STOCKHOLM, Sweden, Feb. 20, 2002 (PRIMEZONE) -- Sigma AB (publ):
-- Profit before goodwill amortization (EBITA) and items affecting
comparability amounted to SEK 2.6 M (28.4) in the fourth quarter,
including provisions of SEK 7.8 M for the action plan.
-- Cash flow in the fourth quarter amounted to SEK 15.5 M and
SEK 4.7 M (neg: 25.2) for the full year.
-- Sigma ranked first in procurements of consulting services by the
Swedish Agency for Administrative Development.
-- The result for full-year 2001, before goodwill amortization and
items affecting comparability (EBITA), was a loss of SEK 8.1 M
(profit: 84.0), including provisions of SEK 11.2 M for the action
plan.
-- Nonrecurring write-downs of goodwill and intangible fixed assets
amounted to SEK 208.1 M (0).
-- Forecast for 2002, positive earnings after financial items.
(All comparable figures for 2000 are pro forma. EBITA is always
adjusted for items affecting comparability that pertain to listing
and demerger expenses, as well as amortization of goodwill and
write-downs of intangible fixed assets.)
Comments on Market Development
The market is characterized by restraint in new investments in the IT sector. As a result of concentration on upgrades of existing business and IT-systems, the market remains favorable for suppliers with in-depth operational skills and expertise in customer activities. We also note more stable demand, compared with the end of September.
Action Plan Implemented
At the close of 2001, the entire action plan was implemented and is expected to reduce total annual costs in 2002 by slightly more than SEK 80 M. About 150 persons were affected by the action plan, which reduced the workforce in 17 locations in Sweden, Norway, Denmark and the US. Costs for the action plan accounted for a substantial part of the decline in earnings exceeding SEK 90 M (EBITA), compared with 2000, and are not included in items affecting comparability. Operating earnings in the fourth quarter were charged with provisions of SEK 7.8 M for severance salary payments in 2002.
Full-Year 2001 - Sales and Earnings
Net sales rose 41% to SEK 1,405.4 M (998.2). Organic growth during the year amounted to 12% and acquisitions accounted for 29%. Adjusted for acquisitions from the Teleca Group in the first quarter, growth would have amounted to 34%.
Operating earnings (EBITA), adjusted for items affecting comparability, amounted to a loss of SEK 8.1 M (profit: 84.0), with a negative operating margin (EBITA) of 0.6% (positive: 8.4%). Excluding costs for the action plan, operating earnings would have amounted to a profit of SEK 3.1 M. The result after net financial items amounted to a loss SEK 294.1 M (profit: 50.1), including items affecting comparability of SEK 12.6 M in 2001 and nonrecurring write-downs totaling SEK 208.1 M. Operating earnings for the year were charged with substantial costs for the action plan. The Group also expensed all software and several computers in the amount of SEK 15.2 M, in accordance with Sigma's accounting principles.
Nonrecurring write-down of goodwill at year-end is based on a new valuation related to the weaker market at year-end 2001, and was made in accordance with a recommendation by the Swedish Financial Accounting Standards Council regarding current value calculations of future cash flow. The valuation also includes due consideration for the uncertainty surrounding cash flow in 2002. Goodwill arose primarily through acquisitions in 1999-2000 with share issue in the former Sigma Group, with marginal dilution. As a result of the nonrecurring write-downs, amortization of intangible assets in 2002 will be reduced by about SEK 23 M and is expected to total about SEK 34 M, compared with SEK 57 M in 2001.
Net Sales and Earnings in the Fourth Quarter of 2001
Net sales amounted to SEK 390.0 M (346.4), an increase of 13%.
Operating earnings before goodwill amortization (EBITA) in the fourth quarter amounted to SEK 2.6 M (28.4). Earnings during the quarter were charged with provisions of SEK 7.8 M for the action plan and amounted to SEK 10.4 M before the action plan provisions. Compared with the year- earlier period, the fourth quarter had one (1) less working day, which had a negative effect on earnings of about SEK 4 M.
Trends for Business Solutions were extremely strong during the fourth quarter, with positive EBITA earnings of SEK 19.9 M (9.0). IT Solutions showed a negative trend in the fourth quarter, with costs for the action plan accounting for most of the business area's loss during the quarter. Network & Wireless Solutions reported a loss of SEK 3.6 M (profit: 4.1) during the fourth quarter, including costs of SEK 1.8 M for action plan provisions. The result is a strong improvement compared earlier quarters in the year.
Examples of new assignments during the fourth quarter:
Forsmarks Power Group Development of an information portal
for the nuclear power plant in
Forsmark. (www.forsmark.com)
Upplands-Bro Network solution for Upplands-Bro
Municipality municipality, with a common network
for data, Internet and telephony.
Skanska Framework agreement that includes
technical IT development and technical
solutions for the Internet and
communications.
Anoto Development and implementation of
training programs based on the Anoto
concept, which is based on the
utilization of digital paper.
Cardo Rail Design, development and implementation
of intranet and extranet focused on
applications and development tools
from IT Factory. Operations and
support of the company's Domino
environment.
Elanders Delivery of back-up service for secure
copying of information
Swedish Office of Sigma ranked first in the Agencu for
Administrative Administrative Development's framework
Development procurements of IT-related services in
(Statskontoret) the areas of operational development
and strategy, project management,
system development, customer support,
operations and technology. Earlier in
the year, Sigma was also No. 1 for
framework procurements of network
products and services by the Agency
and Sweden's Defense Forces.
Telia Framework agreement that includes
project management, process
development and systems development.
Cerdo Bankpartner Upgrades and installation of Dynaplug,
a proprietary Web tool developed by
Sigma.
Falck Reporting solution for Falck's new
alarm operator systems
National Social Framework agreements for operational
Insurance Board (RFV), development and strategy, project
National Patent and management,system development, system
Registration Office management, computer operations and
(PRV), Central Student technology.
Grants Committee (CSN)
and the National
Government Employee
Pensions Board (SPV)
Most of the assignments described above are long-term in nature and cover several years.
Sigma's Focus
Sigma has been listed on the O-List of the Stockholm Stock Exchange since September 2001.
Sigma offers IT solutions and consulting services to development- intensive customers. With comprehensive operations expertise, entrepreneurial spirit and cutting-edge technical skills, we increase the competitiveness of our customers. Sigma establishes partnerships with customers to strengthen their long-term market positions and relations with their customers. The company's strategy is based on niche- and customer-oriented subsidiaries that offer a strong commitment and entrepreneurial know-how and operate both independently and in close cooperation with customer projects. Development within Sigma is focused on quality and profitability. In the beginning of 2002, Sigma had approximately 1,200 employees in seven countries.
Dividend
The dividend policy of the Board of Directors is that about 30% of earnings for the year shall be paid in dividends to the shareholders. For fiscal year 2001, the Board proposes that no dividend be paid.
Future Report Dates
- Three-month (Q1) 2002 interim report April 25, 2002 - Six-month (Q2) 2002 interim report August 21, 2002 - Nine-month (Q3) 2002 interim report October 29, 2002 - Year-end report (Q4) on operations in 2002 February 21, 2003
The Company's Annual Report will be distributed to shareholders at the end of March and will also be available on the company website www.sigma.se
The Annual General Meeting of Sigma AB will be held on April 25, beginning at 5:00 p.m., in the company's office building at Dockplatsen 1 in Malmo. The notice of the meeting will be sent to shareholders at the end of March 2002, with the printed version of the Annual Report.
The year-end financial report on operations in 2001 can be ordered from the Company or downloaded from Sigma's website: www.sigma.se
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www.waymaker.net/bitonline/2002/02/20/20020220BIT00270/bit0001.doc The full Year-End Report www.waymaker.net/bitonline/2002/02/20/20020220BIT00270/bit0001.pdf The full Year-End Report