Interim report January - September 2001

Interim report January - September 2001 Third quarter · The strong growth trend noted in the first two months of the quarter was consistent with developments earlier in the year. However, the repercussions of the dramatic events of September 11 have been felt throughout the world, and these factors had a significant impact on September license revenues, resulting in a temporary dip. · Revenues for the third quarter rose by 20 per cent to SEK 64.9 million (54.3m). · Earnings net of financial items for the third quarter amounted to SEK -1.5 million (8.0m). Nine months · Revenues for the period January - September rose by 40 per cent to SEK 184.2 million (132.0m). · Earnings net of financial items for the period January - September improved by SEK 10.4 million, amounting to SEK 10.9 million (0.5m). · Revenues calculated on a rolling twelve-month basis rose by 43 per cent to SEK 248.8 million (174.6m). · Earnings net of financial items calculated on a rolling twelve-month basis improved by SEK 16.6 million to SEK 19.3 million (2.7m), which corresponds to a profit margin of 8 per cent. · The average number of permanent employees for the period January - September was 210 (167), an increase of 26 per cent compared with the previous year. Prospects for 2001 · The company's management estimates that revenue growth for 2001 will be around 40 per cent and the profit margin will be around 10 per cent. Frango in brief Frango is one of the world's major providers of specialized group controlling systems for management reporting, statutory consolidation, planning and analysis in complex multinational groups. Frango systems, which rationalize and simplify group controlling, are used by more than 1,800 groups with subsidiaries in some 200 countries. Frango, which is headquartered in Stockholm, Sweden, is active in a total of 15 countries and collaborates with distributors in a number of other countries. Frango's customers in Sweden include some 70 corporations listed on Stockholmsbörsen (the Stockholm Stock Exchange). The Frango share is quoted on the 'O' list of Stockholmsbörsen. Significant events during the period July - September 2001 In year 2001, up to and including the month of August, the company continued to achieve strong revenue growth, 50 per cent, and the earnings trend remained positive. In August, earnings net of financial items calculated on a rolling twelve-month basis reflected a profit margin of almost 13 per cent. Internal sales forecasts made in August for September also indicated continued strong growth in license revenues. More recently, however, the dramatic nature of developments world-wide has had a significant impact on license revenues for September, as customers postpone or delay their software investments. Revenue trends and earnings January - September 2001 Demand for the company's products during the period has remained strong. The current uncertainty, following the developments noted in September, has had a significant impact on license revenues during the last month of the period. The opening of the third quarter normally marks the beginning of an important sales period for the company and in the past two years, the last two quarters have on average accounted for 60 per cent of revenues for the respective years. Earnings net of financial items improved by SEK 10.4 million and amounted to SEK 10.9 million, compared with SEK 0.5 million for the corresponding period in 2000. The decline in license sales has led to a substantial loss of earnings and the positive earnings trend that began in the second quarter of 2000 has now been reversed. The achieved revenue and the overall earnings are below expectations and the targets set by management for 2001 (see also under Prospects). Revenues for the period January - September 2001 rose from SEK 132.0 million to SEK 184.2 million, an increase of 40 per cent compared with the corresponding period last year. The proportion of revenues attributable to new licenses during the period was 45 per cent, compared with 55 per cent for the corresponding period in 2000. Customers outside Sweden accounted for 83 per cent (78%) of overall revenues. Sales in Asia indicate strong growth in these markets. Meanwhile, growth in key markets in Europe has remained positive. Revenues from software licenses rose by 15 per cent to SEK 82.6 million (71.7m). Revenues for maintenance and consulting services continued to show strong growth, rising by 69 per cent and 72 per cent respectively. Operating expenses were up SEK 53.4 million or 41 per cent on the previous year, from SEK 131.6 million to SEK 185.0 million, largely due to an increase in personnel expenses. Of overall operating expenses, a total of SEK 12.1 million, attributable to the development of a major new software version, has been reported as capitalized development expenditure in accordance with the Swedish Financial Accounting Standards Council's recommendation (recommendation no. 15) pertaining to Intangible assets (see below). ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/12/20011012BIT00140/bit0002.doc The full report http://www.waymaker.net/bitonline/2001/10/12/20011012BIT00140/bit0002.pdf The full report