YEAR-END REPORT
JANUARY–DECEMBER 2008
IFS reports improved EBIT and substantially better
cash flow for the full year
• Net revenue amounted to SKr 744 million (682) during the fourth
quarter, an increase of 9% including, and of 5% excluding, exchange
rate effects.
• EBIT during the fourth quarter amounted to SKr 117 million (64)
before the effects of the restructuring program and to SKr 105 million
(64) after.
• Adjusted EBITDA amounted to SKr 100 million (83) during the fourth
quarter and SKr 236 (206) for the full year.
• Net revenue for the full year amounted to SKr 2,518 million (2,356),
an increase of 7%, including and excluding exchange rate effects.
• Cash flow after investments amounted to SKr 98 million (20).
• Full-year earnings before tax amounted to SKr 161 million (129), an
increase of 25%. Earnings for the period amounted SKr 95 million
(122) after tax, with earnings per share after dilution amounting to
SKr 3.51 (4.80). The previous year’s earnings included tax revenue of
SKr 58 million.
INDUSTRIAL AND FINANCIAL SYSTEMS, IFS AB
Message from the President
A strategy working in difficult times
I am pleased with the full-year result with an EBIT of SKr 178
million, excluding restructuring charges, representing an increase of
26% compared with 2007. All through the year IFS has clearly stated
that it has increased market focus on the more complex project-based
industries. This focused approach will enable IFS to achieve a leading
position in the key markets of EPCI (engineering, procurement,
construction, installation), utilities and infrastructure. Already in
2008, IFS achieved the leading position for maintenance and logistics
systems in the defense sector. Despite the difficult times, product
revenue grew, and 70–80% of the new licenses sold were from these
target sectors.
With this shift in targeted markets, IFS has moved further away
from consumer-facing sectors and general manufacturing. In other sectors there are still major trends that
will drive long-term investment such as the development of alternative sources of energy, demand for food
and other natural resources, and military projects. Furthermore, many governments plan increased
investments in infrastructure to stimulate the activity in their economies. This has already benefited IFS
with the license pipeline at the end of 2008, adjusted for currency effects, being 7% higher than at the same
time last year.
Consulting margins have, as predicted, continued to improve through 2008, achieving 19% compared
with 16% the previous year. This is the result of dealing with issues that were reported in previous years,
namely a couple of challenging projects, staff turnover and the use of high-cost external resources. The
consulting backlog at the end of 2008 was equal to that seen at the end of 2007, and as long as the backlog
remains stable, further efficiency gains are expected to yield continued margin improvement. Maintenance
and support revenue increased in 2008 by 7% and is unlikely to be affected by the economic downturn.
In March 2008 IFS announced a plan to double product revenue and deliver an EBIT of 15% by 2012.
This goal would be achieved by continued organic growth and by the acquisition of product companies
operating in our target markets and our main existing geographies. In 2008 IFS evaluated a number of
acquisitions but decided that none was ideal—this is an ongoing process. The commitment to the strategy
continues, but progress is likely to be affected by the economic situation.
Business analyst forecasts for the global IT market in 2009, based on extensive surveys of IT budgets,
were adjusted downward during the end of 2008. The most recently reported surveys from analysts such
as Gartner, AMR, and Forrester indicate a total market growth of between -3% and +3%, which is stable
in relation to many other industries. Furthermore, ERP solutions are among the highest prioritized IT
investments due to the need to streamline corporate processes, reduce costs, and improve business
intelligence.
IFS does not offer any predictions regarding the world economy but must assume that the downturn
will persist for all of 2009. Despite the favorable market positioning described above, IFS expects that
investments are likely to be delayed and ongoing projects slowed down. For this reason IFS’ development
for 2009 is expected to be stable and generally in line with 2008. Demand for products and services will be
constantly tracked across all regions and should any deterioration in demand be seen, then cost reduction
action will be quickly taken.
