ÅRSREDOVISNING
2007
SIGMA SUPPLIES CONSULTING SERVICES AND FUNCTIONAL UNDERTAkINGS IN IT,
MANAGEMENT AND INFORMATION LOGISTICS.
www.sigma.se
SIGMA ANNUAL REPORT 2007
SIGMA CONTINUES TO SUCCESSFULLY DELIVER IN AN
INTERNATIONAL
MARkET
This document is essentially a translation of the Swedish Annual Report.
In the event of any differences between this translation and the original Swedish Annual Report the Swedish Annual Report shall govern.
annual report 2007 the year in brief
the year in brief
Divestments of units have converted the Group to a pure consulting company within IT & Management and Information Logistics.
During the year, Sigma’s 10 largest customers increased their purchases from Sigma by 20% or SEK 130 M in invoicing compared with the preceding year.
Demand from Sigma’s most important Nordic customers was stable. Net recruitment was 126 employees and organic sales growth was 11%.
The proportion of undertakings increased. Several large orders in excess of SEK 100 M were signed.
Sigma is adjusting to customer demand for global deliveries. Several new units have been established, including one in India. Developments in China are accelerating.
Sigma was awarded the Swedish computer society Dataföreningen’s Diamond award and was deemed to be the IT company that under- stands customer needs the best.
A number of new framework agreements were signed during the year. Other older framework agreements were renewed.
Strategic acquisitions were pursued to achieve a strong market position in Information Logistics and the Lawson M3 business system.
Investments contributed SEK 111 M in invoicing to the Group, but charged SEK 20 M to earnings. Nonrecurring impairment losses on goodwill of SEK 50 M were also charged to earnings during the year.
ContentS 2007
The year in brief 4
President’s message 8
Sigma in brief 12
Vision
Business concept Goals
Overall strategies Core values Brand
Market 14
IT & Management 19
Information Logistics 20
Examples of assignments 22
Employees 26
Board of Directors’ report 28
Financial summary 30
Definitions 31
Consolidated income statement 32
Consolidated balance sheet 33
Consolidate cash-flow statement 34
Changes in consolidated shareholders’ equity 35
Notes to the consolidated accounts 36
Parent Company income statement 46
Parent Company balance sheet 47
Parent Company cash-flow statement 48
Pages 28–54 comprise the formal Annual Report examined by the company’s auditors.
Changes in Parent Company shareholders’ equity 49
Notes to the Parent Company accounts 50
Auditor’s report 54
Corporate governance and ownership 55
Deviations from the Swedish Code
of Corporate Governance 56
Board of Directors and auditors 58
Notice of Annual General Meeting 60
annual report 2007 preSiDent’S MeSSaGepreSiDent’S MeSSaGe annual report 2007
”hearing that Sigma is the best at understanding customer needs and delivering the right solutions inspires me and our employees.”
SiGMa’S preSiDent, Sune nilSSon:
annual report 2007 preSiDent’S MeSSaGe
Sigma stands firm in its focus on follow- ing our customers in an international market. The conditions for this are favo- rable. Our long-term engagements are increasing. As is the number of frame- work agreements we have with major customers. We have a high frequency of repeated purchases, and our customers are constantly increasing our sales.
We are pursuing multiple efforts to strengthen our proximity to our global customers. Today, we have assignments and consultants out working on five continents: in Asia, Australia, Europe, North America and Africa. We do so not least to have capacity and resources to secure major undertakings, which in the past half-year have been exemplified by several new, large assignments, totaling well above SEK 100 M in order value in our operations.
eXtraorDinary inVeStMentS
We pursued a number of aggressive investments in the past year to obtain long-term competitiveness.
This primarily pertains to acquisitions and geographic establishments, but is also true of organizational change through which we are going from three business areas to two – IT & Management and Information Logistics.
In terms of information logistics, we have decided to offer these services under our own brand, Sigma Kudos, as a result of our acquisition of the interna- tional company, Kudos, early in 2007.
This acquisition makes us the world leader in information logistics to the telecommunication market.
operationS in inforMation loGiStiCS Our acquisition of four companies in the Kudos Group increased our expertise and our resources in information logistics so
that we currently view ourselves as world leaders in the field. Work is currently under way here to adapt the work methodology and synchronize ISO certification pro- cesses, including the certification of local networks in seven countries – Sigma Kudos has operations in Finland, France, China, Sweden, Germany, Hungary and Ukraine. We view this year as an estab- lishment year for the operations resulting from the merger of former Sigma Infor- mation Design with Kudos, and our operational excellence concept is in full swing to synchronize the operations.
This means that we combine the efforts to meet customer demands for quality, cost-efficiency and delivery precision with developing and deepening the coopera- tion with the customer by simplifying interfaces, increasing transparency and clarifying areas of responsibility between us and our customers.
GeoGraphiC eStabliShMentS During the year, we established operations in China, India, the UK and Germany. The common denominator for all of our establishments is that we are following our global customers out into an international arena.
