ARCHIVE 2005

ALDATA SOLUTION OYJ FINANCIAL STATEMENT: JANUARY - DECEMBER 2004

Net sales decreased 12.4 % to EUR 66.0 million (EUR 75.3 million in 2003).
Operating profit, EBIT, decreased 143.7 % to EUR -1.5 million (EUR 3.4 million).
Earnings per share was EUR -0.070 (EUR 0.004)
Supply Chain Management Software net sales decreased 12.7 % to EUR 46.9 million (EUR 53.7 million).
In-Store Software net sales decreased 10.9 % to EUR 12.5 million (EUR 14.0 million).
Security Systems net sales decreased 12.8 % to EUR 6.7 million (EUR 7.7 million).
Aldata Industries Oy was divested for EUR 6.2 million
Net cash was EUR 6.3 million (EUR 5.4 million) at the end of the year.
The comparable order backlog (excl. Aldata Industries) decreased to EUR 18.0 million, compared to EUR 18.5 million at the end of Q3 2004.
Aldata employed 514 people at year-end (495).

General

The objective has been set to develop Aldata from a diversified technology company into a focused software vendor that develops integrated business applications for the retail, wholesale and logistics industries. By 2007 Aldata aims to be globally the leading provider of SCM applications for the daily goods sector and the leading provider of applications for retail, wholesale and logistics in Europe.

In 2004 the company took major steps towards reaching these goals:
In two major markets, the US and the UK, Aldata set up its own operations and by the end of 2004 these had succeeded in establishing a significant presence in their respective markets.
Aldata's senior management was brought together in the same location with the setting up of an International Management Centre in Paris, France, to better support customers, partners and Aldata's international subsidiaries.
Aldata made major investments in research and development, resulting in many new functionalities and modules for the G.O.L.D product family as well as new versions of the In-Store products.
The company strengthened its partnerships through many joint projects and customer deliveries. A new major alliance was set up with Unisys covering 14 countries in Latin America.
Aldata trimmed its business by divesting its non-core subsidiary Aldata Industries Oy.

With three major markets - the US, the UK and Asia - in a very early phase of development, this was a challenging year for Aldata. Substantial investments were required for setting up the new operations, in the localization of the G.O.L.D. product family for new geographic areas, and in the training and education of Aldata personnel and partners.

Despite facing a tough market for enterprise software and the need to allocate substantial internal resources to developing new geographical areas, Aldata succeeded in generating new business. During the year 2004 the Group won 38 new customers and installed its products in five new countries. In total Aldata has installations in 46 countries.

Financials 2004

In 2004 Aldata faced great difficulties in forecasting its financial performance. Misjudgments were made in the budgeting process for 2004, especially in estimating the net sales generated in the new geographical areas of the US, the UK and Asia. The company also underestimated the speed of the decline in net sales from the very large Casino France project, due to fast delivery and implementation. Improved forecasting processes have been set in place and the visibility of business development has substantially increased.

Aldata Group had net sales of EUR 66.0 million (EUR 75.3 million). Supply Chain Management (SCM) Software accounted for 71.0 % (71.3 %) of Group net sales, In-Store Software for 18.9 % (18.6 %) and Security Systems for 10.1 % (10.2 %). The ten largest customers represented 45.0 % (52.3 %) of the Group's net sales.

Software licenses and maintenance accounted for 24.7 % (22.7 %) of 2004 net sales, services for 59.0 % (61.5 %) and third party licenses and hardware for 16.3 % (15.8 %).

The Group's gross profit was EUR 49.9 million (EUR 55.7 million). The Group's operating profit before depreciation and goodwill amortization, EBITA, was EUR 0.1 million (EUR 5.1 million). The operating profit, EBIT, was EUR -1.5 million (EUR 3.4 million). In 2004 earnings per share were EUR -0.070 (EUR 0.004), return on investment -4.0 % (13.8 %) and return on equity -20.5 % (1.5 %).