2
Group financial overview for the fourth quarter 2008
SKr million
Net revenue
2008
Q4
2007
Q4
Full year
2008
2 518
Full year
2007
744
682
2 356
License revenue
145
148
479
478
Maintenance and support revenue
200
176
703
659
Consulting revenue
391
353
1 310
1 194
350
319
1 106
1 048
whereof
Gross earnings
whereof
Licenses
133
133
440
429
Maintenance and support
107
110
400
423
Consulting
106
74
248
186
EBIT
105
64
154
141
EBIT margin
14%
9%
6%
6%
Earnings before tax
115
67
161
129
Earnings for the period
64
28
95
122
Cash flow after investment operations
25
61
98
20
Significant events during the quarter
• Significant agreements were signed with: Sanitec, industrial manufacturing (Nordic region); SeaDrill,
offshore (Norway); Zomrex, process industry (Poland); Serimax, construction and contracting
(France); Brightpoint, trade and logistics (Sweden). Moreover, several important agreements were
signed within aerospace & defense with: General Electric (U.S.A.), Babcock Marine (UK),
Domodedovo Technique (Russia), and with another major manufacturer and a large support company
in the defense sector.
• Atrion International, which develops solutions for managing and monitoring hazardous substances in
the chemical industry, joined the IFS Global Software Partner Program. The program enables partners
to integrate their solutions with IFS’ business applications.
• Significant improvements to IFS Applications were launched during the fourth quarter: SOA–based
CAD-PDM (Product Data Management) integration as a web service, support for the Single Euro
Payments Area (SEPA), which enables faster, less costly payment transactions for companies within all
industries in Europe, and new functionality for advanced planning for repair shops in the aerospace &
defense sector.
• IFS Enterprise Explorer, IFS’ revolutionary new user interface, was installed at the first customer sites
for testing and evaluation.
F I N A N C I A L OV E RV I E W
All comments refer to figures for the quarter unless otherwise stated.
Revenue
Net revenue amounted to SKr 744 million (682), an increase of 9% including exchange rate effects and of
5% excluding exchange rate effects. License revenue amounted to SKr 145 million (148), a decrease of 2%
including exchange rate effects and 3% excluding exchange rate effects. Maintenance and support
revenue increased by 14% including exchange rate effects and 9% excluding exchange rate effects, and
amounted to SKr 200 million (176).
3
Consulting revenue amounted to SKr 391 million (353), an increase of 11% including exchange rate
effects and 6% excluding exchange rate effects.
Earnings
Adjusted EBITDA increased to SKr 100 million (83), an increase that is primarily explained by stronger
consulting earnings. Adjusted EBITDA shows the Group’s organic earnings trend as presented on page 9
of the report.
EBIT before expenses related to the restructuring program increased to SKr 117 million from
64 million in the previous year as a result of stronger sales in consulting operations.
Personnel-related expenses increased by approximately SKr 45 million, an increase of 12%. An
increasingly larger part of salaries is incentive-based, which means that improved earnings increase salary
expenses, especially when most of the improvements in earnings are generated in high-cost countries. The
restructuring program, presented in connection with the second-quarter report, is proceeding according to
plan. Expenses related to the program charged earnings with approximately SKr 12 million during the
quarter and approximately SKr 24 million for the full year. The restructuring program is expected to result
in savings of approximately SKr 50 million on a full-year basis; during the quarter, savings amounted to
approximately SKr 7 million.
Maintenance and support earnings amounted to SKr 107 million (110), on par with the previous year.
The support margin was lower during 2008 than in the previous year as new product versions were
released. The margin is expected to increase in 2009.
Consulting earnings increased to SKr 106 million (74). IFS had an increased level of activity in several
markets during the fourth quarter, resulting in a high rate of invoicing.
Earnings before tax amounted to SKr 115 million (67). Net financial items improved by SKr 7 million
because of the lower amount of interest-bearing liabilities and positive exchange rate effects.
Earnings for the period amounted to SKr 64 million (28). Earnings for the previous year contained tax
revenue of SKr 58 million as a result of activated deferred tax claims.
Cash flow and investments
Cash flow after investments amounted to SKr 25 million (61). Cash flow for the full year improved by
SKr 78 million compared with the previous year and amounted to SKr 98 million.
The change in working capital had a negative effect of SKr 71 million (18) on cash flow. The increase is
mainly attributable to the fact that customers to a greater degree than in the previous year postponed
payments until after the turn of the year.
Investments amounted to SKr 55 million (40), of which amortized product development expenditure
accounted for SKr 46 million (28). The amount of amortized expenditure varies depending on which phase
of the product development process the company finds itself in. In previous quarters during the year, this
was lower compared with the previous year. The amount of amortized expenditure increased and for the
full year was at the same level as during the previous year.
Liabilities to credit institutions amounted to SKr 196 million (179) at the end of the period; these
amounted to SKr 145 million at the end of the previous quarter.
