Interim Report January-September 2000

Interim Report January-September 2000 Continued strong growth Turnover increased 31 percent to SEK 151.4 million (115.4). The number of employees at the end of the period was 225 (138), an increase of 63 percent. The strategic build-up of services gave a strong sales increase in deployment services and consulting, to SEK 50.2 million (7.5), corresponding to 33 (7) percent of total sales. Organic growth of almost 35 percent within deployment services and consulting during the third quarter. Increased volumes of transaction-based business in accordance with future income model. Examples of this are deals with Deutsche Post of Germany, Phoenix International Freight Services Ltd in the US and Asia Pacific Cargo of Hong Kong. The major part of the revenue from these assignments will be realized in the first quarter of 2001 onwards. Focus on mobile Internet generates increased business During the third quarter, Nocom's investments in the mobile Internet resulted in new, profitable business agreements with Skandiabanken and Braathens, among others. At the beginning of October, Nocom and Europolitan formed a joint company, MR Mobile Relations AB, to focus on sales of mobile intranet and extranet solutions. Nocom's software platform for the mobile Internet, Mobilectrl@, was adapted for the strategically important financial and travel sectors with Mobilectrl Finance@ and Mobilectrl Travel@. Issue of new shares ensures continued expansion The issue of new shares in February provided Nocom with SEK 230 million. The strong financial position, combined with the build-up of expertise, gives Nocom the necessary prerequisites of taking full advantage of the present market opportunities. Mobile investments and expansion burdened earnings Operating profit/loss before depreciation was SEK -25.3 million (4.9). Profit/loss before tax was SEK -37.5 million (1.9). The substantial investments in technology, market and organization, approximately SEK 30 million, burdened profits according to plan. Acquisitions resulted in leading position within e-logistics and supplemented Nocom's complete offering On August 14, 2000, acquisition from SAS was finalized for 70 percent of TradeVision AB, a global leader in e-logistics. During the first six months of the year, the following companies were acquired: Hera AB in Uppsala, a leading agency for industrial market communication; Interactive-TM AB in Gothenburg; a specialist company in imaging and new media; and Cyberink Information Systems AB in Stockholm, an Internet consulting company. Nocom's operations and market Nocom's business concept is to offer companies and organizations solutions for electronic trade over the Internet and mobile network based on integrated expertise in market communication, business processes and technology. Nocom assumes long-term responsibility for customers' projects, systems and business utilization by offering market communication solutions, business development consultation, software and secure deployment solutions. Nocom - Provider of Solutions Since its founding in 1985 Nocom has introduced and represented software solutions based on innovative technology and new perspectives within the IT sector. Over the years, Nocom has built up long-term relationships with thousands of Nordic companies and provided products and services for their operations outside of the Nordic countries as well. Nocom was initially a vendor of software, but since 1999, Nocom has increasingly focused on becoming a strategic partner for the company's customers, both by providing leading-edge expertise and by offering a wider range of services and products. In line with investments in services, Nocom's solutions with leading software applications have been complemented with a consulting organization and an organization for secure deployment solutions for fixed and mobile networks. Acquisitions result in leading position within e-logistics and strengthen Nocom's overall offerings. The strategic establishment of business development services and deployment services complemented with software has continued during the year 2000, both organically and through acquisitions. In August 2000, Nocom acquired 70 percent of TradeVision AB from SAS, which is retaining 30 percent of the company. TradeVision has 22 employees and is one of the world's leading companies in e-logistics solutions. Nocom's objective with the acquisition is to take a leading position in the growing e-logistics market. This investment also pushes forward the international launch of TradeVision WCM, a mobile logistics solution. The acquisition of TradeVision entails a joint international effort in sales and marketing, as well as the establishment of a global infrastructure for the Nocom Group's products and services. With the consolidation of TradeVision, Nocom gains immediate access to an industry that is dependent on both mobile solutions and the rapid and secure flow of information. For the transportation industry, e-solutions provide access to business-critical information in real-time. Nocom acquired its shares in TradeVision for SEK 12 million cash and provided the company with an additional SEK 30 million through a new share