04/22/2020

NorCom was able to increase its sales revenues in 2019. The total output of 14.0 million euros was 1.0 million euros above the previous year's level. At EUR 1.9 million, EBITDA was also above the previous year's level (EUR 1.1 million).

However, one-off effects have an impact on the 2019 income statement, which must be taken into account in the consequent valuation of the figures: For example, a special effect due to the reversal of warranty provisions is recorded under other operating income: In August 2019, the action brought by the BMVBS was rejected, NorCom's counterclaim was upheld. NorCom had set up a provision of € 1.8 million for a possible warranty obligation, which has now been released. Compared to the previous year, total output increased to a greater extent than sales, which were lower at € 11.9 million (+ 0.2 million euros) are above the previous year's figure.

The business development in the last year led to a reassessment of the NorCom assets DaSense and EAGLE. As a result, the management wrote off all internal work capitalized in recent years. Although the EBITDA is 1.9 million euros, the EBIT due to the high depreciation is only around 21 thousand euros (previous year 0.9 million euros). The negative effect of the extraordinary depreciation is mitigated by the reversed warranty provision. By adjusting the figures, NorCom also sees itself better equipped for possible bottlenecks that could arise from the Corona crisis.

Business development 2019

At the beginning of the year there were positive signals from the automotive industry: NorCom was able to set up a test installation of DaSense at the Detroit Diesel Corporation - a subsidiary of the Daimler Group.

At the end of June, NorCom was able to announce an additional order from Audi as well as the successful integration of DaSense on Microsoft Azure - a prerequisite for the use of the software at Daimler. ALP.Lab also opted for DaSense as the central software. However, the prospect of larger orders did not materialize.

“The crisis in the automotive industry was already noticeable in our business development in 2018. That is why we have already started the year 2019 with a very cautious forecast, which assumed stable business development and we were able to meet it, ”says Viggo Nordbakk, Managing Director of NorCom, commenting on the business development. “In the first half of 2019, we still expected that the situation for automotive customers could improve soon and we worked intensively on positioning our products - through partners or directly. In the first half of the year it slowly became apparent that a trend reversal was not in sight and we therefore began to identify new growth markets for ourselves with EAGLE. "

In October the strategic development of EAGLE was made public: In the future, legal processes should be optimally supported with EAGLE. This created new perspectives for NorCom's business development.

In mid-December, NorCom was able to announce the intention of the Federal Employment Agency to award NorCom the contract for four lots of the framework contract "IT service production", which was confirmed at the end of December.

Strategy and Outlook

NorCom relies on four pillars in order to be able to break new ground without losing existing business.

“We see DaSense as a high-performance, specialized analysis platform for the development and testing of cars. We are now expanding this specialization to include industrial production and quality assurance, ”continues Nordbakk. “We want to position EAGLE as a broad solution for the mass market with extensive machine learning functions for searching, editing and sharing documents.

Especially against the background of the Corona crisis, we are striving for an even more intensive, more active cooperation with the Federal Employment Agency and other authorities. In addition, we have established accompanying, low-threshold offers such as the NorCom Academy. "

A reliable forecast for the 2020 financial year cannot be made due to the difficult-to-estimate duration of the corona crisis and its effects. Business is currently quite stable despite the restrictions caused by Corona and there may even be opportunities for NorCom from the crisis:

“The large home office could lead to increased investments by companies in their technological equipment,” explains Nordbakk. “EAGLE is a platform for working together on documents in distributed teams - for example a lean, high-performance home office solution. With increased sales activities, we want to solve the challenges that arise for companies from the crisis with EAGLE. "

Some of NorCom's offers and orders have not yet been affected by the crisis: "The Academy offer can also be complied with in times of limited travel options: all training courses can be carried out entirely as webinars," continues Nordbakk. At the Federal Employment Agency, the order situation has so far remained unchanged

Nevertheless, NorCom is cautiously planning for 2020 and is assuming a decline in sales due to the ongoing crisis. Assuming that the fourth quarter will again offer better market conditions, it should still be possible to partially offset the stronger declines in sales due to the troubled overall market in the second and third quarters towards the end of the year.