China
Here we are primarily investing in the customers that already have operations in China. However, several establish- ments are being requested locally in China, and we have begun operations in Shanghai. We also note local market cultivation of globally active Chinese companies. For the products of these companies to be competitive, they need to raise their level of documentation to achieve a level in line with the regulations with which the European and American companies work.
uKraine
From our Ukrainian operations, the three most important areas of which are soft- ware development, system integration and IT consulting, we not only deliver to Swedish customers, but also supply Internet-based IT solutions and system administration to the UK, the US, Austria and Germany. We also note that this operation will have a favorable pace of expansion moving ahead.
Our employees in the Ukraine are very prominent with regard to system develop- ment. The office is geographically well placed and is only four hours flying time from Sweden compared with the signifi- cantly longer time it takes to India, for example.
inDia
Sigma has had proprietary operations in India since October 1 and Sigma’s person- nel on site manage subcontractors in the engagements we accept. We choose to have our own personnel on site to bridge potential cultural differences and different ways of working. India plays a key role in our work to ensure the highest possible quality at the smallest possible price with a highly flexible delivery organization.
uK
We had a successful start in Manchester with extremely skilled employees on site.
Our establishment in this area is attribut- able to us listening to customer demand for our presence in the region. At the begin- ning of 2008, we also won an exclusive contract with AstraZeneca under which we will secure the IS/IT support for AstraZeneca’s clinical testing centers in the UK and Sweden. This agreement is proof that our efforts to support multinational com- panies with advanced solutions are be- ing welcomed by our customers.
thiS year’S inVeStMentS proViDe the ConDitionS for future
inCreaSeS in earninGS
Gothenburg, February 29, 2008 Sune Nilsson
teChniCal it
The Group’s work with the customers’
development units has resulted in many customers also asking us for technical IT support. Now, this also takes place through broader deliveries to existing customers, mainly in locations and facili- ties in which we are already established.
internal effiCienCy enhanCeMentS Our extraordinary investments during 2007 are charged to earnings. At the same time, continuous improvements of work processes and delivery forms make us attractive to customers when they seek cost-saving alternatives to doing the development themselves. To maintain a favorable balance in operations, we are now undertaking active internal measures to achieve higher efficiency in our new establishments and in our internal organization.
ContinouS orGaniC GroWth
Our recruitment activities continued and were intensified during the year. Despite tough competition in today’s labor market, we often succeed in employing the skilled people we need. Net recruit- ment was 126 people with a significant increase in future sales as a result. My goal for 2007 was approximately 100.
pleaSinG aWarD
We continue to receive gratifying recogni- tion. In Exido’s IT Barometer survey of 1,500 companies conducted during the autumn, Sigma was awarded the Swedish computer association Dataföre- ningen’s challenge trophy, the Diamond 2007. This kind of award is naturally a perishable good, but combined with the two first-place rankings in Veckans Affärer’s 2003 and 2004 surveys of a number of Swedish customers, it is
encouraging proof that we are the best at understanding customer needs and being able to deliver.
With Sigma’s in-depth business know- ledge, we are succeeding in providing our customers the solutions they need.
This inspires me and our employees to try to maintain such a position.
annual report 2007
our GoalS 2008
We formulated overall goals for 2008 under the headings growth, profitability and market, based on investments made:
GroWth:
Existing operations shall grow by at least 10%.
profitability:
Sigma shall achieve a profit margin that exceeds 8%.
MarKet:
Sigma’s proportion of invoicing for the thirteen largest customers shall increase by at least 10%.
our ViSion – firSt ChoiCe
The Sigma Group shares an overall vision.
Given the rapid growth of the industry and our company, it is important to always be aware of the direction in which we are headed and where we want to go.
In the vision we have formulated, Sigma should be the First Choice. In practice, this means that Sigma should always be our customers’ first choice for consulting services and IT solutions. We also want to be the obvious first choice when we need to recruit new employees or enter partnerships. First Choice also involves being the natural first choice of investors in the IT consulting market on the OMX Nordic Exchange in Sweden.
our buSineSS ConCept:
What We liVe on
Sigma supplies consulting services and functional undertakings for leading companies. Through great understanding and commitment, we increase the efficiency of the customer’s business and add new value.
SiGMa in brief
oVerall StrateGieS:
hoW We Will aChieVe our GoalS Organic growth through recruit- ment
Higher billings ratio
New organization with higher internal efficiency
Increased delivery from our own units with lower productions costs Understand and rapidly cover customer development and efficiency enhancement needs Increase the proportion of projects that we lead and control
our Core ValueS
CoMMitMent
The Sigma culture is based on commit- ment to our customers and our employees. We all have the ability to influence our work and work together across various boundaries. Customers perceive strong commitment in Sigma employees. We make our customers’
challenges our own and keep working until they are overcome.
Sigma also supports the fight against AIDS in Africa.
entrepreneurShip
Sigma has a well-developed ability to identify business opportunities and is quick to move from words to action while maintaining awareness of quality. We are skilled in combining existing resources in a productive manner that creates added value for both small and large customers. For Sigma, entrepreneurship is synonymous with business focus.
