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ANOTO GROUP AT A GLANCE
The Group’s unique solutions are based on camera technology and real-time image processing. They combine the intuitive advantages of pen and paper with the many benefi ts of digital communication.
BUSINESS CONCEPT
Anoto’s business concept may be summed up as ’connec- ting pen and paper to the digital world’ – in other words, enabling the processing of handwritten text.
BUSINESS MODEL
Anoto uses a partner-driven business model. In colla- boration with a global network of partners, the Group creates commercial solutions based on the Anoto technology platform. The solutions can be applied to a number of different sectors, including healthcare, bank- ing and fi nance, transport and logistics, and education.
Because Anoto’s partners upgrade its offering and add their own expertise, applications for multiple markets are developed alongside each other. As the number of partners grows and their sales volumes expand, Anoto’s income also increases without requiring any additional expenditure. Anoto had approximately 350 partners at the end of the fi nancial year, primarily in Europe, the United States and Japan.
APPLICATION AREAS
Anoto is broken down into three application areas.
ANOTO PRODUCTS
Anoto Products focuses on systems, products and ser- vices, primarily in the fi eld of forms processing. Anoto employs an indirect business model and markets its products through partners, such as system integrators, software developers and IT consulting fi rms, all of
which offer customized solutions with Anoto Digital Pen and Paper technology to their corporate customers and fi eld users. The basis of this offering is the digital pen, which Anoto controls and sells since the acquisi- tion of the Hitachi Maxell Digital pen division, together with the former Anoto Forms’ solution platform.
Turnkey products, such as existing scanning and trans- lation pens, as well as newly developed products in- cluding Anoto penPresenter and Anoto penDocuments, may also be marketed through other sales and distri- bution channels.
TECHNOLOGY & LICENSING
Technology & Licensing develops and sells digital pen technology and digital pens on an OEM basis to market- leading customers. Customers develop their own product offers based on the technology components and pens provided by Anoto. Examples of customer products are learning toys, educational tools, visual communication equipment and personal productivity solutions. Several of these products are interactive, enabling real-time audio or visual feedback while writing or when touching interactive areas.
IMAGING TECHNOLOGY
Imaging Technology develops and markets basic Anoto technology, such as ASICs (Application-Specifi c Integrated Circuit) and IP blocks. It supplies and licenses imaging technology modules, components and function blocks for integration with customer products or components, including mobile phones, accessories and components.
QUOTATION
The Anoto Group AB has been listed since 2000 and trades on NASDAQ OMX Nordic Small Cap list under the ticker ANOT.
“Connecting pen and paper to the digital world.”
Anoto Group AB has a world-leading technology in the area of digital pen
and paper. This technology enables the rapid, reliable translation of hand-
written text into digital form thereby streamlining paper-based processes.
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2008 IN BRIEF
IMPROVED SALES AND POSITIVE RESULTS
• The new strategy and organizational restruc- turing that was implemented at Anoto in 2006 is now starting to show positive results.
• Net sales rose by 26 per cent to MSEK 182 (145).
• The result after taxes totalled MSEK 33 (-8).
• Earnings per share were SEK 0.25 (-0.06) after full dilution.
• Cash fl ow was MSEK -32 (-49).
• Anoto introduced Anoto penPresenter, a pro- gram that enhances Microsoft PowerPoint
®functionality, in cooperation with printer manufacturer OKI.
• Anoto acquired Hitachi Maxell’s division of digital pens. The transaction included intangible rights, production equipment and existing in- ventory. In connection with the acquisition, Hitachi Maxell acquired 20 per cent of the shares in Anoto Nippon KK, a wholly-owned subsidiary of Anoto.
• Anoto entered into an agreement with Poly- Vison
®, a world-leading global manufacturer of visual communication products in areas as whiteboards and fl ipcharts. In January 2009 PolyVision
®introduced its ē no
™product.
• Anoto acquired Covelus’ routing technology.
The technology is now incorporated in the platform-product Anoto Forms Solution (AFS).
• Anoto signed an agreement with Group Hamelin in France for the delivery of 30,000 pens to its product Papershow.
• Anoto divested a major part of its applica-
tion area Imaging Technology to the British
company ARM. The transaction included the
subsidiary Logipard AB and the long term
contracts covering deliveries of IP-blocks. The
total contract value to Anoto was MSEK 76,
of which MSEK 68 was paid in December
2008. The remaining amount will be settled
by mid 2010. The net income of the sale was
MSEK 71.
KEY RATIOS FOR THE GROUP
(SEK thousand) 04 05 06 07 08
Net sales 147 392 113 230 108 725 144 691 182 204
Other income 19 180 71 387
Gross profi t/loss 89 936 79 395 78 404 129 114 201 329
Operating profi t/loss -80 011 -79 775 -131 823 -9 665 39 707
Profi t/loss after tax -75 218 -13 884 -132 965 -7 549 32 699
Cash fl ow for the year -74 293 169 554 -31 649 -48 540 -31 957
Earnings per share (SEK) -0.64 -0.11 -1.03 -0.06 0.25
Shareholders’ equity per share (SEK) 3.27 4.39 3.56 3.52 3.80
Equity/assets ratio, % 80 79 80 81 81
Average no. of employees 132 110 121 103 127
NET SALES (SEK THOUSAND)
PROFIT/LOSS AFTER TAX (SEK THOUSAND)
CASH FLOW FOR THE YEAR (SEK THOUSAND)
EQUITY/ASSETS RATIO %
2008 2008
2008 2008
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A WORD FROM THE CEO
In late 2006 we made a decision to reshape the busi- ness from being a technology and licensing oriented company to putting our customers’ needs fi rst. This decision resulted in a strategy of taking increased responsibility for our products and for claiming a bigger part of the value chain.
As the ink dries on Anoto’s 2008 annual report, we can look back on a period in which this decision has proved correct and the benefi ts have really started to show on the bottom line.
I’m pleased to say that the favourable trends we identi- fi ed in our 2007 report have progressed as planned.
Over the past year, Anoto has been able to capitalize on the solid platform for growth that we built through 2007.
During the year we acquired the pen production from Maxell, launched our Anoto Forms Solution platform and developed a strong sales organization. We entered into a number of signifi cant technology licensing partner- ships in line with our new focus on delivering complete products that meet customer needs.
A key difference to the way we worked before is that we now assume the overall responsibility for developing pens and related technology, something that over time will tie partners and customers more closely to Anoto.
This new cooperation will bring us continuous revenue over the coming years. With the divestment of most of our non-core imaging business, we are now in an even better shape to focus on developing attractive products and supporting our partners.
RECORD QUARTER ROUNDS OFF PROFITABLE YEAR
Anoto fi nished 2008 with the best quarterly sales re- sults in the company’s history. Net sales for the fourth quarter were up 25 per cent year-on-year, at SEK 56 million. Net sales for the full year came to SEK 182 million, also up 25 per cent on a year earlier.
This, combined with our continued cost control focus, meant that we ended 2008 in profi t. Net earnings after tax were SEK 33 million, compared with a net loss of SEK 8 million in 2007.
Selling our Logipard IP-block business to ARM, one of the world’s leading semiconductor companies, made a positive contribution to our cash position, and the year ended at SEK 99 million.
FIRMER BUSINESS FOCUS
The business strategy and organizational restructuring started at the end of 2006 is now truly bearing fruit.
