Opus Prodox AB (publ)

(1)

A ^nnual R ^eport 2009

Opus Prodox AB (publ)

Innovative Technology for Environmental- and Safety Testing of Vehicles

(2)

Vision

”Opus’ vision is to be a world leader in innovative techno- logies for environmental and safety testing of vehicles and create opportunities for developed and emerging countries to improve their environment through the best use of the latest

and most cost-effective technologies”

(3)

Notice

Annual General Meeting

Shareholders of Opus Prodox AB (publ) are hereby notified of the Annual General Meeting (AGM) to be held on Wednesday May 26, 2010, at 7 pm at the Elite Park Avenue Hotel (Taube Hall), Kungsportsavenyn 36-38, Gothenburg, Sweden. Registra- tion for the AGM takes place between 6 pm and 6.45 pm.

Notice of Participation

Participation in the AGM is limited to shareholders who are both registered in the register of shareholders maintained by Euroclear Sweden AB (formerly VPC AB) on Thursday May 20, 2010, and who notify Opus of their intention to attend, along with any assistant, no later than at 12 pm on Monday May 24, 2010. Notice of participation in the AGM may be submitted in one of the following ways:

- By telephone +46 31 748 34 00 or fax +46 31 28 86 55 - By ordinary mail: Opus Prodox AB, ”AGM 2010”, Bäckstens-

gatan 11C, SE-431 49 Mölndal, Sweden - By email to ir@opus.se

When giving notice of participation, the shareholder shall state his or her name, personal ID/corporate registration number, address and telephone number, and the names of the assistants they wish to invite, if any (maximum two).

Proxies

Shareholders who are represented by proxy shall issue a Power

The Year in Brief 4

Financial Overview 2009 5

CEO’s Comments 6

This is Opus 8

Opus’ Offering 10

Business Areas 12

The Share 16

Five Year Overview 20

Quarterly Overview 22

Definitions 23

Board, Management and Auditor 24

Corporate Governance 26

Director’s Report 30

Group Consolidated Accounts 37

Parent Company’s Accounts 42

Notes - Group 47

Notes - Parent Company 60

Director’s Certificate 63

Audit Report 64

Glossary 65

of Attorney to be enclosed with the notice of participation. If the proxy form is issued by a juridical person, a verified copy of the said person’s certificate of registration or other proof of authorisation shall be enclosed. The proxy must not be more than one year old. Originals of proxy forms and certificates of registration, if any, should reach Opus on Monday May 24, 2010, at the latest.

Trustee-Registered Shares

Shareholders with shares registered in the name of a trustee must, in order to be entitled to take part in the AGM, tempo- rarily register their shares in their own names. Such temporary registration must be effected at Euroclear Sweden AB by Thurs- day May 20, 2010. To ensure that such registration is completed in time, shareholders are advised to notify their trustees to request temporary registration well before this date.

Financial Information

The Board has decided on the following financial reporting dates for 2010:

• May 20, 2010, Interim Report (Jan - March, 2010)

• August 26, 2010, Interim Report (Jan - June, 2010)

• November 25, 2010, Interim Report (Jan - Sept, 2010)

• February 24, 2011, Year-end Report 2010

• The North American vehicle inspection operations continue to deliver stable earnings with an EBITDA margin exceeding 30 percent for the full year 2009. During the year, a number of smaller contracts of strategic value were won, such as Louisiana and Anchorage, as well as a new Remote OBD test program in Utah.

• On January 1, 2009, Opus took over Bilmateriel AB’s (BIMA) operations within sale of workshop equipment both to Volvo dealers as well as to independent garages. As part of the transition, Opus’ wholly owned subsidiary, Opus EWJ Sven- ska AB, took over 18 employees, inventories of workshop equipment and spare parts and the existing order backlog. In connection to the takeover, the company name was changed to Opus Bima AB.

• Due to the recession in the automotive industry in 2009, which resulted in a sales drop of roughly 35 percent in our European operations, a cost savings program was initiated during the year. The cost savings program is expected to reduce the total cost base in the European operations by approximately 10-15 percent compared to 2008 levels, and we expect to see the full effect of this after the second quarter of 2010.

• On September 17, 2009, Opus was approved by NASDAQ OMX to join First North’s new market segment, First North Premier. First North Premier imposes stricter requirements on information disclosure and accounting principles than those in the normal rules for First North. The higher demands improve the possibility for investors to evaluate and compare companies on the new market segment.

Furthermore, the Company appointed Remium as liquidity provider for the Opus share, with the aim of reducing the price difference between the bid and ask price and of promoting the liquidity in the share. The commitment began

on August 3, 2009.

The Year in Brief

“The European operations were hit by the recession why a prof- itability program was imple- mented during the year”

”The North American vehicle inspection business demonstrated its stability and a number of new smaller contracts were won”

* Organic growth is calculated by comparing net sales in existing business units in the period with the prior year’s performance.

