Cybercom accomplished a lot in 2008. We continued international expansion, followed customers to new geographic markets, and boosted our brand and market position via two valuable acquisitions.
ybercom Cybercom has a strong Nordic platform and presence in Asia and eastern Europe; this enables our global sourcing business model – a highly sought-after model by world-leading players, authorities, and organisations for managing major projects. We enhanced relationships with our major customers, increased the proportion of turnkey projects, and further broadened our customer base.
In line with our strategy and conviction that globalisation will continue to play a key role in the future, we're building a geographic organisation based on long-term goals. Our strategy of local presence and global delivery capacity positions Cybercom to be one of the strongest companies to emerge from the economic downturn.
Two acquisitions carved global growth path in 2008
Cybercom acquired Nexus Consulting in 2008. The acquisition fortified our position as the leading Nordic consultancy in IT security, which is a globally expanding market. Cybercom offers unrivalled IT security skills that are in demand internationally. Our expert security consultants work on assignments worldwide, from South America to Iceland. They serve an extensive range of customers, from banks in Thailand to intelligence services in Europe.
Acquisition of Plenware, a Finnish consultancy, was the next step in Cybercom's growth strategy. Plenware fortified our stronghold in the Nordic market and sharpened our telecom proposition. We also gained eastern European nearshore operations in Estonia, Romania, and Poland. We established a presence in China, which is very valuable and follows our strategy to expand the company, particularly in Asia. Right now, we have a presence in China, India, and Singapore.
Asia – vital on an increasingly global market
India and China are expanding markets for many Cybercom customers. The IT market is progressively becoming more global, and there is a clear trend among our customers to search for partners that support their organisations with outsourcing and global sourcing.
Customers demand 24/7 availability and increased productivity, which also accelerate upscaling and cost efficiency. Customers can focus on their core business and growth, while cutting total costs.
We took a key strategic decision in 2008 when we began to seriously invest in growth in Asia. Besides our Beijing presence, we opened a second office in Chengdu, China. Chengdu is a university town close to customers such as Ericsson and Nokia.
Doubled earnings in Singapore
Our Singapore operation were the most successful in 2008.
In Singapore, we doubled sales and earnings in 2008. We're one the most sought-after companies for telecom management in the region. Singapore serves as a base for our African and Middle Eastern rollout projects for new mobile networks and of existing networks to improve performance and cost efficiency.
We also opened a Dubai office to establish presence closer to our customers – a successful strategy that generated new business.
Focus – corporate culture
Our growth strategy is well-defined, and during the past two years, we chose growth via acquisitions rather than organic growth. Our acquisition strategy allowed us to quickly penetrate new geographic markets, which we see as favourable for business in the long term. Expansion in existing markets is now mainly organic. We fully realise that acquisitions require time for integration. So during the year, Peter Keller-Andreasen, Cybercom's vice president, and I devoted considerable effort to travelling around to our companies and conducting seminars on Cybercom's vision, strategies, objectives, and values – to build a unified corporate culture. Our consistent focus is to create one company, one team, and one culture.
I believe the best strategy for successful integration is joint business deals, and we made several during the year.
Local presence – global delivery capacity
We have a strong value proposition in our niche core services: telecom management, security, mobile services, portals, and embedded systems. We have strong Nordic presence and almost 1,500 employees, which qualifies us for most framework agreements and procurements that place requirements on local and global delivery capacity.
We have international delivery capacity in China, eastern Europe, and India that is unique for a company our size. Our consultants have 10 years of experience in global sourcing. We're a preferred supplier to all major purchasers of consultant services in the Nordics. We have well-established, long-term customer relationships and solid expertise in our customers' products, technologies, and industries – expertise our customers demand.
Cybercom is +1 – we add something extra
Cybercom employees have extensive technical expertise, we're accustomed to managing complete solutions, and we're a business-driven organisation. A few years ago we internally adopted the +1 concept. It describes who we are and what we stand for: +1 means always adding a little extra to everything we do – for customers, colleagues, and business partners.
The +1 concept spread like wildfire internally and everyone, from Mumbai and Beijing to Stockholm, Linköping, and Copenhagen proudly use it.
Strong growth despite an unsettled finish to 2008
The start of 2008 was great for business, and we made good progress toward our targets. We expanded our customer base and reduced dependence on individual customers; no single customer accounts for more than 17% of sales.
In 2008, we grew 62%, and our liquidity was good. We enhanced our cash flow and profit. We succeeded at this while we launched an assertive initiative to expand our presence in China and go onshore in Poland.
We sold our UK subsidiary because its operations and main proposition had few synergies with the rest of the Group. The time was right to sell the company, and we did so successfully.
The recession's full force hit the Nordics in Q4, which affected our market and operations. Demand in the Nordics declined due to cutbacks by major purchasers of consultant services, but demand is rising in Africa, Asia, and the Middle East.
Considering the situation, I'm pleased with 2008, but I'd naturally prefer to see a better bottom line. Our long-term objective is an EBIT of 13%.
Today’s market situation is also a driving force for Cybercom's global sourcing proposition through our structure of local presence and global reach – business-critical project elements stay close to the customer while parts of production are placed in low-cost countries. This allows our customers to focus on their core businesses and services to secure their competitiveness – a priority for many companies today.
Future winners can manage change
Going forward, winners will be companies that have a clear value proposition, a local market and presence, framework agreements and long-term assignments, flexible business models, and attractive global sourcing offerings. Other critical success factors are a strong sales culture, proximity to customers, and very fast adaptation to market changes. We made major changes in 2008 to create an inspiring future for employees and to increase shareholder value. We substantially strengthened the brand and became even more internationally conspicuous.
I'm convinced that Cybercom is well-positioned to meet customer needs and the challenges that lie ahead. We're building a strong team with a common culture and common values.
When I visit our operations worldwide and meet all of our talented, dedicated employees, I’m struck by the fact that this is the most enjoyable and exciting job I've ever had!