Available cash
Liquid assets amounted to SKr 317 (254). Liquid assets including unutilized lines of credit amounted to
SKr 466 million (479).
4
Pledged assets
Pledged assets were reduced during the year, primarily due to the centralized financing structure
implemented at the turn of 2007/2008, as a result of which liabilities incurred by subsidiaries are no longer
pledged.
Outlook
IFS’ development for 2009 is expected to be stable and generally in line with 2008.
Other information
Parent Company
Net revenue for the fourth quarter amounted to SKr 5 million (5), and earnings before tax amounted to
SKr 10 million (293). Liquid assets, including unutilized lines of credit, amounted to SKr 278 million (248).
During the year, convertible bonds amounting to SKr 32 million were converted. The remaining part of
the convertible bond, SKr 3 million, was repaid.
The annual general meeting of shareholders resolved to issue a share dividend (SKr 26 million), to
implement a reverse share split (1:10), to issue new shares, and to establish an incentive program.
During the third quarter 400,000 Series B shares were repurchased for approximately SKr 20 million.
Annual General Meeting of stockholders
The annual general meeting of stockholders for 2009 will be held on April 1, 2009 in Solna, Sweden. The
board of directors will submit proposals concerning the disposition of profits and other resolutions no
later than in connection with the notification convening the AGM at the beginning of March, 2009.
Annual report
The annual report for 2008 will be available at www.ifsworld.com and at IFS headquarters no later than
March 18, 2009. There will be no hard-copy version of the annual report for 2008.
Miscellaneous
The quarterly report for the first quarter of 2009 will be published on April 21, 2009.
Linköping, February 6, 2009
The Board of Directors
Audit report
This interim report has not been subject to review by the Company’s auditors.
5
Consolidated income statement
SKr million
2008
Q4
2007
Q4
Full year
2008
Full year
2007
License revenue
145
148
479
478
Maintenance and support revenue
200
176
703
659
Consulting revenue
1 194
391
353
1 310
Other revenue
8
5
26
25
Net revenue
744
682
2 518
2 356
License expenses
-12
-15
-39
-49
Maintenance and support expenses
-93
-66
-303
-236
-285
-279
-1 062
-1 008
-4
-3
-8
-15
Direct expenses
-394
-363
-1 412
-1 308
Gross earnings
350
319
1 106
1 048
-214
Consulting expenses
Other expenses
Product development expenses
-50
-55
-228
Sales and marketing expenses
-124
-126
-445
-446
-73
-70
-258
-236
Administration expenses
Other operating revenue
8
3
13
12
Other operating expenses
-6
-7
-34
-23
Indirect expenses, net
-245
-255
-952
-907
EBIT
105
64
154
141
Result from participations in associated companies
1
1
1
1
Interest expenses
-2
-6
-13
-25
Other financial items
11
8
19
12
115
67
161
129
Tax
-51
-39
-66
-7
Earnings for the period
64
28
95
122
64
28
95
122
0
0
0
0
2.41
1.06
3.56
4.80
2.39
1.04
3.51
4.80
At the end of the period
26 553
26 347
26 553
26 347
At the end of the period, after full dilution
26 823
27 009
26 823
27 009
Average for the period
26 553
26 346
26 681
25 392
Average for the period, after full dilution
26 823
27 009
27 042
27 034
Earnings before tax
Earnings for the period are allocated as follows:
Parent Company shareholders (SKr million)
Minority interest (SKr million)
Earnings per share pertaining to Parent Company
shareholders (SKr)
Earnings per share pertaining to Parent Company
shareholders, after full dilution (SKr)
Number of shares (thousands)
6
Consolidated balance sheet
Assets
SKr million
2008
Dec 31
2007
Dec 31
Capitalized expenditure for product development
454
476
Goodwill
254
232
Other intangible fixed assets
Intangible fixed assets
Tangible fixed assets
Participations in associated companies