DynaMiCS
Sigma’s willingness to change over the years shows that we are a dynamic company. Sigma is accustomed to meeting market challenges through rapid growth, acquisitions and expansion in new markets and segments. The most lasting qualities in Sigma are change and development.
branD
During 2007, we reworked our brand platform to better reflect the changes made to our operations. We continue to stand firm in our brand identity, our core values and our positioning strategy.
hoW SiGMa WantS to be perCeiVeD The positioning statement that was for- mulated for Sigma drives virtually every- thing we do, including our behavior, our marketing communication and our product development. Everything is focused on communicating a single identity for Sigma. Sigma is a leading supplier of solutions in IT, Management and Information Logistics that serves an international market and focuses on functional engagements.
To clarify Sigma’s position in informa- tion logistics, operations are conducted under the proprietary brand Sigma Kudos.
ViSion, buSineSS ConCept,
GoalS anD StrateGieS
annual report 2007
Customers competing globally with products sold on a global market want to have suppliers that can handle their engagements and work with similar processes in several locations worldwide. Along these lines, we note growing demand for cost-effective solutions through a local presence.
Leading companies want to work with in- creasingly fewer suppliers, which means that Sigma works continuously to develop new and refine existing delivery models. Flexibility, extended partner cooperation and certified work models are subcomponents that make our international deliveries possible.
DoMeStiC MarKet a SiGnifiCant baSe
At the same time that we continue to follow the major Nordic export companies into an international arena, the small and medium- sized customers in Sigma’s domestic market are significant to our development and growth, which not least includes the public sector.
Within Sigma, we have a total of 700 customers that purchase our services annually, which is a sign of the broad confidence we enjoy in the Swedish market. Without it, we would never be able to expand our operations to new parts of the world. Our ambition in the expansion outside Sweden is to create value and provide opportunities not only to our major international customers, but also to customers that will expand to other countries and other parts of the world in the future.
neW enGaGeMentS DriVe SiGMa’S GroWth During the autumn, Sigma won several large engagements with an order value totaling well over SEK 100 M in our operations.
AstraZeneca outsourced the management of 84 systems to Sigma. Because they are research systems, our work processes and networks were required to be certified in accordance with FDA regulations. Astra’s
our larGeSt MarKet CoMpriSeS our norDiC CuStoMerS anD their non-norDiC eStabliShMentS
auditors visited us and checked that we are working in the right way.
Sigma won a project to upgrade a large CRM system, which we will carry out in Sweden and India.
We have a major engagement in technical documentation for a number of major products, involving work in three locations:
Stockholm and Karlskrona in Sweden and Shanghai in China.
Given our goal of supporting global customers locally, this type of assignment drives Sigma’s growth in the market.
lonG-terM DeVelopMent With Global SourCinG Sigma can offer a number of different delivery models, in which our work methods with global sourcing have proven increasingly successful. Global sourcing means that, when large requests are received, we directly determine if we can achieve a higher level of efficiency by conducting parts of the work outside Sweden, such as in India, China, Ukraine or Hungary. This way of working and thinking requires an adjustment where the organization, the managers and, above all, the sales force work purposefully on development.
SiGMa SupportS the fiGht aGainSt hiV/aiDS in South afriCa
Star School is the name of a comprehensive program that aims to provide hope and faith in the future to students at a number of schools in southern Africa and thereby slow the spread of HIV/AIDS.
Sigma partners with Zandlazethu High School with nearly 800 students and about 25 teachers. Our commitment in the Start School program is a way for us as a company to contribute to something as fantastic as a brighter future for the students at our school.
This commitment permeates the entire Group on various levels, where besides financial support, we have contributed to the installa- tion of some 100 computers at five schools in South Africa.
MarKet
annual report 2007 preSiDent’S MeSSaGe
Sigma’s growth in China began with the establishment of Sigma Kudos in Beijing in November 2006 and is now taking a decisive step forward.
Sigma Kudos has initially had an assignment from a large Nordic telecom- munications company since the beginning of 2007 and we now also have several other customers in telecom as well as
SiGMa SuCCeSSfully inVeStinG in GroWinG ChineSe MarKet
In just over a year, Sigma Kudos culti- vated several customer relationships and now has approximately 20 people in China. In this short time, we amassed considerable experience and knowledge, and have primarily noted that our know-how is very much in demand in the Chinese market.
the automotive industry in Beijing.
The Nordic telecom company conducted procurement for its opera- tions in Shanghai and the assignments have occupied several Sigma Kudos employees since November. This beginning in Shanghai is the result of establishing business in Shanghai ahead of the original plans.
årSreDoViSninG 2007 MarKet
rapiD GroWth in KarlSKrona
We grew by more than 20 employees in Karlskrona, Sweden in the nine months since the beginning of operations in the spring of 2007. This rapid growth was possible thanks to our very strong brand and our experience of starting new operations. We note that companies in Karlskrona have quickly recognized that our deliveries increase the value of their products. Our increasingly clearer presence in Karlskrona builds on the successful deliveries we have made in other cities in Sweden.
hunGary playinG an
inCreaSinGly iMportant role
Sigma Kudos’ operations in Budapest, Hungary appear to be becoming more important to our European deliveries and are involved in several projects.
