Knowit AB Year-End Report 2012Published 08 Feb 2013
During this year, we have seen quick technical development and high demand for changes on all the markets where we operate. Despite this, clients have shown some reticence regarding new investments and consultancy purchasing. Especially in Finland, clients have shown great reserve, but we have seen similar behavior from larger purchasers in Göteborg and Skåne. But the picture isn’t unambiguous. There are local markets with high demand. The highest demand is in Norway, but the regions Norrland and Stockholm have also shown high demand.
I am not happy with this year's result in relation to the opportunities available in the markets where we operate. For a company like Knowit, such times of changes always mean that new opportunities will appear as regards deals and improvements. This year we have finalized the large-scale and necessary efforts we have been working on for the past two years, to prepare for the future. These projects have focused on organization, sales, IT and branding. The goal of these ventures was to increase efficiency, sales coordination, joint deliveries and ensure that we can continue to work with retained profitable growth in a clearly decentralized culture.
Growing organically is in line with our strategy, where we prioritize recruitment and startups of new companies together with driven entrepreneurs. This year, we have grown by seventy employees, on those parts of the market where demand is high.
During the fourth quarter, we have founded a company offering management consultancy in the energy sector, a company focusing on web and digital communications in Linköping, and a company in systems development on the Oracle platform in Stockholm. We are also venturing into Denmark, by founding a company with experienced entrepreneurs.
During this year, we have increased sales by 3.4 percent. However, the year had fewer working days than 2011 which, in combination with tougher markets mainly in Finland, but to some extent also in Sweden, has affected the result negatively. The large projects we completed this year also affected results. The costs for these projects were about SEK 20 million.
A focus on profitability Knowit’s single most important financial target is that earnings per share will grow in tandem with the development of operating margin and sales growth. To achieve this, our new organizational structure is a must. Through this structure, we see each company’s earning capacity and can benchmark both internal and external companies. Thus, we can work to maximize each company’s profit and minimize the risks in companies showing poor results.
The future Assessing how demand will be affected by the economic development is difficult. However, I am firmly convinced that we, by focusing on client benefits and shareholder value, can create positive development for Knowit. Our focus in future will be increased client-value, improved cash flow and increased earnings per share, mainly through an improved margin.
Per Wallentin CEO and President