Comments from the CEO

Comments from the CEO

2015 was an outstanding year!

It was a year of meetings, relationships, opportunities, challenges, new products and record-breaking sales and profit.

We anticipated that 2015 would be a year when the market would present us with exciting new opportunities. Looking back, we can see that this is exactly what happened. Embedded systems, which we have devoted ourselves to for over 30 years, are now found in more places and products than ever before. In 2015, the consolidation of suppliers that has been under way for several years continued, and you don’t need a crystal ball developed by IAR Systems to see that it will continue for the next couple of years. We are also part of the Internet of Things, the largest transformation of the IT industry in decades, and this makes us proud of our journey so far. We promised high ambition!

We’ve continued the successful improvement of our product portfolio, adding yet another add-on product. C-STAT, which complements our code analysis offering, is a bigger success than its predecessor C-RUN, which came out in 2014. Our analysis products are well suited to the growing market for safetycertified products. This is not only because there are now more formal requirements for code; the importance of code quality is also increasing, along with the complexity of the embedded systems being developed today. Our message and offering in the field are growing rapidly, and our technology has put us in an extremely strong position among current digital products.

Sales in our regions are better than they havebeen for several years. This demand is mainly attributable to our add-on products, but we are also seeing increased demand for support and maintenance services. Our customers continued to grow and diversify their performance at the global level, resulting in a higher number of global enterprise agreements. The automotive and medical technology industries are showing the fastest growth rates. When it comes to customers’ product requirements, low energy consumption continues to be one of their top objectives. This is one of the factors driving our customers to continuously refine their products by incorporating our technology, thereby gaining superior performance and global support.

It was clear in 2015 that our relationships are important to us. Our relationship with Renesas, which has endured for more than 25 years, has grown into a major future opportunity – not only because we are integrating our technologies and sharing business models, but also because we are creating opportunities in new markets such as the Internet of Things. Together we’ve created a platform of technologies to guarantee the performance and quality of customers’ future innovations, in a shorter time and with less complexity.

We are proud of 2015! We’ve been in the industry longer than most, and this experience gives us confidence while also serving as a source of inspiration for the future. 2016 will be about continued interaction, relationships and the refinement of our products. This also most likely means new market opportunities, more consolidations and a changing operating environment. We are now entering 2016 with a strong belief in the future, a continued ambition and a desire to show our customers, partners and shareholders that we are more prepared than ever.

Stockholm, March 17, 2016

Stefan Skarin CEO, IAR Systems Group AB

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