Preliminary Report of 2000 Earnings

Preliminary Report of 2000 Earnings: At the request of the Board of Directors of ENEA DATA AB, the President and CEO submits the preliminary report of 2000 earnings. * Sales for the Enea Group were SEK 869 million (up 69%). * Profit for the entire Enea Group, excluding goodwill amortization, was SEK 55.2 million (46.0). Totals include SEK 29.1 million in surplus funds from SPP * Enea OSE Systems reported sales of SEK 257 million (+47%) and earnings of SEK -57.3 million (-7.7), including SPP funds of SEK 0.5 million * The consulting business reported sales of SEK 671 million (+77%) and earnings excluding goodwill amortization and SPP funds of SEK 65.1 million (43.6) * Preparations for listing Enea OSE Systems on Nasdaq are under way * OSE sales in the United States rose 129% The Enea Group The number of employees grew apace. At the end of the period, the number of employees was 851 (528), up 61%. Of this rise, 177 people were attributable to acquisitions, and 146 represented organic growth. Organic growth in staff numbers from the same time the preceding year was 28%, so Enea remained successful at attracting skilled recruits in the market. The rate of employee turnover was approximately 12% during the year. SPP's surplus funds are reported among items affecting comparability. The funds have been discounted to net present value. Investments The Group's investments during the period equaled SEK 349.3 million (34.8). Of total funds invested in acquisitions, SEK 303.8 million (19.1) was goodwill. Cash and Bank Balances and Financial Position Liquidity ended the year at a satisfactory level, SEK 236.1 million (32.6). The Group's equity totaled SEK 728.0 million (155.5). Earnings per share Earnings per share for 2000 were SEK 0:03 (0:20), after the split and deductions for estimated tax. The Parent Company, Enea Data AB Sales for the period reached SEK 110.7 million (364.4), and profit after financial income and expense was SEK 61.8 million (46.8) including surplus funds from SPP. Any comparisons with the preceding year would be misleading, because the Parent Company has not conducted any consulting business since April 1, 2000. Net financial income was SEK 12.1 million (4.3), which includes a dividend of SEK 4.2 million from the associated company Combitech Systems AB. Cash and bank balances totaled SEK 191.7 million (28.9). The Parent Company invested a total of SEK 342.3 million (30.1), of which SEK 332.6 million (21.0) was for the acquisition of subsidiaries. The number of employees at December 31, 2000, was 35. The Subsidiary Group Enea Realtime Enea Realtime was formed at April 1, 2000, from what were previously Industrisystem Stockholm, Industrisystem Gothenburg, Industrisystem Malmö and Enea Epact AB in Linköping. Hence, operations have been conducted in Enea Realtime AB since the start of the second quarter. For full-year 2000, the subsidiary group reported sales of SEK 280 million and operating profit before goodwill of SEK 35.0 million (giving an operating margin of 12.7 %). Pro forma sales for full- year 2000 were SEK 359 million, corresponding to a pro forma profit of SEK 48.4 million. Because of the new organization, no figures for comparison are available from the preceding year. Robust growth helped Enea Realtime stake out excellent positions in the market in all four business locations. The company's biggest clients include Ericsson, Nokia, and Volvo. Juha Juslin, president of Enea Realtime AB, has decided to take a year- long leave starting March 1, 2001. The sabbatical has been planned for some time, and Erik Waesterberg, currently vice president, is appointed president at the same time. The company enjoys healthy demand in its market, a demand that it has not been able to satisfy fully with existing resources. Enea Epact AB, acquired in Linköping, has developed favorably since the acquisition. The number of employees in the group at December 31, 2000, was 359. The Subsidiary Group Enea Business Software Enea Business Software was formed at April 1, 2000, from what were then Business Systems, Dynamic Document Solutions, Software Components in Malmö and Enea Redina AB in Uppsala. Hence, since the beginning of the second quarter operations have been conducted in Enea Business Software AB. For full-year 2000, the subsidiary group reported sales of SEK 143 million and operating loss before goodwill of SEK 4.4 million (giving an operating margin of -3.2%). Pro forma sales for 2000 were SEK 179 million, corresponding to a pro forma loss of SEK 1.5 million. Because of the new organization, no figures for comparison are available from the preceding year. From the third quarter, a loss of approximately SEK 14 million on a project was charged to earnings. In 2000, Enea Business Software completed several sizable e-business projects. Vattenfall, Föreningssparbanken, Postgirot, Rexroth Mecman, and the Stockholm County Council were among the largest customers. The acquisition Enea Redina AB continued to perform well. The number of employees in the group at