ACANDO ANNUAL REPORT 2008
team spirit, passion and results
annual Gener al mee tinG
The Annual General Meeting of Shareholders will be held at 3pm on Monday, 27 April 2009 at Salén Konferens & Matsalar, Norrlandsgatan 15, Stockholm, Sweden.
Shareholders who wish to attend the meeting must be recorded in the shareholders’ register maintained by Euroclear Sweden AB / VPC by no later than 21 April 2009. Shareholders whose shares are held in trust must ensure that they are temporarily registered with VPC in their own name before the above closing date. Notifi- cation of attendance must be made to Acando by no later than 12 noon on 21 April 2009. Each notification must include the shareholder’s name, personal identity number or corporate registration number, address and telephone number.
Notification may be made by post to Acando AB, Box 5528, 114 85 Stockholm, Sweden, by telephone to +46 (0)8 699 70 00 or directly via the company’s website at www.acando.com.
Shareholders represented by proxy must submit a power of attorney prior to the meeting.
reporting dates 2009
› Interim report
January–March 2009 27 April 2009
› Interim report
January–June 2009 24 July 2009
› Interim report
January–September 2009 3 November 2009
› Year-end report
for 2009 February 2010
Highlights of the year 3
This is Acando 4
CEO report 6
Market 8
Quality and the environment 9
Acando’s offering 10
Organisation 12
Employees 14
Risks and opportunities 16
Five-year overview 17
The share 18
Directors’ report 21
Consolidated income statement 25 Consolidated balance sheet 26 Shareholders’ equity – Group 28 Cash flow statement – Group 29 Income statement
– Parent company 31
Balance Sheet – Parent company 32 Shareholders’ equity
– Parent company 34
Cash flow statement
– Parent company 35
Notes to the accounts 36
Auditors’ report 51
Corporate governance 52
Board of Directors 54
Group management 55
AHA! Management 56
Distribution policy 57
Addresses 58
Contents
Highlights of the year
HIGHlIGHtS oF tHe Year
Financial targets and dividend policy
Acando’s overall financial target is to increase earnings per share by at least 15 percent per annum. Acando also follows certain restrictions regarding the company’s maximum debt-equity ratio and minimum available liquidity.
The Board of Directors proposes that the Annual General Meeting of Shareholders adopt a dividend of SEK 0.50 per share, equivalent to a total of approximately SEK 37.5 million.
+50%
earnings per share amounted to seK 1.99
awards and prizes
Strong growth of deliveries within the Microsoft area has led to several awards:
Membership of the prestigious Presidents Club & Inner Circle as well as the .Net Award in the Information Worker category.
› Acando Ltd received the ISO 9001:2008 Quality Award.
› Bengt Lejdström, CFO of Acando, was appointed Acting CEO of the Acando Group with
effect 19 January 2009.
»Increased external exposure through public relations and the aHa!
brand campaign«
»2008 was a historic year for acando with the best results ever and several all-time-highs.«
Most important channel
Several acquisitions were made in 2006-2007, and focus in 2008 was placed on coordinating activities. The companies concerned now operate under the Acando name. In conjunc- tion with this process, a joint website has been created in order to strengthen communication with the company’s partners.
www.acando.com
+20%
net sales amounted to seK 1,611 million
+49%
operating profit amounted to seK 152 million
»correctly positioned within Information Management based on customer demand.«
Significant events in 2009
› Carl-Magnus Månsson was appointed new Managing Director and CEO of the
Acando Group, and will take up his position in the summer of 2009.
› Acando implemented rationalisa-
tion measures in western Sweden
by giving notice to 50 employees
at the Gothenburg office.
tHIS IS acando
strategy
Customers’ needs for consultancy services have changed in recent years.
In 2005, Acando established a strategy to become a major operator in this new IT market. Since then, Acando has experienced 35 percent average annual growth in sales and is now sufficiently large and geographically well-placed to be able to offer customers high capacity and a good regional presence in Europe.
The IT industry has undergone change over a number of years. Most major customers prefer to have close relations and long-term partnerships with fewer consultancy companies in order to achieve higher cost-efficiency, flexibi- lity and supply reliability. In return, the selected suppliers are offered longer, more comprehensive and more interes- ting assignments.
Customers now systematically eva- luate consultancy companies’ expertise, supply and financial capacity, quality systems and future prospects. This means that consultancy companies are subject to stricter requirements to have and be able to demonstrate well-oiled internal machinery, with structured expertise and quality development, methodology and operational mana- gement.
Acando is a consultancy company that in partnership with its customers identi- fies and implements business improve- ments through information enabled by technology.
Measurable improvements are generated by developing strategy and organisation, processes, and IT in combination with managing change.
We understand and are deeply rooted in information technology, but our passion is improvements to customers’
operations.
Our approach is driven by a strong focus on results and responsibility, so that the customer can quickly obtain the expected effect. Through conti- nuous visualisation, we illustrate goals and delivery.
Our customers see us as their pre- ferred, local, close partner in simple and complex undertakings.
We as employees are driven by passion, team spirit and results, which constitute the foundation of Acando’s common culture.
Acando Mission
oslo trondheim
copenhagen Malmö Gothenburg
Stockholm linköping
Västeråsludvika
Helsinki
Manchester
Stuttgart Hamburg Bremen
Frankfurt düsseldorf
The strategy provides close and leading expertise
The changed purchasing behaviour of customers is creating a new industry structure with two types of consultancy companies. The first category consists of companies working in close partner- ship with customers on comprehensive projects over a long period of time.
To belong to this diminishing group of companies, it is necessary to have high supply capacity, broad expertise, geographical coverage and stable operations and finances.
