HiQ profits leap by 71% in third quarter

HiQ profits leap by 71% in third quarter During the first nine months of this year, the operating profit for the IT and management consultancy HiQ soared by 71% to SEK 27.3 million (SEK 15.9 m) compared with the same period last year. Net sales rose over the same period to SEK 155.0 million (SEK 105.5 m), an increase of 47% compared with the same period in 1998. This profit corresponds to an operating margin of 17.6% (15.1%). - HiQ is continuing to expand while maintaining excellent profitability and high standards of quality. The future is looking bright and we see many new business opportunities ahead, both domestically and internationally. We see no indications that the market is levelling out. In fact, we see an opportunity to increase our growth rate even more, says Ken Gerhardsen, CEO of HiQ International. Income has increased dramatically in all market areas compared with the same period last year. Demand continues to be strong for HiQ's services in Sweden and Norway, and demand from global players for international assignments has increased. - We see a clear trend towards an increase in demand for HiQ's services in the international market, says Gerhardsen. This fits in very well with our aim to follow our customers into the global arena. HiQ's unique scope and experience in the telecoms industry is a result of it working together with, suppliers, operators and end users alike. - The number of Mobile Internet assignments has increased and we currently have 35 consultants employed in this field. This development, together with the increase in Internet-related assignments, means that we are intensifying our focus on business support solutions designed for end users and based on the Internet and the Mobile Internet, comments Gerhardsen. Ken Gerhardsen, CEO of HiQ, is presenting the report at Operaterassen in Stockholm at 07:45 tomorrow, Friday 22 October. The presentation will also be broadcasted on the Internet at 14:00 that afternoon on www.fti.se The report can also be downloaded from HiQ's web site www.hiq.se, or you can order a copy by calling +46 8 588 90 000. For further information, please contact: Ken Gerhardsen, CEO and MD of HiQ International, tel: +46 8 588 90 000. HiQ is an IT and management consultancy focusing on high-tech communication and simulation solutions. Formed in 1992, HiQ is now a leader in these fields and the Nordic region is its domestic market. The Group's net sales in 1998 were SEK 152 million and it employs 230 people in Stockholm, Arboga, Gothenburg and Oslo. The Parent Company, HiQ International AB, has been listed on the Stockholm Stock Exchange O-list since 12 April 1999. Interim report for HiQ, January - September 1999 HiQ is an IT and management consultancy focusing on high-tech communication and simulation solutions. Formed in 1992, HiQ is now a leader in these fields and the Nordic region is its domestic market. The Group's net sales in 1998 were SEK 152 million and it employs 230 people in Stockholm, Arboga, Gothenburg and Oslo. HiQ has been listed on the Stockholm Stock Exchange O- list since 12 April 1999. Interim report for HiQ International AB (publ.), Swedish company registration number 556529-3205, for the period January - September 1999. HiQ profits leap by 71% in third quarter @ Net sales have increased 47% compared with the same period last year, and have now reached SEK 155.0 million (SEK 105.5 m). @ The operating profit soared by 71% compared with the same period last year, and has now reached SEK 27.3 million (SEK 15.9 m), corresponding to an operating margin of 17.6% (15.1%). @ HiQ has recruited 75 new employees over the period. At the end of the period, the number of employees was 197. @ HiQ has signed a new general agreement with telecoms supplier Ericsson, raising its status to that of "preferred supplier" of consultancy services to Ericsson. @ HiQ has set up a division specializing in the banking and financial sector. @ HiQ has started a WAP agency and has focused on the Mobile Internet. @ HiQ received orders worth around SEK 20.4 million from the Swedish Defence Material Administration (FMV) for the continued development of flight training simulators for JAS 39 Gripen. @ HiQ has signed a general agreement with Swedia Networks. @ HiQ has started a new unit in Stockholm focusing on management and international companies. Market development HiQ is continuing to expand, while maintaining excellent profitability and high standards of quality. Demand for HiQ's services continues to be strong in Sweden and Norway, and the demand for international assignments has increased. HiQ currently has consultants working on assignments in France, Germany and the Netherlands, which fits in well with HiQ´s plans to follow its customers into the global arena. Income has increased dramatically in all market areas compared with the same period last year. The client base now includes several new names, particularly in the financial and telecoms sectors. In early July, HiQ presented its special focus on the Mobile Internet. The first step was to start a WAP agency, which aims to become Scandinavia's leading supplier of consultancy services in the field of the Mobile Internet. The number of Mobile Internet assignments has increased and we now have 35 consultants employed in this area. This development, together with the increase in Internet related assignments, means that HiQ is intensifying