issue in conjunction with the acquisition. TradeVision was consolidated into the Nocom Group on August 14, 2000. During the first half of the year, several acquisitions were made: The company acquired Hera AB with 20 employees and offices in Uppsala. Hera is one of the country's oldest and most well-known agencies for industrial market communication. Through Hera, the Nocom Group gains experience and expertise primarily within market analysis and market communication. Hera was consolidated on March 15, 2000. Interactive-TM AB, with 15 employees and offices in Gothenburg. The company, which has changed its name to Nocom Interactive AB, specializes in imaging and new media. Through this acquisition, Nocom gains advanced expertise in interactive media. The acquisition is also an important first step in Nocom's focus on the Gothenburg region. Interactive was consolidated on April 1, 2000. Cyberink Information Systems AB in Stockholm, an Internet consulting company with 10 employees and specializing in parallel publishing solutions with Web and mobile networks as its main channels, was acquired. The company was consolidated on June 30, 2000. Major investments in the mobile Internet The market for mobile Internet solutions is expected to grow strongly during the next few years. Nocom's focus on developing solutions for the mobile Internet, which began in 1999, has continued and increased during 2000. Companies within the financial sector, and transportation and travel industries were early to adopt the new mobile technology for their business-critical applications. Other sectors are expected to begin using this technology in the immediate future. The first step in the development of the mobile Internet was WAP (Wireless Application Protocol) technology, which was introduced in 1999. Within the mobile Internet and WAP sectors, Nocom collaborates with several leading suppliers, including Ericsson, Hewlett-Packard, Sun and, in particular, Nokia. Together with Europolitan, Nocom has introduced WAP Direct , a quick and secure operating service for mobile applications. On October 3, 2000, a joint company was formed, MR Mobile Relations AB, for the marketing and sales of mobile Internet services for businesses. Mobile Relations combines the mobile phone operator Europolitan's considerable resources with Nocom's solid knowledge of creating effective intranet and extranet solutions. Nocom's mobile solutions have now been in commercial use for over a year and considerable experience has been gained in the area. Because of this, Nocom has received an increasing number of strategic assignments in business development, project management, solution development, and in the installation and deployment of mobile services. Nocom has received assignments from SEB Enskilda Banken, Scandic Hotels, Skandiabanken, Braathens and TV4, among others. Experience from these assignments has enabled the development of a standard platform for the mobile Internet, Mobilectrl , which was launched in the Nordic countries in September prior to worldwide release. Transaction-based business, future income model Nocom was early to see that customers' investment models for various forms of applications would change. Customers are expected to be making software investments based on actual usage rather buying licenses for all users- pay-per-use instead of pay-per-user. For Nocom, this means that income (primarily from software but also for services) will increase at the same rate as customers-usage. Over a period of time, this will provide secure and steady income, and create long-term customer relationships. Furthermore, Nocom can enhance customers' usage by improving service values. This income model is already in use within the transportation and travel sectors, and several of Nocom's assignments during the period have taken this form. Expansion and long-term goals Prospects for the further expansion of operations in the Nordic market are seen as favorable. Nocom also intends to expand internationally. International expansion is planned within Nocom's prioritized market segments- e-logistics, travel and finance. This strategy is based on development and opportunities that Nocom sees in e-business via fixed and mobile networks. Nocom's expansion will be through both organic growth and strategic acquisitions. The new share issue in February provided the necessary financial conditions for securing the planned expansion of operations. Within consulting and deployment services with integrated expertise in market communication, business processes and technology, Nocom's goal is annual growth of 50 to 100 percent. The goal for earnings in these sectors is to achieve a sustainable operating profit margin, averaging 12 percent over a business cycle, within a period of two to three years. 1For software activities, which include ASP services, the long-term goal is to achieve annual growth of at least 20 percent and an operating profit margin of 10 percent. It is expected that these goals can be achieved within two years. ------------------------------------------------------------ This information was brought to you by BIT The following files are available for download: The full report The full report