The second category consists of companies that are sub-contractors to the first category. They are often small specialist companies or broad-based,
Borlänge
tHIS IS acando
up an interesting market window for Acando’s offering of small and medium- sized deliveries performed by regionally hired consultants
Comprehensive
Acando can supply all aspects of every individual project with a broad expertise base of management and IT consultants who are regionally based near the customers. These consultants have experience and in-depth know- ledge of the customers’ critical business processes such as sales, purchasing, production, logistics, product deve- lopment, financial control and human resources. Acando’s definition of comprehensiveness also includes being able to offer customers expertise and solutions on a comprehensive platform of technology and solutions. Therefore, the company has entered into part- nerships with several of the market’s leading technology suppliers such as SAP and Microsoft.
industrialised
In order to reduce the customers’ risk and offer deliveries with high quality, efficiency and delivery reliability, Acando industrialises its offerings and internal processes. A standardised, quality-assured method of working re- sults in shorter lead times and faster rea- lisation of business advantage. Being in- dustrialised also involves enhancing the quality and efficiency of Acando’s sales, recruitment, operational, project mana- gement and staffing processes. One of the ways in which this is done is by crea- ting homogeneous working methods based on guidelines, tools, templates and expertise support that are common to the entire Group. Acando is also implementing a comprehensive leader- ship program to create a homogeneous management philosophy and better leadership. To guarantee high quality, Acando follows the ISO 9001 quality management system and has its own quality policy. Acando also follows and has been approved in accordance with the US Food & Drug Administration’s GXP requirements, which is demanded
by several of Acando’s customers in the pharmaceutical industry.
Acando’s quality philosophy is to focus on efficiency enhancement to improve customer deliveries. To ensure that the organisation follows the quality policy and works in accordance with established processes, regular checks are carried out to quickly remedy faults, and to constantly trim operations and raise quality, in small steps in a struc- tured manner.
“The supreme objective is to make our customers satisfied. Our regular customer surveys tell us how the quality of our internal and external processes is developing and how Acando is perceived as a supplier. Consistent, concerted quality work leads to increased security for both consultant and customer. The end result is more satisfied customers,” explains François Texier, Acando’s Quality Manager.
www.acando.com
»Satisfied customers are our most important quality objective.«
cost-efficient consultancy resource brokers. Acando belongs to the first category of consultancy companies.
This means that Acando is, and will continue to be, one of the few strategic consultancy partners within business improvements enabled by techno- logy. The strategy requires continued development of supply capacity and internationalisation, plus the further development of structure capital and quality systems. Acando’s strategy is based on three foundations that are both the company’s watchwords and its characteristics: close, comprehensive and industrialised.
Close
By “close”, Acando means that the com-
pany must be more perceptive, more
flexible, faster and more cost-efficient
than the large global consultancy com-
panies. Acando’s method of working
is characterised by rapid start-up and
commissioning, with new solutions
being introduced in small, quality-
assured deliveries. This shortens lead
times and generates customer benefit
quickly. In this way, Acando creates high
operating value at low cost. The large
global consultancy companies aim
for outsourcing contracts, taking over
entire IT departments and working on
comprehensive, multi-annual projects
and offshore services. This has opened
CEO report
2008 saw the best results ever for acando – for which we are both happy and proud. We would like to thank all of our customers for the confidence you have shown in us, and to thank all employees who have contributed to our success.
our achievements in 2008 include the following:
› earnings per share increased by 50 percent compared with 2007. acando has doubled earnings per share in the last two years.
› total sales have increased by more than 150 percent in the last three years and by 20 percent in 2008.
› We have gained the confidence of new customers to carry out operationally critical development projects, and the continued confidence of existing customers to further develop their business.
› our employees have strengthened their expertise within both ”hard” and
”soft” professional areas in order to be able to meet and exceed customer expectations in providing business benefits.
› We have consolidated our investments in markets outside sweden, where all countries show strong development as well as having become part of the acando community in a satisfactory way.
› We have developed the ”one acando” concept through an increase in cross-border deliveries to customers, where consultants from several countries work together.
The market has been good throughout 2008 for all delivery areas and regions.
A number of acquisitions were made between 2005 and 2007, with the objective of developing Acando from a Swedish consultancy company to a European player. In addition to comple- ting several acquisitions (for example Resco, Abeo and IQ Consulting), our goal has been reached through a geograph- ical and expertise platform that we are now consolidating through organic growth and potential acquisitions.
We have introduced the Acando brand in all markets and launched a new external web platform. We have intensi- fied external communication through a battery of PR measures combined with brand-enhancement campaigns. The
”One Acando” slogan is one of our major assets for the future, but simultaneously our greatest challenge.
We have continued to reduce depen- dence on the absolutely largest custo- ceo report
»the company’s strong financial position and differentiated offering enables acando to continue to
provide services to a broad spectrum of customers.«
ceo report
»After many years as CEO of the Acando Group, I have chosen to move on to new challenges, and can proudly state that the company has experienced a fantastic journey. I would like to thank all customers, employees and shareholders for a wonderful time and to warmly wish you all the best in the future.«
Lars Wollung
mers by broadening our customer base, and for the time being no customer represents more than 10 percent of total sales. The four largest customers cur- rently represent 33 percent of total sales (two years ago, the equivalent figure was 59 percent). This risk reduction has provided Acando with an advantage in an economic downturn.
Acando’s significant presence within the public sector, the pharmaceutical and healthcare industry and the energy sector means that we are less exposed to major economic declines than many of our colleagues in the sector. We are also maintaining a continued strong presence within other industries, such as telecommunications and manufac- turing, and we are able to support our customers through developments in the coming years.
We have entered 2009 with uncer- tainty about future demand. At the time of writing this report, at the
beginning of 2009, demand continues to be sound. The company’s strong financial position and differentiated offering enables Acando to continue to provide services to a broad spectrum of customers. However, we see that the market in western Sweden has changed dramatically over the last six months, and we are now adapting to the weaker and different nature of the demand for consultancy services. The objective of the staff reductions in western Sweden is to create long-term prerequisites to enable Acando to maintain a continued presence in the region.
We believe that demand is satisfac- tory in other markets where Acando is active. However, uncertainty prevails with regard to demand trends over the coming year. In the current economic climate customers are cautious about deciding comprehensive and long-term improvement programs. We continue to offer our customers support in
developing their business processes by maintaining both good control of operations and further developing the opportunities that arise.
The Board of Directors of Acando has appointed Carl-Magnus Månsson as Managing Director and CEO of the Acando Group. He will take up his duties in the summer of 2009. I would like to welcome Carl-Magnus to the Acando family, and at the same time thank Lars Wollung, who after many years within Acando has decided to change roles, from CEO of the Acando Group to a potential customer of Acando. All of his former colleagues at Acando wish him all the best!
