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IFS expects to double product sales by 2012
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04/03/2008
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Swedish extended ERP firm IFS is predicting that it will double software revenues (licenses, maintenance and support) by 2012, through organic growth and acquisitions.
The firm’s announcement follows an improved financial and competitive position in 2007 – now it’s third consecutive year of profitable growth – following the difficult years between 2001 and 2005, when the firm was forced into cost-cutting and refocusing measures .
Over the next five-years, the company says that it also plans to gradually improve its EBIT margin to 15% (up from 6%) with a return of 25% on average operating capital. It also expects to increase dividends to 50% of earnings after tax, while using surplus capital not required for expansion to repurchase shares.
Growth in software sales to date has stemmed from spending in capital-intensive sectors such as the defence, energy, communications, construction and the process industries – with their focus on logistics, service, asset management and project-based manufacturing.
In particular, the firm says that product revenue will now continue to increase at a higher pace than consulting revenue, because it intends to collaborate with partners to a greater extent to improve on delivery capacity.
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Author
Brian Tinham
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