
Translation differences	-18 424	54 694	54 694
Retained earnings	584 001	696 358	667 570
	699 218	884 693	855 905
Minority interests	1 389	2 470	2 470
Total equity	700 607	887 163	858 375
Liabilities
Pension liabilities	20 625	22 878	22 878
Long-term liabilities	368 717	246 086	246 086
Total long-term liabilities	389 342	268 964	268 964
Overdraft facilities	89 824	75 101	75 101
Other interest-bearing current liabilities	31 031	87 470	87 470
Total interest-bearing current liabilities	120 855	162 571	162 571
Payables to suppliers	104 798	80 579	80 579
Unpaid government taxes	35 289	39 429	39 429
Other current liabilities	62 178	131 179	131 179
Total other current liabilities	202 266	251 187	251 187
Total current liabilities	323 121	413 758	413 758
TOTAL EQUITY AND LIABILITIES	1 413 069	1 569 885	1 541 097

Change in equity from 1 January to 31 December

	2009	2008
Equity as at 31 December	887 163	823 918
Correction result 2008	-28 794	0
Profit/loss for the period	-83 013	45 169
Premium on share issue	0	-48 672
Foreign exchange losses/gains from translation of foreign subsidiaries	-74 756	66 748
Equity	700 607	887 163

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Report for 4th quarter 2009

Indirect model (Figures in NOK 1000)

Cash Flow Statement

4. kvartal				Pr. 31.12		Adjusted
2009	2008			2009	2008	2008
CASH FLOW FROM OPERATIONAL ACTIVITIES
-74 468	5 559		Pre-tax profit/loss	-93 960	63 293	22 167
81 723	24 611	+	Depreciation and amortisation of capital equipment	146 138	81 340	81 340
-23 811	-131 012	+/-	Change in receivables from customers	112 767	-131 469	-131 469
152 037	104 415	+/-	Change in stocks of finsh. goods and WIP	16 121	-92 401	-51 275
9 854	-4 492	+/-	Change in supplier debt	24 219	1 180	1 180
-86 874	46 442	+/-	Change in other accruals	-131 988	47 823	47 823
58 461	45 523	A =	Net cash flow from operational activities	73 297	-30 234	-30 234
CASH FLOW FROM INVESTMENT ACTIVITIES
-24 992	-19 566	-	Payments for purchase of capital equipment	-76 555	-90 201	-90 201
0	0	-	Payments for purchase of company's	0	-40 050	-40 050
-24 992	-19 566	B =	Net cash flow from investment activities	-76 555	-130 251	-130 251
CASH FLOW FROM FINANCING ACTIVITIES
0	0	+	New long-term debt	287 269	0	0
-9 151	-10 927	-	Payments on long-term debt and loans	-210 343	-23 246	-23 246
3 646	-17 199	+/-	Net change in bank overdraft	14 723	-48 178	-48 178
0	-5 258	-	Net payments for purchase of treasury shares	0	-48 770	-48 770
-5 505	-33 384	C =	Net cash flow from financing activities	91 649	-120 194	-120 194
27 963	-7 427		A+B+C Net change in cash and cash equiv.	88 391	-280 679	-280 679
136 910	83 909	+	Cash and cash equivalents	76 482	357 161	357 161
164 873	76 482	=	Cash and cash equivalents	164 873	76 482	76 482

