January 2nd - 2002
This letter is intended to provide Mandriva shareholders with the latest news of the company.
Summary:
1. Mandriva in the news
Extremetech.com -- Linux: It's now!
In this article, Mandriva Linux is rated as the best operating system both for newbies and "oldbies":
"We can't end the review without mentioning that Mandriva Linux 8.1 was the easiest to install, maintain, and use of all the distros tried... Of the four distros we have used to research and produce this article, Mandriva 8.1 remains in each of our PC's as our primary operating system."
http://www.extremetech.com/article/0,3396,s%253D1027%2526a%253D19919,00.asp
ZDNET -- Mandriva 8.1 offers superior server platform.
Great article at ZDNet about Mandriva Linux 8.1 used as a server:
"Mandriva Linux 8.1 is an excellent choice for organizations seeking a viable, stable, technologically advanced alternative to Windows-based servers. While its utility as an alternative desktop is still dependent upon (growing) commercial app support, Mandriva's server environment is an excellent--and affordable--option for use as an Internet gateway or file and print server for Windows (and Linux) clients. Its included applications and utilities are highly useful, and its support offerings are more than adequate for corporate server deployments. Also, its support for ACLs (with XFS) enhances Mandriva's capabilities as a file/print server in NT environments. Organizations looking for ways to lower their server costs would be well advised to evaluate this latest offering from Mandriva."
http://techupdate.zdnet.com/techupdate/stories/main/0,14179,2826684,00.html
The Register -- "Mandriva 8.1 easier than Win-XP".
Comparison between ML 8.1 and WinXP in several areas with an emphasis on Internet tasks:
Various facets of ML 8.1 and WinXP were compared with particular emphasis given to Internet tasks. The article concluded that Mandriva Linux 8.1 is "a fine choice if you want to surf the Web and take control of the information you're leaving behind, and what Web sites are leaving on your machine; it's good for using e-mail with far fewer dangers (start by displaying all received messages as text only); and of course it works well for chatting and trading files with your friends on line. In other words, it's better at most of what the majority of Windows addicts use their computers for: wasting time on line."
http://www.theregister.co.uk/content/4/23436.html
2. The Linux market
The dotcom collapse has led some to believe that Linux has lost some of its lustre, whereas the opposite is true. Linux has evolved from primarily "non-official" ultilization in businesses and organizations, into properly authorized adoption at ever increasing rates.
Over the past year, Mandriva has been conducting an online business survey determining how Linux is used in professional environments. The large number of responses collected have been published on the MandrivaBizcases.com website:
http://www.mandrivabizcases.com
http://www.mandrivabizcases.com/geocases.php
In addition, a growing number of world governments are now paying attention to Free Software and Linux. France is a pioneer in this respect with the creation of a government agency that is looking into the adoption of Free Software and Open Standards throughout the administration.
The following links provide relevant information.
About the French government:
http://www.linuxtoday.com/news_story.php3?ltsn=2001-11-21-021-20-PR-LL
http://www.idg.net/go.cgi?id=607065
About German ministers:
http://www.linuxtoday.com/news_story.php3?ltsn=2001-07-09-007-20-NW-CY
About the British government:
http://www.theregister.co.uk/content/4/23413.html
A complete survey from the European Union:
http://europa.eu.int/ISPO/ida/?http&&&ag.idaprog.org/Indis35prod/doc/333
3. Mandriva and the stock exchange
Mandriva's initial public offering was conducted on August 3, 2001 on the Euronext "Marche Libre". The following encompasses several of the most commonly asked questions:
Q. Why doesn't Mandriva's stock prices follow those of other Linux companies (such as Redhat, Caldera, VA Linux)? Why do the share prices sometimes fluctuate substantially?
The number of daily transactions on the Marche Libre can be quite low and, as a result, a small number of orders can markedly impact the share price. However, these variations don't reflect the underlying status of the market or the company.
Q. How to buy Mandriva shares?
Assuming that your bank or broker accepts orders for the Euronext market, they will need to be given the Euroclear Code 4477.PA.
Currently, it seems that there are no North American Online Brokers that trade on this market at a reasonable cost, but the the Belgian Company Keytrade is highly recommended by many investors
(http://www.keytrade.com). Keytrade is a leader in its country -- it accepts foreign orders (minimum 1000 Euros) and operates in a large number of markets.
If you have a positive experience with a broker while trading Mandriva shares, please send the details to Jennifer Miller ([email protected]).
For orders dealing with a large number of shares (>10000), please write to investors @ mandrakesoft . com.
4. Mandriva's position within the Linux Market
Several recent polls have shown that Mandriva has succeeded, in less than 3 years, in becoming one of the most widely used Linux distributions in the world:
Linux Magazine UK
Detailed survey of 35,000 readers (figures were not published and are provided courtesy of the magazine)
1. Mandriva: 46.02%
2. Red Hat: 21.33%
3. SuSE: 18.67%
4. Debian: 5.33%
5. Corel: 2.66%
6. Caldera: 2.66%
7. Others: 3.33%
PCMag.com (US) - 8 October 2001
http://www.pcmag.com/poll_archive/0,3044,p%253D1035%2526bn%253D1,00.asp
What's your favorite Linux distro?
