Interim report for HiQ january - march 2000

25 April 2000 HiQ's turnover up 59% and profits up 61% The IT and management consultancy HiQ increased its operating profit by 61% to SEK 15.7 million (SEK 9.7 m) during the first quarter of 2000. At the same time, turnover rose to SEK 79.9 million (SEK 50.2 m), an increase of 59% compared with the same period in 1999. The figures do not include the acquisitions of WISE Networks and Open Software. The profit is equivalent to an operating margin of 19.6 % (19.4%). "The new millennium really has got off to an excellent start. Our focus on telecoms, the mobile Internet and simulation technology gives us a strong, distinct position in the marketplace. This, combined with our efforts to deliver high-quality services, makes our customers satisfied and we can continue to be profitable while maintaining our growth," says Lars Stugemo, CEO at HiQ International. In March, HiQ received new orders from the Swedish Defence Material Administration (FMV) worth SEK 130 million for training simulators for the JAS 39 Gripen. "The assignment puts the stamp of quality on our consulting services and advanced high-tech solutions to Sweden's armed forces," says Stugemo. All areas of the market outperformed the same period last year. Mobile Internet and telecoms assignments in particular are on the increase, and around 25% of HiQ's consultants are working on various projects involving GPRS and mobile solutions. "Our international assignments are increasing as our customers become more global. HiQ currently has assignments in several countries outside the Nordic region, including Germany, France and the Netherlands. We have long-standing experience of deregulated telecoms markets and a broad range of telecoms skills, from suppliers' technology to end-customer solutions. Our ambition is to follow our customers overseas and continue to offer them high-quality consulting services," he continues. HiQ acquired two IT and telecoms consultancies at the beginning of the year: WISE Networks, with offices in Copenhagen and Århus in Denmark, and Open Software, with offices in Gothenburg. HiQ's CEO Lars Stugemo will be presenting the interim report at HiQ's th offices on the 17 floor at Sveavägen 17 in Stockholm at 12.00 noon today, Tuesday 25 April 2000. The presentation will also be broadcast on the Internet at 15 pm this afternoon. The interim report can be downloaded from HiQ's home page, www.hiq.se, or ordered by calling +46 8 588 90 000. For more information, please contact: Lars Stugemo, CEO and President of HiQ International, tel: +46 8 588 90 000 HiQ is an IT and management consultancy focusing on high-tech solutions in the fields of telecoms, the mobile Internet and simulation technology. The company was formed in 1992 and is one of the leaders in these fields. The Nordic region is its domestic market. The Group's turnover was SEK 233 million in 1999 and it has 330 employees in Sweden, Norway and Denmark. HiQ is listed on the OM Stockholm Stock Exchange's O list. For more information, please visit our web site at www.hiq.se. INTERIM REPORT FOR HiQ JANUARY - MARCH 2000 HiQ is an IT and management consultancy focusing on high-tech solutions in the fields of telecoms, the mobile Internet and simulation technology. The company was formed in 1992 and is one of the leaders in these fields. The Nordic region is its domestic market. The Group's turnover was SEK 233 million in 1999 and it has 330 employees in Sweden, Norway and Denmark. HiQ is listed on the OM Stockholm Stock Exchange's O list. For more information, please visit our web site at www.hiq.se. Interim report for HiQ International AB (publ), Swedish company registration number 556529-3205, for the period January - March 2000. HiQ's turnover up 59% and profits up 61% Turnover increased by 59% year on year, and was SEK 79.9 million (SEK 50.2 m). The operating profit is up 61% year on year and was SEK 15.7 million (SEK 9.7 m), which is equivalent to an operating margin of 19.6% (19.4%). HiQ renewed its general agreement with telecom supplier Ericsson as "preferred supplier". HiQ acquired WISE Networks, a Danish IT and telecoms consultancy with offices in Copenhagen and Århus. HiQ acquired Open Software, an IT and telecoms consultancy with offices in Gothenburg. Lars Stugemo was appointed new CEO and President of HiQ International. Anna Åkesson was appointed new CFO of HiQ International. HiQ received orders from the Swedish Defence Material Administration (FMV) worth around SEK 130 million for the continued development of flight training simulators for the JAS 39 Gripen. Market trends The year got off to a good start with continued strong growth combined with healthy profitability. Strong demand for HiQ's services in the Nordic region has been accompanied by an increase in demand for international assignments. HiQ currently has assignments in the UK, France, Germany, Luxembourg, the Netherlands and New Zealand. These developments are in line with HiQ's strategy to follow its customers overseas and continue to offer them high-quality consulting services focusing on telecoms in new geographic locations. All areas of the market outperformed the same period last year. Mobile Internet and telecoms assignments in particular are on the increase, and around 25% of HiQ's consultants are working on various projects involving GPRS and mobile solutions. The tendency is increasingly towards a demand for HiQ's services when customers are looking for cutting-edge skills in sectors such as the financial and telecoms markets. Assignments in which Java is used as the programming language have increased alongside WAP and GPRS. This is particularly true of solutions that help enhance user mobility in day-to- day or working life. We are also seeing an increase in demand for Internet assignments. In March, HiQ received new orders from the Swedish Defence Material Administration (FMV), worth SEK 130 million. The agreement pertains to the development of training and teaching