Helsinki, Finland -
April 19, 2005
SSH's interim report for January 1-March 31, 2005
- Net sales reported for January-March totaled EUR 1.6 million, down
-3.8 percent year on year (EUR 1.7 million in Q1/2004).
- The SSH Tectia business grew in Asia and Europe by a strong 66
percent over the previous year.
- In January, the company launched the industrys first Secure Shell
product for the IBM mainframe environment.
- The company introduced in February SSH G3, the 3G Secure Shell
software architecture, the companys most advanced new release which
provides SSH Tectia products with a number of major new features.
- Operating loss came to EUR -1.9 million (a loss of EUR 2.1 million).
- During the report period, the company concluded a number of new
customer agreements, 2 of which were worth over EUR 100,000.
- Since early 2005, SSH has applied IFRS 2 (Share-based Payment) to
all stock options granted since November 7, 2002 and to which the
right has not accrued prior to January 1, 2005. Comparatives for 2004
were adjusted to be in compliance with IFRS 2.
KEY FIGURES
1-3/ 1-3/ 1-12/
2005 2004 2004
Net sales, EUR million 1.6 1.7 8.2
Net sales, change % -3.8 -53.4 -40.6
Operating profit/loss, -1.9 -2.1 -6.4
EUR million
% of net sales -116.2 -127.4 -77.8
Operating profit/loss, 12.3 8.6 -223.7
change %
Profit/loss before -1.9 -2.0 -5.9
extraordinary items and
taxes, EUR million
% of net sales -115.8 -123.7 -71.2
Number of employees 89 106 105
at period-end
Earnings per share, EUR -0.07 -0.07 -0.21
Shareholders 1.20 1.42 1.26
equity/share, EUR
NET SALES
Consolidated net sales for the period totaled EUR 1.6 million (EUR 1.7
million), remaining almost at the previous years level. The Q1/2004
net sales are not fully comparable with those recorded a year later
because they include sales generated by SSH Certifier sold as a stand-
alone product. In November 2004, SSH licensed the further development
of its SSH Certifier product to Instasec Oy on an OEM basis, including
the transfer of existing SSH Certifier customer accounts.
During the first quarter, SSH continued the systematic implementation
of its strategy based on the SSH Tectia solution, primarily targeting
large enterprises, financial institutions and government agencies,
almost all of its Q1 sales stemming from these customer segments.
Since the majority of SSHs invoicing is based on the US dollar, the
dollars value and changes in it have a fundamental effect on
consolidated net sales. The SSH Tectia business in the USA was flat in
US Dollars in the Period, but the average value of the US dollar
decreased during the first quarter in 2005 about 5 % compared to the
same period in 2004.
RESULTS AND EXPENSES
Operating loss for the period came to EUR -1.9 million (a loss of EUR
2.1 million) and net loss totaled EUR -1.9 million (a loss of EUR 2.1
million). Exceptional non-recurring expenses were incurred due to the
relocation of the companys headquarters from downtown Helsinki to
Pitäjänmäki. The lease for these new premises will considerably reduce
SSH Finlands rental costs from May 1, 2005 forward.
SSH will also incur costs due to a dispute over royalty payments
between F-Secure Corporation and Nokia Corporation. Accordingly, F-
Secure Corporation is claiming excess royalties paid to SSH for
2001-2004. In December 2004, SSH entered EUR 136,000 in expenses for
any such royalty refunds. A pre-agreement was made between F-Secure
Corporation and SSH and due to that SSH recorded an additional
provision of about EUR 70,000 against such refunds in March 2005.
SSHs US subsidiary, SSH Communications Security, Inc., received a
claim for recovery, valued at USD 50,000, from the bankruptcy estate
of its US customer, Global Crossing Ltd, regarding a license fee paid
in 2002. Negotiations were completed with the bankruptcy estate,
resulting in final compensation of EUR USD 40,000, with USD 10,000
expensed in the Report Period and USD 30,000 which SSH had already
expensed in December 2004.
SSHs fixed costs reported for the period continued to decline year on
year, as evidenced by the about EUR 0.5 million reduction in fixed
costs recorded for January-March, almost all of which were due to
lower payroll costs.