Acquired business units, which were not part of Opus Group during the full comparable period, are pro forma adjusted to enable true comparability. Fx-effects are eliminated by applying this years fx-rates to prior years’ figures in local currency

** See page 53.

(5)

Group Consolidated 2009 2008 2007 2006 2005 Income Statement (SEK thousands)

Net sales 214,131 143,522 66,448 36,307 20,914

Total income 223,092 144,536 66,525 36,907 21,336

Earnings before interest, taxes, depreciation and

amortization (EBITDA) 26,342 17,760 6,026 2,518 1,647

Loss/profit after financial items -1,878 3,931 5,064 2,053 1,127

Net loss/earnings -4,542 5,228 3,671 2,012 1,127

Balance Sheet (SEK thousands)

Shareholders' equity 277,462 300,016 41,835 19,899 2,533

Total assets 384,465 419,137 67,753 29,921 17,343

Cash Flow Statement (SEK thousands)

Cash flow from operating activities 22,446 6,094 -12,233 -1,006 453

Key Ratios Return on Capital

Return on operating capital, percent 0.9 1.9 17.1 19.1 19.9

Return on equity, percent neg. 3.1 11.9 17.9 63.7

Profitability

EBITDA margin, percent 11.8 12.3 9.1 6.8 7.7

Net profit margin, percent neg. 2.7 7.6 5.6 5.3

Labour and Capital Intensity

Sales growth, percent 49.2 116.0 83.0 73.6 16.1

Value added per employee, SEK thousands 603 528 437 441 511

EBITDA per employee, SEK thousands 163 154 121 114 127

Capital turnover ratio, times 0.6 0.7 2.0 3.0 2.8

Financial Position

Net debt / equity ratio, times 0.2 0.3 0.2 -0.2 2.5

Interest coverage ratio, times 0.8 1.7 8.4 5.5 3.7

Equity ratio, percent 72.2 71.6 61.7 66.5 14.6

Acid test ratio, percent 81.1 82.4 150.5 194.7 54.6

Number of employees on average 162 115 50 22 13

Financial Overview 2009

150 120

0

Net sales

05 06 07 08

180

90 60 SEK millions

09 30

”Our North American operations continue to deliver stable earnings with an EBITDA margin exceeding 30 percent”

210 240

25

15

0 30

10

5 20

EBITDA, margin

05 06 07 08

SEK millions

09 15

0 20

10

%

5

(6)

About the Year

2009 was a challenging year for the Opus Group. The recession in the automotive industry forced our customers to reduce their investments which resulted in a sales drop of roughly 35 percent in our European operations. During the second half of the year, we saw signs of improvement in terms of more inquires, new leads and increased order volumes, but European revenues are still at historically low levels. In order to adjust to the difficult market situation, a cost savings program has been initiated in our European business during the year and we expect to see the full effect of this after the second quarter of 2010.

Our North American operations continue to deliver stable earnings with an EBITDA margin exceeding 30 percent. Dur- ing the year, we won a number of smaller contracts of strategic value, such as Louisiana and Anchorage, as well as a new Remote OBD test program in Utah. We look forward to new contract opportunities in the U.S. market in 2010.

For the full year, sales ended at SEK 214 million for the Group with an EBITDA of approx. SEK 26 million. The good profitability in our North American operations contributed to generating a cash flow from operating activities of approx. SEK 22 million after changes in working capital, which has been used to am- ortize on our debt and strengthen our cash position for future investments.

Technology Shifts and Tougher Environmental Standards Provides Opportunities for Expansion

Cars, trucks and busses are becoming more advanced and more computer technology is being introduced in all types of vehicles.

The new technologies create new opportunities but also place demands on new equipment and knowledge to be able to check and service the vehicles. This forces vehicle repair shops to invest in new machinery in order to be able to monitor the systems and to perform service and repairs on the vehicles.

The U.S. market for vehicle inspection, in U.S. dollars, has been declining for several years as simpler electronic tests have replaced the previously more expensive and time-consuming measurements of exhaust emissions. As an effect of increased environmental awareness and tightened air quality requirements, Opus now expects the market to start growing again.

This is evidenced by the number of states currently discussing expansion of their programs and the fact that the EPA (Environ- mental Protection Agency) places heavy demands and punishes the states who do not participate in the battle for improved air quality.

Opus, through its subsidiary SysTech International, currently has a market share of around three percent of the U.S. market for environmental testing of vehicles. It is Opus’ strategy to increase this market share over the next few years during which the market also is expected to grow.

Revolutionary New Technology

Traditionally, vehicle inspection is conducted by having vehicles

CEO’s Comments

U.S. Counties Which Violate the Standard From 2008 With Regards to Ground-Level Ozone of 0.075 Parts Per Million (ppm)

U.S. Counties Which Would Violate the Proposed Standards of 0.060 - 0.070 Parts Per Million (ppm)

”Cash flow from operating acti- vities amounted to SEK 22.4 million”

”Sales amounted to SEK 214.1 million and EBITDA to SEK 26.3 million”

Source: Environmental Protection Agency (EPA)

Counties which would violate a standard of 0.070 ppm Additional counties which would violate a standard of 0.060 ppm

(7)

regularly visit a vehicle inspection station or a repair center that is authorized to perform inspections or environmental testing.

