Wayfinder_omslag_e_13sep.qxd 05-09-13 16.23 Sida I
Invitation to subscribe for shares in Wayfinder Systems AB (publ) Wayfinder_omslag_e_13sep.qxd 05-09-13 16.23 Sida II
Wayfinder Navigator™ turns your mobile phone into a complete navigation system. Install the software, connect to the GPS and you are ready to navigate throughout Europe and North America. Wayfinder Navigator is a network-based tool that gives you the opportunity to see maps, routes and points-of-interest wherever you are.
Turn left in hundred metres Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 1
Contents
Invitation to subscribe for shares in Wayfinder Systems ...... 3
Conditions and Offer particulars ...... 4
Background and reasons...... 6
Comments by the CEO...... 7
Wayfinder Systems in brief ...... 9
Financial trends in summary ...... 10
Comments on historical financial trends...... 12
Risk factors...... 14
Taxation ...... 16
Market overview...... 17
Vision, mission, goals, strategy and business model...... 23
Operation ...... 25
Governance and policies...... 39
The Board of Directors, Key management personnel and Auditors ...... 40
Share capital and ownership structure ...... 41
Supplementary information...... 43
Articles of Association ...... 47
Interim report for the period 1 January – 30 June 2005 ...... 48
Accounts 2002–2004...... 53
Auditor’s review report...... 58
Word list and abbreviations ...... 59
Addresses ...... 60
Important information The newly-issued shares are not listed, and no application for listing will be submitted, in any country other than Sweden. They have not been registered, and will not be registered, under the United States Securities Act 1933 (“the Securities Act”) or any provincial law in Canada, and may not, either directly or indirectly, be sold or offered for sale in the United States of America or in Canada or to any person resident there or on behalf of such a person other than in exceptional cases which do not require registration under the Securities Act or any provincial law in Canada. Nor is the offer aimed otherwise, either directly or indirectly, at any person whose participation requires additional prospectuses, registration or other measures than those required under Swedish law. Subscription applications which conflict with the above may be regarded as void. This prospectus may not be distributed to or in any country in which such distribution or the Offer (i) requires additional prospectuses, registration or other measures than those required under Swedish law, or (ii) contravenes the law, regulations or other provision in that country. Disputes or claims, of any type whatsoever, which arise in consequence of the contents or distribution of this prospectus or the Offer in general, as well as all associated issues, are to be settled exclusively by Swedish courts and exclusively through the application of Swedish Law. This prospectus contains pronouncements about future prospects which have been made by the Board of Directors of Wayfinder Systems and which are based on the Board’s knowledge of current circumstances in respect of the Group, market conditions and external factors in general. Information supplied in respect of future prospects is always hedged with uncertainty, and no assurances are given that estimates and forecasts relating to the future will be fulfilled. An investment in shares in Wayfinder Systems involves risk. Anyone contemplating investing in Wayfinder Systems is, therefore, urged to study this prospectus carefully, especially the section on Risk factors on pages 14–15. The Swedish prospectus has been approved and registered by the Swedish Financial Supervisory Authority, Finansinspektionen, in accordance with Chapter 2 § 4 of the Trading in Financial Instruments Act (1991:980). The approval and registration do not mean that the Swedish Financial Supervisory Authority guarantees that the factual information in the prospectus is accurate or complete. This is a translation of a Swedish prospectus that has been prepared by the Board of Directors of Wayfinder Systems AB. In case of any discrepancies between the English and Swedish version, or, in any other context, the Swedish version shall have precedence. Certain figures in this prospectus have been rounded up or down.
Wayfinder Systems AB intends to list the Wayfinder Systems AB share on the Nordic Growth Market NGM (“NGM”), provided NGM approval. Nordic Growth Market NGM is a stock market under the supervision of the Swedish Financial Supervisory Authority. The listing is expected to take place on 21 October 2005. Trading parcels will consist of 100 shares. The stock market audit was carried out by Deloitte & Touche AB. Wayfinder Systems has signed a listing agreement with NGM, part of which related to the provision of information to ensure that shareholders and other players in the market receive correct, prompt and simultaneous information on Wayfinder Systems’ circumstances. This means that, in its provision of information, Wayfinder Systems will comply with the applica- ble law and ordinances, as well as the recommendations applying to stock market companies on Swedish stock markets. Shareholders, other players on the stock exchange and the general public can subscribe free of charge for Wayfinder Systems’ press releases and reports through the Nordic Growth Market’s NG News service (www.ngnews.se). Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 2
Summary of conditions Application period: 15 September – 30 September 2005 Issue price: SEK 49 per share Application: Through the application form at the latest on 30 September 2005 Minimum subscription: 200 shares Payment: Payment is to be made in accordance with the contract note sent out Estimated first trading date: 21 October 2005
Other ISIN code: SE0001234626 Abbreviation: WAYF
Financial information The interim report for the period 1 January – 30 September will be published on 28 November 2005. The year-end report for the period 1 January – 31 December 2005 will be published on 24 Feb- ruary 2006. The interim report for the period 1 January – 31 March 2006 will be published on 26 May 2006.
The annual general meeting is intended to be held in May.
Definitions References to “Wayfinder Systems” or “the Company” refer to the Group of which Wayfinder Systems AB (publ) (Corporate ID No. 556526-2929) is the Parent Company or to Wayfinder Systems AB (publ), depending on context.
References to “Öhman” refer to E. Öhman J:or Fondkommission AB.
References to “NGM Equity” refer to the NGM Equity market, a part of the Nordic Growth Market NGM AB.
References to ”VPC” refer to VPC AB, a Swedish central securities depositary and clearing organ- isation.
References to ”the Offer” refer to the offer to subscribe for shares in Wayfinder Systems in accordance with the ”Invitation to subscribe for shares in Wayfinder Systems” on page 3.
2 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 3
Invitation to subscribe for shares in Wayfinder Systems
Institutions and members of the public are hereby invited, in accordance with the particulars in this prospectus, to subscribe for shares in Wayfinder Systems.
The Board of Directors of Wayfinder Systems has applied for a listing of the Company’s shares on the NGM Equity list, and has resolved to increase the Company’s shareholder base by combining the list- ing with a new issue of shares.
At an extraordinary general meeting of Wayfinder Systems on 19 August 2005, a resolution autho- rised the Board of Directors to implement a new issue. The Board of Directors, under the terms of this authorisation, resolved on 8 September 2005 to execute a new issue, without preference to existing shareholders, to institutions and the general public of 3,808,000 shares at an issue price of SEK 49 per share.
The issue resolution means that the Company’s share capital will increase by a maximum of SEK 380,800 through the issue of a maximum of 3,808,000 shares. After the new issue has been made, on the assumption that the Offer is fully subscribed, the Company’s share capital will amount to SEK 1,240,921, divided over 12,409,210 shares. In the event that the Offer is fully subscribed, the Com- pany will be provided with SEK 186.6 million before issue expenses1). In the event that the Offer is fully subscribed, the newly-issued shares will amount to 30.7 percent of the total number of shares.
The Offer will not be guaranteed. The Offer is conditional on no circumstances arising which could result in the date for executing the Offer becoming unsuitable. Such circumstances may be of an economic, financial or political nature, and involve circumstances in Sweden or abroad. Further, the Offer is conditional on the new share issue being subscribed to 50 percent or more. The Offer may be withdrawn in whole or in part.
The Company’s principal shareholders, members of the Board and key management personnel – whose holdings jointly represent approximately 51 percent of the shares and votes in the Company, provided that the Offer is fully subscribed and following full dilution – have agreed with Öhman that they will not dispose of their shares in the Company during a period of six months after the first day of listing without first receiving Öhman’s written consent.
The newly-issued shares are expected to be listed on NGM Equity around 21 October 2005. A trading parcel will consist of 100 shares.
In consequence of the above, the Board of Directors of Wayfinder Systems, in accordance with the conditions and particulars in this prospectus, hereby invite institutions and members of the general public to subscribe for shares in Wayfinder Systems.
Lund on 8 September 2005
Wayfinder Systems AB (publ) The Board of Directors
1) Issue expenses, including financial, legal and other advice, as well as expenses relating to the production of the prospectus, are estimated at approximately SEK 12.6 million.
3 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 4
Conditions and Offer particulars
The Offer printed text. Only one application form per person will be Institutional investors and the general public are invited accepted. to subscribe for shares in Wayfinder Systems’ new issue, involving a maximum of 3,808,000 shares, corresponding Investment agent to a maximum 30.7 percent of the capital and votes in The prospectus and application form for Sparbanken Finn’s Wayfinder Systems provided that the Offer is fully sub- customers will be available at all branches of Sparbanken scribed. The new issue will provide Wayfinder Systems with Finn. Sparbanken Finn’s customers may apply by handing a maximum of SEK 186.6 million. in their application at any branch of the bank, or by post- ing their application to: Issue price Sparbanken Finn The issue price is SEK 49 per share. Brokerage commission Emission/Wayfinder Systems will not be payable. Box 44 SE-221 00 Lund, Application period Sweden Subscription applications for shares must be lodged or sent in during the period from 15 September to 17.00 on 30 Applications must be received by Sparbanken Finn at the September 2005. The Board of Directors may decide to latest by 17.00 on 30 September 2005. extend the application period. If the Board of Directors Submitted application forms are binding. Incomplete or decides to extend the application period, the date for pay- incorrectly completed application forms may be disre- ment and receipt of shares will be delayed by the same garded. No additions or amendments may be made to the time period as the extension. printed text. Only one application form per person will be accepted. Application The prospectus and application form may also be ordered Subscription applications for shares are to be made by by telephoning + 46 (0)46-16 75 88 and will be available sending in the application form accompanying the at Sparbanken Finn’s website (www.sparbankenfinn.se). prospectus. Subscription will be for parcels of an even 100 shares, however not less than 200 shares. Applications are to be sent to or lodged with: Allocation The allocation of shares in Wayfinder Systems will be E. Öhman J:or Fondkommission AB decided by the Board of Directors of Wayfinder Systems in Emissionsavdelningen/Wayfinder Systems consultation with Öhman. The goal of the allocation is to Box 7415 achieve a sound institutional shareholder base and a wide SE-103 91 Stockholm, Sweden distribution of shares, with the aim of creating a liquid Office address: market in the shares and securing the required shareholder Berzelii Park 9 spread. Stockholm The allocation is not dependent on when during the appli- Applications must reach Öhman at the latest by 17.00 on cation period the application was submitted. In the event 30 September 2005. that the issue is oversubscribed, the number of shares allocated may be less than the number applied for, and it The prospectus and application form will be available at is possible that no shares will be allocated to some Öhman’s offices in Stockholm and Malmö, on Öhman’s web- subscribers. The allocation may also take place in whole or site (www.ohman.se) and on Wayfinder Systems’ website in part by lot. Applications from business associates of (www.wayfinder.se). Wayfinder Systems and customers of Öhman and The prospectus and application form may also be ordered Sparbanken Finn may be given preference. by telephoning + 46 (0)8-402 51 32. Shares may be allocated to employees of Öhman and Submitted application forms are binding. Incomplete or Sparbanken Finn, but these will not be given priority. Such incorrectly completed application forms may be disre- allocations will be handled in compliance with the rules of garded. No additions or amendments may be made to the the Swedish Securities Dealers’ Association, Fondhandlare-
4 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 5
Conditions and Offer particulars
föreningen, and the regulations laid down by the Swedish Right to dividends Financial Supervisory Authority, Finansinspektionen. The shares carry the right to dividends from and including Notification of allocation financial year 2005. Profit distribution will, where appro- priate, be handled by VPC. As soon as possible after the allocation of shares has been determined, contract notes will be sent to subscribers who The Board of Directors of Wayfinder Systems does not have been allocated shares. The estimated date for this is expect to declare any dividend for financial year 2005. 4 October 2005. Information will not be sent to sub- scribers who have not received an allocation of shares. Liquidity guarantee Wayfinder Systems has entered into an agreement with Payment Öhman under which Öhman stands as liquidity guarantor Cash payment for allocated shares is to be made in accor- for the shares in Wayfinder Systems. The undertaking, dance with the instructions on the contract note no later briefly, involves continuously setting buy and sell prices than 7 October 2005. If a custody account with Öhman or for the shares. The purpose of the liquidity guarantee is to Sparbanken Finn is specified on the application form, the reduce the difference between the buy and sell prices and funds will be taken directly from the custody account. thereby promote liquidity. The agreement will run for six If full payment is not received by the specified time, the months from the date of listing. allocated shares may be transferred to another subscriber. If the selling price on such transfer is lower than the sell- Undertaking by the principal shareholders, ing price under the Offer, the difference may be demanded the Board of Directors and key management from the subscriber who received the initial allocation. personnel The Company’s principal shareholders, that is to say Medici Receipt of shares Holdings Ltd., POS Invest Belgium Sprl, Joshua Mailman, Wayfinder Systems is party to VPC’s account-based securi- Nordic Wireless AB and Metdist Limited, the members of ties system, and no physical share certificates will, there- the Board Bernhard Steiner, Pär Arvidsson, Peter Blom fore, be issued. and Magnus Nilsson (directly and through companies) and all key management personnel in the Company, After full payment has been received and registered, which Stefan Bengtsson, Franz Bonner, Lars-Erik Larsson and normally takes place several banking days after payment, Jonas Sellergren as well as Jan Höjman – whose holdings the Company will register the new issue with the Swedish jointly represent approximately 51 percent of the shares Companies Registration Office, Bolagsverket, which nor- and votes in the Company, provided that the Offer is fully mally takes about a week. After the new issue has been subscribed and following full dilution – have agreed with registered, the shares will be entered in the purchaser’s Öhman that they will not dispose of their shares in the securities account. Notification that the shares are now Company during a period of six months after the first day available in the purchaser’s securities account will be sent of listing without first obtaining Öhman’s written consent. out by VPC, beginning on 20 October 2005. For purchasers whose shares are held by nominees, notification will be Conditions for the implementation of the given in accordance with the procedures adopted by the Offer nominee. The Offer is conditional on no circumstances arising which Listing on NGM may result in the date for executing the Offer becoming unsuitable. Such circumstances may be of an economic, Wayfinder Systems intends to list the Wayfinder Systems financial or political nature, and involve circumstances in share on the Nordic Growth Market NGM, provided NGM Sweden or abroad. Further, the Offer is conditional on the approval. Nordic Growth Market NGM is a stock market new share issue being subscribed to 50 percent or more. under the supervision of the Swedish Financial Supervisory The Offer may be withdrawn in whole or in part. In that Authority. event, notification will be published at the earliest oppor- Trading parcels will consist of 100 shares. The listing on tunity through a press release. NGM Equity is expected to take place on 21 October 2005.
5 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 6
Background and reasons
Wayfinder Systems is an innovative company which offers The commercialisation of the Company’s products has content services to mobile phone users, particularly already led to a number of collaborative projects with through mobile operators and mobile phone manufacturers, mobile phone operators and mobile phone manufacturers. as well as through distributors and the Internet. Wayfinder If it is to continue to be a reliable partner and the clear Systems is now on the threshold of a period of increased first choice of these players throughout the world, the commercialisation and marketing activities with a prize- Company must demonstrate a solid balance sheet during winning portfolio of products and services. the expansion of the operation.
The market for navigation and location based services has In light of the strongly growing market and the opportuni- been one of the segments within mobile communication ties open to the Company in the global market, the Board which has been expected to grow most rapidly since the of Directors resolved to float a new issue and to apply for end of the 1990s. It was not, however, until 2003 that the a listing of the Company’s shares on NGM. The new issue market showed the growth that forecasters had been will create the necessary financial conditions to enable the expecting for so long. This acceleration was further rein- Company to take advantage of the business opportunities forced during 2004 and the current year. Part of the driving the market offers, both today and in the future, and force behind this market trend is that mobile phone thereby to increase sales and ensure a high level of prof- operators began to market navigation services, and so itability. The flotation of the Company’s shares will made personal navigation available to the wider public. increase the Company’s visibility, and the Company expects Technological developments have also made a strong that the listing will also generate greater confidence contribution to the development of navigation services, among customers and partners. In addition, the listing is since they have made it possible to use the services expected to improve the Company’s ability to recruit and through mobile phones and PDAs. Given the present market retain desirable staff. Together, the new issue and the list- situation, and the expectation that GPS receivers will be ing will greatly improve Wayfinder Systems’ prospects of integrated into mobile phones in the very near future, just participating actively in the sector consolidation which is as cameras are today, the Company anticipates very strong currently in progress, and which is expected to gather market growth for navigation services via mobile phones. speed. Wayfinder Systems’ focus is now on exploiting the opportu- Potential subscribers are invited to study the information nities which the expanding market will offer for the presented in this prospectus, which has been prepared in Company’s highly-developed products and services. connection with the Offer to subscribe for shares in Wayfinder Systems’ growth strategy is based on the goal of Wayfinder Systems. The Board of Directors of Wayfinder the Company becoming the leading global supplier of navi- Systems is responsible for the content of the prospectus. The gation services to mobile phone operators. Growth will be Board of Directors hereby guarantees that, to the best of its based primarily on further collaboration with mobile opera- knowledge, the information in the prospectus is in conform- tors at global level, leading to strong growth in the ity with the actual circumstances, and that nothing of mate- number of subscribers. Important success factors for the rial significance, which may affect the picture of Wayfinder Company in the exploitation of market growth include its Systems presented in the prospectus, has been omitted. global presence and cutting-edge technology. Lund on 8 September 2005 The increased geographical presence, with expansion to North American and additional European countries, means Wayfinder Systems AB (publ) that the Company will be investing significant resources in The Board of Directors expanding its sales and marketing organisations.
6 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 7
Comments by the CEO
From technology to commercial On a personal level, I am success. That’s how we see our surprised at how much time task at Wayfinder Systems. we spend discussing distances Highly-qualified staff have between locations, how to get spent years developing the from A to B and where the services and products which nearest shop is. It would be are now seeing the light of just as interesting to be able day. Wayfinder Systems has to find out where my friends always had a vision of the and colleagues are, simply by mobile phone – owned by pushing a button. With every man and woman – as Wayfinder as part of every- something to be used for much one's daily routine, the world more than just voice. For many and its geography becomes a years, mobile phone operators straightforward topic of con- have invested in the develop- versation. Naturally, Wayfinder ment of new services, and Systems' services and products location services have formed also have a substantial com- a natural part of this. The market for many of these mercial value. This value relates to time saved, increased services has, however, taken some time to catch up. reliability, increased sales for the businesses in our data- base, effective management of an organisation's resources, It is, however, now clear that dramatic changes have and increased security, to name a few. occurred. For a number of years, demand for navigation services in particular (both vehicle-based and personal) In the past year, much has happened on the commercial has increased substantially. In 2004, there were 4.3 million side of Wayfinder Systems, and we are now seeing the new users in Europe alone, the equivalent of a market result of this in our own organisation. In a very short worth SEK 30 billion. Even so, this is just the beginning of space of time, the company has changed from a largely a trend which will give mobile phone users access to infor- technical organisation to one with a much more pro- mation and applications which were previously only acces- nounced commercial focus. We plan to continue to launch sible via a PC and a fixed Internet link. Another alternative new top-class products and services to underpin our has been to invest in expensive products, specially devel- commercial success. Our product development operation oped, for example, for the automotive industry. has changed dramatically. For many years, it concentrated on developing internally-generated ideas to the best of its At Wayfinder Systems, we use a number of phrases as con- ability, but now we have gained access to the most stant reminders to ourselves of for whom we develop our important product developer of all – the customer! products and services. The two most frequently recurring ones are “For people on the move” and “We get you there”. In the case of one of our customers, we allowed end-users Mobile phone access to maps, directions and voice instruc- to test our products free of charge for an introductory tions which tell people in good time when to make a turn period. At the end of the test period, when the users were – that is the core offer to our customers. Our aim is to given the option of either purchasing or not purchasing develop and sell functional and useful services with a sig- the services we offered, two out of three decided to nificant entertainment content. Our operation is based on become paying customers. On the basis of this result, we the need for people to receive answers to questions about can confidently state that we have the right products and geographical positioning. The value of such information services, that there is a market for them and that now is does, of course, vary from person to person and from one the time to create an organisation which will sell effec- situation to another. tively what we have developed.
