rsr. E. Web 2002

Annual report 2002
Contents
3
Main events of the year
4
Introducing Consorte
6
The Board
7
Annual Report of the Board of Directors, 2002
13
Report from the CEO
17
Supplementary information about creating value
26
Product portefolio
28
Use of Consorte solutions
33
Annual accounts 2002
38
Notes to the accounts 2002
48
Auditor´s report
Main events of the year
The renevues in 2002 were
MNOK 125,9, up 116,7%
compared to 2001
Profitable growth
An increasing proportion of the group's
2002 was a year of solid growth for
existing clients have expanded their
Consorte, with greatly improved results
business with Consorte by increasing the
compared with 2001. The group had a
functionality of services used.
turnover of MNOK 125.9: an increase of
Client defection was low, representing 0.9%
116.7% over the previous year.
of the turnover of MNOK 125.9 in 2002.
The operating result was MNOK –20.6, an
improvement of 63.2% over 2001. Of the
New service areas
NOK 35,5 million improvement in the year's
Over the year, Consorte launched two new
operating result, half derives from cost
service areas: directory enquiries services
reductions, with the remainder coming from
and telephone banking services. Turnover
increased turnover over the year.
growth in 2002 derives to a significant
The company's growth in 2002 was
degree from the setting up of these new
profitable, and this trend will be further
service areas.
extended in 2003.
International operating agreement
The 2002 operating result provides clear
In the autumn of 2002, Consorte entered
evidence of the company's benefits of
into an international operating agreement
scale. While turnover in 2002 increased by
with Hewlett Packard (HP), whereby HP
116.7%, infrastructure costs rose by only
assumed operating responsibility for
1.9% compared with 2001. At the same
Consorte's service production platform in
time, the Group's wages and salaries costs
Norway, Sweden, Denmark and the UK. This
were reduced by 13.8% in the same period.
3-year agreement will provide Consorte with
increased flexibility and open up for simplified
Clients
scaling of the company's technology in the
Consorte's client base lies in the business
international marketplace.
market. The target group consists of large
and medium-sized enterprises in the private
Partner certification
and public sectors. During 2002, Consorte
In 2002, Consorte initiated a partner
Group ASA had a net gain of 61 new clients.
certification programme in the UK, and
currently has 6 certified British partners. The
basis for this initiative is that sales in the UK
are to be made through external distribution
channels. The partner certification programme
will be implemented in other markets in
2003.
Revenue growth
1998-2002
3
Introducing Consorte
Consorte is a telecoms and software
management, VIP customer management,
company that develops and operates
and call centre, portal and teleworker solutions.
customer contact solutions for companies
The current trend sees more and more
and organisations of varying sizes. These
companies opting to outsource ICT systems
clients have a requirement for processing
and to devote efforts to their own core
inbound customer communications that
competences. Consorte seeks to be at the
demands high levels of stability and
leading edge of the Nordic market for
cost-efficiency. Consorte's services offer
outsourcing customer contact solutions
reduced costs, improved customer service
through new functionality and the breadth of
and critical information concerning the
its portfolio.
enterprise's processing of customers. The
One of the group's aims for 2003 is to offer
solutions can be employed using existing
customer contact solutions that provide
infrastructure without further investment,
telephony, SMS and e-mail in a single
and they thereby provide a quick, clear-cut ROI.
solution, and thereby become a full-service
provider of integrated-channel customer
Consorte:
The company was founded in 1998 and has
contact solutions.
◗ A leading developer of
subsidiaries in Norway, Sweden, Denmark
customer contact solution
and the UK. The group has 56 employees
Consorte's business clients are entirely
and was listed on the Norwegian stock
reliant on efficient customer management
exchange in 2001. The technology is based
and the integration of contact channels will
on a scalable platform for the production of
therefore provide them with a more direct
◗ Supplies software for
intelligent network services (IN). This means
and more straightforward interface with
web-based administration
that Consorte's solutions provide equivalent
their own customers. None of Consorte's
and information services
functionality to client-installed hardware and
clients need invest in new equipment or
software. The difference is that Consorte
infrastructure. They can use existing
offers this functionality through leased
systems and lease telecoms services from
services, while clients are spared the
Consorte as an adjunct to resident systems.
technologies
◗ A telecoms operator on
the Nordic market
◗ Advises on and instigates
improved customer
relations for companies
operating responsibility for the customer
contact solutions Consorte provides.
Using Consorte's technology platform,
Upgrading of functionality and service
our clients obtain a solution incorporating
maintenance are undertaken by Consorte.
advanced routing functionality, so that
This allows our clients to concentrate all
geographically dispersed businesses are
their resources on their own core competences.
provided with a uniform customer interface,
through a single telephone number.
How does Consorte create value for
The same applies, for example, to call
clients?
centre solutions where agents work from
Consorte creates value for its clients by
home-based offices. Additionally, through a
offering private and public enterprises
number of web applications, Consorte
value-adding services related to their
provides businesses with access to
customer management.
information about performance levels in
their customer relations operations. For
Consorte's value-adding is achieved by
many clients, this represents an important
routing inbound communications from
analytical tool for further improving
customers through various standard modules
customer management.
developed by Consorte, or through customised
4
solutions. The standard modules
Consorte also supplies its clients with
comprise time management, geographical
invaluable experience in the organisation and
Consorte has a portefolio
development of customer-facing operations.
Consorte has 10 employees dedicated to
in excess of 200 corporate
The whole process through to implementation
product development. They have a wide
customers i 4 markets
of a solution gives clients a valuable guide to
range of skills and experience in developing
the best ways of tailoring customer contact
products in the relevant niche markets.
solutions to people and to the organisation
This ensures that Consorte is well-placed to
itself.
offer competitive, leading-edge customer
contact services, while the on-going evolution
How does the company create value for
of the technology platform creates dynamic
its shareholders?
prospects for integration with other
Consorte creates value for its shareholders
suppliers.
by developing the group into a leading
player in customer contact solutions in the
Consorte operates customer contact
Nordic home market and the UK. Consorte
solutions for companies with 40-55,000
is the second biggest player in Norway, and
inbound phone calls per day, and the current
the company is in the process of building a
platform is capable of dealing with much
strong challenge in the other markets.
greater volumes. The benefits of scale in the
technology are considerable, and the
The company currently has a substantial
marginal costs of implementing new services
portfolio of more than 200 business clients
for clients are low.
in 4 markets, which will provide an excellent
foundation for profitable growth.