Roughly speaking, about 10 cars in the U.S. must be inspected today in order to find one vehicle that does not meet the environmental requirements. This means that nine people are going for an inspection unnecessary, which must be regarded as very inefficient.

”Well positioned for the future”

Opus has since 2003 been working on a new technology to be able to perform environmental inspections more efficiently.

With the new technology, the car is equipped with a small computer device and an antenna. Along roads and at intersections, scanning antennas are placed which are also mobile. When the vehicle passes the scanning antenna, the system automatically intercepts if the car has any faults and reports the findings via a link to a server. If the vehicle has faults, the driver is contacted automatically via, for example, e-mail and also the nearest car repair shop can get information on the potential customer.

This new technology is called Remote OBD in the U.S. (wireless vehicle inspection) for which Opus has the patent in Europe and has applied for the patent in North America. We believe that this new technology will play an important role in the mod- ernization of environmental testing of vehicles in the coming years.

Unique Position as a ”One Stop Shop ’

Opus is a full range provider within environmental and safety testing of vehicles. In addition to delivering a full range of workshop equipment, the Group provides customers with advanced systems and databases for information management and management services in connection with vehicle registration and vehicle inspection. In the Opus Group today, there is a vast knowledge and experience in both products, IT systems and operation of vehicle inspection. This means that the Group has a very special position as a ”one-stop shop” for any new country or region considering to introduce vehicle inspection, or modernize existing operations. We believe that this competitive advantage will be crucial for winning future contracts in the context of a global expansion.

The Future

The focus for 2010 is to improve profitability in Europe and win new vehicle inspection contracts in the U.S. Several larger contracts are scheduled to come up for re-bidding and, as well, the EPA (Environmental Protection Agency) has proposed a rule

Magnus Greko, President and CEO

”Focus for 2010 is to improve profitability in Europe and win new vehicle inspection contracts in the U.S.”

for lowering ground-level ozone standards. If the rule is passed, this will create pressure on several states and counties to ex- pand existing, or to implement new, vehicle emissions inspection programs in order to reduce emission levels. In addition, we see several interesting new market opportunities outside the U.S., such as in Latin America, the Middle East and Africa, where the demand for emission & safety testing of vehicles is increasing.

Finally, I conclude by thanking all the talented employees in the Opus Group for a good effort and good cooperation in 2009, and I look forward to meeting the challenges in 2010 together with you.

Gothenburg, Sweden, in April, 2010 Magnus Greko

President and CEO

(8)

A Global Supplier of Products and Services for Environmental and Safety Testing of Vehicles

The Opus Group is in the business of environmental and safety testing of vehicles. The Group develops, produces and sells a broad portfolio of products and services to the automotive industry, vehicle inspection stations and vehicle repair shops on the global market. The Group sells its products and services in more than 50 countries all over the world. The Group’s products include emission analyzers, diagnostic equipment, brake testers, automatic test lanes, electronic driver’s logs, alco locks, fleet management systems and systems for wireless vehicle inspection (so-called Remote OBD). Services include management of mandatory vehicle inspection programs for authorities that have opted to outsource this to third parties, primarily in the U.S., as well as support services to customers on the equipment side.

Opus is Active in the Aftermarket, a Market that is Less Cyclical

Opus is active in the aftermarket of the automotive industry and the demand for the Group’s products and services is driven

primarily by the number of vehicles in the world, the so-called vehicle fleet. Environmental and safety testing of vehicles is legislated in most countries, and is something which the authorities require all vehicle owners to undergo regardless of the economic climate. This makes Opus less cyclically-sensitive than many other players in the automotive industry. The equipment side is affected, of course, by the current economic climate in which customers have become more cautious about making new investments. However, the Group’s long vehicle inspection contracts in the United States have been a stabilizing factor for the Group during the year and is a reassuring factor for the next few years.

The Group currently has ten vehicle inspection contracts in the U.S. market and is involved in a number of ongoing tenders.

The contracts that the Group signs with states in the U.S. are primarily long term. They typically have a length of 5-7 years with the possibility of extension. If extended, the contract normally runs for 2-5 additional years without any new bidding processes. Extension normally occurs as long as contractual obligations are met. This therefore gives the Group long-term and well-planned revenue streams for a number of years after a contract has been signed.

Growth is Driven by New and Tougher Environmental Legislation and by the Increasing Number of Vehicles, Primarily in Developing Countries

The market for Opus’ products and services is primarily driven by new and tougher environmental legislation. Pollution in large cities around the world has steadily grown and emissions testing

This is Opus

”Opus is a global supplier of products and services for en- vironmental and safety test- ing of vehicles”

Opus’ equipment is used to diagnos vehicles to detect faults that may impose a safety risk. Areas inspected include brakes, wheel alignment, headlights etc

(9)

of vehicles has proven to be a powerful tool in reducing emission levels. Knowledge of the effects that exhaust emissions have on the increasing greenhouse effect has created an awareness of the need for emissions reduction, which consequently, has lead to an increased market for vehicle emissions testing and related equipment and services. Stricter legislation on environmental testing is a driving factor behind increased investment rates within the Group’s product areas.