7 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 8
Comments by the CEO
Our most important partners in this pursuit are, without Wayfinder Systems will focus on user-friendly services question, the mobile operators. Mobile operators are look- which can easily and inexpensively be integrated into the ing for services which will complement existing voice serv- mobile operators' existing infrastructure. We have started ices and which can compensate for the significant price by investing in Europe and North America. As soon as sales pressure they are exposed to in voice-based services. In are picking up in these markets, we will progress to mar- addition, Wayfinder Systems' services create the right con- kets where we have so far declined invitations to launch ditions for a deeper relationship between the operators our services. and their customers. In the long term, this is of the Our vision is simple - Wayfinder in every mobile phone! utmost importance to operators who wish to avoid the high costs associated with the acquisition of new cus- Finally, I would like to say that I have great confidence in tomers. Finally, we have determined that Wayfinder users the future. We are facing some hard work but, above all, an are also inclined to use other data services offered by the enjoyable and stimulating challenge. operators, and this further confirms the value of Wayfinder Wayfinder Systems welcomes you as a shareholder. Systems to the operators.
We are now building a sales organisation with a mixture of Key Account and geographical responsibility, where our key clients are the mobile operators and their customers. Our sales and marketing organisation will undergo significant expansion. The dominant aspect of our commercial organi- sation is customer focus with clearly defined customer Magnus Nilsson responsibility. This customer responsibility is global and is supported by local resources wherever necessary. CEO
8 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 9
Wayfinder Systems in brief
Wayfinder Systems is a Swedish company which offers con- increases, and the market for position-related services tent services to mobile phone users based on geographical matures. With the aim of maintaining and strengthening position. The Company develops and offers for sale con- its market position, the principal features of Wayfinder sumer-orientated navigation and content services through Systems’ strategy are: mobile phone operators, mobile phone manufacturers, • To sell to final consumers will primarily take place via distributors and the Internet. mobile operators. Other distribution channels are a Wayfinder Systems’ operation derives from a development precondition for this strategy. project which started within the telephone company, LM • To maintain a cost-effective server solution to offer Ericsson (“Ericsson”) in 1989. Behind the development competitive products in terms of both price and content. project, lay a vision that, some time in the future, GPS • To provide technical solutions that will be compatible (Global Positioning System) receivers would be integrated with all significant mobile platforms on the market. into mobile phones. In 1995, the operation was spun off, • To ensure freedom of action through a strong balance and shortly after that, transferred to the Company, which sheet. was then called Itinerary Systems AB. In 2002, the Company adopted its present focus within navigation The market applications. Wayfinder Systems operates within one of the most rapidly growing market segments in mobile communications – Wayfinder Systems launched its main product, Wayfinder location services, focusing on navigation. After strong Navigator, in March 2003, and short thereafter acquired its growth over the past ten years, the European market first users. From being largely technology-orientated, totalled SEK 30 billion in 2004, and the market is expected Wayfinder Systems has, since then, metamorphosed into a to grow to SEK 52 billion during the current year.1) The company with sharp commercial focus. most important factor underlying this trend is the consid- Mission erable degree of interest shown by consumers and busi- nesses in rapid and simple route-finding from one place to Wayfinder Systems’ mission is to offer location services another. tailored to the mass-market, such as navigation, mapping and add-on services for mobile phones. Through competi- With the increased launch rate of mobile phones with the tive pricing, attractive payment models and user-friendly capacity to handle navigation, mobile phones are expected services, Wayfinder Systems reaches all “people on the to be the fastest-growing platform type for navigation. As move”. a result, an increasing number of mobile phone operators, both in Europe and in North America, see navigation serv- Goals ices as a vital component in their portfolios of data-traffic Wayfinder Systems’ goal is to become a market leader in generating services. mapping, route-finding and navigation services, with the Organisation focus on mobile phone operators as partners and distribu- tion channels. By the end of 2005, Wayfinder Systems’ The Company has a subsidiary in Sweden, one in the objective is to have established collaboration with ten United States and one in Romania. Only the Romanian mobile phone operators. The Board’s target is that sales, subsidiary is currently actively operating. through organic growth, on average will double each year Scandinavian sales, customer services, administrative and over the next three years. finance functions are largely concentrated at the Com- pany’s office in Lund. The Lund office also houses the bulk Strategy of the Development Department, which is complemented Wayfinder Systems will focus on user-friendly services by a small Development Department at the Romanian which can be simply and inexpensively integrated into office. The Stockholm office is primarily the base for the mobile operators’ existing infrastructure. The growth target group management team and market and sales functions. will be realised through strong growth in subscriptions as The Company has a total of 60 employees, of whom around the number of collaborations with mobile operators 30 are involved in technical development.
1) Source: Tele Atlas.
9 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 10
Financial trends in summary
Income statement Jan–Jun1) Amounts in SEK thousands 2005 2004 2003 2002 2001 2000
Net sales 25,009 23,445 2) 13,343 4,908 1,941 5,156 Capitalised work on own account 3,862 6,125 9,700 9,754 11,579 0 Operating expenses –40,648 –49,859 –34,659 –21,001 –22,577 –20,344 EBITDA –11,777 –20,289 –11,616 –6,339 –9,057 –15,188
Depreciation on tangible assets –330 –638 –810 –796 –809 –791 EBITA –12,107 –20,927 –12,426 –7,135 –9,866 –15,979 Depreciation on intangible assets –3,700 –6,435 –3,016 –913 –198 –228 EBIT –15,807 –27,362 –15,442 –8,048 –10,064 –16,207
Financial items, net –504 –535 969 1,848 –301 93 Loss after financial items –16,311 –27,897 –14,473 –6,200 –10,365 –16,114
Tax 0––––36 Net loss for the year –16,311 –27,897 –14,473 –6,200 –10,365 –16,078
Balance sheet Jan–Jun1) Amounts in SEK thousands 2005 2004 2003 2002 2001 2000
Assets Intangible assets 27,551 27,389 27,698 21,015 12,173 791 Tangible assets 1,403 977 1,362 1,447 2,127 2,850 Financial assets – 472 100 100 100 100 Inventories 3,633 1,433 45 1,839 1,890 2,033 Current receivables 12,467 6,830 10,067 3,634 758 3,420 Cash and bank balances 5,273 888 1,452 43 49 623 Total assets 50,327 37,989 40,724 28,078 17,097 9,817
Equity and liabilities Equity 25,363 21,000 18,539 5,953 1,602 6,832 Interest-bearing liabilities 5,591 1,925 4,900 1,607 1,198 20 Other liabilities 19,373 15,064 17,285 20,518 14,297 2,965 Total equity and liabilities 50,327 37,989 40,724 28,078 17,097 9,817 1) For comments on the development during Jan – Jun 2005, see “Interim report for the period 1 January – 30 June 2005” on pages 48–51. 2) Net sales and operating expenses have been reduced by SEK 2.5 million in order to comply with IFRS (International Financial Reporting Standards).
10 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 11
Financial trends in summary
Cash flow statements in summary Jan–Jun Amounts in SEK thousands 2005 2004 2003 2002 2001 2000
Cash flow from operating activities –12,281 –21,373 –10,647 –4,490 –9,358 –15,095 Change in operating capital –1,892 –1,755 –9,261 3,807 15,492 –974 Investment activities –4,618 –6,751 –10,424 –9,871 –11,666 –2,965 Financing activities 23,176 29,315 31,741 10,548 4,958 15,932 Cash flow for the period 4,385 –564 1,409 –6 –574 –3,102
Cash and cash equivalents at start of year 888 1,452 43 49 623 3,725 Cash and cash equivalents at end of period 5,273 888 1,452 43 49 623
Key ratios Jan–Jun Note 2005 2004 2003 2002 2001 2000
Return on equity, % 1 neg neg neg neg neg neg Return on assets, % 2 neg neg neg neg neg neg Operating margin, % 3 neg neg neg neg neg neg Profit margin, % 4 neg neg neg neg neg neg Equity ratio, % 5 50% 55% 46% 21% 9% 70% Debt/equity ratio 6 0.0 0.0 0.2 0.3 0.7 –0.1 Interest coverage ratio 7 neg neg neg neg neg Net investment in tangible assets, SEK thousands 756 253 724 114 212 1,970 Capitalised development costs, SEK thousands 3,862 6,126 9,699 9,755 11,578 989 Number of employees 52 38 30 30 36 27 1) Net loss for the year as a percentage of average equity. 2) Loss before tax with add back of interest expense and fluctuations in exchange rate divided by average balance sheet total. 3) Operating loss after depreciation as a percentage of invoicing for the year. 4) Loss after net financial income/expense as a percentage of invoicing for the year. 5) Equity as a percentage of balance sheet total. 6) Interest-bearing liabilities, minus interest-bearing receivables and cash and cash equivalents, divided by equity. 7) Loss before tax with add back of interest expense and fluctuations in exchange rate divided by interest expense.
Data per share Jan–Jun All data per share is adjusted for split Note 2005 2004 2003 2002 2001 2000
Equity, SEK 1 4.4 3.7 3,7 1.6 0.4 4.6 Profit, SEK 2 neg neg neg neg neg neg Dividends, SEK – ––––– Number of shares at close of period 8.326.210 4.967.000 24.835 18.625 18.625 7.450 Number of shares at close of period after dilution 3 9.151.210 7.951.680 24.835 18.625 18.625 7.450 P/E ratio, after the Offer, multiple 4 neg Price/Equity, after the Offer, multiple 5 2.8 1) Equity through the number of shares at close of period taking account of the dilution effect of outstanding warrants and convertibles. 2) Net loss for the year divided by average number of shares. 3) The number of shares at close of period after conversion to shares of all outstanding warrants and convertibles. 4) The issue price divided by earnings per share, provided that the Offer is fully subscribed. 5) The issue price divided by equity per share, provided that the Offer is fully subscribed and following full dilution.
11 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 12
Comments on historical financial trends
General Sweden has been the single largest market, representing The financial information in this section is based on 12 percent of net sales during financial year 2004. The Wayfinder Systems AB’s annual reports for financial years trend is moving towards an increasing proportion of sales 2000–2004 and refers to the Parent Company, since the outside Sweden. subsidiaries were, in fact, dormant during the above- Capitalised development work on own account is recorded mentioned periods. Wayfinder Systems financial year is the gross in the income statement, and is, accordingly, calendar year. included in both operating income and operating expenses. The income statements and balance sheets for 2004 have been adjusted in respect of classification to achieve com- Results parability with the years 2000–2003. Wayfinder Systems’ Since it began trading, the Company has recorded an oper- annual reports for financial years 2000–2004 have been ating deficit. This must be seen in the light of the sub- audited by Ernst & Young. stantial resources dedicated to research and development, as well as the construction of the organisation. During the Sales development phase and the commercialisation phase, these Up until the end of 2002, Wayfinder Systems’ operation losses were according to plan. focused on the development of the Company’s first prod- ucts. During autumn 1999, agreements were signed with a Accounting of income number of municipalities for the supply of vehicle units, Income is accounted for to the extent it is likely that and in 2000, two major pilot projects were carried out for the economic advantages will be made available to the route-finding services via SMS and WAP for two mobile Company and the income can be predicted in a reliable phone operators as a stage in getting the services into way. When the sales price includes an amount pertaining commercial operation. Telia Respons AB signed a licensing to later service, the accounting of this amount is post- agreement with the Company in November 2001, but the poned until the period the service is performed. greater part of this income was periodised to 2002. In late 2002, agreements were finalised with mobile phone manu- Fixed assets facturers on licensing Wayfinder Systems’ server technol- The majority of Wayfinder Systems’ fixed assets consist of ogy. The licence income strengthened the Company’s view intangible assets, which amounted to SEK 27.4 million at on the strength of the technology and the market poten- the end of 2004. The bulk of the intangible assets repre- tial of the Company’s products. sent capitalised development work. The Company has capi- During 2003, the Company expanded its product range with talised staff costs and fixed costs relating to development Wayfinder Mobile Navigator and Wayfinder Mobile work. As of 1 January 2001, product development costs are MapGuide. The efforts to commercialise the Company’s reported in accordance with the Swedish Financial operation were intensified during this period, and in the Accounting Standards Council’s recommendation number second half of 2003, a market organisation was built up, 15. The Company’s total investment in development work with sales offices in France, Luxemburg, Spain, Great which has been capitalised as an intangible asset for 2004 Britain and Germany. During the fourth quarter of 2003, was SEK 6.1 million, and for 2003 the figure was SEK 9.7 the Company entered into the first of several strategic million. agreements with Nokia, and sales for the year amounted to No substantial investments over and above what may be SEK 13.3 million. regarded as normal for operating activities are planned for In 2004, Wayfinder Navigator widened its product range 2005. further to be compatible with more telephone models and platforms. In addition, an agreement was concluded with the Austrian telecoms operator, A1, and sales took off, reaching SEK 25.9 million.
12 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 13
Comments on historical financial trends
Depreciation Sensitivity analysis Tangible and intangible assets are taken up at the acquisi- Wayfinder Systems has, until now, primarily been a devel- tion value after deduction of depreciation according to opment company, and has, therefore, generated an operat- plan. The depreciation period is calculated on the original ing loss (the largest costs have been staff expenses, rent acquisition values, and is distributed over the estimated and so on). In the future, Wayfinder Systems’ results will economic life of the asset. The depreciation period for be affected by a greater number of factors. Market growth, machinery, equipment and intangible assets is 5 years, sales growth and exchange rates are some of the factors while the depreciation period for construction equipment which are expected to have the greatest impact on the is 10 years. Company’s results in future years.
On the basis of the Company’s current position, it is not Current assets possible to make a detailed and relevant sensitivity analy- As at 31 December 2004, the Company’s current assets sis in respect of these factors. A static sensitivity analysis totalled SEK 9.1 million. Accounts receivable amounted to is misleading, because it does not include any effect of the SEK 6.1 million, equivalent to 23.6 percent of net sales for compensating measures which a company should have 2004. taken if certain events occurred. Since the majority of all staff have been employed in Sweden, and purchases have Equity and liabilities been made largely in Sweden and Asia, costs have been Equity at the year end 2004 amounted to SEK 21.0 million. almost exclusively generated in SEK and USD. Given that Current liabilities as at 31 December 2004 were SEK 13.9 many of Wayfinder Systems’ customers are foreign compa- million, of which accounts payable represented SEK 6.7 nies, and that a significantly larger proportion of the million, and deferred income SEK 2.5 million. Company’s costs are expected to be generated in foreign currency as the operation expands, currency exposure will Taxes increase over the next few years. Wayfinder Systems’ The deficit for taxation purposes in the 2005 assesment currency exposure will primarily be in EUR and USD, in was SEK 49 million. Deferred income taxes recoverable addition to SEK. The Company intends to pursue an active have not been accounted for. finance and currency policy.
Financial position As at 31 December 2004, the Company’s cash and cash equivalents amounted to SEK 2.9 million, including unutilised bank overdraft facilities. During the period 2000–2003, a total of SEK 58.4 million in capital was pro- vided through share issues and shareholders’ contributions. A new issue aimed at new and existing shareholders was made in the second half of 2004, totalling SEK 27.6 mil- lion, and in December 2004, a convertible loan was con- verted to shares, which strengthened equity by 5.0 million. In January 2005, a further new issue was decided on, and this, together with subscription through warrants, provided the Company with SEK 20.7 million.
13 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 14
Risk factors
Anyone contemplating investing in Wayfinder Systems Counterparty risk should carefully weigh up the risks described below, along Through working with well-established customers who have with the other information in this prospectus. A summary is a high level of creditworthiness, and through credit insur- given below of the risks which may be significant for ance of customer payments, credit risks can be reduced. Wayfinder Systems’ operation and future development, Despite this, the possibility cannot be excluded that the which the Board of Directors of Wayfinder Systems considers Company could be affected by a failure of customers to to be the most relevant in evaluating a potential investment pay, or that customers may find themselves in financial in the Company. The list of risk factors is not exhaustive, straits. Should this occur, it is possible that it would have and they are not given in any order of priority. a negative impact on the Company’s financial position.
