Interim Report January-June 2013Published 19 Jul 2013
Despite the fact that we see a continued, quick technical development and a strong pressure for change on our clients, purchasing decisions still take a long time, holding back new orders. During the second quarter, demand is on par with the past two quarters with noticeable differences in different geographic areas and different offerings. There is room for us to make ventures, while we actively streamlining and adjusting operations. For example, we have made and acquisition in Norway, while adjusting our organizations on the weaker markets in Finland, Gothenburg and Malmö.
The ability to change Our corporate structure, with decentralized operative subsidiaries, means that we quickly react to changes on the market, to benefit both our clients and our owners. We have, for example, stable demand in the Stockholm region, and most other markets in Sweden as well as throughout Norway. The challenges are in Finland along with in Gothenburg and Malmö. Clients there have, as formerly, been careful in placing new orders.
In Norway, we have growth potential mainly in Oslo and Stavanger. The acquired Norwegian company Amende in Oslo, with 35 employees marks the start of continued expansion on the Oslo market. Amende adds new clients and competence to Knowit. The company is a perfect match for us and I am sure it will have a positive effect on us in Norway.
The market has been particularly difficult in Finland, were economic development is weak. This, combined with changed purchasing patterns, has lead us to decrease the number of employees. Similarly we have adapted our operations in Gothenburg to suit market needs.
In Malmö, we have for the past two years worked hard to redirect our operations, to avoid dependence on a few large clients. Through intense sales work and increased specialization, we have gained a wider client base and improved order situation.
Optimizing client benefits This spring, we have clarified our client offerings. We have grouped them into three areas: Management, Digi & Design and IT. We have seen that our clients increasingly ask for efforts from us in which competencies from different areas are needed. Our new structure means that we can more efficiently meet their needs.
MANAGEMENT In management, we continue to grow. Currently, we have over 200 specialists in the field. In a modern business operation, the concepts business model, business process and technology are closely linked. We have deep understanding of how IT and product development interact with business operations, and vice versa.
DIGI & DESIGN We have for many years been a total supplier of web, portal and collaboration solutions in the Nordic region. Aside from technical competence, we have extensive knowledge of design. We are currently on the largest web agencies in the Nordic region, with over 450 consultants in the field. In Sweden, we have taken on more assignments and increased our projects with creative breadth in design.
IT There is still a large pressure to change using IT and things are moving faster than ever. The quick development carries with it a need for further development and updating of existing solutions. Within IT, we offer specialists with extensive competence, who jointly cover a wide field of technology.
Improved cash flow We have actively worked to quickly improve our cash flow. Aside from that, we are working with structural activities where our subsidiaries have this issue high on the agenda in order to improve cash flow in the long term.
Our most important goal is earnings per share, so the margin and results are in focus. Sales and results for the second quarter are on par with our performance during the past quarters. In this context, it is important to remember that the actions we have taken during the quarter have not yet had their full effect.
It remains difficult to assess the economic development and how it will affect demand. Even if the market is currently nstable, we will quickly adapt our operations based on demand. This ability to adapt creates stability in our operations and contributes to the development of our results.
Per Wallentin CEO and President