We can very rapidly and flexibly supply teams that complete the customers’
assignments in multiple locations. We have placed consultants locally, close to the customer, and we quickly set up integrated teams in Hungary that function as support in terms of expertise and resources. For example, five consultants from our Stockholm office can collaborate
with two consultants from the Hungarian office, which is a cost advantage for us and the customer.
This has proven particularly success- ful in times like these when many places in Europe experience a lack of personnel/
resources. This way, we can increase the flexibility and scalability of our organization.
annual report 2007 SiGMa
SiGMa’S SolutionS aDD Value to CuStoMerS’ inVeStMentS
it & ManaGeMent anD inforMation loGiStiCS
Sigma’s business is focused on providing our customers with solutions that add value and the most commercial benefit possible. We achieve this by combining business knowledge, strategy and IT.
Within IT & Management, our solutions and consulting services are divided into three main areas, namely System Development, Management and Business Systems. The boundaries between these areas are fluid. A customized solution from Sigma most often combines elements from several of the main areas.
SySteM DeVelopMent
The System Development area can be said to include the services and solutions that mean that we at Sigma can call our- selves suppliers of complete IT solutions.
For example, this area includes system development, systems integration, testing and system administration, and ranges from pure system development services to complex integration projects between various standard systems. Our collective expertise in system develop- ment spans a broad area, where we are experts on many different platforms, technologies and products. This means that we can always select the most optimal solution for the customer.
We work in all phases of system development – ranging from analysis, project management and development to testing and verification. We also offer operation, administration and support for all or parts of our customers’ IT environments.
A large proportion of our assignments are functional engagements that stretch over an extended period of time within the scope of the Sigma Service Center.
ManaGeMent
The basis for Sigma’s entire offering in management consulting is our extensive experience of working closely with the customer’s operation. We offer such management solutions as business development, project management, decision support and IT Infrastructure Library (ITIL).
Our methods aim to take advantage of the improvement potential that exists within all organizations. We identify the possibilities and supply a plan for imple- mentation and, possibly even more im- portantly, Sigma also assumes manage- rial responsibility for the change and consequently for gaining support for and establishing the new strategy or work method in the organization. Through collective expertise, comprising know- ledge, experience and best practice from more than 150 management consultants, we ensure that the customer quickly and effectively receives help to optimize and develop the business.
buSineSS SySteMS
Sigma’s know-how in business, applica- tions and technology guarantees our customers long-term support with regard to developing and improving their business processes beginning with the business systems.
Sigma currently works with several of the business systems available in the market such as SAP, Lawson M3, Microsoft Dynamics AX and Guda. This means that we can analyze and propose the system support that complements existing systems and is the best solution in terms of both operations and costs.
Our objective is to develop and improve our customers’ business processes through expert consulting and solutions tailored to the operations.
In many cases, Sigma has a partnering role with the leading business systems, a role that we are gradually extending with new systems.
business systems for data management By combining information management and cooperation in an integrated manner, we can get people, processes and infor- mation to work together. Information systems and information management are also a type of business or operational system in which Sigma specializes in e-commerce, corporate portals, public Internet services, product data manage- ment, case handling and document management.
business systems for maintenance
For many of the world’s manufacturing industry companies, the maintenance system is the hub of operations. Sigma is a provider of solutions for maintenance and specializes in Maximo®, one of the market’s most comprehensive systems for maintenance and materials manage- ment. Sigma partners with IBM, which owns Maximo®. We represent IBM in the Nordic region, Northern Europe and the Baltic states.
annual report 2007
Sigma Kudos is responsible for Sigma’s successful business in information logistics and product information, making us one of the world-leading suppliers. Today, product information is a product characteristic, a dimension of the product. Information is based on product knowledge, which increases the product’s usability and thereby the product’s perceived value.
Sigma Kudos’ main area of information logistics comprises Technical Information, Information Development, Information Management and Built-in Intelligence.
inforMation loGiStiCS
The task of Sigma Kudos is to expand the end-user’s product knowledge, in other words to ensure that the end-user
understands and learns to prefer our customer’s product.
This means that we have the capacity and the expertise to assume total responsibility for the end-customer being able to install, maintain and use the product, including all components of information logistics. Sigma Kudos is the customers’ end-to-end partner through- out the delivery of product information and its entire lifecycle.
Sigma Kudos can accept responsibility for the entire information logistics chain, including development, translations and publication of information.
We actively work with end-users and train them in how to use the product and the manuals. As a by-product, the users often provide valuable feedback, which can in turn be fed back into product development and the development of information.
Besides highly qualified analysts, project managers and product informa-
tion writers, we have specialists in trans- lation, publication and training that form the optimal delivery channel for the customer and the end-user.
Sigma Kudos’ model for information logistics comprises a set of Key Perform- ance Indicators (KPI) that ensure that the right information is developed and processed effectively throughout the entire chain.
information Development
Sigma Kudos’ ambition is to formulate information based on a holistic business perspective. It is important to give custo- mers and end-users adequate product knowledge because it increases the per- ceived value of the product. Customers and end-users tend to prefer products and systems they understand and consider to be valuable.