The following non-recurring items occurred in 2004 and are included in the 2004 financial reporting: The total affects of these items is EUR 2.2 million positive on operating profit level and EUR 0.4 million negative in profit for the financial period.
Third quarter operating costs include a non-recurring item, a provision of EUR 1.7 million for a receivable from GrandVision S.A. In 2001, Aldata and GrandVision initiated a project that was discontinued in 2002 due to differing views on the delivery. The provision was made because of the expected length of the legal proceedings in France. The system supplied has been in use and it is Aldata's opinion that the company has complied with the terms of the contract and made the deliveries as agreed.
In the fourth quarter the sale of Aldata Industries Oy, at a price of EUR 6.2 million, generated a capital gain of EUR 3.9 million.
In the fourth quarter a deferred tax asset of EUR 2.6 million was reversed and booked as tax.
The main part of the asset was booked in 2002 to compensate the tax savings based on a possible sale of Aldata Industries Oy. This deferred tax asset was reversed simultaneously with the divestment of Aldata Industries Oy. This booking has no affect on Aldata's cash flow.

Financials fourth quarter 2004

In the last quarter of 2004 Aldata Group had net sales of EUR 18.0 million (EUR 22.0 million in Q4 2003). Both for the SCM and In-Store units the fourth quarter net sales was the highest quarterly net sales in 2004. The Group's gross profit was EUR 13.9 million (EUR 16.5 million) and the operating profit before goodwill amortization, EBITA, was EUR 3.9 million (EUR 1.7 million). Operating profit, EBIT, was EUR 3.5 million (EUR 1.3 million), the net profit EUR 0.3 million (EUR 0.0 million). In the fourth quarter the sale of Aldata Industries Oy generated a capital gain of EUR 3.9 million. The order backlog, which includes firm orders for the following 12 months, stood at EUR 18.0 million at the end of the year, compared to EUR 18.5 million at the end of the third quarter (excl. Aldata Industries).

The table below presents the key figures for Aldata's business units in Q4/2004.

Aldata Group SCM In-Store Security
Net sales 18.0 (22.0) 13.0 (15.7) 3.6 (4.2) 1.4 (2.2)
Gross Profit 13.9 (16.5) 10.1 (12.0) 3.0 (3.3) 0.8 (1.3)
-margin 77.0 (75.0)% 77.3 (76.3) % 82.7 (78.9) % 59.7(58.2) %
EBITA 3.9 (1.7) -0.1 (1.1) 0.2 (0.4) -0.0 (0.1)
-margin 21.8 (7.8)% -0.9 (7.2)% 6.2 (10.6) % - 2.8 (6.5) %
EBIT 3.5 (1.3) -0.3 (1.0) 0.0 (0.3) -0.1 (0.1)
-margin 19.6 (5.9)% -2.2 (6.1)% 0.7 (6.2) % - 5.3 (4.1)%

Financing

The balance sheet total at the end of 2004 stood at EUR 38.9 million (EUR 52.6 million). Short-term receivables totaled EUR 22.2 million compared to EUR 28.2 million at the end of 2003.

Aldata Group's cash, cash equivalents and marketable securities totaled EUR 6.5 million (EUR 9.0 million) at the end of 2004. Interest bearing net debt was EUR -6.3 million (EUR - 5.4 million). The Group's solvency ratio stood at 53.0 % (48.2 %), gearing at -30.8 % (-21.2%) and shareholder's equity per share was EUR 0.301 (0.372).

Gross capital expenditure in 2004, on hardware and software purchases and the purchase of subsidiary company shares, amounted to EUR -5.4 million (EUR 7.3 million).

Supply Chain Management Software

Net sales of Supply Chain Management Software in 2004 totaled EUR 46.9 million (EUR 53.7 million). The gross profit was EUR 35.7 million (EUR 40.3 million) and the operating profit, EBIT, was EUR -4.8 million (EUR 3.6 million). The operating profit for the SCM unit includes non-recurring costs of EUR 1.7 million for the provision for the GrandVision receivables.

During 2004 the strong emphasis on the internationalization of the SCM business continued. Aldata's G.O.L.D. software has been supplied to 245 customers in 44 countries worldwide. In the US, where G.O.L.D. made its market-entry in 2003, the market for large software projects remained challenging in 2004, but toward the end of the year demand for merchandise management software showed clear improvement. In the UK, where in 2004 Aldata was building up its local organization, Aldata made a significant market entry by winning new business. In Asia, the large project with Carrefour is developing well and according to schedule. Elsewhere, Aldata increased its market share and continued to win new customer accounts. Major projects are progressing according to plan and the outlook going into 2005 is good.

