Interim Report, 1 January - 31 March 2001

M2S Sverige AB Interim Report, 1 January - 31 March 2001 Continued strong sales increase * Sales rose during 1 January - 31 March by 138 percent to 100.4 (42.1) MSEK. * Operating profit before goodwill amortisation amounted to 14.5 (0.6) MSEK and to 4.5 (0.3) MSEK after goodwill amortisation. * Earnings per share was 0.19 (0.02) SEK. * Sales in M2S's foreign markets rose 172 percent and amounted to 77.8 (28.6) MSEK, corresponding to 83 percent (68) of total Group sales. * Sales in Sweden increased for the second consecutive quarter and amounted to 15.4 (13.3) MSEK. * During the quarter, the previously announced action program involving costs and personnel reductions was implemented, with the aim of increasing the profitability of the Group. * A new issue was effected in March that generated proceeds to the company of 13.2 MSEK before issue expenses. First quarter 2001 Sales in the first quarter increased by 138 percent and amounted to 100.4 (42,1) MSEK. Sales in Sweden rose for the second consecutive quarter and amounted to 15.4 (13.3) MSEK. Sales in foreign market increased 172 percent to 77.8 (28.6) MSEK. Foreign sales accounted for 83 percent (68) of total Group sales. Total revenues included exchange gains of 7.2 (0.2) MSEK. Sales per quarter 1998-2001, MSEK Q1 Q2 Q3 Q4 Operating profit amounted to 14.6 (0.4) MSEK before good will amortisation and to 4.5 (0.3) MSEK after goodwill amortisation. Profit after financial items was 3.6 (0.4) MSEK. Sales per quarter and rolling 12 months, MSEK Operations After a weak start, the quarter finished strongly. Many of the foreign operations continued to develop well. Product sales were particularly favourable in France, Spain, the UK and Germany. In Germany, a number of large orders were received, from Bankgesellschaft Berlin, Volkswagen and Siemens, among others, plus an extension of the earlier major order received from Deutsche Post. In Spain, large orders included one received from the Basque Provincial Government, and in the UK an upgrade order was received from Ufl, University for Industry. M2S's French subsidiary received an important Custom order from Adecco. After the change last autumn in the tax rules for home-PCs, Danish sales continued to developed weakly and the shift to a greater portion of Standard and Custom sales is expected to initially yield effects this summer. Sales in Finland continued to develop weakly and operations began at the end of the period to be successively transferred to a local general agent. After weakening sales during the past year, a sales increase was noted in Sweden for the second consecutive quarter. Sales, MSEK No. of employees Q1 Q1 2000 0103 0003 2001 Germany (1) 55.6 1.1 239 19 Sweden (2) 23.6 13.5 82 81 Norway 2.3 4.8 13 14 Denmark 1.5 8.7 19 14 Spain 6.9 4.7 25 25 UK 6.5 8.9 11 5 Switzerland(1) 1.4 - 5 - France 2.9 - 13 1 Finland 0.4 0.4 5 6 Ireland, -- -- 15 production company Total 100. 42.1 427 165 4 (1) As of 1 June 2000, Prokoda Germany and Switzerland are consolidated. (2) Including personnel active in Group-wide functions for business development, product development and production. The number of employees in these functions amounted to 35 (40) as of 31 March 2001 and the number in the Swedish operations were 47 (41). Sales amounted to 23.6 (13.5) MSEK, including exchange-rate gains of 7.2 (0.2) MSEK. Action program During the quarter, the previously announced action programs was implemented, with the aim of increasing the profitability of the Group. In this respect, costs were reduced, through a personnel reduction of 50 persons and through co-ordination gains after the acquisition of Prokoda. 1997 1998 1999 2000 Operating expenses per quarter, before goodwill amortisation and product capitalisation, MSEK In total, the action program is assessed to result in cost savings of 15-20 percent annually. The program is expected to gain full effect from the second quarter. Investments The Group's investments in fixed assets, including financial leasing commitments and goodwill, amounted during the period to 17.3 (1.1) MSEK. This includes 12.9 (--) MSEK in investments in product development and new titles that were capitalised in accordance with new accounting recommendations. Liquidity and financial position Net disposable funds for the Group, including overdraft facilities of 34.7 MSEK, amounted at 31 March 2001 to 47.1 (78.7) MSEK. The equity ratio at 31 March 2001 was 85 percent (74). The company's interest-bearing liabilities at the end of the period amounted to 27.6 (27.1) MSEK. The Group's accounts receivable amounted to 112.3 (52.5) MSEK at 31 March 2001. Changed accounting principles as of 2001 Beginning in fiscal year 2001 and in compliance with the recommendation of the Swedish Financial Accounting Standard Council's recommendations as of 1 January 2001 regarding capitalisation of development costs of software, among other items, the company will capitalise certain development costs, which will be depreciated over three to five years. If the new accounting principles would have been applied for the corresponding quarter 2000, the operating profit would have amounted to 6.5 MSEK compared to reported 0.3 MSEK. New share issues A share issue was effected in March of 330,000 Series B shares that generated proceeds to the company of 13.2 MSEK before issue expenses. In addition 216,000 M2S class B shares have been subscribed for under the previous employee stock option program. The subscription generated proceeds to the company of 5.9 MSEK. The total number of shares in the company at 31 March 12001 was 19,041,390, of which 708,717 Series A shares and 18,332,673 Series B. The total number of Series B outstanding stock options was 550,000. Future information dates Interim Report Jan - June 2001 17 July 2001 Interim Report Jan - Sept 2001 October 2001 Interim Report Jan - Dec 2001 January 2002 Stockholm, 19 April 2001 M2S Sverige AB (publ) corp. reg. no. 556375-7011 Board of Directors This interim report is unaudited. For additional information, contact: President and CEO Harald Nilsonne tel: +46 8-506 424 00, harald.nilsonne@m2s.com Definitions key ratios Operating Operating profit/loss as a percentage of net sales margin Profit Net profit/loss as a percentage of net sales margin Return on Profit/loss after tax divided by average equity equity Return on Operating profit/loss plus fin. income as a capital percentage of average capital employed. employed Capital Balance sheet total less non-interest bearing employed liabilities. Average capital employed has been calculated as opening plus closing capital employed divided by two. Sharehold Shareholders' equity at year-end. Average equity has ers' been calculated as the average of opening plus equity closing equity. In the event of new share issues, a weighted average has been used. Equity/as Equity as a percentage of balance sheet total sets ratio Investmen Net investment during the year including financial ts leasing obligations and goodwill Sales per Net sales during the year divided by the average employee number of employees No of Number of shares at year-end adjusted for bonus shares at issues and split year-end Earnings Profit/loss after tax divided by average number of per share shares Earnings Profit/loss after tax divided by average number of per share shares plus a supplement for the effect of full after redemption of all outstanding warrants. full dilution Equity Equity at year end divided by number of shares at per share year end M2S in brief M2S is Europe's leading e-learning company in IT-training. The softwareprograms, which are marketed under the brand names Wit and TutorWIN, can be delivered in 11 languages. M2S has about 430 employees, with its own operations in Denmark, Finland, France, Ireland, Norway, Switzerland, Spain, UK, Sweden and Germany. M2S is listed on the Attract 40 list of the OM Stockholm Exchange. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/04/19/20010419BIT00020/bit0002.doc http://www.bit.se/bitonline/2001/04/19/20010419BIT00020/bit0002.pdf