HiQ's interim report for january - june 2001

HiQ's INTERIM REPORT FOR JANUARY - JUNE 2001 HiQ is an IT and management consultancy focusing on high-tech solutions in the fields of telecoms, mobility and simulation technology. The company is a leader in these fields and the Nordic region is its domestic market. HiQ employs 450 people at offices in Sweden, Norway, Denmark and Finland. HiQ is listed on the Stockholm Stock Exchange. For more information, please visit our web site at www.hiq.se Interim report for HiQ International AB (publ), Swedish corporate identity no. 556529-3205, for the period January - June 2001. HiQ - net sales climb 60% with a margin of just over 16% · Net sales have climbed 60% compared with the same period the previous year, totalling SEK 278.0 million (SEK 174.3 m). · The profit before goodwill was up 55% to SEK 44.8 million (SEK 28.9 m) compared with the same period the previous year. This profit corresponds to a margin before goodwill depreciation of 16.1%. · The operating profit rose 45% on the same period the previous year, totalling SEK 39.1 million (SEK 27.0 m), which is equivalent to an operating margin of 14.1%. · HiQ received a new order in March from the Swedish Defence Material Administration (FMV) worth SEK 20 million for the development of training simulators for the JAS 39 Gripen. · HiQ is intensifying its collaboration with Ericsson within the framework of its preferred supplier agreement for consulting services. · HiQ has signed a frame agreement with Saab Automobile. · HiQ has also signed a frame agreement with Utfors. · The AGM on 26 April resolved to pay a dividend of SEK 0.50 (SEK0.30) per share. · Anders Ljungh was elected as an ordinary member of HiQ's Board of Directors. Market trends The prevailing uncertainty as regards the economic situation has led to market changes when comparing with the situation in 2000, when the market was occasionally overheated. Many customers are now increasingly prioritising profitability over growth. This means that customers are more careful about the projects they implement and their choice of consulting company. Our longstanding experience of high-tech solutions and our business know-how in the field of telecoms allow us to provide customers in many industries with both technical and business expertise. During the spring, HiQ has strengthened its relationship with several of its customers, including Saab Automobile, Utfors, the Swedish Defence Material Administration (FMV) and Ericsson. In April, HiQ was the first company to announce that it had been selected by Ericsson as one of the companies that it will be collaborating more closely with on research and development. The number of assignments relating to the motor vehicle industry has risen. The trend whereby cars are increasingly becoming natural communication forums is continuing and is well and truly in line with mobile developments. HiQ possesses longstanding experience of telematics, wireless communication to and from cars, and this has contributed to growth in the motor vehicle sector. Demand for GPRS and UMTS (3G) expertise has continued to be strong throughout the first six months of 2001. HiQ focuses on both technology and business and service development for suppliers and operators alike throughout the Nordic region. During the first half of this year, HiQ has increased its net sales outside Sweden to 18%, which is in line with our ambition to consolidate our position in the Nordic region. Our offices in a number of countries allow our international customers to work with HiQ in several geographic locations and we now increasingly work with the same customers in several different countries. In May, HiQ was voted Sweden's top IT consultancy in a poll performed by the Swedish business magazine Veckans Affärer covering 340 Swedish company decision-makers. The companies were judged on the basis aspects such as confidence in the company, customer focus, expertise and results. Invoiced sales and profit HiQ's net sales increased 60% on the same period the previous year, totalling SEK 278.0 million (SEK 174.3 m). Growth has been exclusively organic. The profit before goodwill rose 55% to SEK 44.8 million (SEK 28.9 m) compared with the same period the previous year, which corresponds to a margin before goodwill depreciation of 16.1%. The operating profit increased to SEK 39.1 million, which is equivalent to an operating margin of 14.1%. The operating profit climbed 45% on the previous year, when the figure was SEK 27.0 million. This strong growth and our excellent financial results are due to strong demand for HiQ's services and longstanding relationships with key