Year-end report for the 2002 financial year

Year-end report for the 2002 financial year Fourth quarter · Earnings net of financial items for the fourth quarter amounted to SEK 0.5 million (4.0m). · Revenues for the fourth quarter totalled SEK 68.8 million (83.9m). · Contracts for Frango Controller were signed with Hunter Douglas in the Netherlands, the Wood Group, RMC and Thorn in the UK and with Swisscom in Switzerland, among others. · The company reported a positive cash flow for the quarter, SEK 14.6 million (-1,5m). Twelve months · Earnings net of financial items amounted to SEK -23.9 million (15.0m) for the reporting period. The decline in earnings is primarily attributable to weaker market conditions for software. The decline year on year can also be attributed to differences in exchange losses of SEK 8.2 million, the net effect of higher development expenses in the income statement, which was SEK 7.8 million higher than last year and a SEK 5.3 million increase in depreciation. · Revenues for the year totalled SEK 252.6 million (268.0m). · The company reported a positive cash flow for the full year, SEK 2.2 million (-9.7m). · The average number of employees for the period was 226 (209). At the end of December, the number of employees was 226 (234). · The equity ratio at the end of the year was 41 per cent (47%). Frango in brief Frango is a leading software company that specialises in the field of corporate financial control for organisations and groups. The company develops and sells software and services through its international network of subsidiaries and distributors. Frango is headquartered in Stockholm. The Frango share is quoted on the 'O' list of the Stockholm Stock Exchange (Stockholmsbörsen). Significant events during the period October - December 2002 At the beginning of December, Frango entered into a strategic alliance with Cap Gemini Ernst & Young (CGE&Y) in Germany. As a result of this agreement, Frango will acquire Cap Gemini Ernst & Young's software division, PC-Konsol, in Germany. Meanwhile, CGE&Y will invite its customer base in Central Europe, comprising around 200 companies, to upgrade to Frango's products for financial control and statutory consolidation. The agreement also means that CGE&Y will become a "Preferred Partner" of Frango and vice versa. Ownership rights to the software division PC-Konsol were transferred to Frango on 1 January 2003. During the quarter, contracts for Frango Controller were signed with Hunter Douglas in the Netherlands, the Wood Group, RMC and Thorn in the UK and with Swisscom in Switzerland, among others. Sales trends and earnings January - December 2002 Market conditions in 2002 have been weaker than anticipated and growth and earnings were disappointing. It is the first time Frango has reported a loss in its sixteen-year history. The year has been characterised by more cautious attitudes and investment trends in software have been adversely affected by the slow rate of economic development. Nor has the fourth quarter, traditionally a strong period, shown any indications of a turnaround. The trend of postponing investments has been a clear one. Some foundations have nevertheless been laid for 2003. The international launch of Frango Controller has been well received in evaluation processes. In addition to several prestigious new contracts, a number of installations are being carried out for existing customers. All of these will become important reference customers. Frango has also taken action to expand the scope of its partner strategy. As a result of these efforts, a number of important distribution and co-operation agreements were signed during the year and the benefits of these are expected to start to show in 2003. Cost-savings programmes have been implemented during the year. Although current forecasts suggest that market growth will be poor in 2003, the cost savings programme implemented, together with the continued development of Frango Controller and the company's formal co-operation agreements will enable Frango to return to profitability. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2003/01/22/20030122BIT00190/wkr0001.doc The full report http://www.waymaker.net/bitonline/2003/01/22/20030122BIT00190/wkr0002.pdf The full report