Bengt Lejdström
Significant forces in motion
During the global turbulence expe- rienced in the second half of the year, parts of the customer base started to tighten their projects. Conditions that prevailed in the first half of the year saw demand being maintained for the whole of 2008. However, several customers have been more restrictive in their budgets compared with previous years. It is probable that many will adopt a wait-and-see policy during the first half of 2009 in order to gain room to manoeuvre so that they can meet both upward and downward trends in the second half of 2009. Acando’s broad customer base has enabled a capacity move from customer segments with declining demand (such as the auto- mobile industry in western Sweden) to customer segments that are still investing (such as the public sector in Norway).
market situation
Around the beginning of 2008, signals from customers were that they were more concerned about the difficulty of finding employees and consultants with relevant expertise than an economic decline.
The pendulum has now swung in the opposite direction. Most organisa- tions are now able to find the expertise they are looking for, but are uncertain about when the market will stabilise.
However, the situation has different effects on different sectors. Parts of the finance sector and industries that produce expensive capital goods for private individuals are hardest hit, while
strong demand for acando’s services in 2008 continued for the whole year.
the fourth quarter was the strongest quarter in acando’s history, and results for the full year represented acando’s best year ever.
pharmaceuticals, parts of telecom- munications and the public sector are affected far less dramatically.
market description
Acando’s market consists of both companies and public organisations.
Around 20 percent of our customers are in the public sector, while the remainder are trade and industry companies.
Of these, most are large international corporations with more than 500 employees, and many have operations in several European countries. Acando’s largest segments are manufacturing industries, the public sector, pharma- ceuticals and medical technology.
Acando’s primary competitors are major international consultancy companies that are able to offer a similar mix of skills to those of Acando, incorporating both IT and management consultants.
Competitors also include regional and local consultancy companies. These are mainly niche operators, which lack Acando’s breadth, mix of skills and MarKet
capacity to work on customers’ core and support processes, with local resources in six countries. Acando competes with these operators in certain well-defined business areas or geographical markets.
Another type of competition comes from international and local staffing companies, which have recently ex- panded their range of services and now also hire out increasingly advanced- level IT and management consultants.
Acando has a broad customer base and has worked with most customers for many years, in some cases for up to 15–20 years. There is a general trend in the market for companies and organi- sations to gradually reduce the number of suppliers and framework agreement partners and instead to establish closer relations with a smaller number. The reason for this is that customers wish to achieve higher cost efficiency, flexibility and loyalty in such relations. Acando’s strategy is based on this trend and the company has therefore fared well as the market has changed, entering into a large number of new framework agreements.
www.acando.com
»acando’s largest seg-
ments include manu-
facturing industries,
the public sector,
pharmaceuticals and
medical technology.«
QualItY and tHe enVIronMent
Business processes, quality and the environment
Quality
Quality is a central component of Acando’s daily operations. Quality concerns everyone in the company, irre- spective of whether their work involves the company’s customers or internal administration. The issue of quality is always present, and an area that Acando constantly improves and develops. The relatively simple processes that Acando previously used have become gradu- ally more complex. Expectations from customers increase, as do the levels of professionalism and efficiency that are required. Furthermore, development technology and flexible methods for systems development demand a strong focus on defining quality assurance in Acando’s deliveries. In a market that is exposed to competition, quality is a strong competitive advantage that the company endeavours to strengthen.
The most important focus for Acando’s quality policy is the mana- gement team’s commitment in all quality efforts with the objective of
achieving strong customer satisfaction.
It is however a joint responsibility for all employees to strive for customer satisfaction. Intellectual capital is documented and made available for all employees in Acando’s knowledge- transfer system, Atlas. Developing new methods or restructuring and strengthening existing systems are an important investment for the company.
This careful process demands both time and precision. But it is worth the effort in view of the excellent results gained:
effective commitment with customers, greater accuracy in deliveries, and more flexible processes.
Acando is committed to living up to the quality parameters – which has been recently recognised through the ISO 9001 accreditation of Acando Ltd.
the environment
Acando’s environmental policy states:
”Each employee at Acando must actively work towards sustainable de- velopment of society by continuously improving and developing themselves and Acando’s operations.” Acando aims for its operations to have the least nega- tive environmental impact possible. The largest contributory factor is consul- tants’ travel. Acando endeavours to reduce environmental impact by using telephone and video conferencing as much as possible. Acando’s offices are centrally located, with good communi- cations facilities.
acando shall:
› integrate environmental issues in our operations so that we meet and exceed the requirements of public authorities and customers
› ensure that we are perceived as a company that is involved in environmental matters
› show respect for natural resources in our work, with economical use of raw materials and a high level of recycling
› use energy in a responsible and economic manner
› ensure, when purchasing, that products and services meet high environmental requirements.
www.acando.com
»Quality is a central component of acando’s daily
operations and quality
concerns everyone in
the company.«
Together with its people, information is a business’ most important asset
If companies are to operate in our increasingly global, digitised world, they need to shift their focus. Organisations must be able to ensure that the flows of information, goods, services and money are both under the control of, and supported by, integrated processes.
Assimilating information involves more than just keeping an eye on what is happening around you. It is equally important to absorb information from your own operations. With an iron grip on business-critical information, it is possible to integrate the processes both internally and also with the external environment. Only then is it possible to control, manage and change operations continuously at all levels.
the recipient must act on the information
Acando works with the leading soft- ware suppliers on the market for the technical realisation of Information Management solutions. The general meaning of the concept of Information Management is the structuring of a company’s information. This means
acando is a consultancy company that, in partnership with its clients, identi- fies and implements business improvements through information enabled by technology. acando sees information as the catalyst, fuel and lubricant to drive developments, and to make operations more efficient and competitive.
But the path ahead is always through people.
ensuring that the right information is available to the right person at the right time (and thus, in an optimum situation, making it possible to achieve change and create maximum business advantage). In its work on Information Management, Acando follows this general approach, but wants to go one step further, and base its process on the recipient. The recipient must not only have access to the right information at the right time. The recipient must also understand the significance of the infor- mation and know what they should do with the new knowledge. Information Management by Acando means that the bridge between the information, the recipient and the activity is secured.