simulators for pilots and ground staff for the JAS 39 Gripen. Our skills in the field of simulation technology are also in demand for civilian projects in fields such as telecoms, where we are involved in a number of projects. The breadth of our telecoms skills, where we work with suppliers, operators and end-users alike, paves the way for new market areas. On the basis of our telecommunications expertise, we are now seeing demand from new customers in areas as diverse as agriculture, electronics and electric power. Other events during the period under review January saw the acquisition of WISE Networks, a Danish IT and telecoms consultancy with just over 20 systems developers and project managers specializing in the fields of telecoms, the Internet and Wireless. With offices in Copenhagen and Århus. WISE provides us with geographic proximity to Denmark and southern Sweden, as well as a strategic position close to the continent, which we regard as very positive. In February, HiQ acquired Open Software, an IT and telecoms consultancy with 20 technical systems developers specializing in the fields of data- and telecoms and the mobile Internet. HiQ Open consolidates our position in western Sweden, where we have already established operations through our subsidiary, HiQ Väst. HiQ WISE and HiQ Open are planned to be consolidated on 1 May 2000. Lars Stugemo was appointed new CEO and President of HiQ International, taking over from Ken Gerhardsen, who decided to resign of his own free will. Gerhardsen will continue his work on the Board and at the company. Anna Åkesson was appointed new CFO, taking over from Peter Silvferswärd. Silvferswärd will take over as President of Ekonomikonsult Islinge, a financial consulting company which manages HiQ's finance administration. Invoicing and profits HiQ's turnover for the first three months of 2000 rose 59% compared with the same period last year, totalling SEK 79.9 million (SEK 50.2 m). This growth has been exclusively organic. The operating profit was SEK 15.7 million, an improvement of 61% on last year, when the profit was SEK 9.7 million. This profit is equivalent to an operating margin of 19.6%, compared with 19.4% for the same period in 1999 and 17.0% for the whole of 1999. The reason for this excellent growth and healthy profit is the strong demand for HiQ's services in new and old markets combined with the successful recruitment of new employees. Recalculated as rolling twelve-month figures, i.e. for the period 1 April 1999 to 31 March 2000, HiQ's turnover was SEK 252.9 million. The operating profit was SEK 44 million, equivalent to an operating margin of 17.4%. Employees Including HiQ WISE and HiQ Open, the number of employees working in the company was 330 on 25 April. Interesting assignments within systems development and management consulting, combined with a human and positive corporate culture continue to attract skilled staff. We work constantly to develop HiQ into an attractive working environment for both male and female members of staff. HiQ took on 25 new employees during the period under review. At the end of the period, the number of employees was 234 in duty. Investments The Group's net investments totalled SEK 8.1 million for the period under review. Of this amount SEK 6.6 million is accounted for by improvement costs to premises. Financial status HiQ's financial position continues to be healthy. At the end of the period under review, the Group's liquid assets were SEK 28.9 million (SEK 14.4 m), and the interest bearing net liquidity was SEK 23.1 million (SEK 9.5 m). Shareholders' equity was SEK 68.5 million on 31 March 2000, compared with SEK 35.9 million on 31 March 1999. This represents an increase of 91%. The equity/assets ratio was 56.1% (50.7%). Outlook for the future HiQ's markets continue to look strong, and we anticipate high staffing levels on a large number of new and highly interesting domestic and international projects. Our broad range of know-how in the field of telecoms is very much in demand and we see this as a strategic asset with which to promote the company to new customers and markets. Our focus on delivering hi-tech solutions in telecoms, the mobile Internet and simulation technology continues to give us a strong, distinct position in the marketplace. In combination with delivering high-quality services to make our customers successful, this gives us the chance to grow while maintaining good profitability. Our main strategy is to grow organically and complement this growth with strategic acquisitions. This year we will put our efforts into developing HiQ into a more international company, with offices in several countries. We will be investing in establishing our operation in Finland and we will also be looking into the possibility of establishing HiQ in other European countries. HiQ's long-term financial goals are a growth of at least 30% and an operating margin of at least 15%. Telephone conference HiQ will be holding a telephone conference on 25 April at 14.30, primarily aimed at overseas customers. The conference will be held in English. Lars Stugemo, CEO, and Anna Åkesson, CFO, will be representing HiQ. The telephone number is: +46 8 686 70 81 The code is : 40 62 42 Presentation material will be available from 13.00 pm at HiQs English website www.hiq.se/english Upcoming financial information The interim report for the period January - June will be presented on 14 August. Stockholm 25 April 2000 The Board of Directors of HiQ International AB This report has not been subjected to an auditor's review. For more information, please contact: Lars Stugemo, CEO and President of HiQ International AB, Tel: +46 8 588 90 000 Anna Svensson, CIO and Investor Relations at HiQ International AB, tel: +46 8 588 90 000 [REMOVED GRAPHICS] [REMOVED GRAPHICS] [REMOVED GRAPHICS] ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/04/25/20000425BIT00320/bit0001.doc The full report http://www.bit.se/bitonline/2000/04/25/20000425BIT00320/bit0002.pdf The full report