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Hansab Group Annual report

2011


Cont Hansab Group Annual report

2011

Compiled and edited by Sigita Babarskaite | Design and layout by Kristo Rosenvald at Avocado.ee


tents Contents 5

1.

Letter to the Stakeholders General Overview of 2010

6

2.

By: PhD. Aigar Urva, Founder and CEO

About Us

Introduction to Hansab Group

11 3.

Sales Excellence in Turbulent Times Overview of the Sales Projects and Activities in 2010

16 4.

Service at a Glance Overview of Service Activities in 2010

20 5.

By: Darius Žekonis, Managing Director Hansab UAB

Financial Results Overview of Financial Operations and Data in 2010

48 13.

By: Janno Kallikorm, Managing Director Hansab AS

Hansab Lithuania at a Glance Overview of Hansab UAB Activities in 2010

43 6.

By: Ingemars Liakovičus, Managing Director Hansab SIA

Hansab Estonia at a Glance Overview of Hansab AS Activities in 2010

39 9.

By: Alar Alumaa, Managing Director Ellore OÜ

Hansab Latvia at a Glance Overview of Hansab SIA Activities in 2010

35 7.

By Andres Johannson, Managing Director BOS OÜ

Ellore at a Glance Overview of Ellore Activities in 2010

32 8.

By: Pranas Aleksiūnas, Managing Director Hansab TOB

BOS at a Glance Overview of BOS OÜ activities in 2010

29 11.

By: Annika Urva-Ronk, Human Resources Manager

Hansab Ukraine at a Glance Overview of Hansab TOB Activities in 2010

27 12.

By: Sigita Babarskaite, Marketing Communications Manager

Human Resources at a Glance Overview of the Key Activities in Personnel Management in 2010

25 10.

By: Algo Puusepp, Service Manager

Marketing Communications at a Glance Overview of the Core Projects

23 7.

By: Nerijus Žikas, Business Development Manager

Map and Contacts

By: Kari Pavelson, Finance and Quality Manager


Hansa Hansab Group Management

2

Aigar Urva

Algo Puusepp

Founder and CEO

Service Manager

Janno Kallikorm

Ingemars LiakoviÄ?us

Managing Director of Hansab AS

Managing Director Hansab SIA

Sigita Babarskaite

Margus Tammoja

Marketing Communications Manager

Product Development Manager

Hansab Group Management Members:


ab Grou Members:

Nerijus Žikas

Kari Pavelson

Business Development Manager

Finance and Quality Manager

Darius Žekonis Managing Director of Hansab UAB

Hansab Group Management Members:

Alar Alumaa

Ruta Urva

Managing Director of Ellore OÜ

Internal Control Manager

Annika Urva Ronk

Pranas Aleksiūnas

Personnel Manager

Managing Director Hansab of TOB

3


S

A letter to

Aigar Urva Founder and CEO


Stakeh the Stakeholders

Back to Growth

The long major depression at our markets is over and the economy has turned back on the path of growth since the second half of the previous year. This has also affected our Group's results. During the last year our turnover increased by 26% and we reached the level of the year 2006. We have shown better results only during the years of the economic boom in 2007 and 2008. During the current year of 2011 we expect to achieve the results of the best years (revenue around 18 million EURO). Thanks to decreasing of our costs during the last two years and increasing of our income, we succeeded in finishing last years with profit (456 thousand EURO). AS Hansab in Estonia showed especially good results. This was partly thanks to the very successful Euro changeover project. Our Lithuanian company UAB Hansab also showed good results thanks to the successful projects in the public service sector.

Our main strategic target is to develop Hansab into the best service company where the income of services covers our current expenses. We continue our investments into our service infrastructure and the improvement of quality. In the year 2011 we expect to increase our service revenue by 20%. Last year we successfully started the service export project in Europe and our goal is to expand it in the future. We see positive developments also in our activities in the Ukraine and Belarus. In 2011 we ended some restriction processes in the Group - emerging Hansab Invest with Hansab Group and the separation of property from the main activities (establishing Hansab Property UAB). Despite the challenging economic environment Hansab Group succeeded to finish the last year with good results and we see nice perspectives ahead of us.

In the situation where the demand of our main customer sector (banking and finance) remained weak (last year 39% of total revenue), we managed to increase revenue in our two public services sector to 23 % of the total revenue.

A letter to the Stakeholders

5


Abou About Us History

Hansab was first founded in Estonia, in 1991 by present CEO Aigar Urva and Hans Tombach. Throughout the years, it has developed into a leading company providing complete business solutions for companies in the Baltic region. After the Estonian company Hansab SIA followed in September 1993 and Lithuania in 1994. In 2005, Hansab Group OÜ was established to manage Hansab Group enterprises, business development and central coordination of focal processes.