The increasing number of vehicles is another driver of growth, which currently is especially pronounced in developing countries such as China and India. Conditions for market growth can be found mainly in developing markets where emissions testing are not yet in place or are substandard. Within the next five years, it is mainly in Asia, the Middle East and South America that Opus expects strong market growth. In recent years, Opus has been successful in several prestigious projects in these growth markets, such as in Mongolia, the Philippines and in Vietnam. In the mature markets of Europe and North America, growth is driven mainly by replacement investments, due either to the equipment ap- proaching the end of its lifecycle, or due to a demand for newer technology. Also, some growth is driven by new countries or states implementing vehicle inspection programs.

Developments in more mature markets is moving towards favoring suppliers with a full product range, the so called one- stop-suppliers. Vehicle inspections are increasingly outsourced - a business model that is currently applied in the U.S., where the supplier manages the complete operation of the vehicle inspection program and is paid per test performed (so-called pay-per- test). This business model provides more stable and long-term revenue streams as well as higher margins to the supplier through a larger and more complete customer commitment than if only delivering the equipment. The development in the industry is also moving towards newer and more user-friendly technology in which motorists are taking a more active role in exchange for increased flexibility in vehicle inspection. In this field, Opus has several new products with the latest technology, such as unmanned vehicle inspection machines and wireless vehicle inspection (Remote OBD).

Opus’ Vision is to be a World Leader in Innovative Technologies for Environmental and Safety Testing of Vehicles and to Create Opportunities for Developed and Emerging Countries to Improve their Environment through the Best Use of the Latest and Most Cost- Effective Technologies

Opus’ products and services shall be unique by combining quality, price and technology. The Group’s products and services shall complement and support each other to achieve synergistic effects. Opus’ growth shall be organic in part through establish- ing the Group’s products on new markets and by developing new products to be offered to existing customers. Some of the Group’s growth will also be driven by acquisitions.

”Opus’ vision is to be a world leader in innovative technolo- gies for environmental and safety testing of vehicles”

Opus’ equipment is used to analyze the content of harmful substances in exhaust gases, such as carbon monoxide (CO), carbon dioxide (CO2), nitrogen oxides (NOx) and unburned hydrocarbons (HC) - substances that contribute to environ- mental degradation and increased greenhouse effect

(10)

Opus’ Offering

The Opus Group is in the business of environmental and safety testing of vehicles. The Group develops, produces and sells a broad portfolio of products and services to vehicle inspection stations and vehicle repair shops on the global market.

A Selection of the Group’s Products and Services

Emission Analyzers

Opus manufactures a number of models of exhaust gas analyzers used in environmental testing to measure and analyze exhaust emissions from petrol-, diesel- or gas-driven vehicles. The analyzers measure the content of harmful substances in the exhaust gases, such as carbon monoxide (CO), carbon dioxide (CO2), nitrogen oxides (NOx) and unburned hydrocarbons (HC) - substances that contribute to environmental degradation and increased greenhouse effect. For diesel, the analyzers measure the soot particles in the exhaust. Soot in diesel exhaust is a carrier of cancer-causing nitrogen oxides and contributes to smog.

Diagnostic Equipment

Modern cars have in their electronic control systems a built-in self-diagnostic function, known as OBD, which is used for de- tecting faults and monitoring the engine’s operation. All Ameri- can cars, from model year 1996, European customized petrol- and LPG-driven vehicles from model year 2001 and European customized diesel cars from model year 2003 follow the OBDII and EOBD standards. These self-diagnostic systems can be read with Opus’ diagnostic systems available as hand-held diagnostic tools and provide easy communication with the cars’ diagnostic systems or with PC-based diagnostic tools used in workshops dealing with multiple brands.

Brake Testers

Brake testers can be regarded as one of today’s most important testing instruments for vehicle testing. Brake testers are used for testing a vehicle’s brake function and can separately inspect each individual wheel. Thus, it is possible in a workshop to safely test and analyze the braking function and to calculate how the vehicle will behave when braking in traffic. A full-fledged brake tester can, for instance, simulate a loaded or unloaded truck.

ATL (Automatic Test Lanes)

ATL (Automated Test Lanes) is a term describing how one, in an effective and rational way, can build a test facility for vehicles.

An ATL lane consists of one or more test instruments that are connected in series, typically to a PC and/or a network. The test equipment units are assembled according to the workshop’s needs, so the size of the facility may vary and may also be ex- panded as the workshop’s needs grow.

Remote OBD (Wireless Vehicle Inspection)

Remote OBD (Wireless Vehicle Inspection) involves regular monitoring of the vehicle when driven in traffic. The technology is based on a box which is installed in your car and communi- cates with the car’s electronics. The box is also connected to

a discreet antenna on the inside of the windshield. When the car passes a receiving antenna, contact is established, and any error codes are transmitted along with an ID to a government database. The benefits of wireless vehicle inspection include increased efficiency, comfort and safety in combination with lower costs and emissions. The system increases the chances of identifying a vehicle’s defects at an earlier stage than, for example, at the annual vehicle inspection. Opus has the patent on this technology in Europe and has applied for the patent in North America.

