• No results found

Annual report 2005

N/A
N/A
Protected

Academic year: 2022

Share "Annual report 2005"

Copied!
56
0
0

Loading.... (view fulltext now)

Full text

(1)

Annual report 2005

(2)

Contents

Date

The annual shareholders’ meeting will be held at 4 pm on Tuesday, April 25, 2006. Reg- istration for the meeting starts at 3:30 pm.

Location

Know IT AB’s office, Kungsgatan 72, Stock- holm, Sweden

Participation

To be entitled to vote at the annual meeting, shareholders must

• be entered in the register of shareholders

• have notified the company Registration in the register of shareholders

Shareholders must be registered in the regis- ter of shareholders maintained by the Swed- ish Securities Register Center (VPC) no later than Wednesday, April 19, 2005. Shareholders whose shares are nominee registered must re-register their shares temporarily in their own names with VPC.

Shareholders who want to re-register must inform the nominee in good time prior to April 2006.

Notification

Shareholders must notify Know IT that they intend to participate at the meeting by 4 pm on Friday, April 15, 2005, at the following address:

Know IT AB (publ) Box 3383, 103 68 Stockholm

or by phone +46 (0)8-700 66 00 or e-mail info@knowit.se.

Notice of participation must include the shareholder’s name, address, personal registration number, and number of shares registered.

Representative

Shareholders represented by proxies shall issue an original dated power of attorney for the proxy. If the Power of Attorney is issued by a legal entity, then a certified copy of the legal entity’s certificate of registration must also be enclosed. The Power of Attorney and certificate of registration must be sent by let- ter, in good time before the meeting, to the address listed above.

Nomination Committee

In accordance with the resolution of the 2005 annual shareholders’ meeting, Know It shall have a Nomination Committee consisting of one representative for each of the three larg- est shareholders.

The election committee for the 2006 annu- al shareholders’ meeting consists of Anders Nordh, CMA Europe AB, Mats Olsson, Retrib S.A.R.L., and Gunnar Lindberg, LF Småbo- lagsfonden. Mats Olsson is chairman of the election committee.

The task of the Nomination Committee is as follows: prior to the 2006 Annual General Meeting, the Nomination Committee will propose the number of Board members to be elected by the Annual General Meeting; direc- tors’ fees; remuneration for committee work;

Board composition; Chairman of the Board;

Chairman of the Annual General Meeting;

and selection of auditors and auditors’ fees (if applicable).

Shareholders may e-mail proposals to the nomination committee via:

valberedning@knowit.se.

Invitation to Annual Shareholders’ Meeting

Fiscal Year 2005 ...1

President’s Review ...2

Business Concept, Targets, and Strategies ...4

Markets and Clients ...5

Operations ...7

Assignments ...10

Employees ...12

The Know IT Share ...14

Corporate Governance ...16

Board of Directors ...18

Senior Management ...19

Financial Review ...20

Directors’ Report ...21

Consolidated Income Statement ...23

Consolidated Balance Sheet ...24

Consolidated Cash Flow Analysis ...26

Statement of Changes in Equity - Group27 Income Statement - Parent Company ...28

Balance Sheet - Parent Company ...29

Cash Flow Analysis - Parent Company ....31

Statement of Changes in Equity - Parent Company ...32

Supplementary Disclosures and Notes ..33

Proposal for distribution of earnings ...49

Auditors’ Report ...50

Glossary ...51

Definitions and Financial Report Dates ...52 Addresses

Anna Rask Anna Rask Stockholm Stockholm

Coverphoto: Erik Almqvist, Lund, Christian Beck och Gustav Gnosspelius, Malmö

(3)

fiscal year 2005

1

A strong year for Know IT

Major events after the end of the year

Know IT strengthened its position in power monitoring, simulations, and military applications through the acquisition of Arosys Datakonsult AB and its six employees in Västerås. The firm is active in the power, defense, and steel industries. The company’s cli- ents include Swedish Nuclear Safety and Training, ABB, the Defence Materiel Administration, the Air Force, and SAAB Avionics.

Know IT gained a foothold in Småland through the acquisition of Epireal AB and its five employees in Växjö. Epireal’s clients include IST, Admera, and Elitfönster.

Net sales

00/01 2001 2002 2003 2004 2005 pro forma

0 100 200 300 400 500 600 SEK m.

Cash flow from operating activities

00/01 2001 2002 2003 2004 2005 pro forma

–15 –10 –5 0 5 10 15 20 25 30 35 40 SEK m.

Operating profit before amortization of intangible assets

00/01 2001 2002 2003 2004 2005 pro forma

–20 –10 0 10 20 30 40 50 SEK m.

Net sales

00/01 2001 2002 2003 2004 2005 pro forma

0 100 200 300 400 500 600 SEK m.

Cash flow from operating activities

00/01 2001 2002 2003 2004 2005 pro forma

–15 –10 –5 0 5 10 15 20 25 30 35 40 SEK m.

Operating profit before amortization of intangible assets

00/01 2001 2002 2003 2004 2005 pro forma

–20 –10 0 10 20 30 40 50 SEK m.

