NorCom Information Technology AG Quarterly figures: Investments burden earnings

In the first nine months of the current fiscal year, NorCom Information Technology AG posted total revenues of EUR 10.2 million (2016: EUR 12.8 million). At the end of the third quarter, EBITDA (earnings before interest, taxes, depreciation and amortization) amounted to 1.1 million euros (2016: 1.1 million euros).

The decrease in sales is mainly due to the new contracts from the Big Infrastructure business: The major order from the Federal Employment Agency was reduced, which already made itself felt in the previous quarter. Compared to the previous year, lesser sales of EUR 300-400 thousand are now being achieved each month.

In the third quarter, major efforts were made in finalizing product maturity and integrating with the customer. Both EAGLE and DaSense are now ready for a large-scale rollout with their respective customers. Achieving this status required intensive development work, many of which were carried out in-house.

"We are now slowly leaving our start-up status in the big data area - but that has cost us a lot of investment," explains Viggo Nordbakk, CEO of NorCom IT AG. "In the last quarter, we had to make some extensions to our products to bring them to enterprise capability and market maturity. These investments have a negative impact on sales figures. However, we have achieved our goal of productification for Enterprise customers of DaSense and EAGLE. "

Two major projects have now installed the final versions of EAGLE and DaSense. The next step is now the company-wide rollout in the coming months and quarters at the end of which more than 1,000 users should work with the software.

Sales and new business

NorCom has intensified investment in sales to build new customer relationships. In addition to the well-known major customers, NorCom was able to launch numerous smaller projects with first-time clients.

NorCom was commissioned by AVL as part of the ALP.Lab project. ALP.Lab is an association of Magna, AVL List, ASFINAG, Virtual Vehicle, Joanneum Research and Graz University of Technology, which have launched a robotic car test region under this name. ALP.Lab acts as an independent company and wants to provide an ideal framework for testing autonomous vehicles.

Intensive is the cooperation between NorCom and AMG in the field of powertrain. AMG is a subsidiary of Daimler AG and responsible for the Group's high-performance vehicles. For AMG, NorCom uses DaSense to carry out data analyzes for test drives.

APS-tech, a service provider for automobile companies, specializes in the development and testing of modern vehicle drives. Within this framework, the company already carries out analyzes and reports. DaSense is designed to help make these reports more efficient.

NorCom has been entrusted by Bosch with a smaller consulting assignment. This is the first of a prelude to another possible cooperation.

NorCom further deepened its customer relationship with Stihl. The chainsaw manufacturer commissions NorCom as part of its consulting services with data analysis using DaSense.

Outlook and strategy

Two main topics dominate the strategic focus of NorCom AG: The attainment of the production maturity of DaSense and EAGLE as well as the further sales.

"By productifying our software, we can expand our existing customers and convince other departments," says Nordbakk. "We also want to build sales through partner companies and reach them through these relevant target groups."

Next is the gradual conversion of the Big Infrastructure business to Asset Based Consulting in the big data environment. In this context, consulting services are to be offered in addition to the in-house developed software products. This transformation is expected to deliver more profitable growth and scalability of the business model.

In addition, NorCom will open a branch office in Stuttgart at the beginning of 2018 in order to ensure optimum on-site support.