Interim Report for the Period January 1€June 30, 2000

Interim Report for the Period January 1-June 30, 2000 At the request of the Board of Directors, the Chief Executive Officer of ENEA DATA AB presents the interim report for the period January 1-June 30, 2000. * Sales for the Enea Group were SEK 381 million (up 70%) * Profit for the Enea Group, excluding goodwill amortization, was SEK 37.2 million (2.0). This includes funds allocated to Enea by SPP of SEK 29.1 million * Profit for the Enea Group, including goodwill amortization, was SEK 25.9 million (2.0), including SPP funds * Enea OSE Systems reported sales of SEK 81.9 million (+51%), earnings SEK -38.0 million (-24.3) including SPP funds of SEK 0.5 million * The consulting business reported earnings of SEK 318 million (+71%), and earnings excluding goodwill amortization of SEK 67.3 million (27.2), including SPP funds of SEK 28.6 million * New frame agreement with Nokia for OSE * Redoubled efforts for Bluetooth The first six months saw ongoing strong demand for the consulting business, resulting in healthy profitability and growth. For Enea OSE Systems, international advances continued, and initiatives previously announced are now being implemented and advancing as planned. Refer also to information later about Enea's new structure for the Group and financial reporting. The Enea Group The shareholders' meeting held 2000-05-04 made the following decisions. - Decision to issue new shares based on preferential rights to current shareholders. The shares were issued in May and raised about SEK 498 million for the Company, which will be used for future investments in the OSE business and for company acquisitions. - Decision to institute a new stock option program for all employees which will dilute equity roughly 7% upon full subscription. (This figure includes the dilution for the option program from 1998.) - Decision to institute a new stock option program for employees in the subsidiary group Enea OSE Systems, entailing a dilution of shares in Enea OSE Systems AB of 13% upon full subscription. (This figure includes the dilution for the option program in OSE's U.S. sales company from 1998.) - The following persons were elected to the Board of Directors. Ola Berglund (CEO), Ulla-Britt Fräjdin-Hellqvist, Rolf Ranvert. (Former CEO Åke Dovärn is now Chairman of the Board) - The par value of Enea's share was changed through a 25:1 split at June 30, 2000. Comparative figures per share are after split. - The shareholders' meeting also authorized the Board of Directors to issue up to 15 million shares (after the split) to be used for acquisitions. The market for Enea's services, products and training has remained stable at a high level of demand. The Enea Group is now stepping up its efforts related to Bluetooth technology. The purpose is to reinforce the Group's position in the market primarily for OSE products and secondarily for services available. We are doing this by developing and adapting OSE products in addition to the customized operative system kernel developed previously and by creating service packages in the Bluetooth field. These renewed efforts are being made at the Group level to apply most efficiently the broad expertise in Bluetooth found in Enea's various subsidiaries. Our ability to attract new recruits remains strong. At the end of the period, the number of employees was 768 (462), representing a rise of 66%. Of this rise, 168 people were attributable to acquisitions, and 136 people represented organic growth. Organic growth from the same time the preceding year was 29%, demonstrating Enea's excellent ability to attract skilled people in a tight labor market. Employee turnover was low during the first half, at about 8% on a full- year basis. Funds allocated to the company by the insurance company SPP are shown under "Items affecting comparability". It is valued as net present value. Investments The Group's investments during the period equaled SEK 339.9 million (8.5). Through acquisitions, SEK 286.5 million was invested in goodwill. Cash and Bank Balances and Financial Position Liquidity was excellent, ending the first half around SEK 345.9 million (45.4). The Group's equity equaled SEK 727.5 million (101.9). Earnings per share Earnings per share for the six months after deductions for