Our improved performance can be traced back to our decision to change Anoto from being a highly tech- nology-centric licensing business to one that is driving sales by meeting real customer needs through fully developed products.
As part of this transformation, Anoto strengthened its product portfolio signifi cantly during 2008.
The acquisition of the Hitachi Maxell Digital pen division in mid-2008 has put Anoto in control of the production and marketing of our digital pens. We have a steady fl ow of orders for pens and licenses from all over the world. In addition, we are winning a growing number of larger orders, including contracts for 1000-plus pens or licenses. Sales of the Anoto Forms Solution platform have developed according to plan and the fi rst customer installations are expected to start in 2009. During the year we also acquired routing technology from Covelus to enable our digital pen and paper technology to inter- act with different platforms and devices.
During the year we developed the Anoto penPresenter and Anoto penDocuments products, designed to be simple for everyone to install and use. Anoto penPresenter is an add-in for Microsoft PowerPoint
®that lets people put real-time sketches and notes into their slides as they present them. In essence Anoto penPresenter functions as a personal digital whiteboard.
With Anoto penDocuments people can make hand- written annotations on printed documents and have these implemented in the electronic version. Both products are being launched on the European market by our part- ner OKI, with other markets to follow later this year.
FLOURISHING PARTNERSHIPS
Anoto is supplying partners and customers with a wider range of products than ever before – including digital pens, licenses and a software platform. What they
CUSTOMER FOCUS BEARS FRUIT
all have in common is that they enable easier and faster implementations of Anoto technology solutions.
All through 2008, and especially in the last quarter, we saw increasing business activity among our product partners.
We have intensifi ed our collaboration with major meet- ing-room solution partners. This initiative has resulted, for example, in follow-up pen orders from Hamelin for its
PaperShow product, as well as the launch of the
ēno
™whiteboard by PolyVision in early January 2009.
During 2008 LeapFrog launched the Tag Reading System, a touch-and-talk reading system for children, while Livescribe launched the Pulse smartpen which links audio to what you write.
2008 also saw such key events as the deployment of Anoto technology by British Airways to help it keep to its fl ight schedule at London’s busy Heathrow airport.
Furthermore, our technology was used by the UN Food and Agricultural Organization in Africa to help prevent the outbreak of animal diseases.
Yet another interesting deployment of our technology was with Würth in Sweden – where digital pens have helped sales representatives increase their productivity.
C-Pen continues to sell at a steady pace and has established customers around the world.
BUILDING ON OUR GROWING REPUTATION
The digital pen and paper market category is gaining signifi cant traction, not least as a result of Anoto’s publi- city efforts. In 2008, we continued to improve awareness of the Anoto brand through a proactive marketing and PR programme that has resulted in profi les in publica- tions like the Financial Times and Le Figaro, along with numerous vertical sector trade media.
No-one is pretending that 2009 is going to be an easy time. However, by continuing to focus fi rmly on meeting customer needs with productivity-enhancing products, I believe Anoto is well positioned to build on the excel- lent results we achieved over the past year.
Anders Norling CEO
Lund, Sweden, March 2009
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ANOTO PRODUCTS
Anoto Products focuses on systems, products and services, primarily in the fi eld of forms processing.
Anoto employs an indirect business model and markets its products through partners, such as system integrators, software developers and IT consulting fi rms, all of which offer customized solutions with Anoto Digital Pen and Paper technology to their corporate customers and fi eld users. The basis of this offering is the digital pen which Anoto controls and
sells since the acquisition of the Hitachi Maxell Digital pen division, together with the Anoto Forms Solution platform. Turnkey products, such as existing scanning and translation pens, as well as newly developed pro- ducts including Anoto penPresenter and Anoto pen- Documents, may also be marketed through other sales and distribution channels.
The market for Anoto Digital Pen and Paper techno-
APPLICATION AREAS
Anoto offers a unique, patented technology. As the company does not have any direct competi- tors in the fi eld of Digital Pen and Paper, it mainly competes with other technologies, such as tablet PCs, PDAs and smartphones. Demand is being powered by increased knowledge and penetra- tion in both new and existing markets as well as the need for cost-effi cient and user-friendly solu- tions. According to a study by the University of Applied Sciences Hamburg (2008), the Anoto Digital Pen and Paper technology is being rated as consider-ably more user-friendly compared to the alternative technologies listed above.
In terms of total cost of ownership (TCO) internal customer data shows that the Digital Pen and Paper technology has signifi cant cost advantages when benchmarked according to the same method that was used to estimate TCO in a 2007 Gartner report on PDA’s and Smartphones.
Anoto has offi ces in Sweden, the United States
and Japan and operates through partners in the
Americas, Europe, South Africa, Australia and
Asia-Pacifi c. Western Europe, Japan and the
United States are the single largest geographical
markets.
logy includes virtually every segment of the com- munity that uses pen and paper and needs to trans- mit data to digital media. Anoto focuses on a number of key areas to ensure ongoing expansion and profi - tability improvements, and proactively strives to in- crease the number of partners, particularly system integrators, in order to increase market reach. The most important end-customer markets are the healthcare and clinical trials sectors, but there are also a number of digital pen solutions for inspections and reporting, for example in real estate, insurance and government. Within healthcare digital pen and paper is used to simplify administrative routines and for documenting and assuring the quality of healthcare interventions. Among the benefi ts of the technology are more effi cient paper-based processes, reduced risk of error, improved productivity and noticeable cost savings.
CASE STUDY SWEDISH GERIATRIC CARE The Swedish geriatric care is using Anoto Digital Pen and Paper to facilitate documentation, quality assur- ance and data transmission. The solution is now being used in more than 30 Swedish municipalities, for example Sundbyberg, Kristianstad, Lomma and Karls-
krona, and more are expected to follow. Altogether, 3,000 digital pens are being used by homecare person- nel in Sweden.
The success in home care services has helped spread the technology to other areas of healthcare, such as breast cancer screening, physical examinations and bedsore prevention.The technology is also currently being deployed within emergency care and hospital environment.
CASE STUDY STÄDTISCHE KLINIKEN MÖNCHENGLADBACH, GERMANY
A recent deployment is that of the Städtische Kliniken Mönchengladbach, a municipal hospital in the north- west of Germany. The hospital is divided between two sites, with 600 beds for patient treatment and rehabilitation.
Whether they are being treated for broken bones or
undergoing appendectomies or caesareans, patients
often need to be treated under anaesthetic. Quick
and accurate documentation of the entire anaesthetic
process is critical, for medical and legal reasons. The
core element of this documentation is the anaesthetic
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log, that keeps track of administrative data, such as patient details as well as information on medication, anaesthetic procedures and supplementary measures.
Traditionally, anaesthetics staff had to fi ll out the log forms with normal pen and this information then had to be entered manually into the hospital’s computer systems for further processing - a labour-intensive and time-consuming process, prone to errors. The hospital was looking for a technology solution to accelerate the documentation process and transfer handwritten information gathered during an anaesthetic procedure to the Hospital Information System (HIS) more effi ciently.
In order to achieve this, a range of solutions, including tablet PCs and document scanners were evaluated.
As these technologies would have required an amend- ment of the documentation process, the hospital decided to choose a digital pen and paper solution.
The digital pens are part of a comprehensive intensive care system solution that Anoto partner and digital pen and paper specialists, Diagramm Halbach, designed especially for the Städtische Kliniken.