The client portfolio is well-founded and
comprises renowned companies in the
banking/finance/insurance sectors, travel
sectors, and, in the public sector, service
provision enterprises and organisations.
Increasing revenue per cost
unit NOK
5
24
Chairman: Jan E. Engebretsen (58)
- MSc.
Jan E. Engebretsen is MSc from the
University of Oslo. He is doing
consultancy business in Nettverk AS
and NovaTeam AS. He also participates
in the commercial development of technology companies and investment
companies. He sits on the boards of
NovaTeam AS, Xtractor, NorgesInvestor
Vekst, Selvaag Gruppen, Selvaag Invest,
Telecomputing and Dolphinics. He was
previously CEO ofTBK AS (Telenor) and
Head of Research at theTeleverkets
Forskningsinstitutt (Telenor).
He has experience and expertise in
international negotiations,
organisational development, project
management, as well as a fund of
knowledge of the ICT sector in general.
At Consorte, he has held the post of
Chairman of the Board since 1988.
Board member: Bjørge Gretland (38)
- PhD Economics, Bachelor in Business
Administration.
Bjørge Gretland is CEO of the Convexa
Capital AS and Convexa Seed AS
venture-capital companies. He is also
the General Manager of Nestor
Kapitalforvaltning AS (NorgesInvestor
Vekst). He is a BBA and PhD in
Economics from Norges
Handelshøyskole and held a Stanford
University research scholarship from
1989-1991. He is widely experienced in
venture capital, mergers and
acquisitions and the capital market.
He is a member of the boards of a
range of Norwegian and US start-ups,
including AxxessIT ASA, Apptix ASA,
Telecomputing ASA, Xtractor AS,
Escenic AS,Torp Computing Group AS,
Cylex Systems Inc. andTrustix AS.
He has been a member of Consorte's
Board since 1998.
Board member:Trond S. Storbråten (53)
- Bachelor in Business Administration.
Trond S. Storbråten has worked in the
ICT sector for the last 25 years.
He has senior managerial experience
from Norsk Data AS, and broad
management experience with Statens
Driftssentral (now Ergo Group),
Telegruppen and, most recently,
ConsorteTele AS. He has worked for
many years in a variety of managerial
positions in business development,
strategic marketing and restructuring.
He has been a key-player in several
turn-arounds of Norwegian
organisations and businesses, and also
has wide experience of starting up and
developing new businesses. Storbråten
was one of the founders of Consorte in
1998 and was CEO until 2000.
He is on the boards of numerous
companies, including Consorte's
since 1998.
Board member:
Stein Holst Annexstad (58)
- Bachelor in Business Administration.
Stein Holst Annexstad is CEO ofTrinity
Capital AS. He has senior management
experience as acting Group President of
Hafslund Nycomed AS (now Nycomed
Amersham). He has also held a number
of positions at Dyno Industrier ASA, in
addition to working as partner and CEO
of AS ISCO Group and Annexstad
Hartvig Wennberg AS. Annexstad has
held a number of board positions in
Norwegian businesses and educational
institutions, including Fokus Bank ASA,
Norsk Medisinaldepot AS,
Handelshøyskolen BI and Sintef.
He is also Chairman of Johan G. Olsen,
Biotec ASA and Luxo ASA, and has
been on the Board of Consorte
since 1999.
Board member: Morten Neeb (55)
- MSc.
Morten Neeb is CEO of the MobiTeam
AS consultancy company which
provides services relating to regulatory
provisions and contact with
the authorities, as well as business
development and strategic planning in
the telecommunications sector.
He was formerly CEO ofTele2 Norge AS
and Vice-chairman ofTele2's Board.
From 1982 to 1995, he was CEO of
Datametrix AS, and held the same post
at Kommhuset AS for a period.
He is also the Chairman of the Board of
Axiti ASA. He joined Consorte's Board
in 2001.
Annual report of the Board of Directors, 2002
Consorte has
experienced solid, organic
growth in 2002
Growth with a focus on profitability
market conditions have been tougher than
2002 has been a year of solid, organic
expected, and the company itself has been
growth for Consorte. There has been a keen
less active, as a result of the cost reduction
rise in turnover, while earnings are
programme of 2001. Sales and marketing
significantly improved relative to 2001. The
activity will however be stepped up in
trend in the company's development is
Sweden from Q1, 2003 onwards. The UK
positive, especially so in the light of the
market continues to be in its establishment
prevailing market conditions in the ICT sector.
phase. Consorte UK Ltd has prioritised the
development of the distribution chain with
While 2001 was marked by adapting the
the certification of UK partners in 2002.
group to changing market conditions, in
2002 the business has concentrated on
The Market
profitable, organic growth. At the same
The Board anticipates a continued positive
time, Consorte has consolidated its market
earnings trend for 2003. This assessment
position in Norway and Denmark.
is informed by the fact that growth in the
Technological developments, with initiatives
market is expected to come from outsourced
in information services and telephone
ICT services, and that Consorte's
banking services, have been all to the good
solutions offer rich functionality and reduced
for the group.
costs for the company's clients. At a time
when more and more companies are con-
Consorte has experienced significant growth
centrating on core expertise and cost
in 2002, especially in comparison with the
savings, Consorte will be able to offer
overall growth in the ICT market. This is due
solutions that are implemented, operated
primarily to initiatives in information and
and upgraded with a minimum of
telephone banking services. There has also
investment and time on the part of the
been satisfactory growth in our client
client. This creates savings and frees up
numbers over the year, with a net 61 new
resources for the customer’s own business
clients, while many existing clients have
operations.
extended or expanded the scope of their
Consorte Norge AS
achieved positive PBT in all
four quarter of 2002
contracts. Client defections continue to be
SUBSIDIARIES
extremely low; in terms of turnover, the
Norway
clients deserting the company over the year
Consorte Norge AS showed a positive
correspond to less than 1% of annual
development in 2002. Several large clients
turnover.
expanded and extended their contracts with
the company. The company achieved
Consolidated position
positive pre-tax earnings in all four quarters
During 2002 – after consolidation in the
of 2002, with its EBITDA of MNOK –4.941,
market – Consorte has confirmed its
for 2001 climbing to MNOK 7.005, in 2002,
position as the only genuine challenger in
an improvement of MNOK 11.946. The
IN-based customer contact solutions in
company will contribute further to the group's
Norway. Calculations, based on market
ambitions in 2003. Over the year, Consorte
figures, accounting figures for 2001 and
Norge AS established services in two new
Consorte's own estimates, indicate that the
areas: information services and telephone
company has a market share in Norway of
banking services. Among other things, the
around 17%. In Denmark, Consorte enlisted
company has extended and
28 new clients, of whom a significant
broadened an agreement involving operation
proportion are large businesses. In Sweden,
of a portal for a telephone bank.