This means that results from informa- tion systems and procedures become new experiences and knowledge that flow into the operations and improve processes and the organisation, while providing competitive advantages.
mix of expertise ensures a holistic perspective
Switching to being an information-
driven company involves understan- ding both problems and opportunities and doing things correctly from the start. With its deep roots in both mana- gement and IT, Acando can offer a com- plete, holistic perspective. The com- pany possesses knowledge about the information required by the different parts of a business and knows how to design systems so that they contribute.
Acando also has experience of how to implement processes and
solutions and how to get an organisa- tion to move on to the next level. As all companies are different, there are no simple standard solutions. But Acando has travelled this path on many occasions. Over time, Acando has developed powerful models, methods and tools that rapidly identify where customers should begin and how they can generate the best results the most quickly.
deep and broad expertise to deliver on customers’ challenges
The customers’ challenges come in all forms – and in order to be able to find the right mix of expertise and the right solution, Acando possesses broad and deep knowledge within Management Consulting, Strategic IT, Business Intel- ligence, Business Systems, IT Solutions and Application Management.
acando’S oFFerInG
Team spirit
Results
Passion
management Consulting The starting point for Acando’s ma- nagement consultants is that access to information is essential in creating improvements in business. Acando’s management consultants help orga- nisations convert information into bu- siness-critical knowledge and identify and implement the improvement me- asures that produce the greatest benefit for the company. Acando also develops the company’s business models and functional strategies, and ensures that they are fully harmonised with pro- cesses, organisation, corporate culture and IT, and that these are implemented in a long-term sustainable manner.
strategic it
Acando’s range of services and skills in Strategic IT aims to allow customers to obtain as much value as possible from IT, and to ensure that IT is used to support current and future business operations optimally. The consultants have solid understanding and ability in both ope- rational and IT-related issues. In strategic IT, Acando works to improve IT opera- tions throughout the value chain, from requirements to service; that is, from the customer to IT units and IT partners.
The consultants work to establish and manage business-driven transforma- tion of the entire IT landscape and use
a benefit-based, information-centric approach as the change motor for the development and improved efficiency of operations.
Business intelligence
Business intelligence is an area that requires both breadth and depth of expertise to achieve the right effect. In BI, Acando helps companies and orga- nisations become more competitive and make better decisions. Information management is the basis for this, and Acando works with both structured and unstructured information. Within the projects, Acando works with small and highly experienced teams, in which ex- perts in management consulting, infor- mation and technology work together.
Acando has its own delivery methods that are used to deliver BI solutions quickly, efficiently and iteratively.
Business systems
Acando is one of the largest opera- tors in the business systems area. The company has a strong position with two of the biggest suppliers of business systems, as well as a smaller supplier – SAP, Microsoft and Infor. The business systems of today are functionally very broad-based and also contain much of what was previously found in specia- lised systems. To allow customers to maximise their business advantage, Acando offers a good understanding of operational requirements and deep knowledge of the technical and functional dimensions that the business systems of today comprise. Acando offers the entire chain of services from requirements analysis and purchasing to implementation, rollout, administra- tion and change management.
it solutions
Within systems development, Acando has extensive experience of working with tailor-made IT support to develop customers’ operational processes.
Acando has the expertise to help its
acando’S oFFerInG
customers with solutions based on leading platforms and development environments, often in combination with components and frameworks that are based on open standards and open source code. The solutions that Acando develops are based on .Net and Java and cover various areas, from document management and portal solutions to specific support for parts of a customer’s operations. Acando is also an internationally leading supplier in the area of business integration, and guarantees a strategically correct start, an efficient organisation and mana- gement of integration issues as well as quality-assured integration deliveries.
Acando has many years of experience and top-level expertise in the areas that are critical for efficient management and delivery of integration projects.
Acando systematises its experience from previous integration projects, in order to offer cost-efficient solutions that provide high quality and deliver tangible business value.
application management
Businesses today are extremely depen- dent upon IT support. Actively working with Application Management and IT Service Management is a prerequisite for ensuring that IT supports and deli- vers services to business operations in an efficient, flexible and secure manner – and thereby tangibly contributes to the organisation’s business value.
Acando has long and solid experience within such areas, and proceeds from the framework in ITIL (IT Infrastructure Library). Acando offers undertakings for all or part of management related to an application during its lifecycle. This includes support, administration and further development.
www.acando.com Business
Systems
Business Intelligence
Management Consulting SolutionsIT
Strategic IT Application Management
orGanISatIon
sweden
lars Wollung
anders engdal
Ferhat Kaya
aasmund Fröseth
Bengt lejdström, t.f.
Michael Mörchen charles
Halpin
denmark Finland norway united sweden Germany
Kingdom Gunilla
Bjerre marketing &
Quality Bengt lejdström
CFo
John Karnblad
Cto
christer norrman sales &
Business dev Bengt lejdström
acting ceo of the acando Group
Ceo
delivery areas:
Business Systems, Business Intelligence, IT Solutions, Strategic IT and Management Consulting.
largest customers:
Airbus, Kuoni, Vattenfall Europe, HanseNet, Comdirect, Société Generale.
market comments:
Germany is a large market with excellent potential for both growth and increased market share. Strong demand prevails for services offered. During the year, Acando opened one more local office with the objective of working closer to customers.
www.acando.de Md: Michael Mörchen
Germany norway
Md: aasmund Fröseth carl-Magnus Månsson
Bengt lejdström
acting ceo of the acando Group as of 19 January 2009 to the summer of 2009.
newly appointed Managing director and ceo of the acando Group starting in
the summer of 2009.