The results of information develop- ment may be customer product informa- tion, marketing product information, SiGMa
training solutions and internal product information. The actual preparation and development of the information is Sigma Kudos’ core business. We can assume responsibility for parts of or all product information in a company.
Sigma Kudos develops product infor- mation for our customers with the objec- tive of not just producing the information, but also of developing methods and tools to maintain the highest efficiency possible in our projects.
information Management
Sigma Kudos’ knowledge of information management generates highly qualified services that aim to further improve our customers’ information logistics. We implement solutions that support the entire lifecycle, from creation to publica- tion and distribution.
Our employees in development, analysis, system architecture and project management possess in-depth knowledge
of information structures, administrative processes, international standards and market-leading tools in information management. Typical assignments are analyses and pilot studies of information and systems as well as implementation and integration of content management systems to fully match the customer’s business value.
Our customers require systems that can manage large volumes of information produced and used by a large number of people worldwide. The information must be managed and archived for an extend- ed period of time and the customers wish to utilize the benefits of publication through one source: recycling information in various documents and the parallel publication of the same information in different formats.
built-in intelligence
The automotive industry is a typical example of an area where the develop-
ment and utilization of built-in systems are constantly increasing. For many years, Sigma Kudos has possessed in-depth knowledge of how to develop and inte- grate advanced software for built-in real- time systems. Here, we work with the customer’s R&D, production and after- market departments. Since we work across the entire chain, we facilitate the exchange of knowledge between different departments and shorten lead-times and develop products with a high level of service that can easily be put into produc- tion. As a supplier of built-in systems to the automotive industry, in a world characterized by large customers and complex technologies, we have cutting- edge knowledge in several disciplines such as diagnostics.
annual report 2007
Conny WiCKberG fotoGraf
Stena Rederi IT (SRIT) provides engage- ments and services within IT to most companies within Stena AB. This means that a total of 400-500 users should be supported by a small, lean organization.
Trying to work ad hoc with incoming issues inevitably results in such problems as excessive dependence on certain people, many variants of how the issues are hand- led and virtually non-existent traceability in changes. This in turn means that pre- paring a precise budget is impossible.
This was the situation when Sigma was asked to present a solution.
Sigma confirmed that SRIT not only served the companies within Stena, but also had the strategic coordinative respon- sibility for approximately another 1,200
users in the company’s Active Directory.
At the same time, customers were increasingly proposing ISO certification.
DeManD for retaineD Quality the DeCiDinG faCtor
Although SRIT perceived external demands, the internal need to organize and structure the working methods to become more professional towards the customers, particularly in connection with the growth of the company, was very much the deciding factor.
Sigma had previously developed an operational plan and was again entrusted to contribute to the quality management system now being developed. Together with Sigma, a business model, an IT
eaSier to holD the CourSe for Stena reDeri it With the riGht inStruMentS
policy and suitable processes for the organization were developed based on Sigma’s expertise within methodology and ITIL service management.
faSt reSultS
SRIT obtained a better workflow. Com- bined with effective follow-ups, this prevents matters from being overlooked.
At the same time, budgeting has become easier and provides good investment documentation for the coming year’s budget.
Now, SRIT can devote more time to preparatory work and risk assessments, can maintain a significantly higher quality of work, and has received a better basis for a potential expansion.
aSSiGnMentS
Sigma continues to administer and further develop the Swedish national pension portal, minpension.se. During the past year, Sigma developed the portal to be able to manage accelerating customer growth. This involved a 24-hour service to manage even more users, faster up- dates, more pension products, more detailed information such as fund infor- mation and an entirely new and more flexible forecast function.
The portal is now better equipped for the needs of the future and can offer more services and more integrated pension companies. Through the years, Sigma has built up considerable base of confi- dence, which is the reason that Sigma
was entrusted to continue managing the further development of the portal.
Minpension.se is a cooperative effort between the Swedish government and pension companies and together with three other portals was nominated for the Web Service Award in the Information and Service category.
Today, the following companies are integrated into MinPension: Alecta, AMF Pension, Folksam, Folksam LO Pension, FPK, Försäkringskassan, Handelsbanken Liv, KPA Pension, Kåpan Pensioner, Länsförsäkringar, Nordea Liv & Pension, PPM, Swedbank, SEB Tryggliv, Skandia, SPK, SPP, SPV and Volvoresultat Försäkringsförening.
penSion portal MinpenSion.Se eQuippeD for the
neeDS of the future
New proof of Sigma Kudos’ good name in terms of reliable software deliveries connected to built-in systems was received a few months ago. Sigma Kudos was entrusted to be in charge of project management in an initial stage of a very extensive and important assignment for a commercial vehicle manufacturer.
The assignment covers new develop- ment of the IT support for the diagnostics and repair of trucks and buses in the global aftermarket. It involves the drafting and review of the requirement specifica- tion for how this IT support will be used and will function in the service centers.