7
The operation of directory information
continued to prevail. Consorte has since
services has demonstrated that Consorte's
contested this decision, and a final judgement
technology is exceedingly well-suited to this
in the case is expected during 2003.
service area. Consorte Norge AS will
actively seek to exploit the opportunities
UK
inherent in the Group's flexible and scalable
In 2002 Consorte UK Ltd had its first
technology. The ongoing liberalisation of new
complete year of operations. The actual
services in the Norwegian telecoms market
setting up of the company went as
will enhance these areas of opportunity, and
expected, but its development suggests that
this provides further incentive to expand our
it takes time to achieve recognition as an
product portfolio in a number of categories.
innovative service provider in the market.
During 2002, the company has built up a
Sweden
customer base of 6 business clients.
Because of the extensive activity in the
Consorte UK Ltd has opted for an indirect
Norwegian market, there was less sales and
sales model, with sales through partners,
marketing activity in Consorte Sverige AB in
and the build-up phase has taken longer
2002 than in the previous year, but the
than was the case in the Nordic home
company experienced relatively good
market, where direct sales provided a
turnover growth in 2002. The company aims
substantial sales channel to the market. To
to achieve a positive cash-flow in 2003. The
date, 6 partners have been certified, putting
company's EBITDA improved by 65% over
them in a position to design and sell
2001, and marketing activity will be stepped
Consorte solutions. These activities will
up in 2003.
continue through 2003. The company posted
its first income in Q2, 2002. Through its
Denmark
presence at the two largest contact centre
Consorte Danmark A/S
Consorte Danmark A/S showed a positive
trade fairs in the UK, Consorte UK Ltd has
had a net influx of 28 new
development in 2002. Net customer influx
gained recognition for its product and
was satisfactory, with 28 new clients in the
services portfolio. The company was "Highly
year. This is in line with customer influx in
Commended" for its Consorte PULSE
Norway.
service in the "Best Product or Service
The company had a 49% improvement in
Award" category at the Irish Contact Centre
EBITDA in 2002. The company's operating
Exhibition 2002. Consorte PULSE was
results in 2002 also improved quarter by
ranked as the second best product in a
quarter. The margin on traffic is lower in
competition with other international
Denmark than in Norway and Sweden. This
suppliers to the contact centre industry.
cuctomers i 2002
means that the company gets a larger share
of its turnover from set-up and licence fees.
Growth rewarded
In working to achieve better conditions for
Consorte can boast of strong growth in
was ranked as number 120
traffic earnings, a complaint was lodged with
the 5 short years the company has been in
among the fastest growing
the Danish Competition Authority against
business. Turnover has grown from
TMT companies in Europe,
TDC for abuse of its dominant position with
MNOK 10.293, in 1999 to MNOK 125.871, in
regard to its valuation of Danish "70" numbers
2002. This is equivalent to 1123% growth.
(corresponding to the Norwegian 5-digit
This takes Consorte into the list of the
numbers). This was done in September
fastest growing TMT (Technology, Media and
2000. The Competition Authority ruled in
Telecoms) companies in Europe for the
Consorte's favour, but an appeal by TDC
period 1999-2001, according to a survey by
meant that the applicable TDC rates
Deloitte & Touche. In their European Fast
In 2002, Consorte Group ASA
according to a survey by
Deloitte &Touche
8
500 list, covering the whole of the continent,
operating agreement will give Consorte
Consorte was number 120 among the
increased flexibility in an international
fastest growing TMT companies.
marketplace, with one of the world's largest
IT companies as its operating partner. HP
Technology
will provide Consorte with greater capacity
Consorte's strengths are flexibility and
for dealing with the increasing customer
2002 shows that the
scalability in the company's technology and
base, while the cooperation brings with it a
technology scales without a
organisation, which give it an ability to react
world-class, secure and cost-effective
quickly to market needs. This has been
operating environment. This allows Consorte
shown by the establishment of operating
more opportunity for focusing on clients and
services for directory enquiries and telephone
the market, as well as developing our
banking. These two new service areas
customer contact solutions technology and
demonstrate that Consorte's technology
portfolio.
Proof on concept:
matching rise in
infrastructure and
hardware costs
incorporates a flexibility and applicability that
offer a great potential for exploitation. The
Finances
substantial increase in turnover has also
In the Board's judgement, Consorte Group
shown that the company's technology
ASA has, at the end of 2002, sufficient
means for achieving the goal
scales up without a matching rise in
financial means for achieving the goal of
of profitability at Group level
infrastructure and hardware costs. From this,
profitability at group level in 2003, based on
it is clear that the company's technology has
the market situation and underlying growth.
an applicability offering interesting business
Going in to 2003, the group has no
potential for deployment in other areas.
interest-bearing liabilities or goodwill in the
Consorte Group ASA
has sufficient financial
in 2003
balance sheet. The equity ratio at the start
International operating partners
of 2003 came to 66%.
In the spring of 2002, Consorte entered into
an international operating agreement with
2002 has been a year of significant growth
Hewlett Packard (HP), whereby HP assumed
for Consorte. All key indicators are
operating responsibility for Consorte's
considerably better than in 2001. The group
production platform in Norway, Sweden,
achieved turnover of MNOK 125.871,
Denmark and the UK. This 3-year
corresponding to growth of 116.7% over
2001. The operating result was
MNOK –20.640, an improvement of 63.2%
over 2001. Of the improvement in the year's
operating result of MNOK 35.469, half
derives from cost reductions, with the growth
in turnover accounting for the remainder.
The share of traffic revenues increased
considerably more in 2002, in relative terms,
than the licence and set-up revenues, as a
result of the new service areas. The revenue
share from traffic minutes rose from 70% in
Q1, 2002 to 84% in Q4. This has led to a
weakening in the gross margin, because of
The scalability in Consorte´s
technology - Value
per man - year
an increased incidence of content elements
from third-party suppliers, and consequently
increased sales costs. The gross margin is
9
expected to sales again as new
Swedish and UK currencies.
customer solutions are set up. In Q4, 2002
Equity capital amounted to
MNOK 56.096 at
31 December 2002
the gross margin came to 44.1%, against
Share capital was not expanded during
41.7% in the previous quarter. This is
2002. Equity capital amounted to
because the share of customer contact
MNOK 56.096, at 31 December 2002.
solutions rose, with infrastructure costs
increasing relatively less than the growth in
Net cash flow from operations in 2002 came
turnover.
to MNOK –18.404. Of this,
MNOK –12.448, was charged to operations,
Compared with 2001, operating costs
while changes in working capital amounted
(excluding COGS) fell by 17.5%.
to MNOK –5.955.