Research and development expenses for the period totaled EUR 1.0
million (EUR 1.0 million), while sales and marketing expenses came to
EUR 1.9 million (EUR 2.0 million) and administrative expenses EUR 0.5
million (EUR 0.7 million).
Since early 2005, SSH has applied IFRS 2 (Share-based Payment) to all
of its stock options granted since November 7, 2002 and to which the
right has not accrued before January 1, 2005. No expenses for prior
stock options are stated on the income statement. Based on the Black-
Scholes option-pricing model, stock options are stated at fair value
on their granting date. The fair value for stock options to which the
right is expected to accrue will be expensed on the income statement
for the period during which such a right accrues. Comparatives for
2004 are in compliance with IFRS 2 as if SSH had applied the standard
in earlier accounting periods.
BALANCE SHEET AND FINANCIAL POSITION
SSHs financial position remained at a healthy level during the report
period. Consolidated balance sheet total on March 31, 2005 stood at
EUR 36.4 million (EUR 41.6 million), of which liquid assets accounted
for EUR 32.9 million (EUR 34.9 million), or 90.6 percent of the
balance sheet total. Except for the subordinated loan of EUR 0.2
million granted by the National Technology Agency (Tekes), the company
has no other long-term liabilities.
In March 31, 2005, gearing, or the ratio of net liabilities to
shareholders equity, was -96.9 (-87.9) and equity ratio stood at 94.5
percent (96.0 percent).
The reported gross capital expenditure for the period totaled EUR 0.01
million (EUR 0.1 million), consisting mainly of equipment purchases.
Reported financial income came mainly from interest income and
exchange rate differences. Financial income and expenses totaled EUR
0.0 million, compared with EUR 0.1 million a year ago.
Since SSH, under IAS 39, classifies financial assets and other
marketable securities as available-for-sale assets, it recognizes any
changes in their value under shareholders equity. Only after the
disposal of an asset does the company recognize interest income in the
income statement. During the report period, SSH recognized an increase
of EUR 0.2 million in the value of its available-for-sale assets.
Instead of recognizing any financial income from financial investments
for the first quarter, the company held all such assets in its
portfolio.
Business operations cash flow showed a negative cash flow of EUR 1.0
million. Investments cash flow and cash flow from financing, were
during the first quarter of 2004 very small, and those did not have
any impact in to the companys total cash flow. The company showed a
negative total cash flow of EUR 1.0 million during the period.
MARKET DEVELOPMENTS
The number of invitations to tender and projects pending among SSHs
customers - large enterprises, financial institutions and government
agencies - was on the rise, with target customers, especially in North
America and Japan, showing a growing interest in adopting SSHs
commercial data security products. Benefits provided by these
products, such as significant ongoing product development advances and
strong customer support, have come to play a major role when companies
compare alternatives. Nevertheless, the conclusion of actual contracts
was a slow process.
Legislative reforms on data confidentiality and secure data
communication are currently taking place both in the US and Europe.
Customers are facing an ever-greater challenge in terms of information
security management due to deperimeterization, or the gradual
disappearance of boundaries between companies internal and external
information networks, with recent surveys suggesting that large
enterprises are finding it more difficult to protect their networks
and businesses from sophisticated worms and back doors. The SSH Tectia
solutions features and management capabilities align well with this
trend, and SSH is confident that reforms will have favorable effects
in terms of customers planning secure remote management of their
information systems and solutions for protecting their business
applications.
The number of companies actively testing new data security solutions
increased in North America, SSHs main market area, with demand mainly
focusing on solutions for secure remote management of network servers
and various kinds of data communication equipment. Currently, SSH
Tectia Manager is included in practically all major SSH Tectia
installations. In addition, rules under Sarbanes-Oxley 404 Section in
the US have obviously begun to contribute to SSHs target customers
data security plans for 2005 and the related investment plans.
In Europe, the SSH Tectia solution attracted growing interest,
especially among financial institutions and government organizations.
Customers interest in securing their business applications grew
during the report period. For SSH, the most interesting markets in
Europe include Germany, the UK and the Nordic countries.
In Japan, a new law on distributing and storing personal data is
expected to increase both public and private-sector investments in
data security. During the first quarter, there was a clear indication
in Asia of large enterprises growing interest in adopting commercial
solutions for remote management of network servers and various data
communication equipment.