The requirement specification should result in concrete project plans, which involve the development of a new inte- grated diagnosis tool to support service center mechanics.
The project plans must also present how existing information will be migrat- ed to the new system, try to ensure a flexible solution to cover future changes, and choose an implementation strategy that takes maintenance costs of the continued operation of the system into account.
reliability reWarDS SiGMa With preStiGiouS aSSiGnMent
raMirent anD SiGMa in DeCaDe-lonG
Cooperation
Ramirent AB is one of Sweden’s leading machine rental companies and is a part of the Finnish Ramirent Group. Ramirent has been a customer of Sigma’s for more than a decade and is a good symbol of our focus on increasing the proportion of long-term engagements, which is a part of Sigma’s goals.
Sigma continuously works with admin- istration and engagements. This coopera- tion began with Sigma being given minor system development assignments in the middle of the 1990s. This has led to Sigma currently maintaining total responsibility for the operation, administration and further development of business and administrative systems.
During 2007, the assignments have included shifting the accounting system and establishing a new integration plat- form. A project to create an external web- site with e-commerce support is under way in parallel, in which Ramirent’s customers will themselves be able to take care of a large part of the rental process.
SiGMa ManaGeS pfiZer’S buSineSS SySteM
In an administration agreement, Sigma was entrusted to manage the Lawson M3 (Movex) system for Pfizer’s Swedish operations. The agreement extends over three years. With the high standards of the pharmaceutical industry, Sigma now has proof that the company has the right skills and concepts. Sigma is looking
forward to the cooperation with the IT administration department at Pfizer Health AB. Sigma develops and improves the customer’s business processes through expert consulting and customized solutions, which are then applied in the customer’s business system.
annual report 2007
Boss Media, headquartered in Växjö, Sweden, is one of the world’s leading and independent total suppliers of systems for digitally distributed gambling entertain- ment such as poker, casino games and bingo. Boss Media develops gambling system solutions for such distribution channels as personal computers/the Inter- net, interactive gambling machines, and digital TV. The operators are licensees that are offered a customized gambling system, an integrated payment system and operator-oriented services.
Sigma Kudos has worked with Boss Media since 2003 and has had between 3–7 consultants in Växjö, who have continu- ously worked with system development and the development of technical informa- tion and product manuals for Boss Media.
WelCoMe eXpertiSe in uKraine
During 2006, Sigma Kudos entered an engagement together with Sigma Eclipse in the Ukraine, which led to Sigma current- ly employing 10 consultants in Ukraine for Boss Media, with a particular focus on system development. When Ukraine and Växjö work together in the same project,
uKraine anD VäXjö in the SaMe projeCt
work is primarily performed on a distrib- uted basis through Internet communica- tion and e-mail correspondence.
This solution has proven to work very well, which on one hand has involved a cost benefit and on the other a way for Boss Media to be able to quickly supply new gambling solutions. When Boss Media receives a new order from a customer, generally it means that an extremely large amount of work is to be done in a short time. The electronic connections between Växjö and the Ukraine mean that a sufficient amount of advanced skills can quickly be placed at Boss Media’s disposal.
The Swedish Emergency Management Agency, SEMA, was established in 2002 through a parliamentary resolution. SEMA is a government agency charged to coor- dinate the work of developing emergency management in Sweden and in Swedish society. In this context, SEMA allocates significant funding to research every year.
Like growing numbers of authorities in Sweden, SEMA follows the current trend and is moving from a paper-based way of working to managing operations digitally as the requirements of greater transparency, access and control of case handling over the Internet grow.
eleCtroniC platforM prepareS for the future
Sigma delivered a platform to SEMA with the overall objective of digitizing opera- tions, making it possible for the agency to manage all of its documents electroni- cally and to publish its records so that they can be monitored on the Internet.
Sigma is now reviewing each work process with SEMA on this platform.
yeSterDay: a Very paper-intenSiVe proCeDure The first process concerned the research
DiGitiZeD eMerGenCy ManaGeMent
unit’s handling of applications for research grants. This involves considerable annual funding and a large number of applica- tions. The processing of this was in prin- ciple impossible. Just the work of copying the documents and distributing them to all concerned was extremely burdensome, both in terms of effort and cost. Tradition- ally, researchers applied for grants by sending in their research proposals to SEMA in an application, which generated large amounts of paper.
SEMA in turn copied all submissions for distribution to expert groups charged with the task of reviewing the applications and submitting their views on the propos- als. The experts then returned the docu- ments with their comments.
Everything was compiled and decisions were made. Then there was post-approval work in the form of a check that the re- searcher had kept his or her promises.
toDay: effiCient anD unDerStanDable Today, the researchers use the Internet to submit their applications, including all appendices, electronically.
Sigma built an electronic administra- tion system around this, where an
SiGMa upGraDeS tele2
Tele2 has used the Maximo system for several years and Sigma had the assignment to administer the system.
Tele2 uses Maximo to manage all technical equipment such as base stations. Maximo is also used as a purchasing system for this kind of equipment.