Infrastructure costs for 2002 are on a par
with those for 2001 (an increase of 1.9%),
The Group invested MNOK 3.213, in
while labour costs and other operating costs
tangible fixed assets over the year, against
fell by 13.8% and 41.7% respectively. This
MNOK 10.405 in 2001. This reduction in
has produced efficiency and productivity
investment reflects the fact that the initial
gains, an anticipated effect of the benefits of
phase of the Group's technological
scale and the cost savings implemented.
expansion is complete, and that future
investment levels – based on the company's
Product and technology development is
current plans – will be characterised by
centrally organised in the parent company.
gradual capacity expansion. Of the
This area's costs are mainly labour, but
investments made in 2002, 51% went on
investments have also been made in the
technical infrastructure, with 48% going on
technical development environment and
IT equipment and software.
facilities. Research and development costs,
with the exception of acquired fixed assets,
WORKING AND EXTERNAL
are posted against operations. In 2002 these
ENVIRONMENT
costs came to MNOK 6.585, an increase of
Working environment
12.7% over 2001.
The Board would characterise the company’s
working environment as good. Absence
Pursuing the strategy determined in 2001,
through illness is below the average for the
the group's marketing activities in 2002
ICT sector in Norway. No work accidents or
have remained concentrated on initiatives
occupational injuries occurred during 2002.
aimed directly at existing and potential
clients. Primarily, this is a matter of active
External environment
participation in appropriate trade fairs and
Consorte does not pollute the external
conferences and of media visibility. In 2002,
environment over and above the indirect
the group posted marketing costs of
effect from its use of transport facilities. The
MNOK 2.266.
company’s operations involve a relatively
heavy consumption of energy, mostly in the
10
The profit and loss account shows positive
form of electricity. The company knows of
net financial items of MNOK 0.888, a fall
no effects on the external environment over
from MNOK 3.007, from 2001. This fall is due
and above possible indirect pollution from
primarily to lower average cash in hand, but
the consumption of electricity and scrapping
also to the MNOK 1.001, exchange rate loss
of technical infrastructure such as
that occurred through the strength of the
computers. For this reason no special
Norwegian Krone in relation to the Danish,
measures have been taken to limit negative
effects on the external environment.
more than the generally expected growth in
the European ICT market.
Settlement of losses
The company's future development will be
For 2002, the annual result for Consorte
undertaken with continued focus on cost
Group ASA was MNOK –3.818 and for the
control and efficiency.
group, MNOK –21.050. It is proposed to
settle the loss from the share premium
Going concern
fund. The company’s distributable equity at
The Board is of the opinion that the going
the end of 2002 was zero.
concern assumption is valid and the
accounts have been prepared on this basis.
Outlook
The influx of new clients in the last six
Oslo, 6 March 2003
months of the year was somewhat weaker
than in the first half of 2002, but this was
Jan E. Engebretsen (Chairman of the Board)
offset by several large clients renegotiating
Bjørge Gretland
their contracts and expanding their
Stein Holst Annexstad
solutions. The Board believes that the ‘wait-
Trond S. Storbråten
and-see’ climate will also be characteristic of
Morten Neeb
the market at the start of 2003. Meanwhile,
Marit E. Døving (Group CEO)
investment banks such as
DresdnerKleinwortWasserstein and
Goldman Sachs have upgraded the telecoms
sector for 2003. This is from a belief, in
particular, that the demand for ICT services
will increase, while the sector has restructured
and established healthier business models.
DresdnerKleinwortWasserstein Research
anticipates growth of 10-15% in outsourced
telecoms services in 2003. This is 10%
11
Marit Døving, CEO Consorte Group ASA
10
Report from the CEO
THE LONG-AWAITED CONVERGENCE?
since the early 90s. IP will be of great
The international telecommunications
importance in the future. The challenge with
sector is struggling and is undergoing
new technology however is to predict when
endemic and necessary restructuring
and how the transition will occur. Through
following a period of over-investment and
the press and publicity – as for UMTS – we
unrealistic business models.
often gain the impression that the market is
Will a convergence of technologies
more mature than it in fact is. Which makes
provide the sorely tested sector with its
it easy to miss one's footing. The ICT sector
long-awaited turn-around?
has also had a long tradition of communicating
with the market through three-letter acro-
The international telecoms
sector is in trouble.
Copying business models
for competing in high
volumes, has failed
The international telecoms sector is gasping
nyms (TLAs) rather than explaining what the
for breath. High levels of debt and
product will do for the customer.
uncertainty continue to dominate the market.
The secondary European operators'
In the 90s, the Internet sprung up as a tool
attempts to compete with the dominant
for everyman, and here open standards
players' well-tested business models
were the most important factor in the
through high volumes of traffic and low
spread of the medium. In the business
added-value have, by and large, hit the wall.
market, it took a while before companies
The acquisition of customer bases and
saw how e-commerce could become a
market presence has been at too high a
reality that would change the way people
cost, and UMTS licences were auctioned off
looked at business development and
on terms that, in retrospect, appear highly
interaction between businesses, and
unrealistic and overvalued. A transition in
between businesses and their customers.
communications technologies to IP and
The potential for introducing applications and
UMTS is taking, as is always the way, much
business processes as networked-based
longer than anticipated; Cisco, for example,
web services offers new, cost-effective
predicted that half of current business
ways of integrating businesses. And this in
telephony would be IP-based three years
turn lets companies trade more quickly and
ago. The figure is currently less than
more flexibly than previously.
5%, which goes to show that the
Seamless business
processes across
over-estimation of market potential is
Norwegian – and international – business is
nothing new in the telecoms sector.
becoming more focused on core
competences. This is a development which
international and external
Telecoms and data are converging
demands service providers who can take
demand, will become one of
For many years, voice and data traffic have
responsibility for sections of the value-chain
the most significant
developed along separate, though parallel,
without the end-user noticing. Seamless
lines. The skills required for marketing,
business processes across internal and
constructing and managing a PSTN network
external networks, supplied on demand,
for voice traffic and a data network for IT
will, we believe, become one of the most
systems were very different. Current efforts
significant competitive advantages of the
on common digital standards are ensuring
ICT companies of the future. This has come
that these two worlds are about to fuse, an
to be known in some quarters as
event that has been the talk of the sector
"E-business on demand" or "virtual enterprise".
networks, supplied on
competetive advantages of
the ICT companies
of the future
13
We see great parallels between Consorte's
invest. Cost-savings in new technology
business strategy for service provision and
fields, including in IP, appear to be smaller
what is expected to be the foundation of
than predicted. Conversely, both fixed and
ICT services in the years ahead.
mobile telephony represent business-critical
solutions that no one wants to take chances
Niche focus
with.