Dependence on key staff Technical and system faults and breaches of Wayfinder Systems’ operation is dependent on the efforts, security abilities and competence of key individuals and specialists The Company’s operation is to a great degree dependent on within the Company. Even though the Company cannot see internal and external information systems, external mobile any reasons why these key individuals and specialists telephony systems and other technology. The Company’s would want to leave the Company, the possibility of a technical infrastructure, and through that its operation, is negative impact on the Company’s operation if those key vulnerable to damage or disruption, resulting, among other individuals or specialists decided to leave the Company things, from natural disasters, interruptions in the power cannot be ruled out. supply, faults in the telephone system or faults in external computer networks. Should such damage or interruption Need for additional capital occur, there may be a negative impact on the Company’s Wayfinder Systems’ Board considers that the Offer will, for operation. the foreseeable future, provide the Company with the nec- Wayfinder Systems products are in part complex, and may essary capital to achieve its strategy, objectives and the contain undiscovered faults or performance problems. Even expected growth. Should the Company exceed or fall short though the current versions have been tested, both inter- of its budget and forecasts, additional capital may, how- nally and externally, the current versions, new versions or ever, be required to finance the increased need for operat- developments of the products may contain faults which ing capital or to cover operational losses. Equally, addi- show up only after deliveries of the products to customers tional capital may be required if the Company decides to have begun. Any faults may give rise to claims, loss of make acquisitions for they purpose of broadening the prod- income and negative publicity. uct offer or for other strategic reasons. Additional capital may then be obtained though issuing securities or borrow- Competition ing. Any issue of securities may lead to a dilution of exist- Wayfinder Systems operates in a fickle market which is ing shareholders’ holdings. Alternatively, current share- exposed to competition, and faces competition from a holders may be offered the option of injecting further number of different directions and from various types of capital. player. Competitors may have greater financial resources than the Company, and so be in a better position to take Currency risk advantage of future business opportunities. It is possible Exchange rates have historically shown substantial fluctua- that increased competition may reduce opportunities for tions, and are affected by factors outwith the Company’s growth and profitability for Wayfinder Systems. control, and the indications are that they may fluctuate sharply in the future. A great deal of Wayfinder Systems’ Seasonal variations operational revenue is linked to EUR, while its costs are The market in which Wayfinder Systems operates is still primarily in SEK and USD. These fluctuations, especially in immature, and this means that seasonal variations cannot the EUR/SEK rate, may in future have a significant nega- be discerned. Since the Company’s sales are partly corre- tive impact on the Company’s results, operation and finan- lated with new sales of mobile phones, and since the cial position. market for mobile phones exhibits seasonal variations,
14 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 15
Risk factors
Wayfinder Systems may also be expected to see seasonal right, trade secrets, trademarks, confidentiality undertak- variations in its sales. In addition, use of the services, ings and other agreements to establish and protect the including supplementary services, may be more intensive at Company’s intellectual property rights. The Company has certain times of the year. Seasonal variations may affect not registered any patents for its software. The source code the Company’s liquidity, as well as its sales and results for is protected as a trade secret, and, where appropriate, by the different quarters. copyright. The measures taken by Wayfinder Systems to protect its copyright may prove to be inadequate, and Customer dependence third parties may infringe the Company’s copyright, its At present, Wayfinder Systems has a relatively high cus- trademarks, domain names and similar rights. Conversely, a tomer concentration, implying a smaller number of large third party may bring an action against Wayfinder Systems customers and a larger number of smaller customers. The alleging infringement of the third party’s rights, such as Company’s ambition is gradually to increase the number of copyright or trade mark rights. There is a high level of large customers. The loss of any the Company’s larger uncertainty associated with legal disputes over copyright customers would, possibly, have a negative impact on the and trademarks etcetera, which makes the outcome of such Company’s operation and results. disputes difficult to predict. In addition, legal and other costs in connection with legal disputes, irrespective of Technological progress whether Wayfinder Systems succeeds in upholding its The market in which Wayfinder Systems is active is rela- rights, may have a damaging effect on Wayfinder Systems’ tively young, and is subject to changes and constant tech- financial position. Improper use of the source code for nological progress. To maintain its market position and to Wayfinder Systems’ products could limit Wayfinder Systems’ take market share, the Company must continue to invest in ability to protect its intellectual property rights in the technological and product development. Even though future. In addition, improper use of the source code or Wayfinder Systems has been and is successful in doing so, other rights by third parties could damage Wayfinder this may change. It may also happen that the cost of tech- Systems’ reputation. It is also possible that Wayfinder nological progress and product development, marketing Systems’ competitors and others may assume or use prod- and sales becomes greater than estimated, and that uct or other names which are reminiscent of Wayfinder expected sales volumes are not achieved. Systems and its trademarks, which would compromise the Company’s ability successfully to build and maintain strong Intellectual property rights trademarks. Wayfinder Systems takes the view that the Company’s abil- ity to sell its products successfully is partly dependent on No previous organised trading in Wayfinder the effective defence of its intellectual property rights and Systems shares trade secrets and the favourable resolution of any disputes. Before the Offer, no organised trading has taken place in If Wayfinder Systems is unsuccessful in this, the Company’s the Company’s shares. Even though Wayfinder Systems ful- ability to sell its products and services may be limited, fils the requirements for listing on NGM Equity, no guaran- which may lead to a deterioration in the Company’s results. tee can be given that active trading will develop. Various Wayfinder Systems is dependent on a combination of copy- factors may cause the share price to fluctuate sharply.
15 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 16
Taxation
The following summary of certain Swedish tax regulations is Wealth tax based on the legislation currently applicable for individuals Shares in Wayfinder Systems will be listed on NGM Equity, and joint stock companies liable without limit to taxation in and are, therefore, exempt from wealth tax. Sweden unless otherwise specified. The summary is intended only as general information, and does not, for example, take Joint-stock companies into account securities held as inventory items in a business For joint-stock companies, all income is taxable, including activity or held by a partnership. Nor does the summary capital gains and dividends, in income tax schedule Busi- included the special regulations relating to tax-free capital ness Activities, at a tax rate of 28 percent. gains (including the prohibition of deductions for capital Deductions for capital losses on shares for which a deduc- losses) and dividends in the corporate sector which may be tion is to be made, are granted only against taxable capital applicable where the investor holds shares in Wayfinder gains on shares and other securities which are taxed as Systems which can be regarded as business-contingent.1) shares. In certain cases, such capital losses can be Specific tax regulations applicable to special corporate cate- deducted from capital gains on shareholders’ rights within gories or certain legal entities are not included in the sum- a corporate group if there is a group contribution right mary. Since the tax treatment of every individual is partly among the companies. Capital losses which cannot be dependent on their particular situation, every prospective utilised in a specific year can be utilised against taxable investor should consult a tax advisor on the tax conse- capital gains on shares and other securities which are quences of the Offer on their circumstances, including the taxed as shares during subsequent tax years without limit application of foreign regulations and taxation agreements. of time. Individuals Shareholders who have limited tax liability in For individuals, all income on capital, such as dividends Sweden and capital gains, is normally taxable in the income tax Shareholders who are not domiciled in Sweden for tax pur- schedule for capital at a tax rate of 30 percent. The main poses, and who receive dividends on shares in a Swedish rule is that 70 percent of capital losses are deductible. joint-stock company, are normally subject to Swedish Capital losses on shares may, however, be fully set off coupon tax. The same applies to disbursements from the against capital gains arising in the same year on shares company, including those in connection with the redemp- (listed or unlisted) or on market-listed securities taxed as tion of shares and the repurchase of the company’s own shares. shares through an acquisition offer targeted at the share- If a loss arises in the income tax schedule for capital, a holders. The coupon tax rate is 30 percent, but this is, in tax reduction of 30 percent is granted on that part of the general, reduced through double-taxation agreements loss which does not exceed SEK 100,000, and of 21 percent which Sweden has signed with other countries. In Sweden, of the remaining loss. The tax reduction shall apply to the deduction of coupon tax is normally made by VPC, or, municipal and central government income tax, as well as for nominee-registered shares, by the nominee. to central government property tax. The loss may not be Shareholders who are not domiciled in Sweden for tax pur- carried forward to subsequent tax years. poses are not normally liable for tax in Sweden on capital For individuals resident in Sweden, there is a preliminary gains which arise in connection with the disposal of withholding tax on dividends from shares of 30 percent. Swedish shares. Individuals who were resident in Sweden The preliminary tax is normally withheld by VPC or, for or who had been permanently resident in Sweden at any nominee registered shares, by the nominee. time during the year of disposal or during the ten years immediately preceding the disposal, are, however, liable for tax on capital gains on Swedish shares. This tax liabil- ity may be limited though double-taxation agreements with the country in which the shareholder is domiciled.
1) Listed shares are regarded as business-contingent if the shareholding consists of a capital assets for the holder, and the holding amounts either to at least 10 percent of the votes or is dependent on businesses run by the owning company, or, taking account of the ownership relationship or organisational circumstances, may be regarded as associated with the owning company.
16 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 17
Market overview
An expanding market From PDA to mobile phone Wayfinder Systems operates within one of the fastest- One indication of the rapid growth of the market is that growing market areas in mobile communications – location one in three PDA’s sold in Europe in 2004, were sold with a services, focusing on navigation. Navigation is a concept navigation system.1) Since the breakthrough in the late used here to describe the applications and services used to 1990s, it has been possible to connect a navigation system provide people with geographical directions. A navigation with maps to a local memory card, and guide a user to a application answers such questions as what is the best way predetermined destination. With its high cost and limited to get from one place to another. The user is given active memory, the memory card represents a limitation. help with voice instructions, arrows, maps and symbols. Wayfinder Systems’ focus on the mobile phone as a carrier “We get you there” describes simply how we see our task for navigation and location services is in line with the at Wayfinder Systems. market trend which is seeing the free-standing PDA being rapidly replaced by smart phones, which can do everything The market for navigation, which has developed and grown a PDA can do, but also function as a phone. The introduc- dramatically in the past ten years, had a turnover of tion of attractive and user-friendly compatible phones in around SEK 30 billion in Europe in 2004, and is expected volume is now opening additional opportunities to provide to reach SEK 52 billion in 2005.1) The most important cost-effective, portable navigation which is not tied to a factor underlying this trend has been the massive interest specific vehicle. These phones (usually Java-phones) all shown by consumers and businesses in rapidly and easily have one thing in common – their memory space is lim- finding a route from one place to another. Increased trav- ited, and this makes it impossible to load any substantial elling in all its forms has led to a growing interest in geo- amount of mapping onto the phone. The phones are, how- graphical directions. Paper maps are slowly losing their ever, ideal for the type of navigation service offered by role as the primary aid on trips. One of the indications of Wayfinder Systems. The traditional systems, with large this is the proportion of new cars sold with navigation quantities of data stored locally on the phone itself have systems as standard equipment. In recent years, the pro- only a limited functionality on these units. portions of cars sold with navigation systems in Europe has risen from three percent in 1999 to eleven percent in 2004.1)
Thousands of navigation units sold in Europe Estimate sales compatible phones
Million 900 8,000 800 7,000 700 6,000 600 5,000 500 4,000 400 3,000 300 2,000 200 1,000 100 0 0 2001 2002 2003 2004 2005P 2006P 2003 2004 2005E 2006E 2007E 2008E
Personal navigation Sales mobile phones Vehicle-installed navigation Sales compatible mobile phones
Source: Tele Atlas
1) Source: Tele Atlas, the leading supplier of maps in the personal navigation segment.
17 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 18
Market overview
The market for compatible phones A further division among the applications available on the – 70 percent of all phones market is whether the information is in the navigation unit Navigation via mobile phone to date represents only a or on a server. These sub-segments are designated on- small proportion of the total market for personal naviga- board and off-board. An on-board solution means that the tion. According to an assessment by Tele Atlas, the seg- information, including maps, required for running the ment represented five percent of the market for personal application, is stored and processed on the local terminal. navigation in 2004. The launch of new phones is expected In an off-board solution, the information processing takes to open the market for navigation via mobile phones. The place on a server, and the local terminal communicates proportion of compatible phones launched is increasing with it whenever necessary. steadily. In Öhman’s judgement, the number of Symbian- based mobile phones will increase sharply over the next Development in personal navigation in Europe few years, and will achieve a penetration of around 25 per- Thousand users cent by 2008. In addition to Symbian, Wayfinder Systems’ 5,000 products are compatible with Microsoft Mobile and Java. 4,500 Wayfinder Systems believes that the great majority of Java- 4,000 based phones launched today and in the future will be 3,500 powerful enough to handle mobile navigation in the 3,000 format Wayfinder Systems offers. That is the basis for 2,500 Wayfinder Systems’ assessment that around 70 percent of 2,000 all new phones launched on the world market can utilise 1,500 the Company’s services. 1,000 500 0 The market for navigation products 2004 2005E 2006E 2007E
The market for navigation products can be divided into two Navigation via dedicated unit main segments: personal navigation and vehicle navigation. Navigation via PDA Navigation via mobile phone The first of these refers to portable products, while the latter includes products permanently installed in vehicles. The personal navigation segment, in which Wayfinder Comparison between on-board and off-board solutions Systems operates, can be further divided into three smaller An off-board solution, such as Wayfinder Systems’ applica- sub-segments, depending on whether the application is tion, permits a significantly more advanced and content- integrated into another unit, mobile phone or PDA, or rich service, partly because the quantity of information whether it is a separate, dedicated unit. Wayfinder Systems which can be offered is not dependent on the memory operates exclusively in the mobile phone segment. The capacity of the mobile phone or processor, and partly vehicle navigation segment is divided into pre-fitted and because continuous communication with a central server retrofitted systems. makes it possible to update the information and adapt it to the user’s unique position. The on-board system stores Mobile phone all the information on a locally-situated memory card in the mobile phone. A high-capacity memory card allows the Personal navigation Dedicated units storage of maps of a whole country, but in the majority of PDA cases without access to any additional information, such as company databases or hotel and restaurant reviews. On-
Pre-installed systems board systems also compete with other memory demands, Vehicle navigation such as photographs, video clips and so on, which are Aftermarket systems important focus areas for the mobile phone operators.
18 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 19
Market overview
Wayfinder Systems updates the mapping content continu- Market size and driving force ously, along with the extras which are added to the map, The consumer market for navigation products has shown such as company databases, descriptions of places on the strong growth, especially in Europe. The European market map and much more. The updated information is available for personal navigation is currently more than twice as to the user immediately, and the lead time for making a large as the US market. Since 2004, the market for per- new map available to the end-user is, in most cases, sonal navigation has overtaken the market for vehicle several months shorter than the time it takes to make navigation. TeleAtlas expects considerable growth in available a new CD or memory card with map updates. personal navigation over the next few years.
On-board navigation systems rely on the processing power Personal navigation 2004 2005P 2006P of the PDA or mobile phone for working out routes or Europe carrying out a search. On shorter routes, the computation Market volume (thousands of units) 2,300 5,000 7,000 time is comparable with the off-board system. But for Change in number of units (percent) 168 117 40 longer and more complex routes, it is considerably faster
to work out the route on a server and transfer it to the North America navigating phone, than it is to carry out the equivalent Market volume (thousands of units) 565 1,000 2,800 operation on an on-board system. Change in number of units (percent) 100 77 180
The off-board solution also enables a dynamic information Vehicle navigation content to be added. One example is the current fuel price at different filling stations, and Wayfinder Systems has Europe Market volume (thousands of units) 1,922 2,200 2,495 installed this for the Austrian operator, A1. Other examples Change in number of units (percent) 24 14 13 are traffic information, weather and a great deal of dynamic information. With maps on a memory card, it is North America difficult, and sometimes impossible, to achieve this Market volume (thousands of units) 900 1,241 1,627 dynamic feature. Change in number of units (percent) 44 38 31 The main disadvantage of an off-board solution is that the Source: Tele Atlas, April 2005 application is net-dependent when new routes or maps are Wayfinder Systems believes that the market for personal being downloaded, or when the user wants access to the navigation and mobile navigation will continue to grow extra information services which the application can offer. strongly as a result of the following driving forces: Downloading the whole route when it is worked out largely gets round the problem of network dependence. There are • Strong demand. Man’s ambition to know where he is and also hybrid solutions (of which Wayfinder is one), where to control his surroundings provides the raison d’etre for frequently re-used map material can be saved locally on navigation products for a broad target group – people the phone in compressed format. One important difference on the move. Both a rise in journeys and greater focus between off-board and on-board solutions is that only the on safety are driving demand. former generates any significant data traffic. • Technical changes. Technical advances in the accuracy and reliability of GPS receivers has created the condi- tions for portable navigation products. Improved proces- sor capacity and increased memory capacity mean that an increasing number of phone models are compatible with the type of navigation service that Wayfinder Systems offers.
19 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 20
Market overview
• Lower prices. The prices of navigation products are In 1999, the restrictions on the GPS system were lifted, expected to fall as the market grows and matures. and all users have had access to the maximum positional accuracy the system can achieve. Even before 1999, the • Increased accessibility and customer knowledge. Naviga- automotive industry used GPS in combination with other tion products used to be distributed by vehicle manufac- sensors to compensate for the positional accuracy lost due turers and other specialised installers, but now the prod- to the selective availability of GPS signals instituted by ucts are available from a wide range of distributors in the US authorities. When the GPS system was derestricted the retail sector and on the Internet. Mobile operators in 1999, it became possible to operate position-linked also have an interest in driving forward the market for services and applications which were not dependent on computer-generated services, so that they can increase additional supplementary positioning aids to function cor- their income from data traffic. rectly. The GPS system consists of 24 satellites, and is • More attractive products. Improved user-friendliness and available for commercial use as GPS receivers on the more attractive design are increasing consumer interest earth’s surface receive signals from the satellite network in the products, and turning navigation services into a free of charge. Provided that signals are received from at lifestyle product. least three satellites, the GPS receiver can, on the basis of the time taken for each signal to be received, calculate its • Integrated GPS receivers. In the relatively near future, geographical position with a very high level of accuracy. GPS receivers will be integrated into mobile phones just as cameras are today. This will provide significant Satellite navigation depends on the free transfer of signals improvements in user-friendliness, since the user does between the satellite network and GPS receivers. This com- not need to carry a separate GPS receiver. munication can be prevented if the signals are blocked by buildings, mountains or tunnels, for example, but the large • Supplementary services. With positioning as a base, a number of satellites which the GPS receivers normally have range of relevant supplementary services can be offered. contact with largely overcomes these obstacles. As an example, information content, such as weather and exchange rates, can be tailored to the individual’s A limiting factor on mobile phone-based navigation prod- position. Other exciting services are location, which can ucts has been the number of attractive smart mobile increase safety, and communicating positions or route phones with open operating systems in which navigation directions between two people. applications can be installed. In the past two years, how- ever, this situation has changed radically, and there are an • Lower learning threshold. Since mobile phone users are increasing number of platforms on the market which permit learning to use more functions, such as SMS and MMS, navigation applications. The mobile operators are showing and user-friendliness is increasing, the learning thresh- a great deal of interest in these phone platforms and the old for navigation products will become lower. applications which can contribute to an increase in current income from their customers. Technical history The underlying factors which made the market trend possi- Over the past few years, the mobile operators have been ble included technological developments by the phone improving their ability to take payment for external serv- manufacturers, the automotive industry and the GPS indus- ices. Premium SMS is a concrete example of this. Another, try. For a long time, the GPS system, which is owned by smaller concrete example is that the majority of operators the US government, was restricted for civilian use in a way have open systems for the integration of payment solu- which made exact positioning for civil applications impos- tions, though the actual types vary. This change is impor- sible. The US military, however, had access to uncorrupted tant, since it allows the launch of services from third party positions. suppliers on the mobile operator’s network.
20 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 21
Market overview
Competitive situation Tom Tom is a Dutch company, concentrating on dedicated Wayfinder Systems’ competitive situation depends both on units, but the company has also begun to commercialise the demand for substitutable products within other naviga- on-board applications for mobile phones. Tom Tom has a tions segments, and on the level of direct competition in strong presence with retailers throughout Europe. Navigon the segment in which the Company operates. Since it is is a German company with a wide operational focus, which Wayfinder Systems’ strategy to focus on personal naviga- also includes the vehicle segment. Their application for tion, competition from the vehicle segment is dependent mobile phones is based on an on-board solution. on the partnership discussions which the Company is hold- Competitors focusing on the mobile phone segment include ing with companies active in the vehicle segment. Navicore Oy, Route 66 Geographic Information Systems BV, Within the personal navigation segment, Wayfinder T-mobile International AG, Appello AB and Webraska Systems is facing competition both from competitors Mobile Technologies SA. Of these, the three last-named, within the PDA and dedicated unit segments, and also like Wayfinder Systems, offer off-board based solutions. Of from direct competitors in the mobile phone segment. Of these three, only Webraska has full control over its server- these, Tom Tom International BV (“Tom Tom”) and Navigon client platform. GmbH (“Navigon”) are active in all sub-segments.
In order to use the Wayfinder Navigator™ you need a compatible mobile phone, a GPS receiver (is included in the GPS-package) and a GPRS Internet connection. With Wayfinder Navigator you will be able to navigate throughout Europe and North America.
The number of compatible phone is continuously increasing. Please visit www.wayfinder.com for the latest information.
21 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 22
On travel, by car or by foot…. Regardless what way of travel you choose, Wayfinder will guide you throughout Europe and North America.
