Year-end Report 2001

Year-end Report 2001 based on audited accounts for Nocom AB (publ) Corporate identity number 556400-7200 Year 2001 · Turnover increased by 21 percent to SEK 280.4 M (232.2). · Operating profit/loss before depreciation was SEK -75.9 M (- 45.9). · Net income after financial items amounted to SEK -188.0 M (- 64.9), of which approximately SEK 93 M were nonrecurring costs according to the following: - Goodwill write-downs, SEK 45.2 M - Capital losses, SEK 22.0 M - Corrective measures program, SEK 17.0 M - Miscellaneous, SEK 9.0 M · Cash flow from current operations was SEK -41.6 M (-47.2). · Unappropriated liquid funds amounted to SEK 62.9 M as of December 31, 2001. · Fourth Quarter, 2001 · Turnover increased by 3 percent to SEK 79.1 M (76.9). · Operating profit/loss before depreciations was SEK -17.1 M (- 22.3). · Net income after financial items amounted to SEK -67.9 M (- 29.1), of which approximatelySEK 44 M were nonrecurring costs according to the following: - Goodwill write-downs, SEK 17.7 M - Capital losses, SEK 22.0 M - Corrective measures program, SEK 4.2 M · Cash flow from current operations was SEK 9.9 M (-17.4). CEO Change in June Stefan Skarin, formerly vice president of Nocom AB and president of Nocom Communications, became Nocom's chief executive officer on June 11. Positioning and Streamlining of Operations During the second half of 2001, the company positioned for concentration on IT solutions. Among other things, this has entailed that the subsidiaries Hera and Tradevision were sold during December, and that operations in Norway were restructured. Corrective Measures Program Gains Full Effect in 2002 Cost-savings and the corrective measures program that were initiated during the second half of the year have contributed to improved earnings and positive cash flow during the fourth quarter, and are expected to gain further impact during the year 2002. Good Liquidity Provides Increased Freedom of Action With positive cash flow during the fourth quarter and good liquidity, the company does not foresee any additional financing needs with the present plans. Report from the CEO During the fourth quarter, Nocom reported a continued improvement in net income for core operations, but net income was burdened with costs related to the sales of Hera AB and Tradevision AB. Both of these companies reported negative net income, which burdened the group's operating profit/loss for the fourth quarter. The market situation has continued to be one of caution, which makes the earnings trend difficult to predict during the first part of 2002. The company continued with cost-savings and a corrective measures program during the fourth quarter as a part of the focusing on IT solutions and profitability. Among other things, operations in Norway were restructured, which led to six persons leaving the company. The corrective measures program burdened the quarter with about SEK 4.2 M in core operations. A large portion of the support and maintenance agreements, which are expected to represent approximately 80 percent of the company's service revenues, were renewed during the fourth quarter and allocated over a running 12-month period. Development of these revenues during the period was favorable. The degree of utilization for consulting and service operation continued to be low . Positive Cash Flow in Fourth Quarter Nocom reported a positive cash flow from current operations during the fourth quarter with SEK 9.9 M (-17.4). The sale of Tradevision created a positive cash flow from investment operations as well, with SEK 18.3 M (-28.8). The company reported interest-bearing funds of SEK 47.2 M as of December 31, 2001. Unappropriated liquid funds amounted to SEK 62.9 M. Major Reduction in Costs Streamlining and the corrective measures program reduced the company's costs (personnel, operating and marketing costs) considerably at the close of 2001. Costs are thus 33 percent lower than two years ago (2000), when operations were comparable in size. Costs of a nonrecurring nature, due to the corrective measures program, were SEK 17 M during the year. The implemented streamlining of operations and good liquidity provide the company with increased freedom of action. Nocom Sells Hera and Tradevision A part of our focusing on IT solutions were the sales of the subsidiaries Hera AB and Tradevision AB in December. Tradevision was acquired by the Canadian company Descartes, a global leader in e- logistics. At the same time, Nocom and Descartes entered a long-term collaborative agreement relating to integration and implementation of Descartes' solutions at Nocom e-channel center. The sales entailed that the quarter was burdened by SEK 22 M in capital loss. Outlook for the Future Nocom expects continued improvement in net income during the first quarter of 2002, but the extent