Self-Service Station for Vehicle Inspection (Self-Service OBDII-Kiosk)

Opus’ unmanned vehicle inspection kiosks represent a step towards a more user-friendly solution for vehicle testing and is one which is designed so that motorists themselves can perform OBDII controls around the clock. This implies a slightly different formulation of the product with regard to its users.

Consequently, the product needs to have an intuitive user pro- cess and needs to be able to be operated by drivers without the need of a manual. In the future, the databases used in these kiosks can also be used in other ways. They may for example be used by car manufacturers to make available data on cars wear and changes over time.

Vehicle Inspection Databases (VID)

A network-based environment for inspection and testing. A network-based infrastructure with automated data capture for vehicles has several advantages, including that it is faster, makes it easier to obtain a more complete analysis, and that it leads to greater participation from government and public bodies. Opus has, in its products, integrated three technologies: a main server, advanced databases, and local telecommunications services.

A VID stores all data from a vehicle inspection, controls the vehicle inspection program and the vehicle inspection station’s parameters, as well as analyzes all aspects of the results. The advantages of this system is increased efficiency, improved reliability and reduced costs. The systems are adaptable for both Microsoft (including Windows Vista, SQL) and Oracle.

This gives Opus a broader product portfolio than most of its competitors. As far as Opus knows, the Opus Group is the only player on the U.S. market which offers VID solutions via Intra- net, private networks and the Internet.

I/M Program Management Services

These services enable a regulatory body to have a responsible contractor for all components of a vehicle inspection program.

Opus offers the customer a total solution within vehicle inspection which may include design, construction and operation of inspection stations, VID, centralized or decentralized vehicle inspection programs, test lanes for safety inspections, training, program review, and accreditation/certification of stations.

Fuel Tank Testers / EVAP tester

The Opus fuel tank tester is a new product in the form of a pressure gauge which locates leaks in fuel tanks. This product

(11)

can help states control hydrocarbons emitted as a result of leaking fuel tanks. Opus has delivered EVAP testers to Califor- nia, the state which currently has the strictest requirements re- garding hydrocarbons. Hydrocarbons represent the main cause of smog that several larger cities in the world suffer from.

Electronic Driver’s Log

Opus’ TripLogPRO streamlines and simplifies administration of company cars and private cars used in service. TripLogPRO stores the car’s driving data such as start and stop time, mile- age and whether it is driven in service or if it is private use.

Using a GPS antenna, the coordinates of each stop position are recorded. The stored routes are transmitted by radio over to a

key chain. Once inside the office, all data are transferred from the key chain to a PC. With the MAPS program, the coordinates are automatically converted to addresses and the development of driver’s logs are thus almost entirely automated.

Alco Locks

TripLog Alco is part of the Group’s Fleet Management equipment, where the alco lock function can be combined with, for instance, the driver’s log using the same electronics. The use of new fuel cell technology for the detection of alcohol in breath allows for a good ratio of price to performance in this product.

As a spin-off, Opus also offers a handheld alco tester with high reliability at a competitive price.

Automatic Test Lane

Emission Analyzer Automatic Test Lane Computer

System

(12)

Business Areas

Three Business Areas Based on the Group’s Geographical Structure

Starting in 2009, the Opus Group has steered its operations through three business areas based on the Group’s legal entities, each led by a business area manager. Reporting to the Group Management Team, the Board of Directors and the stock market as well as other external stakeholders is in accordance with this structure. The three business areas are: Europe, North America and Asia.

Business Area Europe

Business Area Europe consists of the Group’s European companies. Business Area Manager is Henrik Wagner Jörgensen.

The business area has its headquarters in Gothenburg, Swe- den, but the unit also has operations in Alingsås, Sweden and in Skaevinge, Denmark. The business area has approx. 61 employees. The unit develops, produces and markets equipment for environmental and safety testing of vehicles, including aftermarket service and support, and supplies vehicle garages with equipment through distribution agreements with third parties.

Moreover, the unit has a smaller business within Fleet Manage- ment with products such as electronic driver’s logs, ”driver behaviour”- products and alco lock solutions.

Sales within the unit are mainly conducted through distribution networks in approx. 50 countries globally where the distributors often have the exclusive right to market and sell Opus’

products. The unit’s distribution network has been built up over many years and is part of Opus’ structural capital. As environmental testing of vehicles in many cases is driven by regulatory requirements and as these are implemented unevenly in different parts of the world, it is important for Opus to be present when such a change occurs in a market. The distribution network that Opus has today has largely been developed through participation in trade fairs and through business trips worldwide.

Opus has a complete product range today which includes

advanced equipment for environmental and safety testing at vehicle inspection stations and repair shops. Examples of products are emission gas analyzers, diagnostic equipment, brake testers, wheel alignment equipment and complete test lanes.

Emissions testing and vehicle diagnosis is a mature market in Europe and North America. However, Opus has managed to increase sales through increasing its market share. Opus’ opin- ion is that the industry is in need of structural transformation, something that Opus consider itself able to take advantage of.