The ultimate travel companion for people on the move. Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 23
Vision, mission, goals, strategy and business model
Vision Product strategy. Wayfinder Systems supplies products and Wayfinder Systems’ ambition is to be “the ultimate travel services adapted to the requirements of mobile operators, companion for people on the move”. phone manufacturers, distributors and especially the mass- market for content, reliability and user-friendliness. The Mission product portfolio is at the cutting edge of technological Wayfinder Systems’ mission is to offer location services and market developments, and is the market leader in the tailored to the mass-market, such as navigation, mapping qualitative content of the Company’s services. By adapting and add-on services for mobile phones. Through competi- its products to the special needs of its partners, the tive pricing, attractive payment models and user-friendly Company tailors its products and services to the maturity services, Wayfinder Systems reaches all “people on the and opportunities of each market. The use of Wayfinder move”. Systems’ cost-effective server solution ensures that the Company offers the products and services which the most Operating goals competitive on the market for price and content. Wayfinder Systems’ goal is to become a market leader in Technical strategy. Wayfinder Systems will work with all mapping, navigation and add-on services, with the focus major mobile platforms. At present, Wayfinder Navigator on mobile phone operators as partners and distribution can be used on Symbian, Microsoft and the majority of channels. By the end of 2005, Wayfinder Systems’ objective Java phones, which means that the product is compatible is to have established collaboration with ten mobile phone with around 70 percent of all new mobile phones. The operators. Company will own and develop its technical platform in such a way that it facilitates product development. In Financial goals practice, this means that both server and client technology The Board’s target is that sales, through organic growth, are wholly-owned and controlled by Wayfinder Systems. on average will double each year over the next three years. CRM strategy. Through the use of the server technology, customers’ user patterns will be analysed, so that market- Strategy ing will be optimised to achieve maximum customer loyalty Market strategy. Wayfinder Systems will focus on user- and repeat purchases. friendly services which can be simply and inexpensively integrated into mobile operators’ existing infrastructure. Financial strategy. Wayfinder Systems will build a profitable Geographically, the world is Wayfinder Systems’ market, operation with positive cash flow on the foundation of a and the Company concentrates on mobile phone operators strong balance sheet. Apart from financing operating as distribution partners. Growth will be realised primarily capital, the Company will have no external liabilities. Over through strong growth in subscriptions as the number of the next two years, in the Board’s judgement Wayfinder collaborations with mobile operators increases, and the Systems will pay no dividends. market for position-related services matures. By position- Organisation and personnel. If Wayfinder Systems is to ing itself as market leader in the operator segment, the achieve its goals, its ability to attract, recruit and retain Company will be the clear first choice for mobile operators skilled personnel will be decisive. Every effort will be made introducing mobile positioning services. to make the Company an attractive employer. The Company Sales strategy. Wayfinder Systems’ sales to the end-con- will create and maintain an environment in which there sumer will take place principally through mobile operators. will be great scope for personal initiative, while taking Mobile phone manufacturers and distributors are important account of the need for controlled development. partners in achieving this strategic goal. Wayfinder Systems will supplement its sales with cost-effective payment solu- tions via the Internet for consumers who are not covered by the Company’s collaboration with mobile operators.
23 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 24
Vision, mission, goals, strategy and business model
Business model Since Wayfinder Systems’ services are integrated into its Wayfinder Systems sells navigation, mapping and supple- partners’ product range in an attractive way, for example mentary services for mobile phones to the consumer market. by being pre-installed on the customer’s phone, the value of the partners’ products and services is also raided. This Wayfinder Systems business model is based on the end- attracts new customers for the partners. Jointly with the customer paying for the Company’s services, either through mobile phone operators, the Company aims to integrate purchasing a lifetime licence for the phone or a continuous the end-customer’s payment process with the operator’s, subscription licence. The Company builds its customer base and so minimise costs. Since the payment process is effec- through partners, such as mobile phone operators and tive, it enables Wayfinder Systems to offer competitive mobile phone manufacturers, whose broad customer base prices with high margins, while the Company can utilise makes it possible to acquire a large number of end-cus- flexible price models tailored to the sales channel. tomers. Partners market and offer Wayfinder Systems’ serv- ices to established and potential customers. Wayfinder By offering attractive services and good value for money, Systems also uses distributors and the Internet to acquire along with effective customer care in collaboration with end-customers, but the Company expects around 80 per- the mobile phone operators and mobile phone manufactur- cent of sales to come via collaboration with operators. ers, the Company will build a long-term relationship with the end-customer.
Wayfinder Systems’ goal is to become a market leader in mapping, navigation and add-on services, especially developed for mobile operators.
Today Wayfinder Systems collaborates with mobile operators in Spain, Austria and Hungary.
24 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 25
Operation
Wayfinder Systems is a Swedish company which offers con- receivers would be integrated into mobile phones. In 1995, tent services to mobile phone users based on geographical David Svensson acquired the intellectual property rights to position. The Company delves and sells customer-tailored the project, which were brought into the Company, which navigation and content services through mobile phone had just been formed under the name Itinerary Systems AB. operators, mobile phone manufacturers, distributors and In 1998, the Company began the construction of a central the Internet. The target group is people on the move. The server, now known as the Wayfinder Server, to handle navi- service offer is ideal for both the unfamiliar user and the gation. The server is still the heart of Wayfinder Systems’ more advanced user. technical infrastructure. The first commercial order came in Wayfinder Systems’ has developed its own server-based 1999, from the Swedish Road Administration, Vägverket. navigation platform which, through the Company’s main The Company’s assignment was to develop a system for products, Wayfinder Navigator, and their mobile phone, intelligent external speed compliance for vehicles using gives the user answers to the following questions: GPS technology.
• Where am I? At the beginning of 2002, Telia Respons, Telia AB’s 118 • Where am I going to? 118 directory enquiry service, secured a licence to use • How will I get there? Wayfinder Systems’ server to offer route-finding to its • How far is it to my destination, and when will I get directory enquiry customers. Shortly after that, the Telenor there? ASA’s directory enquiry service obtained a licence to pro- • What’s the phone number of the restaurant I’m heading vide route-finding on the Norwegian market. for? After some changes in ownership in 2001 and 2002, the • Where is the nearest hotel, filling station and so on? Company adopted the new business name of Wayfinder In a few seconds from receiving the user’s question, the Systems. Magnus Nilsson, at that time President of Nordic server delivers a route optimised for time or distance, and Wireless AB, later became President of the Company, a role detailed maps at street level to mobile phones and web he still has. pages. The route description is received through turn-by- Later in 2002, the Company took a strategic decision to turn instructions, dynamic, graphical and voice navigation. focus on its navigation application, which, since then, has The server also offers supplementary information such as been the core of the operation. A project with the Nokia traffic information, weather information, company Corporation (“Nokia”) was launched in autumn 2002, to addresses, attractions, restaurants, hotels, theatres, filling allow navigation on Nokia’s first Symbian-based phone, the stations and exchange rates etcetera. Nokia 7650. This phone was launched in January 2003, and was one of the first smart phones, which was essential for Background and history integration with Wayfinder Systems’ mobile navigation. In Wayfinder Systems’ operations sprang from an earlier March 2003, Wayfinder Navigator was unveiled at the Cebit cloning from a hived-off development project at Ericsson’s Trade Fair in Hanover. Wayfinder Systems had now estab- Development Department in Lund. The development project lished itself as a leading supplier of mobile navigation. The began in 1989, and was run by David Svensson with the market for mobile navigation was and is regarded as one of underlying vision that, at some time in the future, GPS the most dynamic and growing in mobile applications.
Construction of Joint project with Wayfinder Navigator Java and Microsoft central server begins Nokia begins launched versions launched
19951998 1999 2000 2001 2002 2003 2004 2005
Wayfinder Systems First commercial order Strategic decision to The first agreements established received from the focus on the navigation signed with operators Swedish Road Administration application
25 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 26
Operation
The collaboration with Nokia deepened, and, in August Wayfinder Navigator is a complete navigation product, 2004, a framework agreement was signed, in consequence which includes the following functions: of Nokia’s interest in developing a GPS receiver. The part- • Voice instructions. Detailed voice instructions guide nership was taken a stage further in November 2004, with the customer from starting point to destination in such the aim of creating a package with mobile phone, GPS and a way that it is possible to plan the driving to take navigation software. In June 2005, the Nokia Navigation account of turns that follow each other closely. The Pack was launched as a result of this collaboration. voice instructions are given in good time before the The Company’s success after the commercial launch at actions required, and are the most important component Cebit, along with the closed partnership with Nokia, led to in guiding the customer. increasing interest from retailers and operators, especially • Rapid transfer of updated maps. The customer can always in Europe, in selling the Company’s products. The first see an updated map of the current position based on retail agreement was signed in February 2003, and, since GPS data or addresses and locations found by search or then, a further 15 agreements have been signed with saved. retailers. In autumn 2004, Wayfinder Systems took a strategic decision that the Company’s principal distribution • Rotation of map in relation to direction of travel. When channels would be mobile operators. Since then, the Com- the customer navigates or uses the map to show current pany has actively targeted European mobile operators. The position, the map orientates automatically so that the first operator agreements were signed in late autumn with direction of travel is always upwards on the screen. A Mobilkom Austria AG & Co KG (“A1”) in Austria and in compass rose indicates north. December 2004 with Telefónica Moviles Espana S.A. • Speed-sensitive zoom function. When speed is low, the (“Telefónica”) in Spain. In 2005, a business relationship map automatically zooms in to a high-detail level which with the Hungarian mobile operator, Pannon GSM Távkö- gives a good picture, for example, of the area close to zlési Rt. (“Pannon”) was also initiated. an intersection to make it easier to take the correct route in a complicated area. When speed is high, say on Product portfolio an expressway or motorway, the system zooms out to Wayfinder Systems has several product segments: Wayfinder give a good overview of the area. Navigator, Wayfinder Cities, Wayfinder Locator and Wayfinder Add-ons. Wayfinder Navigator was launched in • Dynamic, graphical picture of position, direction, distance March 2003, and is the Company’s main and most advanced and next turning. This function combines map display product. Wayfinder Cities offers a rather simpler level of and simple route instruction diagrams with distance functionality than Wayfinder Navigator, and is aimed at a information. wider range of customers. It is compatible with a larger • Automatic computation of a new route in the event of number of mobile phones. Wayfinder Cities was unveiled in a navigational error. If the user takes a wrong turning, February 2005. Wayfinder Locator and Wayfinder Add-ons a new route is immediately computed and presented. refer to a number of supplementary services which will be put on the market in autumn 2005. • Option of storing favourites. Search results and positions can be stored as Favourites. These are saved in a list Wayfinder Navigator which can be synchronised with the server so that the Wayfinder Navigator has an attractive and user-friendly Favourites are available and can be used on interface, which makes it easy for a new customer to use MyWayfinder.com. the product. The main menu provides a clear overview of • MyWayfinder.com. Wayfinder Navigator gives access to the software, with instantaneous access to maps and MyWayfinder.com via the Internet. favourite destinations. The software contains the latest mapping technology, which offers a speed-sensitive zoom In its basic version, Wayfinder Navigator contains 1.5 mil- function and a display with direction of travel upwards. lion POI descriptions (Point-Of-Interest) in 1,000 European Best of all, it gives the user voice instructions which cities. The customer can choose to have maps of Western efficiently guide him or her to the destination. and Central Europe, as well as parts of Eastern Europe, or maps of North America (the USA and Canada).
26 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 27
Operation
Wayfinder Navigator is packaged by the Company and The product gives the user access to the following func- distributors as four different offers, depending on the tions: length of the subscription and whether a GPS receiver is • Map display. Maps at different zoom levels show towns included or not. The length of a subscription is either and cities in the whole area included in the map cover- twelve months or the lifetime of the phone on which the age, Western and Central Europe, as well as parts of service is installed. Eastern Europe or North America (USA and Canada). When Wayfinder Navigator is purchased with GPS, the • Information on POI. POI and locations that the user has following products are included; Bluetooth GPS receiver, searched for information on are described with detailed battery charger and car battery charger for the GPS and relevant information. Everything from an address to receiver, universal mobile phone holder for a car, user full descriptions, reviews and telephone numbers. manual, activation code for the navigation service in Western Europe or North America and a MMC memory card • MyWayfinder.com. Wayfinder Cities gives access to with the Company’s software. The pricing of Wayfinder MyWayfinder.com via the Internet. Navigator is competitive with other suppliers, and is • Computation of route description. Route descriptions tailored for the mass-market consumer. between a starting point and a destination found At present, Wayfinder Navigator can function on over thirty through a search, a stored Favourite or a location of the phone models on the market. The number of com- selected from the map, can be worked out and presented patible phone models is increasing continuously, and is in a simple and clear way for the user. expected to rise sharply from October 2005, when Wayfinder Cities is sold particularly via the Internet, and, Wayfinder Navigator is launched for mobile phones with in addition to an activation code and instructions on how Microsoft Mobile and Java support. to install the product in its basic format, it provides:
Wayfinder Cities – Access to updated maps of all cities in Western, Central Wayfinder Cities is a pan-European/North American guide and parts of Eastern Europe or North America, with for people on the move. In contrast to Wayfinder Naviga- around 1.5 million POI on each continent. tor, it does not use a GPS receiver, and so the product can – Access to MyWayfinder.com. be primarily seen as a mapping and route-planning appli- cation. The product covers more than 1,000 towns and Wayfinder Cities is currently compatible with around 100 cities in Europe alone, and more in North America. With mobile phone models. highly-detailed and updated maps, it provides information on over 1.5 million POI to the mobile phone. In addition, Wayfinder Locator Wayfinder Cities also gives instructions for finding the way Wayfinder Locator is an application, which functions as a from A to B with detailed text instructions and map dia- supplementary service to Wayfinder Navigator. It is a grams. Wayfinder Cities helps find the nearest restaurant in flexible and easy-to-use system for vehicle tracking. Real- Rome just as well as it shows a map of the user’s home time tracking of vehicles provides transport suppliers and town. service suppliers with a simple way to handle their trans- port units more efficiently. The current position of their vehicles can be displayed with a high level of precision on a website from which SMS messages can be sent to the vehicle units. The system requires no additional installa- tion, either in the phones or in the web reader, which tracks the vehicles, provided that users already operate software from Wayfinder Systems. The system can be moved easily between different vehicles, which allows for simple and cost-effective handling of vehicle tracking.
27 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 28
Operation
The product gives the user access to the following func- • The Company Database is available at present only in tions: Sweden, but in the autumn it will be offered for the whole of Europe. The service gives access to a database • Wayfinder Navigator. Wayfinder Locator is based on with 25 million company addresses, shops, filling Wayfinder Navigator, and gives the user the opportunity stations, cinemas and more. These are presented on the to utilise all its advantages and functions. Wayfinder Navigator application’s map, as well as in the • Security. Security is provided through the positions search response. being password-protected. The password can be changed • Wcities gives, among other things, extensive information at any time from the tracked unit, and then tracking is on attractions, restaurants, bars, hotels and theatres in not possible by units, which do not have access to the over 1,000 European and 1,600 American cities. The current password. information includes independent reviews of all POIs, • Tracking. From a Locator webpage that has the same contact information, opening hours, payment cards basic functionality as MyWayfinder.com, one or more accepted and frequently a photograph of the location. vehicles can easily be tracked in real-time or histori- Wcities is included free of charge for all Wayfinder cally. Navigator and Cities customers in 2005.
• Positioning. At a designated time interval, the applica- • Lonely Planet tourist and travel information is a supple- tion sends position information to the Wayfinder mentary product to both Wayfinder Navigator and Systems’ server. In addition to longitude and latitude Wayfinder Cities, which gives access to Lonely Planet’s information, the position information contains particu- travel destination and POI information for the larger lars of time and current speed as part of the transmis- cities and travel destinations in Europe. The information sion. is updated on a regular basis, and is presented on the Wayfinder application’s map, as well as through the • Messages. From the Wayfinder Locator webpage, SMS phone’s web browser. messages on destinations and assignments can be sent to the vehicle units. These messages automatically trig- A number of additional supplementary services are under ger the downloading of a route, provided that Wayfinder development, and will be launched in winter 2005/06. Navigator is running. Otherwise, navigation based on the SMS message begins after the application is started. MyWayfinder.com All customers have access to the MyWayfinder.com plan- Wayfinder Locator is based on the same map and POI ning tool, which can be accessed from an ordinary PC with coverage, which the user has access to via his or her web reader and Internet access. Destinations can be Wayfinder Navigator and MyWayfinder.com. searched for and saved in advance. Routes can be com- puted and displayed with map diagrams and instructions, Wayfinder Add-ons which guide the user turn by turn to the destination. In addition to navigation services with the above-men- Routes and maps can be sent by e-mail to friends, acquain- tioned supplementary services, the Company also offers tances and colleagues. MyWayfinder.com also provides Wayfinder Add-ons, which are a number of ancillary serv- customer support and a fault reporting service for when ices, which will be offered to Wayfinder Systems’ customers the customer finds a mapping error or other problem. from October 2005. MyWayfinder.com is also an effective way for Wayfinder • Wayfinder Traffic gives current information on the traffic Systems to communicate with its customers. situation, accidents, roadworks and other occurrences on the roads in large parts of Europe. The information will benefit the customer both through being presented on the Wayfinder Navigator application’s map display, and also through taking account of relevant disruptions in computing a route.
28 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 29
Operation
Wayfinder Systems’ technical infrastructure allows maps to be installed on the mobile phone, and The fundamental idea underlying the technology in these are used in the first instance. This gives the cus- Wayfinder Systems’ navigation system is to store maps and tomer access to map coverage independent of the mobile other necessary data centrally, and allow the user to use phone network. Technically, this is a hybrid solution the information when required. The same idea is used for between on- and off-board. web pages on the Internet. Both the central system (the To give as good and as comprehensive a service as possi- Wayfinder Server) and the program in the user’s phone (for ble, users of the Company’s products also have access to example, Wayfinder Navigator or Wayfinder Cities) have Wayfinder Server through the Internet-based planning been largely developed by the Company. tool, MyWayfinder.com. The architecture selected, which in navigational contexts is called off-board, offers many advantages: Wayfinder Systems’ server The heart of the Company’s system is the central server, • In principle, unlimited storage space for data permits the Wayfinder Server, which processes all information and world-wide map coverage. also carries out most of the calculations. The server func- • The ability to offer access to content-rich updated tions include: databases with information on companies, attractions, • Handling all map material, such as roads, addresses, private individuals etcetera. This means that end-users communities, lakes, watercourses, parks, POIs, etcetera. can easily find the nearest hotel, restaurant or golf • Processing searches, such as addresses and company course, and not only be told where it is, but also, for names. example, be given the telephone number and opening • Computing optimal routes. hours. • Storing user data, such as names, addresses, favourite • Fast computation and downloading of routes at all destinations, vehicle type, etc. times, thanks to the power of the server. • Handling user rights (what data or geographical area each user has access to). • The ability to offer dynamic information through the • Billing function to operators for the subscribed period. software, such as petrol prices, information on events, • Importing and manipulating dynamic traffic information traffic information, on-line booking, weather informa- and POIs. tion and current exchange rates. The Wayfinder Server consists of software developed in its • Constantly updated maps, since the maps are stored and essentials by Wayfinder Systems. Considerable effort has updated in the central server. gone into ensuring that the software meets the mobile • Off-board is ideal for mobile phone operators to offer operators’ requirements for security. That is why the server their customers, since the solution utilises the mobile uses a distributed architecture with inbuilt load balancing, phone network, and so ties the end-user more closely to error recovery, monitoring and redundancy. The software the mobile operator. was developed especially for the Linux operating system, and executes on standard Pentium computers. It is easy to • The option of having different subscription lengths, such increase capacity by linking in additional computers, and as single day, month, year or longer periods. this can even be done while the system is running. With The strength of the off-board solution, that it provides the selected architecture, even if one computer crashes, constantly updated information on a central server, is also the system continues to run as before, but at somewhat a disadvantage, since it is dependent on the mobile phone reduced capacity, and without the end-user noticing any network. The answer to this is that Wayfinder Systems difference in practice.
