Business divisions

Cybercom's operation has two divisions: Sweden and International. The operative organisation, division of sales, and number of employees are described below:

Sweden division

In Sweden, operations focus on telecom and selected technologies for e-commerce and billing, portals and mobile solutions, and embedded systems. The number of employees at the end of the period was 377 (348).

Sales for Sweden increased 11% during 2006 to SEK 469.5 million (422.2). Organic growth in the division was 5%. Operating profit for the division amounted to SEK 44.5 million (27.6), which is a strong improvement of 61%. As a result, the operating margin increased to 9.5% (6.5).

The strongest growth comes from the operation in the booming Öresund region. In 2006, Cybercom opened another office in the region - in Lund. Around year-end, Cybercom signed an agreement to acquire Varchar, an IT company that specialises in .Net. The acquisition brings 24 employees and SEK 20 million in annual sales - starting January 2007. Varchar contributes key customers from new market segments, for example, Smittskyddsinstitutet, Wihlborgs Fastigheter, Cerdo Bankpartner, Alfa Laval, and Lunds Energi.

Cybercom paid a fixed purchase price of SEK 12.5 million. There may be an additional purchase payment if certain profit levels are reached within eight months. The acquisition was effective January 2007 and integration is planned to be completed during H1 2007. No structural costs are expected.

The operation in Singapore is a subsidiary to Netcom Consultants, a Stockholm-based acquisition from 2005, and is thus reported within the Sweden division. The operation in Singapore shows strong growth and generated SEK 25.6 million in net sales during the year.

International division

This division includes operations in Denmark, the UK, and Cybercom's share in the joint venture in India. The division has 84 employees (44). The Norwegian operation was excluded from this report after a decision to close the operation was taken in Q4 2006.

The exclusion of losses from the Norwegian operation has generated a positive effect of SEK 2.4 million (2.8) to the division's operating profit.

The UK operation was very successful in 2006 with considerable growth and a substantial earnings trend. Its focus is on financial information services, and Reuters is a key customer. The operation also offers e-commerce solutions and IT infrastructure advice. By concentrating on e-commerce in 2006, Cybercom won several new customers within retail. New customers include Pentland Brands, John Lewis, and Tomy.

Cybercom's Danish operation ended the year with a very strong quarter. A large part of the operation is focused on banking, financial services, and pension insurance companies. PFA Pension, BRF Kredit, and Nordea are key customers. In 2006, the Danish operation focused on recruiting in the .Net area - with good results. Strong demand for consultants within specialist services in Denmark enabled price hikes. Cybercom also signed a partnership agreement with BEA, which has J2EE and Weblogic products, and this resulted in new projects.

Cybercom's joint venture in Mumbai, India is reported using proportional consolidation. So Cybercom's share of assets, debts, revenues, and costs are reported with the corresponding items in the Group's income and balance sheet. The company had 56 employees at year-end. Of these, 50% are included in Cybercom's employee count.

Sales in 2006 for Cybercom's operations in Denmark, India, and the UK amounted to SEK 76.4 million (63.2), a 21% increase over 2005. The division's organic growth was 21%. Operating profit rose to SEK 9.7 million (8.0), corresponding to a 12.7% margin (12.7).

In Q4 2006, net sales were SEK 23.1 million (18.7). Operating profit was SEK 4.7 million (2.2), giving a 20.3% operating margin (11.8).