Net sales

00/01 2001 2002 2003 2004 2005 pro forma

0 100 200 300 400 500 600 SEK m.

Cash flow from operating activities

00/01 2001 2002 2003 2004 2005 pro forma

–15 –10 –5 0 5 10 15 20 25 30 35 40 SEK m.

Operating profit before amortization of intangible assets

00/01 2001 2002 2003 2004 2005 pro forma

–20 –10 0 10 20 30 40 50 SEK m.

l Net sales rose 39 percent to SEK 535.2m (383.8) compared with the corresponding period in the previous year.

l Operating profit before impairment of intangible assets was SEK 45.6m (22.3).

l Operating profit after taxes was SEK 32.2m (39.0). Taxes were SEK -14.2m (16.5). Net profit for 2004 includes a deferred tax claim and tax revenue of SEK 17.7m.

l Earnings per share were SEK 2.73 (3.76), including a deferred tax claim for 2004 of SEK 1.77.

l Current operations generated a positive cash flow of SEK 37.5m (37.4).

l Number of employees, converted to full-time equivalents, increased by 71 percent to 593 (346).

l Know IT established a new division on March 1 focusing on consulting services in busi- ness intelligence and systems development in Linköping.

l Employees subscribed to 505,000 options in the option program approved by the Annu- al General Meeting. The price per option was SEK 3.65. If the options are fully exercised, the dilution effect will be about 4.4 per cent.

l Know IT strengthened its presence in southern Sweden on August 1 when it acquired Create Group AB, an IT consultancy with more than 100 employees and operations in Lund, Malmö, Stockholm, and Karlskrona. Create Group pursues activities such as sys- tems development, testing and technology information.

l On September 1 Know IT acquired RealM Holding AB, an IT consulting company with about 60 employees and operations in Stockholm. This acquisition strengthens Know IT’s position in project management, Java, Microsoft, Oracle, and mobile solutions.

l Know IT strengthened its offering in Enterprise Content Management, document man- agement, by signing a cooperation agreement with FileNet Corporation and by taking over operations in Imagon System AB.

l Know IT AB acquired Techology Nexus AB’s operation in Borlänge in November. Nexus in Borlänge has 19 employees with extensive experience in fields such as operational development, project management, systems development, and operations support.

(4)

2

president’s review

Strengthened Position

The industry has experienced structural change through acquisi- tions and mergers among small companies, though we have seen few large corporate deals. Know IT carried out several acquisitions during the year that strengthen us in many ways. These acquisi- tions increased our delivery capacity and further broadened our geographic presence and complemented our operations with new skills, which I believe are significant to our future growth.

Acquisitions that Broaden

The acquisition of Create Group, with operations in Lund, Malmö, and Karlskrona, has provided us with a local presence in southern Sweden, which is in line with our strategy to pursue operations close to our clients. This acquisition also strengthened our offer- ing in testing and quality assurance and today we are one of Swe- den’s largest providers in the field. In addition the Group acquired completely new expertise in technology information, a field that I believe will continue to be significant in the future.

We also strengthened our offering in Stockholm through the acquisition of RealM, which brought us expertise in Java and Ora- cle and expanded our delivery capacity in project management.

In the Dalarna region we strengthened our position through the acquisition of Nexus Borlänge and we can now be considered one of the major local players. This acquisition strengthened our offering in business consulting.

In Linköping we supplemented our offering by establishing operations with a focus on business intelligence.

Strong Financial Performance

Historically, 2005 was a very good year in terms of our financial performance. Our operating profit before taking an impairment loss for intangible assets was SEK 45.6 million, up from SEK 22.3 in 2004. Operating profit after financial items was the best in the Company’s history, SEK 46.4 million. Sales were also high, histori- cally speaking: SEK 535 million. Developments have indeed been extremely positive for Know IT.

We are extremely proud of our greatly improved profitability, espe- cially since we achieved it in combination with robust growth.

During the year the number of our employees increased by a full 71 percent, with 23 percent attributable to organic growth. At the same time we retained our strong financial position and at year- end our equity/assets ratio was 51.7 percent.

Gratifying Results in Staff and Client Surveys

We conducted an employee survey during the year and the gratify- ing results showed that we enjoy working at Know IT. A full 97 per- cent of employees enjoy their jobs and appreciate the fact that they can influence how they carry out their duties. We will continue to develop Know IT into a workplace where all employees experience job satisfaction and know that they will grow, both professionally and personally.

We also asked our clients whether they enjoy working with us as a provider. Happily, even this survey produced excellent results.

Over 84 percent of responding clients are satisfied or very satis- fied with us as a provider. Just as many feel that we do a good job or a very good job of meeting their expectations. These results are inspiring and we will continue to develop our offering so that we can do an even better job of living up to the high expectations of our clients.

World-Class Solutions

As previously, we have received evidence in various contexts that our solutions are appreciated. At Microsoft’s global partner event in Minneapolis our entry, the mobile solution for mine clearing of land, EOD IS-Survey, developed for the Armed Forces, was the only European solution that made it to the finals along with six other entries. It is with pride that I conclude that our consultants develop world-class solutions.