29 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 30
Operation
Content 1. Users who purchase a “standard” Wayfinder Navigator, The most important information stored in the server is the for example in a store, utilise activation codes to gain actual mapping. To load the maps into the system, the access to the service. The start package normally Company developed an import tool, which supports the includes an activation code, which entitles the pur- formats used by the map suppliers. Internally, a format chaser to either twelve months’ use or use for the developed in-house is used, optimised for information lifetime of the telephone (depending on the product searching and computations. Running updates to the data- purchased). The subscription can be extended either base are carried out every second week, and more radical through activation codes bought in the same way as map updates are executed at least four times a year as new the start package, or with a credit card over the phone. data is received from the map suppliers. Since users com- 2. Users with a version of Wayfinder Navigator, which is municate directly with the server, they have access to integrated with a mobile operator, pay for the service updated information at all times. through their phone bill. Depending on the preference The server also handles information on POIs, which may be of the operator, various alternatives are offered to the companies, restaurants, hotels, attractions, airports, etc. end-user – everything from one day to annual subscrip- For many POIs, additional information is also provided, tions. such as opening hours, prices and numbers of rooms. This No matter to which of the above categories the user type of information is updated as updates are received belongs, the system uses one and the same server operated from the supplier, normally several times a month. by the Company.
Languages Wayfinder Navigator Wayfinder Systems’ navigation services are currently The Wayfinder Navigator software is installed in the mobile accessible in fifteen different languages. This includes phone through downloading from Wayfinder Systems’ all text and all voice instructions, which are presented for server. The application installed in the phone handles com- the user in the application in the mobile phone, on munication with the user, communication with the server MyWayfinder.com and on the Company’s website. It is a and the actual navigation itself, using information from simple matter to add further languages without changing the GPS receiver. Communication with the user is done anything in the actual application. Other information from through the keyboard, the screen and voice instructions. sub-suppliers, such as embedded descriptions of POIs, is Communication with the server takes place over GPRS/3G available only in the languages in which they are supplied and is a background operation without any user interac- to Wayfinder Systems. tion. For navigation, the application in the mobile phone carries out the computations necessary to give the correct Payment solution for use instructions to the user, such as “turn left in 200 metres”. Depending on where and how the user purchases the If the user deviates from the computed route, a new route Wayfinder product, there is a range of payment options. is automatically computed in the server and downloaded As far as payment is concerned, users are divided into two into the mobile phone. categories; those with a direct relationship to Wayfinder Systems, those with a relationship via a mobile operator. The graphical user interface is tailored to suit each mobile phone, as regards screen and keyboard. The Company has developed a uniform design, which means that users are able to recognise the product on any model of mobile phone.
30 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 31
Operation
Navigation with Wayfinder Navigator 1 Internal or external GPS receivers determine the exact position through the satellite-based GPS system.
2 Current position is sent from the GPS receiver to the mobile phone via Bluetooth (if an external GPS receiver is being used).
3 The user specifies the destination in one of the following ways: • Enter address or company name. • Specify the category, e.g. “restaurant”, to find the nearest in the category. • Mark on the map. • Select from a list of saved destinations (“Favourites”). The destination selected by the user is sent to the server along with current position.
4 The server computes the optimal route between the starting point and the destination, based on the choice made by the user, such as the shortest or the quickest route, and type of vehicle.
The Wayfinder Navigator product, with the same basic Wayfinder Cities functionality, is available for three different platforms: Wayfinder Cities is available for the majority of the mobile phones on the market. At present, Wayfinder Cities is com- Symbian is the most common operating system for ‘smart patible with around 100 different models of mobile phone. phones’. Wayfinder Navigator is compatible with all The Wayfinder Cities application is based on the same Symbian phones on the market. At the moment, that software components as the Navigator product, but, since means around 30 mobile phone models, mostly from Wayfinder Cities requires less resources, it is compatible Nokia, Sony Ericsson and Motorola. with more terminals than Wayfinder Navigator. Wayfinder Windows Mobile is used in smart phones and in PDAs. Cities is less demanding on available memory and proces- Microsoft Windows Mobile is available in several differ- sor capacity, and it does not need to be linked to a GPS ent variants. Wayfinder Navigator supports Pocket PC receiver. and Smartphone, and will soon also support Windows Mobile 2005, which is available in 15 different models Wayfinder Locator of mobile phone. The Wayfinder Locator product consists of two different parts: a module for the mobile terminal which reports Java is used as the application platform in virtually all information to the server at regular intervals and the part phones which do not have an open operating system. in the Wayfinder Server which processes and presents the Wayfinder Navigator supports those phones which have information. The user can set the interval for uploading the technical capability for navigation, including the the information to the server, including position, speed, option of linking to GPS receivers, communicating with time and distance since the last position. The information the server and playing voice instructions. Through is stored in the user profile in the server, and is presented supporting the Java platform, the number of compati- for the end-user on MyWayfinder.com. The modules in both ble phones increases considerably. Due to the limited the mobile phone and in the server are generically memory capacity and processing power of Java-based designed, which means that they can be entered in exist- phones, they are even more suited to off-board than ing products, such as Wayfinder Navigator, or sold as a on-board solutions. free-standing unit without navigation. 31 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 32
Operation
Wayfinder Add-ons The Company estimates that the capacity of the existing A central component of Wayfinder Server is the ability to server and the network can cope with at least one million separate access to different functions and databases, users. Scalability is effectively linear, through adding addi- based on what the respective user is paying for. Users who tional nodes to the network. For this reason, both the cost have the right to use traffic information have access to it, and technical complexity associated with an expansion in while other users do not see it, even though they are using capacity are not great. the same server. The same thing applies to access to To ensure that the whole system does not crash through searches in different databases. problems with hardware or software, the server has been Wayfinder Locator is, technically, an Add-on in the server. designed so that it does not contain a “single point of fail- The same mechanism is also used to govern the geographi- ure” (see the diagram below). Even if a computer or other cal coverage an specific user is entitled to. This makes it piece of hardware should break down, the system would possible for a user to purchase the right to use a specific continue to function with somewhat limited capacity, but country or continent for a specific period. without the user noticing.
The end-user can, for example, purchase Add-ons through Since the start, the server system has only been affected purchasing activation codes which lock up a certain func- by one brief unplanned stoppage. This gives an up-time of tion or through a credit card over the mobile phone. over 99.99 percent over the past three years.
The computer environment in which the server system is MyWayfinder.com executed is protected against attack by several different MyWayfinder.com is a journey planning tool which has firewalls and virus protection programs. Physical access is been developed to make using the products easier, and to prevented by keeping the server cluster in a locked room. improve the user experience. MyWayfinder.com is a comple- The computer hall at the hosting supplier is also protected ment to the mobile phone which offers about the same against fire and flood, and has several redundant suppliers functions but makes it possible to plan journeys via the of both electrical power and Internet access. Internet as well. All users have a personal navigation home page, on which they can plan and communicate routes and create their own POIs through contacts in Microsoft Out- Node 1 look, as well as communicate and store them for use both via the Internet and on the mobile phone. Precisely what Switch 1 Node 2 Client network options are available once the user has logged in depends Switch 2 on which supplementary services that the user has access to. The basic functions are the same, but users who, for Node 3 example, have Wayfinder Locator, have a folder that no Outline of the Wayfinder Server architecture. other user has access to. Node 1–3 corresponds to physical computers in which the software components are executed. Thanks to the redundancy built into the Security & operation software and the fact that there are multiple links between the computers, all single points of failure have been avoided. The num- Wayfinder Systems is responsible for the operation of the ber of computers connected in this way is practically unlimited. Wayfinder Server. The server is duplicated, and is located in a protected server environment, once with Wayfinder Product and technical development Systems, and once with a first-class external hosting supplier. The set-ups work simultaneously, which is why The launch of new products is critical for Wayfinder the system continues to function without a break even if Systems’ continued success. Of the Company’s 60 employ- a problem arises with one of the networks. ees, around 30 work on product and technical develop- ment. Product development drives technical development, as product managers draw up requirement specifications for the technical department on the basis of their knowledge of customer needs.
32 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 33
Operation
Product development Map suppliers The Company has five product managers, who are responsi- There are two leading suppliers of maps: Tele Atlas and ble for both the existing Wayfinder Navigator, Wayfinder Navteq. Wayfinder Systems uses Tele Atlas as its principal Cities and MyWayfinder.com products, and for future prod- supplier of maps. In addition, the Company has agree- ucts in the Locator and Add-ons segments. Open interac- ments with Top Map, a player whose map coverage concen- tion between product managers and the Marketing Depart- trates on Hungary. Since the Wayfinder Server can handle ment will ensure that only ideas which correspond to all commercial map formats on the market, the Company is identified customer needs will be exploited. not dependent on any single player.
The identification of customer needs will be carried out in Other content suppliers collaboration with the Company’s Customer Services To increase its value offer to its customers, the Company Department, mobile operators and mobile phone manufac- also has comprehensive content based on information turers. Wayfinder Systems holds regular product meetings which may be of interest in association with the use of the with both mobile phone manufacturers and the operators. Company’s services. At present, Wayfinder Systems has These players contribute in varying degrees both with agreements with content suppliers relating to company requirement specification and with the quality assurance addresses, stores, restaurants, cinemas, filling stations, of the products. The development process is volume- attractions, hotels, museums, exchange rates, weather orientated, and focuses on the needs of a wide customer information and traffic information. Content suppliers segment. Existing customer segments, therefore, give only include Wcities Inc. (POI information), Forex (exchange limited guidance in the identification of future customer rates) and ARC (traffic information). needs.
Hardware and software suppliers Technical development Wayfinder Systems has its own Development Department, The product managers are supported in a matrix structure and the bulk of development work is carried out in-house. by around 30 people in technical development. This reduces the need for sub-suppliers. The Company cur- Development is primarily carried out in project form, using rently has agreements with a contract developer, who is an iterative process, as is usual for object-orientated soft- developing most of the Windows Mobile versions of the ware development. Product managers, jointly with the user interface for Wayfinder Navigator. This project is the development staff, draw up requirement specifications second to be placed with an external player. setting out what is to be developed. Then the design and Wayfinder RO, a wholly-owned subsidiary in Romania, has architecture work leads on to implementation and testing. three developers working with the Java products along Throughout the process, the work is continuously checked with the Java team in Lund. Wayfinder RO was taken over in meetings involving product managers, developers, by Wayfinder Systems at the beginning of 2005, and the testers and other interest parties. plan is for the Romanian operation to expand gradually.
Sub-suppliers Wayfinder Systems currently uses RoyalTek as its supplier Wayfinder Systems has three main categories of sub- of GPS receivers, but the system is compatible with all supplier: the Bluetooth GPS receivers on the market. RoyalTek is a Taiwanese company with many years of experience in GPS • Map suppliers development and manufacture. • Other content suppliers • Hardware and software suppliers
Wayfinder Systems’ policy is to include only high-quality content, and the Company regards the choice of content suppliers as crucial. Content reviews are carried out as part of the procurement process for content suppliers, as well as through the Company’s own observations and contact with customers and users.
33 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 34
Operation
Marketing and sales Mobile operators Wayfinder System aims at a global market for mobile navi- Wayfinder Navigator is marketed by mobile operators as a gation products. Until now, the Company has focused on supplementary service to existing and new customers. The the European market, in which the Company has estab- collaboration between Wayfinder Systems and the opera- lished sales through mobile operators, mobile phone tors may include sharing revenue, integrated payment manufacturers, distributors and the Internet. Wayfinder solutions and varying degrees of co-branding. Wayfinder Systems has a presence through sales channels in Belgium, Systems’ solution is well-suited to being a supplementary Denmark, Finland, France, Italy, the Netherlands, Norway, service in the mobile operators’ service offer. Switzerland, Spain, Great Britain, Sweden, Germany, For mobile operators, navigation systems using off-board Hungary and Austria. Sales in the USA are expected to solutions means increased data traffic and, therefore, begin in autumn 2005. increased average revenue per user (“ARPU”), while also The Company has so far generated most of its sales being an effective tool in increasing customer loyalty. For through distributors, and to an increasing extent through Wayfinder Systems, that kind of collaboration offers excel- mobile operators. Today, mobile operators represent the lent opportunities to benefit from the mobile operators’ largest distribution channel, and they are expected to extensive marketing and strong brands. remain the primary distribution channel for the foreseeable Since November 2004, Wayfinder Systems has cooperated future. The collaboration with Nokia has done much to with the Austrian operator, A1, and with the Spanish strengthen Wayfinder Systems’ position among distributors, operator, Telefónica since December 2004. In May 2005, but it is also expected to generate an increasing share of a collaborative venture was initiated with Pannon in the Company’s revenue after the launch of the Nokia Hungary. The agreements are not exclusive, but the opera- Navigation Pack. tors have, in general, no reason to work with other players. Diagram of sales per sales channel, first half 2005 The Company is holding discussions with a large number of mobile operators on implementing Wayfinder Systems’ Web sales 13% products, and the ambition is to conclude a significant number of agreements over the next few years. Discussions Mobile phone on agreements with mobile operators are a relatively time- Distributors 21% manufacturers consuming business, and, in the Company’s experience, it and operators 66% usually takes between six months and two years to con- clude a deal.
Since Wayfinder Systems’ products are part of the mobile operator’s offer, the mobile operator chooses the name of Development of service/hardware sales 2005 the service. In A1’s case, the service is called “A1 Navi”,
% Telefónica has “Ruta Movistar” and Pannon has “Pannon 80 Navigator”. In all cases, it states that the service is 70 “Powered by Wayfinder”. 60 50 A1 A1 launched Wayfinder Navigator in December 2004, with 40 an integrated payment solution, in which the user pays for 30 the service on his or her ordinary mobile phone bill. The 20 version of Wayfinder Navigator developed for A1 is known 10 as A1 Navi, but, in principle, it offers identical functional- 0 ity to the standard version. A GPS receiver is included in jan-05 feb-05 mar-05 apr-05 may-05 jun-05 jul-05 aug-05 the purchase of the new mobile phone, and the user then Hardware decides how long a subscription for Wayfinder Systems’ Service services to take out: one day, one month or one year. If
34 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 35
Operation
the customer already owns a GPS receiver, the application Distributors can be downloaded into the mobile phone through the Wayfinder Systems sells its products through 40 distribu- user sending a SMS message (WAP-push technology). tors in 14 European countries. The distributors either have During the summer, A1 also began selling phones with A1 their own stores or sell the products on to other retail Navi pre-installed. chains specialising in telecommunications, or to independ- ent players. The following list shows the main distributors Telefónica supplied by Wayfinder Systems at present. In spring 2005, Telefónica brought the product, “Ruta Belgium Silicon Technology movistar”, to market, an unpackaged Wayfinder Navigator. Denmark Dangaard, MilCom, Dantrack, Easy, The navigation and mapping service is included, among the Novendo other services offered by Telefónica, so that customers can Finland Anglo Nordic subscribe to it via Telefónica’s Customer Service, webpage France Sabatier, Blueway or directly on their mobile phones, and pay via their Italy Distrel mobile phone bill. The subscription form offered at the Spain CMR, Movidream, Updatel moment is continuous monthly subscription. The Netherlands FIT Norway Brightpoint, Telefast, Mobildata Pannon Switzerland Comlight, Dangaard Pannon Navigator was launched in Hungary by Pannon in Spain Movidream, Telenet June 2005. This is a re-branded version of Wayfinder Great Britain Total PDA, Dextra, Widget, Santok Navigator. Customers purchase either a Pannon Navigator Sweden Brightpoint, Dangaard Telecom, Axcom, package with GPS and other hardware, or, for customers Datanät, The Phone House, Order who already own a GPS, download the software over the Germany Dangaard, CKC, Degen, DuG Telecom, Internet. After that, payment for the service is made Euric directly through the mobile phone, via Pannon’s website or Austria Würth Customer Service. The customer decides whether to buy access for one day, one week or one month, and also selects geographical coverage limited to just Hungary or The Company is represented on the most important mar- for the whole of Europe. The customer pays for the service kets in Europe, and intends in the longer run to have rep- via his or her normal monthly mobile phone bill. resentation in other European countries, including Eastern Europe, as well. Mobile phone manufacturers Wayfinder Systems has no sales via distributors outside The Company currently collaborates with two of the lead- Europe at present. The ambition is to set up representation ing mobile phone manufactures, Nokia and Sony Ericsson. in other non-European markets. Interest from potential The collaboration with Nokia has continued since autumn distributors is particularly high in Asia, parts of Africa and 2002, and has made a very positive contribution to South America, Australia and New Zealand. strengthening the Company’s position in the market. In June 2005, Nokia Navigation Pack was launched in Europe, The Internet a package offer which includes a GPS receiver, mobile Wayfinder Systems’ products are also sold online, partly phone and software. The offer is marketed as “try and under the Company’s own auspices on Wayfinder.com and buy”, so the customer has the opportunity to try the serv- directly from mobile phones (Mobile Shop), and partly ice for a period of six months. After that, the customer through external Internet distributors such as Jamba, purchases a service licence directly from Wayfinder Systems Handango, Nokia, Software Market and Fun&Downloads for continued access to the service. (Sony Ericsson). Products like Wayfinder Cities are particu- Through the collaboration with mobile phone manufactur- larly well-suited to this distribution channel, since they ers, Wayfinder Systems’ products can either be integrated are not dependent on any hardware. into the mobile phone before sale, or packaged along with the phone as a joint product.