For most of the markets in Europe, emissions testing programs were implemented in the 90’s, and at that time, a large number of measurement equipment were sold. These machines are now ten years old or more, creating a replacement market. Usually it is in connection with the introduction of stricter legislation that a new market becomes available. Sales can be good for some years and then decreases when the market is saturated. This is followed by an aftermarket for parts and consumables.

Conditions for market growth are mainly found in emerging markets, where emissions testings is not yet in place or is substandard. Within the next five years, it is mainly in Asia and the Middle East, but also in South America, where the Group expects strong growth. In recent years, Opus has managed several complex projects in these emerging markets and developing countries. Among other things, Opus delivered equipment for vehicle inspection programs in South Korea, the Philippines, Vietnam, Mongolia and Laos.

Business Area North America

Business Area North America consists of the Group’s U.S.

operations and operates under the company name SysTech International. Business Area Manager is Lothar Geilen.

The business area is headquartered in Salt Lake City (Murray) with offices in Tucson, Nashville, Rhode Island, Missouri, Idaho, Alaska and in New York City. The business area also has employees in Michigan and Pennsylvania. The total number of employees is approx. 87.

The business area offers vehicle safety and emission inspection systems and services for vehicle testing to various counties and states in the U.S. as well as to other countries on a global basis. In practice, this means that Opus offers government agencies integrated and technology based vehicle inspection services including delivery of their own test equipment, systems and databases for vehicle inspection. It also offers related services such as I/M program management or assistance with program Europe

SEK thousands 2009 2008

External sales 113,631 77,235

Internal sales (to other segments) 0 1,244

Reported net sales 113,631 78,479

Other external operating income 3,115 999

Segments income 116,746 79,478

Segments EBITDA -8,301 -3,122

EBITDA margin neg. neg.

Items of unusual nature, size or

incidence** 2,071 -685

Segments assets 273,773 285,037

Sales for 2009 amounted to SEK 113.6 million (78.5). The sales growth equated to approx. 45 percent of which organic growth was approx. -34 percent*.

EBITDA amounted to SEK -8.3 million (-3.1).

The average number of employees was 61.

One of SysTech’s vehicle inspection stations in Nashville, U.S.

(13)

management, maintenance and training. Products include vehicle databases, computerized control systems for vehicle emissions, PC-based control systems for vehicle safety, wireless vehicle inspection systems (Remote OBD), unmanned vehicle inspection machines and fuel tank testers.

It is mainly environmental testing that is regulated in the U.S. market today - that the vehicles on the road are in good condition are each vehicle owner’s responsibility. Today, most American cities have problems with pollution or so-called smog.

Implementing environmental testing of vehicles has proven to be an effective method to improve air quality in densely populated areas. In March 2008, the U.S. ground-level ozone standards were tightened and a growing number of states are tightening their requirements for vehicle inspection in order to overcome the problems.

Currently, there are approximately 32 U.S. states that have some type of vehicle inspection activity. Opus’ management estimates that contracts in each state are up for re-bid approximately every 7-10 years, which means that every year there are about 3-4 tenders. The market is primarily driven by regulations which are specific to each state and the number of vehicles on the road. The size of the U.S. vehicle inspection market is estimated at approximately USD 420 million (approximately SEK 3 billion). It is the task of the U.S. federal Environmental Protection Agency (EPA) to develop standards for environmental emissions, but the procurement of, and responsibility for, environmental programs are managed by the authorities at the state level. In the event that a state is not complying with the federal standards, the EPA can reduce or even cancel the funds to the state for investments in the road network. This serves as a means of pressure from federal authorities to implement environmental programs in the states.

Through this business area, the Opus Group is currently present in eleven U.S. states as well as in Bermuda. An additional operation is currently being set-up in Peru. The Group has a total of ten vehicle inspection contracts with government agencies in the U.S. market and is currently involved in a number of ongoing contracts. The business unit has also started to market their products and services on the global market, which will continue during 2010.

The revenue model for the business unit is unique for each contract, but can be generalized to two different models, depending on whether the contract is of a centralized or decentralized nature. Centralized vehicle inspection means that the state carries out in-house vehicle inspection programs or alternatively, the state authorizes a counterparty to perform all vehicle inspections, and to create the necessary databases. In a centralized vehicle inspection system, it also performs the training of counterpart staff, and to some extent, manages recruit- ment. In a centralized system, the testing of a vehicle is carried out at a station while any necessary repairs are performed by a separate workshop operated by a third party. Decentralized vehicle inspection means that independent garages may seek accreditation to perform safety and environmental testing.

The state appoints a prime contractor who, in turn, appoints a number of workshops to carry out the testing, with only one company providing the testing equipment for these vehicles and

administering the database and the overall systems. Opus estimates that approximately 2/3 of all vehicle inspection programs in the U.S. market are decentralized.

The contracts that Opus signs with state officials are es- sentially long term. They typically run over 5-7 years with the possibility of renewal. If extended, the contract typically runs for 2-5 additional years. Extension is normally approved as long as contractual obligations are met. This therefore provides Opus with long and well-planned revenue streams for a number of years after a contract has been signed.

