Acando - Interim Report January 1 - September 30, 2013

Regulatory News:

Acando (STO:ACANB):

Third quarter, July 1 - September 30, 2013

· Net sales SEK 296 m (321)

· Operating profit SEK 3 m (18)

· Operating margin 1.0% (5.5%)

· Profit after tax SEK 2 m (12)

· Earnings per share SEK 0.03 (0.17)

Accumulated, January 1 – September 30, 2013

· Net sales SEK 1,033m (1,137)

· Operating profit SEK 32 m (81)

· Operating margin 3.1% (7.1%)

· Profit after tax SEK 24 m (58)

· Earnings per share SEK 0.34 (0.80)

· Cash and cash equivalents SEK 81 m (75)

Statement by Carl-Magnus Månsson, CEO

The uncertain market situation meant continued sluggishness during the summer regarding new project starts and, in addition, a propensity to completely "shut down" activities during the holiday period. In combination, this led to a lower utilization rate over the summer months and a slower than expected improvement in September. The dialogs signaling a recovery in the third quarter materialized later than expected and the notified projects and assignments did not commence until the latter end of the quarter. Naturally, we are less than satisfied with the third-quarter financial performance but we are still convinced that the measures we have taken on an ongoing basis will deliver an impact over the remainder of the year. The quarter’s margins and earnings are in line with the preceding quarter after adjustments for nonrecurring costs linked to the acquisition of e-vita and some restructuring measures.

During the quarter, we won a framework agreement with the Norwegian Tax Administration, which means that we now have framework agreements in all the major IT procuring government administrations. Our position as market leader in Strategic IT and Architecture has thus been further confirmed. As part of fully leveraging our framework agreement position with regard to more technical services, and to take a clearer position on packaged solutions for the Internet, portals and integration, we acquired Norway’s leading Oracle consulting company, e-vita AS, in the third quarter. e-vita combined with Acando’s own consultancy operations in the Java area provides favorable prerequisites for continued growth.

In Sweden, we are experiencing an upswing in the market with an improved order situation and more new projects and assignments, primarily in the Business Systems and Strategic IT areas. Several of these are starting in the fourth quarter and provide better preconditions for the coming period. These assignments mean a need for recruitment with inflows in the first quarter of next year.

The German market is characterized by continued uncertainty and increasing competition for assignments. This is clearest in Northern Germany while operations in the south of Germany continue to trend favorably, particularly in Frankfurt and Stuttgart. We are now seeing increasingly clear effects from the decline in volume at one of our largest customers and, during the quarter, took measures to restructure and downsize operations in Hamburg and Düsseldorf, particularly in the SAP area. Moving forward, our focus is on continued expansion at existing customers and, again, recruitment in skills areas with healthier demand such as Management Consulting, Java and Microsoft. In our assessment, the German market and our position there remains challenging.

The IT industry analyst Radar argues in IT Strategic Direction 2020 that the future belongs to those consulting companies that best understand that operations and IT must cooperate proactively. Our business consultants understand the opportunities and limitations of IT and our IT consultants always start from the basis of business benefit. This understanding of the whole picture is part of our consultants’ DNA and, accordingly, I am confident that we will continue to create value for our customers and thereby value for our owners. We anticipate improved conditions in several markets ahead of the fourth quarter. We expect these improvements to have an effect in the fourth quarter, although not quite in line with the fourth quarter of 2012. We have a strong balance sheet and are focused on maintaining a healthy cash flow.

This is information that Acando AB (publ) is obligated to disclose according to the Securities Market Act and/or the Financial Instruments Trading Act. This information was submitted for publication on October 25, 2013.

Acando (http://www.acando.com/) is a consulting company that in partnership with its customers identifies and implements sustainable business enhancements through information technology. Acando provides a balance between high customer value, short project times and low total cost. Acando has annual sales of about SEK 1.5 billion and approximately 1,100 employees in five countries in Europe. The company is listed on the NASDAQ OMX Nordic exchange. Its company culture is based on the core values of Team Spirit, Results and Passion.

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