The future will present new challenges in the form of tough competition for clients and employees, as well as constant tech- nological developments. Expertise will become more important,

As I summarize 2005, I look back on an extremely positive year for Know IT. We have strengthened our local presence and our value proposition, at the same time that demand for our services has increased and profits and margins greatly improved.

(5)

president’s review

3

as will building solutions that can be integrated with others sys- tems and managed with operational efficiency. To be successful we must continue to grow our company while maintaining the highest standards. We do this best in dialogue with our staff and our clients, and by never sitting on our laurels.

Know IT is an enterprise with tremendous potential. We’ve shown that we’re on the right path in 2005. It is a privilege to lead a company with strong growth and good profitability and I am convinced that we have an excellent future. The IT industry will continue to grow in significance and the market situation has improved substantially over the year. These developments will continue in 2006.

March 2006 Anders Nilsson President and CEO

Anders Nilsson Anders Nilsson Stockholm Stockholm

(6)

4

business concept, objectives and strategies

Know IT contributes to the success of its clients by developing and taking long-term responsibility for our clients’ value-generating processes, functions, and IT solutions. We deliver the IT expertise of a big company with the soul of a little company and the com- mitment of the individual consultant.

Working Closely with Clients

Business Concept

We develop our clients’ businesses and make them more com- petitive by offering strategic expertise and creating IT solutions tailored to fit business-critical operations. We also assume long- term responsibility for the solutions we helped create through administrative assignments and support functions.

Our clients are mainly organizations and companies that have IT systems with stringent requirements for accessibility from several different interfaces and channels. By combining state-of- the-art expertise in strategic consultation, system development, and administration of IT solutions with knowledge of our clients’

operations, we can offer a comprehensive view of IT.

Financial Targets l Profitability

Profitability, measured as operating result before goodwill expressed as a percentage of net sales, should on average amount to at least eight percent over the next three years.

l Growth

Average sales growth should amount to at least fifteen percent annually over the next three years. This growth will be achieved in both existing operations and through acquisitions.

l Equity ratio

The equity ratio should exceed 30 percent.

Strategies

To achieve these targets, Know IT has chosen the following strategies:

l Keep operations close to our clients

We see a huge advantage in offering local contacts and resources and therefore focus on opening offices close to our clients.

l Create conditions in which strong business skills thrive By working with a nonhierarchical organization and with clear incentives for profitability and growth in each division, we create a driving force for success in those employees who work with busi- ness close to our clients.

l Offer expertise in new fields of technology

We often know about and have access to new technology at an early stage through our partnerships with providers of develop- mental tools. When new technology has a proven track record as a commercial solution we offer it to our clients.

l Continue to safeguard our independence

We remain independent of suppliers and strive to maintain bal- ance among several different partners. Maintaining our indepen- dent status benefits our clients, allowing us to offer them the best solution for the situation. We have also opted not to develop our own standard products in order to focus on the best solution for the customer.

l Continuously foster employee expertise

To offer our clients the best possible expertise and to create a working environment where employees can grow, Know IT strives to continuously improve our employees’ skill sets, including through certification in important areas of expertise.

(7)

markets and clients

5

Market Trends 2005

During the year Know IT identified a number of trends in the market in which it is active.

General Agreements

General agreements continue to be of great significance. General agreements help clients to reduce sourcing costs, by purchasing projects from a limited number of quality-assured preferred providers.

Support Function Projects

Demand for support function projects continued to be strong during the year. One of the driving forces is that clients are focus- ing on core business to a greater degree and outsourcing various types of support functions. Support services

are often long-term, which means that in addition to system development, IT consultancies also accept responsibil- ity for development and administration of applications, quality of information, and integration with other systems.

Integration

Many large companies and orga- nizations have often acquired an array of different IT systems and applications to handle the specific needs of various units and depart- ments. The need to cut costs and take advantage of synergistic effects creates a demand for integration services to combine these systems into one common system. Demand for this type of service is also fueled by the need for companies to use modern solutions to integrate clients, partners, and suppliers into new alliances.

Mobile Solutions

The goal of extending the life span and maxi- mizing the profitability of previous invest- ments in IT systems drives developments in

Steadily improving market

In 2005 the market steadily improved compared with 2004. Despite increasing demand, prices only increased marginally. Analysts see potential for slowly rising prices during 2006.

mobile solutions. Companies implement mobile solutions mainly to achieve more efficient internal processes and work flows. By developing handheld computer solutions, clients make IT systems and information available to a larger group of employees, which leads to greater efficiency. Many different methods of commu- nication are usually combined within the same mobile solution – people want to be able to communicate via GPRS, W-LAN, SMS, and Bluetooth.

Business Intelligence

Demand for Business Intelligence solutions also increased during the year. These solutions make it possible to take advantage of

existing data to achieve a reporting and analysis environment in which information can be synthesized into a basis for deci- sion-making. Another important driving force is the growing demand for informa-

tion management, which in part is a con- sequence of the implementation of

the Swedish Code of Corporate Gov- ernance and its equivalent abroad.