its focus on business support solutions designed for end users and based on the Internet and the Mobile Internet. The company was listed on the Stockholm Stock Exchange's O-list on 12 April, and is continuing to reap the benefits of this listing. The number of enquiries from potential customers has increased and HiQ has also forged closer relationships with several major clients. A growing number of highly qualified potential employees are now showing an interest in the company, as demonstrated by tripling the number of applications we receive. Invoicing and results During the first nine months of 1999, HiQ's net sales increased by 47% compared with the same period last year, reaching a total of SEK 155.0 million (SEK 105.5 m). Growth has been exclusively organic. The operating profit was SEK 27.3 million, a 71% rise compared with last year, when the profit was SEK 15.9 million. This profit is equivalent to an operating margin of 17.6%, compared with 15.1% in the same period of 1998 and 14.6% for the whole of 1998. This excellent growth and the impressive profit figure are due to considerable demand for HiQ's services in both new and old markets, as well as by the successful recruitment of new employees. Recalculated as results for a rolling twelve-month period, i.e. 1 October 1998 to 30 September 1999, HiQ's net sales were SEK 200.9 million, and the operating profit was SEK 33.5 million, giving an operating margin of 16.7%. On 30 June, HiQ reported costs connected with the listing of the company on the Stockholm Stock Exchange's O list on 12 April. These were charged to the Group's profit in the amount of SEK 4.1 million. Since these are by nature non-recurrent costs which affect comparability, they were booked as a separate item after the operating profit. Staff HiQ took on 75 new employees during the period. At the end of the period, the number of employees in our service was 197. HiQ has had no difficulties in recruiting qualified and experienced employees, partly as a result of the increased interest shown in the company since its Stock Exchange listing. Investments The Group's net investments totalled SEK 2.6 million for the period, of which SEK 1.6 million were investments in financial leasing. Financial position HiQ's financial position continues to be good. At the end of the reporting period, the Group's liquid assets were SEK 18,0 million (SEK 14.4 m) and the interest-bearing net cash assets were SEK 12.5 million (SEK 10.2 m). Shareholders' equity was SEK 45.5 million on 30 September 1999, compared with SEK 31.2 million on 30 September 1998, an increase of 46%. The equity/assets ratio was 56% (54%). Other important changes since the end of the period @ HiQ signed a general agreement with Telia Mobitel in October. The agreement relates to IT and management consultancy services and chiefly focuses on Telia Mobile and Telia Nät. Everyone at the companies in the Telia Group can utilise this agreement. @ Former Prime Minister of Sweden and Special Envoy of the Secretary-General for the Balkans, Carl Bildt has joined the Board of HiQ. Outlook for the future HiQ will continue to expand, while maintaining excellent profitability and high standards of quality. The future is looking bright and we see plenty of new business opportunities, both domestically and internationally. We see no indications that the market is levelling out. In fact, we see an opportunity to increase our growth rate even more. Our in-depth knowledge of high-tech and communications is in increasing demand and is also a great asset in new markets. The market for HiQ's services is excellent, and demand in the international market is increasing. We will be intensifying our international efforts to meet this substantial demand. HiQ has long-standing experience of working in a deregulated telecommunications market, and this gives us a competitive edge in telecoms assignments for companies establishing themselves in Europe. We intend to maintain the breadth of our scope in the telecoms industry and will continue to work together with all players, including suppliers, operators and users. We have a large number of assignments in the field of mobility and these operations are expanding as demand for our services from end users continues to increase. The mobile trend will also be intensifying when the first GPRS systems are taken into operation at the end of next year and are later integrated with other technologies in the field of the Mobile Internet, such as WAP. Our acquisition plans remain unchanged, focusing mainly on complementary acquisitions in the Nordic region, chiefly in Sweden, Norway and Finland, although we also have international plans for the European market. HiQ's long-term financial goals are to maintain a growth rate of at least 30% and an operating margin of at least 15%. We believe that we will be exceeding our own long-term financial goal for the 1999 calendar year. Upcoming reports The press release of the unaudited annual accounts for the 1999 financial year will be presented on 2 February 2000. Stockholm 21 October 1999 The Board of Directors of HiQ International AB This report has not been reviewed by an auditor. For further information, please contact: Ken Gerhardsen, CEO and MD of HiQ International AB Tel: +46 8 588 90 000 ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/1999/10/21/19991021BIT00580/bit0001.doc http://www.bit.se/bitonline/1999/10/21/19991021BIT00580/bit0002.pdf