Since then, Hansab’s management decided to expand its knowledge, expertise and experience to the Central Eastern area of Belarus and Ukraine. In 2009, Hansab management made a strategic decision to launch a new company in Kiev, Ukraine, in order to expand their knowledge and expertise to the wider territory. Currently, Hansab has eight subsidiaries – Hansab AS, Hansab SIA, Hansab UAB, Hansab TOB, BOS OÜ, Ellore OÜ, Hansab Property OÜ and Hansab Turtas UAB.

Companies' Structure Hansab initially started its activities in the Baltic States (Estonia, Latvia and Lithuania) and then expanded its activity to Ukraine and Belarus. This is what we call Hansab Territory.

Position in the Market Hansab has earned a position of the leading supplier of full solutions for financial, retail and public sectors in the Baltic’s and now aims to expand even further.

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About Us


ut Us

Structure of the companies Headquarters

Hansab Group OÜ Established in 2007

About Us

Established

Branches in

Hansab AS

Tallinn, Estonia.

1991

Tartu, Pärnu, Jõhvi, Kuressaare

Hansab SIA

Riga, Latvia.

1993

Rezekne, Liepaja, Valmiera, Daugavpils

Hansab UAB

Vilnius, Lithuania.

1994

Kaunas, Klaipeda, Siauliai, Panevezys

BOS OÜ

Tallinn, Estonia.

2006

Ellore OÜ

Tallinn, Estonia.

2007

Hansab Property OÜ

Tallinn, Estonia.

2009

Hansab TOB

Kiev, Ukraine.

2009

Hansab Property UAB

Vilnius, Lithuania.

2010

7


Abou About Us

Hansab is the leading company in the Baltic States providing full business technology solutions. Our main activities are involved in the sales of products, solutions and service.

8

About Us


ut Us

Hansab Group Revenue Sales Service

thousand EUR

20 000 18 000 16 000 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 2000

Hansab Group Revenue

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011 forecast

9


S Nerijus Žikas Business Development Manager


Sales a Sales in Turbulent Times

Sales Excellence in Turbulent Times After the last two years of economy decline, finally we can forecast new perspectives and opportunities. Hansab sales are B2B oriented. From the management perspective, we try to be organized as much as possible: strategy moderation every year, product development, partnership management, and business line monitoring. That has helped us a lot when the turbulent times reached us and our customers. Macroeconomic factors affected our major accounts – financial sector, dramatically downsized number of the branches, investment to new technologies was postponed; general strategy and future were not certain. Retail sector – rather new target for Hansab, while balancing on the survival mode, we targeted our investments towards security and efficiency.

technology vendors due to the investment of EU into the sector at hand. We closed abundant projects in 2010 – we equipped several harbors in Estonia with the transport automation and parking, started library automation projects on the large scale, and improved parking fleet management. All of those actions confirmed that our strategic goals oriented to new directions were correct and timely. So, focused sales activities and efforts on Public and Retail market sectors gave tangible outcome, which resulted in our sales results increasing up to 25%. At the same time services demand remained stable and even increased as our customers trust us and we secure their business continuity. We succeeded as we constantly believe in our strategy and people. Even during the economic downturn, we didn’t stop our investment into the service processes development, new products and markets.

Only Public Services sector continued long- term projects where we were involved as the innovation and

Sales in Turbulent Times

11


rbulen Sales in Turbulent Times We have extended our territory of activity to Ukraine. Our competence and core business knowledge convinced our customers and we began to realize several new projects. At the same time, we created unique solution for a local Ukrainian bank where we integrated CFM with the bank’s CRM database online. The outcome of the project is that it helps to improve relationship with customers and confirms our business competence.

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As much as that, in 2010 we extended our export to Belarus market, participated in the biggest technology fair TIBO and developed local partner network. This year we’re planning to present a few new products to the market and extend our presence in Belarus even further. As a final note, core business knowledge, competence and proper solution setup based on the customers’ needs is our recipe for the turbulent times.

Sales in Turbulent Times


nt Time Structure of Revenue

Structure of Revenue by Product Groups in 2010 Security solutions

Services

12%

32%

Cash Handling solutions

18%

Structure of Revenue by Product Groups

Consumables

4% Automation solutions

Card solutions

1%

Finance & payment solutions

Structure of Revenue

18%

15%

13


e of Re Structure of Revenue

Structure of Revenue by Customer Segments in 2010

Banking + Finance

We are mainly focusing our efforts towards 7 customer segments – Banking and Finance, Public Services, Retail, Resellers, Transport and CIT.

Besides the above mentioned segments, we are also active in Industry and Manufacturing, Hotels and Leisure and Security fields.

These segments make up for more than 90% of our revenue with Banking and Finance occupying the leading position.

Wherever there is a need for technology, innovation and security, we will have the solution.

Public Services

38%

28%

Structure of Revenue by Customer Segments

Transport + Logistics Retail

10%

Other CIT

14

8%

Resellers

5%

7%

4% Structure of Revenue


Service at a Glance

Algo Puusepp Service Manager


Service Service at a Glance

The year 2010 was very successful for service from the aspect of process development. The main focus was on service PR, service certification and service strategy.