The telecommunications sector can be
divided into vertical and horizontal players.
Many telecommunications players are
The vertical players are companies who
realising that there are more specialised
seek to participate right along the telecoms
niches to compete in, in order to generate
sector value-chain, from network ownership
requisite profitability and growth. The
to sales and provision of services to the
positive aspect of the powerful dynamic the
end-user. Companies such as Consorte,
sector is experiencing is that it is being
which focuses only on added-value in
driven inexorably forward by customer
customer contact solutions, are horizontal
demand for seamless and flexible solutions
players.
at the right place and the right time.
Vertical players will encounter
In our view, vertical players will encounter
problems in retaining
problems in retaining market shares along
Communication without equivocation
market shares along the
the whole value chain. There is insufficient
There are several market-related and
innovation in service provision and
technical factors that will push companies'
customer-service models in a vertical
decisions in the direction of more flexible
value-chain of this kind, and totally inadequate
systems. One such is that today's
volumes are generated for the
customers are demanding better and better
investment-intensive infrastructure level to
service. According to Consorte's research,
allow many players to achieve satisfactory
as many as 30 percent of inbound calls are
earnings. With the transition to IP, broadband
never answered, because the line capacity
and UMTS, the players will also have to deal
or response capacity is too weak. Interactive
with convergence with the data sector's
Voice Response and Voice automation
technologies, business models and players,
systems can produce just as much
not forgetting the media sector's
frustration as simplification. This type of
significance in the convergence framework.
solution may also be prone to geographical
This means entirely new and unfamiliar
and linguistic barriers, and trends point to
business models, with only the very best
international traffic only increasing in extent
able to survive the change. Convergence
and complexity. Customers also want to
between data and telephony means that
communicate using SMS or by e-mail.
many companies will be unsure where to
In the future, customer-centric businesses
whole value chain
14
will need to deal with multiple message
Convergence – and then?
systems. The Gartner research organisation
What will be the effect of convergence of
maintains that companies able to
telecoms and data on the market for
synchronise customer interactions, in
value-added telecoms services?
whatever medium, stand to better
We will see increasing specialisation of
competitor results by 20%, come 2005.
companies and service providers in the
telecommunications sector in the years to
A second factor is that many telephony
come. Consorte is both a telecoms operator
systems require costly upgrading to meet
and a producer of web-based software
customer demands, because they are not
applications. This is unequivocally a strength,
adequately configured for the volume of
because we can adapt to the convergence
inbound communications. Moreover, they
of telecoms and data from both camps.
are not flexible enough and cannot be
Competetive advantages as
healthy customer relations,
scaled up and down at short notice in step
Our positioning is however completely clear:
with the enterprise's immediate needs.
Consorte has positioned itself as a supplier
adaptability and
responsiveness will equipe
Consorte to take on a
persistently turbulent market
in 2003
of services for managing inbound
Thirdly, there is the need to develop a more
communications. This means that our clients
pliant approach to the accessible markets.
can use their existing exchanges in just the
The world is tending towards a 24/7 business
same way as new IP equipment in our
model. This requires companies to be
solutions. At Consorte we have every
available when it suits their customers.
conviction that our extensive expertise fully
Business activity therefore demands greater
equips us take on a persistently turbulent
flexibility, which can be met using virtual
market in 2003, with our healthy customer
solutions, where the company's staff can
relations, adaptability and responsiveness as
talk with customers no matter where they
our strongest competitive advantages.
actually are themselves. This means that it is
easy for companies to link up to their staff in
Sincerely
different geographical locations, and thereby
Marit Døving
meet capacity requirements and dispense
CEO Consorte Group ASA
with cost implications. This development
offers a new paradigm for contact centres.
15
16
Supplementary information about creating value
Consorte wishes to increase information
Regulatory frameworks
Consorte aims to be an
users' appreciation of the company's added
Consorte aims to be an active participant in
active participant in
value. To this end, the Group will take as its
cooperation with the regulatory frameworks
cooperation with the
basis in the annual report the guidelines of
for telecommunications in the Nordic region.
the Norwegian Society of Financial Analysts
As a supplier of network-centric solutions, a
(NFF) for reporting supplementary
new area undergoing rapid change and
information about added value.
development, the company needs to play an
regulatory frameworks
in the Nordic region
active role in the formulation of new laws
Consorte Group ASA was formed in 1998
and mandates in the Nordic telecommunications
and has not so far developed a comprehensive
sector, and, through that role, to contribute
framework for measuring the critical para-
its expertise.
meters which are important for the Group's
success. However Consorte intends to use
Norway
the guidelines and, for 2002, will issue a
2002 was characterised by a series of
verbal description of the information which
events in the Norwegian regulatory area,
the NFF guidelines recommend be provided.
including as a result of preparation of the
"Draft of a new act on electronic
In 2003, Consorte intends to set out a
communications" green paper, and a decision
framework for measuring critical success
by the Norwegian Post and Telecommunication
factors, and in next year's report will
Authority (PT) which offered better
accordingly include a more complete
provisions for challengers in the mobile sector.
description of added value which is not
reflected in the accounts and notes thereto.
"Draft of a new act on
telecommunications"
THE MARKET AND EXTERNAL
The new electronic communication act is to
CONDITIONS
replace the current Telecommunications Act
Macro-economic conditions:
and is to be better adapted to the current
Consorte operates in four different
situation, in which telecoms, IT and
geographical markets and is therefore
broadcasting are converging. The draft act
subject to exchange rate fluctuations. Since
proposes identical treatment of all electronic
services are sold locally in these markets,
communication, regardless of the transfer
the strength of the Norwegian Krone does
medium. Preparation of the new act is the
not affect actual turnover. Nonetheless, it is
direct result of the EU's new framework for
the Norwegian currency that forms the
electronic communications (package of
basis of calculations for common initiatives
Directives). The Framework Directive orders
such as the development, operation and
EU/EEA Member States to implement the
production of network services, and this
package of Directives in their own legislation
leads to indirect exchange rate fluctuations
before the end of July 2003.
through product sales. A strong Norwegian
Consorte is committed to harmonising the
Krone therefore has negative impact when
new telecommunications act with the EU's
the Group accounts are consolidated.
package of Directives to the greatest
possible degree.