The international projects with Carrefour that started during 2004 in Asia (Thailand), Europe (Italy) and Latin America (Brazil) are progressing according to plan. Major new projects in France in 2004 are with Grand Marnier, Elidis and Guillot Jouani. In the UK Lloydspharmacy has successfully rolled out Aldata G.O.L.D. across its 1,400 stores. New customers for the UK unit include Thorntons, Dorma Group, Shoprite and Unicare in Ireland. During 2004 Aldata established a firm position in the UK market and expects to further strengthen its position in its targeted segment. In the US the two projects started in 2003 with Smart and Final and Trader Joe's are progressing according to plan and in December Aldata signed a contract with Mike Campbell and Associates. Going into 2005, Aldata has a significantly improved market position in the US and expects strong growth. Aldata will continue to invest in sales and marketing activities both directly and together with its global partners BearingPoint and EDS. In Central Europe, during 2004 Aldata has strengthened its position with new projects with Netto and Frankenbrunnen in Germany, ERA in Slovenia, Nelt in Serbia, Ruch and Young Fashion in Poland, Dynadro in the Netherlands and UTC in the Czech Republic. In Finland, Aldata has achieved a success with Alko. In the second half of 2004 Aldata won projects in the U.A.E. and Tunisia, reinforcing its successes in the first half of 2004 in Saudi Arabia and Bahrain.

A major effort in 2004 has been to further develop the partner network within the SCM unit. The latest success came in October, when Aldata established a major partnership agreement with Unisys, a global information technology services and solutions company. Unisys will provide distribution and implementation services for Aldata in South America and Mexico.

In 2004 Aldata invested heavily in research and development within the SCM unit. The G.O.L.D. product family was further developed and the current version five of the software will remain the core platform for the coming years. Major launches were the new G.O.L.D. Track modules, a federation module for providing integrated traceability across business networks, and G.O.L.D. Mobile, a module providing mobility in the retail store and enabling store operations such as stocktaking, receiving and price control using PDAs or radio frequency terminals. Mobility is a major market evolution and Aldata has already commenced several pilot projects with retail chains. Market demand for mobility is expected to increase. Government legislation and the deployment of RFID, or electronic bar-coding, will see enhanced traceability requirements in the market-place and therefore Aldata also expects an upturn in the traceability market.

In-Store Software

Net sales of In-Store Software in 2004 totaled EUR 12.5 million (EUR 14.0 million). The gross profit was EUR 10.5 million (EUR 11.2 million) and the operating profit, EBIT, was EUR -0.2 million (EUR -0.5 million).

For the In-Store unit, 2004 was a year of returning to profitability in Sweden but of underperformance in Finland. Steps have been initiated to improve the unit's performance.

Major new projects in 2004 include those with Swedish Railways, Bokia and NetonNet in Sweden, Spaceworld in Norway, McDonald's and SOL in Finland. The most significant new contract was signed in October with Alko Oy, which will replace its current in-store software with Aldata's G.O.L.D. Shop and G.O.L.D. POS products.

As a result of its investments in research and development, during 2004 Aldata made several major product launches within the In-Store unit. These include Aldata G.O.L.D. POS, a completely new in-store solution that integrates seamlessly with Aldata's G.O.L.D. Supply Chain Software, version 4.5 of Megadisc, Aldata Payment Platform (a software-based system for processing credit and debit card payments) and a Linux-based version of Aldata Profix. All these products are in commercial roll-out at customers.

Security Systems

Net sales of Security Systems in January - December 2004 totaled EUR 6.7 million (EUR 7.7 million). The gross profit was EUR 3.8 million (EUR 4.3 million) and the operating profit was EUR -0.4 million (EUR 0.4 million).
In December 2004 the entire share capital of Aldata Industries Oy was sold to the Swedish security company Bewator Group AB. Flexim, an access control, security technology and time and attendance system, was the main product of Aldata Industries Oy.