Digital pen and paper captures and converts the handwritten information in the anaesthetists’ logs into digital format, eliminating the need for separate regi- stration post-surgery and resulting in less work for clinical and clerical staff. Among the range of benefi ts
that have been identifi ed, the clearest one is being able to continue the use of a pen and paper. Other benefi ts include faster and accurate information availability for other clinicians and accounting and research purposes.
The digital pens have made the anaesthetics opera- tion more productive by helping optimise workfl ows and making day-to-day routines more effi cient – all while maintaining familiar ways of working.
CASE PHARMACEUTICAL INDUSTRY
Anoto technology is also making an impact in the
pharmaceutical industry, where international pharma
companies like Novartis, Actelion Pharmaceuticals,
Sanofi -Aventis and GlaxoSmithKline are using it suc-
cessfully in a number of different areas. Within the
pharmaceutical industry digital pen and paper is used
for documentation of data in clinical trials, data entry
for the distribution of drug samples and streamlining
of ordering processes. For pharmaceutical companies,
every successful effort to improve effi ciency and quality
in the clinical trials process directly contributes to
continued competitiveness of the company and can
be measured in actual revenue. Anoto Digital Pen
and Paper technology helps to achieve this through
benefi ts, such as easy deployment, ensured traceability
of collected data and reduction of the time it takes
for a drug to get to market, which may represent
millions of euro in revenue.
PRODUCTS
The development of customized platforms and pro- ducts, such as Anoto Forms Solution, Anoto penPre- senter and Anoto penDocuments enables both Anoto and its partners to facilitate the sales process and reduce time to market.
The Anoto Forms Solution includes all components required to set up and use digital pen and paper in order to capture, transfer and incorporate handwrit- ten information from paper forms into any back-end system - enabling rapid implementation and use of digital pen and paper in commercial services. Sales of the new Anoto Forms Solutions platform that was launched in 2008 has developed well and new partner- ships are expected to start generating end-customer installations in 2009. As a result increased penetration of new and existing markets is predicted, as well as sales to larger customers in both private and public administration.
The Anoto penPresenter is a personal digital white- board that captures every word that is written. By simply projecting a blank PowerPoint
®slide, a digital whiteboard is created and, using Digital Pen and Paper, everything that is written is automatically captured.
PowerPoint presentations turn interactive by writing on the slides during a presentation.
Anoto penDocuments is an entry-level product allowing the user to create electronic copies of handwritten
documents instantly. Anoto penDocuments digitally captures handwriting while writing. Documents can be saved, stored and distributed immediately, which means no more scanning, faxing or using couriers. For smaller businesses, simply requiring a method of keeping track of handwritten documents, this is an attractive offering.
C TECHNOLOGIES
C Technologies develops and markets the C-Pen, which scans and recognizes printed text for further internal processing or transmission to a computer.
The main customer benefi t is the ease with which printed information and text can be transmitted to digital media. The two most common areas of use are electronic payment systems and generic capture, recognition and transmission of text. Linguistic appli- cations for the consumer market have also been developed and the fi rst version of C Dictionary was launched in mid-2008.
The C-Pen is sold through both retail outlets and directly to businesses using the OEM model.
ANOTO PRODUCTS
MSEK Net sales Gross profi t
2008 85 59
2007 78 66
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TECHNOLOGY & LICENSING
Technology & Licensing develops and sells digital pen technology and digital pens on an OEM basis to market- leading customers. The customers develop their own product offers based on the technology components and pens provided by Anoto. Examples of customer products are learning toys, educational tools, visual communication equipment and personal productivity solutions. Several of these products are interactive, enabling real-time audio or visual feedback while writing or when touching interactive areas.
Currently Anoto has two customers that develop their own pens using technology components from Anoto, LeapFrog and Livescribe, both based in the United States. During 2008 LeapFrog launched the Tag Reading System, a touch-and-talk reading system for children, while Livescribe launched the Pulse smartpen that links audio to what you write. Both products have built-in audio capabilities, enabling real-time audio feed- back from paper. During 2009 LeapFrog will expand their Anoto based product portfolio and launch Tag Junior for toddlers.
In 2008 Anoto fi nalized the development of the new pen, DP301, which streams data in real-time to com- puters and mobile phones. With DP301, Anoto can address interactive application areas, initially within the educational and offi ce market segments. DP301 is offered to customers on an OEM basis and is also included in Anoto penPresenter.
During 2008, a number of partners launched innova- tive new products based on the Anoto technology.
Groupe Hamelin launched Papershow, an interactive paper digital writing product which enables people to project handwritten notes directly on the screen during meetings.
DNP started commercial sales of its interactive class- room product OpenNOTE to Japanese schools in November 2008.
Anoto signed an agreement with PolyVision in 2008 and worked to enable Anoto functionality with PolyVision e3 environmental ceramicsteel
™- interactive whiteboards.
PolyVision launched the
ēno
™, a revolutionary new interactive whiteboard in January 2009.
ēno
™by PolyVision is the fi rst result of applying Anoto´s pattern technology in the area of visual communication products, such as whiteboards and fl ipcharts. A combination of the Anoto Bluetooth-enabled digital pen (DP301), an
ēno
™interactive whiteboard and a simple projector will enable teachers to move from ink to the Internet or from markers to multimedia, in an instant and with- out the need for power or data cables.
The focus of Technology & Licensing in 2009 will be
on close collaboration with existing customers in order
to ensure the development and delivery of pens and
technology as well as on supporting the establishment
IMAGING TECHNOLOGY
Imaging Technology develops and markets basic Anoto technology, such as ASICs and IP blocks. It supplies and licenses imaging technology modules, components and function blocks for integration with customer products or components, including mobile phones, accessories and components.
Imaging Technology develops and markets video technology in two different product areas. The fi rst area includes the development and (through partners) the manufacture of complete chips for digital surveil- lance cameras. The chips convert images to various video formats, such as MPEG4 and H264, for further distribution. The main customers are surveillance equipment manufacturers.
Anoto sold its subsidiary Logipard AB and its existing contracts for video technology to ARM, the world’s leading semiconductor intellectual property supplier.
The value of the transaction was MSEK 76, of which MSEK 68 was paid upon signing. The outstanding amount will be settled by mid 2010. The net result of the transaction was MSEK 71. According to the contract, Anoto has transferred most of its imaging technology business, including customer contracts and Anoto’s 80 per cent shareholding in Logipard, to ARM.
Anoto is retaining the ASIC sales, which correspond to approximately 40 per cent of this year’s volume within the Imaging Technology application area.
IMAGING TECHNOLOGY
MSEK Net sales Gross profi t
2008 60 45
2007 34 21
and growth of products based on Anoto technology within different market areas. Technology & Licensing will continue to establish new partnerships with mar- ket-leading companies and identify new application areas for Anoto technology. Examples of potential new application areas are pen tablets, games and entertain- ment products.
TECHNOLOGY & LICENSING
MSEK Net sales Gross profi t
2008 37 24
2007 34 23
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THE SHARE
LARGEST SHAREHOLDERS DECEMBER 31, 2008
NAME % TOTAL
Essensor AS 11.1% 14 205 603
Norden Technology AS 7.4% 9 500 000 Swedbank Robur Fonder 6.4% 8 202 297 Tor Aksel Voldberg 5.1% 6 500 000 Michael Mathile 4.9% 6 300 000 Barclays Bank 4.8% 6 188 150 DnB NOR Bank 3.8% 4 925 900 Carnegie Norway Branch 3.8% 4 832 500
Banco Fonder 3.1% 4 035 000
Chister Fåhraeus 2.7% 3 500 000 In January 2009, Michael Mathile increased his shareholding to 10.0% of total number of shares.