The report period saw no major changes in competition in the market
for secure remote management solutions.
SALES PERFORMANCE
SSHS NET SALES
EUR million 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ 1-12/
2005 2004 2004 2004 2004 2004
BY SEGMENT*
AMER 0.9 1.4 1.4 2.0 1.0 5.7
APAC 0.2 0.2 0.1 0.1 0.2 0.6
EROW 0.5 0.3 0.6 0.5 0.5 2.0
SSH Group total 1.6 1.9 2.1 2.6 1.7 8.2
SSH TECTIA BUSINESS
Net sales / license 1.0 1.4 1.5 2.1 1.2 6.2
sales
Net sales / 0.6 0.5 0.6 0.4 0.5 2.0
maintenance
SSH Tectia total * 1.6 1.9 2.1 2.6 1.7 8.2
* The 2004 net sales are not fully comparable because they include
sales generated by SSH Certifier sold as a stand-alone product.
In line with its strategy, SSH continued to sell its SSH Tectia
solution to selected customer segments, this solution enabling
customer companies to protect their information systems remote
management, data transfer and business application data communications
against both external and internal risks, cost-efficiently.
Q1/2005 net sales generated by products based on the SSH Tectia
solution remained almost the same as in Q1/2004. In 2004, Q1 showed
the poorest sales performance.
SSHs recently launched Tectia solutions have met with an
extraordinary favorable reception in the market, and product launches
have paved the way for growing interest in SSHs products.
The sales process for a system-level product for major customers is a
long one, and sales talks may take up to several months at their
shortest.
The Americas, Asia Pacific, Europe and Rest of the World accounted for
55.9 percent (59.1 percent), 13.2 percent (9.2 percent) and 30.9
percent (31.7 percent) of reported net sales, respectively.
Asia Pacific and Europe and Rest of the World saw a year-on-year
increase in their share of net sales. SSH completed the reinforcement
of these areas sales organization at the end of 2004, and training of
sales personnel in the SSH Tectia solution is progressing as planned.
During the report period, SSH concluded a number of new customer
agreement, 2 of which were each worth more than EUR 100,000. SSHs ten
largest customers accounted for 49.4 percent of reported net sales,
with the largest single customer accounting for around 15.1 percent.
PRODUCTS AND MARKETING
During the report period, SSH focused its sales and marketing efforts
on large enterprises, financial institutions and government agencies
in the US, Europe and Asia, in line with its long-term strategy.
The company strengthened its sales organization by reinforcing its
partner network complementing the SSH Tectia solution and continued to
implement targeted marketing campaigns in the market for secure remote
management solutions.
In January, SSH introduced the industrys first SSH Tectia Server-
based product for the IBM mainframe environment. This new product
included support for the IBM z/OS operating system with SSHs Secure
Shell data security protocol, enabling secure remote management, data
transfer and data communication protection for business applications.
Market reports suggest that over 90 percent of Fortune 1,000 companies
use mainframe environments for their business applications and more
than 70 percent store their business data on mainframe computers.
The company also launched in February SSH G3, a third-generation
Secure Shell software architecture based on a Secure Shell data
security protocol designed by SSH. This architecture incorporates
myriad new features, such as considerably higher-performance encrypted
data transfer, higher scalability and the worlds first high-speed
CryptiCore encryption algorithm. SSH G3 is fully compatible with the
SSH2 standard. SSH Tectias users will reap the benefits provided by
the SSH G3 architecture in terms of productivity gains and higher
information system performance, applying in particular to large data
mass transfers, mainframe servers and critical applications. In
February, SSH also announced a new version of its SSH Tectia solution
that supports Linux running on the board range of IBM eServer
platforms. In cooperation with IBM, SSH developed its SSH Tectia
support for eServer platforms by participating in a pilot program for
the IBM eServer Application Advantage for Linux offering. Both
February launches will offer a significant supplement to IBMs data-
security solution offerings.
In March, SSH announced a partnership with BMC Software, Inc.,
enabling BMC Software CONTROL-M customers to achieve secure file
transfers, based on SSH Tectias SFTP (Secure File Transfer Protocol)
technology, in their integrated scheduling environments. This combined
solution allows enterprises to manage their file transfers using BMC
Softwares industry-leading job scheduling solution while ensuring the
confidentiality, integrity and authentication of mission-critical
data.