is dependent on market developments. The company will present long-term goals for earnings in the next interim report on April 29, 2002. With the present plans, the company anticipates no needs for investments or supplementary financing. Nocom's Fiscal Year, 2001 Turnover and Net Income*) Total turnover increased by 21 (25) percent during the year. Nocom Communications increased turnover by 7 (25) percent. The business unit Nocom Travelutions, which began operations during the first quarter of 2000, billed for SEK 8.9 M (2.4). Tradevision was added in August 2000, which makes a comparison irrelevant, billed for SEK 46.7 M (15.8) The portion based on contract- and transaction-based income was SEK 135.5 M (99.2), which corresponds to 48 (39) percent of total turnover. Turnover per business unit 2001 2000 2001 2000 SEK M Full year Full year Oct-Dec Oct-Dec Nocom Communications 1) 230.1 215.7 67.1 65.2 Nocom Travelutions 8.9 2.4 1.5 1.1 Tradevision 46.7 15.8 11.2 11.1 Minus group turnover -5.3 -1.7 -0.7 -0.5 Total 280.4 232.2 79.1 76.9 1) Comparative figures adjusted to reflect revised accounting principles. Growth during the year is primarily due to service operations, for which operations at Tradevision represent the majority. Software operations and the segment within service operations that concerns yearly support and program service agreements, however, showed growth of 10, respectively, 20 percent. Consulting operations, because of low degrees of utilization and associated streamlining measures, have reduced in scope. Turnover per business unit 2001 2000 2001 2000 SEK M Full year Full year Oct-Dec Oct-Dec Software 88.4 80.0 34.8 29.6 Consulting 47.3 53.2 7.8 17.8 Services 1) 150.0 100.7 37.2 30.0 Minus group turnover -5.3 -1.7 -0.7 -0.5 Total 280.4 232.2 79.1 76.9 1) Comparative figures adjusted to reflect revised accounting principles. Net income before depreciations was burdened with nonrecurrent restructuring expenses of approximately SEK 17 M, which have primarily burdened earnings for the first half of the year. Net income has also been burdened by goodwill write-downs related to Hera with SEK 20.8 M, Travelutions with SEK 17.2 M and consulting operations at Nocom Communications with SEK 7.2 M. Write-downs for Nocom Communications, and SEK 1.8 M of the write-downs for Travelutions, pertain to adjustment of the reported value in goodwill to an amortization period of five years. In conjunction with the sales in December of Hera and Tradevision, earnings were burdened with SEK 22.0 M in capital losses. Net income from financial investments includes depreciations of SEK 7.0 M for Pharma Interactive CGS AB. *) Figures pertain to the group unless otherwise noted. Operating profit/loss and net income after financial items 2001 2000 2001 2000 SEK M Full year Full year Oct-Dec Oct-Dec Nocom Communications 1) -46.4 -31.0 -8.2 -10.6 Nocom Travelutions -5.1 -5.8 -1.3 -2.9 Tradevision -21.5 -8.8 -7.0 -8.5 Shares in associate companies' -2.9 -0.3 -0.6 -0.3 net income Operating profit/loss before -75.9 -45.9 -17.1 -22.3 write-offs Depreciation (tangible assets) -25.2 -15.3 -6.8 -5.3 Amortization (intangible -14.6 -8.1 -3.4 -2.9 assets) Write-down (intangible assets) -45.2 - -17.7 - Capital losses, sales of -22.0 - -22.0 - subsidiaries Profit/loss from financial -5.1 4.4 -0.9 1.4 investments Net income/loss after financial -188.0 -64.9 -67.9 -29.1 items 1) Comparative figures adjusted to reflect revised accounting principles. Nocom Communications The total turnover of SEK 230.1 M (215.7) for Nocom Communications during the year was distributed as follows: software, SEK 88.4 M (80.0); consulting services, SEK 38.4 M (50.8); and other services, SEK 103.3 M (84.9). The year's profit/loss before depreciations of SEK -46.4 M (-31.0) have to a great extent been influenced by the streamlining of operations, which during the fourth quarter, can be considered as accomplished with the sale of Hera and the restructuring of our operations in Norway. These measures have burdened earnings before depreciations with about SEK 4.2 M and with a capital loss of about SEK 11 M for the fourth quarter. The investments completed during the year in e-channel center, with relocation, quality improvements and capacity expansion has created a base for future growth. The investments have burdened the year's earnings with about SEK 14 M. The earnings trend during the fourth quarter was position without, however, being profitable. Nocom Travelutions During the autumn, operations were restructured and oriented to management consultation in the travel sector as based on the operations and expertise gained by Travelutions through the acquisition of Aerohosting AB. The purpose of restructuring is to quickly achieve profitability. Tradevision Turnover for the year amounted to SEK 46.7 M (15.8)1) and net income