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Interim Report, 1 January – 30 September, 2013

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A challenging third quarter - Addnode Group can do better 

Third quarter 2013

  • Net sales totaled SEK 301.4 (291.3) M, up 3 percent.
  • Adjusted EBITA amounted to SEK 14.4 (27.1) M, an EBITA-margin of 4.8 (9.3) percent. 1)
  • Adjusted operating profit amounted to SEK 8.3 (22.0) M, an operating margin of 2.8 (7.6) procent. 1)
  • Profit after tax was SEK 0.9 (16.9) M
  • Earnings per share after dilution amounted to SEK 0.30 (0.60).
  • Cash flow from operating activities amounted to negative SEK 1.4 (-10.7) MSEK.

January – September 2013

  • Net sales totaled SEK 1 010.0 (970.3) M, up 4 percent.
  • Adjusted EBITA amounted to SEK 62.5 (86.3) M, an EBITA-margin of 6.2 (8.9) percent. 2)
  • Adjusted operating profit amounted to SEK 45.5 (71.8) M, an operating margin of 4.5 (7.4) procent. 2)
  • Profit after tax was SEK 28.9 (53.5) M
  • Earnings per share after dilution amounted to SEK 1.01 (1.89).
  • Cash flow from operating activities amounted to SEK 64.4 (48.9) MSEK.

1) Excluding non-recurring cost SEK -5.5 (0.0) M for management changes and for the revaluation of the conditional purchase considerations totaling SEK -0.2 (0.0) M. 
2)  Excluding non-recurring cost SEK -5.5 (0.0) M for management changes and for the revaluation of the conditional purchase considerations totaling SEK -0.2 (-1.9) M

Significant events during the third quarter of 2013

  • Acquisition of Joint Collaboration AS, a Norwegian software company with annual sales of approximately SEK 135 M.
  • Order for e-archives for the Swedish National Police Board valued at SEK 10 M.

Significant events after the end of the period

  • Order for document and case management system and e-archive for Statistics Sweden (SCB) valued at a minimum of SEK 9 M.
  • Management changes at the Content Management business area.

CEO’s comments

A challenging third quarter

Addnode Group reported year-on-year growth of 3 percent during the third quarter but the financial result has been unsatisfactory. 
Protracted decision-making processes in the industrial sector impacted license and service sales in the Design Management and PLM Management business areas. However, we continue to increase the recurring revenue from support and maintenance.

The Process Management business area, with the public sector as its market, reported continued growth and stable margins. Customers have a positive view of our e-service offering and we have secured several new case management orders from such customers as the Swedish National Police Board, Statistics Sweden (SCB) and several municipalities.

During the third quarter non-recurring costs were charged to the Content Management business area relating to organizational and management changes, as well as for new management in Denmark within business area Design Management. Efforts are proceeding to restore an acceptable level of profitability to the underperforming parts of the groups’ operation.

Addnode Group can do better than its third-quarter results suggest

There is a high level of activity in the Group and, over the past number of months; we have participated in several major market events, such as the Technia Innovation Forum, Cad-Q open days, TekisTräffen and iipax open days, which attracted a total of nearly one thousand visitors.

As we leave the third quarter behind us, I am not satisfied with what we have achieved in terms of financial results, but I am nevertheless hopeful and I know that Addnode Group can do better. We have a long-term plan that does not depend solely on the results of a single quarter. We are continuously implementing measures to enhance efficiency and carrying out robust investments, such as the acquisition of Joint Collaboration. We do not issue any forecasts, but Addnode Group’s business is seasonal and, in historical terms, the fourth quarter delivers the highest net sales and EBITA.

Staffan Hanstorp, President and CEO

For further infomration, please contact:

Staffan Hanstorp                                                          
CEO and President                                                      
Tel: +46 733 772 430                                                
E-post: staffan.hanstorp@addnodegroup.com                    

Johan Andersson
Corporate Head of Communications
Tel: +46 704 205 831
E-post: johan.andersson@addnodegroup.com

The information in this interim report is such that Addnode Group must disclose in accordance with the Swedish Securities and Clearing Operations Act and/or the Financial Instruments Trading Act. The information was released on 25 October 2013 at 08:30 am.

About Addnode Group
Addnode Group offers mission-critical IT solutions. We are market leader in the Nordic region in IT solutions for design, construction and product lifecycle management for products and installations. Addnode Group commands a strong market position in Sweden in the public sector, with an offering comprising case management systems, e-services, administrative systems and web solutions.

We are 950 employees in Sweden, Norway, Finland, Denmark, Serbia, India and the US. The Group is organized in four business areas under several brands. With over 3,000 customers using our solutions in more than 60 countries in the public and private sectors, we are continuing to build an extensive portfolio of mission-critical IT solutions.

Net sales in 2012 amounted to SEK 1,365 M. Addnode's Series B share is listed on the OMX Nordic List, Small Cap. For more information about Addnode Group, visit www.addnodegroup.com.

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