Interim report January-Sept 2002

Positive continued organic growth

• Sales rose by 7% to SEK 885.7 million (829.1 m)
• The operating profit (EBIT) reached SEK 17.0 million (27.7 m)
• The completed rationalisation programme boosted earnings by SEK 13.9 million in Q3.

Comments by CEO Hans Johansson
It is pleasing to note that sales rose by 7% during the first nine months. Growth has mainly been achieved through the expansion of existing partnership agreements, which means that customers are showing increased confidence in our long-term complete solutions. The situation is however difficult in all areas of operations, mainly in the Stockholm region where we have yet to see any improvements.

During Q3 Volvo Car Corporation and Saab Automobile began implementing large savings programme, which resulted in their buying fewer consulting services. Of total sales to these companies, more than half involve partnership agreements, which are only marginally affected by the cutbacks. Outside the partnership agreements we have, despite a fall in overall demand, signed agreements for a number of new assignments with companies over the past few months. As the Preferred Supplier for product development with Volvo Car Corporation and Saab Automobile we are guaranteed to be notified about all requests within this area.

- Our increased sales internationally and within the area of Medical & LifeScience are extra pleasing and are in line with our long-term aim of "being a global leader in design and development".

- We believe that the lacklustre market will remain throughout the winter. This will mean that we will continually adapt our organisation to meet lower levels of demand. Despite the lacklustre market we see a number of new business opportunities in the form of rationalisation schemes, efficiency projects, and outsourcing of activities outside our clients’ core activities and within the area of product development.

Business activities
Sales rose by 7% to SEK 885.7 million (829.1 m). The operating profit before goodwill depreciation was SEK 23.8 million (32.5 m), representing a profit margin of 2.7% (3.9%). The operating profit after goodwill depreciation was SEK 17.0 million (27.7 m), representing a profit margin of 1.9% (3.3%). Sales in Q3 amounted to SEK 253.5 million (224.6 m), an increase of 12.9%, and the operating loss was SEK 3.9 million (-17.8 m). Sales increased thanks to the significant expansion of existing partnership agreements and a strong increase in international sales. The main reason for this earnings trend is the weak market situation. A number of measures have been taken to alter the negative earnings trend.

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