Interim Report January – March 2015

January – March 2015

• Sales amounted to SEK 333.9 million (309.1)
• EBIT was SEK 14.8 million (15.8) 
• EBIT operating margin was 4.4% (5.1)
• Net profit after tax for the period was SEK 11.0 million (11.4)
• Earnings per share were SEK 0.06 (0.06)

Key events

• Cybercom was awarded major framework agreements with the Swedish Legal, Financial and Administrative Services Agency (Kammarkollegiet).
• Cybercom was awarded a major framework agreement with Hansel, Finland.
• Ericsson announced major cutbacks. The current assessment is that this will not have a material impact on the company in the long term since Cybercom is a key partner. 
• Sony Mobile announced major cutbacks. Cybercom's assignments continue as planned.

Key events after the end of the period

• Cybercom won a turnkey contract with multi-site delivery in testing and simulation for a major telecom client.

Comments from the CEO

We have started the year at a good pace of growth. With SEK 333.9 million (309.1) in sales, we grew by 8% compared to the same period last year, adjusted for currency effects, sales growth was 5.5%. Our framework agreement with the Swedish Tax Agency has developed very well, and we have also been awarded new assignments, including some with Karlstad Municipality, the City of Gothenburg, the Swedish Board of Agriculture, Västra Götaland County Council and Jönköping County Council. We continued to grow, with a larger proportion of subcontractors acting as a complement where we have required additional skills or geographical presence. We noted higher demand during the quarter from the Swedish automotive industry in Gothenburg and also in Linköping, with Autoliv and Actia as our key clients. Our operations in Karlskrona have performed favourably with several clients in telecoms and industry. We are being awarded with more business by our clients as they strive to enhance their efficiency, including a recent multi-site delivery in testing and simulation for a major telecom client.

We experienced increased sales in all segments, to some extent influenced by currency effects. We are further strengthening our position through winning contracts under the Swedish Legal, Financial and Administrative Services Agency's new multi-year framework agreements in Sweden, and we expect a greater impact here in the second half of the year. We have also won a contract from the Agency's Finnish counterpart, Hansel. We expect some effect already this year. This is positive for our business in Finland, which is otherwise facing a tougher climate, especially in the industrial sector.

EBIT profitability strengthened in our Swedish operations to SEK 13.8 million (11.3), but decreased overall in the group to SEK 14.8 million (15.8). This resulted in a margin of 5.8% (5.1) in Sweden and 4.4% (5.1) for the group. Net profit after tax for the period is in line with last year, amounting to SEK 11.0 million (11.4). We are not satisfied with this; we can do better and we have our sights set on step-by-step improvement in order to achieve our financial targets. We have been affected by a tougher market climate, with increasing competition in general and with widespread pressure on prices. We have initiated measures to enhance efficiency given the continued weakness of the Finnish economy. Our international operations were impacted during the quarter by delayed project starts. In Sweden, Sony Mobile's cutbacks mean that we are reducing our business with them. Ericsson's announced cutbacks will probably not affect us materially since we see good potential to be able to assist them with, for example, cost-effective deliveries from Poland.

During the quarter we made a number of investments in our business and in our brand. We have participated in several key marketing activities, most recently the Vitalis eHealth conference in Gothenburg. We have invested in our capital structure with packaged solutions, in our Cybercom Cloud service, and in new premises. This is important for our long-term competitiveness.

We are now focusing on assuring continued growth and on adapting the structure of the organisation and its costs.

At Cybercom we assist our clients to implement business transformation, deliver competitive differentiation and improve their customer experience. We are involved in developing public services for the connected citizen and secure accessibility for the connected consumer. There is fundamental demand and great market potential in this.

We look ahead well aware that we have to manage our own journey of change as well as the opportunities and challenges in the market. Our goal is to constantly improve ourselves to create profitable growth and increased value for our shareholders during 2015.

Niklas Flyborg
President and CEO

For additional information, please contact: 
Niklas Flyborg, President and CEO +46 70 594 96 78
Camilla Öberg, CFO +46 73 398 50 01
Kristina Cato, Communications Director and IR Manager +46 70 864 47 02

About Cybercom
Cybercom is an IT consulting company that assists leading companies and organisations to benefit from the opportunities of the connected world. The company’s areas of expertise span the entire ecosystem of communications services. Cybercom’s domestic market is the Nordic region, and in addition the company offers global delivery capacity for local and international business. Cybercom was founded in 1995 and has been quoted on the NASDAQ Stockholm exchange since 1999.

Tags: