Ementor AB

EME - Results 3rd quarter 2004

Pressmeddelande   •   Okt 20, 2004 08:48 CEST

EBITA mnok 2.5. Revenues mnok 899. Strong growth in Outsourcing, 24% y-o-y. Strong growth in Business Solutions, 23% y-o-y. Improved customer satisfaction. Share issue. Change of CEO in 2005.

Revenues amounted to mnok 899 in the third quarter, down 3.7% from the corresponding period last year and down 17.0% compared to second quarter 2004. Adjusted for the drop in HW product sales related to the disposal of the HW product sales unit in Denmark, the volume has increased in third quarter year-on-year. The positive development on recurring revenues from Services continues in the third quarter. Growth year-to-date is 5.1% compared to the same period last year. The outsourcing contract base has increased 30.7% year-to-date measured by yearly revenue value.

Gross margin of 42.8% in the third quarter has improved from 42.0% compared with the same period last year and up from 41.6% in second quarter 2004. The increase from second quarter 2004 mainly relates to a decreased product sales share of revenues, while the increase from the corresponding period last year is also influenced by improved product margins.

Operating expenses in the third quarter was mnok 382.4, down mnok 19.2 from the corresponding period last year. Compared to second quarter, operating expenses are down mnok 80.0.

EBITA improved from mnok -9.7 in the third quarter last year to mnok 2.5 in the third quarter 2004, due to improvements in all country segments except Denmark. The third quarter performance in Denmark is negatively influenced by cost overrun on fixed price consulting projects. Third quarter EBITA of mnok 2.5 is improved from mnok -11.6 in the second quarter. All countries report a profit increase compared with second quarter.

Goodwill amortisation in the third quarter was mnok 2.9, compared to mnok 2.4 in the same period last year. A restructuring charge of mnok 60.0 has been recorded as unusual items in the third quarter and is related to a re-estimate of the required provision for empty office space in Norway. The provision is mainly related to the merger and co-location of Ementor and Eterra implemented in 2003. Ementor is currently investigating the potential for reducing the operating costs in Denmark by subleasing of premises. A decision to sublease premises will result in additional provisions in fourth quarter 2004, amount in the range mnok 30 - 40. Net financial items were mnok -0.8 in the third quarter compared to mnok -5.2 in the same period last year. Reversal of provisions related to financial obligations contributed with mnok 5.0. 18 October 2004 Ementor made an agreement regarding sale of its fully owned Norwegian subsidiary Ajourit for mnok 21.4. Settlement of the shares and repayment of a mnok 12.9 loan will give Ementor fourth quarter total cash proceeds of mnok 34.3. The transaction will not result in any significant financial gain or loss. Profit before taxes from continued operations in the third quarter was mnok -61.2 compared to mnok -17.4 in the same period last year.

Ementor will seek to carry out an offering of new shares with a total subscription value of approx. mnok 200. The subscription period is 20 - 22 October 2004. In addition Ementor plans a subsequent offering with priority for shareholders not participating in the first offering of up to mnok 100.

The President and CEO, Arne A. Jensen, has informed the Board that he wishes to resign from his position during 2005.

Outlook
Ementor continues to build on its recurring revenue strategy. With third quarter results being encouraging in this respect, the Board has decided to strengthen the capital base of Ementor in order to accelerate the implementation of the strategy through 2005.

For further information please contact:
Arne A. Jensen, President/CEO Ementor ASA, tel. +47 915 14 088
Ole Mjåtvedt, CFO Ementor ASA, tlf. +47 930 06 671


The report including tables can be downloaded from the following link:

http://hugin.info/85/R/964786/139844.pdf

Ementor is one of the largest business consulting and IT solutions & services companies in the Nordic region. With expertise within consulting, technology and outsourcing, we help the most demanding of Nordic companies to improve their operational efficiency, create customer loyalty and build platforms for change. Ementor has 2 300 employees and is located in 21 cities across Norway, Denmark, Sweden, and Finland. The company is listed on the Oslo Stock Exchange. To find out more about what Ementor can offer, please visit www.ementor.com.