In 2007, Sigma carried out an extensive upgrade for Tele2 to the latest version of Maximo. Sigma is ultimately responsible for the admin- istration and further development of new services in the solution they now have. This includes the integration with other systems such as the accounting system, etc.
Tele2 previously had a Centura- based Maximo version, but with Sigma’s help, Tele2 now has a fully web-based solution accessible from their intranet.
administrator can indicate which experts should be involved. These are then given access to the information in the original electronic documentation. They can also perform their evaluations directly through the administrative interface.
The entire process thereby becomes electronic and virtually nothing needs to be on paper.
Gain: half a rainforeSt. annually.
The work together with SEMA is a clear example of how many of today’s IT in- vestments can have a decisive, green impact on considerable savings in paper and thereby in forests. Moreover, the agency in this case avoids a consider- able amount of administrative work. The entire process becomes better, more efficient and easier to supervise at the same time as it will be significantly easier for the Swedish Emergency Management Agency to handle the government’s new requirements with regard to how research funding is distributed.
SiGMa initiateS Cooperation betWeen VäXjö uniVerSity anD the uniVerSity of eleCtroniCS in uKraine
The background of this cooperation is Sigma’s presence through its office in Kharkiv, Ukraine and close contacts with the university there. During the autumn, 50 students from the Ukraine will con- currently undergo parts of their education together with 15 students at Växjö University through IT.
aSSiGnMentS
The SP Technical Research Institute of Sweden develops and mediates technology for the development and competitiveness of the business community. It also contri- butes to security, sustainable growth and a favorable environment in society. This means that SP’s public website must have a structure that can accurately guide a visitor through a jungle of information.
Together with Sigma, SP succeeded in developing sp.se into such a website in 2007.
forerunner on neW Sharepoint In connection with the name change to SP Technical Research Institute of Sweden, the time was deemed right to overhaul and upgrade the company’s website, which was previously composed of a number of different websites maintained and published by some 40 editors with the help of Frontpage.
The new website is currently one of the first implementations of a public web portal based on Microsoft Office Sharepoint Server 2007.
Clear profile
An important part of Sigma’s assignment was that the website should contribute to honing and clarifying SP’s profile as a broad-based research institute with con- siderable research resources and a com- mercial relationship to its customers.
SP has resources to involve cooperating experts from several different fields, when the customer presents their problems.
At the same time, this makes it difficult to have a single website that reflects this.
KeyWorDS
By using a system of well-analyzed keywords with connections to a content index and a search function, it is now easy to find the information one is look- ing for as well as related information.
Today, the sp.se website is well- structured, inviting and a prominent example of state-of-the-art design in the area.
optiMiZeD
buSineSS intelliGenCe proViDeS CoMpetitiVe aDVantaGeS
Today, important information for a company comes from many sources. The Internet and accounting, HR, customer, order and inventory systems are a few examples. At the same time, the right and relevant information reaching the right person at the right time is crucial.
By integrating the information from all sources and presenting it in a single, easily understood image, Sigma offers an optimized solution under the concept of Business Intelligence (BI).
Corporate perforManCe ManaGeMent neXt phaSe in bi
Orifarm is Denmark’s largest pharma- ceuticals supplier. After the company successfully worked for a few years with a Business Intelligence solution developed by Sigma, the companies jointly decided it was time for Orifarm to take the next step. The Corporate Performance Management (CPM) used has strong connections and feedback routes between business strategy, budget and planning, the operational areas and follow-up.
Together with Sigma, Orifarm chose Microsoft’s new CPM platform, Perform- ancePoint Server. This is one of the first projects in Denmark on this platform.
KuWait petroleuM inCreaSeS uSe of bi By utilizing Business Intelligence, Q8 has in the past three years been able to obtain an overview and critical insight into business operations with regard to sales made through the service stations. This overview makes it possible to plan and optimize the supply chain and marketing campaigns in terms of timing and content. Q8 has decided to increase its use of BI so as to also cover the Direct Market business area.
rynKeby ContinuinG aCCorDinG to buSineSS intelliGenCe plan
Together with Sigma, Rynkeby, which is a part of ARLA, successfully concluded the first phase of the company’s Business Intelligence Plan, which covered the areas of sales, marketing and service. With this system, Rynkeby acquired insight into how to succeed in sales and service efforts towards the customers. The two upcoming phases cover production and logistics as well as finance.
SuCCeSSful Web
upGraDe proViDeD Sp
With a neW profile
As consultants in Sigma, our employees have the opportunity to be involved and perform vital work for the largest, interna- tionally active Nordic companies. This means that they can often participate in the most exciting and challenging assignments. At the same time, they are given the opportu- nity to contribute to the possibilities of small and medium-sized companies grow- ing and developing through intelligent and skilled solutions.
