Technology Nexus AB (publ) Interim report January-September 2001

Technology Nexus AB (publ) Interim report January-September 2001 The period in brief § Net sales totalled SEK 360.6 million (253.6) § Operating profit before goodwill depreciation totalled SEK 28.9 million (22.2), which provides a margin of 8.0% (8.7) § Profit after financial items totalled SEK 15.1 million (8.6), which provides a margin of 4.2% (3.4) § The order book at the end of the quarter stood at SEK 425.5 million (362.1) § Orders received during the period amounted to SEK 390.7 million (419.3) § Liquidity, unaccounted credit, amounted to SEK 32.7 million (27.8) at the end of the period § The number of employees at the end of the quarter was 381 (245) § Investments during the period amounted to SEK 32.7 million (270.3) § Net sales for the third period totalled SEK 113.1 million (81.3) § Operating profit before goodwill depreciation for the third period totalled SEK 5.9 million (4.5) § Orders received for the third period totalled SEK 107.1 million (55.9) Operations in Brief Nexus' sales and result have developed positively during the period. The market for secured IT solutions has shown strong growth during the period. The IT market in general, however, is still characterised by uncertainty and growth in demand has been negative, both within Scandinavia and internationally. During the latter part of the period, we have also seen a certain weakening in the rate of growth with regard to demand, even in the Nexus segment. Most of all, the decision process for new assignments has been lengthened considerably, and pressure to reduce prices in standard areas, such as system integration, has increased. During the period, Nexus has secured its market position as the leading supplier of secured IT solutions in Sweden. No considerable acquisitions have been made during the period; the considerable growth in sales and profit is primarily organic. The level of orders received during the period has been good and a considerable number of new contracts have been signed. This trend has continued during the third quarter of 2001 when orders received amounted to SEK 107.1 million (55.9) The company's overseas operations have developed better than planned with regard to sales and result. All overseas markets provide positive contributions to both results and cash flow. A letter of intent concerning the acquisition of the IT security company 2B+D SARL, with seven employees in France, was signed during the period. A letter of intent concerning the acquisition of the IT security company Dagaz AB, with sixteen employees in Sweden, was signed after the report period. The Market Growth in the market for IT security is structural rather than market steered and is in the beginning of its development, even if short-term growth is affected - as is the industry as a whole - by pressure on prices and longer decision processes. The trend towards greater demands on security in all IT and telecom applications and products has been clear and will grow in strength, according to assessments made by both the company and external parties. The restraint currently prevailing affects Nexus in that the number of preliminary studies and analyses is increasing, but the number of large projects embracing the entire Nexus business model has temporarily decreased. The customers' choice of partner for the development and operation of new system solutions and products is, however, increasingly based on expertise and size within the security field, which is positive for Nexus and indicates that the company is in a good position to grow considerably when the market gains momentum again. Turnover and Results Sales increased by 42% compared to the same period the previous year, and totalled SEK 360.6 million (253.6) The result after goodwill depreciation and financial items increased by 75% in comparison with the same period the previous year, and totalled SEK 15.1 million (8.6). During the same period the previous year, SPP funds totalling SEK 7.5 million were returned, which had a positive effect on the result. Order Book and Orders Received Orders received during the period totalled SEK 390.7 million (419.3). The order book at the end of the period stood at SEK 425.5 million (362.1). Personnel The number of employees at the end of the period was 381 (245). Personnel turnover during the period has been 10%. The Third Quarter 2001 Net sales for the third period totalled SEK 113.1 million (81.3) Operating profit before goodwill depreciation for the third period totalled SEK 5.9 million (4.5) Orders received for the third period totalled SEK 107.1 million (55.9) Prospects for the Rest of the Year Nexus is of the opinion that the general IT market will continue to develop weakly during the rest of 2001 and the beginning of 2002. Despite this forecast, Nexus anticipates positive development within its segment, Secured IT Solutions. A number of important deals have been signed during the latter part of the period. In addition to these contracts, the company has had several interesting discussions, which may be concluded before the end of the year. Nexus' position and business model are the reasons behind the assessment that the company will develop better than the market in general, as these factors guarantee the customer's IT investment quality and profitability demands. The company judges that the trend from product deliveries towards secured solution deliveries will continue to strengthen and contribute to consolidation within the industry. It is Nexus' intention to actively participate in this process, in both Scandinavia and Europe. Previously published forecasts have indicated a growth in sales within the range 30-50%. This forecast stands. Result development during the first three quarters has been positive and the company forecasts a profit margin of 5-6% after financial items for the entire year. The company predicts that operational cash flow will continue to be positive during the year. Accounting Principles No alterations have been made with regard to the accounting principles and calculation methods in comparison with the year-end report for 2000. Next Financial Report The Year-End Report for 2001 will be made public on February 12, 2002. For the Board: Linköping, Sweden, October 25, 2001 Mikael Jacobsson. Chief Executive Officer We have performed an overall review of this quarterly report in accordance with the recommendations of the Swedish Institute of Authorised Public Accountants (Föreningen Auktoriserade Revisorer, FAR). An overall review is considerably more limited than an audit. We have found nothing that would indicate that the quarterly report does not meet the requirements of the Swedish Accounting Act. Linköping, Sweden, October 25, 2001 Jüri Pundi Tom Skarin Authorised Accountant Approved Accountant ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/10/25/20011025BIT00370/bit0001.doc The full report http://www.waymaker.net/bitonline/2001/10/25/20011025BIT00370/bit0001.pdf The full report