1. Mandriva: 43.78%
2. Redhat: 27.9%
3. Suse: 15.41%
4. Libranet: 1.42%
5. Other: 11.49%
Linux.com (US) - 24 September 2001 -
Best distribution for beginners
http://www.linux.com/polls/index.phtml?pid=128
1. Mandriva - 36.7%
2. Redhat - 33.5%
3. SuSe -13.5%
4. Slackware - 5.6%
5. Debian - 4.6%
6. Caldera - 3.7%
Linux.ie (Ireland) - July 2001
Which distribution do you prefer?
http://www.linux.ie/polls/pollresults.php?recount_pollId=1
1. Mandriva: 35%
2. Debian: 23%
3. Redhat: 18%
4. Suse: 18%
5. Caldera: 1%
6. Corel: 1%
7. Others: 1%
LinuxUser Magazine (Germany) - November 2001
Which distribution do you use regularly?
1. Suse: 76.2%
2. Mandriva: 33.8%
3. Redhat: 19.7%
4. Debian: 10.7%
5. Slackware: 2.8%
6. Caldera: 2.4%
7. EasyLinux: 2.1%
8. Others: 2.8%
(Several answers are allowed)
These polls were conducted with individual users and not enterprises. Mandriva has reached this position because of its emphasis on ease of use and installation. This extensive user base povides a strong position to begin conquest of the corporate market.
5. Mandriva's latest news
- Launch of the Mandriva Linux Users Club
The goal of the club is to offer a yearly paid subscription system that provides privileges to Club members in exchange for supporting Mandriva's R&D:
www.mandrivalinux.com/en/club/
A Q/A explains Mandriva's business model
http://www.mandrivalinux.com/en/club/club-qa.php3
- Mandriva Linux for IA-64 available. The IA-64 Intel processor is used for high performance computing.
https://mandriva.com/company/press/pr?n=/pr/products/1444&lg=en
- Launch of the Gaming Edition (featuring "The Sims") in Partnership with Transgaming and Electronic Arts
mandriva.com/company/press/pr?n=/pr/products/1318&lg=en
- Launch of Mandriva Linux 8.1:
https://mandriva.com/company/press/pr?n=/pr/products/1316&lg=en
This newest release has been reviewed by many magazines
http://www.mandrivalinux.com/en/reviews.php3
6. Mandriva financial results for 2000/2001
|
In K Euros as of 30/09 |
1998/1999 |
1999/2000 |
2000/2001 |
|---|---|---|---|
|
Revenues |
571 |
2,996 |
3,557 |
|
EBITDA |
79 |
-5,958 |
-13,088 |
|
Net profit |
55 |
-6,790 |
-13,575 |
|
Staff members |
0 to 21 |
21 to 94 |
94 to 147 |
Mandriva's revenue for the 2000-2001 period is 3.6 million Euros, an increase of 18.9%.
Nonetheless, these results are some 0.7 million Euros below the forecasts published at the time of the listing on the Marche Libre; this is due to a decline in retail sales (73% of the turnover) in Europe and in the United States (65% of the turnover) which occurred in July reinforced by the tragic events of September 11. On the other hand, direct sales through the online shop Mandriva Store (9% of the turnover) and corporate services (16% of the turnover) have met objectives, thereby validating the company's new commercial strategy.
Half-yearly evolution of the revenue
After a stable first half of the year (September-April), Mandriva accelerated its growth in the second half with an increase in turnover of approx. 45% compared with the previous financial year, while reducing the number of staff members.
The results, as forecast, are deeply in deficit but are in line with with the projections given at the time of the Initial Public Offering. The first half of the year was marred by the failure of the E-learning strategy which was launched by a new management team recruited at the end of 2000. The heavy expenditure (staff, R&D, Marketing) incurred by this strategy have had a negative impact on the results, which has lead Mandriva to focus again on its core business based on Linux. This revised focusing has resulted in drastic cost cutting and greatly improved margins for the second half:
- Management change and refocus on Linux business
- Cutting of one third of the staff and 57% of payroll
- Reduction by half of overheads
- Launch of more profitable activities (E-commerce, services)
Quarterly evolution of operating expenses
The described measures have allowed Mandriva to cut its monthly overheads and payroll between April and November by half, while accelerating growth during the second half of the year. Now, the overheads and payroll amount to 0.7 million Euros. Already seen in the fiscal year ending on September 30, 2001, the impact on Mandrivasoft results will be much more visible in 2001-2002.
In this context, Mandriva continues to maintain its goal of reaching "breakeven" at the end of the 2001-2002 fiscal year.
Fund raising
Mandriva has appointed the bank "KBC Securities" to seek a private capital increase with institutional investors or industry partners.
This fund raising has been initiated to help accelerate Mandriva's growth in the corporate market either via the recruitment of dedicated teams or exploitation of external growth opportunities.
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