IFS Continues to Blossom

ndustrial & Financial Systems (IFS AB) announced an increase in net revenue for 1999 to Swedish Kroner (SEK) 1,948 M compared to SEK 1,238 M in 1998, an increase of 57% compared with the previous year. License revenue rose by 49% to SEK 552 M as compared to SEK 371 M in 1998. IFS reported a loss after net financial items of SEK 147 M as compared to SEK 10 M in 1998.
IFS has been the fastest-growing vendor among the world's largest suppliers of enterprise applications over the past two years. Bengt Nilsson, president of IFS, commented: "IFS reports continued strong growth in revenue compared with our competitors. This can be attributed to major new sales of IFS' enterprise applications, among other things. The third generation of our component-based enterprise applications - IFS Applications - was shipped in September and has been well received by the market. Moreover, interest in IFS' e-business solutions increased significantly during the end of 1999. During the last quarter, IFS license revenue increased by no less than 70%, which is proof of the increasing demand for our advanced component-based enterprise applications and eBusiness modules."
"Market sales on the whole were considerably lower than expected during the latter part of the year due to customers' wait-and-see attitude toward the new millennium," continued Bengt Nilsson. "The lower growth rate in consulting revenue reported in the third quarter continued into the fourth, resulting in excess capacity among IFS consultants during the second half of the year. We expect our capacity to be fully utilized during the first half of 2000."
During the fall, IFS has further enhanced IFS Applications with an increased number of components for e-business. The 2000 generation of IFS Applications, because of its component-based architecture and rich array of Internet functions, is particularly suited to projects within e-business. Bengt Nilsson explained: "Today, a significant part of our sales to both new and existing customers encompasses e-business. A large number of IFS' 3000-strong customer base will need various types of e-business solutions, and IFS has developed systems to help them find the right solution."
IFS made major investments in the USA during the year through the acquisition of the US Manufacturing Execution Systems (MES) vendor, EMS, Inc. During the last quarter, 12 new contracts were signed, and net revenue in the USA for the fourth quarter rose by 283%. Bengt Nilsson commented: "Integration of EMS has gone well. IFS is now well positioned in the USA, which represents 40% of the world market. In the coming years, US operations will significantly increase their share of the Group's overall net revenue."
In November, IFS started its outsourcing unit, @IFS, which operates and maintains enterprise applications and e-business operations for IFS customers. The first customers were signed in November. In the middle of February, @IFS had nine new customers. "This operation has got off to a flying start. Customers hire us to do what we are best at, which allows them to concentrate on what they do best. We started in the Nordic region, and the USA is next in line," continued Bengt Nilsson.
The market for enterprise applications is expected to improve successively during 2000, reaching a growth rate of 20-35%. Bengt Nilsson adds: " In our assessment, IFS will continue to grow faster than the market. Moreover, operating margins in several of IFS' established markets are expected to increase as demand can be met with only a limited need for new recruitment." IFS had 3,226 employees at the end of the year, an increase of 67%.
SOURCE:http://www.technologyevaluation.com/research/articles/ifs-continues-to-blossom-15500/