IFS 2006 Third Quarter Financial Report - License revenue grew by 22%. The positive trend is expected to continue as a result of a stronger competitive position and the new version of IFS Applications

(30 October 2006, Linköping)

Third quarter 2006

Net revenue reached SKr 485 million (485). License revenue increased to SKr 93 million (76), representing a growth of 22%. Maintenance and support revenue amounted to SKr 146 million (136), and consulting revenue reached SKr 238 million (257).

EBIT reached SKr 13 million (12), with earnings before tax of SKr 3 million (3). Profit for the period totaled SKr 3 million (3), with profit per share for the period of SKr 0.01 (0.01).

Cash flow from operating activities totaled SKr 0 million (–39). Cash flow after investing activities totaled SKr –26 million (–66).

January–September 2006

Net revenue rose to SKr 1 593 million (1 519). License revenue increased to SKr 293 million (241), representing a growth of 22%. Maintenance and support revenue amounted to SKr 447 million (388), and consulting revenue reached SKr 827 million (846).

EBIT increased to SKr 57 million (55). Earnings before tax amounted to SKr 26 million (32); year-on-year comparison is distorted by a charge of SKr 42 million related to severance cost, capital gains and losses, as well as net currency effects. Profit for the period totaled SKr 23 million (26), with profit per share for the period of SKr 0.11 (0.12).

Cash flow from operating activities improved to SKr 118 million (71). Cash flow after investing activities totaled SKr 11 million (–21).

Outlook

The uncertainty in the timing of defense contracts, combined with negative but temporary effects within consulting, will make it difficult to achieve the targeted EBIT margin of close to 10% for the year. Based on continued strong license sales, the expectation is an EBIT considerably above last year and improved cash flow.

For additional information, contact:

Alastair Sorbie, President and CEO
Phone: +44 (0) 1494 42 89 00

Håkan Gyrulf, Chief Financial Officer
Phone: +46 8 58 78 45 00

Manni Svensson, Investor and Public Relations
Phone: +46 8 5878 45 00

About IFS

IFS (XSSE: IFS), the global enterprise applications company, provides solutions that enable organizations to respond quickly to market changes, allowing resources to be used in a more agile way to achieve better business performance and competitive advantage.

IFS was founded in 1983 and now has 2,600 employees worldwide. IFS pioneered component-based enterprise resources planning (ERP) software with IFS Applications, now in its seventh generation. IFS’ component architecture provides solutions that are easier to implement, run, and upgrade. IFS Applications is available in 54 countries, in 20 languages.

IFS has more than 500,000 users across seven key vertical sectors: aerospace & defense, automotive, high-tech, industrial manufacturing, process industries, construction & facilities management, and utilities & telecom. IFS Applications provides extended ERP functionality, including supply chain management (SCM); enterprise asset management (EAM); maintenance, repair, and overhaul (MRO); product lifecycle management (PLM); customer relationship management (CRM); and corporate performance management (CPM) capabilities.


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