35 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 36
Operation
Marketing Competitive advantages The Company’s future growth depends on its ability to In Wayfinder Systems’ judgement, the Company enjoys the attract and retain new users. Wayfinder Systems’ marketing following competitive advantages: has, historically, been targeted at indirect marketing via • Fast-growing market segment. Wayfinder Systems the Company’s sales channels, and, to a lesser extent, to operates exclusively in the mobile phone segment, the marketing to the end-customer. The players in the sales segment which is predicted to grow fastest in the channels have significantly greater financial resources to future. market the products, and an already-established customer contact. With the aim of strengthening the Wayfinder • Off-board solution. Wayfinder’s off-board solution allows: brand, the Company’s ambition is that the different – more advanced navigation services and a greater products will always include the expression, “Powered by range of value-generating ancillary services to be Wayfinder”. This makes customers very aware of the offered. Company at small cost. As the Company grows, achieving a – the Company to avoid competing for capacity on the better financial position and better cash flow, the Com- mobile phone with other mobile services, such as pany will also undertake its own marketing to some extent. music. The most important marketing channel will still, however, – the service to be more attractive to mobile operators, be the Company’s sales channels, as well as an expanded since the application generates data traffic, at the customer base which actively uses Wayfinder Systems’ same time as it balances the consumer’s navigation products and passes on the experience to others. cost in a useful way. – the product to be pre-installed in the mobile phone or The Company’s marketing will reflect the following factors: downloaded to the phone, thanks to its low memory • Wayfinder Systems will invest in marketing to a target requirements. (“try and buy”). group which can be described as “people on the move”. • Wayfinder’s server. Since the server was developed in- The marketing will focus on communicating the unique house by Wayfinder Systems, no licence costs arise, and advantages of Wayfinder’s navigation solution, namely: the Company has full control of the direction in which – a complete navigator in the mobile phone the technology will be further developed. The technical – wide map coverage flexibility and scalability of the Company’s server means – constantly updated information that synergies between navigation services and other – easy and fun to use mobile information services can be exploited to the full. • Wayfinder Systems’ brand is a vital strategic asset, cru- The high level of technical flexibility also means that cial to achieving sales targets. The Wayfinder brand is the Company can optimise its purchase prices and qual- associated with cutting-edge technology and a high ity in relation to sub-suppliers. It also makes it simpler level of service in personal navigation. The Company will to change sub-supplier should this prove necessary. continue to invest in the brand through: • Partners. Wayfinder Systems currently has a number of – campaigns directed at the end-consumer strategic partnerships with both operators and mobile – co-branding under agreements with operators and phone manufacturers. Even though the agreements are mobile phone manufacturers not exclusive, any incentive for these players to initiate – continuous support to retailers through staff training equivalent collaboration with Wayfinder’s competitors is and the distribution of store sales material not high. – high level of customer service • Degree of commercialisation. In comparison with the majority of its competitors in the mobile phone segment, Wayfinder Systems has gone further in commercialising the Company’s product portfolio.
36 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 37
Operation
• Marketing collaboration. Through its strategic partner- Index of number of users Jan 2004 – Aug 2005 ships with operators, mobile phone manufacturers and User index distributors, Wayfinder Systems reaps the benefit of 1,200% being seen together with strong brands. This means that
marketing synergies can be achieved, and this improves 1,000% the Company’s ability to reach out to the global market. 800% • Payment solution. Through the payment solution devel- oped in-house, the Company is in a position to integrate 600% an operator quickly, so that the customer pays for the use directly through his or her phone bill. It also gives 400%
Wayfinder Systems the opportunity to be paid directly 200% for the service over the mobile phone in Wayfinder Systems’ “mobile shop”. Both these solutions mean that 0% -04 -04 4 -04 05 -05 -05 -05 the Company has no administrative expenses for pay- jan-04mar may jul-04 sep-0 nov jan- mar may jul ments from customers through these channels, and that it is easy for the customer to extend the user licence for Wayfinder Systems has, therefore, not only developed the the product. functionality of the applications, but also ensured that they will function on a range of different platforms. In this • Mobile phone compatibility. Wayfinder Systems’ software way, the Company has looked after the interests of the is compatible with the three largest platforms, Symbian, mobile operators in being able to offer Wayfinder Systems’ Java and Microsoft Windows, which cover a great part of services to the majority of their customers. current and future mobile phone models. Over the next few years, focus will be on two areas. The Future prospects first, and for the Company, the most critical, is to sign Wayfinder Systems is in an exciting phase. For a relatively agreements with as many operators as possible. The focus long period, the Company has concentrated on product here is global, with the first efforts in Europe and North development in the field of Location Based Services. The America. Futher, the Company sees great potential in Asia telecoms industry and the venture capital market have and Latin America, where the markets are currently taking similarly invested massive resources in this area. Notwith- shape. Wayfinder Systems is, however, though at a rather standing this investment, the market was a long time lower level of activity, also in discussion with potential developing. It was not until 2003 and 2004 that adjacent business partners on these continents. It is in partnership applications and services showed the sales success that so with the operators that the Company can create attractive many market observers had predicted. In recent years, the end customer offers. The opportunity to sell profitable sup- business of the Western European mobile operators in plementary services easily constitutes a fundamental part particular has changed dramatically. From seeing the of the Company’s business relationships with the operators. subscriber base grow for month after month, the market is The other important area for the Company is participating now showing clear signs of saturation, in both the growth in the inevitable consolidation of the market. There are in the number of subscriptions and in sales revenue per many exciting companies operating in the Company’s focus subscription. These two parallel trends – increased market area that are simply just too small to break through to the demand for location services and signs of saturation in the customers. Wayfinder Systems will utilise the leverage mobile operators’ growth – have resulted in Wayfinder which its established business relationships provide, by Systems finding itself in a very exciting market situation. continuously expanding the Company’s market offering. Demand among end-customers for the Company’s products Complementary acquisitions will form an important role of and services is growing strongly, at the same time as there this part of the Company’s expansion strategy. is a sales channel with a considerable interest in partici- pating in the sales of the Company’s services, which Wayfinder Systems is presently in negotiations with a large actively contribute to increasing the mobile operators’ number of mobile phone operators. These negotiations are revenues. expected to create substantial revenue generation for the company during the fourth quarter 2005 and more signifi- cantly during the full year 2006. Seasonally, the third quar- ter is a weak quarter in the navigation market and this will also be the case for Wayfinder Systems in 2005. With the successful execution and implementation of the existing 37 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 38
Operation
operator contracts as well as the successful closing, of a the fundamentals of the markets in the USA and the rest reasonable share, of the on-going negotiations, Wayfinder of the world have not justified having people dedicated Systems expects to be cash flow positive on a monthly to these positions. When the balance between critical basis, on an operational level, early during the second mass and the anticipated growth opportunities in these quarter of 2006 and expects to generate revenues in the markets is right, dedicated staff will be appointed to these range of EUR 35 to 45 million for the full year 2006. positions.
All in all, Wayfinder Systems looks to the future with Personnel confidence, and the Company anticipates very high levels Wayfinder Systems’ 60 employees are divided into 23 women of growth throughout the market area and for the Company (38 percent) and 37 men (62 percent). The adjoining table itself. shows Wayfinder Systems’ current personnel structure with respect to geographical distribution, educational level and Legal structure operation. Wayfinder Systems AB is the Parent Company in the Group The Company recruits staff primarily on the Swedish labour which includes three wholly-owned subsidiaries, Wayfinder market, and foresees no future difficulties with recruiting Systems Förvaltnings AB, a Swedish company (Corporate ID personnel with excellent education and experience. No. 556579-4004), Wayfinder Systems Inc., a US company, and Wayfinder RO S.R.L., a Romanian company. The Geographical distribution Swedish and US subsidiaries are currently not trading, and Number of Of whom Of whom the Romanian subsidiary carries on certain development Country employees women men operations. Sweden, Lund 50 19 31 Sweden, Stockholm 6 3 3 Wayfinder Systems AB Romania 4 1 3 (Sweden) Total 60 23 37
Wayfinder Systems Wayfinder Number of Propor- Wayfinder RO S.R.L. Förvaltnings AB Systems Inc. (Romania) Educational level employees tion, % (Sweden) (USA) Regular compulsory school or equivalent – – Certain formalities remain before the acquisition of the Further education or equivalent – – shares of the foreign subsidiaries is complete and Upper secondary school definitive. or equivalent 3 5 University 57 95 Organisation Total 60 100 Wayfinder Systems has 60 full-time employees, of whom 50 work at the Company’s office in Lund and 6 in Stockholm. Number of Propor- The Company’s group management team is predominantly Distribution within the operation employees tion, % based in Stockholm, and the Development Department, Development 31 52 Customer Service, administrative personnel and the Finance Sales and marketing 10 17 Department are located mainly in Lund. Product management 8 13 Finance, Customer Support At present, the President of the Company has responsibility and Administration 11 18 for sales in the USA and the rest of the world. Historically, the focus of sales has been on the European market, and Total 60 100
CEO Magnus Nilsson
Product Finance & Sales US Sales CEE Sales ROW Development Management administration
38 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 39
Governance and policies
The composition of the Board of Directors Currency exposure and currency policy The Board of Directors of Wayfinder Systems consists at Wayfinder Systems invoices mostly in EUR and SEK. present of four members including the President, who is Purchases take place primarily in USD and EUR. Currency employed by the Company. fluctuations are monitored constantly by the Company, and when considered necessary, hedging will be used. The composition of the Board of Directors, the number of At present, currency risk is regarded as limited, and no members of the Board and their respective expertise are derivative instruments are held. not to be regarded as static, but may change as the Company grows and the Company’s business environment Policy in respect of credit and excess alters. liquidity At the annual general meeting in 2006, the Board of Direc- The management of cash and cash equivalents/excess tors intends to propose to the general meeting to expand liquidity will take place through short-term investments the Board by one or more further independent Board in interest-bearing government securities with the aim of members. minimising financial risk.
The programme for the Board of Directors Wayfinder Systems’ credit policy stipulates that orders in excess of SEK 10,000 are to have credit insurance with a The Board of Directors shall hold about six ordinary Board credit insurance company with the aim of minimising bad meetings during the year, of which one shall be an inaugu- debt losses. ral meeting. Four meetings shall be held in connection with the Company’s quarterly reporting, and one shall be Information policy held in December in connection with the adoption of the budget. In addition, one meeting per year shall be devoted Wayfinder Systems’ external information and investor to the Company’s strategic plans. relations shall be relevant, trustworthy and accessible. The official spokesman for Wayfinder Systems is the Compensation committee President. Wayfinder Systems does not comment on rumours relating to the Company. In the event that the The Compensation committee consists of the Board mem- spread of rumour is judged to be harmful to the Company, bers Pär Arvidsson and Bernhard Steiner. The Committee’s however, the Company may decide to issue clarifying task is among other things to prepare and suggest princi- information. In the event that information leaks/rumours ples of compensation to the Board of Directors. The com- may affect the stock exchange, the stock exchange will be mittee prepares and suggests, for the Board of Directors, informed and press releases drawn up/released. the actual terms for the President and decides the terms for the other key management personnel. The annual general meeting is to be held within six months of the end of each financial year. The notice convening the Dividend policy meeting will be published in national newspapers and in The objective for the Board of Directors is that the average the Swedish Official Gazette. Interim reports will be pub- dividend over time shall amount to at least 30 percent of lished quarterly and the year-end report and annual report the consolidated profit after full tax. In adopting a pro- will be published once a year. posal for dividends, however, Wayfinder Systems’ expansion Press releases will be issued in Swedish and English, and opportunities, consolidation requirements and liquidity, as distributed simultaneously to NGM, news agencies and to well as the financial position in general, will be taken into media relevant to the news. Press releases are to be account. The Board of Directors considers that Wayfinder approved internally by the departmental manager(s) for Systems will not declare any dividend for the next two the area to which the press release refers. Distribution will years. be made through NGNews, in accordance with the stock exchange’s regulations. Press releases will be published on the Company’s website as soon as possible after the news has been made public.
39 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 40
The Board of Directors, Key management personnel and Auditors
The Board of Directors
Bernhard Steiner Pär Arvidsson Peter Blom Magnus Nilsson Born 1948 Born 1960 Born 1955 Born 1955 Chairman Member of the Board of Member of the Board of President Member of the Board of Directors since 2005 Directors since 2002 Member of the Board of Directors since 2003 Qualifications: B.A. University Qualifications: Stockholm Directors since 2002, Qualifications: Ph.D. business of California at Berkeley, MBA School of Economics Qualifications: Stockholm administration, MBA, Harvard Business School Other Directorships: School of Economics St. Gallen University Other directorships: Silva Sweden AB, Cross Other directorships: Other directorships: Hive Technology Group Inc., Sportswear Intl. AB, Rupert Netsurvey AB, Academic Clean Diesel Technologies Inc Wcities International Inc. Marine AB. Search AB, Campuscareer- Shares: 25,000 Shares: 42,250 Shares: 02) center.com Inc, Nordic Warrants1): 7,500 Warrants1): 6,250 Warrants1): 5,000 Wireless AB, Wcities.com Inc, SWEDISH Satellite Systems AB Shares: 125,0003) Warrants1): 46,000
Key management personnel
Magnus Nilsson Stefan Bengtsson Franz Bonner Lars-Erik Larsson Jonas Sellergren President and Chief Executive Born 1975 Born 1965 Born 1961 Born 1971 Officer Vice President R&D Vice President Operator Sales Chief Financial Officer Vice President Product See the Board of Directors Employed at Wayfinder Employed at Wayfinder Consultant working for Management Systems since 1998. Systems since 2004 Wayfinder Systems since Employed at Wayfinder Qualifications: Degree in Qualifications: Technischer 20044) Systems since 2000 computer technology, Lund Hintergrund Qualifications: Business Qualifications: Information Institute of Technology Shares: 28,750 Administration, University of Science and Geography at Shares: 10,000 Warrants1):1,250 Lund and University of University of Lund and the Warrants1): 5,000 California Military Academy Shares: 7,500 Shares: 10,000 Warrants1):0 Warrants1): 5,000
Auditor Göran Neckmar, born 1956 Authorised Public Accountant Ernst & Young Regular auditor for Wayfinder Systems AB (publ) since 1995.
1) Every subscription option carries the right to subscribe for five shares in Wayfinder Systems at an issue price of SEK 30.00 per share in the scheme from 2004 and SEK 13.50 per share in the scheme from 2005. 2) Peter Blom owns 574,000 shares indirectly through the company, Nordic Wireless AB. 3) Magnus Nilsson owns 125,000 shares directly, 171,005 shares indirectly through the company Carl Magnus Nilsson AB and 574,000 shares indirectly through the company, Nordic Wireless AB. 4) Lars-Erik Larsson will remain in this position until the current recruiting of a permanent CFO is completed.
40 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 41
Share capital and ownership structure
Share capital The share capital will increase from SEK 860,121 to SEK Wayfinder Systems’ share capital amounted on 25 August 1,240,921, and the number of shares in the Company will 2005 to SEK 860,121, divided into 8,601,210 shares of a increase from 8,601,210 to 12,409,210 if the Offer is fully nominal SEK 0.10 per share. Every share carries an entitle- subscribed. ment to one vote. All outstanding shares are ordinary shares, and carry the same right to shares in Wayfinder Trend in share capital Systems’ assets and results. Since the formation of Wayfinder Systems, the Company’s share capital has altered in accordance with the table below.
Change in Total Increase in Total Nominal number of number of share capital, share capital, Issue Year Transaction amount, SEK shares shares SEK SEK price
1995 Formation of the Company 100 1,000 1,000 100,000 100,000 1996 New issue 100 27 1,027 2,700 102,700 7.41 1998 New issue 100 161 1,188 16,100 118,800 35.00 1998 Exercise of options 100 172 1,360 17,200 136,000 60.00 2000 Exercise of options 100 130 1,490 13,000 149,000 100.00 2001 Conversion of debt instrument 100 2,235 3,725 223,500 372,500 2.30 2003 New issue 100 1,242 4,967 124,200 496,700 8.05 2004 Split 200:1 0.50 988,433 993,400 – 496,700 – 2004 New issue 0.50 373,736 1,367,136 186,868 683,568 14.80 2005 New issue 0.50 298,106 1,665,242 149,053 832,621 20.00 2005 Exercise of options 0.50 55,000 1,720,242 27,500 860,121 11.20
2005 Split 5:1 0.10 6,880,968 8,601,210 – 860,121 – 2005 Present new issue1) 0.10 3,808,000 12,409,210 380,800 1,240,921 49.00 Total 12,409,210 1,240,921 1) Provided that the Offer is fully subscribed.
Ownership structure The ownership structure of Wayfinder Systems as at 30 June 2005, based on information from VPC, adjusted for known changes, is shown in the table below, which also shows the ownership structure after the completion of the Offer. The num- ber of shareholders prior to the Offer was 66.
Ownership structure prior to the Offer Ownership structure after the Offer1) Number of Proportion of Number of Proportion of Shareholders shares votes and capital, % New issue1) shares votes and capital, %
Medici Holdings Ltd. 2,601,085 30.2 2,601,085 21.0 Pos Invest Belgium SPRL 1,469,945 17.1 1,469,945 11.8 Mailman, Joshua 589,120 6.8 589,120 4.7 Nordic Wireless AB 574,000 6.7 574,000 4.6 Metdist Limited 548,000 6.4 548,000 4.4 Catella Fokus 285,000 3.3 285,000 2.3 Banque Carnegie Luxembourg S A 218,000 2.5 218,000 1.8 Carl-Magnus Nilsson AB 171,005 2.0 171,005 1.4 Northern Trust Global Services Ltd 162,500 1.9 162,500 1.3 Lindberg, Per 146,500 1.7 146,500 1.2 Other 1,836,055 21.3 1,836,055 14.8 Pending new issue 3,808,000 3,808,000 30.7 Total 8,601,210 100.0 3,808,000 12,409,210 100.0 1) Provided that the Offer is fully subscribed, and unchanged holdings by existing shareholders.
