Framfab Unveils Action Plan to Boost Profitability

Framfab Unveils Action Plan to Boost Profitability The Swedish part of Framfab's operations reported reduced sales and earnings during the third quarter of 2000. In an effort to restore profitability and ensure the company's future positive development, Johan Wall, Framfab's new CEO, today announced an action plan. The program includes a workforce cutback affecting 340 employees in Sweden, a focus on the core business, professional services and innovation, and continued growth outside Sweden. The decline in earnings from the Swedish part of operations is due to changes in market conditions resulting in low business volumes in relation to the size of the Swedish workforce. The seriousness of the problem became clearer as the analysis of the third-quarter results progressed. However, there is a substantial potential to increase efficency and focus in the Swedish organisation. To adapt the organization to current local market conditions, Framfab will reduce its workforce by 340 employees in Sweden. Of these, 70 are trial employees that will not be offered permanent employment. The cutbacks affect all personnel categories. Operations outside Sweden will not be affected by the current cutback program. Framfab will continue to open new offices in selected markets. The company believes that the powerful action program will secure Framfab's position as a strong international Internet professional services company. "This is an extremely difficult decision that I and Framfab's management have made. But it is necessary to ensure the company's long-term competitiveness," explains Johan Wall, CEO Framfab. To facilitate the situation for those involved, all the employees concerned will be offered personal support by counselors, in addition to career guidance and assistance in seeking alternative employers. The plan also includes a focus on Framfab's core business, i.e. professional services. As part of this focus, the Marketing and Investments business areas will be phased out, and innovation operations will be concentrated to Framfab Labs. Framfab's global client focus is on a number of industrial sectors such as finance, healthcare, telecom/media/technology, automotive and consumer goods. Executive management will also be strengthened. Ralf Pispers, former President of Framfab Germany, has been appointed Vice President International Operations, and Leif Andersson has been appointed Vice President Corporate Communications. A restructuring cost in an amount of SEK 130 Million is estimated to affect fourth-quarter earnings in the current year. Annual savings generated by the program are expected to amount to SEK 230 Million for the full year 2001. The year-end report for operations in 2000 will be presented on February 22, 2001. For more information, contact: Ola Kallemur, Press Relations Manager +46 709 41 21 11, ola.kallemur@framfab.se Niclas Lilja, Investor Relations Manager +46 709 41 21 79, niclas.lilja@framfab.se Johan Haeggman, CFO +46 8 545 258 00, johan.haeggman@framfab.se Johan Wall, CEO + 46 8 545 258 00, johan.wall@framfab.se Framfab is global Internet professional services company that creates new business for the network economy with the help of strategy consulting and digital services. Framfab runs operations in Austria, Bulgaria, Denmark, France, Italy, the Netherlands, Norway, Switzerland, Spain, UK, Sweden, Germany and the US. Framfab's clients include 3M, AstraZeneca, AXA, Den Danske Bank, Electrolux, Ericsson, Expressen, le Groupe Pernod Ricard, IKEA, JP Morgan, Nike Europe, Packard Bell, SAAB, Vattenfall, Volvo Car Corporation and the Volvo Group. The Internet professional services operations are supported by Framfab Boosters, Framfab Software and Framfab Labs. Framfab is listed on the OM Stockholm Stock Exchange's Attract 40 List (ticker FTID). Framfab's Organisation Framfab conducts international professional services operations supported by Framfab Software, Framfab Boosters and Framfab Labs. Internet Professional Services Operations Framfab's Internet professional services operations is present in 13 countries in Europe and the USA. It is the company's strategy to work with the most demanding Internet projects on behalf of global clients. This approach includes working with an overall strategic perspective and implementing Internet solutions throughout the client's entire business process. Projects of this nature are growing in volume, complexity and number of countries involved. Internet professional services operations currently employ about 2,180 persons. Framfab Boosters Framfab Boosters support the Internet consulting business by providing specialist expertise in certain areas. Framfab Boosters also coordinate holdings in portfolio companies. Framfab Boosters consists of Driftbolaget, Framfab IT Consulting, Framfab Integration and holdings in portfolio companies. Framfab Boosters has about 350 employees and is headed by Göran Westling, former CEO and founder of Guide. Framfab Software Framfab Software works on requirement specifications for and sales of Framfab's own software. Work is focused on the Brikks portal software and the CM 2000 Content Management System. Framfab Software has about 10 employees and is headed by Johan de Verdier, former CEO of Guide. Framfab Labs Framfab Labs was established to ensure that Framfab maintains its high level of innovation. Framfab Labs is Framfab's R&D center for new concepts and products. Ideas arising through client contacts are refined by Framfab Labs and then recycled to the Internet Professional Services operations for commercialisation. Framfab Labs is currently working on the refinement of Brikks and has client account responsibility for Trygghetsbolaget (Framfab's ownership share: 28%) and Hårdvarubolaget (Framfab's ownership share: 10%). Framfab Labs, headed by Jonas Birgersson, employs about 70 persons at offices in Lund and Helsingborg. Framfab's Client Strategy Framfab's strategy is to work with global companies with strong brands. The company develops an overall strategic perspective for clients who demand a high degree of innovation. Framfab's ambition is to provide the leading offering in its prioritized industrial sectors. Efforts to accumulate knowledge and experience within prioritised client groups will be intensified and focused on the following sectors: Automotive, Healthcare, Financial services, Telecom/Media/Technology, Consumer goods. * Telecom, Media and Technology In this client segment, Framfab is developing and customizing communication between people and companies and actively driving the development of broadband services and mobile Internet. Clients include BLU, Bredbandsbolaget, VIAG Interkom, Ericsson and Expressen. Through B2 Mobil AB, Framfab is a participant in the Orange consortia that have applied UMTS licenses in Sweden and Norway. * Financial Services and Insurance Within financial services and insurance, Framfab is developing digital business solutions for banks and insurance companies. Framfab is particularly well positioned in Germany in this market sector. Clients include AXA, Deutsche Kranken Versicherung, BHW, Den Danske Bank and Postgirot. * Consumer Goods With companies that manufacture and sell consumer goods, Framfab is working with everything from marketing to integration with the client's underlying business systems. Framfab develops services for transactions, customer service, marketing, etc. Clients include IKEA, Electrolux and Nike Europe. * Automotive Framfab has long-standing experience of global launches of new car models, digital system solutions for the automotive industry and the creation of efficient global trading sites for both manufacturers and retailers. Framfab also develops services that take advantage of integrating the Internet with the vehicle itself. Clients include Volvo Car Corporation, AB Volvo, Bilia and Autobytel. * Medical and Healthcare In this area, Framfab is developing services for digitizing and increasing the efficiency of medical and healthcare services, in part to enable people to receive medical care and counseling in their homes. Clients include AstraZeneca and Docco. Framfab's New Executive Management Johan Wall, President and Chief Executive Officer Leif Andersson, Vice President Corporate Communications Sofia Ericsson, Vice President Mergers and Acquisitions Michael Gustavsson, President Framfab Sweden Johan Haeggman, Chief Financial Officer Ralf Pispers, Vice President International Operations Peter Svanfeldt, Vice President Client Development Johan de Verdier, President Framfab Software Göran Westling, President Framfab Boosters ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/11/22/20001122BIT00020/bit0001.doc http://www.bit.se/bitonline/2000/11/22/20001122BIT00020/bit0002.pdf