Improvement of the Service PR Hansab has a unique service package called SEPRO. Our customers need more complex services and full solutions. They let professional service provider manage all service issues. SEPRO services will cover the full lifecycle of product services: starting with the installation process, the usage of equipment and finally the replacement or the

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utilization of equipment. Customers can focus on core business and save service costs. Hansab has reorganized our sale of services and SEPRO is a good solution for offering full service solutions to customers. SEPRO covers all services needed by our customers to make business more profitable.

Service at a Glance


e at a G Certification of the Service Processes All services offered by Hansab on our territory comply with ISO9001 and ISO20000. All service providers mostly focus on the procedures of service support – procedures in which a customer can get a direct access (incident management, problem management, change management, release management) and does not have to think about how services should be delivered to customers. Hansab has implemented all ITIL processes and we have made many improvements in service

Service at a Glance

delivery procedures (availability management, capacity management, continuity management, information security management and service financial managements). Hansab has adequate resources to meet the customers' demand and our services are reliable and have a good backup. Thanks to the well-developed services Hansab has won lots of trust on behalf of the customers.

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Sepro Sepro Customer portal

Fixed incident repair time Auto e-mail (repair status)

Fixed reaction times - fast response

Service help desk Quality meetings

Stock transport services

Installation services

Quality improvement program

Configuration services

Regular maintenance services Extended time weekend servides

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Sepro


Marketing Communications at a Glance

Sigita Babarskaite Marketing Communications Manager


Marketi Marketing Communications Value Driven Innovation: Managing Change within New Realities Establishment of Hansab Marketing Communications department was a strategic business goal back in 2007. Hansab, being the leader in business technology solutions in the Baltic’s already had a reputation of an impeccable company with innovative solutions; so the goal was to communicate it to our main stakeholders. Well defined and mutually executed in all three countries marketing and brand communication principles were the kernel elements for the establishment of the Group’s marketing communication departement. They say change is the only constant: current business, financial and political climate have all reinforced this message, with new challenges for communications professionals to face. Last four years have brought together a fully functioning Hansab Group Marketing department with many projects implemented. Hansab now has a slogan that has become inseparable from the name itself – „it works“, our communication with the customers and suppliers as well as the general public has changed dramatically.

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Our means of communication changes as technology becomes more a state of the art. We have established an e-newsletter to our customers and it is now fully working in all of the countries we operate in. Our newsletter is a credible source of information providing organizational changes, successful projects and innovative products. Having started with 100 customers, now we have nearly 1000 subscribers. One of the strategic goals was to widen an in-house knowledge regarding our annual customer satisfaction survey. For the last two years, we, here at Hansab Group, conduct and collect information in house. Not only it has fastened our reaction time and efficiency of results, it as well cut our budget costs at a challenging economic climate at the time. Results have constantly been improving year by year and in 2010 they reached 4,36 from 5 point scale.

Marketing Communications at a Glance


ing Com at a Glance

Marketing Communications at a Glance

Another strategic goal was to start marketing our well established Hansab service. As a continuation of the idea, SEPRO was born. SEPRO stands for Service Professionals and covers all Hansab Activity area and gives us a clear differentiation edge from the competitors.

create a website that promises to satisfy the daintiest needs of a viewer. It features 3D environments showcasing our full solutions in finance and banking, retail, public and other environments and a custom product catalogue.

Finally, our most Daedalean and extensive project was a renewal of Hansab website. I teamed up with Margus Tammoja, Hansab Group Product development manager to reach the best results. The goal was to have a well-structured multilingual and elucidative website with easy navigation. In addition, based on an open source platform and a simple and innovative design that best reflects Hansab brand, we have managed to

Ultimately, Hansab Group marketing and communications department has fostered an innovative school of thought by introduction of alternative methods to reach desired marketing and communications strategic goals. Our aim is to show that complex technology can be interesting and easy to understand with the right methods of expression.

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H Annika Urva-Ronk Human Resources Manager


Human Human Resources 2010

Human Resources in 2010: Focus on Development and Training of the Staff The keywords of 2010 were development and training of staff, redistribution of duties and the resultant intensification of processes and achievement of efficiency. While in 2009 no new posts were created and recruitment took place only to the existing posts, then in 2010 the recruitment became more active and new posts were created in service as well as sales in connection with the development of the company. In a year the number of employees in Hansab Group increased by 10%, reaching 151 people by the end of the year 2010. A major change was separation of project management from sales department and establishment of the department of projects. This process started at the end of

Human Resources 2010

2010 and will continue also in 2011. Objective of the establishment of the department of project management is to develop project management competency in the company, to be ready to manage extensive projects. Also active staffing of the team of the Ukrainian subsidiary was a topical issue in 2010. By the end of the year already 6 people were working in the Ukrainian company and replenishment of the staff will continue also in 2011. Personnel is the most important resource of Hansab. General objective of personnel management of Hansab is to ensure the development and motivation of employees and thus achieve the fulfilment of the vision, mission and objectives of the company.