41 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 42
Share capital and ownership structure
Option programme shares, convertible debt instruments and/or debt instru- During 2004, Wayfinder Systems issued 110,000 warrants, ments linked to options to subscribe for new shares. The which were acquired by employees and members of the Board of Directors were given the right, in connection with Board of Directors of the Company. this, to depart from the preferential rights of shareholders and the provisions on non-cash issue, set-off issues or Half of the warrants issued in 2004, 55,000, carried an other condition. In the event of new issues, the issue price entitlement to subscribe for one share per warrant at an is to be determined on the basis of the market price of the issue price of SEK 56.25, during the period up to and shares on the respective issue dates. The purpose of the including 31 May 2005. All these warrants had been exer- authorisation and the reason for the possible departure for cised, and the resulting 55,000 shares are included in the shareholders’ preference, was to make it possible for the registered share capital. Company, in an appropriate way, to implement the neces- The remaining 55,000 warrants issued in 2004 can be sary diversification of shareholdings in connection with exercised for subscription during the period up to and the application for listing, to strengthen the Company’s including 31 May 2006. No warrants have been exercised capital, to improve the opportunities for acquiring capital so far. The conditions for these warrants include the in the future to finance the Company’s operation and/or to normal conversion provisions. Conversion took place as a carry out corporate acquisitions. The authorisation sets no result of the split resolved on at the extraordinary general limit on the number of securities which may be issued. The meeting of Wayfinder Systems held on 19 August 2005. maximum volume is, accordingly, set at the upper limit for Every warrant carries the entitlement after conversion to share capital, SEK 3,320,000. subscribe for five shares at an issue price of SEK 13.50 per The Board of Directors has utilised the above-mentioned share. authorisation to issue shares within the framework of the During 2005 a further 55,000 warrants were issued, and Offer and in that connection to depart from the preferen- these can be exercised during the period up to and includ- tial right of shareholders with the aim, in an appropriate ing 31 May 2007. No warrants have been exercised so far. way, to broaden the shareholder base, create a more diver- The conditions for these warrants include the normal con- sified ownership structure and create the conditions for a version provisions. Conversion took place as a result of the liquid market in the Company’s shares. Remaining parts of split resolved on at the extraordinary general meeting of the authorisation may be used in the future for other Wayfinder Systems held on 19 August 2005. Every warrant purposes, such as corporate acquisitions. carries the entitlement after conversion to subscribe for five shares at an issue price of SEK 30 per share. Undertaking by the principal shareholders, the Board of Directors and key management Accordingly, in the event of full conversion, 550,000 new personnel shares will be added, each at a nominal SEK 0.10, repre- senting an increase in the share capital of SEK 55,000. The The Company’s principal shareholders, that is to say, Medici additional shares will constitute 6.0 percent of the total Holdings Ltd., POS Invest Belgium Sprl, Joshua Mailman, number of shares and votes after full exercise of all out- Nordic Wireless AB and Metdist Limited, the members of standing warrants before the Offer and 4.2 percent after the Board of Directors Bernhard Steiner, Pär Arvidsson, the Offer, provided that it is fully subscribed. Peter Blom and Magnus Nilsson (directly and through com- There are no other outstanding options or other share- panies) and all key management personnel in the Company, related incentive schemes where Wayfinder Systems has Stefan Bengtsson, Franz Bonner, Lars-Erik Larsson and issued warrants, convertibles, call options, synthetic Jonas Sellergren as well as Jan Höjman – whose holdings options or similar instruments. taken together represent about 51 percent of the shares and votes in the Company provided that the Offer is fully Authorisation of issue subscribed and following full dilution – have agreed with Öhman that they will not dispose of their shares in the At the extraordinary general meeting held on 19 August Company during a period of six months from the date on 2005, it was resolved to authorise the Board of Directors, which the shares were first listed without having obtained during the period until the next annual general meeting, written consent from Öhman in advance. on one or more occasions, to decide on a new issue of
42 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 43
Supplementary information
Significant agreements Mobilkom Austria AG & Co KG (“A1”), and with the Spanish Wayfinder Systems has four categories of agreements for operator, Telefónica Moviles Espana S.A. since December the Company’s operation: agreements with distributors, 2004. In May 2005, a collaborative venture was initiated agreements with mobile phone manufacturers, agreements with the Hungarian operator, Pannon GSM Távközlési Rt. with phone operators and agreements with suppliers. Negotiations are in progress between the Parties on the details of a written agreement. The products will be Agreements with distributors marketed under the operators’ own brands. Through its distributors, Wayfinder Systems has a presence in Belgium, Denmark, Finland, France, Italy, Luxemburg, the Agreements with suppliers Netherlands, Norway, Switzerland, Spain, Great Britain, Wayfinder Systems’ principal supplier of maps is Tele Atlas Sweden, Germany and Hungary. Although, taken together, NV in the Netherlands, which is one of the leading suppli- the distributors are important to the Company’s operation, ers of digital maps. The agreement with Tele Atlas runs it is the Company’s view that no single agreement is of vital until the end of 2007, and will then automatically be importance to the Company’s operation or profitability. extended by one year unless the agreement is terminated with three months’ notice. In addition, the Company has Agreements with mobile phone manufacturers agreements with Top Map, a player with map coverage of The Company collaborates with several of the leading Eastern Europe. Since the Wayfinder Server can handle all mobile phone manufacturers, and through this, Wayfinder commercial map formats on the market, the Company’s Systems’ products are offered by the manufacturers on view is that it is not dependent on any single player. The sales of mobile phones and/or GPS products. Among the GPS equipment that the Company sells along with its prod- mobile phone manufacturers, Nokia is the one with whom uct is currently supplied by RoyalTek. Given both the num- the collaboration is the most extensive. ber of existing suppliers of GPS equipment, and the price transparency in this market, it is the Company’s opinion During 2003, Wayfinder Systems entered into an agreement that it is not dependent on any single player. with Nokia under which the Company’s Wayfinder Mapguide product is included on a memory card with sales of one of Intellectual property rights Nokia’s mobile phones. Since then, the agreement has Wayfinder Systems holds no patents, and nor does it have expanded to include the majority of Nokia’s mobile phone any pending patent applications. Protection for Wayfinder models. Systems’ software consists of trade secrets and copyright. In August 2004, the Company expanded its collaboration Wayfinder Systems has a Swedish trade mark registration with Nokia regarding the launch of a Bluetooth GPS prod- and a EU trade mark registration for a logo. The logo does uct in early 2005. For this product, Nokia has selected the not include the word ‘Wayfinder’. Over and above its regis- Company’s Wayfinder Navigator product for pre-installation tered business name, Wayfinder Systems AB, the Company on a memory card which will be supplied as a package with has no registered protection for the word ‘Wayfinder’. the GPS product. The GPS product can be used with all Nokia’s Wayfinder-compatible mobile phones. During 2005, the Company applied for an EU trademark, both for the word ‘Wayfinder’, and for a logo including the In April 2005, the Parties signed a supplementary agree- word ‘Wayfinder’. The trade mark application for the word ment to the 2004 agreement, under which Nokia has the ‘Wayfinder’ has also been lodged with the US registration right to sell Wayfinder Navigator along with Nokia’s Navi- authority. gator Pack product. Besides Wayfinder Systems’ product, the package also includes Nokia’s GPS product and certain The Company is currently carrying out a review of its trade- of the mobile phone models specified in the agreement. marks. During this process, the Company has discovered that the trade mark ‘Wayfinder’ is owned by other parties Agreements with phone operators in a number of European countries and in the USA, with Wayfinder Systems has joint arrangements with phone the registrations covering goods and services correspon- operators through which Wayfinder Systems’ navigation ding to those offered by Wayfinder Systems. For this products and associated services are supplied to the phone reason, it is not clear that patent applications submitted operators’ customers. Since November 2004, Wayfinder by the Company will be granted. Systems has cooperated with the Austrian operator,
43 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 44
Supplementary information
Shareholders’ agreements Remuneration to key management personnel As far as the Board of Directors of the Company is aware, and the Board of Directors there are no shareholders’ agreements or other significant The Compensation committee has together with the Com- agreements between shareholders with reference to shares pany’s larger shareholders determined the remuneration for in the Company. the President. For other key management personnel, the President has determined the remuneration together with Disputes the Compensation committee. The Company is not and has not been party to a dispute, Remuneration to the President and other key management legal action, arbitration proceedings or other legal case personnel consists of basic salary, variable remuneration, which, in the view of the Board, has had or may be other benefits and pension. The term ‘key management considered to have material financial significance for the personnel’ refers to the four individuals who, with the Company. President, constitute the group management team. For the composition of the group management team, see page 40. Insurance It is the Board’s opinion that Wayfinder Systems has In financial year 2004, key management personnel and adequate insurance cover in relation to the risks to which members of the Board of Directors received salaries and the operation is exposed. The Company has no intellectual other remuneration totalling SEK 2,705,000. property rights insurance.
Premises The Company owns no real estate. The Company’s operation is carried on in rented premises at Baravägen 1 in Lund, and at Kungsgatan 5 in Stockholm, with a total office area of around 2,200 square metres. In the Board’s judgement, the leases are on market conditions.
Remuneration and other benefits during 2004 Pensions Salaries/ Consultants and other Options SEK Directors fees Bonus fees1) benefits (benefit) Total
Chairman of the Board 0 00000 Other Directors 0 0 882,500 2) 0 0 882,500 President 200,000 0 0 3) 0 0 200,000 Other key management personnel (4 individuals) 1,181,000 0 441,500 0 0 1,622,500 Total 1,381,000 0 1,324,000 2,705,000 1) Consulting fees are a gross amount, which means that the consultant or the consulting company are responsible for all tax and social security contributions. 2) The amount pertain to consultancy fees paid to Bernhard Steiner, who during 2004 was a member of the Board of Directors and still is. 3) Fountainhead Group AB, a company partly owned by Magnus Nilsson, has received consultancy fees of SEK 2.5 million during 2004. The fees pertain to four consultants in accordance with a consultancy agreement with Wayfinder Systems.
Options acquired by current key management personnel and the Board of Directors during 2004 Acquisition SEK Number of Value price Benefit
Chairman of the Board 10,000 14,200 14,200 0 Other Directors 12,500 17,750 17,750 0 President 25,000 35,500 35,500 0 Other key management personnel (3 individuals) 22,500 31,950 31,950 0 Total 70,000 99,400 99,400 0
44 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 45
Supplementary information
Remuneration of the Board of Directors Severance pay Remuneration paid to the Board of Directors of Wayfinder There are no agreements carrying the right to severance Systems during 2004 amounted to SEK 882,500. The pay. annual general meeting of Wayfinder Systems on 2 May 2005 resolved that the Board of Directors would not be Pensions entitled to any fees for its duties for the period until the At present, the Company has no pension scheme for its close of the annual general meeting in 2006. employees. Consequently, no remuneration has been paid in the form of pension benefits. From 1 August 2005, how- The Company’ chairman, Bernhard Steiner, may, at the ever, employees have the option of ‘salary trade-off’, under request of the Company’s President, when such duties are which they can give up part of their salary in favour of required and are deemed to be outside of what can be pension contributions, based on actual payments, through expected to be part of the board duties, perform consult- the Company. ing services for the Wayfinder Systems. For these consult- ing services, Bernhard Steiner has the right to remunera- Remuneration to auditors tion of EUR 30,000 per year. Remuneration paid to the Company’s auditors in 2004 Remuneration to the President amounted to a total of SEK 55,000, of which SEK 25,000 For 2004, the President has been paid salary and other relates to audit fees. For the current financial year, the Company’s auditors will be entitled to remuneration for remuneration totalling SEK 200,0001). No pension contribu- fees in accordance with the approved account. tions have been paid. As shown above, the President has received no special remuneration in addition to this for his work on the Board of Directors. Agreements and transactions with related parties For the first eight months of the year, the President has The Company’s President, Magnus Nilsson, directly and 2) been paid a salary of SEK 41,600 per month. After 1 Sep- indirectly through Nordic Wireless AB and Carl Magnus tember, his salary amounted to SEK 175,000 per month. Nilsson AB, holds around 7 percent of the shares in The mutual period of notice is 12 months. Pension policies Wayfinder Systems. Magnus Nilsson is also, through the have been taken out at 15 percent of salary, within the same companies, owner of 25 percent of the shares in framework of the tax regulations. Wcities Inc. in the USA. Peter Blom, a member of the The President also has the right to remuneration in the Board of Directors of Wayfinder Systems, and Medici form of a bonus based on certain performance based Holding Limited, Wayfinder Systems’ largest shareholders, conditions. During the period 1 September 2005 until also has a propriety interest in Nordic Wireless and Wcities. 31 March 2006, bonus can be paid with a maximum of EUR In November 2004, Wayfinder Systems and Wcities con- 105,000. cluded an non-exclusive agreement governing both a right for Wcities to utilise Wayfinder Systems technology for the Remuneration to key management personnel development and sale of Wcities own products, primarily For 2004, salaries and other remuneration paid to key webbased travel information service, and a non-exclusive management personnel in the Company, excluding the right for Wcities as a retailer to sell Wayfinder Systems’ President, amounted to a total of SEK 1,622,500. products from Wcities’ website. Wayfinder Systems and Wcities has signed an agreement under which Wayfinder Systems is granted the right to use information from Wcities database in Wayfinder Systems service offer. The agreements were entered into on market terms.
1) Fountainhead Group AB, a company partly owned by Magnus Nilsson, has received consultancy fees of SEK 2.5 million during 2004. The fees pertain to four consultants in accordance with a consultancy agreement with Wayfinder Systems. 2) Fountainhead Group AB, a company partly owned by Magnus Nilsson, has received consultancy fees of SEK 2.0 million during January–August 2005. The fees pertain to four consultants in accordance with a consultancy agreement with Wayfinder Systems.
45 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 46
Supplementary information
In addition, Magnus Nilsson holds shares in a company Audit report named Fountainhead Group AB, which company has The auditor submitted a departure from the standard for- performed consultancy service for Wayfinder Systems in mula for audit reports for financial years 2002, 2003 and accordance with a consultancy agreement. The consultancy 2004. The departure relates to the fact that, during these services have been performed by Magnus Nilsson and three years, the Company did not pay taxes and charges at the other consultants. In connection with the recently decided correct time, and that, in 2002, the Company did not file move of some functions from Lund to Stockholm, the its annual report in time. Company also leases office premises in Stockholm from Fountainhead Group AB. Other Wayfinder Systems AB (publ) has Corporate ID No. 556526- The Company also collaborates with Academic Search Inter- 2929. The Company has its head office at Baravägen 1 in national AB, in which Magnus Nilsson, through companies, Lund. The Company registered with the Swedish Companies has an interest. Registration Office, Bolagsverket, on 13 November 1995, The shares in Wayfinder Systems US subsidiary, Wayfinder and has traded since that date. The Company’s present Systems Inc., were acquired from Pole Inc., whose shares business name was registered on 25 August 2005. The at the time of the acquisition were owned by P-O Söder- Company’s form of association is regulated by the Swedish berg, who indirectly is a shareholder in Wayfinder Systems. Companies Act (1975:1385).
The shares in Wayfinder Systems Romanian subsidiary, Wayfinder RO S.R.L., were acquired from Franz Bonner, who is one of the key management personnel in the Company.
You drive, we get you there!
The Wayfinder server processes information about POI, such as companies, restaurants, hotels, airports etc. Many POI also contain additional information about opening hours, prices and number of rooms available. The information is continuously updated. Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 47
Articles of Association
Articles of Association of Wayfinder Systems AB (publ) Notification of a general meeting shall be given through 556526-2929 advertisement in the Swedish Official Gazette as well as in Adopted at an extraordinary general meeting held on Svenska Dagbladet or other national daily newspaper. 19 August 2005 General meetings shall be held in Lund or Stockholm. § 1 Business name § 10 Application to attend a general meeting The Company’s business name is Wayfinder Systems AB (publ). Shareholders wishing to attend a general meeting shall § 2 Registered office notify the Company no later than 12.00 on the date speci- The registered office of the Company shall be in Lund. fied in the notice convening the meeting. This last-named § 3 The object of the Company date shall not be a Sunday, other public holiday, a Satur- The object of the Company’s operation is, directly or indi- day, Midsummer Eve, Christmas Eve or New Year’s Eve, and rectly, to carry on research, development, production and shall not fall earlier than the fifth working day before the marketing of equipment, software and services for vehicle meeting. Should any shareholder intend to bring assis- navigation, and to conduct operations compatible with tant(s), the number of assistants (maximum two) shall be that object. In addition, the Company shall have the stated on the application. object, directly or indirectly, of owning, building and man- § 11 Agenda for an annual general meeting aging properties, and of conducting operations compatible At an annual general meeting, the following matters will with that object. be considered:
§ 4 Share capital 1. Election of chairman for the general meeting; The Company’s share capital shall be a minimum of SEK 2. Preparation and approval of the voting list; 830,000 and a maximum of SEK 3,320,000. 3. Approval of the agenda; § 5 Nominal amount 4. Selection of one or two minutes checkers to sign the The nominal amount of the shares shall be SEK 0.10. minutes; 5. Check that the general meeting has been duly con- § 6 Financial year vened; The Company’s financial year shall be the calendar year. 6. Presentation of the annual report and audit report, § 7 The Board of Directors and, where appropriate, the consolidated accounts and The Board of Directors shall, as far as it is appointed by consolidated audit report; the general meeting, consist of a minimum of three and a 7. Resolution on the adoption of the income statement maximum of ten members without deputes. The members and balance sheet, and, where appropriate, the consol- of the Board are to be elected annually at the annual gen- idated income statement and consolidated balance eral meeting for the period until the close of the next sheet; annual general meeting. 8. Resolution on the appropriation of the Company’s profit or loss in accordance with the balance sheet § 8 Auditors adopted; The Company shall have one or two auditors without 9. Resolution that the members of the Board of Directors deputies. The auditors appointed shall be authorised public and the President be discharged from liability; accountants or a registered public accounting firm. 10. Determination of the number of members of the Board The Board of Directors has the right to appoint one or of Directors, and, where appropriate fall, the number more special auditors to review both the Board’s state- of auditors; ments in connection with new issues with provision for 11. Determination of the fees to be paid to the Board of non-cash subscription or shares with set-off right or other- Directors and, where appropriate, the auditors; wise with conditions, and merger plans. Special auditors 12. Election of directors and, where appropriate, auditors; shall be authorised public accountants or a registered 13. Any other business which rests upon the general meet- public accounting firm. ing under the provisions of the Companies Act or the Articles of Association. § 9 Notice convening a general meeting and location for the meeting § 12 VPC registration clause A notice convening an annual general meeting, as well as Any person who, on the stipulated record day, is entered in an extraordinary general meeting at which the matter of a the share register or in a list under the provisions of Chap- change to the Articles of Association is to be considered, ter 3 § 12 of the Companies Act (1975:1385) shall be shall be issued no earlier than six weeks and no later than regarded as entitled to receive dividends and, in the event four weeks before the meeting. A notice convening another of a bonus issue, new shares to which shareholders are extraordinary general meeting shall be issued no earlier entitled, and to exercise the preferential right of share- than six weeks and no later than two weeks before the holders to participate in an issue. meeting. 47 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 48
Interim report for the period 1 January – 30 June 2005
• Net sales more that doubled – increasing by 140% to SEK 25.0 (10.4) million • Operating loss before depreciation amounted to SEK –11.8 (–8.2) million • Launch in Spain with Telefónica and in Hungary with Pannon • USA and Canada new markets for Wayfinder Systems
Market, business and the operation Sales and results Wayfinder Systems’ services are aimed at actively helping Net sales for the current reporting period were SEK 25.0 people find their way when they are on the move. The (10.4) million, which means that the Company more than mobile phone is the principal tool for providing the user doubled its sales compared with the corresponding period with map directions, route instructions and other impor- in the preceding year. The rise in sales is due above all to tant information. This may involve finding the nearest successful ventures in Spain and Austria, but also to closer bank, filling station or restaurant. The market for collaboration with distributors and strategic partners in Wayfinder Systems products and services is growing explo- the rest of Europe. sively. Route-finding services, especially for car navigation, Operating loss before depreciation for the current reporting are proving particularly popular with consumers, and period amounted to SEK –11.8 (–8.2) million. Increased within this segment, aftermarket products like the Com- investment in marketing, and the associated expansion of pany’s are growing faster than factory-fitted solutions. the workforce, has contributed to the slight deterioration The market in North America, which is trailing a little com- in operating loss compared with the corresponding period pared with Europe, is showing clear signs of coming to life. in the preceding year.