Managing director and ceo of the acando Group in 2008.
delivery areas:
Business Systems, Business Intelligence, IT Solutions, Strategic IT and Management Consulting.
largest customers:
AstraZeneca, Ericsson, Telia Sonera, Vattenfall, Volvo.
market comments:
Strong demand in all business areas. The mix of expertise with business consultants and IT specia- lists is well received on the market and gives Acando advantages over niche companies. The brand is continuously strengthened by growth within the Group as well as brand-enhancement activities in Sweden.
www.acando.se
delivery areas:
Business Intelligence, IT Solutions, Strategic IT and Management Consulting.
largest customers:
Politiets data og matrielltjeneste (Norwegian Police), DnB NOR, Helse Midt-Norge IT, Helse Øst RHF/ Helse SørØst RHF, Statens Vegvesen, Lindbak Retail Systems.
market comments:
Norway has strengthened its posi- tion through the transition to the Acanco brand. Acando is market leader in the public sector – an area that is investing in and deve- loping its IT environment, parti- cularly in the healthcare sector.
www.acando.no
An organisation for close cooperation
Acando operates in six countries with approximately 1,100 employees who possess a wide range of skills. In order to work effectively, Acando has a flat organisation that favours integration between business areas and countries.
The key word for the structure is co- operation.
the Group management is close to operations
Group management is composed of six executives:
› Bengt Lejdström, CFO and Acting CEO of the Acando Group.
› Gunilla Bjerre, deputy Managing Direc tor and responsible for marke-
ting and communication, quality, internal IT and HR, as well as two bu- siness areas in Sweden: Management Consulting and Strategic IT.
› Christer Norrman, deputy Managing Director and responsible for Group sales and business development, as well as for the business areas Denmark, Finland, United Kingdom and five business areas in Sweden:
Business Intelligence, IT Solutions East, IT Solutions West, Microsoft Dynamics & Infor and SAP.
› Michael Mörchen, MD in Germany.
› Aasmund Fröseth, MD in Norway.
› John Karnblad, CTO.
same offering in all countries Denmark, Finland, Norway, the United Kingdom and Germany make up Acando’s separate business areas.
Sweden is divided into several business areas in order to appropriately organise the extensive breadth of the operations.
Operations in the various countries differ slightly, depending on the stage of development. The business offerings apply in all six countries, utilising cross- border cooperation.
Total sales and number of employees:
Sweden SEK 1,037 million and 718 people, Germany SEK 331 million and 260 people, Norway SEK 139 million and 87 people, Other Countries (Denmark, the UK and Finland) SEK 121 million and 69 people.
orGanISatIon
denmark
Md: anders engdal
delivery areas:
IT Solutions, Strategic IT and Management Consulting.
largest customers:
AstraZeneca, Bristol Myers Squibb, BP, UCB.
market comments:
The greater focus on document management matches the continued strong growth in the area, which provides good growth potential in the UK and within the Acando Group. Demand within Learning Services is also increasing.
www.acando.co.uk
united Kingdom
Md: charles Halpin
Finland
Md: Ferhat Kaya
delivery areas:
Business Systems (SAP), Business Intelligence and Management Consulting.
largest customers:
TeliaSonera, Novo Nordisk, Assurant.
market comments:
The Öresund region is a growth region where Acando has strong potential with cooperation between the offices in Malmö and Copenhagen. In the Danish market, primarily BI and SAP are demanded.
www.acando.dk
delivery areas:
Business Systems (SAP).
largest customers:
Altia, Anglo Nordic, Wurth Oy.
market comments:
Acando has experienced conti- nued strong demand within the SAP area. Compared with other countries within the Group, custo- mers are purchasing more project assignments. Several projects were carried out during the year in cooperation with Acando Nordic colleagues.
www.acando.fi
eMploYeeS
Working at Acando
acando’s employees are of course essential for acando’s success and develop- ment. the company’s aim is therefore to ensure that acando is the most att- ractive alternative, with the best consultants on the market within it, Business systems and management Consulting.
each other towards common, clear results are critical to both the success of customer projects and the company’s ability to attract employees. Acando manifests this ethos in its core values of team spirit, passion and results, in com- bination with a clear code of conduct and ethical position. Taken together, these elements establish Acando’s common corporate culture.
The company’s development towards its vision – to be a leading regional business and IT consultancy company in Europe, has also attracted many employees, particularly because of Acando’s dynamic corporate culture and the opportunity to work on interna- tional customer assignments.
Acando’s employees’ personal development is guaranteed through their opportunity to work within the most prominent area today: Information
Management. In addition to exposure to Acando’s corporate culture, the company’s development and personal development, employees are offered various forms of compensation and benefits.
employee development
Communicated development paths ensure that each employee obtains feedback about their performance, as well as the chance to decide with their manager how their future skills enhan- cement will be planned in both the short and long-term. The development paths enable each employee to develop as a specialist within one or several subject areas, project management, commitment responsibility, customer responsibility, or responsibility for personnel and results. Each employee has the opportunity to develop and broaden their skills within several of the above areas.
The introduction procedure for newly recruited employees has been strengthened and enlarged during
»our employees’
personal development is guaranteed through their opportunity to work within the most prominent area today: Information Management«
acando’s employee offering Acando’s employee offering is for- mulated on the basis of the business concept and what will attract the em- ployees of today and the future.
Committed employees who work
closely with customers, partners and
eMploYeeS
n 0–2 years n 3–5 years n 6–10 years
n 11–20 years n 21– years
number of years of employment
other Years Sweden Germany norway countries total
0–2 277 125 38 53 493
3–5 218 83 26 7 334
6–10 121 52 13 6 192
11–20 72 0 10 3 85
21– 30 0 0 0 30
718 260 87 69 1 134
number of years of employment in the Group
age distribution in the Group
n –25 n 26–29 n 30–39
n 40–49 n 50–59 n 60–
age distribution
other Years Sweden Germany norway countries total
–25 9 6 2 1 18
26–29 57 27 10 5 99
30–39 285 98 42 27 452
40–49 246 86 29 29 390
50–59 102 41 4 7 154
60– 19 2 0 0 21
718 260 87 69 1 134
number of women and men in the Group
n Women n Men
the year. Experience-based learning is applied during the induction period, in areas such as how Acando works with sales, delivery of customer projects and target-related conflicts and dilemmas that a consultant can encounter during a working day. This learning is supp- lemented with information about Acando’s history, goals, strategy and what characterises a successful Acando consultant.