estimated tax were SEK 0.08 (-0.02). The Parent Company, Enea Data AB Sales for the period were SEK 108.6 million (176.5) and profit after financial items was SEK 54.5 million (27.2) including SPP funds of SEK 28.6 million. Comparisons with the preceding year are somewhat misleading because the Parent Company has not conducted any consulting business since 2000-04-01. Net financial income was SEK 3.4 million, which includes a dividend of SEK 4.2 million from the associated company Combitech Systems AB. Cash and bank balances totaled SEK 310.9 million (40.3). Parent Company investments reached SEK 315.5 million (5.6), of which SEK 310.5 million was for the acquisition of subsidiaries. The number of employees at June 30, 2000, was 29. The Subsidiary Group Enea Realtime Enea Realtime AB was formed at April 1, 2000, from the units Industrisystem Stockholm, Industrisystem Gothenburg, Industrisystem Malmö and Enea Epact AB in Linköping. Consequently, operations have been conducted in Enea Realtime AB only since the beginning of the second quarter. For the first half, the subsidiary group reported sales of SEK 97.1 million and operating profit before goodwill of SEK 13.2 million (operating margin of 14.1%). Pro forma sales for the first half were SEK 168.9 million, pro forma profit SEK 26.6 million. Because of the new organization, no figures for comparison are available from the preceding year. In the year so far, demand in the market has been outstanding. We haven't been able to meet the demands to a full extent. Events since the preceding report worth highlighting are: * Cooperation on training began with Nohau (Malmö) * Kreatel is a new customer for Enea (Linköping) * A marketing campaign was conducted in April-May to establish operations in Denmark (Malmö) The number of employees at June 30, 2000, was 335. The Subsidiary Group Enea Business Software Enea Business Software AB was formed at April 1, 2000, from the units Business Systems, Dynamic Document Solutions, Software Components in Malmö, and Enea Redina AB in Uppsala. Consequently, operations have been conducted in Enea Business Software AB only during the second quarter. For the first half, the subsidiary group reported sales of SEK 58.4 million and operating profit before goodwill of SEK 2.6 million (operating margin of 4.4%). Pro forma sales for the first half were SEK 92.0 million, pro forma profit SEK 5.4 million. Because of the new organization, no figures for comparison are available from the preceding year. We are experiencing very strong demand for our services, and a large proportion of the personnel are engaged in major undertakings for customers such as Vattenfall, Postgirot, Telia, and the Stockholm County Council. The number of employees at June 30, 2000, was 157. TekSci Inc TekSci was acquired at February 1, 2000, and was consolidated in the accounts from that date. During the period the TekSci subsidiary in France was phased out and the employees now work for OSE, France. Sales during the first five months were SEK 57.1 million, operating profit SEK 6.7 million (giving an operating margin of 11.6%). Comparisons with previous years are misleading because of changes in accounting principles and policies upon acquisition. Our OSE Design Center in the United States has now been established under the management of TekSci's in close cooperation with OSE. 20 TekSci employees have undergone OSE training, and at the end of the period 6 people from TekSci were working in Sweden on development for the OSE company. The first purely OSE-related consulting contracts were received as a result of the synergies created between Enea OSE Inc. and TekSci Inc. The number of employees at June 30, 2000, was 108. The Group's Consulting business in total The sales this period for the Group's total consulting business were SEK 318 million (up 71%) and the operating profit was SEK 38.7 (27.2) million, excluding goodwill amortization and excluding SPP funds of SEK 28.6 million. The Subsidiary Group Enea OSE Systems OSE products continued to win success internationally, and during the first half about 85% of all invoicing was outside Sweden. In the Swedish and Nordic markets, the position remains solid, and sales in the U.S. market continue to exceed expectations. Enea OSE Systems AB has also signed a contract with