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H Pranas Aleksi큰nas Managing Director Hansab TOB


Hansab Hansab Ukraine at a Glance

2010 - Beginning of the company's growth TOB Hansab is the youngest Hansab Group branch company, whose principal business activity is the implementation of its business solutions in Ukraine. The company was initiated in February, 2009. Two years of work in the Ukrainian market are in the past. What have they been to our company? What good have they brought to us and our customers? Hansab Group shareholders adopted the decision to register a Hansab daughter company in Ukraine in the autumn of 2008. By the end of the year financial and retail market research was completed and the registration of the company was started. After all the legal formalities were completed, the company's registration certificate was obtained on 13 February, the year 2009. From that moment the company's financial activities began in Ukraine. The first year of the activities was the year of acquisition of the first customers, presentation of the company and self-establishment. During these years the first contacts with potential customers were established. Much attention has been paid to the Baltic companies operating in Ukraine. The first clients of Hansab became SEB

Hansab Ukraine at a Glance

bank, Swedbank, Alfa Bank. In the retail business it was a Lithuanian company NOVUS. The year 2010 became the year of growth of the company. The first contract was signed with Alfa Bank - "Creation of Alfa Bank's image”. TOB Hansab in cooperation with the architects of UAB „VILNIAUS ARCHITEKTŪROS STUDIJA“ (Architecture Studio) created the uniform image of the branches of Alpha Bank and submitted the "brand book" of "Alpha Bank" as the final product to the customer. The main achievement of 2010 was the fact that the company won the tender to provide and install up to 80 rows of the regulatory systems of the Q-Matic in Alpha Bank. This was a large and significant project that encouraged further growth of the company. During this period the company’s staff increased up to 7 employees. The company has moved to a new office, situated in the centre of the city. New and reliable clients and partners have appeared. The year 2010 gave a good start for further growth of the company. In the coming year we will seek for stable and profitable activities of the company.

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B

Baltic

Andres Johannson Managing Director BOS OĂœ


BOS at Operations Service (BOS)

Summary of the Activities in 2010 Baltic Operation Services has been operating at the Estonian market for more than four years and our brand Moya is known all over Estonia. In 2010 we managed to increase our turnover by 13% compared to the previous year. There were also substantial changes in our daily operations – we hired additional personnel and at the same time our operations became more efficient. We have been focusing on our major activity - operation of reverse vending machines and in this field we have gained more stability in evaluating and exploiting the market situation. Our current activities have been directed to the development of the company's different business processes to make them more efficient and allow immediate feedback on the operation of 44 reverse vending machines.

Implementation of new projects is currently under preparation - in cooperation with our partners we will find solutions that help us to understand our customers better and also provide better service. The goal is also to broaden the network of reverse vending machines and provide our service to the end-customers in a greater number of shopping centres and stores. We will continue cooperation with two major chains of stores and other shops. Regarding activities on vending machines we will continue cooperation with different partners. We have increased the number of vending machines and have installed euro handling equipment at the beginning of 2011. We hope that the currency change to Euro will make the usage of vending machines more active.

Well-planned activities ensure success.

Baltic Operations Service (BOS)

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Alar Alumaa Managing Director Ellore OĂœ


Ellore Ellore at a Glance

Overview of Ellore's Activities in 2010 The year 2010 was a period of growth in activities and changes in the structure for the Ellore Company. Although financial results did not meet the expectations, the company managed to finish the year with similar results as in 2009. Being an expert in the Card payment and IT development field, Ellore has been integrated into the development of solutions and everyday operations of Hansab Group companies. During the year Ellore concentrated on building up the Card payment Solutions Competence Center within Hansab Group to support the Lithuanian, Latvian, Ukrainian and Estonian Sales and Service activities. Technical Support procedures and an online environment to share technical competence and provide solution for technical issues were created. The sales of the card payment solutions have never been so complicated. As Estonia has been a standard for card payment solutions at the mature market, the emphasis was on special solutions and the integration

Ellore at a Glance

of unattended solutions. Latvia had a significant fall in the Card payment segment in all banks. The stock of the most popular desktop terminals in banks covered the biggest part of the need for 2010. This resulted in Ellore directing more efforts to the promotion of integrated and self service card payment solutions to give the merchants new business opportunities. Many efforts have been made to introduce Ingenico cardterminal-based solutions to the Lithuanian and Latvian market. During the year Ellore launched several new projects to integrate Ingenico terminals via PosXML to other systems. All in all, over 1500 Ingenico card payment devices were sold around the Baltics. During the year several long-term development projects were accomplished: Ellore spent a lot to develop Telium2 terminals Family, which is a follow-up to the Ingenico current Unicapt32 terminals range. The installation ends in spring 2011. The Telium2 Family terminals were first introduced in Swedbank Card Payment Forum in Riga.

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Glance Ellore at a Glance Ellore delivered the integrated self-service card payment modules to the MPDE Forum Cinemas Ltdticket sales kiosks, which are the first ones in the Baltics. There was also created for the integration of the attended ticket sales to their attended sales stations. The interest towards the card payment function in the parking sector continued also in 2010. Ellore's integration project of Ingenico i9500 Unattended terminals to Cale Open area parking card payment automates was also accomplished. The first pilot automate was

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installed at Europark Ltd parking area in Tallinn. The same technology was introduced also in Latvia and Lithuania. Ellore managed to launch first unattended card payment terminals in Latvia. These were installed in a closed area parking system payment stations of Riga Patollo Galleria Amaon Xparc. EMT (Estonian Mobile Telephone) chose Ellore as a strategic partner for their card payment solution provider in their proprietary parking solution.

Ellore at a Glance


What We are Proud in Latvia

Ingemars LiakoviÄ?us Managing Director Hansab SIA


Proud What We are Proud in Latvia Because Today is Yesterday’s Tomorrow At the very beginning of 2010 we hoped that we had hit the lowest level of economy and everything was going to improve. It was due to the fact that companies which had faced such deep economic crises were not able to think logically about business investments. Business was an emotional topic after having gone through such a deep downturn of economy. Investments ceased everywhere despite the efforts of our sales forces to convince customers about the fast payback time of current investments in the technologies offered by SIA Hansab. The word "investment” had become unpopular in our market. But in Hansab Latvia we strongly believed that the saying "today is yesterday’s tomorrow” was very appropriate. During the time of deep crises our sales focused on visiting the existing and new customers, trying to keep up good relationships and helping them in the best way by introducing new business solutions. We invested our time and resources irrespective of having to face low sales results. But we understood that we shared the same position with all other companies operating at the domestic market and we knew that it was only a question of time when activities started to give us positive results.

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And suddenly in the middle of 2010 economy started to show signs of improvement. The market became more active, customers started to ask us:"Hey, do you remember that you offered us this or that kind of solution some time ago? We are looking for a possibility to invest in this technology". Now we are sure that the work we did back in 2009 and in the first half of 2010 was no waste of time at all. The end of 2010 was rather busy and SIA Hansab managed to achieve better sales results. The sales revenue during the last quarter equalled to the total of the first three quarters taken together. Another good thing was that we managed to achieve more or less an equal turnover in all three market segments – banking, retail and state and public. During the entire history of Hansab before the majority sales - 75% was sold to banking. During the last year we have been positioned among the top three companies selling EAS gates for retail shops in Latvia. We also have finished a few CCTV projects. We are proud that we have got an access to new market sectors that are new to us.

What We are Proud in Latvia


in Latv Our best Project of 2010 was a new shopping mall in downtown – Galerija Riga. We have about 20 installations of EAS gates, a few CCTV projects, but most important – we have installed two closed car parking systems with integrated card payment which makes us the first to provide that kind of solutions at the market. The entire Galerija Riga project gave us about 22% of the total sales turnover in 2010. That was really an excellent job. At the end of 2010, when we were working on the budget of 2011, we were already aware of the significant part of the projects we expected to do in 2011. That made us believe that 2011 would be much better for us and we could expect a rising trend in our development phase again. During the economic downturn we

What We are Proud in Latvia

managed to create a strong sales team, to train it and to motivate it. During 2010 we worked hard to fine-tune our service structures and procedures, and succeeded in achieving the ISO 20000 certificate. We have also received an Industrial Safety Certificate, which allows us to work with projects qualified as a state secret. After all, our customers have evaluated us as a good and reliable cooperation partner in our annual customer satisfaction survey. We have 4.33 points out of 5 but we still are looking for improvements based on comments we got back from the market. Now I am surer than ever that we are in a very good shape and our competitors should really get nervous. And all over again we keep saying: "Today is yesterday's tomorrow”. That keeps us going.

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H

What We

Janno Kallikorm Managing Director of Hansab AS


Hansab Are Proud In Estonia:

Year 2010 was the turning point for AS Hansab after the economic

downturn, which affected us all in 2008 and 2009. The sales targets were met with flying figures, amounting to 7,0 million euros in turnover and 0,5 million euros in net profit. The service income also saw a significant increase amounting to 1,7 million euros.

Hansab AS became the first company in Estonia to be certified with ISO 20000 �In addition to the Internet bank, ATMs and payment terminals are the most frequent direct contact for the customer with the bank and the reliability of these is extremely important for us,� Hanno Hussar, Head of the Operations Division of Swedbank Eesti, the largest cooperation partner of Hansab, noted. "The certificate given to Hansab is proof for the customers that the machines and card terminals are in working order almost non-stop.� The certificate assures, with the audit conducted by an accredited certification company, that the supply chain

What We Are Proud In Estonia:

of services and the management processes at the company are managed correctly and with a high level of quality, which reduces the risk of the availability of services to customers and ensures constant monitoring and improvement of services. ISO 20000 is directly related to the globally recognized information technology process management framework Information Technology Infrastructure Library (ITIL), which dates back to 1985 in England. ITIL handles the best practice of the management of IT services.