In 2004, the net sales of the divested business amounted to EUR 6.3 million of total business unit net sales of EUR 6.7 million. The Smart Card unit accounted for the remaining net sales of EUR 0.4 million.

To strengthen its product and technology leadership, in February 2004 Aldata established a Smart Card and RFID competence centre. In August, the unit was incorporated into Aldata Smart Card Oy. As the competence centre for smart card and RFID technologies within the Aldata Group, this unit targets external clients as well as supporting Aldata's other units in these new technologies.

During 2004 Aldata Smart Card established itself as a key player in its field and in September obtained a major order from the Finnish Vehicle Administration. Aldata Smart Card will continue to develop and sell smart card and RFID solutions within the Aldata Group. Aldata expects strong growth in these new technologies and sees great potential for the unit.

As from January 2005, Aldata Smart Card has been included in the Supply Chain Management Software Business Unit.

Personnel

Aldata Group had 514 (495) employees at the end of the review period. This represents a 4% increase compared to the previous year. The growth was reduced by the sale of Flexim business in December. The growth was strongest in the Supply Chain Management Business Unit which had 389 (335) employees at the end of the year. The number of employees grew especially in the UK and the US, where the company actively built its organization after starting operations in these countries the previous year. The Group had on average 525 (470) employees between January and December 2004.

Dec. 31, 2004 Dec. 31, 2003
By business areas Persons % Persons %
SCM Software 389 76 335 68
In-Store Software 104 20 111 22
Security Systems 5 1 34 7
Corporate Administration 16 3 15 3
514 100 495 100

At the end of the review period, approximately 17% of the personnel were employed by Aldata companies in Finland, 51% in France, 13% in Germany, 10% in Sweden, 5% in Slovenia, 2.2% in the UK and 1.8% in the US. At the end of the review period 189 (182) employees were in R&D activities which represent 37% of the Group's entire personnel.

Share performance, foreign ownership and changes in ownership during 2004

The highest price of the Aldata Solution Oyj share in 2004 was EUR 2.24 and the lowest was EUR 1.00. The average share price was EUR 1.49 and the closing price was EUR 1.11 The absolute trading volume of the Aldata share on the Helsinki Stock Exchange during the period totaled EUR 77.1 million and 51.7 million shares changed hands.
At the end of 2004 33.1 % of Aldata Solution Oyj shares were in foreign ownership. The company had 8,059 shareholders and the free float totaled 99.6 % of the share capital at the end of the year.

No changes in share capital and number of shares in 2004

The number of shares of Aldata Solution Oyj, 67,433,942 and the share capital 674,339.42 was unchanged during the review period.

Board authorizations

The Annual General Meeting on April 15, 2004 authorized the Board to raise the share capital by issuing new shares, convertible bonds, and bonds with warrants or stock options in one or more installments totaling at most EUR 134,867.80. At most 13,486,780 new shares of nominal value EUR 0.01 per share may be offered for subscription at a price and on other conditions to be determined by the Board.
The Board is also authorized to decide who shall be entitled to subscribe for shares and the authorization includes the right to disapply the pre-emptive subscription rights of shareholders provided that the company has important financial grounds for doing so, such as to strengthen the company's financial structure, to finance acquisitions and other corporate arrangements, or to carry out co-operative arrangements. New shares may also be issued on payment of consideration in kind. The authorization remains in force until April 15, 2005.
By December 31, 2004 the Board had not issued any shares under the authorization given at the Annual General Meeting on April 15, 2004.

Transition to IAS/IFRS standards

Aldata's IAS/IFRS project has proceeded according to plan during the financial year 2004. IAS/IFRS standards have been analyzed focusing on the biggest impacts for Aldata Group. The employees have been trained and an internal manual on changes has been made to ease the transition period. The accounting processing has been developed to meet the challenge of IAS/IFRS standards.
Aldata will publish its IAS/IFRS financial statement from the financial year 2005.
For Aldata the key differences arising from the adoption of IAS/IFRS are:
- Business combination: amortization will disappear and goodwill will be impairment tested.
- Capitalized expenses: some research and development cost will be capitalized and activated
- Share based payments: option programs will be expensed
In Aldata's IAS/IFRS segment reporting the primary segments will be Supply Chain management and In-Store Business Units and the secondary segments will contain geographical regions.