Business Area Asia

Business Area Asia consists of the Group’s Asian companies and includes the Group’s sales office in Hong Kong and Opus’

production facility in Foshan, China. The Business Area Manager is Jörgen Hentschel, also Vice President and Head of R&D at Opus.

The Asian business unit consists of both production and sales activities. The unit has approximately 14 employees. The business unit manufactures equipment that is directly offered to customers on the local market but also some of the Group’s two other business units equipment are manufactured here, primarily for the business unit Europe. The relocation of production to

North America

SEK thousands 2009 2008

External sales 100,500 66,287

Internal sales (to other segments) 0 0

Other external operating income 5 0

Segments income 100,505 66,287

Segments EBITDA 32,261 21,587

EBITDA margin 32.1% 32.6%

Segments assets 310,754 362,057

Note. SysTech International, LLC and TriLen LLC was consolidated in the 2008 accounts starting April 30.

Sales for 2009 amounted to SEK 100.5 million (66.3). Comparable figures only include eight months as SysTech was only part of the Opus Group starting April 30, 2008. Organic growth was approx. -4 percent*.

EBITDA amounted to SEK 32.3 million (21.6), equivalent to an EBITDA margin of 32.1 percent (32.6).

The average number of employees year was 87.

Construction of SysTech’s first vehicle inspection station in Ica, Peru, started in February 2010 and is targeted to open in June

(14)

China began in 2006 with the aim of improving the profitability of the Group. Opus has had suppliers in China since 1997 and in June 2005, Opus hired local staff on a consulting basis in China.

Opus’ new assembly plant in China, became operational in 2007 - thus giving Opus the opportunity to offer equipment at more competitive prices whilst increasing gross margins. This approach is considered necessary in order to manage competi- tion from producers in the Asian low-cost countries. The Group is therefore constantly evaluating which of its products can be manufactured in the Group’s Asian production facility.

Sales on the local Asian markets were initiated in 2008 as the Group recruited a sales and marketing director in Asia. The Group will continue to sign up new distributors with the hope to increase the local sales in the coming years.

Asia

SEK thousands 2009 2008

External sales 0 0

Internal sales (to other segments) 4,829 5,128

Other external operating income 50 15

Segments income 4,879 5,143

Segments EBITDA 255 98

EBITDA margin 5.2% 1.9%

Segments assets 3,994 4,100

Note. External sales to the Asian market are currently invoiced from Busi- ness Area Europe and amounted to SEK 1.3 million (2.9) during 2009.

Sales for 2009 amounted to SEK 4.8 million (5.1).

EBITDA amounted to SEK 0.3 million (0.1).

The average number of employees was 14.

* Organic growth is calculated by comparing net sales in existing business units in the period with the prior year’s performance. Acquired business units which were not part of Opus Group during the full comparable period are pro-forma adjusted to enable true comparability. Fx-effects are eliminated by applying this year’s fx-rates to prior year’s figures in local currency.

** See page 53.

Business Areas

Vehicle diagnostics

(15)

Emissions testing

Visual safety test

(16)

The Share

Opus is a public company whose shares are issued in accordance with Swedish law, and the owners’ rights associated with its shares are governed by the Swedish Companies Act. Opus’

shares are registered in electronic form with Euroclear Sweden AB (formerly VPC AB).

Opus’ shares were listed on April 18, 2006 at Aktietorget and since September 4, 2006, have been listed on First North. Since September 22, 2010, the Company’s shares are listed on First North Premier. The Company’s certified adviser is Thenberg &

Kinde Fondkommission AB. The short name for the Company’s

*At the time of Opus listing on First North in 2006, the First North All Share Index had not started to be calculated why Opus share price development since listing instead is compared to the OMXS ALL SHARE INDEX (OMXSPI).

Share price development and turnover in the Opus share, 2009 Share price development in the Opus share, 2006-2010

shares is OPUS and the ISIN code is SE0001696683. There have been no public share offerings to Opus’ shareholders during the current or previous financial year.

The share capital in Opus amounts to SEK 3,861,241 and the number of shares amounts to 193,062,046, each with a nominal value of SEK 0.02. All shares have one (1) vote and equal rights to the Company’s assets and profits.

Opus’ market capitalization amounted to SEK 189 million as of December 31, 2009.

Shareholding on December 31, 2009 (based on data from Euroclear) The number of shareholders amounted to approx. 1,650 on December 31, 2009.

Shareholding in Opus is shown in the table below.

