Cybercom Group: Interim Report July – September 2015

Regulatory News:

July – September 2015

• Sales amounted to SEK 270.6 million (287.4)
• EBIT before non-recurring items was SEK 12.4 million (12.3) and the EBIT operating margin was 4.6% (4.3)
• EBIT was SEK –7.4 million (12.3) and the EBIT operating margin was –2.7% (4.3)
• Net profit after tax for the period was SEK –13.2 million (9.1)
• Earnings per share were SEK –0.07 (0.05)

January – September 2015

• Sales amounted to SEK 933.7 million (908.8)
• EBIT before non-recurring items was SEK 32.6 million (42.1) and the EBIT operating margin was 3.5% (4.6)
• EBIT was SEK 4.4 million (42.1) and the EBIT operating margin was 0.5% (4.6)
• Net profit after tax for the period was SEK –3,4 million (30.2)
• Earnings per share were SEK –0,02 (0.17)

Key events

• Goodwill impairment of SEK 19,8 million has been made to adjust the valuation of the earlier acquisition of Netcom Consultants, part of segment International
• The Board has revised down the company's sales target to 5% annual growth over the business cycle
• The Procurement Check was named Swedish IT Security Solution of the year
• Com Hem chose Cybercom for its internal digital collaboration channels
• MTV chose Cybercom's cloud service
• Cybercom participated in the UN meeting at which 17 new global goals were adopted
• Cybercom has been nominated for a number of Swedish design awards during the quarter

Comments from the CEO

There have been many positive events in Cybercom's operations during the third quarter. Com Hem entrusted us to take care of its internal digital collaboration channels, MTV chose our cloud service and we are enhancing the digital presence of several municipalities. We have growing engagements with the Swedish Enforcement Authority, the Swedish Tax Agency, Assa Abloy, Atlas Copco, Volvo Cars and SAAB. My innovative colleagues in Finland won the Konecranes Hackathon and our The Procurement Check service was named as Swedish IT Security Solution of the year – excellent performance amongst tough competition. In addition, our Sustainability Report and our activity-based office in Stockholm won first-rate design nominations. Together with leaders from several of our clients, I participated in the UN Private Sector Forum to solidify the important cooperation that will guide the world towards the 17 new global goals for economically, socially and environmentally sustainable development until 2030.

Cybercom's sales in the third quarter amounted to SEK 270.6 million (287.4). A decrease of 6%, due to lower sales in Finland and in the operator business in Asia and Africa. EBIT was in line with the previous year and amounted to SEK 12.4 million (12.3) before non-recurring items, which resulted in an increased margin of 4.6% (4.3), despite the negative volume growth. The actions we have taken in Finland have yielded results, but challenges in the Finnish economic environment hamper purchasing in the private sector.

In Sweden, on the other hand, we are seeing strong demand in industry, where our business is growing. Ericsson's cutbacks have not affected us during the quarter, but we are seeing a shift towards low-cost countries, which will affect our commitments in Sweden. Our operations in the Öresund region still face challenges, but with a growing order intake and continued good development in Denmark we foresee an improvement before the end of the year.

A goodwill adjustment of SEK 19.8 million was made during the quarter so that our balance sheet better reflects the actual size of the current operations. The impairment is related to previous acquisition in the international operation, and does not affect cash flow.

In connection with our annual strategic planning, we decided that the company's growth will primarily be organic, with the possibility of small add-on acquisitions and a greater portion of blended delivery. The board has therefore decided to revise down our sales target to 5% annual growth over the business cycle. The other financial targets remain unchanged.

The overall market continues to develop in line with previous quarters. We are seeing good demand in Sweden and Denmark, but with more complex purchasing behaviour that requires more business models. We continue to see good development in our Polish operations, and our blended delivery business is growing. We assist our clients with innovative solutions that drive business transformation, competitive differentiation and enhanced customer experience. Together with our clients, we are developing public services for the connected citizen and secure accessibility for the connected consumer. This area offers fundamental demand and large market potential. I am proud of our client list and I envisage great opportunities for continued good development.

Niklas Flyborg
President and CEO

You are welcome to attend a presentation of the report at 09.30 today, Sveavägen 20, Stockholm,

or call +46 8 465 013 85 to participate, using conference ID: 933450

About Cybercom

Cybercom is an IT consulting company that assists leading companies and organisations to benefit from the opportunities of the connected world. The company’s areas of expertise span the entire ecosystem of communications services. Cybercom’s domestic market is the Nordic region, and in addition the company offers global delivery capacity for local and international business. Cybercom was founded in 1995 and has been quoted on the NASDAQ Stockholm exchange since 1999.

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