Testing and Quality Issues

Clients have increased their focus on testing and quality issues in system development contexts. System quality is crucial to the management cost of a system and the trend toward starting testing and quality assignments earlier in the development project continues.

Demand for this type of service has increased sharply.

Know IT in the Market

Know IT is primarily active in the Swedish market. We work closely with our clients to build our business based on local deals and our size enables us to deliver the IT expertise of a big company with the soul of a small company and the commitment of the individual consultant.

Nina Ljung

Stockholm Björn Tennander

Stockholm

(8)

6

markets and clients

In 2005, Know IT reinforced its local presence by establishing local operations in Lund, Malmö, and Karlskrona. We also strengthened our operations in Borlänge, Linköping, and Stockholm during the year. Know IT is now one of the IT consulting companies with the best geographic coverage in Sweden.

Know IT has combined strong organic growth with acquisitions carried out during the year to increase its market share and take a position among the major consulting firms in the Swedish market.

During the year the number of employees increased by 71 percent, including 23 percent attributable to organic growth.

Local Operations

Demand is influenced by the customer base and competitive situ- ation in local markets. Know IT endeavors to meet this demand with locally active consultants, but when necessary, greater resources and expertise are available from other parts of the Group. Competition from offshore and nearshore outsourcing currently does not pose a serious threat to Know IT since it mainly affects services with low added value. The services we offer have a higher added value and our competitors are primarily other large IT consultants established in Sweden.

Important General Agreements

During the year Know IT increased the number of general agree- ments from 40 to 50, which together account for a substantial per- centage of Know IT’s sales. Clients with which Know IT signed or extended general agreements during 2005 include Umeå Energi, the Swedish Coast Guard, the Swedish National Road Administra- tion, Ladok, Swedish Customs, Swedish Agency for Public Man- agement, the Swedish Rescue Services Agency, Pharmacia Diag- nostics, the Swedish National Land Survey, Volvo Passenger Cars, the Swedish Emergency Management Agency, and TeliaSonera.

Know IT continued to develop its offering within integration services and solutions, recognizing the need to create solutions to promote interaction among several companies to meet the grow- ing demand for increased synergies and efficiency. We expanded our delivery capacity within integration based on the Java and Oracle platforms. Know IT has experience as a leading integration provider of Microsoft-based solutions.

Know IT’s position in mobile solutions is strong and we continue to enjoy success in this field, providing several mobile projects during the year. Know IT’s model of customized development projects that are not limited to standard products has proven to suit the clients’ needs for handling multiple interfaces and chan- nels. More than ever, clients choose the latest version of devel- opmental tools, smart phones, and handhelds for their technical environment and hardware for mobile solutions, which suits Know IT perfectly because its alliances with leading providers ensure that the Company always has access to the latest technology.

Know IT’s strategic consultation business has gradually increased over the year. Our clients often want an independent advisor when implementing new IT systems. In particular, we have noted increased interest from the public sector and electronic administration services that require operational development, change management, and guidance related to organizational issues.

During 2005 Know IT also strengthened its delivery capacity in systems development, testing, and quality assurance.

Customer Structure

Know IT’s customers mainly include large and medium-sized com- panies and organizations. The emphasis is on the public sector, telecom, and industry, as well as banking, finance, and insurance.

Together, these segments accounted for 84 percent of Know IT’s sales.

Customer Survey

Know IT conducted a customer survey in 2005 to map, explain, and measure customer satisfaction among its clients. A selec- tion of the company’s clients took part and the results showed that 84 percent of Know IT’s clients are satisfied or very satisfied with Know IT. About the same number of clients feel that Know IT meets their expectations well or very well. The result is a Custom- er Satisfaction Index of 77.5. Know IT intends to continue using customer surveys in order to continue offering a high standard of delivery quality.

Industry 17%

Public sector 32%

Net sales per industry

Banking/

insurance 9%

Trade 4%

Energy 2%

Pharmaceutical 4%

Media 1%

Telecom 26%

Other 5%

>SEK 10m 42%

Invoicing to clients by size

>SEK 5 to 10m 11%

>SEK 3 to 5m 20%

>SEK 2 to 3m 7%

>SEK 1 to 2m 10%

<SEK 1m 10%

Top ten clients in alphabetical order IKEA

Insurance Office Prosecutor General SAAB

Sony Ericsson

Swedish National Land Survey Swedish National Rail Administration Telia Sonera

Tele2 Volvo

During the financial year our ten biggest clients accounted for about 44 percent of sales.No indi- vidual customer was responsible for more than 20 percent of sales.

(9)

operations

7

Know IT’s operation is based on three cornerstones: strategic consultation, system devel- opment, and application administration. We offer a number of packages within these areas of expertise, tailored to market needs.

Specialists Provide Maximum Client Benefit

Maja Almevi Maja Almevi Lund Joakim Holmbäck

Lund

Mathias Lindbro Mathias Lindbro Lund

Dick Lundblad Lund Strategic Consultation

Businesses and organizations often have great potential for devel- oping internal operations. We can achieve major improvements by modifying central processes and designing customized IT support services.

