Adcore’s Financial Statement: our foundation has been laid

2001-02-06

Today, Adcore publishes its Financial Statement for 2000, a year hallmarked by the merger of Connecta and Information Highway and the integration of a substantial array of acquisitions across Europe. Adcore has pursued integration on a broad front, at high intensity and has been highly successful. Adcore now offers a competitive skills mix in the 13 countries where the group is active. As of the reporting date, Adcore had an employee headcount of some 2,000.

Net sales rose by 135% through the year to SEK 1,294.5 m, with organic growth of 63%-against the group’s 50% target. Operating profit before goodwill amortisation and items affecting comparability rose by 132% on the previous year, to SEK 119.3 m. Average billing per consultant rose 18% year-on-year, to SEK 1,253,000.

Commenting on the Financial Statement, Adcore’s CEO Göran Wågström said:

“We’ve laid the foundation for sustained profitable growth, and have a successful year of profitability, growth and European integration behind us. We’ve delivered our results according to plan. Our acquisitions have been highly successful, while our international operations are expanding.”

Adcore made a substantial number of acquisitions in the year, which have consistently performed according to plan, making a positive contribution to Adcore’s operations and customer offerings. The majority of these transactions were financed with Adcore shares in periods when the market’s valuation of Adcore and its sector peers was far higher than at present. As a consequence of the subsequent revaluation, Adcore has decided to adapt its balance sheet by means of a non-recurring goodwill write-down of SEK 1,329 m. The write-down is based on the Adcore market valuation of December 31, 2000. This measure has been taken exclusively as a consequence of the market’s revised valuation of the sector as a whole. Adcore’s assessment of the acquired enterprises’ qualities, earnings ability and healthy development potential remains unaltered. Adcore uses 20 years goodwill amortization period on strategic acquisitions, and 5 to 10 years on non-strategic. Subsequent to the write-down, Adcore’s equity ratio is 82 per cent.

The full interim report including tables is available to download from the enclosed link.