Deferred tax receivables
Other long-term receivables and other participations
7
14
715
722
95
79
3
2
278
306
27
31
308
339
1 118
1 140
Accounts receivable
832
759
Other receivables
204
158
Cash and cash equivalents
317
254
Current assets
1 353
1 171
Assets
2 471
2 311
Financial fixed assets
Non-current assets
Equity and liabilities
SKr million
2008
Dec 31
2007
Dec 31
Share capital
539
527
Other capital contributed
697
677
Accumulated loss, including earnings for the period and other reserves
Shareholders' equity pertaining to Parent Company shareholders
Minority interest
-7
-87
1 229
1 117
0
0
1 229
1 117
Liabilities to credit institutions
20
33
Pension obligations
40
44
Other provisions and other liabilities
16
30
Non-current liabilities
76
107
113
131
Shareholders' equity
Accounts payable
Convertible debentures/bonds
-
34
Liabilities to credit institutions
176
146
Other provisions and other liabilities
877
776
Current liabilities
1 166
1 087
Liabilities
1 242
1 194
Equity and liabilities
2 471
2 311
900
1 263
8
2
Pledged assets
Contingent liabilities
7
Consolidated statement of cash flows
SKr million
2008
Q4
Cash flow from operations before
change in working capital
2007
Q4
Full year
2008
Full year
2007
151
119
317
283
Change in working capital
-71
-18
-75
-109
Cash flow from current operations
80
101
242
174
Cash flow from investment operations
-55
-40
-144
-154
Cash flow after investment operations
25
61
98
20
Cash flow from financing operations
48
-75
-47
-140
Cash flow for the period
73
-14
51
-120
235
265
254
372
9
3
12
2
317
254
317
254
Cash and cash equivalents at the beginning of the period
Exchange rate differences in cash and cash equivalents
Cash and cash equivalents at the end of the period
Consolidated segment reporting
January–December
EMEA
SKr million
2008
Americas
2008
2007
2007
Undistributed Corporate
revenue and expenses
2008
2007
Rest of the World
2008
2007
GROUP
2008
2007
License revenue
357
325
51
72
63
80
8
1
479
478
Maintenance and support revenue
507
467
113
107
80
83
3
2
703
659
1 012
921
172
161
124
110
2
2
1 310
1 194
19
10
0
0
5
9
2
6
26
25
1 895
1 723
336
340
272
282
15
11
2 518
2 356
Consulting revenue
Other revenue
Net external revenue
Intra-Group revenue
60
56
23
31
28
21
-111
-108
0
0
Net revenue
1 955
1 779
359
371
300
303
-96
-97
2 518
2 356
Operating expenses, external
-2 204
-1 352
-1 241
-249
-250
-305
-286
-436
-427
-2 342
Operating expenses, intra-Group
-90
-91
-7
-14
-4
-5
101
110
0
0
Other operating items, net
-14
2
4
2
5
-7
-17
-8
-22
-11
-1 456
-1 330
-252
-262
-304
-298
-352
-325
-2 364
-2 215
499
449
107
109
-4
5
-448
-422
154
141
Average for the period
1 259
1 219
210
221
377
407
817
799
2 663
2 646
At the end of the period
1 299
1 241
213
209
371
387
840
790
2 723
2 627
26%
25%
30%
29%
-1%
2%
6%
6%
Operating expenses
EBIT, undistributed
Number of employees:
EBIT margin, undistributed
Fourth quarter
EMEA
SKr million
2008
Americas
2008
2007
2007
Undistributed Corporate
revenue and expenses
2008
2007
Rest of the World
2008
2007
GROUP
2008
2007
License revenue
110
99
14
20
16
28
5
1
145
148
Maintenance and support revenue
139
120
34
26
26
29
1
1
200
176
Consulting revenue
302
280
48
42
41
30
0
1
391
353
6
3
0
0
2
2
0
0
8
5
557
502
96
88
85
89
6
3
744
682
Other revenue
Net external revenue
Intra-Group revenue
17
14
16
3
7
6
-40
-23
0
0
Net revenue
574
516
112
91
92
95
-34
-20
744
682
Operating expenses, external
-614
-389
-347
-71
-59
-87
-77
-93
-131
-640
Operating expenses, intra-Group
-21
-25
-2
0
-1
-2
24
27
0
0
Other operating items, net
-11
2
3
1
8
-5
1
-2
1
-4
Operating expenses
-421
-370
-70
-58
-80
-84
-68
-106
-639
-618
EBIT, undistributed
153
146
42
33
12
11
-102
-126
105
64
Average for the period
1 294
1 246
211
213
378
391
832
794
2 715
2 644
At the end of the period
1 299
