Quarterly Report January - March 2001

Quarterly Report January - March 2001 ConNova Group AB (publ) Operations during the period First quarter revenues of SEK4.7 million (SEK13.5 million) were accounted for by the maintenance and upgrades of existing customer installations. The company's focus on sales activities and the positive market trend in the TV segment fuelled the strong recovery of the company's "pipeline" of prospective clients. The number of proposals by ConNova to prospective customer's, and the prospective revenue arising from these proposals if the prospective customers accept them, is at the time of writing the company's largest ever. Costs for the period were SEK15.1 million (SEK21.1 million). All internal development costs, totalling SEK 3.6 million, were charged directly to the profit/loss account. The quarter saw the further development of the company's flagship product BizManager with enhanced functionality, flexibility and performance prior to the release of version 2.2, which is due for delivery in the second quarter this year. Systems are also being upgraded in ConNova´s customer service company, ConNova TVX to raise the level of service in our ASP services. Partnership agreements were signed with Cap Gemini, Ernst & Young and NorSistemas Soluziona. These agreements involve each partner selling, delivering and maintaining ConNova's products. There have been joint sales activities and customer sales-proposal work and a skills development plan has been initiated. Orders at the end of the period were SEK9.7 million (SEK21.1 million). Orders received in the first quarter totalled SEK5.3 million (SEK10.0 million). Initiatives in new market segments The process of analysing, evaluating and drawing up plans for introducing ConNova's BizManager, and the outsourcing and ASP services we offer through TVX in the market segment outside the TV industry accelerated during the year. As Internet operators, mobile operators with 3G networks and other players start offering content services as a supplement to their communication services, these market segments will also become highly attractive. Other segments with similar structures and ranges of services are also under evaluation. This analysis process will take into account the possibilities of developing the company through the acquisition of peripheral and complementary businesses. The principal agreement concluded between ConNova TVX and X2 Media Group regarding a working partnership for the newspaper and publishing business has already led to the start of ConNova's participation in the publishing market-place. The agreement provides for TVX to run subscriber management systems and databases for publishers. Revenue, Profitability and Liquidity Q1 2001 turnover was SEK4.7 million (SEK13.5 million). The loss was - SEK10.4 million (-SEK7.5 million). Q1 costs totalled SEK15.1 million (SEK21.1 million) of which SEK3.6 million related to internal product development (SEK3.6 million). The fall in costs is mainly due to a cost reduction programme started at the end of 2000 and fully implemented during the first month of this year. The company's new delivery projects are gradually becoming simpler to implement as main product BizManager's functionality and flexibility is extended. Profitability per project will therefore increase over time. ConNova will continue to charge all product development costs to the profit/loss account as they arise The group's liquidity as of 31 March was SEK28.2 million. There is an overdraft facility of SEK8.0 million which has been authorised, but has not been used. The company continues to follow the same accounting principles and calculation methods which were used in the previous annual report. Organisation The staff cutbacks provided for in this autumn's cost reduction programme have all been effected and the number of employees fell in the first quarter. At the end of the period, the company had 51 employees and no consultants, compared with 64 employees and 18 consultants for the same period the previous year. The company'' new Managing Director, Christian Ekström took over in February. The remainder of the year The favourable trend in both the market and prospective customer base is expected to continue. There is, however a risk that delays of certain communications operators' licenses and that the prevailing economic conditions further deteriorate, will postpone the order placement. Income statement, balance sheet and cash flow statements Income Statement The Group The Parent Company SEK thousand Jan - Jan - Jan - Jan - Jan - Mar Mar Dec Mar Mar 2001 2000 2000 2001 2000 Operating income 4 654 13 500 25 812 501 787 Other externel costs -6 281 -11 482 -42 084 -2 468 -1 653 Staff costs -8 671 -8 797 -41 002 -1 086 -1 299 Depreciation of tangible and intangible fixed assets -138 -833 -20 172 -91 -95 Operating expenses -15 090 -21 112 -103 258 -3 645 -3 047 Loss before financial items -10 436 -7 612 -77 446 -3 144 -2 260 Other financial items 152 64 2 353 109 128 Pre-tax loss -10 284 -7 548 -75 093 -3 035 -2 132 Taxes 2 882 2 113 15 603 851 597 Loss for the period -7 402 -5 435 -59 490 -2 184 -1 535 Earnings per share (SEK) Number of shares 4 414 4 414 400 400 Earnings per share, with account taken of outstanding warrants -1,52 -1,19 (470.000/150.000 shares) Earnings per share, if no account taken of out- standing warrants -1,68 -1,23 The Consolidated Balance Sheet 31 March 31 March SEK thousand 2001 2000 Intangible assets 42 52 Tangible assets 3 707 3 811 Deferred tax claim 37 796 34 914 Other long term receivables 2 2 Total fixed assets 41 547 38 779 Current receivables 8 675 9 974 Liquid assets 28 157 37 638 Total current assets 36 832 47 612 TOTAL ASSETS 78 379 86 391 Shareholders equity 62 830 70 232 Interest bearing liabilities 3 157 3 157 Non interest bearing 12 392 13 002 liabilities TOTAL LIABILITIES AND 78 379 86 391 SHAREHOLDERS' EQUITY Group change of equity SEK thousand Closing balance previous year 70 232 Loss for the period -7 402 Closing balance 31march 2001 62 830 Consilidated cash flow Jan - Jan - statement Mar Mar SEK 000´s 2001 2000 Cash flow from current operations before change in working capital -10 146 -6 715 Change in working capital 689 -7 454 Cash flow from current -9 457 -14 169 operations Cash flow from investment -24 -59 operations Cash flow from financing - -16 890 operations Cash flow for the period -9 481 -31 118 Liquid assets at the 37 638 110 872 beginning of the period Liquid assets at the end 28 157 79 754 of the period The Quarterly report has not been reviewed by the company´s auditors ConNova specialises in developing and supplying business support systems for multimedia operators handling pay TV, the Internet, broadband and telecoms services. The company has 15 years' experience of the industry. ConNova's services range from consulting services to the development of software adapted to meet the market's latest needs. Within the framework of ConNova TVX AB, ConNova also runs customer services on an assignment basis for European pay TV operators and other communications businesses, including publishing businesses. ConNova's current customers are to be found in the fields of cable TV, DTT (Digital Terrestrial Television), multimedia, telecommunications and publishing. At the international billing systems trade fair held in London in May 1999, ConNova's customer management system BizManager was awarded two honourable mentions, one for "Overall Best Contribution to Billing" and the other for "Most Innovative Billing Product". The ConNova Group AB (publ) has been listed on the OM Stockholm Stock Exchange's O list since 1997. Addresses and company details ConNova Group Tel: +46 141 237 600 Box 231 Fax: +46 141 564 24 Platensgatan 1 e-mail: info@connova.se SE-591 23 Motala Web site: www.connova.se Sweden Swedish corporate identity number: 556423-7716 Additional information For more information, please contact: Christian Ekström, MD Torbjörn Ullman, CFO Tel: +46 141 237 601 Tel: +46 141 237 685 e-mail: chek@connova.se e-mail: toul@connova.se ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/04/26/20010426BIT01340/bit0002.doc http://www.bit.se/bitonline/2001/04/26/20010426BIT01340/bit0002.pdf