With our extensive operational and technological expertise, we offer strategic consulting and operational development services based on the interface between the clients’ core operations and IT. One effect of our focus on consultations is that we can get involved in our clients’ IT projects earlier, which increases the accuracy of our IT solutions.

Know IT has extensive experience helping clients in their change processes. Success is based on the ability to understand the customer’s business and to apply different types of solutions, often based on IT.

Many clients know the process(es) with which they want to work. In other cases we begin by working with the client to identify problem areas and processes that may have room for improve- problem areas and processes that may have room for improve- In 2005 we expanded and strengthened our operation both by

increasing our geographic coverage and by incorporating new skills into the operation, including through the acquisitions of Create Group and RealM. The acquisition of Create Group and its subsidiary Multicom provided the Company with a local presence in Lund, Malmö, and Karlskrona. These acquisitions provided new expertise in technology information and strengthened existing expertise in testing and quality, as well as in systems develop- ment. In 2005 Know IT became one of Sweden’s leading suppliers in testing and quality assurance, with over 65 consultants in the field.

Know IT provides customized IT solutions where we contrib- ute to maximum customer benefit by assisting with:

l Strategic consultations, including sourcing.

l System development in several areas of technology, both to strengthen skills and as total solutions.

l Management and development of existing systems.

(10)

8

operations

ment. Once identified, we evaluate and rank the problem areas, after which the actual work begins.

Know IT has a well-developed approach that takes optimal advantage of the client’s experience. Projects are staffed with teams that combine knowledge of operations with the relevant technical overview.

We offer the following strategic consultation services:

l Purchasing IT systems, where we draft and negotiate agree- ments that provide complete traceability, from the request for tenders to follow-up of deliveries and projects.

l Development and follow-up of IT strategies that support the client’s business objectives.

l Technology-driven business development – we help clients to combine technology and business know-how more effectively.

l Quality assurance of clients’ business-critical projects.

l Technical assessment – we analyze and determine the conse- quences of alternative technical solutions.

l Process development – we help the client analyze work flows to create the most efficient IT solution possible.

l Technical operational development with a focus on embedded systems.

l Process and organizational issues linked to management and support of all types of IT-based HRM solutions. We offer sup- port and strategic consultations, design and implementations of IT solutions, or updating of existing IT support for personnel and payroll administration solutions related to acquisitions.

System Development

System development is the heart of Know IT’s operations. We have extensive expertise in a number of methods and fields of technology and can staff all jobs from design and architecture to technology and can staff all jobs from design and architecture to testing and installation. During the year Know IT strengthened its delivery capacity within the Java, (J2EE) and Oracle platforms, its delivery capacity within the Java, (J2EE) and Oracle platforms, especially in Stockholm through the acquisition of RealM.

In recent years clients have become more interested in sys- tems development based on standard products. Consequently it tems development based on standard products. Consequently it is now even more important for us as independent providers to is now even more important for us as independent providers to establish partnerships that strengthen our delivery capacity, but establish partnerships that strengthen our delivery capacity, but do not jeopardize our independence.

Our expertise in systems development includes the following methods and technologies:

l Systems Development based on products and developmental tools sources such as from Microsoft, Oracle, BEA, IBM, SAS Software, and Open Source.

l Embedded Communications in real time systems.

l Database managers such as Oracle, SQL Server, and DB2.

l TTesting, supervision of testing and test design using tools from sources such as Mercury.

l Integration using tools from sources such as Microsoft (Biz- Talk), and Tibco.

l Internal portals and external websites based on sources such as EpiServer.

l Infrastructure.

l Project Management.

l IT architecture.

l Data modeling.

l Interface design with a focus on usability.

Administration, Maintenance, and Development

Good IT solutions feature embedded flexibility to enable continu- ous development in harmony with the customer’s core business.

We see management and development—both functional and technical—as increasingly important aspects of the busi- ness. Development takes place in phases, keeping pace with the client’s own operational development, allowing new technology features to generate maximum benefit for the client.

Mikael Granath Stockholm Sten Walde

Stockholm

Mats Beckman Stockholm

(11)

operations

9

Administration Process

At the end of development projects, after the client approves deliv- ery, the IT solution or system is transferred to an administration organization that was appointed while the project was in progress, consisting of two different, usually separate, components referred to as functional administration and technical administration.

Functional Administration

Functional administration is a concept that includes all activities that ensure that the solution—the IT system or area of operation for which the solution is built—provides the functions that the qualified client ordered. Functional administration also encom- passes ensuring that the system works in accordance with the agreed upon specifications pertaining to:

l Functional maintenance.

l Help desk including on-call phone service.

l Functional development within the administrative framework/

plan.

Functional administration usually means that the administration organization also acts as a client and stipulates requirements in the implementation of new development projects.

Technical Administration

Technical administration is a concept that includes all direct physi- cal procedures in the solution’s hardware and software to ensure function and performance, including production of technical documentation, technology support, and reporting.