For 2002, Consorte Group ASA posted to
costs an exchange rate loss of
Among the salient issues for Consorte is the
MNOK 1.001.
continued regulation of providers with
strong market positions. The larger providers
in the electronic communications sector will
17
continue to have greater obligations
drawing attention to the fact that the new
imposed on them than their competitors.
Act should be based on the new Directives
The proposal is to change the definition of a
and not – as it may appear – on the existing
player with a strong market position from
Telecommunications Act.
being a provider with a market share of at
least 25% to "a provider who alone or in
Sweden
conjunction with others has the financial
The Swedish market is less strongly
strength in a specific market such that, to a
regulated in the area of value-added services
significant degree, he can operate
than the Norwegian. In practice, this means
regardless of competitors, customers and
that the commercial framework conditions
consumers". This is also more in accord with
for the company's IN services are less well
what the EU Directive sets out. This means
developed than in Norway as concerns
that several providers can be considered a
interconnect traffic agreements and traffic
dominant player (with up to 50%
prices in the wholesale market. At the same
market coverage), as is the case in the
time, Sweden is subject to the same
Norwegian GSM market, with its duopoly.
conditions vis-à-vis the EU's new package of
Consorte assumes that this sector-specific
Directives on electronic communications.
regulation will be maintained until effective
competition is achieved in all areas of the
Denmark
telecoms market.
In Denmark, Consorte has been one of the
motive forces for improved operating
The new draft act proposes that PT be
conditions. On 16 January 2001 Consorte
furnished with an array of instruments to
Danmark lodged a complaint against Tele
use with regard to providers with strong
Danmark's abuse of its dominant position
market positions. With flexible use of these
with regard to its valuation of Danish "70"
instruments, the authority will be able to
numbers (and corresponding to the
impose special requirements as the need
Norwegian 5-digit numbers). Denmark is
arises. This is an innovation compared with
also subject to the same conditions vis-à-vis
current regulation, where a player with a
the EU's new package of Directives on
strong market position is automatically
electronic communications.
subject to a range of requirements.
In May 2002, Consorte Danmark A/S
18
The EU's package of Directives
succeeded in a complaint to the Danish
After a careful reading of the draft legislation
Competition Council regarding TDC's abuse
and commentary, and the entire package of
of its dominant position. From this it
EU Directives, Consorte has found a number
appeared that Consorte could obtain
of discrepancies between the text of the
significantly better competitive conditions in
Norwegian act as drafted and the statutory
Denmark, which would apply to all operators
texts the EU describes in the Directives. It is
in Denmark. However, TDC appealed this
precisely these texts that Norway, as an
decision and succeeded in the Danish
EEA Member State, is obliged to implement
Competition Authority in August 2002 with
during July 2003. In Consorte's opinion, the
its new pricing proposal for "70" numbers.
Directives should be reflected to a greater
Consorte would like to see corporate
degree in the text of the Norwegian act. The
separation of network and traffic in Tele
wording of the Act, as detailed in its
Danmark in order to avoid the
provisions, must not be at variance with the
cross-subsidy which currently exists.
package of Directives. Consorte will be
Consorte Danmark appealed the
Competition Authority's decision in August
contact centre industry. For customers, the
2002 and a final judgement is expected
question is whether to own or lease
during 2003.
functionality. In comparison with these
suppliers, Consorte can supply equivalent
UK
functionality at a much lower cost than that
The UK market is better regulated for
of investing in a full-scale contact centre
value-added IN services than Sweden and
with its own equipment and operating
Denmark, which provides Consorte with a
set-up. In the main, it is the large, traditional
better framework for traffic prices. Consorte
call centres of more than 100 agents which
is not an operator in the UK, but has a
purchase their own equipment. In the Nordic
different business model, offering lower
countries, call centres are smaller in size,
infrastructure and operating costs than in
which makes Consorte's services an
the home market, through an agreement
excellent alternative for the SME market.
with MCI WorldCom.
STRATEGY
Consorte´s competition fall
into two main categories
Competition
Consorte's vision:
Consorte's competitors fall into two main
Through innovative technology, Consorte will
categories. The first of these consists of the
offer enterprises the capacity to successfully
telecommunications companies who supply
adapt to competitive environments in
intelligent network services like Consorte's.
constant change.
In Norway, Telenor Business Solutions is the
largest player. In the Swedish market, Telia is
Consorte's business concept:
the IN services leader, while TDC holds the
Consorte will strengthen its clients'
same position in Denmark. There are also a
competitiveness through the best possible
number of lesser players in these markets.
management of inbound communications.
The Swedish and Danish markets are less
well-developed than the Norwegian, i.e.
Consorte's primary objective is to create
competition in the IN segment is weaker,
value for its shareholders. This will be
because the dominant operators do not
achieved through a strategy of organic
have the incentive to develop a wholesale
growth with a focus on new sales, better
market for fixed networks. The regulatory
utilisation of the sales resources in the
frameworks are correspondingly less
Nordic countries and partnerships.
satisfactory, as Consorte sees them. This is
because, in the first place, the Norwegian
The company's mission:
telecommunications has been at the cutting
1. In the short term, Consorte aims to be a
edge of IN-related services for a number of
preferred supplier of network-centric
years, while the regulatory frameworks have
customer contact solutions in the Nordic
supported the growth of an innovative
home market.
services market, in fixed and mobile
2. In the longer term, Consorte will offer
networks alike.
enterprises the capacity to successfully
adapt to competitive environments in
The second area of competition concerns
constant change.
equipment and software suppliers selling
client-installed equipment which has the
The company is well-established in the
same functionality as Consorte's IN services
customer contact market. This is a market
and associated web applications. These are
with a number of niches for which Consorte
suppliers to the call-centre and customer
offers solutions, including:
19
◗ Telephone banking services
distribution in all the markets, while different
◗ Information services
operating strategies may be more
◗ Call centre services
cost-effective and appropriate in some
◗ Administrative services for customer
sub-markets. Consorte therefore aims to
resource managers
extend its distribution network through the
◗ Teleworking services
certification of partners in all sub-markets.
