Interim report January - June 2011

Interim report January - June 2011

April - June

  · Sales reached SEK 384.1 million (387.3)

  · EBITDA totalled SEK -22.4 million (18.7)

  · EBITDA margin of -5.8% (4.8)

  · EBIT totalled SEK -166.9 million (6.2)

  · EBIT margin of -43.5% (1.6)

  · EPS of SEK -4.49 (-0.12)

  · Goodwill write-down of SEK 125 million and
brand value write-down of SEK 10 million

  · Restructuring costs of SEK 27.2 million

  · Completed restructuring expected to generate annual
savings of SEK 20 million

January - June

  · Sales reached SEK 766.1 million (797.4)

  · EBITDA totalled SEK 7.2 million (40.3)

  · EBITDA margin of 0.9% (5.1)

  · EBIT totalled SEK -164.2 million (14.9)

  · EBIT margin of -21.4% (1.9)

  · EPS of SEK -4.51 (-0.01)

  · Total write-down of intangible assets in H1 of
SEK 151 million (SEK 125 million goodwill, SEK 10 million
brand value, SEK 16 million customer relationships)

  · Restructuring costs of SEK 27.2 million

  · Completed restructuring expected to generate annual
savings of SEK 20 million

A more efficient cost structure for increased profitability

Second quarter sales amounted to SEK 384.1 million (387.3) with an
operating EBITDA of SEK -22.4 million (18.7), giving a margin of -5.8%
(4.8). That is a decline from last year with which we are not satisfied.
A non-recurring charge of SEK 27.2 million and write-downs in goodwill
and brand value of SEK 135 million affected earnings. The second quarter
had initially a weak start due to reduced utilisation. We have also
written down projects, primarily in Cybercom Sweden. Earnings improved
toward the quarter's second half, but we were not able to fully
compensate for the weak start.

As previously announced, we are focusing on a major reorganisation of
the consulting business in Finland in response to market changes,
primarily in the telecom field. We began shifting chiefly toward
industry, media, and the public sector where we see stronger and more
stable demand. As part of this shift, we made cuts to our Finnish
operation, including its associated offices in China and Romania. At the
same time, we continue to optimise our structure and reduce overall
costs by adapting administration of our Finnish and Swedish operations,
since we can take advantage of synergies in our new Nordic organisation.
Implemented measures resulted in non-recurring charges of SEK 27.2
million in the second quarter but are expected to give annual savings of
SEK 20 million and establish conditions for a gradual earnings increase
by the third quarter. The changes in Finland also led to intangible
asset write-downs of SEK 135 million in the quarter.

Besides the major action programme that influenced the second quarter,
we noted positive developments in Cybercom's Polish operation, where we
increased both global sourcing and local business. We also had positive
net growth in number of employees in Sweden during the quarter, and we
see good growth in our Swedish security business, where we may well
broaden our customer base in the public and private sectors. In
addition, we closed the quarter by winning an important framework
agreement for IT services from the Finnish government and its
authorities, which is a breakthrough in the Finnish public sector that
is in line with our strategy.

I have appointed a broader and more business-oriented management team to
drive Cybercom's development toward growth and improved profitability.
We are now prioritising a stronger presence in the Nordic home markets
and developing an international delivery capacity that over time will
focus on fewer and larger international units. Through the measures we
have implemented, it is my belief that we are dealing well with the
situation in Finland. By continuing to refine our operations in Sweden
and Finland toward our offerings in telecom management, connected
devices, Internet services, and security, and organising both countries
into national divisions, we create synergies and a more focused
operation while reducing administration to better suit our new Group
structure.

With continued focus on profitability, we will keep optimising our
structure and lowering our overall costs. We are building a stronger
Cybercom designed for long-term business.

Stockholm, 15 July 2011

Patrik Boman

President and CEO

 

For more information, please contact:

Patrik Boman, president and CEO of the Cybercom Group +46 73 983 89 79

Odd Bolin, CFO +46 70 428 31 73

Kristina Cato, communications and IR manager +46 70 864 47 02