Techstep ASA — Interim / Quarterly Report 2009

Feb 11, 2010

Birdstep Technology ASA

Forth Quarter Interim Report

February 11th, 2010

Torbjörn Sandberg
CEO & President

birdstep TECHNOLOGY

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Q4 2009 in brief

• Revenues of NOK 29,1 million (NOK 39,1 million)
• 42% revenue growth for EasyConnect
• 85% annual growth for EasyConnect
• EBITDA of NOK -5,1 million (NOK 4,5 million)
• Cash flow of NOK -1,0 million (NOK 16,7 million)
• Corrective measures implemented during Q4 and will be continued with full force in Q1

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Birdstep Technology ASA

• Headquartered in Oslo
• Listed on Oslo Stock Exchange since 2002 (BIRD)
• 100 employees
• Offices in Norway, Sweden, Finland, UK and the United States
• Organisation
• Birdstep Technology (EasyConnect and SafeMove)
• Orbyte
• Raima

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Income statement

Amounts in NOK million	Q4 2009 1)	Q4 2008 1)
Operating revenue	29,1	39,1
Total revenue	29,1	39,1
Cost of sales	-2,4	-4,2
Salaries and wages	-20,1	-20,9
Other operating expenses	-11,7	-9,5
Restructuring cost	-	-
EBITDA	-5,1	4,5
Amortization and write-downs	-1,8	-189,7
Ord. depreciation	-1,3	-1,3
Operating profit (EBIT)	-8,2	-186,4
Share of associated company	-0,1	-0,4
Write-down of associated company	-	-22,8
Financial items, net	1,1	7,5
Income before tax	-7,2	-202,1
Taxes	-	-
Net income	-7,2	-202,1
Other comprehensive income
Currency translation effect	-7,2	15,1
Total comprehensive income	-14,4	-187,0
Attributable to
Equity holder of the parent company	-14,4	-187,0
Minority interests	-	-
	-14,4	-187,0
Earnings per share (NOK)	-0,33	-2,90
Diluted earnings per share (NOK)	-0,33	-2,90
2009 1)	2008
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107,9	103,6
107,9	103,6
-9,8	-12,4
-79,3	-74,4
-42,3	-45,6
-	-4,3
-23,5	-33,1
-7,5	-196,0
-4,9	-3,7
-35,9	-232,8
-0,4	-1,6
-	-22,8
-0,6	13,2
-36,9	-244,0
-	-
-36,9	-244,0
-16,0	36,6
-52,9	-207,4
-52,9	-207,4
-	-3,5
-52,9	-210,9
-0,74	-3,49
-0,74	-3,49

1) Unaudited figures

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Cash flow

Amounts in NOK million	Q4 2009 1)	Q4 2008 1)
Operating profit	-8,2	-186,4
Depreciation and write-downs	3,1	191,0
Options fair value	0,1	-1,0
Changes in net working capital	4,0	7,3
Net cash flow from operations	-1,0	10,8
Net investments	-	0,5
Financing activities	-	5,3
Net change in cash and cash equivalents	-1,0	16,7
Cash at beginning of period	56,7	68,4
Cash at end of period	55,7	85,0

1) Unaudited figures

Equity statement

Amounts in NOK million	Q4 2009 1)	Q4 2008 1)
Opening balance	186,5	383,5
Net profit /(loss)	-7,2	-202,1
Equity share issue	-	11,0
Options	0,1	-1,0
Currency translation effect	-7,2	15,1
Closing balance	172,2	206,5

1) Unaudited figures

2009 1)	2008
-35,9	-232,8
12,4	199,7
0,4	-
-0,9	-4,9
-24,0	-37,9
-1,0	0,2
-4,3	9,3
-29,3	-28,4
85,0	113,4
55,7	85,0
2009 1)	2008
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206,5	402,9
-36,9	-244,0
18,2	11,0
0,4	-
-16,0	36,6
172,2	206,5

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Net cash flow 2009

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Balance sheet

Amounts in NOK million	Q4 2009 ¹)	Q4 2008 ¹)
Assets
Intangible fixed assets	118,6	142,2
Other fixed assets	1,6	2,5
Investments	6,5	5,9
Fixed assets	126,7	150,6
Short term receivables	29,9	47,0
Cash and cash equivalents	55,7	85,0
Current assets	85,6	132,1
Total assets	212,3	282,7
Equity and liabilities
Equity	172,2	206,5
Minority interests	-	-
Total equity	172,2	206,5
Liabilities, short term	32,2	68,2
Liabilities, long term	7,9	7,9
Total equity and liabilities	212,3	282,7

¹) Unaudited figures

Q4 2008
142,2
2,5
5,9
150,6
47,0
85,0
132,1
282,7
206,5
-
206,5
68,2
7,9
282,7

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Revenues per business segment