PER-SHARE DATA 2008
No of shares 128 583 867
No of outstanding options 0
Average no of shares 128 583 867 Average number of outstanding options 0
Earnings per share (SEK) 0.25
Earnings per share incl options (SEK) 0.25 Cash fl ow per share for the year (SEK) 0.25 Cash Flow per share incl options (SEK) 0.25 Shareholders equity per share (SEK) 3.80 Shareholders equity per share incl options (SEK) 3.80
The Anoto Group has been listed on the NASDAQ OMX Stockholm Stock Exchange (ticker: ANOT) since 16 June 2000. Today the share is listed on the Small Cap list of the NASDAQ OMX Nordic Exchange Stockholm. The share had previously traded on the New Market starting on15 March 2000. Anoto Group’s share capital of SEK 2,571,677 is allocated among 128,583,867 shares. Each share entitles the holder to one vote at general meetings and all shares provide equal rights to participation in the company’s assets and profi ts.
SHARE PRICE PERFORMANCE AND TRADING
The price of the Anoto Group share declined by 81 per cent from SEK 9.65 to 1.81 during the year. During the same period, the Affärsvärlden General Index was down by 42 per cent and the Stockholm Stock Ex- change IT Index lost 30 per cent. Anoto Group’s market capitalisation was SEK 232 million on 31 December 2008. On 25 March 2009, the share price was SEK 4,55 and the market capitalization was SEK 585 million.
A total of 68,776,269 Anoto shares traded on the NASDAQ OMX Stockholm Stock Exchange in 2008, for a turnover rate of 54 per cent.
SHAREHOLDERS
At the end of 2008, Anoto Group had 7,439 share- holders. Foreign shareholders controlled 62 %; the ten largest shareholders 54 per cent; and institutional and industrial investors 88 per cent of the shares.
DIVIDEND POLICY
No dividend will be considered over the next few years. The company’s future dividend policy will refl ect its earnings, fi nancial position and fi nancing needs.
Dividend proposals will be examined in the light of shareholder demands for a reasonable return and the company’s internal fi nancing requirements.
OPTION PROGRAMMES
The parent company currently has one outstanding stock option program with underlying warrants for employees. The 585,000 options that have been sub- scribed for expire on 31 March 2010.
Full exercise of the options that have been subscribed for would result in subscription for no more than 585,000 new shares, increasing the company’s share capital by SEK 11,700 and diluting existing shares by 0,5 per cent. The issue prices for options are SEK 18.00.
ANALYSTS
Anoto Group is covered by analysts at a number
of banks and securities brokers, including Carnegie,
Hagströmer & Qviberg and Redeye.
SHAREHOLDERS BY SIZE, DECEMBER 31, 2008
Holdings Total no.of % av total Hold collectlively % of share
shareholders shareholders number of shares capital
1-1000 5 710 76.8 1 679 481 1.3
1001-10000 1 380 18.6 4 867 834 3.8
10001-100000 271 3.6 8 055 024 6.3
100001- 78 1.0 113 981 528 88.6
7 439 100 128 583 867 100
The share
0 10 20 30 40 50
2004 2005 2006 2007 2008 2009
Anoto share OMXSPI OMX SX45
2004 2005 2006 2007 2008 2009
0 5 000 10 000 15 000 20 000 25 000 30 000 35 000 40 000
No. of shares traded, Thousands
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FIVE-YEAR SUMMARY
Summary of income statements
(SEK thousand) 2004 2005 2006 2007 2008
Net sales 147 392 113 230 108 725 144 691 182 204
Other income – – – 19 180 71 387
Gross profi t/loss 89 936 79 395 78 404 129 114 201 328
Amortization – intangible fi xed assets -20 661 -22 680 -25 809 -13 710 -12 159 Depreciation – property, plant and equipment -7 825 -3 644 -1 709 -2 201 -3 011
Operating profi t/loss -80 011 -79 775 -131 823 -9 665 39 706
Profi t/loss on participations in Group companies – 70 457 -769 -252 0
Profi t/loss on participations in associated companies 3 059 – – – –
Profi t/loss on other receivables that are non-current assets -2 431
Other fi nancial items 1 861 -4 446 794 3 269 -5 974
Profi t/loss after fi nancial items -75 091 -13 764 -131 798 -6 647 31 302
Tax -127 -120 -1 208 -791 -853
Minority share in profi ts – – 41 -110 2 250
Profi t/loss after tax -75 218 -13 884 -132 965 -7 549 32 699
Summary of balance sheets
(SEK thousand) 2004-12-31 2005-12-31 2006-12-31 2007-12-31 2008-12-31
Assets
Intangible fi xed assets 368 031 357 536 343 324 339 473 364 025
Property, plant and equipment 5 589 3 568 3 512 4 046 5 279
Financial fi xed assets 5 155 5 346 5 080 8 560 30 599
Total non-current assets 378 775 366 450 351 916 352 079 399 903
Inventory 1 671 1 517 1 936 5 960 37 329
Accounts receivable 20 337 36 780 27 615 24 062 32 564
Other current assets 29 384 15 667 15 669 51 132 32 304
Cash and bank balances, including current investments 41 740 211 490 179 841 131 301 99 344
Non-current assets for divestment 74 235 0 0 0
Total current assets 93 132 339 689 225 061 212 455 201 541
Total assets 471 907 706 139 576 977 564 534 601 444
Liabilities and shareholders’ equity
Shareholders’ equity 385 629 555 690 458 237 452 809 488 474
Minority shareholdings — — 1 959 2 069 -160
Provisions (Non-interest-bearing) 0 0 0 54 0
Long-term liabilities (Non-interest-bearing) 13 692 4 231 4 728 50 089 41 891 Current liabilities (Non-interest-bearing) 72 586 146 218 112 053 59 513 71 239
Total liabilities 86 278 150 449 118 740 111 725 112 970
Total liabilities and shareholders’ equity 471 907 706 139 576 977 564 534 601 444
Summary of cash fl ow statements
(SEK thousand) 2004 2005 2006 2007 2008
Profi t/loss after fi nancial items -75 091 -13 764 -131 798 -6 647 31 302
Items that do not affect liquidity 8 787 -39 559 8 913 16 243 28 337
Change in working capital -4 949 60 251 73 642 -39 015 -9 317
Cash fl ow from operating activities -71 253 6 928 49 243 -29 419 50 322
Cash fl ow from investing activities -7 633 -14 933 -14 190 -20 808 -40 257
Total cash fl ow before fi nancing activities -78 886 -8 005 -63 433 -50 227 10 065
Cash fl ow from fi nancing activities 4 593 177 669 31 784 1 687 -42 022
Cash fl ow for the year -74 293 169 554 -31 649 -48 540 -31 957
Key ratios
2004 2005 2006 2007 2008
Sales growth, % neg neg neg 33 26
Gross margin, % 61 70 72 76 71
Operating margin, % neg neg neg neg 16
Profi t margin, % neg neg neg neg 21
Capital employed (SEK thousand) 385 629 555 690 460 196 454 878 488 314
Return on capital employed, % neg neg neg neg 7
Return on shareholders’ equity, % neg neg neg neg 7
Proportion shareholders’ funds, % 80 79 80 81 81
Equity/assets ratio, % 82 79 80 81 81
Net debt/equity ratio, multiple -0.11 -0.38 -0.39 -0.29 -0.20
Interest coverage ratio, multiple -2 264 -1 -29 -3 5
Earnings per share (SEK) -0.64 -0.11 -1.03 -0.06 0.25
Earnings per share after dilution (SEK) -0.64 -0.11 -1.03 -0.06 0.25
Cash fl ow per share for the year (SEK) -0.63 1.42 -0.25 -0.38 0.25
Cash fl ow per share after dilution (SEK) -0.63 1.40 -0.25 -0.38 0.25
Shareholders’ equity per share (SEK) 3.27 4.39 3.56 3.52 3.80
Shareholders’ equity per share after dilution (SEK) 3.15 4.32 3.56 3.52 3.80
Average no. of employees 132 110 121 103 127
Sales per employee (SEK thousand) 1 117 1 029 1 029 1 405 1 435
