Interim report six months ended june 30, 2000

Interim Report Six months ended June 30, 2000 * Consulting revenue increased by 117%, to SEK 116 M, in the second quarter, compared with revenue in the second quarter of 1999. Consulting revenue in the second quarter of 2000 was 55% higher than in the first quarter. * The EBITA margin in the second quarter improved by 6.5 percentage points, to minus 4.8%, compared with the first quarter this year. Adera incurred a loss of SEK 5.5 M before amortisation of goodwill and items affecting comparability (EBITA) in the second quarter. * Consulting revenue per consultant increased by 17% in the second quarter compared with first-quarter results. Consulting revenue per consultant in the second quarter amounted to SEK 1,277 thousand on an annual basis. * The number of employees as of June 30 was 547, an increase of 227 during the first six months of the year. Including announced acquisitions, the number of employees was more than 600. * Six new companies were acquired and letters of intent pertaining to additional acquisitions have been signed. * Intensified investments in the excellence centre Mobile Business Services have been made. "Many exciting developments have taken place in terms of our Client Portfolio" comments CEO Jörgen Ericsson. "We have worked closely with a large number of clients -- including Wallenius Wilhelmsen Lines, ESAB, Swedish Match and SCA - - to jointly define their eBusiness strategies. We have received very favourable evaluations and letters of recommendations from several customers. During the second quarter we have secured clients like Heineken, RTL (The Holland Media Group), Pharmaplaza and Papyrus. "Adera expanded substantially during the second quarter", Jörgen Ericsson says. "We have made six acquisitions and have signed a number of important letters of intent during the past half-year. We have established ourselves solidly in the Benelux countries through the acquisition of HCM. There have been two types of acquisitions: geographical expansion as well as strategic, customer-driven complementary acquisitions that have been made in order to be able to offer our customers the full suite of services." The activities involving mobile services were intensified during the second quarter. At the present time approximately 25 employees are working in Adera's excellence centre for mobile services and mobile technical systems (Mobile Business Services). Adera has created state of the art mobile services solutions for customers such as Scandic Hotels, IC Tech, Telia Investor Relations, MobiGolf and the Värmland County Council. Adera has been able to proceed with the many new acquisitions faster than expected. This has involved comprehensive integration programs that have had a negative impact on profitability in the second quarter. However, investments in the integration of skills and employees are necessary in order for the new units to become part of the Adera Group rapidly and in an efficient manner. The establishment of a strong unit in Mobile Business Services has resulted in costs for development and market activities. The investments in expansion and mobile services are, however, essential for an innovative and integrated consulting company, such as Adera, in order to offer competitive services to multinational companies. Innovative and integrated customer assignments Many of the existing customer relationships were strengthened during the second quarter and a number of new customers were added. Adera's customer base consists largely of "traditional" companies that wish to take advantage of the new opportunities offered by the new economy. Fewer than 10% of Adera's assignments involve so-called dotcom companies. As an example, Adera implemented a strategic Web project for Strålfors during the last quarter and were responsible for system development and redesign of the Papyrus Company website. Adera built Nyman & Schultz's website for commercial travellers, which won the "Guldknappen"-award as the best commercial-travel site. Adera also signed a long-term agreement with Wallenius Wilhelmsen Lines covering eBusiness services. Following are brief descriptions of some successful projects that are under way or which have been completed successfully by aiming for and achieving superior quality standards. ESAB -- eBusiness strategy and 21 websites in 19 different countries During the spring, in association with the company, Adera developed a long- term eBusiness strategy for ESAB (the world's largest supplier of welding equipment). This strategy, which covers a period of three years, resulted in an aggressive implementation plan enabling ESAB to develop its Internet services to further strengthen its business operations to the greatest possible extent. Up to now Adera has built and delivered 11 websites, in local languages, in nine European countries. Ten additional websites, some of which are multilingual, will be delivered in ten countries during the autumn. Telia -- closer co-operation During the spring of 2000, and within the framework of a general agreement, Adera received an assignment to develop the telia.se and telia.com websites based on Telia's new brand name strategy. The assignment also included preparing a "re-profiling" campaign that is integrated with Telia's other media programs. According to Telia, Adera exceeded expectations in terms of both quality and on-time performance. This has resulted in strengthening the confidence in Adera and the company was asked to produce Telia's Investor Relations website as a direct result. The website has been designed to meet the needs of shareholders as well as securities analysts and others in the financial market. Adera and Telia have worked together on web solutions since 1995. As a result of its participation in many projects, and its efforts to create innovative solutions that strengthen Telia's operations, Adera has developed a very fine relationship with the company. The work on telia.se and telia.com was conducted from