Events after end of year

On January 10, 2005, Aldata announced two new customers in the pharmacy sector. Unicarepharmacy, Ireland's largest pharmacy group, and Dynadro, one of the leading Dutch chains of drugstores with cosmetics and OTC products, have decided to use Aldata G.O.L.D. for managing their central supply chain operations.
On January 18, 2005, Aldata Smart Card signed a contract with Finlandia Hotels to supply a loyalty system based on radio frequency identification (RFID) smart cards.

Board's dividend proposal

The Board of Directors proposes to the Annual General Meeting on 14 April 2005 that no dividend is distributed from the financial year 2004. The assumption is that in the rapidly developing and expanding markets shareholders' investments are likely to give best returns if the company invests its profits primarily in developing its business.
Outlook
Aldata's strategy is built on a clear long-term vision: By 2007 Aldata aims to be globally the leading provider of SCM applications for the daily goods sector and the leading provider of applications for retail, wholesale and logistics in Europe. The financial targets are to generate constant positive cash-flow and to have in 2007 over EUR 100 million in net sales.

In 2005, Aldata's main focus is on strong profitable growth in the SCM unit and on a return to profitability in the In-Store unit. The order backlog, a strong sales pipeline and improvements in operational efficiency give confidence for a clearly stronger performance in 2005 compared to 2004. Aldata expects comparable growth (excluding the 2004 net sales of the divested unit) of over 10% in net sales, a positive result and a positive cash-flow in 2005.

The SCM unit aims to increase its presence and market share in 2005. Growth drivers will be the geographical areas where operations have been built in 2004: the US, the UK and Asia. In all of these Aldata is entering into 2005 with long-term orders from key customers, which improves visibility and allows long-term planning of resources. Aldata's strong base of references with successful global projects and its close co-operation with partners support the unit in reaching these targets.

The In-Store unit is focusing on increasing its market share in the Nordic countries, Russia and the Baltic countries. This will be based on Aldata's strong local presence and long experience in the region, its highly competitive product offering and the possibility of combining In-store Software with Aldata's leading Supply Chain Software G.O.L.D. to offer a seamlessly integrated end-to-end solution. Special attention will be paid to bringing In-Store operations back to profitability.

The market for enterprise software solutions is highly competitive and recent consolidation among vendors will change the competitive landscape. Aldata is convinced that by focusing on providing integrated business applications for customers in retail, wholesale and logistics, it will be able to challenge its large competitors and further strengthen its market position. Aldata is aware that both the overall economic situation and the level of IT spending by retail chains and logistics companies will have a significant impact on the performance of the company.

Helsinki, 10 February 2005

Aldata Solution Oyj
Board of Directors

The audited financial report will be published in Finnish and English in Group's web site www.aldata-solution.com on week 10. The printed English version of Annual Report will be published on week 14.

More information:
Aldata Solution Oyj, Matti Hietala, President and CEO, tel. + 358 9 5422 5000, 045 670 0554,
Aldata Solution Oyj, Thomas Hoyer, CFO, tel. +358 9 5422 5002, 045 6700 491.

Aldata will arrange a press conference for media and financial analysts in Helsinki on February 10, 2005 at 13.00 in Hotel Simonkenttä (Simonkatu 9, 00100 Helsinki) in Espa-room, ground floor.

The presentation material will be published on the Group's web site www.aldata-solution.com

Aldata Solution Oyj

Matti Hietala
President and CEO

Aldata in brief

Aldata Solution is a Finland based Corporation with global operations. The company is one of the leading providers of software solutions for the retail industry. The product portfolio includes Supply Chain Management Software, In-Store Software and Smart Card Solutions. Aldata supplies its software through its own subsidiaries in Finland, Sweden, France, Germany, Slovenia, the UK and the USA, as well as through its global partner network.

Aldata has more than 200 installations in over 40 countries. Aldata's net sales in 2003 amounted to 75.3 MEUR and the personnel amounted to 533 in the end of Q3/2004. Aldata's shares are quoted on the Helsinki Exchanges with the identifier ALD1V. More information at www.aldata-solution.com.

Distribution :
OMX Helsinki Stock Exchange
Media