a Japanese distributor, Softboat Inc. in Tokyo. A new frame agreement has been signed with Nokia during the period, regarding OSE licenses. During the period, invoicing reached SEK 81.9 million, up 51%, while the loss was SEK 38.0 million (-24.3) Orders taken during the period totaled SEK 96.1 million. On a rolling 12-month basis (99Q3-00Q2), orders received equaled SEK 224 million, up 59% from the preceding period (98Q3-99Q2). Christophe Ballan has been recruited to head sales for Europe. He was previously in charge of sales in Europe for OSE's competitor WindRiver Systems. Joakim Engelsten has been recruited to head sales for Asia. He joins Enea from iD2tech, where he was responsible for sales for Asia. The following key design wins, since the preceding report, are all in the high-priority telecom/datacom segment. - Thomson CSF-Racal (UK) - IPWireless (UK) - Cisco (Sweden) - Ericsson Mobile Communication (Sweden) - Ocular Networks (U.S.) - Netensity (U.S.) - Yuni Networks (U.S.) - White Rock Networks (U.S.) At the start of the year, Enea OSE Systems initiated an aggressive investment program to step up the pace of growth, which is expected to have full effect from 2001 on. The areas in focus and their current status are as follows. * Establishment of global Key Account Management for the biggest clients. This is progressing as planned. * A doubling of the total sales force in 2000. This is also proceeding as planned. * Establishment of our own sales company in Japan during 2000. A contract has been signed with a Japanese distributor, Softboat Inc. * Renewed efforts in product development. This is now well under way, with respect to product planning as well as product development. The number of employees at June 30, 2000, was 137, and 53 of those were outside Sweden. The Associated Company Combitech Systems in which Enea owns 35%, reported sales of SEK 90 million (73). The Enea Group's share of earnings is reported in financial revenues and totaled SEK 1.5 million (2.8). The participation in earnings is reported as gross profit. Reorganization and Financial Reporting The Enea Group was reorganized at April 1, 2000, as the business activities in the Parent Company Enea Data AB were moved to two newly formed subsidiaries, Enea Business Software AB and Enea Realtime AB. The subsidiary Enea Redina AB was made a subsidiary of Enea Business Software AB, and the subsidiary's subsidiary Enea Epact AB was made a subsidiary of Enea Realtime AB. During the first quarter, consulting business was conducted in the Parent Company Enea Data AB and the subsidiary TekSci Inc, the subsidiary group Epact Technology Holding and the subsidiary Enea Redina AB. During the second quarter, consulting business was conducted in the subsidiary groups Enea Realtime and Enea Business Software and TekSci Inc. This announcement of earnings reports the income statements for each subsidiary group; the figures for the first quarter are pro forma for the subsidiary groups Enea Realtime and Enea Business Software. Please refer also to the diagram showing the new corporate structure, later in this document. Overall Forecast for 2000 The market for Enea's services, products and training is expected to remain steady. Likewise, Enea's ability to recruit talent is expected to remain strong, and acquisitions are possible during the year, in services or products, in Sweden or elsewhere. The forecast for the Enea Group remains unchanged, which means that the earnings are still expected to end in the interval SEK 45-70 million (46.0) before goodwill amortization and excluding SPP funds of SEK 29.1 million. Goodwill amortization is expected to total SEK 26.6 million for the full year. The forecast for the subsidiary group Enea OSE Systems also remains unchanged, which means the the financial results are still expected to end in the interval SEK -25 - -45 million (-7.7). Sales are still expected to increase some 50%, to exceed SEK 260 million for the year. Earnings can fluctuate considerably from quarter to quarter because of the impact of major individual orders. The forecast for the full year includes uncertainty about how fast and to what extent increased investments will lead to increased invoicing. Future information Interim report for the third quarter: 2000-10-27 Preliminary Report of 2000 