The precondition for Sigma’s business is
SiGMa ShoulD be the SuM of the beSt forCeS
our employees’ specialist knowledge, com- mitment and creativity. Our employees are also the reason why Sigma time and again is found among the leading IT consultants in customer satisfaction. Consequently, it is important for us to be able to recruit and retain employees who have the experience and knowledge necessary to conduct and develop the business. Sigma aims to be the first-hand choice for the market’s most qualified consultants and for young, recent graduates.
annual report 2007 eMployeeS
SIGMA IN FIGURES
ANNUAl REpoRt2007
ANNUAl REpoRt 2007 BoARD oF DIRECtoRS’ REpoRt
The Board of Directors and the President of Sigma AB (publ), corporate registration number 556347-5440, hereby submit the following annual report and consolidated financial statements for the January 1, 2007 to December 31, 2007 fiscal year. Sigma AB (publ), registered in Malmö, Sweden, is the Parent Company of the Sigma Group. The Parent Company’s office is located in Gothenburg, Sweden. Sigma AB (publ) has been listed on the Small Cap list of the OMX Nordic Exchange in Stockholm since September 28, 2001.
opERAtIoNS
Sigma is a consulting company with operations in IT and manage- ment as well as information logistics. Sigma’s customers are medium-sized and large companies, the majority of which are based in the Nordic region, but have global operations. In Sigma’s non-Nordic units, there are also a large number of local customers.
Operations focus on long-term functional engagements and were conducted in three business areas in 2007: Business Solutions, IT Solutions and Information Solutions in a total of nine countries.
The operations now conducted in Sigma were started in 1996 as a Group unit and as individual subsidiaries long before that.
tHE GRoUp – ACQUISItIoNS AND DIVEStMENtS
During 2007, investments were made in four companies in a collec- tive acquisition from Kudos Information Ltd. in the UK. The acquired companies conduct operations in Finland, Hungary, Germany and France in the area of information logistics with a focus on the telecom sector, and complement the existing Sigma subsidiary, Sigma Information Design.
During the year, investments were also made in three relatively recently founded Swedish companies that conduct operations in business systems and the development of built-in systems.
In July, Sigma acquired Intellector AB, which is specialized in the Lawson M3 business system and complements Sigma’s existing operations concerning this business system.
In July, Sigma’s 70% holding in Berika AB with its subsidiary ID Kommunication was divested. The acquirer was a member of the Board of the subsidiary, which is why an extraordinary share- holders meeting of the Board of Sigma AB was held in August to approve the agreed upon sale in accordance with the Swedish Act on Certain Directed Placements in Stock Market Companies etc.
SAlES AND EARNINGS
Sales increased by 12% to SEK 1,375.5 M (1,223.4). Organic growth accounted for SEK 132 M or 11% and acquired sales contributed SEK 82 M to the increase. Divestments and exchange-rate differences account for the remainder of the differences. Operating profit amounted to SEK 24.7 M (97.3), corresponding to a margin
of 1.8% (8.0) and includes impairment losses on goodwill of SEK 50.5 M. Excluding these impairment losses, earnings amounted to SEK 75.2 M with a margin of 5.5%. Profit before tax amounted to SEK 19.1 M (93.3). Impairment of good will is not tax deductible and the year’s tax expense amounted to SEK 20.9 M. Earnings per share after tax were a loss of SEK 0.02 (gain: 0.71).
RESEARCH AND DEVElopMENt
Sigma conducts no research. Development of proprietary products and concepts takes place as a part of normal operations. In cases where such development satisfies the requirements for capitaliza- tion, it is booked at the value of expenses.
pARENt CoMpANY
The Parent Company’s revenues totaled SEK 30.7 M (24.9) during the year and mainly derived from the invoicing of services within the Group. Revenues for consulting assignments amounted to SEK 5.2 M (5.7). These are assignments performed by the subsi- diaries for which invoicing has been passed on. These projects generate no earnings effects in the Parent Company. The loss before net financial items amounted to SEK 11.4 M (loss: 11.3). As a result of investments in subsidiaries, a loss of SEK 46.0 M (loss:
25.5) was reported, including impairment losses of SEK 120.0 M (20.0). Shareholders’ equity in the Parent Company amounted to SEK 344.2 M (373.0). The Parent Company had no cash or cash equivalents, only a bank overdraft facility totaling SEK 107.5 M (87.5), of which SEK 88.2 M (12.7) had been utilized by year-end.
During the year, the Parent Company invested SEK 19.3 M (96.3) in equities. The Parent Company also sold subsidiaries to divisions that represent the Group’s business areas. SEK 0.1 M (0.1) was invested in other fixed assets. The Parent Company had an aver- age of 5 employees (6) and had 7 employees (5) at year end.
During the year, the Parent Company received Group contribu- tions totaling SEK 109.3 M (68.8) and granted SEK 14.8 M (1.7) in Group contributions.
BoARD oF DIRECtoRS’ WoRK
The work of the Board of Directors during the year is presented in the section on Corporate Governance and Shareholders on page 55.
GUIDElINES FoR REMUNERAtIoN AND otHER tERMS oF EMploYMENt FoR CoMpANY MANAGEMENt IN 2008
The Board of Directors proposes that the Annual General Meeting resolve in accordance with the proposal below relating to guidelines for remuneration and other terms of employment for company man- agement. The Board of Directors’ proposal is in line with the preced- ing year’s resolution of the Annual General Meeting. Consideration
