GOTHENBURG, Sweden, Oct. 29, 2002 (PRIMEZONE) -- Sigma (Stockholm:SIGMb):
Operating profit (EBITA) in third quarter
-- Q3 profit (EBITA) amounted to SEK 1.0 M (loss 24.4). -- Net indebtedness reduced by SEK 42.6 M during Q3. -- Sales successes for Sigma's voice-enabled IT system and the advantum(R) document system. -- Nine-month loss (EBITA) amounted to SEK 10.5 M (loss: 10.6), with a loss after financial items of SEK 127.2 M (loss: 71.6), which includes a reduction of goodwill by a total of SEK 113.7 M (41.1). -- Network and Wireless business area divested. -- The forecast of a profit (EBITA) for the full year is retained.
Comments on market trends
Sigma sees continued strong demand for the development of existing business systems. Customer investments in IT solutions are now focused on efficiency and cost-saving measures in contrast to previously when there was greater emphasis on revenue-generating solutions. As in the past, there are considerable regional differences and considerable competition for all projects. Several customer companies postponed decisions until after the vacation period, which resulted in lower capacity utilization within the IT Solutions business area during the beginning of the year.
Demand is substantial for Sigma's new SAY IT concept for voice-enabled IT systems and for the advantum(R) document management system. Orders were received from such customers as AstraZeneca, the municipality of Sundsvall and Locum for advantum(R) and the Port of Gothenburg, Vasttrafik and Schenker for SAY IT.
Major projects with assignments primarily in the areas of information design and management of IT applications are increasing. These areas are included in the packaged service Functional Sourcing that was launched earlier this year.
Sigma is also focusing its efforts on integration and rationalization projects in business support systems, which mean that we have more than 220 employees in this area and foresee continued expansion.
Sales by market segment 2002 % 2001 % Public administration and health care 25 16 Industry 18 14 Telecom 16 18 Commerce 15 12 Banking and Insurance 8 8 IT 5 10 Other 13 22
Net sales and earnings in third quarter
Net sales amounted to SEK 249.0 M (294.2). Profit before goodwill amortization (EBITA) amounted to SEK 1.0 M (loss: 24.3). Compared with the same quarter during the preceding year, costs were reduced by SEK 70 M or 22%.
Earnings during the third quarter were also affected by non-recurring costs of SEK 61.2 M, primarily attributable to the divestment, but also to discontinuation of operations. A loss after financial items of SEK 71.7 M (loss: 42.4) was reported. The Business Solutions business area reported a profit (EBITA) of SEK 3.7 M (1.1) during the quarter. Demand was strong in the segments market communications and business systems, while strategic consulting was weak.
The IT Solutions business area reported a significantly better quarterly result this year with a loss of SEK 0.2 M, to be compared with a loss of SEK 14.6 M in the year-earlier quarter. This is also the business area in which most personnel reductions were implemented and in which several companies were sold or shut down.
The Network & Wireless Solutions business area reported a loss (EBITA) of SEK 0.9 M, which was an improvement over the year-earlier quarter (loss: 10.5). All operations within this business area have been discontinued.
Sales and earnings during the first nine months
Sales during the first nine months of the year amounted to SEK 881.5 M (1,015.4), a decline of SEK 134 M compared with the preceding year. Operating expenses declined by a corresponding amount during the period. The effect of measures implemented during the year was already evident during the third quarter. The loss before goodwill amortization (EBITA) amounted to SEK 10.5 M (loss: 10.6). Earnings were reduced by costs for personnel reductions that were implemented during the year and which are not attributable to a total shut-down of operations. In accordance with Sigma's principles, the company also expensed investments amounting to SEK 6.6 M for computers and other equipment with an economic lifetime of less than three years.
Units divested or closed down during the period reported a loss (EBITA) of SEK 31.7 M. Units that will be retained within the Group at the beginning of 2003 reported a profit of SEK 17.8 M for the first nine months. In addition to the loss in discontinued units, costs amounting to SEK 81.5 M were charged against Group earnings. These non-recurring costs are reported as items affecting comparability.
The loss from financial investments amounted to SEK 10.5 M (loss: 7.3). Interest expenses and other charges amounted to SEK 10.0 M (expense: 7.6), while exchange-rate differences amounted to SEK 0.0 M (income: 1.9) and the loss on investments in associated companies was SEK 0.5 M (loss: 1.6).
The loss after financial items amounted to SEK 127.2 M (loss: 71.6).
Accounting principles
The same accounting principles and methods of calculation were used as in the latest annual report. This interim report was prepared in accordance with the recommendations and opinions issued by the Swedish Financial Accounting Standards Council.
Forthcoming reporting dates:
- Year-end report, 12 months (Q4) 2002 February 21, 2003
Gothenburg, October 29, 2002
Sigma AB (publ)
(Corporate registration no. 556347-5440)
Sune Nilsson President
The Company's auditors have not reviewed this report. The report can be ordered from the Company of downloaded from Sigma's website at: www.sigma.se
This document is essentially a translation of the Swedish Interim Report. In the event of any differences between this translation and the original Swedish document, the Swedish document shall govern.
For further information, contact:
Sune Nilsson, President Sigma AB (publ) tel. +46-31-335 67 15, cell phone: +46-703-79 15 28 e-mail: sune.nilsson@sigma.se, or Lars Sundqvist, Chief Financial Officer Sigma AB (publ) tel. +46-31-335 67 16, cell phone +46-703-79 22 02 e-mail: lars.sundqvist@sigma.se
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