Payroll expenses, incl. social security contributions (SEK thousand) 112 906 95 829 121 822 88 184 106 075
(of which, pension premiums) 14 006 11 030 10 925 10 588 13 337
PROPORTION SHAREHOLDERS’ FUNDS
Shareholders’ equity, minority interests and deferred tax at the end of the year as a percentage of total assets
RETURN ON SHAREHOLDERS’ EQUITY
Profi t for the year as a percentage of average shareholders’ equity
RETURN ON CAPITAL EMPLOYED
Profi t after net fi nancial income/expense plus interest expense, divided with of average capital employed
GROSS MARGIN
Gross profi t as a percentage of net sales. Gross profi t is defi ned as net sales less cost of goods sold
SHAREHOLDERS’ EQUITY PER SHARE
Shareholders’ equity divided by the weighted average number of shares during the year
AVERAGE NUMBER OF EMPLOYEES
Average number of employees during the yearNET DEBT
Interest-bearing liabilities less liquid assets and current investments
NET DEBT/EQUITY RATIO
Net debt divided by shareholders’ equity, including minority interests
SALES PER EMPLOYEE
Net sales divided by the average number of employees
DEFINITIONS
SALES GROWTH
Increase in net sales as a percentage of net sales for the previous year
EARNINGS PER SHARE
Profi t after tax divided by the weighted average number of shares during the year
INTEREST COVERAGE RATIO
Profi t after net fi nancial income/expense plus interest expense, as a percentage of interest expense
OPERATING MARGIN
Operating profi t/loss after depreciation and amortization as a per- centage of net sales
CAPITAL EMPLOYED
Total assets less non-interest-bearing provisions and liabilities, inclu- ding deferred tax liabilities
EQUITY/ASSETS RATIO
Shareholders’ equity including minority interests as a percentage of total assets
PROFIT MARGIN
Profi t after fi nancial income/expense as a percentage of net sales
CASH FLOW PER SHARE FOR THE YEAR
Cash fl ow for the year divided by the weighted average number of shares during the year
1 6 | A N OTO A N N UA L R E P O RT 2 0 0 8
The Board of Directors and CEO of Anoto Group AB (publ.), Corporate identity No.
556532-3929, hereby submit the annual accounts and consolidated accounts for the 1 January – 31 December 2008 fi nancial year.
GROUP STRUCTURE
Anoto Group AB is the holding company in the Group and performs group-wide functions. The operational activities are performed by the subsidiaries Anoto AB, C Technologies AB, Anoto Inc and Anoto Maxell Ltd.
Logipard AB, in which Anoto AB controlled 80 per cent of the shares, was sold on December 16, 2008.
ORGANIZATION
Anoto Group is a Swedish high-tech company that has developed a unique technology for digital pen and paper, enabling rapid, reliable transmission of handwritten text to digital media. The organization is broken down into three application areas, i.e.
Anoto Products, Technology & Licensing and Imaging Technology. The entire business is based on digital camera technology and image processing in real-time.
ANOTO APPLICATION AREAS
ANOTO PRODUCTS
Anoto Products focuses on systems, products and services, primarily in the fi eld of forms processing.
Anoto operates by an indirect business model and markets its products through partners, such as system integrators, software developers and IT consulting fi rms, all of which offer customized solutions with Anoto Digital Pen and Paper technology to their corporate customers and fi eld users. The base for this offering is the digital pen which Anoto controls and sells since the acquisition of the Hitachi Maxell Digital pen division, together with the former Anoto Forms’
solution platform. Turnkey products, such as existing scanning and translation pens, as well as newly developed products including Anoto penPresenter and Anoto penDocuments, may also be marketed through other sales and distribution channels.
Anoto Products continues to show growth. European markets are developing well, with continued focus on applications within the healthcare and clinical trials sectors. The infl ow of new partners is good and bodes well for the future. Increased media coverage is helping
to bring solutions based on Anoto Digital Pen and Paper technology to the attention of both end-users and new partners. The Japanese market, which did not perform as expected during the fi rst three quarters, showed some signs of improvement in the last quarter, although major projects have been postponed until 2009.
Since the acquisition of the Hitachi Maxell digital pen division, Anoto controls and markets the digital pens.
There is a steady fl ow of orders for smaller volumes of pens and licenses from all over the world. In addition to these orders, an increased activity in the market for pens and licenses in larger volumes can be noted.
Sales of the new AFS platform that was launched last year has developed according to plan and is expected to start generating end-customer installations in 2009.
TECHNOLOGY & LICENSING
Technology & Licensing develops and sells digital pen technology and digital pens on an OEM basis to market leading customers. The customers develop their own product offers based on the technology components and pens provided by Anoto. Several of these products are interactive, enabling real-time audio or visual feed- back while writing or when touching interactive areas.
Examples of customer products are learning toys, educational tools, visual communication equipment and personal productivity solutions.
A major milestone this quarter has been the completion and introduction of the Anoto branded DP301 pen used by PolyVision for the product
ēno™being the result of developing Anoto technology in the direction of visual communication products, such as whiteboards and fl ipcharts.
IMAGING TECHNOLOGY
Imaging Technology develops and markets basic Anoto technology, such as ASICs and IP blocks.
The application area supplies and licenses imaging technology modules, components and function blocks for integration with customer products or components, including mobile phones, accessories and their components.
Anoto sold its subsidiary Logipard AB and its existing contracts for video technology to ARM, the world’s leading semiconductor intellectual property supplier.
The value of the transaction was MSEK 76, of which MSEK 68 was paid upon signing. The outstanding
MANAGEMENT REPORT
amount shall be settled within 18 months. The net result of the transaction was MSEK 71. Anoto is retaining the ASIC sales, which corresponds to approximately 40 per cent of this year’s volume within the Imaging Technology application area.
Sales developed well during 2008, although slightly below expectations due to unforeseen delays in the market introduction of mobile phones using Anoto technology.
SHARES AND SHAREHOLDERS
The company had 128,583,867 shares as of year-end.
According to VPC AB statistics, there were 7,439 shareholders on 31 December 2007, representing a decrease of approximately 3 per cent over the past 12 months. The largest shareholders were Essensor AS (11.1 per cent of the votes and capital) and Norden Technology AS (7.4 per cent of the votes and capital).
