IBS Interim report January-June 2007

Press Release 2007-07-19

January-June 2007

Total revenue amounted to SEK 1,072 m (1,124).
Net profit amounted to SEK -24 m (21).
Earnings per share amounted to SEK -0.28 (0.26).
Operating profit amounted to SEK -31 m (27).
Earnings after financial items totaled SEK -32 m (27).

April-June 2007

Total revenue amounted to SEK 531 m (562).
Net profits amounted to SEK -15 m (11).
Earnings per share amounted to SEK -0.18 (0.13).
Operating profit amounted to SEK -22 m (13).
Earnings after financial items totaled SEK -23 m (13).

Outlook for 2007

In June, IBS communicated that the company will not achieve its forecast of 7% operating margin for the full year 2007. The Board of Directors and Group Management have decided to implement a comprehensive analysis of the IBS business model and cost structure, and possible measures to increase the billing rate in the professional services organization, which is responsible for more than 50% of IBS’ revenue. The ongoing restructuring program will proceed during the second half of the year, with the relocation of parts of the software and product development to middle and low-cost countries, the consolidation of offices and enhancing the efficiency of IBS’ administration.

IBS’ long-term financial goal of an operating margin of at least 10% remains.

Summary of H1-2007	H1 2007	H1 2006	Change %
Total revenue, SEK m	1,072	1,124	-5%
- New sales - Renewal revenue Software licenses, SEK m	77 129 206	109 127 236	-13%
License margin	92%	91%	+1 p.p.
Professional services revenue, SEK m	599	628	-5%
Professional services margin	22%	24%	-2 p.p.
Hardware and other revenue, SEK m	267	259	+3%
Hardware and other margin	18%	20%	-2 p.p.
Operating profit, SEK m	-31	27
Earnings after financial items, SEK m	-32	27
Operating margin, rolling 12-month basis*	2.5%	3.8%	-1.3 percentage points