In March, SSH announced new products for upgrading unsecured FTP
connections to secure file transfer connections with high-performance
encryption throughout heterogeneous enterprise networks.
RESEARCH AND DEVELOPMENT
January-March R&D expenses totaled EUR 1.0 million (EUR 1.0 million),
accounting for 61.6 percent of net sales (63.1 percent).
In accordance with IFRS, SSH capitalizes only product development
expenses caused by the commercialization of completely new products at
the end of R&D processes. No development expenses were capitalized
during the report period.
At the end of March, the company held nine patents while 18 were
pending.
HUMAN RESOURCES AND ORGANIZATION
At the end of March, the Group had 89 employees on its payroll, down
by 17 over the previous year (-16.0 percent).
At the end of the report period, 40.5 percent of the employees worked
in R&D, 43.8 percent in sales and marketing, and 15.7 percent in
corporate administration.
BOARD AND AUDITORS
The Annual General Meeting (AGM) on April 27, 2004 re-elected Tapio
Kallioja, Tomi Laamanen, Timo Ritakallio and Tatu Ylönen to SSH
Communications Security Corps Board of Directors, with Tomi Laamanen
re-elected as Chairman.
The AGM re-elected PricewaterhouseCoopers Oy, an authorized public
accountants firm, as the companys auditor, with Henrik Sormunen, an
authorized public accountant, acting as the principal auditor.
In a stock exchange release on March 23, 2005, Tatu Ylönen and Tero
Kivinen, whose combined holding exceeds 50 percent of company shares
and votes, announced that they would put forward a proposal to SSH
Communications Security Corps Annual General Meeting of April 26,
2005 for the election of Board members.
Accordingly, the number of Board members would be fixed at four and
Tapio Kallioja, Tomi Laamanen, Timo Ritakallio and Tatu Ylönen would
be re-elected to the Board.
All of the proposed Board members have agreed to their re-election.
SHARES, SHAREHOLDING AND CHANGES IN THE GROUP STRUCTURE
The reported trading volume of SSH Communications Security Corp shares
for the period totaled 3,678,170 (valued at EUR 5,056,381.04) i.e.
13.4 percent of the shares changed hands. The highest quotation was
EUR 1.59 and the lowest EUR 1.13. The trade-weighted average share
price for the period amounted to EUR 1.37, and the share closed at EUR
1.55 (March 31, 2005).
There were no substantial changes in SSH Communications Security
Corps shareholding during the report period. With Tatu Ylönen and
Tero Kivinen being the largest shareholders, the former holds,
directly and through his company, Tatu Ylönen Oy, 43.7 percent of
company shares and the latter 8.4 percent. Ylönen and Kivinen owned
Applied Computing Research (ACR) Oy that previously held 60.4 percent
of SSH shares. Based on Applied Computing Research (ACR) Oys merger
with SSH on October 31, 2004, Tatu Ylönen and Tero Kivinen, ACRs
shareholders, received 14,344,639 and 2,597,848 new SSH shares,
respectively, as a consideration of the merger, or a total of
16,942,487 shares. The number of these shares equaled SSH shares then
held by ACR.
SHARE CAPITAL AND BOARD AUTHORIZATIONS
The companys registered share capital on March 31, 2005 came to EUR
843,208.74, consisting of 28,106,958 shares. During the report period,
SSH increased its share capital once, based on the subscription of the
new shares under SSHs stock-option scheme. A total of 1,750 and 3,666
new SSH shares were subscribed under the 1999 and 2003 stock-option
schemes, respectively, with the result that the companys share
capital increased by EUR 162.48.
SSHs Annual General Meeting of April 27, 2004 authorized the Board to
decide by April 27, 2004 to increase share capital through a rights
issue and/or grant stock options or issue bonds with warrants, or
convertible bonds, in such a way that the resultant share capital may
increase by a maximum of EUR 165,000. The Board has not exercised this
authorization.
