Adcore’s comments on early 2001

The market was weaker than expected early in the year; first-quarter earnings before goodwill amortisation (EBITA) will be negative. Preliminary quarterly sales were SEK 433 (254) m, up by some 70% compared to the first quarter 2000. Expected losses for the first quarter are SEK -45 (32) m, including some non-recurring expenses primarily attributable to the integration of units acquired in the latter half-year 2000. Operations in Sweden continue to show profits for the quarter.

Göran Wågström, Adcore’s CEO and President, commented on progress: “Although being forced to post one quarterly loss is disappointing after such a long chain of positive reports, I’m convinced that with our competency mix, our market positioning is correct, and we are now taking a number of steps that will consolidate our position further.”

Adcore is maintaining its assessment of a long term positive market progress with sustained healthy demand for the corporation’s services, although market conditions have been subject to increasing cyclical concerns for some time. Generally, this has made clients more wary of embarking on new projects, which for Adcore, has implied slightly lower utilization rates. Alongside some residual integration expenses, this resulted in a loss for the first quarter.

The management has been pursuing a number of measures intended to improve earnings and sustain healthy profitability performance for some time. This package includes both revenue-enhancing and cost-cutting activities. Adcore is continuing to hire professionals, although its rate reduced through the quarter.

With measures taken and in the present market conditions, Adcore anticipates its second-quarter 2001 earnings being positive.

Adcore’s complete first-quarter report will be published on 25 April—no further details of its management actions and earnings will be published before this date.

Stockholm, Sweden, 9 April 2001, Adcore AB (publ)