The Acando Academy was esta- blished during the year in order to support our employees’ skills enhan- cement. Training programs have been carried out within the framework of the Acando Academy in areas such as project management, process develop- ment, workshop techniques, change management, Lean Manufacturing, management methods and models, as well as business systems.
For employees with few years of professional experience, the program for Young Professionals has been further developed. Participants work in their respective customer projects but meet together every six months to learn the tools and models that can be implemented in customer projects. The
toolbox includes various elements such as the role of a consultant, project ma- nagement, presentation techniques, IT tools and methods, as well as tools and models for management consulting.
executive development
Two sessions of Acando’s executive development program were carried out during the year, in which all managers with responsibility for personnel took part in around ten different elements with the aim of enhancing and develo- ping both leadership and business skills.
Each manager follows an individual executive development plan that is continuously evaluated based on a 360- degree analysis from employees, the superior manager and management colleagues. Between each element, the managers exchange experiences in their respective coaching groups. We are pleased to see that we have gradu- ally developed even more secure and skilful managers, which is also reflected in the employee survey.
employee survey
The annual employee survey, together with associated improvement initiatives
is an integrated part of the business planning and budget process. With regard to employees’ well-being and health, the strategic goal has been to exceed the median value of the sector.
This value has been continuously raised over the years, and Acando is now positioned in the upper scale. The po- sitive areas that are most noticeable are security and well-being, development opportunities, motivating leadership and structured leadership. These results are probably attributable in part to the initiatives described above.
recruitment
Given Acando’s growth targets, operations had a high influx of new employees during the year. Advertising, recruitment meetings, participation in labour market days and, not least, all the efforts of our employees to encou- rage others to work for Acando, have borne fruit. Consistent with the sector in general, Acando experienced high personnel turnover during the year.
www.acando.com
number of women and men
other Sweden Germany norway countries total
Women 214 32 16 15 277
Men 504 228 71 54 857
718 260 87 69 1 134
rISKS and opportunItIeS
Risks and opportunities
economic factors
Customer demand is strongly related to their confidence in the future and their willingness to invest, and demand can therefore change abruptly. A weaker economic climate could negatively impact Acando’s future prospects. The level of demand was strong in 2008 and is expected to continue to be favourable in 2009 – but uncertainty nonetheless prevails regarding growth in demand in 2009. The prevailing economic climate leads to customers being cautious about adopting comprehensive improvement programs.
price levels and undertakings vis-à-vis customers
Price levels are critical for Acando’s ear- nings capacity. In 2008, price levels were stable or slightly positive. For 2009, it is be- lieved that price levels will be unchanged or slightly negative. For the portion of sales from customers with which we have framework agreements, changes in prices depend on the renegotiation of such agreements. Framework agreements are normally signed for one to two years.
In conjunction with the signing of as- signment contracts, companies within the Acando Group assume the responsibility of executing a defined assignment based on certain conditions and prerequisites.
Should Acando not be able to fulfil such undertakings or should Acando or its employees grossly neglect conditions specified in contracts, the company could be exposed to significant, and in extreme cases, potentially unlimited claims for damages. Acando’s measures to reduce this risk include continuous monitoring of projects, special authorisation instruc- tions, and liability insurance. Other risk factors in the Group’s business activities are fixed-price assignments or similar undertakings in relation to customers.
Such undertakings represent a limited proportion of sales, although the trend is that these undertakings are increasing.
Acando actively monitors and controls ongoing fixed-price assignments.
Competition
The tendency towards consolidation within the sector continues. This provides opportunities for growth, but also means greater competition in the sector. Custo- mers are choosing fewer suppliers, which so far has resulted in strong demand volumes for the suppliers who have been selected, but also in corresponding strong downward price pressure. Acando has
a number of factors that affect acando are set out below. the list is not intended to be comprehensive, nor are the factors ranked according to their relative importance.
been successful in procurements in 2008, leading to good volume growth.
A greater number of staffing agen- cies, both international and local, have broadened their range of employment services to cover Information Technology.
This increases competition in the portion of the market in which the structural capital content is low. Furthermore, the effect of off-shoring has increased, which sees suppliers deciding to locate parts of their development in low-price countries.
Acando has cooperation agreements in place with international players in order to be able to provide similar services for certain parts of the company’s offering.
Acando competes with large interna- tional IT and management consultancy companies as well as regional companies that have the Nordic region or Sweden as their domestic market. A change in the behaviour of Acando’s competitors could have both negative and positive impacts on Acando’s future prospects.
Changing customer demands
In general, customers have become better at procuring consultancy services. Sales processes are longer and require more professional sales work. There is greater demand for both specialised and broad skills that enable turnkey assignments.
Acando is endeavouring to become the regional company that best meets these customer demands. As part of this process, Acando offers to support its customers in both an ordering and supplying role.
the proportion of both consolidated sales with major customers, and sales generated in sweden, has declined
Further to the decline in the proportion of consolidated sales represented by the company’s largest customers, and the spreading of total sales over a larger number of countries, the related risk expo- sure has fallen. In 2008, the company’s ten largest customers in Sweden represented 48 percent of sales in Sweden, compared with 54 percent in 2007.
Sweden’s proportion of consolidated sales decreased to 64 percent in 2008, having represented 73 percent of sales in 2007, and 78 percent in 2006.
employees and personnel costs
To continue to be able to grow, Acando is dependent on its ability to attract, recruit and develop new, qualified employees, to retain existing staff and key people, and maintain a personnel cost level that is
reasonable with regard to prices applied to customers.
Financial position
The company’s financial position is good.
At 31 December 2008, Acando had cash and cash equivalents of SEK 181 million (62) and unutilised bank overdraft facilities of SEK 67 million. The equity-assets ratio at year-end was 64 percent (60).
Financial risks
Due to the nature of its operations, Acando’s financial risks are low. Acando’s increasing internationalisation also implies a certain currency risk that is considered to be limited, in as much as the company en- deavours to match income and expenses as well as assets and liabilities in the same currency, so as to reduce the currency exposure associated with transactions.
Acando’s customers consist principally of large or medium-sized companies, and organisations and government agencies with high creditworthiness, which is why the credit risk is considered to be low.
Acando carefully monitors customer pay- ment ability as well as risks noted within general credit trends.
