NorCom reports stable results despite lower sales
04/30/2019
Slowed economic growth and the difficult business of automobile manufacturers had a negative impact on 2018 sales growth at NorCom Information Technology GmbH & Co. KGaA. The total output of 13.0 million euros was 0.7 million euros below the previous year's level of 13.7 million euros.
Nevertheless, NorCom was able to keep EBITDA at EUR 1.1 million, roughly at the previous year's level (EUR 1.2 million). At just under 8 percent, the EBIT margin is one percentage point below the previous year's figure.
Business development 2018
The reason for the positive operating result was stable business in the high-margin product area. For example, NorCom recorded a decline in sales of around EUR 1.4 million for its major customer, the Federal Employment Agency, but the positive development of the EAGLE project at Audi was able to partially compensate for this.
Projects related to the big data analysis software DaSense suffered from the crisis in the automotive market: project postponements, cost-cutting measures and budget cuts determined the negotiations. Nevertheless, NorCom was able to successfully implement numerous smaller big data analytics projects with DaSense and thus keep sales in this area stable.
“In terms of sales growth, 2018 did not quite keep what it promised,” says Viggo Nordbakk, Managing Director of NorCom, commenting on the figures. “The ailing business of the automobile manufacturers thwarted our plans. Not all orders were implemented as planned and some of them were called up to a lesser extent than expected. "
NorCom was able to achieve important strategic goals in 2018, however, as Nordbakk further explains: "We had four major issues in 2018: To acquire the partner ability for our software solutions DaSense and EAGLE, to convince strategic sales partners of a cooperation, to strengthen the relationships with our customers and to achieve a positive contribution to earnings. We were able to implement all of this in 2018: EAGLE impresses with its high quality and DaSense can go into sales as a complete solution through partners. With AVL, we have been able to win one of the most renowned companies as a partner. We were able to retain all existing customers in 2018 and generate follow-up orders. "
Accordingly, NorCom made investments in 2018 primarily to make DaSense compatible with partners. Furthermore, investments were made in the constant quality improvement of the products.
Commentary and outlook
“The time was ripe for EAGLE in 2018 and we made rapid and successful progress. In the next expansion stage, EAGLE is to be used by all more than 20,000 employees in the "Technical Development" department. EAGLE will manage the complete technical documentation of Audi AG and in particular ensure compliance with all compliance requirements. Documents are managed in EAGLE according to the "Classification System for Documents" (KSU). The KSU defines standards for the classification, processing, storage and timely deletion of data and documents. Temporary documents in particular are screened out at an early stage and waste of data is avoided. In the case of documents to be deleted, it is ensured that they can actually no longer be restored - this has been a relevant point, especially since the GDPR came into effect. With this installation we have an excellent reference project for further marketing ”, says Viggo Nordbakk.
“At DaSense, it is important to us to be present on the market and to remain active in sales through partners and to generate further use cases. We want to be able to offer as soon as there is demand. At the beginning of the year we were able to set up demo installations at two promising companies and we have interesting projects in prospect for the second quarter as well. "