Our collaboration with mobile operators is growing rapidly Financing and liquidity in scope. At present, we are working in partnership with Cash and cash equivalents at 30 June 2005 totalled Telefonica, Vodafone, Mobilkom, Hutchinson – 3 and SEK 5.3 (–1.5) million. Pannon. A number of new collaborative projects are under discussion. On top of this, we are working with a number The equity ratio rose during the current reporting period of mobile phone manufacturers, including Nokia and Sony from 20 to 51 percent. The rise is due largely to new Ericsson. issues, including the options scheme, which supplied the Company with the equivalent of SEK 20.7 million. Our operation is now concentrating on exploiting the mar- ket. Over the past few years, we have been working consis- Investment tently to develop a broad product portfolio which can be Investment in intangible assets amounted to SEK 3.9 used in all the major operating systems, i.e. Java, Symbian (2.4) million, entirely made up of capitalised development and Microsoft. We now have excellent products and serv- expenditure. Investment in machinery during the period ices, suitable for around 70 percent of all new phones totalled SEK 0.7 (0.1) million. A company in Romania was being launched. acquired, and a Java development centre located there. Wayfinder Systems is based on a unique and world-leading This acquisition has not given rise to any book goodwill. technology, which won the prestigious US Handango Cham- pion Award in June 2005. We have now shifted our focus Taxes to investing in marketing and sales activities, and these The deficit for tax purposes was at least SEK 65 (33) mil- will provide the pay-back for the many years of work that lion, but no deferred income taxes recoverable relating to has gone into product development. Accordingly, the num- this loss carry forward have been recognised. ber of staff in the marketing and sales organisation will rise, partly through setting up a sales and marketing Future prospects organisation in North America. The Board of Directors’ full-year forecast is for continued good sales growth and improved margins compared with the previous year.
48 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 49
Interim report for the period 1 January – 30 June 2005
Events following the end of the period to any changes in the income statement and balance sheet Option scheme for the period. Revenue recognition for the full year 2004 The Parent Company issued a debt instrument linked to has, however, been adjusted, and this has had a negative warrants to subscribe in new shares in the subsidiary, impact on sales of SEK 2.5 million. Operating loss was not Wayfinder Systems Förvaltnings AB. The debt instrument is affected. linked to 55,000 warrants for new shares. Each warrant carries the entitlement to subscribe for one share, so that Future information date the share capital of the Parent Company may increase by a 28 November 2005: Interim report Jan – Sept 2005 maximum of SEK 27,500. Subscription for new shares will be possible until and including 31 May 2007. The addi- Lund 17 August 2005 tional shares, including earlier options schemes, will repre- sent 6.0 percent of the total number of shares and votes, if Wayfinder Systems AB all options are exercised. The Board of Directors
Accounting principles Review report This interim report has been drawn up in accordance with I have reviewed this interim report, and in doing so I have IAS 34, Interim Financial Reporting, which conforms with followed the recommendations issued by the Swedish the Swedish Financial Accounting Standards Council’s rec- Institute of Authorized Public Accountants. A review is ommendation RR 31, Interim Reporting for Groups. considerably more limited than an audit. Nothing has emerged to suggest that the interim report does not fulfil With effect from 1 January 2005, listed companies within the requirements for interim reports laid down in the the EU must draw up their consolidated accounts in accor- Annual Accounts Act. dance with IFRS (International Financial Reporting Stan- dards), and this report is, accordingly, the first issued by Lund 18 August 2005 the Company using these standards. Wayfinder Systems has carried out an analysis of the effects of this change, and Göran Neckmar can, therefore, state that the transition to IFRS has not led Authorised Public Accountant, Ernst & Young
49 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 50
Interim report for the period 1 January – 30 June 2005
Consolidated income statement Jan–June Jan–June Full year Amounts in SEK thousands 2005 2004 2004
Net sales 25,009 10,412 23,445 Capitalised work on own account 3,862 2,450 6,125 Other operating income 739 0 0 Operating expenses –41,387 –21,028 –50,409 Loss before depreciation –11,777 –8,166 –20,839
Depreciation on tangible assets –330 –310 –638 Depreciation on intangible assets –3,700 –3,217 –6,435 Operating loss –15,807 –11,693 –27,912
Financial items, net –504 –304 –535 Loss after financial items –16,311 –11,997 –28,447
Tax 000 Net loss for the period –16,311 –11,997 –28,447
Consolidated balance sheet Jan–June Jan–June Full year Amounts in SEK thousands 2005 2004 2004
Assets Intangible assets 27,551 26,931 27,389 Tangible assets 1,403 1,134 977 Total fixed assets 28,954 28,065 28,366
Inventories 3,633 700 1,433 Current receivables 12,467 4,769 7,302 Cash and bank balances 5,273 0 888 Total current assets 21,373 5,469 9,623 Total assets 50,327 33,534 37,989
Equity and liabilities Equity 25,363 6,541 21,000 Interest-bearing liabilities 5,591 13,511 1,925 Other liabilities 19,373 13,482 15,064 Total equity and liabilities 50,327 33,534 37,989
50 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 51
Interim report for the period 1 January – 30 June 2005
Consolidated cash flow statements in summary Jan–June Jan–June Full year Amounts in SEK thousands 2005 2004 2004
Cash flow from operating activities –12,281 –8,469 –21,373 Change in operating capital –1,892 718 –1,755 Investment activities –4,618 –2,530 –6,751 Financing activities 23,176 8,829 29,315 Cash flow for the period 4,385 –1,452 –564
Cash and cash equivalents at start of period 888 1,452 1,452 Cash and cash equivalents at close of period 5,273 0 888
Change in equity Jan–June Jan–June Full year Amounts in SEK thousands 2005 2004 2004
Amount at start of period 21,000 18,538 18,538 New issue 20,674 0 30,909 Net loss for the period –16,311 –11,997 –28,447 Amount at close of period 25,363 6,541 21,000
Data per share Jan–June Jan–June Full year 2005 2004 2004
Number of shares at close of period 1,665,242 993,400 993,400 Number of shares at close of period (after full dilution) 1,830,242 1,103,400 1,590,336 Earnings per share, SEK –8.9 –10.9 –17.9 Equity per share, SEK 21.8 12.0 18.5
Key ratios Jan–June Jan–June Full year 2005 2004 2004
Return on equity, % neg neg neg Return on assets, % neg neg neg Operating margin, % neg neg neg Profit margin, % neg neg neg Equity ratio, % 50% 20% 55% Interest coverage ratio neg neg neg Capitalised development costs, SEK thousand 3,862 2,450 6,126 Average number of employees 52 34 38
51 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 52
Content. In order to increase the user experience, Wayfinder products have a rich content of interesting additional information. At present, Wayfinder Systems has agreements with content suppliers relating to company addresses, stores, restaurants, cinemas, filling stations, attractions, hotels, museums, exchange rates, weather information and traffic information. Content suppliers include Wcities Inc. (POI information), Forex (exchange rates) and ARC (traffic information). Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 53
Accounts 2002–2004
During the period 2002–2004, no consolidated accounts were prepared, since the Company’s subsidiaries were dormant. Consequently, the following extracts from the annual report documents include accounts for the Parent Company, Wayfinder Systems AB, only. With effect from 1 January 2005, the accounts will be prepared in accordance with IFRS, as stated in the “Interim report for the period 1 January – 30 June 2005”, on pages 48–51.
Income statement Amounts in SEK thousands Note 2004 2003 2002
Net sales 25,945 13,343 4,908 Capitalised work on own account 6 6,126 9,700 9,755
Operating expenses Goods for resale –14,865 –6,198 –50 Other external expenses 5 –20,951 –13,598 –5,764 Personnel expenses 2, 3, 4 –16,543 –14,863 –15,188 Loss before depreciation –20,288 –11,616 –6,339
Depreciation tangible assets 7 –639 –810 –796 Depreciation intangible assets 6 –6,435 –3,016 –913 Operating loss –27,362 –15,442 –8,048
Financial items Interest income and similar profit/loss items 191 1,328 1,921 Interest expense –726 –359 –73 Loss before tax –27,897 –14,473 –6,200 Net loss for the year –27,897 –14,473 –6,200
53 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 54
Accounts 2002–2004
Balance sheet Amounts in SEK thousands Note 31 Dec 2004 31 Dec 2003 31 Dec 2002
ASSETS Fixed assets Intangible assets 6 Capitalised development expenses 27,389 27,698 21,015
Tangible assets 7 Equipment 977 1,362 1,447
Financial assets Shares in subsidiaries 472 100 100 Total fixed assets 28,838 29,160 22,562
Current assets Current receivables Inventories 1,433 45 1,839 Accounts receivable 6,127 9,572 3,220 Other receivables 14 30 24 Prepaid expenses 689 465 390 Cash and bank balances 888 1,452 43 Total current assets 9,151 11,564 5,516 TOTAL ASSETS 37,989 40,724 28,078
EQUITY AND LIABILITIES Equity 8 Restricted equity Share capital (993,400 shares at a nominal SEK 0.50) 497 497 373 Share premium reserve 44,144 44,144 34,268 New issue in progress 30,908 0 0 75,549 44,641 34,641 Non-restricted equity Loss brought forward –26,652 –11,629 –22,487 Net loss for the year –27,897 –14,473 –6,200 –54,549 –26,102 –28,687 Total equity 21,000 18,539 5,954
Long-term liabilities Loan from subsidiary 90 65 0 Unutilised bank overdraft facilities 9 1,784 219 0 Other long-term liabilities 1,216 4,399 0 Total long-term liabilities 3,090 4,683 0
Current liabilities Accounts payable 6,712 6,942 2,585 Other liabilities 3,091 3,997 18,561 Accrued expenses and deferred income 10 4,096 6,563 978 Total current liabilities 13,899 17,502 22,124 TOTAL EQUITY AND LIABILITIES 37,989 40,724 28,078
Pledged assets 11 7,950,000 5,500,000 5,000,000 Contingent liabilities None None None
54 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 55
Accounts 2002–2004
Cash flow statements Amounts in SEK thousands 2004 2003 2002
Business activities Operating loss –27,361 –15,442 –8,048 Depreciation 7,073 3,826 1,709 Group contributions –550 0 0 Net financial items –535 969 1,848 Total funds provided –21,373 –10,647 –4,491
Change in operating capital Change in accounts receivable 3,445 –6,352 –2,860 Change in other current receivables –208 –81 –8 Change in other current liabilities –3,603 –4,622 6,625 Change in inventories –1,389 1,794 51 The operation’s cash flow before investment –23,128 –19,908 –683
Investment activities
Machinery and equipment –253 –725 –116 Intangible assets –6,126 –9,699 –9,755 Subsidiaries –372 0 0 The operation’s cash flow after investment –29,879 –30,332 –10,554
Financing activities Shareholders’ contributions 0 17,058 10,551 New issue/exercise of options 30,908 10,000 0 Increase/decrease in long-term liabilities –1,593 4,683 –3 Tax for the year 000 Total financing activities 29,315 31,741 10,548
Cash flow for the year –564 1,409 –6 Cash and cash equivalents at start of year 1,452 43 49 Cash and cash equivalents at end of year 888 1,452 43
55 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 56
Accounts 2002–2004
General accounting principles Inventories The annual report has been prepared in accordance with the Inventories are valued at the lower of cost or net realisable value, Annual Accounts Act, the Swedish Accounting Standards Board’s and the first in-first out model is applied. general advice, and, where appropriate, the recommendations of the Swedish Financial Accounting Standards Council. Provisions Provisions are made for known obligations or anticipated risks Note 1 Accounting and valuation principles after individual testing. The accounting principles adopted are in conformity with the Annual Accounts Act, the Swedish Accounting Standards Board’s Note 2 Average number of employees general advice, and, where appropriate, the recommendations of 2004 2003 2002 the Swedish Financial Accounting Standards Council. Men 272124 With effect from 1 January 2005 the accounts will be prepared in Women 11 9 6 accordance with the IFRS. In connection with the transition to the Total 38 30 30 new regulations, the Board of Directors has concluded that the changes will not have a material effect on the accounts. Note 3 Information on absence due to illness 2004 2003 Consolidated accounts Absence due to illness for employees Since the subsidiaries, Wayfinder Systems Förvaltnings AB and younger than 30 years 5.0% 6.1% Wayfinder Systems Inc. were not trading during the financial year, Absence due to illness for employees and since the Group’s equity is identical to that of the Parent older than 30 years 1.0% 3.1% Company, no consolidated accounts have been prepared. Total absence due to illness 3.8% 4.7% Receivables and liabilities in foreign currency Of which, long-term sick leave 70.0% 41.2% Receivables and liabilities in foreign currency are not translated at the closing day rate in the balance sheet since these not are of Note 4 Salaries, other remuneration and social security significant impact. Exchange rate differences are reported in the expenses income statement in the period in which they arise. 2004 2003 2002 Salaries and other remuneration Revenue recognition The Board of Directors and Revenue has been recognised at the actual value of what has been the President 606 1,033 900 received or what will be received. Revenue is recognised insofar as Other employees 11,901 10,125 10,382 it is probable that economic benefits will flow to the Company 12,507 11,158 11,282 and the amount of the revenue can be measured reliably. Social security expenses Intangible and tangible assets Statutory and contractual social Tangible and intangible assets are recognised at the acquisition security contributions 4,097 3,630 3,664 value after the deduction of depreciation according to plan. Pension expenses 0 76 242 The depreciation amount is calculated on the original acquisition 4,097 3,706 3,906 value and is allocated over the estimated useful life of the asset. The depreciation period for machinery, equipment and intangible Note 5 Information concerning remuneration to auditors assets is 5 years, while the depreciation period on construction Remuneration has been paid to the Company’s auditors and audit equipment is 10 years. firm: As from 1 January 2001, expenditure for the development of the 2004 2003 2002 server and navigator has been capitalised in accordance with the Swedish Financial Accounting Standards Council’s recommendation for audits and other reviews 25 19 18 RR15 Intangible assets. The requirements for capitalisation are for independent advisory assistance etc that the asset is identifiable, that future economic benefits will provided by Ernst & Young 30 28 40 flow to the Company from it, and that the Company has control Total 55 47 58 over the asset. The depreciation period is calculated on the useful life of the asset, up to a maximum of 5 years.
56 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 57
Accounts 2002–2004
Note 6 Intangible assets Note 8 Change in equity 2004 2003 2002 Share New Non- Share premium issue in restricted Capitalised development expenses capital reserve progress equity Acquisition value brought forward 32,173 22,474 12,719 Acquisitions for the year 6,126 9,699 9,755 31 Dec 2001 373 34,268 –33,038 Shareholders’ contribution 10,551 Accumulated acquisition value Net loss for the year –6,200 carried forward 38,299 32,173 22,474 31 Dec 2002 373 34,268 –28,687 Accumulated depreciation Shareholders’ contribution 17,058 brought forward 4,475 1,459 546 New issue 124 9,876 Depreciation for the year 6,435 3,016 913 Net loss for the year –14,473 Accumulated depreciation 31 Dec 2003 497 44,144 –26,102 carried forward 10,910 4,475 1,459 New issue 30,908 Carrying value carried forward 27,389 27,698 21,015 Group contribution –550 Net loss for the year –2,897 Note 7 Tangible assets 2004 2003 2002 31 Dec 2004 497 44,144 30,908 –54,549
Equipment Acquisition value brought forward 5,126 4,402 4,287 Note 9 Bank overdraft facilities Net purchases for the year 253 724 114 2004 2003 2002 Accumulated acquisition value Credit limit granted 2,000 1,000 0 carried forward 5,379 5,126 4,401 Unutilised portion 216 781 0 Accumulated depreciation Utilised credit amount 1,784 219 0 brought forward 3,764 2,954 2,160 Depreciation for the year 638 810 794 Note 10 Accrued expenses and deferred income 2004 2003 2002 Accumulated depreciation carried forward 4,402 3,764 2,954 Accrued holiday pay 470 446 352 Accrued salary liability 61 293 47 Carrying value carried forward for Accrued social security remaining equipment 977 1,362 1,447 contributions 137 360 290 Other accrued expenses and deferred income 3,428 5,464 289 Total 4,096 6,563 978
Note 11 Pledged assets Pledged assets refers to floating charges for loans and guarantees with Sparbanken Finn and ALMI.
57 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 58
Auditor’s examination report
In my capacity as auditor for Wayfinder Systems AB (publ) Corporate ID No. 556526-2929, I have examined the present prospectus. The examination has been carried out in accordance with the recommendation issued by the Swedish Institute of Authorised Public Accountants, FAR. In accor- dance with the recommendation, I have examined the projections and forecasts included in the prospectus to a limited extent only. I have reviewed the interim report included in the prospectus. The annual reports for the years 2002, 2003 and 2004 were audited by me. In the audit report for 2002, I remarked that the annual report was submitted too late, and that the Company, on a number of occasions during the financial year, had not paid taxes and charges at the correct time. In the audit reports for 2003 and 2004, I remarked that the Company, on a number of occasions during the financial year, had not paid taxes and charges at the correct time.
The information extracted from the annual reports has been quoted accurately. Nothing has emerged to suggest that the prospectus does not fulfil the requirements of the Companies Act and the Trading in Financial Instruments Act.
Lund on 8 September 2005
Göran Neckmar Authorised Public Accountant
58 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 59
Word list and abbreviations
Term Definition & explanation 3G is short for third-generation mobile telephone technology. The services asso- ciated with 3G provide the ability to transfer both voice data and non-voice data with a speed up to 2 Mbit/s. This means that advanced services are avaliable wherever the user is located.
ARPU Average Revenue Per User. This term is mostly used by telephone carriers in order to describe the average revenue per user.
Bluetooth is a standard developed for wireless communication between units, for exam- ple between a GPS and a mobile phone.
GPRS General Packet Radio Services, is a platform for network services in a GSM- network. GPRS means that it is possible to transfer data to mobile phones with a speed up to 100 kbit/s and be constantly connected to the Internet.
GPS Global Positioning System. A navigation system containing 24 satellites.
Java is an object-oriented high-level programming language which is platform independent.
MMS is a short for Multimedia Messaging Service. It is a technique that enables subscribers to compose and send messages with one or more multimedia parts. With this technique it is possible to send digital photos, music, text and video sequences.
Off-board Technical solution where the information is stored and processed in a central server, which the local terminal communicates with.
On-board Technical solution where the information needed is stored and processed in the local terminal.
PDA – Personal Digital Assistant is a computer small enough to fit in your hand or your pocket.
Point-of-interest (POI) Special geographical locations of interest for a user, such as restaurants, hotels, gas stations etc.
Premium SMS is a payment solution via SMS, where the payment is included in an ordinary telephone bill.
Smart phones Advanced mobile phones with large memory capacity and an advanced processor.
SMS – short message service is a service available on most digital mobile phones that permits the sending of short messages between mobile phones, other handheld devices and even landline telephones.
Symbian is a platform made for smart phones and is developed by Symbian Ltd.
WAP – Wireless Application Protocol is an open international standard for applications that use wireless communi- cation, for example Internet access from a mobile phone or PDA.
Windows Mobile is a compact operating system for mobile devices.
59 Wayfinder_1-60_e_13sep.qxd 05-09-13 16.29 Sida 60
Addresses
Head Office Wayfinder Systems AB Baravägen 1 Box 1154 SE-221 05 Lund Sweden Telephone: +46 46 288 22 00 Fax: + 46 46 288 22 01 E-mail: [email protected]
President’s Office Wayfinder Systems AB Kungsgatan 5 111 43 Stockholm Sweden Telephone: + 46 8 555 176 40 Fax: + 46 8 555 298 99
60 Wayfinder_omslag_e_13sep.qxd 05-09-13 16.23 Sida III
Destination London, New York, Budapest or Stockholm? Regardless city, Wayfinder will guide you in Europe and North America. Wayfinder_omslag_e_13sep.qxd 05-09-1316.23SidaIV
Intellecta Finanstryck 0517907