CORPORATE GOVERNANCE
SSH applies corporate governance recommendations for listed companies
issued by HEX Ltd, the Central Chamber of Commerce of Finland and the
Confederation of Finnish Industry and Employers in December 2003. More
information on corporate governance is available on the companys
website at www.ssh.com.
EVENTS AFTER THE REPORT PERIOD
SSH and F-Secure Corporation have come to an agreement on royalty
payments for 2001-2004. The reason behind this agreement was the
dispute over royalty payments between F-Secure Corporation and Nokia
Corporation from 2001-2004.
PROSPECTS
The underlying factors behind SSHs forecast for sales growth in 2005
are based on several legislative reforms underway in both the US and
Europe and the reinforcement in 2004 of the companys sales
organizations, especially in the UK and Germany. SSHs partner network
expansion in 2004 is also expected to enhance recognition of the SSH
Tectia solution. The ongoing development of the SSH Tectia solution
and new product applications will pave the way for wider target
markets from the perspective of both existing and new customers.
SSHs management is confident that all these factors will have a
favorable effect on demand for the SSH Tectia solution.
SSHs updated net sales forecast for 2005 is EUR 8-10 million. The
companys management expects that the SSH Tectia solution, including
the SSH Tectia Manager and SSH Tectia Connector products, which met
with a favorable reception in the market, will increase the average
size of contracts while contributing to the achievement of the
companys net sales target. The management estimates that SSH will
still have the opportunity to make a positive operating profit in the
second half of the year 2005.
INCOME STATEMENT
EUR million 1-3/ 1-3/ 1-12/
2005 2004 2004
Net sales 1.6 1.7 8.2
Purchasing and production 0.0 0.0 -0.1
costs
Gross profit 1.6 1.6 8.1
Other operating income 0.0 0.0 0.3
Expenses
Product development -1.0 -1.0 -3.8
Sales and -1.9 -2.0 -8.5
marketing
Administration -0.5 -0.7 -2.4
Operating profit/loss -1.9 -2.1 -6.4
Financial income and expenses 0.0 0.1 0.5
Profit/loss before taxes -1.9 -2.0 -5.8
a Taxes 0.0 0.0 0.0
Net profit/loss for the -1.9 -2.0 -5.8
period
a) Taxes are proportionate to the net profit for the period, and no
deferred tax assets are recorded for the accrued loss.
1-3/ 1-3/ 1-12/
2005 2004 2004
Earnings per share, EUR -0.07 -0.07 -0.21
Earnings per share (diluted), -0.06 -0.07 -0.21
EUR
BALANCE SHEET
EUR million Mar. Mar. Dec.
31, 31, 31,
2005 2004 2004
ASSETS
Fixed and other non-current
assets
Tangible assets 0.4 0.5 0.4
Intangible assets 0.8 1.2 0.9
Deferred tax assets 0.2 0.2 0.2
Total fixed and non-current 1.4 1.9 1.6
assets
Inventories and current
assets
Short-term receivables 2.0 4.7 2.6
Short-term investments 31.1 33.4 32.3
Cash and cash equivalents 1.8 1.5 1.5
Total inventories and current 35.0 39.7 36.4
assets
Total assets 36.4 41.6 38.0
LIABILITIES AND SHAREHOLDERS
EQUITY
Shareholders equity 33.7 39.4 35.4
Long-term liabilities
Provisions 0.3 0.0 0.2
Deferred tax liability 0.1 0.1 0.0
Long-term financial 0.3 0.3 0.3
liabilities
Total long-term liabilities 0.7 0.4 0.6
Short-term liabilities 2.0 1.8 2.0
Total liabilities and 36.4 41.6 38.0
shareholders equity
STATEMENT ON CHANGES IN
SHAREHOLDERS EQUITY
EUR million Share Issue Fair Translat Retained Total
capital premium value ion earnings
fund* and differen
other ce
reserves
Shareholders 0.8 39.3 0.0 -0.7 1.7 41.1
equity Jan. 1,
2003
Change 0.0 0.1 0.2 0.1 -2.1
Shareholders 0.8 39.4 0.2 -0.6 -0.4 39.4
equity
Sept.30, 2003
Change 0.0 -15.0 15.0 -0.2 -3.8
Shareholders 0.8 24.4 15.1 -0.8 -4.2 35.4
equity Dec.