◗ IVR (Interactive Voice Response) services
Corporate structure and management
Product strategy
The group is structured as a parent
Consorte's product strategy is focused on
company, Consorte Group ASA, with four
the customer contact niche market. During
wholly owned subsidiaries, Consorte Norge
2003 the company will offer several new
AS, Consorte Sverige AB, Consorte Danmark
new services such as SMS
services, such as SMS and e-mail integrated
A/S and Consorte UK Ltd. The parent
and e-mail integrated with
with telephony. This will open up dynamic
company comprises group functions,
business opportunities in a telecommunications
technology development and application
market in which value-added services are
operations. The three Nordic subsidiaries
becoming even more important. 90% of the
are sales and distribution divisions, each
group's product development is done in
with their own direct salesforce and
Consorte's own technology department,
responsibility for customers and marketing,
which makes for rapid development and
while Consorte UK Ltd is a sales division,
products designed in close cooperation with
selling through certified partners. The
our clients.
subsidiaries pay service and licence fees to
Consorte is niche focused
towards the customer contact
market, and will offer several
telephony, during 2003
the parent company for the use of products
Market strategy
and technology which is developed and
The Nordic region is the main home market,
operated by Consorte Group ASA. The
while the UK represents a promising
subsidiaries are controlled through the group
Consorte´s own technology
business expansion project for the group.
CEO´s role as Chair of each of the subsidiaries'
department
The UK call centre market is the largest in
boards.
90% of the group´s product
developement is done in
Europe and, besides the large centralised
call centres, comprises many small and
HUMAN CAPITAL
medium-sized enterprises. This is an
Human capital is one of Consorte's greatest
infrastructure which accords well with
competitive advantages. The company is the
Consorte's market vision, in which flexibility
actual operator along large sections of its
and independence from geographical
value chain, with the exception of the
location are key to the future development
operation of the infrastructure for the
of customer contact solutions. Consorte's
service production platform, which is
target group consists of companies looking
outsourced, through an operating agree-
for lower costs and a rapid return on
ment, to Hewlett Packard for the company's
investment.
technology platform and to Alcatel for the
group's telephone switching. Consorte's
20
Distribution strategy
value chain requires high levels of expertise
In the UK, Consorte has already gained
at all points and this is reflected in the
valuable experience of alternative
education and experience of our employees.
distribution and operating methods, as
The company has high-end expertise in
compared to how these are achieved in the
technology development, telecoms, data
home market. This experience will bear
communications, programming, IT operations,
fruit in stronger partnerships and wider
sales, consultancy and customer care.
Consorte's value-added services are
Consorte's skills profile
developed by in-house technical specialists.
Consorte depends on having self-motivated,
Sales activities are performed by Consorte's
highly trained individuals in the organisation.
own sales organisations in the Nordic
We have been successful in this; a 'can do'
countries and by a number of certified
culture pervades the organisation and more
partners in the UK. In the delivery phase,
than 75% of employees are highly
they work closely with the group's service
educated. The development and testing
production unit to implement the services
department has an average of 13 years'
according to an agreed specification. The
work experience per employee. All of these
client is then looked after through the
are educated to college and university level.
customer contact centre, which deals with
technical and commercial inquiries.
RELATIONSHIP AND CUSTOMER
CAPITAL
Technology and product development
Market position
require good documentation to guarantee
The majority of Consorte's client base
that the company is not overly dependent
consists of Norwegian businesses. In
on individual employees. The company has
Denmark, Sweden and the UK, Consorte is
formalised these processes over the last
a smaller player, although the Group has
year, and this will be supported by the work
several pan-Nordic clients.
on role and responsibility specifications
done through the group's initiatives on
There are no reliable market share statistics
Corporate Governance. Consorte will
in Consorte's niche market. The statistical
document all substantial work routines,
material available is of too general a nature
processes and areas of responsibility and
for the figures to be meaningful for
make these readily available to the
Consorte's service areas. The Group has so
organisation through its intranet.
far not invested in producing the desired
statistics, but makes use of its competitors'
The company went from being a start-up
annual reports as the basis for calculating its
and founder's company in 1998 to having 70
own market share. This provides a correct
employees in 2000. A change in priorities
baseline, but there are very significant
and market conditions mean that, at the
delays in accessing the data.
start of 2003, the company employs 56
staff.
Brand building
Consorte markets itself with the trademark
Number of employees with
higher education:
Technical 25
Financial/marketing 17
Staff profile:
Average age 35.6
Average yrs experience 12
No staff turnover
"ON LINE WITH CONSORTE" and, during
Group management focuses on retaining
2002, worked to cultivate and position the
and developing skilled employees. For the
services in its portfolio by giving them a
moment, no comprehensive staff satisfaction
product name linked to the Consorte brand.
survey for the group has been undertaken,
Consorte now has 6 principal products, of
but all employees are accorded a high
which Consorte PULSE, a virtual call centre
degree of freedom within their domain and
solution, is the most recognised product
feedback indicates that this is regarded as a
name on the market. The solution was rated
source of great satisfaction. This has led to
as "Highly Commended" in the international
an extremely low turnover of key personnel.
class at the Irish Contact Centre Awards 2002.
To date, only a single employee involved
with the development of the company's
technology has left Consorte.
21
Products:
Consorte also has interconnect traffic
◗ Consorte PULSE – a virtual, network
agreements with Netcom (Telia) in Norway,
based call centre solution
and Skanova (Telia) in Sweden. In Denmark
◗ Consorte SONAR – online web reporting
for customer management
Consorte has an interconnect traffic
agreement with TDC. Interconnect traffic
◗ Consorte CONNECT – home-based
agreements regulate the prices Consorte
office solution
pays network owners for telephone traffic
◗ Consorte RESPONSE – IVR solution
when Consorte's client use customer
◗ Consorte SURVEY – consumer surveys
contact solutions.
by telephone
◗ Consorte PORTAL – telephone portal
Consorte has agreements with Alcatel for
solution
the lease and operation of digital telephony
switches (S-12) which manage traffic flow
Consorte solutions often involve adapting
using Consorte's software.
the different standardised functional
modules to the client's specific require-
UK telecommunications
ments. In this way, flexibility and customisation
MCI WorldCom's operation of Consorte's
bring as much added value to the Consorte
services in the UK has so far been successful.
brand as the functionality of the product
This demonstrates that Consorte's service
module itself.
production platform works exceptionally well
with other digital switches than the type
Clients
used by the group in the Nordic home
Consorte had more than 200 business clients
market.
at the end of 2002. Customer retention is
high and defection rates are low; in turnover
It also shows that the company's technology
terms, customer defection amounted to
has the potential for expansion, both
0.9% of the total for 2002. Consorte's client
through the sale of the technology platform
base is well-founded, consisting of enterprises
and through the sale of services and
in both the private and public sectors.
operations in other European markets.
