Interim Report January - June 2007 January - June 2007 * Sales: SEK 284 (246) million * Operating profit: SEK 10 (9) million * Operating margin: 4% (4%) * Profit after tax: SEK 10 (9) million * Earnings per share: SEK 0.06 (0.05) * Cash flow: SEK 18 (-30) million Second quarter 2007 * Sales: SEK 141 (118) million * Operating profit: SEK 3 (-5) million * Operating margin: 2% (-4%) * Profit after tax: SEK 3 (-5) million * Cash flow: SEK 14 (-15) million Comments from CEO Katarina Mellström Mandator continues to win new business and grow. Net recruitments for the first half of the year brought in forty new employees, providing organic growth of 15%. Cash flow was strong at SEK 18 million. Mandator's three prioritised sectors, the manufacturing industry, the telecom industry and the public sector, now generate three quarters of our sales. Most growth was seen in telecom and industry, which on a rolling 12-month basis increased by 25% compared with the second quarter of last year. Our merged operations in Southern Sweden and Denmark show good development. Thanks to our strong position in telecom in Southern Sweden, we recently won a new contract in Denmark that will initially require at least ten consultants from three countries. Moreover, the three-year partnership with Sandvik, has developed well with a 40% increase in volume during the year. We have also signed a preferred supplier agreement with OMX for services in project management, systems development and testing. Post Danmark, the Danish state postal service, has also joined our customer ranks. During the quarter, we delivered Duka's new website and received new orders from Tallinn Technical University and the Estonian police and tax authorities. Despite the good influx of business and promising growth, our earnings are not satisfactory. Most business units are performing well, but a couple have not achieved their goals. We have initiated targeted measures to turn these units around. The costs for these measures burdened the quarterly result by some SEK 4 million, and we expect further costs of the same magnitude during the third quarter. Among other things, we implemented measures that entailed about ten non-billable staff leaving the company. We have wound up unprofitable service areas in favour of additional investments in offerings important to Mandator's future, such as project management and testing/verification. On the positive side, future business prospects are good. Mandator's strong position in industry and telecom provides room for larger and more specialised business deals in the future, with increased levels of nearshore deliveries from our strong unit in Estonia, which has some 100 employees. Good demand for IT services also facilitates more proactive work to refine our pricing models and develop new service offerings. The market for IT services is prosperous and the good business flow, together with the measures taken to increase profits, lead me to expect a considerably improved latter half of the year. Questions regarding this report may be addressed to: Katarina Mellström, CEO, +46 703 092 250, katarina.mellstrom@mandator.com Robert Karlsson, CFO, +46 709 565 141, robert.karlsson@mandator.com Mandator AB Rosenlundsgatan 40 Box 17540 118 91 Stockholm Tel: 08-402 31 00 Fax: 08-402 31 33 www.mandator.com
Interim Report January - June 2007
| Source: Mandator AB
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