31, 2003
Change 0.0 0.0 0.2 0.0
Net loss -1.9
Shareholders 0.8 24.4 15.3 -0.8 -6.1 33.7
equity Sept.
30, 2004
* Transfer to the retained loss account has resulted in a reduction in
the issue premium fund.
CASH FLOW STATEMENT
EUR million 1-3/ 1-3/ 1-12/
2005 2004 2004
Cash flow from business operations -1.0 -1.9 -2.6
Cash flow from investments 0.0 0.0 -0.4
Cash flow from financing 0.0 0.1 0.1
Increase(+), decrease (-) in -1.0 -1.8 -2.8
liquid assets
Liquid assets at period-start 33.0 35.9 35.9
Adjustment for translation 0.0 0.0 0.0
difference
b Liquid assets at period-end 32.0 34.1 33.0
b) Liquid assets consist of cash and cash equivalents, as well as from
other marketable securities the part that is invested into the
interest funds.
NET SALES BY SEGMENT
EUR million 1-3/ 1-3/ 1-12/
2005 2004 2004
AMER 0.9 1.0 5.7
APAC 0.2 0.2 0.6
EROW 0.5 0.5 2.0
SSH Group total 1.6 1.7 8.2
OPERATING PROFIT/LOSS
BY SEGMENT
EUR million 1-3/ 1-3/ 1-12/
2005 2004 2004
AMER 0.2 -0.3 2.1
APAC 0.1 0.1 0.2
EROW -0.3 0.1 -1.6
Common Group expenses* -1.9 -2.0 -7.1
SSH Group total -1.9 -2.1 -6.4
* Common Group expenses include Group administration expenses (e.g.
Management and Finance) and the headquarters Product Management and
R&D expenses. Capital gains on the OEM business divestment have been
divided among these segments.
KEY FIGURES AND RATIOS
1-3/ 1-3/ 1-12/
2005 2004 2004
Net sales, MEUR 1.6 1.7 8.2
Operating profit/loss, MEUR -1.9 -2.1 -6.4
Operating profit/loss, % of net -116.2 -127.4 -77.2
sales
Profit/loss before extraordinary -1.9 -2.0 -5.9
items
and taxes, MEUR
Profit before extraordinary -115.8 -123.0 -71.2
items
and taxes, % of net sales
Profit/loss before taxes, MEUR -1.9 -2.1 -5.9
Profit/loss before taxes, -115.8 -123.7 -71.2
% of net sales
Return on investment, % -13.5
Return on equity, % -15.1
Interest-bearing net -32.6 -34.6 -33.5
liabilities, MEUR
Equity ratio, % 94.5 96.0 94.8
Gearing, % -96.9 -87.9 -94.8
Gross capital expenditure, MEUR 0.0 0.1 0.5
% of net sales 0.0 4.0 5.6
R&D expenses. MEUR 1.0 1.0 3.8
% of net sales 61.6 63,1 46.7
Personnel, period-average 94 106 105
Personnel, period-end 89 106 105
For the companys line of business, the value of outstanding orders
presents no significant reference stated in the notes to the accounts.
PER-SHARE DATA
1-3/ 1-3/ 1-12/
2005 2004 2004
Earnings per share, -0.07 -0.07 -0.21
EUR (undiluted)
Earnings per share, EUR -0.06 -0.07 -0.21
(diluted)
Equity/share, EUR 1.20 1.42 1.26
No. of shares at period-end, 28,107 28,066 28,102
1,000
Share performance, EUR
Average price 1.37 2.27 1.69
Low 1.13 1.69 1.18
High 1.59 2.69 2.69
Share price, period-end 1.55 1.90 1.28
Market capitalization, period- 43.6 53.3 36.0
end, MEUR
Volume of shares traded, 3.7 3.8 9.3
million
Volume of shares traded, 13.4 13.4 33.3
% of total
Value of shares traded, MEUR 5.1 8.5 15.8
Price-earnings ratio (P/E) -6.1
CONTINGENT LIABILITIES
EUR million Mar. 31, Mar. Dec.
