FINANCIAL HIGHLIGHTS
REPORT OF THE BOARD OF DIRECTORS
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED BALANCE SHEET
CONSOLIDATED CASH FLOW STATEMENT
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
INCOME STATEMENT - TANDBERG asa
BALANCE SHEET - TANDBERG asa
CASH FLOW - TANDBERG asa
NOTES - TANDBERG asa
AUDITOR'S REPORT 2005
CORPORATE GOVERNANCE
A Letter from the Chief Executive Officer
In 2005, TANDBERG achieved solid growth and continued to deliver products and services that are well positioned in a growing market. We had top line growth of 13 percent, and earned $85.4 million in operating profits on revenue of $345.2 million.
The market for visual communication and collaboration is evolving, and the competitive landscape is undergoing rapid change. In response, changes at TANDBERG were needed. In the past few months we have made strides in focusing our organization to reach targeted goals.
In December 2005, when I was appointed CEO, I saw the challenges ahead but I also recognized TANDBERG’s accomplishments. At the end of 2005, we held an estimated 40 percent market share, with sound cash flow, a cash balance of $202.8 million, and a gross margin of 67.5 percent. With strong financials and a proven business model, I believe we have an excellent foundation from which to compete and expand.
SHAPING THE MARKET FOR VISUAL COMMUNICATION. TANDBERG has expanded its footprint, strengthened the sales team and improved operations, making us a formidable global competitor.
Now, TANDBERG is entering a new phase in our evolution as a company where we can shape the market and accelerate the adoption of video. This evolution requires that we aggressively deliver our value proposition: to enable multimedia collaboration between people and between companies to increase productivity and better satisfy their customers.
While we face increasing competition, we are proud to be the only player in the industry offering a truly integrated total solution. Regardless, we have no room for complacency.
We must continue to lead our industry with innovative technology and strategic alliances that deliver productivity-based solutions. We also must capitalize on our expertise in industries such as financial services, healthcare, manufacturing, and education.
CAPITALIZING ON STRATEGIC ADVANTAGES. People are the source of our success. TANDBERG’s culture is built on the integrity, teamwork, and creativity of its people. We have focused on building a sales force that is the best in the industry at responding to customer needs. In addition, we have maintained a large and valued set of partners who support the TANDBERG brand with their sales and service expertise. We continue to invest in training and knowledge-exchange to ensure our competitive advantage.
In 2005, our R&D team continued to lead the industry with its speed and innovation. We strengthened our market position with pioneering technology in 3G mobile video, streaming, and public video applications.
3G mobile phones connect seamlessly with TANDBERG’s Total Solution. In January 2006, streaming and 3G mobile video technologies acquired in 2005 were fully integrated into our Total Solution. Based on technology from the Ivigo acquisition, the TANDBERG 3G Gateway allows 3G mobile phone users with videoenabled handsets to place video calls to any IP- and ISDN-based endpoints.
Streaming turning TANDBERG’s solution into a personal broadcast system for new and existing customers. The TANDBERG Content Server, developed from technology acquired from Ectus, converts any endpoint into a streaming and archiving studio; making it possible for any user to record video messages and distribute these messages to a large audience with the click of a button.
New public utility applications believed to expand the market and use of video communication. The Compass MXP and Utility MXP self-contained video systems are designed for face-to-face information access in public spaces such as airports or emergency shelters.
TANDBERG innovation setting industry standards. TANDBERG ExpresswayTM continues to lead the field in providing a secure path for IP video calls through firewalls. Recognizing the advancements made possible by TANDBERG, in October 2005, the International Telecommunications Union adopted standards for NAT and firewall traversal based on Expressway.
ADVANCES WITH TECHNOLOGY PARTNERS. In 2005, TANDBERG strengthened its alliances with leaders in complementary technologies, resulting in integrated solutions that deliver even greater productivity. For example, users of Microsoft® Office Live Communications Server 2005 and Microsoft Office Communicator can now launch TANDBERG video calls using the Communicator interface. Also, users of IBM® Lotus® Sametime® can launch video calls from any endpoint managed by the TANDBERG Management Suite (TMS).
FOUNDATION BASED ON A STRONG CORPORATE CULTURE. In 2005, we expanded our workforce by 31 percent. Now we must channel our collective energy, knowledge, and creativity to achieve our goals. We endeavor to be more innovative and react quickly to market opportunities.
I believe deeply in fostering an atmosphere of collaboration, in rewarding people for their contributions, and in delivering the absolute best. We will continue to invest in people, nurturing a culture where best practices can flourish.
DELIVERING RESULTS FOR 2006. Since December, I have seen a tremendous effort to address organizational issues that will accelerate growth. The management team has aggressively adopted changes to reinforce our strong corporate culture and further empower our organization. A company-wide program has been initiated to reaffirm the TANDBERG values and establish a framework for decision-making.
I am grateful for the opportunity to lead this company and appreciate the support I have received. I believe we are on track to meet our goals and to make TANDBERG the leading source for multimedia collaboration between people and between companies.
Fredrik Halvorsen
Chief Executive Officer
© TANDBERG 2006