Earnings:2001-02-02 Ola Berglund CEO Please direct questions to Ola Berglund, +46 709 71 44 17 I have made a review of this semi-annual report for the period January 1, 2000-June 30, 2000, in accordance with recommendations issued by the Swedish Institute of Authorized Public Accountants. A review is substantially limited in relation to an audit. Nothing has come to my attention that indicates that this semi-annual report fails to comply with the requirements of Swedish legislation regulating stock-exchange-listed companies and joint stock corporations. Per Bergman Authorized Public Accountant Company structure: Income statements (SEK million) Group January- January-June January-December June 2000 1999 1999 Net sales 370.5 216.4 505.5 Changes in work on contract 7.9 6.8 1.2 Other operating income 3.0 1.6 6.4 381.4 224.8 513.1 Raw materials and warehouse -19.2 -22.4 -33.6 supplies Other external costs -65.8 -35.1 -92.1 Personnel costs -278.4 -160.9 -335.2 Depreciation and amortization -8.6 -6.0 -13.3 excl goodwill Items affecting comparability 29.1 0,0 0,0 Other operating costs -1.2 -1.9 -2.9 Operating profit before 37.3 -1.5 36.0 amortization of goodwill Amortization of goodwill -11.3 0.0 -0.6 Operating profit 26.0 -1.5 35.4 Profit/loss from financial income and expense Profit from shares in associated 1.5 3.2 9.1 companies Profit from other securities and 0.2 0.3 0.3 receivables Other interest income and similar 2.1 1.0 1.4 revenue Interest expense and similar -3.9 -1.0 -0.8 costs Pre-tax profit 25.9 2.0 45.4 Tax on profit -11.9 -4.8 -13.8 Minority -0.3 0.0 0.0 Net profit 13.7 -2.8 31.6 Balance Sheet (SEK million) Group ASSETS June 30, June 30, December 31, 1999 2000 1999 Fixed assets Intangible fixed assets 294.1 0.7 19.0 Tangible fixed assets 58.3 36.3 44.1 Financial assets 36.7 22.5 26.1 389.1 59.5 89.2 Current assets Work on contract 21.7 14.2 5.9 Current receivables 240.1 94.8 183.2 Cash and bank balances 345.9 45.4 32.6 607.7 154.4 221.7 TOTAL ASSETS 996.8 213.9 310.9 SHAREHOLDERS´ EQUITY AND LIABILITIES Shareholders´ equity 727.5 101.9 155.5 Minority interests 1.3 0.2 0.2 Provisions 19.4 12.3 15.3 Long-term liabilities 38.2 6.9 12.2 Current liabilities 210.4 92.6 127.7 TOTAL SHAREHOLDERS´ EQUITY AND 996.8 213.9 310.9 LIABILITIES Cash Flow Statement (SEK million) Group January- January- January- June June December 2000 1999 1999 Cash flow from operating activities before changes in working capital 35.1 0.0 37.6 Cash flow from changes in working capital 33.1 22.8 -20.0 Cash flow from operating activities 68.2 22.8 17.6 Cash flow from investing activities -241.0 -7.9 -18.7 Cash flow from financing activities 486.1 -7.8 -4.6 Cash flow for the period 313.3 7.1 -5.7 Liquid assets att January 1 32.6 38.3 38.3 Liquid assets at March 31 345.9 45.4 32.6 Income statement OSE (SEK million) Group January- January- January- June June December 2000 1999 1999 Cash Flow Statement (SEK million) Group Net sales 81.3 51.5 167.0 Changes in work on contract -1.4 1.6 2.1 Other operating income 2.0 1.3 5.9 81.9 54.4 175.0 Raw materials and warehouse supplies -25.8 -20.8 -46.4 Other external costs -34.3 -19.0 -49.8 Personnel costs -57.5 -36.3 -82.6 Depreciation and amortization -1.7 -1.2 -2.6 Items affecting comparability 0.5 0.0 0.0 Other operating costs -0.6 -0.7 -1.2 Operating profit -37.5 -23.6 -7.6 Profit/loss from financial income and -0.5 -0.7 -0.1 expenses Pre-tax loss -38.0 -24.3 -7.7 Period in summary. Group January January- January-December -June June 2000 1999 1999 Net sales (SEK m.) 370.5 216.4 505.5 Sales (SEK m.) 381.4 224.8 513.1 Operating profit before amortization 37.3 -1.5 34.8 of goodwill (SEK m.) Operating profit after amortization of 26.0 -1.5 35.4 goodwill (SEK m.) Profit after financial income and 25.9 2.0 45.4 expense (SEK m.) Operating margin % 7.0 -0.6 7.0 Net margin % 7.0 0.9 9.0 Shareholders' equity (SEK m.) 727.5 101.9 155.5 Balance sheet total (SEK m.) 996.8 213.9 310.9 Equity/assets ratio % 73 48 50 Profit per share (SEK) 0.08 -0.02 0.20 Profit per share after full dilution 0.07 -0.02 0.19 (SEK) Equity per share (SEK) 4.18 0.66 0.99 Share price as per balance date (SEK) 60 6.50 26.20 ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/07/28/20000728BIT00100/bit0001.doc http://www.bit.se/bitonline/2000/07/28/20000728BIT00100/bit0002.pdf