Interim report January - June 2011


2011-07-15, 08:00
April – June · Sales reached SEK 384.1 million (387.3) · EBITDA totalled SEK -22.4 million (18.7) · EBITDA margin of -5.8% (4.8) · EBIT totalled SEK -166.9 million (6.2) · EBIT margin of -43.5% (1.6) · EPS of SEK -4.49 (-0.12) · Goodwill write-down of SEK 125 million and brand value write-down of SEK 10 million · Restructuring costs of SEK 27.2 million · Completed restructuring expected to generate annual savings of SEK 20 million January – June · Sales reached SEK 766.1 million (797.4) · EBITDA totalled SEK 7.2 million (40.3) · EBITDA margin of 0.9% (5.1) · EBIT totalled SEK -164.2 million (14.9) · EBIT margin of -21.4% (1.9) · EPS of SEK -4.51 (-0.01) · Total write-down of intangible assets in H1 of SEK 151 million (SEK 125 million goodwill, SEK 10 million brand value, SEK 16 million customer relationships) · Restructuring costs of SEK 27.2 million · Completed restructuring expected to generate annual savings of SEK 20 million

A more efficient cost structure for increased profitability

Second quarter sales amounted to SEK 384.1 million (387.3) with an operating EBITDA of SEK -22.4 million (18.7), giving a margin of -5.8% (4.8). That is a decline from last year with which we are not satisfied. A non-recurring charge of SEK 27.2 million and write-downs in goodwill and brand value of SEK 135 million affected earnings. The second quarter had initially a weak start due to reduced utilisation. We have also written down projects, primarily in Cybercom Sweden. Earnings improved toward the quarter’s second half, but we were not able to fully compensate for the weak start.

As previously announced, we are focusing on a major reorganisation of the consulting business in Finland in response to market changes, primarily in the telecom field. We began shifting chiefly toward industry, media, and the public sector where we see stronger and more stable demand. As part of this shift, we made cuts to our Finnish operation, including its associated offices in China and Romania. At the same time, we continue to optimise our structure and reduce overall costs by adapting administration of our Finnish and Swedish operations, since we can take advantage of synergies in our new Nordic organisation. Implemented measures resulted in non-recurring charges of SEK 27.2 million in the second quarter but are expected to give annual savings of SEK 20 million and establish conditions for a gradual earnings increase by the third quarter. The changes in Finland also led to intangible asset write-downs of SEK 135 million in the quarter.

Besides the major action programme that influenced the second quarter, we noted positive developments in Cybercom’s Polish operation, where we increased both global sourcing and local business. We also had positive net growth in number of employees in Sweden during the quarter, and we see good growth in our Swedish security business, where we may well broaden our customer base in the public and private sectors. In addition, we closed the quarter by winning an important framework agreement for IT services from the Finnish government and its authorities, which is a breakthrough in the Finnish public sector that is in line with our strategy.

I have appointed a broader and more business-oriented management team to drive Cybercom’s development toward growth and improved profitability. We are now prioritising a stronger presence in the Nordic home markets and developing an international delivery capacity that over time will focus on fewer and larger international units. Through the measures we have implemented, it is my belief that we are dealing well with the situation in Finland. By continuing to refine our operations in Sweden and Finland toward our offerings in telecom management, connected devices, Internet services, and security, and organising both countries into national divisions, we create synergies and a more focused operation while reducing administration to better suit our new Group structure.

With continued focus on profitability, we will keep optimising our structure and lowering our overall costs. We are building a stronger Cybercom designed for long-term business.

Stockholm, 15 July 2011

Patrik Boman

President and CEO

 

For more information, please contact:

Patrik Boman, president and CEO of the Cybercom Group +46 73 983 89 79

Odd Bolin, CFO +46 70 428 31 73

Kristina Cato, communications and IR manager +46 70 864 47 02

The Cybercom Group is an IT consultancy that offers global sourcing for local and international deals. The Group is a recognised supplier in telecom management, connected devices, Internet services, and security. Thanks to its extensive industry and operations experience, Cybercom offers strategic and technical expertise in telecom, industry, media, the public sector, retail, and banking and finance. Cybercom’s consultants operate around the world, and the company has offices in 10 countries. Cybercom was launched in 1995, and its share has been quoted on the NASDAQ OMX Nordic Exchange since 1999.

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