December 31, 2000, was 159. The Subsidiary TekSci Inc. TekSci was acquired at February 1, 2000, and was consolidated in the accounts from that date. Sales for the 11 months to December 31, 2000, totaled SEK 139 million, and operating profit was SEK 12.7 million (for an operating margin of 9.0%). Any comparisons with the preceding year would be misleading because of changes in accounting principles and policies since the time of acquisition. TekSci's progress has been favorable, and the benefits of synergies between TekSci and Enea OSE Inc. are growing. In the fourth quarter, the company invested in a new office. The office, in San Diego, opened right before year-end and will be staffed by TekSci and a group in Enea OSE Systems that has been working on product development in San Diego. A major four-year cooperation concerning programming system design, development, and support was started with Sundstrand Inc., out of Chicago, which manufactures airborne safety-critical equipment. The number of employees at December 31, 2000, was 125. The Group's Consulting Business Overall During the year, the Group reported sales of SEK 671 million (+77%) for its entire consulting business. Operating profit was SEK 65.1 million (43.6), excluding goodwill amortization and excluding surplus funds of SEK 28.6 million credited by SPP. In 2000, the consulting business was reorganized and significantly strengthened overall through the acquisition of Enea Epact and TekSci. Hence, we are now a considerably stronger partner for our key clients in Sweden and the United States. Work on integrating the companies acquired in 2000 has proceeded as planned, and the companies are performing quite well. The Subsidiary Group Enea OSE Systems Outside Sweden, OSE products achieved outstanding success in 2000, chiefly in the United States, such that the international share of OSE sales now exceeds 70%. However, the fourth quarter resulted in a somewhat weaker end to 2000 for the OSE group. Weakness resulted primarily from structural changes made in the European sales organization during the second half of the year that led to growth for the full year falling short of expectations. OSE's customer base expanded significantly during the year, particularly in the vital communications segment. Sales were spread among more numerous large clients, and the five biggest OSE customers now account for a total of 35% of sales. Customers who came over to OSE in 2000 included Samsung, Motorola, and Fujitsu. Fujitsu is a good example of a key client in the communications field; we had been working to win them over for some time and achieved a breakthrough in the fourth quarter. At the start of 2000, Enea OSE Systems launched an aggressive program to accelerate the pace of growth, which is expected to have full effect starting this year. As a result of the program, fixed costs rose sharply in 2000. Important successes were also achieved in the key communications segment. During 2000, invoicing rose 47%, to SEK 257 million, while the loss was SEK -57.3 million (-7.7). In the fourth quarter, invoicing totaled SEK 101 million, up 7% from the fourth quarter of 1999. Orders taken reached SEK 278.9 for the full year, a rise of 45% compared to 1999. During the year, Enea OSE Systems commenced product development activities in three locations in the United States: Phoenix (OSE Design Center), San Diego, and Washington, D.C. In the fourth quarter, numerous key design wins were made in the vital communications segment (telecommunications/data communications). - Fujitsu (our first design win with that group) - Ericsson - Tropic Networks - White Rock Networks - Alcatel - First Access - Radix Wireless To further accelerate the pace of change at Enea OSE Systems, part of which entails transferring some operations to the United States and preparing a separate listing of the company's shares, the Parent Company's CEO Ola Berglund will become acting CEO of Enea OSE Systems AB. The former CEO Lars Österberg will move to the post of vice president, taking responsibility for strategic market issues and for collaboration with partners aimed at safeguarding sustained growth. The number of employees at December 31, 2000, was 173; 71 of those were outside Sweden. The Associated Company Combitech Systems Enea owns 35% of Combitech Systems. During the period, the company reported sales of SEK 211 million (159). The Enea Group's share of earnings is reported in financial revenues and totaled SEK 9.7 million (9.3). 