EMPLOYEES
The average number of employees within the Group increased from 103 to 127 in 2008. The Group had 105 employees at year-end. Logipard AB, which was sold in December 2008 had 15 employees.
REMARKS ON THE INCOME STATEMENT
Net sales for the year increased by 26 per cent, from MSEK 145 to MSEK 182. Other income in 2008 amounted to MSEK 71 and refers to the sale of long term contracts within Imaging Technology and the subsidiary Logipard AB. A major part of the transaction refers to the sale of shares in Logipard AB, which is exempted from taxation. The sale of contracts will reduce tax losses carried forward, but will not result in any taxation. Other income in 2007 of MSEK 19 refers to the sale of the Anoto US operations to Livescribe.
Forty per cent of the Group’s income is in USD and 49 per cent in EUR. During the year, the Group hedged 50 per cent of its currency net fl ows in USD and approximately 50 per cent of its currency fl ows in EUR (refer to the section on risk management).
The Group’s gross profi t for the year rose to MSEK 201 (129), while its gross margin was 71 per cent (76).
The major reason for the lower margin can be explained by the increased sale of digital pens and components.
Overhead costs increased by 19 per cent, primarily due to the larger organization as a result of the acquisition of the Hitachi Maxell digital pen division,
an increased level of activity and the impact on currency fl uctuations when converting costs of foreign subsidiaries into Swedish currency. The expansion of Logipard AB, sold in December 2008, represents a part of the increase in overhead costs. The Group capitalises non-customer fi nanced development expenses that meet IAS 38s criteria, a total of MSEK 20 (9) in 2008. The operating result for the year was MSEK 40 (-10).
REMARKS ON THE BALANCE SHEET AND CASH FLOW STATEMENT
As the result of increased working capital in inventory of MSEK 31, accounts receivable and the increase of long term receivables on customer to MSEK 29, total assets increased by MSEK 37. The negative cash fl ow for the year was MSEK -32, reducing liquid assets to MSEK 99. The main reason for the negative cash fl ow is an increase in working capital and capital expenditures.
Current and long term liabilities increased from MSEK 109 to MSEK 112 . Out of the total liabilities, MSEK 50 represent prepaid royalty, for which Anoto has no obligation to repay or deliver any services.
The Group’s liquid assets, including current investments, decreased from MSEK 131 at the end of 2007 to MSEK 99 at the end of 2008.
Shareholders’ equity of MSEK 488 on 31 December, as opposed to MSEK 453 past year, represented an equity/assets ratio of 81 per cent (81).
Cash fl ow from operating activities was MSEK 50 (-29).
Due to the rise in sales coupled with the acquisition of the Hitachi Maxell digital pen division, working capital increased by MSEK 9, due to more inventory. Investing activities consumed MSEK 40 (21), of which MSEK 20 (9) was for capitalised development expenses during the year. Financing activities contributed MSEK -42 (2), mainly due to the conversion of certain accounts receivable into long term receivables (22 months maximum). Total cash fl ow for the year ended up at MSEK -32 (-49).
INVESTMENTS
Net investments in 2008 for fi xed assets totalled MSEK 36 (15).
RESEARCH AND DEVELOPMENT
The Group’s R&D efforts are focused on upgrading and integration of electronic hardware and software for the development of digital pen and paper solutions.
The Group spent MSEK 69 (63), or 47 per cent (45) of
its total operating costs, on R&D in 2008. The number
1 8 | A N OTO A N N UA L R E P O RT 2 0 0 8
included MSEK 5 (8) for amortization of capitalized development expenses. Pursuant to its compliance with IAS 38, the Group capitalized MSEK 20 (9) in new development expenses during the year. Including capitalization, the Group’s total 2008 R&D costs totalled MSEK 84 (64).
Anoto has an extensive patent portfolio. At the end of 2008, the Group had 308 active patent applications and 217 patent approvals.
DISPUTES
Anoto is currently not engaged in any disputes that are deemed to signifi cantly affect its fi nancial position.
ENVIRONMENT
Anoto does not pursue any activities that require environmental permits. None of its units are environ- mentally certifi ed.
RISK MANAGEMENT
As the Group conducts the the main part of its sales internationally, a majority of the contracts are in EUR or USD. As a signifi cant part of the costs are in SEK and USD, margins and earnings are sensitive to currency fl uctuations. The Anoto Group AB parent company handles all trading in fi nancial instruments.
In 2008, approximately 40 per cent of the total income was related to USD and 49 per cent to EUR.
Refer to Note 4 for a detailed description of the company’s risk management policies.
BOARD AND ITS RULES OF PROCEDURE
The Anoto Group AB Board of Directors consists of seven ordinary members. Refer to page 48 of this annual report under the section entitled “Corporate Governance report” for a detailed account of the Board’s composition and working methods.
The 2008 Annual General Meeting authorized the Board to decide on one or more directed issues totalling no more than 12,000,000 shares prior to the next Annual General Meeting – as well as to depart from the preferential rights of shareholders in order to enable the acquisitions of businesses or operations by paying wholly or partially with shares.
GUIDELINES ON REMUNERATION FOR SENIOR EXECUTIVES
Remuneration for the CEO and senior executives in 2008 appears in Note 10, “Salaries and other remuneration”. The Board has proposed to the
Annual General Meeting that the guidelines on remuneration for senior executives remain unchanged in 2009.
SIGNIFICANT EVENTS AFTER YEAR-END
The Livescribe Inc debt to Anoto of MSEK 20, 1 was settled in full in the middle of March 2009. The debt was the remaining payment from an agreement in early 2007 between Livescribe and Anoto, by which Anoto phased out its operation “Content and Applications”
to Livescribe Inc.
No further signifi cant events have occurred after the year-end.
OUTLOOK
The restructuring programme together with the new strategy implemented in 2008 is beginning to pay off.
The uncertainty in the overall global economy makes it extremely diffi cult to predict market trends.
Therefore, a market outlook for 2009 has been omit- ted in this report.
PROPOSED APPROPRIATION OF ACCUMULATED DEFICIT
Proposed appropriation of accumulated defi cit in the parent company (SEK:
Accumulated defi cit 0
Loss for the year –945 119
Total –945 119
The Board of Directors and CEO propose that the accumulated defi cit of SEK -945,119 reduces the statutory reserve by the same amount.
With regard to the fi nancial position of the Group
and parent company, refer to the following accounts.
INCOME STATEMENT
Group Parent company
(SEK Thousands) Note 2008 2007 2008 2007
Net sales 5 182 204 144 691 30 044 26 155
Other income 41 71 387 19 180 - -
Cost of goods and services sold 12 -52 262 -34 751 - -
Gross profi t/loss 201 329 129 114 30 044 26 155
Selling expenses 9,15 -68 953 -53 529 -6 919 -6 812
Administrative expenses 9, 10,11,15 -18 620 -21 716 -17 048 -15 135
Research & development costs 9,15 -77 010 -63 073 -4 299 -4 559
Other operating income 13 4 703 1 192 40 -
Other operating costs 14 -1 742 -1 653 - -
Operating profi t/loss 12 39 707 -9 665 1 818 -352
Profi t/loss on shares in group companies 16 - -252 - -3 700
Share of earnings in associated companies -2 431
Interest income 17 2 397 4 782 1 148 3 844
Interest and similar expenses 18 -8 371 -1 513 -2 021 -136
Profi l/loss after fi nancial items 31 302 -6 648 945 -344
Tax on profi l/loss for the year 19 -853 -791 - -
Net Profi t for the year 30 449 -7 439 945 -344
Allocation of net profi t for the year
Profi t/loss attributable to minority interests -2 250 110 - -
Profi t/loss attributable to shareholders of Anoto Group AB 32 699 -7 549 945 -344
Earnings per share (SEK) 1) 0.25 -0.06 0.01 0.00
Earnings per share after dilution (SEK) 2) 0.25 -0.06 0.01 0.00
No of shares, weighted average for the year 128 583 867 128 583 867 128 583 867 128 583 867 No of shares, weighted average for the year,
including outstanding warrants 3) 128 583 867 128 883 867 128 583 867 128 583 867
1) Profi /Loss for the year attributable to shareholders of Anoto Group AB divided by average number of shares during the year.