Adera's offices in Stockholm and Gothenburg. Pharmaplaza -- a common customer for Adera in Germany, Holland and Sweden Adera's offices in Munich and Amsterdam have jointly commenced work with Pharmaplaza, a Dutch company whose objective is to become Europe's leading on- line health centre and pharmacy. During the spring Adera's offices in Munich and Amsterdam started to design Pharmaplaza's website, produce marketing strategies and supply IT systems. During the next phase Adera's office in Stockholm will also be involved in order to supply Pharmaplaza with highly localised service. RTL -- severe international competition "The Holland Media Group", better known as RTL, is Holland's largest media company in the field of radio and television broadcasting. Adera was assigned to strategically develop, produce and maintain RTL's portal for all stations in Holland. The assignment was obtained through bidding in severe international competition. Work was started in April and transmission of the first release will begin in September this year. The project is one of the most prestigious and talked about projects in Holland this year. Contract with Heineken During the summer, Heineken -- the world's second-largest producer of beer -- awarded Adera Holland a contract covering development of a strategy for Heineken's global website, Heineken.com. Adera will also operate and maintain the entire site during the first half-year and, during the next phase, will develop marketing material for all of Heineken's markets throughout the world. CM2000 for Swedish Postal Service -- a vision that became a reality In April 2000 the Swedish Postal Service placed in operation Version 2.0 of CM2000, a technically highly advanced Cash Management (CM) system. The first version of CM2000 was placed in service in November 1999. Adera (OOPix) has carried out analysis, design, development and system implementation. CM2000, which today has approximately 1,000 users, provides support to cash managers in connection with programs to improve efficiency and reduce costs of capital tied up in the post office network. The system presents information in an easily accessible manner and constitutes effective support in decision- making. CM2000 has already helped to reduce costs significantly and has created increased interest in, and knowledge of, cash management in the Postal Service. Company acquisitions During the first half of 2000 Adera made a series of strategic acquisitions with the objective of strengthening its geographical presence in a number of key markets and supplementing its range of services in a strategic manner. Substantial resources have been invested to grow as rapidly as possible and maintaining the quality of work performed for customers while integrating the new companies. During the six months ended June 30, Adera acquired six companies and signed letters of intent covering additional acquisitions. Comments on the most important acquisitions follow: * As a result of the acquisition of HCM/BAM (Holland), Adera gained more than 90 qualified employees and a large number of prestigious customers. * The acquisition of OOPix (Stockholm) involved strong expertise in object- oriented systems development and advanced IT project management. * With the acquisition of ITage (Stockholm), Adera obtained additional expertise enabling it to supply IT solutions containing third-party products. * With the acquisition of GCI (Stockholm) in the beginning of the year, Adera gained additional expertise in the area of Internet public relations, a fast- growing market segment. * The acquisition of Blanking (Malmö), a marketing-strategy consulting firm, strengthened Adera in the field of marketing communications in the Öresund region. Letters of intent pertaining to acquisitions have been signed with the following companies, amongst others: * Context Development Group (CDG), (Stockholm), which will substantially strengthen Adera's expertise in e-commerce solutions with advanced transaction systems. * Braendpunkt (Denmark), which means that Adera Öresund will have approximately 100 employees in the region offering complete eBusiness solutions in one of Europe's fastest-growing markets. Adera is investing in the development of mobile services Adera's objective is to become an established partner for integrated mobile systems in the European market. The ability to use the Internet via mobile units offers unique opportunities for new types of applications and services. Users gain access to information and communications and are able to execute transactions wherever they are located. Organisations can, for example, create better customer relationships and improve productivity and communications. During the period January - June, Adera developed mobile solutions for, for example, Scandic Hotels (the world's first WAP-based hotel reservation system), MobiGolf (a WAP-based vertical portal for golfers) jointly with Ericsson and others, and IC Tech (a system that provides professionals who work under pressure of time, such as journalists, brokers and businessmen, with customised knowledge support via hand-held computers and mobile telephones). On Adera's new website, www.aderagroup.com, employees from Adera's excellence centre Mobile Business Services have prepared a White Paper regarding opportunities, developments and trends in mobile services. Sales and results Quarterly analysis For technical accounting reasons, income generated as a result of and in respect of the acquisition of HCM/BAM which was completed during the second quarter, has been consolidated as of March 1, 2000, when Adera gained a determining influence in the company. Accordingly, to improve comparability between quarters, income in the first quarter has been adjusted to reflect this, compared with income reported earlier for the Group. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/08/23/20000823BIT00430/bit0001.doc The full report http://www.bit.se/bitonline/2000/08/23/20000823BIT00430/bit0002.pdf The full report