Amounts in NOK million	2009 Q4	2008 Q4	Change	2009 Q4	2009 Q3	Change	2009 full year	2008 full year	Change
EasyConnect	12,2	8,6	42%	12,2	12,0	2%	44,2	23,9	85%
SafeMove	4,5	11,9	-62%	4,5	4,3	5%	20,3	28,3	-28%
Orbyte	6,6	10,2	-35%	6,6	4,8	38%	24,6	32,4	-24%
Raima	5,8	8,4	-31%	5,8	4,5	29%	18,8	19,0	-1%
Total	29,1	39,1	-26%	29,1	25,6	14%	107,9	103,6	4,2%

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Corrective measures

Raima – in a challenging market

• Independant company
• No further investments, divesture considered

SafeMove – in a high growth market

• Internationalization efforts accelerated
• New international sales team effective Jan 1
• Broadened offering for improved market reach

Orbyte – healthy business in a mature market

• Separate organisation to support a healthy business
• Focus on recapture growth in a mature market

birdstep TECHNOLOGY

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EasyConnect Q4 highlights

EasyConnect activations reached 550K in Q4 2009 (465K).

Sixth consecutive quarter of revenue growth.

Selected by Meteor Ireland for launch across their mobile broadband service.

Awarded contract for the upgrade of Saunalahti and Elisa to EasyConnect 2.8.

EasyConnect

Connection and service management client for network operator and notebook manufacturer offerings in the growing mobile broadband market

	2009 Q4	2008 Q4	Change
Revenue	12,2	8,6	42%

birdstep TECHNOLOGY

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Birdstep EasyConnect

EasyConnect | Go™
EasyConnect | Advanced™

EasyConnect | Inside™

birdstep TECHNOLOGY

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Mobile broadband market growth

• HSPA is the fastest adopted mobile technology ever
• 293 commercially live HSPA networks in 119 countries today
• 46 million new modems shipping 2009
• 94 million new modems in 2011

Source: GSMWorld.com and ABI

Birdstep today: 15 HSPA networks - 11 Countries - 2+ million subscribers

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EasyConnect activation curve

EasyConnect Activations (excl Inside)

First quarter 2008 - Fourth quarter 2009

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EasyConnect – strategy for further growth

• Sales team strengthened
• New VP sales and sales management strengthened

• Increased focus on new sales

• Geographical expansion

• Focus on the fast growing Latin American and Middle East regions

• Product development

• EasyConnect 2.9 and 3.0 will help mobile operators
• ☑ Reduce cost of customer care with technical support automation features
• ☑ Establish a true direct contact with mobile broadband subscribers
• ☑ Move up the value chain and increase value added services
• ☑ Improve revenue via targeted up-sell and cross-sell features

birdstep TECHNOLOGY

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Customer win

EasyConnect Advanced

eircom/Meteor Ireland have chosen Birdstep EasyConnect Advanced for deployment across their mobile broadband service.

The solution supports handling of both mobile broadband and WLAN network infrastructure.

Market release across the eircom /Meteor network is scheduled to quarter two.

birdstep TECHNOLOGY

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SafeMove Q4 highlights

SafeMove 5.0 product release.

SafeMove internationalization efforts accelerated.

Reseller agreement with Nomasis AG, Switzerland.

SafeMove

SafeMove Mobile VPN provides mobile workforce with secure and seamless connectivity to business data regardless of time and place enabling cost savings and higher productivity.

	2009 Q4	2008 Q4	Change
Revenue	4,5	11,9	-62%

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Orbyte Q4 highlights

Suffered cutbacks in customer spending and postponement of investment decisions.

New managed services contract with major Nordic Operator.

Orbyte

Develops, markets and maintains systems that enable broadband services and access management systems

	2009 Q4	2008 Q4	Change
Revenue	6,6	10,2	-35%

birdstep TECHNOLOGY

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Raima Q4 highlights

RDM Server version 8.3 was released.

Raima

Provider of high performance real-time, always on embedded databases for both in-memory database usage and persistent storage devices

	2009 Q4	2008 Q4	Change
Revenue	5,8	8,4	-31%

Expanded distribution channel into Turkey.

birdstep TECHNOLOGY

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Summary

• EasyConnect continues to show positive development
• EasyConnect and SafeMove are the key business segments and primary growth areas
• EasyConnect - dedicated and focused sales organisation and new VP sales
• SafeMove – internationalization efforts strengthened with new VP sales and sales team
• Corrective measures implemented during Q4 will be continued with full force in Q1
• EasyConnect is well positioned to take advantage of the mobile broadband growth

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Thank you for listening!

Questions?