1 241
213
209
371
387
840
790
2 723
2 627
27%
28%
38%
36%
13%
12%
14%
9%
Number of employees:
EBIT margin, undistributed
8
Consolidated organic net revenue
SKr, million
January–December
2008
Actual
Translation
effect
Structural
changes
Fourth quarter
2008
Adjusted
2007
Actual
2008
Actual
Translation
effect
Structural
changes
2008
Adjusted
2007
Actual
License revenue
479
10
-
489
478
145
-2
-
143
148
Maintenance and support revenue
703
5
-2
706
659
200
-9
-
191
176
Total product revenue
1 182
15
-2
1 195
1 137
345
-11
-
334
324
Consulting revenue
Net revenue
(including other revenue)
1 310
3
-5
1 308
1 194
391
-16
-
375
353
2 518
18
-7
2 529
2 356
744
-27
-
717
682
Consolidated organic operating expenses
SKr, million
January–December
2008
Actual
Operating expenses
Translation
effect
Structural
changes
Fourth quarter
2008
Adjusted
2007
Actual
2008
Actual
Translation
effect
Structural
changes
2008
Adjusted
2007
Actual
2 364
10
-6
2 368
2 215
639
-24
-
615
Capital gains/losses
0
0
-
0
3
0
0
-
0
0
Exchange rate gains/losses
Restructuring costs/
redundancy costs
8
-1
-
7
-13
15
-1
-
14
-4
Reversal of restructuring costs
Amortization/depreciation and net
capitalization of prod. development
Adjusted operating expenses
9
618
-30
0
-
-30
-3
-13
0
-
-13
1
1
0
-
1
-
0
0
-
0
-
-52
-1
-
-53
-52
1
0
-
1
-16
2 291
8
-6
2 293
2 150
642
-25
-
617
599
Income statement of the parent company
SKr million
2008
Q4
2007
Q4
Full year
2008
5
Full year
2007
Net revenue
5
16
18
Administration expenses
-5
-8
-27
-35
EBIT
0
-3
-11
-17
Result from participations in subsidiaries
-
304
0
375
Result from participations in associated companies
-
-
-
-
Financial revenue
60
23
110
77
Financial expenses
-50
-31
-91
-100
Earnings before tax
10
293
8
335
Tax
-7
0
-7
8
Earnings for the period
3
293
1
343
Balance sheet of the parent company
Assets
SKr million
Participations in subsidiaries
2008
Dec 31
2007
Dec 31
978
978
Deferred tax receivables
87
92
Receivables in subsidiaries
30
40
Other long-term receivables and other participations
3
6
Financial fixed assets
1 098
1 116
Non-current assets
1 098
1 116
664
698
Receivables in subsidiaries
Prepaid expenses and accrued income
9
7
Cash and cash equivalents
135
29
Current assets
808
734
1 906
1 850
Assets
Equity and liabilities
SKr million
2008
Dec 31
2007
Dec 31
Share capital
539
Statutory reserve
573
573
Retained earnings, including earnings for the period and share premium reserve
478
507
1 590
1 607
2
1
Liabilities to credit institutions
15
26
Non-current liabilities
15
26
Convertible debentures/bonds
-
34
Liabilities to credit institutions
171
81
Liabilities to subsidiaries
108
79
Shareholders' equity
Provisions for pensions and similar commitments
Other liabilities
Current liabilities
Shareholders' equity and liabilities
527
20
22
299
216
1 906
1 850
10
Key figures for the group
2008
Q4
2007
Q4
Full year
2008
Full year
2007
License margin
%
92%
90%
92%
90%
Maintenance and support margin
%
54%
63%
57%
64%
Consulting margin
%
27%
21%
19%
16%
Gross margin
%
47%
47%
44%
44%
Product development expenses/net revenue
%
7%
8%
9%
9%
Sales and marketing expenses/net revenue
%
17%
18%
18%
19%
Administration expenses/net revenue
%
10%
10%
10%
10%
EBIT margin
%
14%
9%
6%
6%
Earnings margin
%
15%
10%
6%
5%
Return on average operating capital
%
10%
6%
15%
14%
Amortization and depreciation
of which amortization of capitalized product
development expenditure
SKr, M
-46
-43
-171
-174
SKr, M
-36
-34
-142
-146
Capitalized product development expenditure
SKr, M
46
28
119
122
%
23%
23%
23%
23%
SKr, M
121
75
121
75
SKr, M
236
223
236
223
times
0.2
0.2
0.2
0.2
Equity/assets ratio, before conversion
%
50%
48%
50%
48%
Equity/assets ratio, after full conversion
%
50%
50%
50%
50%
Accounts receivable (average 12 months)/
net revenue (rolling 12 months)