2005 31, 31,
2004 2004
Rental liabilities 0.2 0.2 0.1
Leasing liabilities 0.1 0.2 0.1
Other contingent liabilities 0.6 2.4 0.6
Currency derivatives (not 0.7 2.0 0.7
included
in hedge accounting)
These data are based on unaudited figures.
NOTES TO THE CONSOLIDATED ACCOUNTS
1. ACCOUNTING PRINCIPLES
This interim report is based on accounting principles under IAS 34
(Interim Reports).
The table below shows the effects of IFRS 2 (Share-based Payment) on
the 2004 comparatives.
2. RECONCILIATION OF
INCOME STATEMENT
EUR million 1-3/ Effect 1-12/ Effect 1-12/
2004 of 1-3/ 2004 of 2004
IFRS 2 2004 IFRS 2
Net sales 1.7 1.7 8.2 8.2
Purchasing and 0.0 0.0 -0.1 -0.1
production costs
Gross profit 1.6 1.6 8.1 8.1
Other operating income 0.0 0.0 0.3 0.3
Operating expenses -3.8 -0.01 -3.8 -14.7 -0.04 -14.8
Operating profit/loss -2.1 -0.01 -2.1 -6.4 -0.04 -6.4
Total financial income 0.1 0.1 0.5 0.5
and expenses
Net profit/loss for -2.1 -0.01 -2.1 -5.8 -0.04 -5.9
the period
Earnings per share, -0.07 -0.07 -0.21 -0.21
EUR
Earnings per share -0.07 -0.07 -0.21 -0.21
(diluted), EUR
The table below shows the effects of IFRS 2 (Share-based Payment) on
the 2004 comparatives.
3. RECONCILIATION OF BALANCE
SHEET
EUR million March IFRS 2
31, March
2004 31,
2004
Fixed and other non-
current assets
Tangible assets 0.5 0.5
Intangible assets 1.2 1.2
Deferred 0.2 0.2
tax assets
Total fixed and non- 1.9 1.9
current assets
Inventories and current
assets
Short-term receivables 4.7 4.7
Available-for-sale 33.4 33.4
Assets
Cash and cash 1.5 1.5
equivalents
Total inventories and 39.7 39.7
current assets
Total assets 41.6 41.6
LIABILITIES AND
SHAREHOLDERS EQUITY
Shareholders equity
Share capital 0.8 0.8
Share premium fund 39.4 39.4
Fair value reserve 0.2 0.03 0.2
Retained earnings -1.0 -0.03 -1.0
Total shareholders 39.4 39.4
equity
Long-term liabilities
Long-term 0.3 0.3
financial liabilities
Deferred tax liability 0.1 0.1
Total long-term 0.4 0.4
liabilities
Short-term liabilities 1.8 1.8
Total liabilities and 41.6 41.6
shareholders equity
SHAREHOLDERS
On March 31, 2005, the companys ten largest shareholders, excluding
nominee-registered shares, were as follows:
Ylönen Tatu and Tatu Ylönen Oy 53.7%
Kivinen Tero 8.4%
Assetman Oy 5.0%
Jaakonsaari Markus 2.2%
Ilmarinen Mutual Pension Insurance Company 1.7%
Promotion Capital I Ky 1.7%
Pohjola Finland 1.3%
Kaukonen Kalle 0.9%
Arto Vainio 0.5%
eQ Extreme Mutual Fund 0.4%
Total 75.8%
FINANCIAL REPORTING
SSH will hold a briefing on its interim report for equity analysts and
the media in its head office, Cabinet no. 204, 2nd floor, Valimotie
17, Helsinki, on Tuesday, April 19, 2005, starting at 11:00 a.m.
SSH Communications Security Corp will release its next interim report
for January 1-June 30, 2005 on July 27, 2005. Further information will
be available on the companys website in due course before that date.
Helsinki, April 19, 2005
SSH COMMUNICATIONS SECURITY CORP
Board of Directors
Arto Vainio
CEO
CEO
Arto Vainio
Tel: +358 20 500 7400
Investor Relations/CFO
Mika Peuranen
Tel: +358 20 500 7419
E-mail: 
© 2005 SSH Communications Security Corp. All rights reserved. ssh® is a registered trademark of SSH Communications Security Corp in the United States and in certain other jurisdictions. All other names and marks are property of their respective owners.