IFS Still the Fastest-Growing Enterprise Application Supplier with 94 Percent Growth in License Sales.

Business Editors/High-Tech Writers

TUCSON, Ariz.--(BUSINESS WIRE)--Aug. 25, 2000

IFS net sales for the first six months increased by 17 percent, to $117 M, compared with $100 M for the corresponding period in 1999.

License sales rose by 85 percent during the first half of 2000, with a sales increase of 94 percent during the second quarter. During the first six months, the company signed 200 new customers. IFS reported a loss of $6 M after net financial items, compared with a loss of $1 M for the first six months of 1999.

"We continue to have the fastest-growing increase in enterprise application/e-business license sales in the world," commented Bengt Nilsson, president and chief executive officer of IFS. "IFS has retained its technology leadership thanks to major investments in product development that are considerably higher than the industry average.

"The result is IFS Applications 2001(TM) software, which was launched globally last week and features 500 major improvements.

"Focusing on supply chain integration, IFS Applications 2001 includes Open Portal Framework, which allows seamless integration of any data or information source, e-business process such as marketplaces or exchanges, enterprise applications, point solutions or other best-of-breed applications.

"It has already received favorable reviews by leading industry analysts such as Gartner Group, AMR Research and Forrester Research.

"Industry analysts have told me they are optimistic about market growth during the second half of the year. My assessment, like that of our competitors and industry analysts, is that the market has turned, with companies making significant IT investments throughout the rest of the year.

"For us, this has been especially evident in the U.S., where sales during the summer have been good. Moreover, we are confident of signing an additional number of major contracts there shortly. During the past year we have built a strong sales organization in the U.S., and trained new employees who have come to IFS via acquisitions."

Like its competitors, IFS has noted a decrease in consulting revenue, which was down by 7 percent during the first six months. As IFS' increased license revenue indicates, companies are focused on the purchase of new IT products that will take them into the e-business era rather than on investments in support services.

"Another reason for the drop in consulting revenue is that the new versions of IFS Applications require less input from consultants, which is, of course, very positive for both our customers and for our continued growth," Nilsson said.

"No one in the industry was able to predict the magnitude of the slump the industry has just experienced. But given the clear signs of an upswing that we and others can discern, our goal of a positive year-end result remains intact," Nilsson concluded.

About IFS and IFS Applications (www.ifsworld.com)

Industrial & Financial Systems, IFS AB, develops and supplies business applications that span the entire demand and supply chain. The company's approach to e-business allows customers to move step-by-step from their present operations to a solid e-business strategy that seamlessly integrates web storefronts, front office applications, and back office operations right down to the shop floor.

The IFS business concept is to increase a company's freedom of action and competitiveness by offering integrated solutions consisting of standardized business components. IFS uses proven component technology and it is, therefore, easy to add a wide variety of new e-business or enterprise resource planning (ERP) capabilities.

IFS Applications includes web-based ERP components, Internet storefronts, customer relationship management (CRM) applications, connectivity to other ERP solutions, and collaboration with process control systems with a variety of e-commerce engines. IFS Applications offers over 50 functional business components for improving business processes in medium- to large-size companies.

IFS is the world's fastest-growing company in the business applications market. The company has 3,400 employees with products sold in 41 countries through 63 offices around the world.

IFS Applications is a trademark of IFS Industrial and Financial Systems. All other referenced company or product names are trademarks or registered trademarks of their respective owners.