Net liquidity
Interest-bearing liabilities, excluding convertible
debentures/bonds
Debt/equity ratio
Number of employees:
Average for the period
2 715
2 644
2 663
2 646
At the end of the period
2 723
2 627
2 723
2 627
274
258
946
890
Net revenue per employee
11
SKr, '000
Financial trend for the group
SKr million
2008
Q4
2008
Q3
2008
Q2
2008
Q1
2007
Q4
2007
Q3
2007
Q2
2007
Q1
2006
Q4
License revenue
145
142
111
81
148
106
152
72
140
Maintenance and support revenue
200
175
165
163
176
161
164
158
153
Consulting revenue
313
391
287
324
308
353
253
296
292
Other revenue
8
8
6
4
5
8
7
5
10
Net revenue
744
612
606
556
682
528
619
527
616
License expenses
-12
-11
-10
-6
-15
-10
-15
-9
-16
Maintenance and support expenses
-93
-71
-74
-65
-66
-63
-55
-52
-54
-285
-246
-266
-265
-279
-228
-259
-242
-263
-4
-1
-3
0
-3
-7
-3
-2
-12
Direct expenses
-394
-329
-353
-336
-363
-308
-332
-305
-345
Gross earnings
350
283
253
220
319
220
287
222
271
Consulting expenses
Other expenses
Product development expenses
-50
-61
-61
-56
-55
-50
-56
-53
-55
Sales and marketing expenses
-124
-109
-112
-100
-126
-100
-120
-100
-110
Administration expenses
-73
-59
-68
-58
-70
-47
-57
-62
-50
Other operating revenue
8
3
1
1
3
2
2
5
5
Other operating expenses
-6
-15
-9
-4
-7
-5
-7
-4
2
Indirect expenses, net
-245
-241
-249
-217
-255
-200
-238
-214
-208
EBIT
105
42
4
3
64
20
49
8
63
Result from participations in associated companies
1
-1
1
0
1
-1
1
0
-1
Interest expenses
-2
-3
-3
-5
-6
-5
-6
-8
-10
Other financial items
11
8
5
-5
8
0
3
1
-3
115
46
7
-7
67
14
47
1
49
Tax
-51
-16
-1
2
-39
40
-11
3
174
Earnings for the period
64
30
6
-5
28
54
36
4
223
Earnings before tax
Cash flow after investment operations
Number of employees at the end of the period
25
-15
-46
134
61
2
-56
13
75
2 723
2 699
2 648
2 623
2 627
2 650
2 625
2 663
2 630
Outstanding shares
Series A
Number of shares on January 1, 2008
249 550 019
263 466 657
-
6 062 568
6 062 568
2
3
5
-12 524 976
-230 051 331
-242 576 307
1 391 664
25 561 259
26 952 923
Share issue
Number of shares on December 31, 2008
TOTAL
13 916 638
Conversion of KV5B
Reverse split
Series B
Repurchasing of own shares, in own custody
-
-400 000
-400 000
Number of outstanding shares on December 31, 2008
1 391 664
25 161 259
26 552 923
Number of voting rights on December 31, 2008
1 391 664
2 516 126
3 907 790
-
269 920
269 920
1 391 664
25 431 179
26 822 843
Additional shares after full dilution
Number of shares on December 31, 2008 after full dilution
Consolidated capital accounts
SKr million
Opening balance
Translation difference
Net income recognized directly in equity, excluding transactions with the owners of the company
Earnings for the period
Total recognized net income, excluding transactions with the owners of the company
Change in minority interest
New issue—redemption of convertible debentures/bonds
New issue—warrants, TO6B
2008
Dec 31
1 117
2007
Dec 31
866
30
-15
1 147
851
95
122
1 242
973
0
0
32
144
1
-
Dividend
-26
-
Buy-back of own shares
-20
-
1 229
1 117
Closing balance
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Risks and uncertainties
In its operations, the IFS Group is exposed to certain risks that can affect earnings to a greater or lesser
extent. Apart from the general concern about the economy, our assessment is that no new significant risks
or uncertainties have arisen. For a detailed account of risks and uncertainty factors, please see the annual
report for fiscal 2007.
Estimates and critical assumptions
To present the financial reports in accordance with the IFRS, the management must make certain estimates
and assumptions that affect the application of the accounting principles and the reported amounts
pertaining to assets, liabilities, revenue, and expenses. Actuals may differ from the estimates and
assumptions.
