Enea interim report, January - March 2011

Enea interim report, January - March 2011

Significant increase in profit for the group and growth for the Software
business unit

The operating profit increased significantly in the first quarter of
2011 compared with the same period previous year. The group's operating
margin was 11.2 (6.3) percent and the profit before tax totaled SEK 21.3
(11.9) million.

Net sales fell by 1.0 percent in SEK but rose by 1.6 percent after
adjustments for currency effects. The Software business unit reported a
2.3 percent increase in net sales during the quarter with continued
improved profitability. The Consulting business unit saw net sales
decline with 2.7 percent while its profitability improved compared with
the same period the previous year.

Cash flow from the operations amounted to SEK 5.4 (4.1) million during
the quarter.

The full-year outlook for 2011 is unchanged. The company expects net
sales to increase compared with the previous year and profitability to
continue improving.

First quarter 2011 (first quarter previous year in brackets)

  · Net sales, SEK 184.5 (186.3) million
  · Growth -1.0 (-10.1)%
  · Growth, currency adjusted 1.6 (-6.2)%
  · Operating profit, SEK 20.6 (11.8) million
  · Operating margin 11.2 (6.3)%
  · Net profit after tax, SEK 15.1 (8.7) million
  · Earnings per share, SEK 0.87 (0.50)
  · Cash flow from operations, SEK 5.4 (4.1) million

Per Åkerberg, President and CEO comments:

“Enea had a good start to the year. Our operating profit has increased
significantly and we have also reported growth in local currencies. Our
main priority for the year is profitable growth.

Development in digital communication has led to a strong increase in the
number of connected devices. With new Internet services, e.g. streaming
video, more data is being sent in the networks.As a result, network
traffic is increasing exponentially, which in turn will generate demand
for the type of solutions that Enea has to offer. This development was
highlighted at the Mobile World Congress in February. The range of smart
phones and tablets is growing drastically and mobile operating systems
such as Android are spreading to other communication devices than
telephones. Multicore processors are no longer only available on the
infrastructure side but have also reached the consumer product market.
For Enea this has been noticeable in the number of new deals for
multicore operating systems. Multicore is one area that will be
instrumental in allowing us to reach our growth targets, so this
development is very good news indeed.

Software

The Software business unit experienced solid growth during the quarter,
reporting a growth of 2.3 percent in SEK and 4.6 percent after
adjustments for currency effects. Profitability continued to increase
and the operating margin was 16.9 percent. Both new license sales and
royalties saw stable growth during the quarter.

On the product side we have taken a strategically important step with
the launch of our improved Linux offering. Many of our customers use a
realtime system such as Enea OSE together with Linux and we need a share
of this business in order to achieve success in the long-term. I am
happy to report that our strategy was proved correct as we closed our
first Linux deal related to the improved offering during the quarter.

Our collaboration with the semiconductor manufacturer Freescale has been
intensified. During the quarter we took part in Freescale's partner
meetings and have conducted a number of joint marketing activities. This
collaboration is on the right track despite continuing to progress more
slowly than we initially planned.

Consulting

In the first quarter, the Consulting business unit's revenues fell by
2.7 percent in SEK but rose by 0.5 percent after currency adjustments.
The operating margin also climbed to 5.1 percent.

In the Swedish operation, demand has been good but we have had
difficulties maintaining the recruitment rate that we planned for. In
the North American operations, on the other hand, both the workforce and
revenues have increased after a number of new deals were concluded.

Demand for Enea's consultancy services has gradually returned, even in
the Öresund region where the state of the market has been difficult for
a long period. Enea has a good combination of competence in the area
under demand.

On a final note

Enea is in a strong financial position and our shareholders will now be
benefiting as the Annual General Meeting resolved upon a redemption
program at a value of SEK 5.00 per share.

Our assessment for 2011 is that net sales will increase compared with
the previous year and that profitability will continue to improve.”

The full report is published at
www.enea.com/investors (http://www.enea.com/investors)

 

For more information

Per Åkerberg, President & CEO
Phone: 46 8 50 71 40 00
Email: per.akerberg@enea.com (per.akerberg@enea.com)

Lars Kevsjö, CFO
Phone: +46 8 507 1 4000
E-mail: lars.kevsjo@enea.com (lars.kevsjo@enea.com)

Catharina Paulcén, VP Corporate Communications
Phone: 46 8 50 71 40 00
Email: catharina.paulcen@enea.com (catharina.paulcen@enea.com)