Services Based on Customers Requests

Based on the skills and expertise we described above we have developed several services tailored to the market. Our extensive skills and experience enable us to continuously develop and adapt these offerings to meet the varying needs of our clients. Our ser- vices can be delivered by Know IT’s entire organization and staffed with IT specialists from various units. However, the client’s con- tact person always comes from the local Know IT office.

Fields developed during the year include technology informa- tion, business intelligence, technology management, testing and quality assurance, mobile solutions, and integration.

Technology Information

In technology information, Know IT develops and produces infor- mation, documentation, marketing materials, and testing and verification processes to enable various target groups to achieve maximum use of a technology company’s products. Technology information increases the value of the clients’ products by ensur- ing that they can be understood, properly sized, and optimally installed, operated, and maintained. We also help many compa- nies with project management and strategies in documentation, communication, and testing.

Business Intelligence

Business Intelligent (decision-making support systems) involves taking advantage of data that are already available in various oper- ations systems to achieve a reporting and analytical environment in which information can be combined as an in-depth basis for decision-making. Know IT offers services in BI strategy, modeling, warehouse architecture, integration, mentoring, ETL design/devel- opment, front-end environments and administrative undertakings.

Technology Management

Know IT offers cutting edge expertise in the field of Technology Management. We focus on operational development and systems development for embedded systems. Know IT takes leading roles in the clients’ projects, provides knowledge, and contributes to more effective development. Our customers mainly include companies who develop software and electronics for embedded systems. Our strengths are system architecture, embedded com- munication, security analyses, and quality assurance. Our cus- tomers are mainly within vehicles, telecom, industry, and public authorities.

Testing and Quality Assurance

Careful planning and execution of tests increases the possibility of success both with systems development projects and with the implementation of standardized systems, ensuring superior qual- ity and leading to major cost savings in both the short and long term. Know IT is currently one of the leading suppliers in testing and quality assurance with concepts for load tests and automated functional tests.

Mobile Solutions

In mobile solutions, Know IT has learned that completely custom- ized solutions are most successful at creating the efficiency gains that customers demand. By creating completely customized solu- tions Know IT can use the latest technology without being depen- dent on standard software. In mobile solutions clients usually choose a technical environment and hardware based on the latest versions of developmental tools and smartphones or

handhelds. Through Know IT’s partnerships with leading suppli- ers, which provide access to the latest technology, we can offer effective services to customers who want mobile solutions.

Integration

Know IT has considerable experience of integration using Micro- soft-based tools and during the year the Company acquired exper- tise and experience in integration using Java (J2EE) and Oracle technical platforms. We have extensive experience from integration projects in various businesses and from projects based on various technical platforms and environments. We have packaged our knowledge in the concept “Integration Factory”, a concept that includes “best practices” and experiences for integration solutions using either standard tools from established suppliers or from open source.

(12)

10

client assignment FRAS

Know IT Enables Exchange of Necessary Information

Christoffer Dunér Christoffer Dunér Lund

Arla Foods, Milko, Norrmejerier, and Skånemejerier are dairies that supply their respective regional markets with products. Some of their products are in demand all over Sweden and these products have been distributed in a common wholesaler-based dairy distri- bution system.

Logistics Cooperative

Faced with a changing dairy market, the dairies decided to give up their role as wholesalers but to retain a common dairy distribution system for those prod- ucts that are in demand nationwide, but now in the role of each other’s distribu- tors – in other words, a logistics initia- tive for distribution that is both cost- effective and an alternative to wholesaler distribution.

The idea of a logistics cooperative is based on the dairies transporting parts of each other’s lines of products and using each other’s order services. The new logistics and transport flow for the nationwide line of products requires the parties to transfer necessary information between each part of the business system.

Know IT Develops Integration Solutions

Know IT was commissioned to develop a central integration solution that linked the dairies’ business systems and gave a combined order, invoice, and logistics flow. The new solution makes

”The new business model, which is the starting point for each company’s sales of nationwide goods with distribution via existing transport capacity, requires the dairies to exchange information. It would have been impossible to implement the new distribution and sales model with- out a functioning integration solution,”

says Thomas Lindgren, CEO of FRAS Integration AB.

Future expansion can easily be han- dled, thanks to the use of the embedded tools in the BizTalk Server, combined with the use of integration patterns for rapid implementation to address current needs.

it possible for the dairies to use their existing logistics and transport capacity more efficiently and to assess market demand for increased availability.

The solution was developed in .NET and BizTalk Server with loosely linked process support. Know IT used its Integration Factory concept, which uses best practices and integration patterns to generate a solution with high dynam- ics and reusability.

The integration solution enabled the different dairies to use existing transport capacity and with retained competition to sell their dairy products nationwide.

The technology creates conditions for The technology creates conditions for huge benefits such as shorter lead times huge benefits such as shorter lead times and decreased operating costs.

The dairies created the new company The dairies created the new company FRAS Integration AB to manage the FRAS Integration AB to manage the IT service and integration solution that IT service and integration solution that was developed. FRAS tasked Know IT, was developed. FRAS tasked Know IT, together with its operational partner together with its operational partner GDM, to handle operations and admin- GDM, to handle operations and admin- istration of the new integrated solution.

istration of the new integrated solution.