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Estonia What We Are Proud In

Hansab AS provides monitoring and help-desk services 7 days per week with its new monitoring centre.

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In February 2010 pan-Baltic monitoring unit started work in Tallinn office. Our monitoring unit works by schedule from Monday to Sunday and covers also Latvian and Lithuanian monitoring and help-desk services after 5 PM and on weekends.

offer this service mainly for ATMs, RVMs (Reverse Vending Machines) and parking systems, but we are ready to offer monitoring service to all devices that are traceable over the internet. For monitoring we have an experienced and well-trained team.

Information technology development has created opportunities to monitor certain equipment and systems from distance in order to respond to failures as quickly as possible and also to prevent them. Today we

Together with our partner Telegrupp AS we installed a complete video surveillance system with more than 120 video recording devices.

What We Are Proud In Estonia:


a at a G Estonia:

Hansab AS played a major part in Estonia’s changeover to Euro as the cash handling equipment provider for most of Estonia’s organizations Year 2010 was very challenging yet interesting period for Hansab due to Estonia becoming the 17th member of the Eurozone. Final approval to join the Eurozone came in July, but the buildup was started with seminars, customer events, etc. already in the beginning of the year. Due to our active work Hansab clearly became the opinion leader whenever cash handling equipment was an issue.

What We Are Proud In Estonia:

AS Hansab managed to win all biggest tenders for cash handling equipment in financial organizations, retail chains and public services. We delivered all necessary equipment for note and coin processing: note counters and sorters, currency detectors, coin counters, sorters, depositors and drawers.

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H What

Darius Žekonis Managing Director of Hansab UAB


Hansab We are Proud in Lithuania

Overview of Hansab UAB Activities in 2010 The financial crisis that began already in the end of 2008 had an impact on UAB Hansab results in the year 2010. UAB Hansab has been known as a company providing banking and property protection solutions for many years, it has had most experience in the banking sector, so it is not surprising that about 70% of the total turnover was derived from this sector. Banks started their business optimization in 2008 and continued to reduce the branch network, so these changes had an impact on sales results. Proceeds from the banking sector accounted for 28% of the sales income - a huge difference in valuation of prevailing trends. However, total UAB Hansab activity in 2010 was much more successful if compared with the year 2009. The company gained profit and exceeded the planned outcome. The turnover in 2010 was 16,698 million, which was higher by 27.8% than in 2009 (2009 sales revenue comprised 13,069 million Lt). While assessing the annual activities could be distinguished, one of the main guides to success – it is differentiation. The company’s strategy to expand its activities not only in the banking sector but also in retail and public sectors in 2010 was abundantly justified. New products and

What We are Proud in Lithuania

solutions to those sectors significantly expanded the range of services and enabled to offer our customers value-added solutions that are particularly important in general economic recession. The greatest effect on the company’s results had the projects implemented in the second half of the year, some of them had been launched already in 2009. Following the stabilization of the country's economy, in the second half of the year 2010 most of the projects in the public sector were revived, mostly the projects in which the company was involved and which were suspended due to lack of funding in 2009. Several projects were implemented successfully: biometric fingerprint/palmprint danctiloscops were installed in the Prison Department, RFID book security and logistics projects were implemented in libraries, parking projects allowed to increase sales revenue in the public sector, which accounted for 45% of total company sales revenue. In Banking sector increased interest in cash protection and optimization trends in the departments prevailed when moving into self-service operation areas. UAB

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nia at a What We are Proud in Lithuania Hansab was engaged in projects related to the changes in the requirements for payment card terminals. From 31 December, 2010 all credit card payment solutions had to comply with the international EMV (Europay MasterCard Visa) requirements, where smart banking cards had to be serviced at the moment the customer entered a PIN code, and the card service terminals had to meet the established safety requirements. Proceeds from the banking sector accounted for 28% of the total sales revenue. Despite the fact that big shopping chains optimized the store chains, the company devoted special attention to the protection against theft. Economic recession and increased unemployment is always directly related to the increased number of thefts, so the traders’ interest in protection of their property and products also increased is natural. Video surveillance, product protection and cash management, also the implementation of security solutions in trade networks allowed the increase of UAB Hansab revenues in this sector, which accounted for 8% of the total sales revenue.