The Group’s liquidity is invested in bank deposits or interest-bearing govern- ment securities with high credit ratings, in accordance with the policy adopted by the Board of Directors. The form and de- gree of financial risks are further described in Note 3 Financial Risk Management.
opportunities in the form of efficiency improvements
Acando endeavours to continuously improve efficiency in its organisation and administration. This policy is effected through evaluating each consultancy unit, merging units that have become too small, raising the efficiency of manage- ment and sales work, and constantly looking for opportunities to further ratio- nalise joint administrative functions and overheads. The cost of the shared service centre and overheads within Acando is decreasing in relation to net sales. An efficient administration enables the com- pany to be relatively less vulnerable to an economic downturn.
Significant internal measures have
been taken to strengthen Acando’s
position by building up a joint platform for
comprehensive Group structure capital
– including the introduction of new
websites for the entire Group for external
communication. Joint tools and processes
are being implemented to strengthen
internal efficiency and to create oppor-
tunities for cross-border market activities
and customer deliveries.
FIVe-Year oVerVIeW
Key figures and ratios
GROUP (SEK m) 2008* 2007* 2006* 2005* 2004
Results
net sales 1 611 1 344 1 049 635 608
operating profit – eBIt 152 102 73 52 33
net profit for the year 168 106 75 52 36
Margins
operating margin, %, eBIt 9.4 7.6 7.0 8.2 5.4
profit margin, % 10.4 7.9 7.1 8.2 5.9
Profitability
return on capital employed, % 22 16 16 19 16
return on equity, % 22 16 17 21 18
Financial position
equity/assets ratio, % 64 60 69 65 59
Interest coverage ratio, multiple 26 34 55 47 32
Per share
equity per share, SeK 9.57 8.09 8.04 4.67 3.64
cash flow per share, SeK 1.49 –0.80 0.68 0.26 –0.33
earnings per share after dilution, SeK 1.99 1.33 0.99 0.77 0.61
dividend per share, SeK 0.50*** 0.50 ** – –
Share price as per 31/12, SeK 10.35 14.20 13.89 11.40 6.10
Employees
average number of employees 1 123 1 012 727 534 576
net sales per employee, SeK ’000 1 435 1 328 1 443 1 189 1 056
* excluding aS WMG sold in January 2008.
** Via a compulsory redemption procedure, SeK 1.30 per share was paid to the company’s shareholders in June 2007.
*** proposal of the Board of directors to the aGM.
Definitions
return on equity
profit after tax divided by the average shareholders’ equity.
return on capital employed
profit after net financial items plus interest expenses divided by the average capital employed.
shareholders’ equity
reported shareholders’ equity.
average shareholders’ equity is calculated by adding together the opening and closing equity balances, and dividing the result by two.
equity per share
Shareholders’ equity on the balance sheet date divided by the number of shares at year-end after dilution with outstanding warrants/options and convertible bonds.
Cash flow per share
cash flow for the year divided by the number of shares at year-end after dilution with outstanding warrants/options and convertible bonds.
earnings per share
net profit for the year divided by the weighted average number of shares during the period after dilution with outstanding warrants/options and convertible bonds.
interest coverage ratio
profit after net financial items plus interest expenses divided by interest expenses.
operating margin
operating profit divided by net sales.
equity/assets ratio
closing shareholders’ equity divided by total assets.
Capital employed
Shareholders’ equity plus interest- bearing liabilities. average capital employed is calculated by adding together opening and closing capital employed, and dividing the result by two.
profit margin
profit before tax divided by net
sales.
share capital
The company’s current Articles of Asso- ciation state that the share capital shall be a minimum of SEK 50 million and a maximum of SEK 200 million.
On 31 December 2008, the share capital amounted to SEK 98,205,961 ap- portioned among 78,564,768 shares, of which 3,639,990 were class A shares and 74,924,778 were class B shares. Each class A share represents ten votes and each class B share represents one vote. The class A shares encompass pre-emptive rights in accordance with the Articles of Association. The company’s shares have a par value of SEK 1.25 per share.
share issues in 2008
Acando did not issue any shares in 2008.
The Annual General Meeting of Shareholders (AGM) held on 19 May 2008 resolved to authorise the Board of Directors to adopt a new issue of class B shares provided such issue is able to take place without amending the Articles of Association. However, the utilisation of such authorisation by the Board may not imply that the overall increase in share capital exceed 10
Name No. of A shares No. of B shares Total shares Equity % Votes %
Family Svedulf with companies 500 000 8 787 700 9 287 700 11.8% 12.4%
Svolder aB 500 000 6 667 120 7 167 120 9.1% 10.5%
livförsäkringsaktiebolaget Skandia 0 5 606 034 5 606 034 7.1% 5.0%
Sentat asset Management aB, Fonden thyra 0 3 060 177 3 060 177 3.9% 2.7%
orkla aSa 0 2 967 790 2 967 790 3.8% 2.7%
Swedbank robur Fonder 0 2 813 110 2 813 110 3.6% 2.5%
ulf J Johansson via company 1 318 500 614 500 1 933 000 2.5% 12.4%
Fjärde ap-fonden 0 1 760 300 1 760 300 2.2% 1.6%
länsförsäkringar fonder 0 1 674 843 1 674 843 2.1% 1.5%
acquireit in Sweden aB 1 321 490 0 1 321 490 1.7% 11.9%
lannebo fonder 0 1 000 000 1 000 000 1.3% 0.9%
eva Simonsson 0 901 500 901 500 1.1% 0.8%
Handelsbanken fonder 0 841 154 841 154 1.1% 0.8%
citibank new York 0 655 684 655 684 0.8% 0.6%
Skandia fonder 0 613 900 613 900 0.8% 0.6%
others (approx 26,500) 0 33 442 930 33 442 930 42.6% 30.0%
treasury shares 0 3 518 036 3 518 036 4.5% 3.2%
Total 3 639 990 74 924 778 78 564 768 100.0% 100.0%
Holdings of the largest shareholders at the end of december 2008
percent of the registered share capital at the point in time that the Board utilises the authorisation for the first time. Such an issue may be able to take place with waiver of shareholders’ preferential rights. The reason that such waiver of preferential rights may take place is so that the company can issue shares in conjunction with the acquisition of companies or business activities.
new incentive programs and repurchase of own shares
The AGM held on 19 May 2008 resolved to introduce a new incentive program in the form of a Share Savings Program, similar to that introduced in 2007. The Program shall embrace a maximum of 60 senior executives and other key persons within Acando, principally those who are active in Sweden. After a qualification period of slightly less than three years, and assuming an investment of their own in Acando shares, the participants will be given the opportunity to receive, free of conside- ration, allotments of additional Acando shares (known as Matching Shares and Performance Shares), the number
of which will depend partly on the number of Acando shares already held in the participant’s own investment, and partly on the attainment of certain performance conditions. Matching Shares and Performance Shares may be allotted under the Program during a certain brief period after the company’s publication of the interim report for the first quarter of 2011, representing a maximum of 1,000,000 Acando class B shares.