New Business Model

As a result of the project the dairies gained a new business model that better gained a new business model that better meets market demand.

(13)

client assignment Posten Logistikk, Norway

11

Efficient Solution for

Operations-Critical Systems

up of production terminals, as well as spe- cial reports to Posten’s Logistikk’s clients.

Since the existing systems were ineffec- tive, required considerable manual han- dling, and were not particularly user- friendly, Posted decided to purchase brand new solutions for the three business-criti- cal modules. One requirement was that the three solutions would be based on the same the technology platform.

Know IT Develops New Solution

Know IT was tasked with developing the new solutions. Back in 1999 Posten Norge established a central data warehouse and it was natural for the new solutions to be included in the data warehouse.

The solutions were developed on the SAS9 technology platform with Busi- ness Intelligence support, developed with the help of the SAS9 BI server. The new system was built into the data warehouse, which is the heart of reports and analyses within the business management and decision-making support systems. The benefit for Posten Logistikk is that it acquired a flexible, efficient, and user- friendly system.

Integration with Central Data Warehouse

The new solutions retrieves data updates from the source units every five minutes.

Because it is integrated with the central data warehouse other departments and divisions within Posten Norge can take advantage of the new system. Through a web portal Posten Logistikk clients can also access parts of the system and moni- tor their own packages.

In the future Posten expects the need for analyses and decision-making support systems to increase. Over the past twelve months Posten Logistikk produced about 1,400 unique reports and analyses. The next step is to see how these reports can be replaced with standard templates or produced with user-friendly solutions integrated with the data warehouse.

Mats Lövgren Lund

Andreas Olsson Andreas Olsson Lund Björn Kolmodin

Lund

Eleven Different Systems

At the beginning of 2003 Posten Logis- tikk had eleven different IT systems that supported operations. The systems were outdated and expensive and needed to be upgraded or replaced. In addition, the number of technology platforms had to be reduced to simplify mainte- nance and operations.

Three of the eleven systems—sales support, customer database and product statistics—were business critical, since they involved management information and decision-making support systems, including information about quality, sta- tistics, follow up of packages and follow tistics, follow up of packages and follow

Posten Norge is one of Norway’s big- gest companies with operations all over Norway and about 25,000 employ- ees. The vision is to become the most future-oriented postal service company in the world.

One of the company’s divisions, Posten Logistikk, develops and deliv- ers total solutions for communications and logistics in physical or electronic networks, both nationally and interna- tionally. The division has about 3,900 employees and sales of about NOK 8 billion. The operation includes distribu- tion of parcels, dry goods, refrigerated goods, express goods, and third party logistics.

(14)

12

employees

During 2005 Know IT grew substantially and increased the total number of employees.

The organic growth involved hiring 78 employees. During the year Know IT also acquired companies and businesses with more than 200 employees.

Expertise and Commitment

Fredrik Abrahamsson Göteborg

Kenneth Ericsson

Stockholm Thomas Engström

Borlänge Anders Brangefält

Västerås Know IT prefers to hire consultants who are university graduates with at least five years of experience in the industry. The consul- tants who work at Know IT have a combined average of about 13 years of industry experience. More than 88 percent of our consul- tants have university or other post-secondary school education.

Know IT consultants are highly skilled and have extensive expe- rience of the IT industry and our clients’ businesses. By accepting long-term assignments we can thoroughly learn our clients’ busi- nesses. Know IT endeavors to achieve a more even gender dis- tribution, but like most companies in the IT sector, the Company mainly has male employees.

Employee Survey

In 2005, we conducted an employee survey to better understand our employees’ attitudes and perception of the workplace and of Know IT as an employer. The areas addressed included the job

situation, organizational support at work, the corporate culture, and the work environment. We intend to conduct similar surveys annually in order to continue being a proactive employer.

The results showed that a full 97 percent of employees enjoy having Know IT as an employer. One area for improvement that became apparent was the desire for clearer information about issues such as owner expectations at Know IT. Employees where very satisfied with the fact that they can clearly see the results of their work, that they can influence how the work is carried out and that they get to apply their skills and knowledge. Most employees also felt it was positive that clients show great appreciation for their work.

Professional Skills Enhancement

To be an attractive partner for clients it is crucial for our consul- tants to continuously develop their skills, and to continuously

(15)

employees

13

review the processes that ensure high delivery quality. Know It consul- tants earn certification, participate in specialized networks, and attend seminars and training programs to promote personal development.

Another important component of continuously delivering practical client benefit and services with superior quality is the development of each consultant through the assignments in which they participate.

Each assignment helps to develop our collective expertise and experi- ence.

We also use relationship-based quality assessment of completed consulting services, where the client, consultant, and Know IT business manager analyze the consultant’s performance in each assignment.

Methods and Partners

Structural capital is a guarantee for the Company’s long-term value and by structuring the Company’s collective knowledge and making it available to all employees, the business becomes more efficient and the added value to clients increases.