The estimates and assumptions are regularly reviewed. Changes in estimates are reported in the period
in which the change is made if the change affects only that period, or in the period in which the change is
made and future periods if the change affects both the current and future periods.
Accounting principles
The consolidated accounts have been prepared in accordance with the International Financial Reporting
Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretations
issued by the International Financial Reporting Interpretations Committee (IFRIC). In addition,
recommendation RFR 1.1 of the Swedish Financial Reporting Board (RFR), Supplementary Accounting
Rules for Groups, has been applied.
This consolidated interim report has been prepared in accordance with IAS 34, Interim Financial
Reporting, and with the Swedish Annual Report Act. The Parent Company accounts are prepared in
accordance with the Swedish Annual Report Act and recommendation RFR 2.1 of the Swedish Financial
Reporting Board, Accounting for Legal Entities.
As of 2008, sales and marketing expenses are reported as a separate function in accordance with IAS 1.
Previously, these costs were included in license expenses.
License expenses now include only expenses related to partners and third-party suppliers. In
accordance with IAS 8, previous periods have been restated and key figures adjusted.
In other matters, the accounting principles applied are the same as those applied in the latest annual
report.
For detailed information about the accounting principles: see annual report 2007.
Definitions
License margin: License revenue minus license expenses in relation to license revenue. License expenses
include only expenses related to partners and third-party suppliers.
Maintenance and support margin: Maintenance and support revenue minus maintenance and support
expenses, in relation to maintenance and support revenue. In addition to external expenses related to
partners and third-party suppliers, maintenance and support expenses include mainly payroll expenses,
travel expenses, and office rental pertaining to personnel staffing the Maintenance and Support service.
Consulting margin: Consulting revenue minus consulting expenses, in relation to consulting revenue. In
addition to expenses related to sub-contracted consultants, consulting expenses include mainly payroll
expenses, travel expenses, and office rental pertaining to personnel staffing the Consulting service.
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Adjusted EBITDA: EBIT adjusted for amortization and depreciation, development expenditure, one-time
items consisting of redundancy costs, as well as capital and currency gains and losses.
Return on average operating capital: EBIT in relation to average operating capital. Operating capital
refers to total assets, excluding liquid assets, and other interest-bearing assets, less total liabilities excluding
interest-bearing liabilities.
Available cash: liquid assets plus unutilized lines of credits.
Net liquidity: Liquid funds minus interest-bearing liabilities to credit institutions, at the end of the period.
Debt/equity ratio: Interest-bearing liabilities, including convertible debentures/bonds, in relation to
equity, at the end of the period.
Equity/assets ratio before conversion: Equity before conversion of convertible debentures/bonds in
relation to total assets, at the end of the period.
Equity/assets ratio after full conversion: Equity after full conversion of convertible debentures/bonds in
relation to total assets, at the end of the period.
Organic change: Year-on-year figures adjusted for currency effects on consolidation as well as changes in
structure.
About IFS
IFS (OMX STO: IFS), the global enterprise applications company, provides ERP solutions which enable
organizations to respond quickly to market changes. The solutions allow resources to be used in a more
agile way to achieve better business performance and competitive advantage.
Founded in 1983, IFS has 2,700 employees worldwide. With IFS Applications™, now in its seventh
generation, IFS has pioneered component-based ERP software. The component architecture provides
solutions that are easier to implement, run, and upgrade. IFS Applications is available in 54 countries in 22
languages.
IFS has over 600,000 users across seven key vertical sectors: aerospace & defense; automotive;
manufacturing; process industries; construction, contracting & service management; retail & wholesale
distribution, and utilities & telecom. IFS Applications provide extended ERP functionality, including
CRM, SCM, PLM, CPM, enterprise asset management, and MRO capabilities.
Financial information 2009
For additional information
Interim Report, first quarter 2009
April 21, 2009
Alastair Sorbie, CEO
Interim Report, second quarter 2009
July 17, 2009
Håkan Zadler, CFO
+46 8 58 78 45 00
Manni Svensson, IR & PR
+46 8 58 78 45 00
Interim Report, third quarter 2009
October 21, 2009
+46 8 58 78 45 00
www.IFSWORLD.com
Industrial and Financial Systems, IFS AB (publ)
Registered office: Box 1545, SE-581 15 Linköping, Sweden – Corporate identity number: 556122-0996
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