customers. Net financial items for the Group totalled SEK 1023 thousand (SEK 447 thousand). Converted to a rolling 12-month period (i.e. 1 July 2000 - 30 June 2001), HiQ's net sales came to SEK 508.6 million. The profit before goodwill totalled SEK 88.9 million, which is equivalent to a margin before goodwill of 17.5%. Accounting principles This interim report has been prepared in accordance with recommendation no. 20 of the Swedish Financial Accounting Standards Council. The accounting principles remain unchanged compared with the latest annual report. Employees The company had 445 employees at the end of the period. HiQ has continued its recruitment initiatives during the period under review, employing 56 new people. Investments The Group's net investments came to SEK 6.0 million for the period, of which investments in financial leasing accounted for SEK 2.3 million. Financial position HiQ's financial position continues to be healthy. At the end of the period, the Group's liquid assets totalled SEK 97.9 million (SEK 34.5 m) and its interest-bearing net cash assets came to SEK 89.1 million (SEK 28.0 m). Shareholders' equity totalled SEK 218.3 million on 30 June 2001, compared with SEK 160.9 million on 30 June 2000. This represents an increase of SEK 57.4 million. At the end of the period, the equity/assets ratio was 65.7% (69.0%). The AGM held on 26 April decided to pay a dividend of SEK 0.50 per share in accordance with HiQ's long-term dividend policy. Other key events since the end of the period · HiQ has signed a frame agreement with the Swedish National Post and Telecom Agency, PTS, for all areas of expertise in which the agency requires consulting assistance. · Panu Kause has been appointed new Managing Director of HiQ East Oy. · Outlook The general uncertainty surrounding economic developments continues to make it difficult to assess future market trends. HiQ enjoys a strong financial position, boasts highly skilled staff and has forged long-term stable relationships with many customers in different industries. We therefore believe that HiQ has good prospects for continued development while maintaining healthy profitability. We continue to pursue our initiatives in the fields of finance, motor vehicles and simulation technology for both military and civilian applications. We believe that all our market segments will continue to feel the need for communication-intensive solutions and expertise as regards both technology and the way technical solutions can be transformed into business operations. HiQ also brings its technical and business expertise to bear on other industries, including the medical, energy and entertainment sectors. HiQ is continuing to develop the company into a leading consultancy in the Nordic region. We are happy to take on international assignments and keen to follow existing customers when they move overseas. Our main strategy is organic growth supplemented with strategic acquisitions, and we are continuing to strengthen our operations, investing in Finland and the Nordic region. HiQ is also pursuing its efforts to attract and retain employees by making the company into the best workplace with the lowest staff turnover in the industry. HiQ's long-term financial goals are organic growth of at least 30% and an operating margin before goodwill of at least 15%. The Parent Company The profit after tax for HiQ International AB during the period under review was SEK -288 thousand (SEK 135 thousand). On 30 June, the company's interest-bearing net cash assets totalled SEK 75.0 million (SEK 15.0 m), while shareholders' equity was SEK 173.0 million (SEK 123.6 m) and the equity/assets ratio was 84.4% (89.6%) The company's net investments for the period totalled SEK 2.1 million (SEK 96.1 m). Telephone conference HiQ will be holding a telephone conference in English on 14 August at 4 p.m. (3 p.m. GMT). CEO Lars Stugemo and CFO Anna Jennehov will be representing HiQ. Telephone no.: +46 8 600 53 81 Code: 16 42 42 Presentation material will be available from 2.00 p.m. on 14 August on HiQ's English web site: www.hiq.se/english Upcoming financial report: The interim report for the period January - September will be presented on 23 October 2001. Stockholm 14 August 2001 The Board of Directors of HiQ International AB This report has not been reviewed by the auditors. For more information, please contact: Lars Stugemo, CEO HiQ International AB, tel.: +46 8 58 90 000 Anna Svensson, CIO HiQ International AB, tel.: +46 704 200 103 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/14/20010814BIT00130/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/08/14/20010814BIT00130/bit0001.pdf The report