Number of Share of capital

Shareholders shares and votes, %

Magnus Greko and Jörgen Hentschel via AB Kommandoran 29,249,844 15.2

Lothar Geilen 17,472,727 9.1

Pradeep Tripathi 12,433,333 6.4

Second AP Fund 9,166,666 4.7

Henrik Wagner Jörgensen 9,101,059 4.7

Nordea Small Cap Fund 8,236,647 4.3

JP Morgan Bank 5,262,411 2.7

Famex Grossist AB 4,583,333 2.4

EFG Private Bank S.A. 4,296,747 2.2

Göran Nordlund via Fore C Investment sprl 4,270,746 2.2

Nordnet Pensionsförsäkring AB 3,742,629 1.9

Vision Invest sprl 3,605,189 1.9

Sune Löngårdh 2,799,000 1.4

AMF Pension 2,750,000 1.4

Länsförsäkringar Småbolagsfond 2,500,000 1.3

Davegårdh & Kjäll Sverige 2,419,508 1.3

KL Capital Aktiebolag 2,015,098 1.0

Hven Fyr Förvaltning AB 1,833,333 0.9

Avanza Pension 1,831,813 0.9

Subtotal 129,570,083 67.1

Other shareholders 63,491,693 32.9

Total 193,062,046 100.0

2006 2007 2008 2009

0.5 1.0 1.5 2.0 2.5

Opus-share OMX Stockholm PI*

Jan 2009 Dec 2009

0.6 1.0

0.8 1.2 1.4

2,500 2,000 1,500 1,000 500 Opus-share

First North All-Share Turnover (no. of

shares, thousands)

2010

(17)

Data per Share 2009 2008 2007 2006 2005

Number of shares at end of period, thousands 193,062 193,062 64,182 54,846 37,500

Average number of shares during the period, thousands 193,062 143,783 59,873 48,738 36,117

Nominal value, SEK 0.02 0.02 0.02 0.02 1.00

Equity per share, SEK 1.44 1.55 0.49 0.27 0.05

Earnings per share, SEK -0.02 0.04 0.05 0.03 0.02

Earnings per share adjusted for goodwill and certain

other intangible assets, SEK 0.04 0.11 0.05 0.03 0.02

Dividend per share, SEK 0.00 0.00 0.00 0.00 0.00

Cash flow per share, SEK 0.14 0.14 0.10 0.06 0.05

Share price 31/12, SEK 0.98 0.80 2.07 1.47 N/A

P / E ratio neg. 22.00 44.85 47.24 N/A

P / E ratio, adjusted for goodwill and certain other intangible assets 22.02 7.03 44.85 47.24 N/A

Yield, percent N/A N/A N/A N/A N/A

Data per share have been recalculated to take into consideration the effect of rights issues and splits. Outstanding share options are considered not to have any dilutive impact, as the discounted strike price for the options exceed the average price for the shares during the period. All data per share figures are based on number of shares outstanding after dilution. The share price is the average price for the actual day.

Share Capital Development

Change in Share Change in Total no.

Year Transaction share capital capital no. of shares of shares

1990 Company formed 50,000 50,000 500 500

1996 Bonus issue 150,000 200,000 1,500 2,000

1998 Bonus issue 300,000 500,000 3,000 5,000

2003 New share issue directed to a number of private investors 179,400 679,400 1,794 6,794

2004 Split 100:1 - 679,400 - 679,400

2005 New share issue directed to a number of private investors 70,600 750,000 70,600 750,000

2006 New share issue directed to Yield AB 40,000 790,000 40,000 790,000

2006 Split 50:1 - 790,000 - 39,500,000

2006 New share issue directed to the shareholders of Yield AB and the general market in connection with the listing on Aktietorget, with preferential

rights for the shareholders of Yield AB 246,914 1,036,914 12,345,679 51,845,679

2006 New share issue directed to a number of private investors in connection

with the list exchange from Aktietorget to First North 60,000 1,096,914 3,000,000 54,845,679 2007 New share issue directed to the sellers of the EWJ Group 126,718 1,223,631 6,335,892 61,181,571 2007 New share issue directed to a number of private investors 60,000 1,283,631 3,000,000 64,181,571 2008 New share issue directed to the sellers of SysTech International LLC

and TriLen LLC 400,000 1,683,631 20,000,000 84,181,571

2008 New share issue directed to institutional and professional investors 422,250 2,105,881 21,125,000 105,306,571 2008 New share issue with preferential rights for the existing shareholders in Opus 1,755,110 3,861,241 87,755,475 193,062,046

Specification of Shareholding per December 31, 2009

(based on data from Euroclear) No. of in % of No. of shares in % of

shareholders all shareholders owned together all shares

Less than 501 shares 68 4.1% 15,238 0.0%

501-1,000 shares 64 3.9% 57,896 0.0%

1,001-2,000 shares 137 8.3% 251,430 0.1%

2,001-5,000 shares 267 16.1% 1,055,310 0.6%

5,001-10,000 shares 329 19.8% 2,836,369 1.5%

10,001-20,000 shares 281 16.9% 4,742,467 2.5%

20,001-50,000 shares 247 14.9% 8,698,341 4.5%

50,001-100,000 shares 134 8.1% 10,038,575 5.2%

100,001-500,000 shares 92 5.5% 18,864,407 9.8%

500,001-1,000,000 shares 13 0.8% 9,064,772 4.7%

1,000,001-5,000,000 shares 19 1.1% 49,020,854 25.4%

5,000,001-10,000,000 shares 4 0.2% 29,260,483 15.2%

More than 10,000,000 shares 3 0.2% 59,155,904 30.6%

Total 1,658 100.0% 193,062,046 100.0%

Of the total no. of shares, approx. 35 percent is owned by institutional owners.

Opus Prodox AB (publ)

A nnual R eport 2009