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The company continued expansion and invested in business improvement in 2010. ITIL implementation process that was started in service section in 2007 was successfully accomplished in the first half of 2010, when the company was certified under the ISO 20000 standard. UAB Hansab is the first and the only company in Lithuania, who certified the management of services in accordance with this standard. In 2009, when the first cooperation agreements were concluded, the strategic partnership with the company Swisslog in Sweden regarding the sale of services was initiated. Under this agreement UAB Hansab launched its first project in Sweden in 2010, which will continue throughout 2011. A lot of resources and time was spent on the development of new areas: new products for new customers (non-banking sector), development (new partners, new products, new clients). In 2011 UAB Hansab intends to earn 20.1 million LTL revenue, 13.9 million LTL of which will come from trade and 6.2 million LTL from services. We believe that the recovery of the economy shall promote the development of our strategic sectors.

What We are Proud in Lithuania


a Glanc Pneumatic Tube System at Huddinge University Hospital Hansab UAB has been selected by Swiss Swisslog to help it install a pneumatic tube system at HuddingeUniversity Hospital south of Stockholm in Sweden. It is a milestone for export ambitions of both the whole Hansab group as well as our Lithuanian subsidiary because the deal is the first one to be carried by the group in Western Europe. So far Hansab has worked on several projects in Belarus and Russia's Kaliningrad enclave. For us it is also important in a broader sense

Pneumatic Tube System at Huddinge University Hospital

because our example shows that it is not only export of goods that is recovering in Lithuania. The Swedish contract worth LTL 1m includes laying 7.5 km of tubes that will be used to dispatch blood and tissue samples, medical instruments, documents, etc., to approxi-mately 110 locations within the hospital. A similar but much smaller pneumatic tube system was installed by the Lithuanian and Swiss partners last year at Lithuania's biggest hospi tal complex Santariskes in Vilnius.

41


F Kari Pavelson Finance and Quality Manager


Financi Financial Results 2010

For Hansab Group, 2010 was an interesting and challenging year where we had to adjust to new economic conditions.

The world economy as a whole ended 2010 in a better state than expected. The recovery of Estonian economy from the crisis was faster than expected. Changeover to the euro from January of 2011 was certainly a positive influence. The recovery of economy in Latvia and Lithuania has also become more active – there has been growth for several quarters in a row. The improvement of economic environment has had a positive influence on the economic results of Hansab group companies. Compared to 2009, the consolidated return on sales of Hansab Group OÜ in 2010 increased by 25.7%. The consolidated net turnover of Hansab Group OÜ was 14.2 million EUR and the consolidated profit was 456 thousand EUR.

Financial Results 2010

The aforesaid result has been achieved due to adjustment to new market conditions, successful implementation of the actual costs cutting program and provision of goods and services to new customer sectors. We have also launched new products and services. In 2010 the turnover of Hansab AS formed 46%, Hansab SIA 13%, Hansab UAB 33%, Baltic Operation Services OÜ 4%, Ellore OÜ 2% and other group companies 2% of the total turnover of Hansab Group. The share of Hansab SIA’s turnover has decreased the most, from 28% in 2008 to 13% in 2010. During 2010 Hansab AS has increased its share of the turnover from 33% to 46% and the share of Hansab UAB has remained at the same level compared to last year.

43


Results Financial Results 2010 In the same period Hansab AS earned the largest amount of profit which was in the sum of 452 thousand EUR. It was followed by Hansab UAB by 214 thousand EUR and Ellore by 31 thousand EUR. The total profit of other, smaller companies was 82 thousand EUR. The loss of the Ukrainian company, Hansab TOB, was 64 thousand EUR. The amount of financial costs in 2010 was 154 thousand EUR which was 26 thousand EUR less than in 2009. The reason for this was that in 2010 less borrowed funds were used which decreased the amount of interest payments.

Hansab Group has had a conservative financial policy for years so the liquidity of the group is still strong. Cash flow from operating activities in 2010 was positive (1.4 million EUR). Consolidated balance sheet total increased in 2010 by 988 thousand EUR to 9.9 million EUR. ROE was 13.2% and profit margin (ROA) 4.9%. In 2010 the entry into Ukrainian and Belarusian markets with the support of Enterprise Estonia (EAS) continued. Investments into the Ukrainian subsidiary started to have a positive effect in the second half of the year by increasing to 200 thousand EUR. This year the growth of turnover will probably continue and the company is expected to start earning profit.

The amount of depreciation costs was 417 thousand EUR. Net profit in 2010 was 441 thousand EUR. EBITA was 1,082 thousand EUR which is almost twice as good as in 2009.

44

We believe that the conservative financial policy, competitive cost base and development strategies will provide conditions for the growth of turnover and profit also in the following years.