2) Profi t/Loss for the year attributalble to shareholders of Anoto Group AB divided by sum of the weighted average number of shares during the year and the weihted average number of outstanding warrants whose exercise price was less than the closing share price for the year. Warrants give rise to a dilutive effect only when their conversion to shares generates poorer earnings per share (IAS 33, Earnings per share).
3) Only warrants whose exercise price is less than the closing price for the year are included.
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BALANCE SHEET
Group Parent company
(SEK Thousands) Note 2008-12-31 2007-12-31 2008-12-31 2007-12-31
ASSETS
Non-current assets Intangible fi xed assets
Capitalized development expenditures 20 26 580 11 504 - -
Patents 21 28 866 28 938 675 764
Goodwill 24 302 496 298 674 - -
Brands 22 334 357 36 40
Other intangible assets 23 5 749 - - -
Total intangible fi xed assets 364 025 339 473 711 804
Property, plant and equipment
Equipment and tools 25 5 279 4 046 356 366
Total property, plant and equipment 5 279 4 046 356 366
Financial fi xed assets
Shares in group companies 26 - - 267 194 267 194
Shares in associated companies 27 1 640 4 071 - -
Other long-term securities 28 - 3 371 - -
Other long-term recievables 29 28 959 1 118 - -
Receivables - group companies - - 77 505 77 505
Total fi nancial fi xed assets 30 599 8 560 344 699 344 699
Total non-current assets 399 903 352 079 345 766 345 869
Current assets Inventory
Finished goods and goods for sale 37 329 5 960 - -
Current receivables
Accounts receivable 30 32 564 24 062 63 -
Receivables from subsidiaries - - 116 040 40 928
Other recievables 16 777 9 534 1 118 1 587
Prepaid expenses and accrued income 31 15 527 41 598 2 091 2 038
Total current receivables 64 868 75 194 119 312 44 553
Current investments
Short-term securities 36 185 74 229 - 64 335
Cash and bank balances 63 159 57 072 897 3 561
Total current assets 201 541 212 455 120 209 112 449
TOTAL ASSETS 601 444 564 534 465 975 458 318
Group Parent company
(SEK Thousands) Note 2008-12-31 2007-12-31 2008-12-31 2007-12-31
LIABILITIES AND SHAREHOLDERS EQUITY Shareholders equity
Share capital 2 572 2 572 2 572 2 572
Other capital contributed 448 508 448 508 - -
Statutory reserve - - 419 610 419 953
Share premium reserve - - 28 555 28 555
Other reserves -152 -3 063 - -
Accumulated loss including loss for the year 37 546 4 792 - -
Profi t/loss for the year - - 945 -343
Equity attributible to the shareholders of Anoto
Group AB 488 474 452 809 451 682 450 737
Equity attributible to minority interests -160 2 069 0 0
Long-term liabilities/Provisions
Provisions for taxes - 54 - -
Other provisions 34 - - - -
Other liabilities 41 891 50 089 - -
Total long-term liabilities/Provisions 41 891 50 143 0 0
Current liabilities
Provisions restructuring 32 - - - -
Provisions for product warranties 33 800 1 573 - -
Accounts payable 12 034 9 835 983 1 377
Liabilities to subsidiaries - - -
Tax liabilities 813 835 - -
Advance payments from customers 12 400 21 665 - -
Other liabilities 23 979 8 643 7 318 1 655
Accrued expenses and prepaid income 35 21 213 16 962 5 992 4 549
Total current liabilities 71 239 59 513 14 293 7 581
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 601 444 564 534 465 975 458 318
Pledged assets 38 8 542 6 196 - -
Contingent liabilities 39 4 721 7 025 - -
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CHANGES IN SHAREHOLDERS EQUITY
(SEK Thousands) Share capital Other capital
contributed 2) Reserves 1) Profi t for the year
Shareholders equity contributable to the shareholders of
Anoto Group AB Minority interest
Total shareholders equity kapital
GROUP EQUITY
Shareholders equity January 1, 2007 2 572 560 655 -1 418 -103 572 458 237 1 959 460 196
Translation differences for the year 1) - - -1 645 - -1 645 - -1 645
Reduction of share premium reserve - -112 147 - 112 147 0 - 0
Total changes in shareholders equity reported directly against equity, excluding
transactions with shareholders 0 -112 147 -1 645 112 147 -1 645 0 -1 645
Profi t for the year - - - -7 549 -7 549 110 -7 439
Total changes in shareholders equity
excluding transactions with shareholders - -112 147 -1 645 104 598 -9 194 110 -9 084
Adjustment costs for options - - - 3 765 3 765 - 3 765
Shareholders equity December 31, 2007 2 572 448 508 -3 063 4 791 452 808 2 069 454 877
Translation differences for the year 1) - - 2 911 - 2 911 21 2 932
Total changes in shareholders equity reported directly against equity,
excluding transactions with shareholders 0 0 2 911 0 2 911 21 2 932
Profi t for the year - - - 32 699 32 699 -2 250 30 449
Total changes in shareholders equity exclu-
ding transactions with shareholders - - 2 911 32 699 35 610 -2 229 33 381
Adjustment costs for options - - - 56 56 - 56
Shareholders equity December 31, 2008 2 572 448 508 -152 37 546 488 474 -160 488 314
1) From translation of Financial reporting from foreign subsidiaries.
2008 2007 Accumulated exchange rate difference at beginning of the year -3 063 -1 418
Exchange rated differences for the year 2 911 -1 645
Accumulated exchange rate differences at year end -152 -3 063
2) Includes parent company statutory reserve and premium reserve from share issues.
For changes in these items references are made to Changes in parent company equity below.
(SEK Thousands) Share capital
Statutory reserve
Share premium
reserve Profi t Total equity
PARENT COMPANY’S EQUITY
Adjustment costs for options 2 572 532 100 28 555 -112 147 451 080
Appropriation of previous year´s loss - -112 147 - 112 147 -
Loss for the year - - - -343 -343
Shareholders equity December 31, 2007 2 572 419 953 28 555 -343 450 737
Appropriation of previous year´s loss - -343 - 343 -
Profi t for the year 945 945
Shareholders equity December 31, 2008 2 572 419 610 28 555 945 451 682
The change in number of shares and their par value, see below.
All shares are fully paid and entitles the holder to an equal per centage of dividend.
