Interim Report: January - June 2001

Interim Report: January - June 2001 Nocom AB (publ) * Turnover increased 37 percent to SEK 144.0 M (105.4). * Operating profit/loss before depreciation was SEK -45.4 M (- 17.5). * Profit/loss before tax was SEK -92.0 M (-24.2). * Nonrecurrent costs burdened profit/loss with approximately SEK 42 M (-) of which SEK 12 M was within operating profit/loss. * Goodwill write-down for the subsidiary Hera burdened profit/loss with SEK 20.8 M. * Cash flow from current operations was SEK -18.3 M (1.5). * Unappropriated liquid funds amounted to SEK 75.6 M as of June 30, 2001. CEO Change in June Stefan Skarin, vice president at Nocom AB and president of Nocom Communications, became Nocom's chief executive officer on June 11. Company Restructuring has Negative Affect on Profit/Loss The restructuring of the company, from a distributor of software to a more diversified IT provider, has taken longer than expected. Both the positive synergic effects from acquisitions and returns on investments were delayed due to, among other things, the current market situation. Positioning of Company within IT Solutions Nocom will focus its expertise on core operations within IT solutions. Positive Development for Tradevision Through a number of significant orders, collaborations and product launches, Tradevision has continued to show strong development. During the period, the company has established itself in Norway, Finland, Germany and the US. Important Business during Second Quarter § Utfors: General agreement for consulting services within, among other areas, strategy, project management and system development. § Torget: Expansion of previous collaboration, primarily within content management § A major contract for host computer access was signed in June. The order is worth approximately SEK 3.5 M. § Birka Energi: A contract worth SEK 3.2 M for document management. § Report from the CEO The market trend has generally been one of wait-and-see, characterized by distinct caution in IT investments. Nocom has shown growth, 37 percent during the first half of 2001, in spite of this, partly due to an increase in transaction-based revenues in Tradevision, and partly due to the stable customer platform the company has established during 16 years of operation, which has primarily resulted in an increase in software revenues with related services. In June, the company launched Nocom e-channel center, thus positioning the company well for further growth. Company Restructuring Has Negative Affect on Profit/Loss The restructuring of the company from a distributor of software to a more diversified IT provider has taken longer than expected. Because of the changed market situation, the positive synergic effects from acquisitions and returns on investments have been delayed. Work entails a restructuring of sales resources, expertise development and integration of the operational sectors for consulting, software and other services. The changeover has caused increased costs in administration, a short-term drop in added value per employee within the sales force and lower degrees of utilization in consulting and service operations. Positioning of Company for IT Solutions Nocom will focus its expertise on core operations within IT solutions. For the past few years, the company has invested in expertise development. The product portfolio is now becoming more distinct and focused to quickly enable profitability for the company. This will be achieved in several steps over the coming two or three quarters. Streamlining the company also entails a number of cost reductions for the infrastructure, and through increased efficiency, within administration and sales as well. Investments will be made in marketing and sales. The company foresees no additional needs for acquisitions or investments in core operations. Positive Development for Tradevision Through a number of key orders, collaborations, product launches and set- ups abroad, Tradevision has continued to show strong development. Outlook for Second Half of the Year1 Through conscientious establishment of service operations, Nocom now has a good market position. The outlook for the future is estimated to be good but depends on continued trends in the IT market, which are presently difficult to foresee. The company expects to achieve profitability before goodwill during the next two to three quarters, depending on the effects of repositioning the company and of streamlining operations. Tradevision will continue to invest in market and product development during the second half of the year. No external financing should be needed to implement the present plans. 1) Previous forecasts for profitability before goodwill depreciation during the fourth quarter of 2001 have thus been partially revised. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2001/08/17/20010817BIT00100/bit0002.doc The full report http://www.waymaker.net/bitonline/2001/08/17/20010817BIT00100/bit0002.pdf The full report