Operating profit up from SEK 35 million to SEK 55 million through stronger focus on Software and improved profitability in Distribution

Nocom year-end report for 2006

Nocom has continued to deliver year-on-year growth in both sales and profit. Software surpassed its profit targets and Distribution showed stable growth in earnings.

Software distributor IAR Systems, with its solid international position, was the top performer with growth of 22 percent and a doubling of operating profit. Northern, acquired during the spring, confirmed the huge potential of its Northern Storage Suite product and enjoyed brisk growth in sales and profit in pace with past investments.

Distribution has achieved strength and stability in its market mix, where Deltaco and Nocom Software made the greatest advances in 2006. The Distribution business area’s flagship company Deltaco has adapted its offering in a fiercely competitive market and succeeded in creating robust growth with a sustained operating margin. We see continued challenges ahead in the market for IT security, where the players are increasingly competing through logistics and price rather than products and expertise.

All business units generated positive cash flows, providing a strong net cash position with scope for increased investment.

“I am proud to be able to say that we increased our profit and sales for the fourth consecutive year. Our focus on Software has proven highly successful and generated growth in both sales and profit while at the same time building potential for the future,” says Stefan Ström, President and CEO of Nocom. “With several leading software products in an expansive market and a continued high level of ambition, we have a unique opportunity in our Distribution business,” adds Stefan Ström.

“Our strong earnings, market development and strategic focus will enable us to raise our sights in streamlining the Group’s business and portfolio,” says Stefan Skarin Chairman of Nocom.

Excerpts from the report:
• Sales rose to SEK 771.5 (635.6) million, of which SEK 229.0 (234.0) million in the fourth quarter.
• Operating profit was SEK 54.6 (34.8) million, of which SEK 19.5 (18.7) million in the fourth quarter.
• Operating margin was 7.1 (5.5) percent, of which 8.5 (8.0) percent in the fourth quarter.
• Cash flow from operating activities amounted to SEK 44.4 (7.4) million.
• Equity at December 31 2006 was SEK 592.3 (448.9) million.
• Equity per share at December 31 2006 was SEK 5.07 (4.50).
• Net cash increased by SEK 50 million to SEK 89.2 million.
• The Board proposes a total dividend of SEK 0.30 per share.

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