Increase in
no. of shares No. of shares Par value/ share
Registered opening balance January 1, 2007 128 583 867 SEK 0.02
Registered closing balance December 31, 2007 128 583 867 SEK 0.02
Increase in
no. of shares No. of shares Par value/ share
Registered opening balance January 1, 2008 128 583 867 SEK 0.02
Registered closing balance December 31, 2008 128 583 867 SEK 0.02
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CASH FLOW ANALYSIS
Group Parent company
(SEK Thousands) Note 2008 2007 2008 2007
OPERATING ACTIVITIES
Profi t after fi nancial items 31 302 -6 647 945 -344
Change in provisions -907 -4 330 - -
Depreciation and amortization on assets 15, 20-25 15 170 15 912 235 224
Disposal of assets 20-25 6 313 4 703 - -
Cost for options 56 3 766 - -
Share of earings in associated companies - - - -
Profi t on shares in subsidiaries 16 - 252 - 3 700
Sale of business 41 2 584 - -
Interest income 17 -2 397 -4 782 -1 148 -3 844
Interest costs 18 8 371 1 513 2 021 136
Tax paid 19 -853 -791 -6 -
Cash fl ow from operating activities before
change in working capital 59 639 9 596 2 047 -128
Cash fl ow from change in working capital
Change in operating receivables 10 326 -31 910 -74 759 -40 938
Change in inventory -31 369 -4 024 - -
Change in operating liabilities 11 726 -3 081 6 712 -34 205
Total change in working capital -9 317 -39 015 -68 047 -75 143
Cash fl ow from operating activities 50 322 -29 419 -66 000 -75 271
Capital expenditure
Capitalized development expenditures 20 -20 134 -9 366 - -
Patents 21 -5 747 -5 163 -25 -86
Brands 22 -7 -58 - -23
Goodwill -3 822 - - -
Other intangible assets 23 -6 439 - - -
Equipment & tools 25 -4 108 -2 365 -105 -302
Shares in group companies 1) 26 - - - -3 700
Shares in associated companies 27 - -3 856 - -
Cash fl ow from net capital expenditures -40 257 -20 808 -130 -4 111
Total cash fl ow before fi nancing activities 10 065 -50 227 -66 130 -79 382
Financing activities
Interest income 17 2 397 4 782 1 148 3 844
Interest expenses 19 -8 371 -1 513 -2 021 -136
Change in long term liabilities -8 198 -6 - -
Change in long term receivables -27 841 - - -
Translation differences -9 -1 576 - -
Cash fl ow from fi nancing activities -42 022 1 687 -873 3 708
Cash fl ow for the year -31 957 -48 540 -67 003 -75 674
Liquid assets at beginning of the year 131 301 179 841 67 896 143 570
Liquid assets at end of the year 99 344 131 301 893 67 896
1) Unconditional shareholders contribution to Anoto AB.
NOTES
(SEK thousand unless otherwise indicated)The consolidated accounts of Anoto Group AB (Anoto) have been prepared in compliance with the Swedish Annual Accounts Act, International Financial Accounting Standards (IFRS), interpretations from International Financial Reporting Committee (IFRIC) as accepted by EU and the Swedish Financial Reporting Board recommendation RFR 1.1 ”complementary accounting stan- dards for group accounting. The parent company’s annual accounts have been prepared in compliance with the Swedish Annual Accounts Act (ÅRL) and the Swedish Financial Reporting Board recommendation RFR 2.1, Accounting for
Legal Entities. The consolidated and annual accounts, which are specifi ed in thousands of Swedish kronor, refer to1 January - 31 December for income statement items and 31 December for balance sheet items.
The annual report and consolidated accounts have been approved for distribution by the Board on 31 March 2009. The Group income statement and balance sheet will be subject to approval by the Annual General Meeting on 14 May 2009.
Note 1 | General accounting policies
THE GROUP
Other than the revaluation of certain fi nancial instruments, the consolidated accounts are based on historical cost. The accounting policies applied by the Group are described below.
Consolidated accounts
The consolidated accounts cover Anoto Group AB (publ), the parent company, and the companies in which direct or indirect holdings at year-end represented more than 50 per cent of the votes, i.e., the parent company had a controlling interest. The consolidated accounts have been prepared in accordance with the purchase method. The historical cost is the sum of the fair values of assets paid, accrued or overtaken liabilities, as well as for the equity instruments that Anoto has issued in exchange for the controlling interest in the acquired unit, along with all costs directly attributable to the acquisition.
The historical cost is allocated among the unit’s identifi able assets, contingent and other liabilities that meet the criteria for accounting in accordance with IFRS 3, Business Combinations, reported at fair value. If the historical cost exceeds net acquired assets and liabilities in accordance with the above, the difference is reported as goodwill.
Deferred tax is calculated as 28 per cent of the difference between the fair values of assets and liabilities reported and tax residual values insofar as the
difference is not part of untaxed reserves. Group equity includes the Group’s participation in shareholders’ equity earned by group companies after acquisition, as well as minority shareholdings in the equity of group companies.
All intra-Group transactions are eliminated in the consolidated accounts.
Intra Group transactions include internal sales, profi ts and balances, as well as shareholders’ contributions to group companies and impairment losses on participations in group companies.
A functional currency is assigned to each foreign subsidiary.
The foreign subsidiaries that have a different functional currency than Anoto’s functional currency (the Swedish krona) are recalculated at the exchange rate on the balance sheet date for all balance sheet items and at the average exchange rate for all income statement items.
The translation differences that arise stem from the difference between the average exchange rates in the income statement and the exchange rates on the balance sheet date, as well as the translation of net assets at a different exchange rate as of year-end than as of the beginning of the year. Translation differences are not reported in the income statement, but as a provision within shareholders’ equity.
Exchange rates
At recalculation of foreign subsidiaries uses these exchange rates.
Note 2 | Anoto’s accounting policies
Average exchange rate On balance sheet date
Country Currency 2008 2007 2008 2007
United States USD 6,5808 6,7607 7,7525 6,4675
Japan JPY (100) 6,4023 5,7437 8,6000 5,7200
Associated companies
Associated companies are those in which the Group controls 20-50 per cent of the votes or otherwise exerts signifi cant infl uence over operating and fi nancial management. Associated companies are reported based on equity accounting.
In accordance with equity accounting, investments in associated companies are reported in the balance sheet at historical cost, adjusted for changes in the Group’s participation in the associated company’s net assets. The Group’s share of the associated company’s profi t/loss is reported in the consolidated income statement. The Group’s share of the associated company’s profi t/loss after fi nancial income/expense is included in theprofi t/loss on participations in associated companies item, whereas the Group’s share of the associated company’s tax expense is included in the tax on profi t/lossfor the year item.
Revenue recognition
Revenue is received from product sales, licenses, royalties and development projects. Revenue from product sales is recognised when essentially all risks and
rights associated with ownership have been transferred to the purchaser, normally at the time of delivery.
Revenue from non fi xed-term licenses is directly reported as of the invoice date.
For instance, license revenue may involve a certain degree of exclusivity or contributions for, or access to, a platform.
Royalties are reported during the same month as the partner makes the actual sale.cost.
Revenue attributable to development projects, Non Refundable Engineering (NRE), is recognised in the same period as the service is rendered. The extent to which each development project has been completed is normally based on a quarterly analysis. The project’s estimates are updated with the costs until the current date in order to determine the per centage of the total estimated costs that have accrued. An anticipated loss on a project is reported immediately as a cost.