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Report for 4th quarter 2009

Segments

	(Amounts in NOK 1000)
	Q4 2009	Q4 2008	2009	2008	Adjusted 2008
Operating revenues:
Information Services	36 726	49 342	119 361	211 291	211 291
Geo Engineering Services	122 756	169 560	617 540	655 918	614 792
Total operating revenues	159 482	218 902	736 901	867 209	826 083
EBITDA:
Information Services	29 506	10 867	52 286	83 129	83 129
Geo Engineering Services	3 490	27 050	75 096	104 880	63 754
Others	-10 094	-5 393	-35 077	-33 176	-33 176
EBITDA	22 901	32 524	92 306	154 833	113 707
EBIT:
Information Services	9 762	3 545	7 895	58 661	58 661
Geo Engineering Services	-58 450	9 765	-26 517	48 055	6 929
Others	-10 133	-5 398	-35 211	-33 223	-33 223
EBIT	-58 821	7 912	-53 833	73 493	32 367
Profit attributable to associated companies:
Information Services	72	0	-565	0	0
Profit attributable to associated companies:	72	0	-565	0	0
Earnings before finance and tax
Information Services	9 834	3 545	7 329	58 661	58 661
Geo Engineering Services	-58 450	9 765	-26 517	48 055	6 929
Others	-10 133	-5 398	-35 211	-33 223	-33 223
Earnings before interest and tax	-58 749	7 912	-54 398	73 493	32 367

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Report for 4th quarter 2009

Segments

	Q4 2009	Q4 2008	2009	2008	Adjusted 2008
Assets:
Information Services			566 178	636 214	636 214
Geo Engineering Services			586 459	783 103	741 977
Others/Unallocated			260 433	150 568	162 906
Total assets 1)			1 413 069	1 569 885	1 541 097
Operational investments:
Information Services	36 227	43 400	70 773	43 400	43 400
Geo Engineering Services	3 741	74 790	30 258	74 790	74 790
Total assets	39 968	118 190	101 031	118 190	118 190

1) Allocated assets include receivables from customers, work in progress, stocks, fixed assets and intangible assets with the exception of deferred tax assets. Investments in associated companies are also included.

Recognised income and expenses

	Q4 2009	Q4 2008	2009	2008
Profit/loss after tax	-69 024	3 775	-83 013	45 169
Translation differences	909	2 367	1 621	3 820
Total recognised income and exp.	-68 114	6 142	-81 391	48 989

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Report for 4th quarter 2009

Blom ASA
P.O. Box 34 Skøyen
N-0212 Oslo
Norway
Tel.: +47 22 13 19 20
Fax: +47 22 13 19 21
E-mail: blom.no@blomasa.com

Blom Sistemas Geoespaciales S.L.
C/ Zurbano 46
28027 Madrid, Spain
Tel.: +34 914 150 350
Fax: +34 9 310 49 14
E-mail: blom@blom.es

Blom CGR S.p.A.
Via Cremonese 35/A
43100 Parma
Italy
Tel.: +39 0521 994948
Fax: +39 0521 992803
E-mail: info@cgrit.it

Blom Kartta OY
Plasilanrairo 5
FIN-00240 Helsinki
Finland
Tel.: +358 9 229 3060
Fax: +358 9 148 1711
E-mail: info@blomkartta.fi

Blom Geomatics AS
P.O. Box 34 Skøyen
N-0202 Oslo
Norway
Tel.: +47 23 25 45 00
Fax: +47 23 25 45 01
E-mail: firmapost.norge@blomasa.com

Blom Aerofilms Ltd.
Cheddar Business Park
Wedmore Road, BS27 3EB
UK
Tel.: +44 1934 311000
Fax: +44 1334 745825
E-mail: info@blomaerofilms.com

Blom Deutschland GmbH
Friedrich-Engels-Ring 48 a
17033 Neubrandenburg, Germany
Tel.: +49 395 570 7480
Fax: +49 398 485 748299
E-mail: info@blom-deutschland.de

BlomInfo Romania S.R.L.
Ion Heliade Radulescu Street, no3-5
130010 Tagoviste
Romania
Tel.: +40(0)245 606 150
Fax: +40(0)245 210 852
E-mail: office@blominfo.ro

Blom Sweden AB
Klippan 1J
SE-414 51 Gothenburg
Sweden
Tel.: +46 317 045670
Fax: +46 317 049980
E-mail: info@blomswe.se

Blom Info AS
Masnedøgade 20
DK-2100 Copenhagen
Denmark
Tel.: +45 70 200 226
Fax: +45 70 200 227
E-mail: blominfo@blominfo.dk