During 2005, we continued to train our consultants in K-RUP, a system development and project management method that is applied when the client does not require other methods to be used. K-RUP is based on a combination of Rational Unified Process and Pejl. Using a common method increases delivery precision and cost-effectiveness in our customer projects.

General agreements are another important element in our struc- tural capital. We have approximately 50 general agreements with vari- ous companies, organizations, and authorities, with over 600 units authorized to place orders. During the year the general agreements continued to play a key role in terms of sales.

Our partnerships with various providers of standardized tools are also part of our structural capital. In our endeavor to be an indepen- dent provider we seek a balance between various providers. Our part- nerships are important for learning about and gaining access to new technology at an early stage.

Graduate engineer 20%

Education levels, consultants

Systems scientist 22%

MSc in Business Administration and Economics 4%

Other university education 33%

Other specialized training 9%

Upper secondary school 12%

Age structure

<25 25–30 31–35 36–40 41–45 46–50 51–55 >55

Men Women 0

10 20 30 40 50 60 70 80 Number of employees

Years

Almost 90 percent of Know IT’s employees are over the age of thirty. A total of 80 percent of the employees are men and 20 percent are women.

The average age of our male employees is 40; the corresponding figure for our female employees is 38. The average age of all employees is 40.

A total of 88 percent of Know IT’s consultants have post-secondary school education and 79 percent have a university education. Systems sciences and engineering are the most common academic back- grounds found among the consultants.

Other No. of employees Consultants employees

Operational units 528 60

Parent Company 5

Total employees 528 65

As of December 31, 2005, Know IT had 593 employ- ees, including 528 consultants. The other employ- ees work in sales, business, administration, and group-wide functions.

Ali Shazahd Butt Ali Shazahd Butt Stockholm Stockholm

(16)

14

the share

Share Capital

On April 19, 2005, the Annual General Meeting resolved to reduce Know IT’s share capital by SEK 39,894,252 by decreasing the par value of the share from SEK 5 to SEK 1. The Stockholm district court approved the decision on September 26 and the reduction became legal on October 19, 2005. After the reduction and shares issued for non-cash consideration, on December 31, 2005, share capital was SEK 11,473,563, distributed among 11,473,563 shares, each with a par value of SEK 1. All shares carry the same number of votes and rights to dividends.

Market Listing

Know IT’s share was listed on SBI (Stockholms Börsinformation), currently NGM (Nordic Growth Market), on November 11, 1997.

The share has been listed on the O list of the OM Stockholm Exchange (Stockholmsbörsen) since March 11, 1999. As of Janu- ary 1, 2006, the share is quoted on the Attract 40 list of the OM Stockholm Exchange. At the end of the fiscal year the share price was SEK 56.75(25.90), equivalent to a total market capitalization of SEK 651.1m (258.3). The highest price paid during the fiscal year, SEK 59.50, was registered on December 29, 2005, while the lowest price, SEK 24.30, was registered on January 20, 2005.

During the financial year 12.1 (4.2) million Know IT shares were traded on Stockholmsbörsen, equivalent to 47,696 (16,400) shares per trading session. The number of shares traded is equivalent to 105.6 (42) percent of the total number of shares at year-end.

Positive performance for the year

Shares were traded on all 254 trading days of the year. As of December 31, 2005, the total number of shareholders was 5,540 (4,243).

Dividend Policy

Know IT’s dividend policy is to distribute the capital that it does not need for planned expansion of the operations. For fiscal 2005 the Board recommends a dividend of SEK 2.00 per share.

Analysts who monitor Know IT

Den Danske Bank: Peter Trigarzky +45-33-44 04 49 Enskilda Securities: Lars Sveder +46 (0)8-52 229 500 Handelsbanken: Stefan Wård +46 (0)8-701 51 18 Redeye: Magnus Dagel +46 (0)8-545 013 43 Remium Securities: Christian Wallberg +46 (0)8-454 32 39

Distribution of holdings

Number of Number of

shareholders % votes %

1–1,000 4,642 83.8 1,564,935 13.6

1,001–5,000 698 12.6 1,667,007 14.5

5,001– 10,000 90 1.6 689,666 6.0

10,001–20,000 50 0.9 715,917 6.2

20,001–50,000 37 0.6 1,158,544 10.1

50,001–100,000 11 0.2 803,622 7.0

100,001–500,000 10 0.2 2,946,940 25.7

500,001–1,000,000 1 <0.1 800,000 7.0 1,000,000–5,000,000 1 <0.1 1,126,932 9.9

Summa 5,540 100.0 11,473,563 100.0

Share Price Performance and Sales 2001–2005

600 1,200 1,800 2,400 3,000

10 20 30 40 50 60

2001 2002 2003 2004 2005

Share SIX IT SIX General Index

Shares traded, 000s (including post-reported transactions) per month.

4

(c) SIX

SEK No. of

shares

References

Related documents

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent

We recommend to the Annual Meeting of shareholders that the income statements and balance sheets of the Parent Company and the Group be adopted, that the profit of the Parent

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent

We recommend to the annual meeting of shareholders that the income statements and balance sheets of the parent company and the group be adopted, that the profit of the parent company