A total of 2,518,036 shares were repurchased in 2008 for a consideration of SEK 30 million. As per 31 December 2008, Acando held 3,518,036 class B shares, of which 1,000,000 shares are reserved for the fulfilment of the con- ditions of the Share Savings Program 2007-2010 and 1,000,000 shares are reserved for the fulfilment of the con- ditions of the Share Savings Program 2008-2011 in accordance with previous AGM resolutions.
In addition to the Share Savings Programs for the years 2007-2010 and 2008-2011, an employee Share Option Program, designed for managers and other key persons within the Acando tHe SHare
Earnings per share increased by 62 percent
Group’s Swedish operations, is also ongoing for the years 2006-2009. Partici- pation in the offer is conditional upon the acquisition of a certain number of Acando class B shares, in the same way as for the Share Savings Programs. For each purchased share, a batch of four share options will be received free of consideration. The share options will be of the employee share-option category.
Each share option shall confer the right to purchase 1.08 Acando class B shares at a redemption price of SEK 6 per share.
The options may be exercised no earlier than 15 trading days after Acando has published its interim report for the period January-March 2009, and no later than 30 June 2010.
The program has been subscribed to by 54 key persons and has resulted in a maximum of 1,083,431 share options being exercisable (1,003,176 x 1.08).
As at 31 December 2008, there were 1,526,000 convertible bonds outstan- ding from the company’s Convertible Program 2006-2009, with a conversion price of SEK 15.10 per share. Conversion may take place during a period of 15 days after the company has published
its interim report for the period January- March 2009, however no later than by the period 27 April to 18 May 2009.
Should no convertible bonds be ex- ercised by their holders, repayment will then be made at the nominal amount of the convertible bonds no later than 15 June 2009.
shareholder structure
At year-end 2008, Acando had a broad ownership base with more than 26,500 shareholders. About 17 percent of the shares are held by non-Swedish- domiciled investors and around 20,800 shareholders hold 500 shares or less.
share performance
At the end of 2007, the Acando share was trading at SEK 14.20 while at year-end 2008 the share price was SEK 10.35, representing a decline of 27 per- cent. During the same period, the OMX Stockholm PI Index on the NASDAQ OMX Nordic exchange fell by 46 percent and the OMX Stockholm IT-services_PI (SX451020) dropped by 63 percent.
Acando’s financial target is to increase earnings per share by at least
15 percent per annum. Acando also fol- lows certain restrictions regarding the company’s maximum debt-equity ratio and the minimum available liquidity.
dividend
The Board of Directors intends to pro- pose that the Annual General Meeting of Shareholders adopt a dividend of SEK 0.50 per share, representing a total of SEK 39,282,384 of which SEK 1,759,018 relates to treasury shares as at 31 December 2008. However, no dividend will be paid for the Parent company’s holding of class B treasury shares.
According to the company’s divi- dend policy, the long-term dividend level shall amount to at least one third of the Group’s reported consolidated profit after tax pertaining to the Parent company’s shareholders. In view of the prevailing uncertainty with regard to trends in demand over the coming 12 months, the Board of Directors deems that the dividend level should not exceed last year’s dividend. This implies that the proposed dividend is lower than the long-term dividend level.
tHe SHare
class B share oMX Stockholm_pI
no. shares traded,
1000s
Year Transaction No. of shares Share capital in SEK
1986 Formation of the company 5 000 50 000
1986 new issue 75 000 750 000
1986 new issue 100 000 1 000 000
1990 Bonus issue 300 000 3 000 000
1993 new issue 329 480 3 294 800
1994 new issue 331 460 3 314 600
1995 Bonus issue 331 460 13 258 400
1995 Split 8:1 2 651 680 13 258 400
1995 new issue 3 651 680 18 258 400
1995 exercise of warrants 4 609 280 23 046 400
1996 exercise of warrants 4 689 280 23 446 400
1996 new issue 5 627 136 28 135 680
1996 Split 4:1 22 508 544 28 135 680
1997 exercise of warrants 22 615 168 28 268 960
1998 new issue 22 631 445 28 289 306
1998 new issue 24 026 088 30 032 610
1998 new issue 25 609 035 32 011 294
1999 exercise of warrants 26 647 433 33 309 291
2000 exercise of warrants 27 115 236 33 894 045
2001 exercise of warrants 27 331 555 34 164 444
2001 conversion of shares 31 405 110 39 256 387
2002 conversion of shares 31 412 110 39 265 137
2003 new issue 55 658 810 69 573 512
2006 new issue 72 780 825 90 976 031
2006 conversion of shares 74 051 168 92 563 960
2006 exercise of warrants 76 643 668 95 804 585
2007 exercise of warrants 77 564 768 96 955 961
2007 Split 2:1 155 129 536 96 955 961
2007 redemption program 77 564 768 48 477 981
2007 Bonus issue 77 564 768 96 955 961
2007 new issue of class c shares 78 564 768 98 205 961
2008 conversion of class c shares to class B shares 78 564 768 98 205 961
Total shares registered as per the Swedish Companies Registration Office 78 564 768
treasury shares 3 518 036
Total shares excluding treasury shares 75 046 732
outstanding convertible loans 2008 1 526 000
outstanding employee share options 2008 1 083 431
Total shares after maximum conversion and redemption of options 77 656 163
