Year-end report, Mind AB (publ), 556570-7071, 1 January - 31 December 2000

Year-end report, Mind AB (publ), 556570-7071, 1 January-31 December 2000 Balance between expenses and revenue re-established * The balance between expenses and revenues has been re-established, and it is believed that the company has sufficient financial resources to continue development according to plan. * Sales amounted to SEK 294.7 1) million (102.2 2) ). Sales during the fourth quarter totalled SEK 57.6 million (40.5). * Operating loss before amortization of goodwill and comparable items amounted to SEK 156.2 million (loss: 26.5). Operating loss for the fourth quarter before amortization of goodwill and items affecting comparability totalled SEK 49.4 million (loss: 20.6). * Goodwill value was adjusted by a total of SEK 180.4 million, resulting in a year-end goodwill value of SEK 51.8 million. * Mind has carried through a powerful programme of measures that have produced the following results: * Operating costs have almost been halved. * No less than 75 percent of Mind's sales are now generated from the prioritised segment - Finance and Insurance - and TIME. The share of Network Pioneers, what are known as "dotcom companies", accounts for less than 3 percent of sales. * An altered skill structure with more technicians and fewer design and communication employees. * Costs for implementing the programme have been calculated at SEK 80.7 million 3) . * Mind's goal remains to achieve a positive result before amortization of goodwill during the first six months of 2001. * Hans Hasselgren, became the new CEO of Mind on 5 February 2001. For additional information, please contact: Hans Hasselgren, CEO, tel. +46 (0) 733-61 10 11 Mind adjusted to match changed market conditions Mind was one of the first IT consultancy companies to present a programme of measures intended to adapt Mind to the changed market conditions and to achieve a positive result before amortization of goodwill during the first six months of 2001. The cost of implementing the programme amounted to SEK 80,7 4) million, which heavily influenced the result for the fourth quarter of 2000. The total burden of expenses has now been reduced by approximately SEK 220 million 5) annually. The programme has now been completed, and its most important aspects are listed below. A new Mind * The balance between revenue and expenses has been re-established. Operating costs have been almost halved. * No less than 75 percent of Mind's sales are now generated by the prioritised segment - Finance and Insurance - and TIME. The share of Network Pioneers, what are known as "dotcom companies" accounts for less than 3 percent of sales. * Mind's operations have been adjusted to accommodate the convergence between IT and Internet consultants in the market. * Altered skill structure with a larger proportion of technicians and fewer design and communication staff. The average age of employees is now 34. Comments on sales In line with the forecast in the interim report for the third quarter, sales in the fourth quarter were negatively affected, primarily by changes in market conditions, and amounted to SEK 57.6 million (40.5), an increase of 42 percent. Sales for the year as a whole totalled SEK 294.7 million (102.2), an increase of 188 percent. Mind has made provisions attributable to Network Pioneers, which negatively influenced sales to the sum of SEK 28.8 million and reduced earnings by SEK 30.7 million. These provisions affected sales in the fourth quarter to the sum of SEK 9.1 million, and reduced earnings in this quarter by SEK 8.7 million. At 31 January 2001, the share of accounts receivable against Network Pioneers was less than 2 percent, which means that Mind considers the risk of having to make further provisions to be appreciably reduced. Comments on earnings The operating loss for 2000 before amortization of goodwill and items affecting comparability amounted to SEK 156.2 million (loss: 26.5). The operating loss for the fourth quarter before amortization of goodwill and items affecting comparability totalled SEK 49.4 million (loss: 20.6). Provisions (see above) negatively affected earnings for the period to the sum of SEK 30.7 million, of which SEK 8.7 million is attributable to the fourth quarter. The loss for the year before tax amounted to SEK 261.7 million (loss: 26.5). The loss for the period for the group totalled SEK 260.6 million (loss: 26.7). Comparable items consist of costs of SEK 98.2 million, partly used for Mind's programme of measures, and partly for the amortization of goodwill. Of the total cost of the programme of measures (SEK 80.7 million) SEK 21.2 million has no effect on cash flow. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/22/20010222BIT01700/bit0001.doc The full Year- End report http://www.bit.se/bitonline/2001/02/22/20010222BIT01700/bit0002.pdf The full Year- End report