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. Enea Redina AB is now a subsidiary of Enea Business Software AB, and Enea Epact AB is now 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. From the second quarter forward, the consulting business has been conducted in the subsidiary groups Enea Realtime and Enea Business Software and in the subsidiary TekSci Inc. Please refer to the diagram showing the corporate structure (later in this document). Looking forward to 2001 Our view of the market for OSE In 2000, the customer base expanded enormously, particularly in the key communications segment, as described earlier in this report. Demand should be buoyant. That, in combination with our substantially bolstered sales resources and larger customer base, suggests that growth will surpass 50%, as forecast earlier for 2001. Our view of the market for Enea's services We expect demand for Enea's services in the companies Enea Realtime and TekSci to remain strong. Demand for Enea's services in Enea Business Software is expected to be good but could suffer from price pressure or temporary setbacks owing to current excess capacity in the Swedish market. Demand for Enea's training is expected to remain strong. Performance of services in 2001 Enea's service business is anticipated to expand about 30% through organic growth. In addition, the Group might acquire other operations, either in Sweden or elsewhere. Profitability in services should be in line with our financial targets, that is, an operating margin more than 10% excluding goodwill amortization. OSE performance in 2001 The vigorous expansion of resources for marketing, sales, and development in 2000 is expected to boost the rate of growth in 2001 above that of 2000, on condition that our customers do not suddenly change their plans for investment in product development. We expect sales growth at OSE to surpass 50% in 2001. The customer base expanded greatly during 2000, especially among major clients in the communications industry, so we anticipate many opportunities will arise for us to build upon our positions with these clients. In early 2000, we forecast investment limits for 2000 and 2001 (entailing retained losses of SEK 70 million), excluding possible acquisitions. We now see that those could be exceeded. Thus, the Board of Directors has approved a new investment limit for the two years combined, totaling SEK 100 million. Approximately SEK 58 million of that was invested during 2000, so the limit for 2001 is SEK 42 million. As in previous years, large variations in sales from quarter to quarter can be expected. While maintaining our rapid pace of growth, we will carry out an efficiency program to ensure that our investments yield the desired results in terms of long-term growth and profitability. We expect Enea OSE Systems to report a profit in 2002, and the company is set to reach the long-term profitability target of 20% in 2003. Nasdaq Work is in full swing preparing the OSE operations for a separate listing on Nasdaq. In 2000, we began a restructuring of the OSE group, and some activities have been transferred to Enea OSE Systems Inc. The Board of Directors believes that a suitable time for the listing will be when the business shows an operating profit, provided that stock-market sentiment is also favorable, of course. The Board also believes that the mission and business model for Enea OSE Systems, on the one hand, and Enea Realtime and TekSci, on the other, suggest that the companies would develop best and succeed best in competition by acting as independent companies, albeit with strong commercial ties that enable them to offer customers solid, comprehensive solutions. Internationalization In parallel with its international initiatives for OSE, Enea will build an international consulting business focusing on providing superior value added to customers in the communications sector. Customers themselves are under extreme pressure to shorten the time-to-market for their products. To do so, customers seek partners in the form of product vendors and in the form of service providers that can take responsibility for the development of major technical product platforms and development platforms. This is Enea's business concept today, in Enea Realtime and TekSci, and the objective is to vigorously reinforce the concept and introduce it to new customers and to new geographic markets. Coming annual shareholders' meeting The Board of Directors intends to propose that the annual shareholders' meeting approve - A share dividend of SEK 0:05 (0:05) - Renewal of authorization for designated new share issues, to finance acquisitions The annual meeting will be held at 3:00 P.M. on Friday, May 4, 2001, at the Täby Park Hotel. Shareholders should submit suggested candidates for the Board to the Chairman of the Board, Åke Dovärn, at the Company's address: Enea Data AB, Box 232, SE-183 23 Täby, Sweden. Future information The annual report will be distributed to shareholders April 5, 2001, after which copies will be available at the Company's head office in Täby, outside Stockholm. It will be published simultaneously on our web site, Interim report for the first quarter: May 4, 2001 Interim report for the second quarter: August 3, 2001 Interim report for the third quarter: November 2, 2001 Preliminary Report of 2001 Earnings:February 8, 2002 Ola Berglund President Please direct questions to Ola Berglund, +46 709 71 44 17 ------------------------------------------------------------ This information was brought to you by BIT The following files are available for download: The full report The full report