Financial Results 2010


s 2010 Consolidated Financial Annual Report 2010 CURRENT ASSETS

LIABILITIES AND OWNERS EQUITY

31.12.2010

31.12.2009

31.12.2010

thousand EUR

thousand EUR

CURRENT ASSETS Cash at bank and in hand

Short term liabilities 557

297

2 210

1 273

Various receivable

199

252

Trade accounts payable

Prepaid expenses

189

198

Inventories

2 086

Total current assets

5 241

Customer accounts receivable

1 241

1 654

112

112

1 962

863

Accrued expenses

276

233

1 943

Taxes payable

755

292

3 963

Total short-term liabilities

4 346

3 154

Long-term liabilities

1 954

2 489

TOTAL LIABILITIES

6 300

5 643

Share capital

3

3

3

3

67

77

3 127

3 304

Unrealized currency

-13

-9

Net profit/loss foe accounting year

441

-81

TOTAL OWNER`S EQUITY

3 628

3 297

TOTAL LIABILITIES AND OWNER`S EQUITY

9 928

8 940

FIXED ASSETS Long-term financial investments

Liabilities Customer advances for merchandise

240

285

4 435

4 692

Intangable assets

12

0

Total fixed assets

4 687

4 977

Reserves

TOTAL ASSETS

9 928

8 940

Minority equity

Tangible assets

OWNER`S EQUITY

Undistributed profit from previous periods

Consolidated Financial Annual Report 2010

31.12.2009

45


Re sults Financial Results 2010 Consolidated Income Statement

2010

2009

thousand EUR

Business revenue

14 212

11 380

Sales revenue

14 193

11 289

Other revenue

19

91

Goods, materials, services

8 386

5 990

Operating expenses

1 749

1 636

Labour expenses

2 927

3 065

417

398

53

118

13 532

11 207

-154

-180

526

-7

70

56

Net profit/loss for the accounting year

456

-63

Owner`s profit

441

17

15

-80

Business Expenses

Depreciation Other commercial expenses Total commercial ecpenses Financial expenses Economic profit income tax

Minority equity profit

46

Financial Results 2010


s 2010 Hansab Group Turnover

thousand EUR

9 000

8 000 7 000 6 000 5 000 4 000 3 000 2 000 1 000 0 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Hansab AS

2 171

3 340

4 063

3 230

5 084

5 440

6 532

8 154

5 338

3 988

6 498

Hansab SIA

1 822

1 462

1 077

2 177

2 065

2 083

3 692

5 502

5 012

2 352

1 882

Hansab UAB

1 262

1 606

1 919

2 023

2 456

2 752

5 183

4 718

5 536

3 739

4 658

Baltic Operation Service

25

150

490

551

Ellore

82

1 522

606

297

47

113

107

Hansab Group Hansab TOB

Hansab Group Turnover

200

47


FINLAND

SWEDEN

Hansab AS

Jõhvi

Tallinn

Ellore OÜ

ESTONIA

BOS OÜ

Tartu

Pärnu Kuressaare

RUSSIA Valmiera

Riga

LATVIA

Liepaja

Hansab SIA

Daugavpils

Šiauliai Klaipeda

Rezekne

Panevežys

LITHUANIA Kaunas

Vilnius

RUSSIA BELARUS

Hansab UAB Hansab TOB POLAND

UKRAINE

48

Kiev

Hansab Map


Conta

Contacts Hansab AS

Hansab SIA

Hansab UAB

Hansab TOB

Head office TALLINN

11415

Keevise 11

Ph. +372 605 9800

Fax +372 605 9839

TARTU

50112

Aardla 15

Ph. +372 736 6444

Fax +372 736 6445

JÕHVI

41533

Jaama 14

Ph. +372 337 0188

Fax +372 337 0188

PÄRNU

80019

Jalaka 4

Ph. +372 443 1440

Fax +372 443 1440

KURESSAARE

93812

Rohu 5

Ph. +372 666 1503

RĪGA

LV-2167

Plienciema 16

Ph. +371 6 732 5550

Fax +371 6 732 6462

RĒZEKNE

LV-4601

Atbrīvošanas Ave. 121b

Ph. +371 6 462 4020

Fax +371 6 462 4020

LIEPĀJA

LV-3401

Ludviķa St. 7

Ph. +371 6 342 3455

Fax +371 6 342 3455

VALMIERA

LV-4201

Rīgas St. 36

Ph. +371 6 423 1453

Fax +371 6 423 1453

DAUGAVPILS

LV-5401

Gimnazijas St. 16

Ph. +371 2 923 0352

VILNIUS

LT-03154

Savanorių Ave. 180a

Ph. +370 5205 8800

Fax +370 5205 8811

KAUNAS

LT-50187

Savanorių Ave. 204-171

Ph. +370 3733 2740

Fax +370 3733 2740

KLAIPĖDA

LT-91252

Tilžės St. 29

Ph. +370 4631 2994

Fax +370 4631 2994

ŠIAULIAI

LT-76339

Žemaitės St. 43

Ph. +370 4152 6324

Fax +370 4152 6324

PANEVĖŽYS

LT-35135

Pušalato St. 38

Ph. +370 6151 4345

01001

T.Shevchenko per, 13/21 B

Ph. +380 44 369 34 01

Head office

Head office

Head office KIEV

Contacts

Fax +380 44 279 10 48

49


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