before depreciations was SEK -21.5 M (-8.8)1). In December 2001, our 70 percent ownership in Tradevision was sold for SEK 27 M, which entailed that net income was burdened with a capital loss of about SEK 11 M. In conjunction with Nocom's acquisition of Tradevision from SAS, there was a potential additional purchase price based on future earnings. In view of Tradevision's negative earnings trend, the board of directors previously concluded that no supplementary purchase price would be paid. This conclusion stands. Financial Position The group's equity/assets ratio was 51 (68) percent. Available liquid assets, including the unutilized portion of the overdraft facility totaled SEK 62.9 M as of December 31, 2001. All interest-bearing liabilities of SEK 12.4 M (16.4) pertain to financial leasing. 1) Comparative figures pertain to 4.5 months. Cash Flow Cash flow from current operations was SEK -41.6 M (-47.2) for the year and SEK 9.9 M (-17.4) for the fourth quarter. Cash flow during the year has been affected positively by improvements in operating capital of SEK 30.8 M (10.3). During the fourth quarter, the subsidiaries Hera and Tradevision were sold. This has affected the cash flow from investment operations positively with SEK 22.3 M. For the full year, cash flow from investment operations amounted to SEK -31.5 M (-72.5), of which SEK 18.3 M (-28.8) was for the fourth quarter. Investments Investments of SEK 30.6 M (139.2) have been made during the year. During the fourth quarter, net investments amounted to SEK -29.9 M as a result of the sales of Hera and Tradevision. The year's investments in tangible assets amounted to SEK 15.1 M (39.3). Other investments are primarily related to outstanding minority shares (30 percent) in Nocom Travelutions AB (previously Nocom Mobile Commerce Solutions AB) and all shares in Aerohosting AB. Personnel The number of employees at the end of the period was 155 (241), distributed as follows: Communications, 145 (214); Tradevision, - (18); and Travelutions, 8 (5). Group functions have 2 (4) positions. Parent Company The parent company's turnover for the period amounted to SEK 68.2 M (56.1). Profit/loss after financial items was SEK -117.1 M (-48.9). Investments in tangible assets amounted to SEK 5.7 M (4.6). Other investments amounted to, as a consequence of selling Hera and Tradevision, SEK -63.5 M (117.3) Available liquid assets, including short-term placements and the unutilized portion of the overdraft facility totaled SEK 50.5 M as of December 31, 2001. The number of employees at the parent company was 54 (58) at the close of the period. Nocom Shares Nocom's B shares are quoted on the Stockholm Stock Exchange O-list. The share price has varied during the year 2001 from a low of SEK 1.95 to a high of SEK 12.00. The share price was SEK 2.95 as of December 31. Nocom's market value as of December 31, 2001 was SEK 83 M. Change in total number A series B series Total of shares, 2001 Total shares, December 3,718,130 22,933,250 26,651,380 31, 2000 Redeemed warrants 27,500 27,500 Directed new share 609,624 609,624 issue, acquisition of Cyberink Directed new share 1,000,000 1,000,000 issue, acquisition of Aerohosting Total shares, 2001-12- 3,718,130 24,570,374 28,288,504 31 Dividends The board of director's dividend policy is that dividends shall be equal to approximately 30 percent of profits after taxes. For the fiscal year 2001, the board proposes no dividends. Annual General Meeting The Annual General Meeting will be held on Monday, April 29 at 5:00 PM at the company's offices in Kristallen, Axel Johanssons gata 4-6, Uppsala, Sweden. Nocom's complete annual report will be available at the company's offices in Kristallen, Axel Johanssons gata 4-6, Uppsala, Sweden. The report will be distributed to shareholders. Dates for Financial Reports Annual Report 2001 March 2002 Interim Report January-March 2002 April 29, 2002 Interim Report January-June 2002 August 27, 2002 Interim Report January-September 2002 November 5, 2002 Uppsala, Sweden, February 7, 2002 The Board of Directors This report is available in Swedish and English. The English version is virtually the same as the Swedish report. If deviations between the Swedish and the English version occur, the Swedish version should apply. For further information, please contact: Stefan Skarin, CEO, +46-(0)708-65 10 05 Stefan Ström, CFO, +46-(0)708-65 10 68 Nocom AB (publ), corporate identity number 556400-7200 Kristallen, SE-754 51 Uppsala, Sweden, phone +46(0)18-65 55 00, fax +46(0)18-65 55 55, www.nocom.se 1) 3.86. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/02/07/20020207BIT00120/bit0002.doc The full year-end report http://www.waymaker.net/bitonline/2002/02/07/20020207BIT00120/bit0002.pdf The full year-end report http://www.waymaker.net/bitonline/2002/02/07/20020207BIT00120/bit0002