Many clients renewed and extended their
contracts with Consorte in 2002.
Service production
From its very start in 1998, the Group has
Client information 2002
had an operating agreement for its digital
Market
Net gain 2002
Norway
27
Hewlett Packard became Consorte's
Sweden
0
operating partner for the operational
Denmark
28
UK
6
Suppliers
Consorte has a number of suppliers who
contribute indirectly to added value. These
can be broken down as follows:
Nordic telecommunications
Interconnect traffic agreements with Telenor
on both fixed and mobile networks.
22
switches with Alcatel. In the spring of 2002,
infrastructure of the service production
platform. In practice, this means that parts
of the service production are located in a
central operations centre at Hewlett
Packard, while applications operations
continue to be performed internally by the
group.
The new operating paradigm will ensure
high-level operational stability and security at
an international level and give Consorte the
opportunity to focus on technology and
product development, customer care and
marketing.
Distribution partners
In 2002, Consorte initiated a partner
certification programme in the UK, and
currently has 6 certified British partners. The
basis for this initiative is that sales are to be
made primarily through external distribution
channels. In 2003, the partner certification
programme will be implemented in other
markets, and Consorte is due to certify the
first Norwegian partner in 2003.
STRUCTURAL CAPITAL
Corporate Governance
Consorte Group ASA was founded in 1998
and commenced the task of preparing a
Corporate Governance framework in
November 2000. The first phase was
concluded in 2001. In this phase a number
of key conditions relating to stock exchange
listing in the summer of 2001 were clarified.
In addition, an analysis concerning the
question of risk management was
concluded in Q2, 2002. The goal is to have
drawn up a full CG framework by the end of
2003.
The company's view of Corporate
Governance (CG):
Consorte noticed, and in particular after the
SE listing, that the demands of the outside
world called for greater professionalism in
external and internal routines with a view to
the governance and steering of the
company. The preparation for listing in 2001
had initiated these processes, which meant
that Consorte had already for some time
maintained high awareness surrounding
corporate governance. On-going work to
improve the following areas in Consorte is in
progress:
◗ Improvement of maintenance routines for
internal control
◗ Creating an efficient control structure
◗ Analysis of risks and management
controls
◗ Increased efficiency of organisation and
routines
◗ Improvement of operational activities
◗ Reinforcing IT security and routines for IT
operations
Consorte Group ASA is documenting these
processes in the Corporate Governance
framework drawn up in spring 2001. There
are still several important components in the
structure to be filled, but the demand for
analyses and information from shareholders,
the Board and clients means that the
company aims to have completed elaboration
of the framework within 2003.
The documentation produced and
implemented in the organisation will be able
to offer enhanced appreciation of Consorte
underlying value engine. Together with
supplementary information for value
creation, this information will pave the way
for a correct valuation of the enterprise. The
Board and management are committed to
prioritising this task in the coming year.
The CG framework in Consorte will be made
available internally in the organisation on an
intranet during 2003. In the 2003 annual
report, the Group's Corporate Governance
structure will be dealt with thoroughly.
Shareholders' rights
The company refers to the stock exchange
recommendation for a corporate governance
policy and wishes to state that there are no
changes to the provisions for shareholders'
rights and general meetings compared with
previous rules for these matters. All shares
have the same voting rights.
Bonus arrangements
The company has no special bonus
arrangements for principal employees. There
23
are option arrangements for the company's
staff; see note 4 to the accounts.
Communications with the market.
The company has drawn up a separate IR
policy and disseminates communications
proactively through its own Internet site, the
Oslo Stock Exchange and HuginOnline.
The Board
All Consorte Board members are
shareholders in the company, either directly
or indirectly through investment companies
in which they have a share of ownership.
The Board has had the same Chairman since
1999, and all Board members have sat for
this period, with the exception of Morten
Neeb who was elected at the AGM in 2001.
Board information
The Board receives normal fees; see Note 3
to the accounts.
Intellectual property rights
Consorte has registered rights to the
trademark ON LINE WITH CONSORTE
in Norway, Denmark, Sweden and the UK
for the goods and service classes within
Consorte's product range. The Group is also
the holder of the consorte.no, consorte.se,
consorte.dk, consorte.co.uk, consorte.com
and consorte.nu domain names.
Critical management processes and
systems
Good corporate governance implies an
active administration of both
management/control and corporate
restructuring. Restructuring is required for
goal attainment, while cost efficiency is
achieved through sound management and
control. To succeed requires insights into
and appreciation of the risks the enterprise
is faced with, so as to manage those risks in
a way that is consistent with the enterprise's
objectives and risk-taking criteria. Consorte
Group ASA carries out risk assessment work
to identify the critical risk elements for the
24
enterprise's further development. As a
result of this work, a Risk Management
Strategy has been drawn up, which, among
other things, includes a description of
Critical Process Reviews.
INNOVATION CAPITAL
Future development of the technology
platform
The technology platform Consorte has
developed is now the basis for production of
the services the group supplies, such as
virtual call centres, advanced routing
functionality, home-based office connections,
IVR solutions, telephony portals, telephone
banking solution and information services.
Further development of Consorte's technology
is an on-going process within the company's
development environment, and, in the
course of 2003, Consorte will launch a
complete customer contact portfolio
comprising SMS and e-mail services.
Product portfolio
With a wide range of inbound customer contact
services, Consorte can help businesses
achieve four specific goals:
◗ Reduction of total costs related to
administration, management and
operations of systems for receiving
inbound customer communications.
◗ Enhancement of customer service
through faster and more qualified
customer processing.
◗ Access to management information on
the enterprise’s customer relations.
◗ Low investment requirements.
basis of real-time information on traffic
patterns, and available manning and skills.
PULSE offers great flexibility to the company
through its location independence.
Employees using PULSE can be anywhere
at all – so long as they have a phone line
(mobile, fixed-line or IP). At the same time,
PULSE offers a high degree of preparedness
for traffic fluctuations, skills-oriented caller
routing, easy access to management data
and an intuitive web-based interface for all
users.
Consorte SONAR
Consorte offers many turnkey solutions, but
The SONAR web-based statistics service
telephony needs are often individual. This
provides precise and updated information on
means that we customise the products to
inbound telephony traffic, 24 hours a day.
our clients' requirements. Our principal
SONAR displays information on response
products are:
times, waiting times and call durations for
inbound calls. Callers can also be localised
Consorte PULSE
geographically, and the customer can see
PULSE is a network-based call centre
how they navigate through menus to the
solution where the company avoids large
desired response location. There are many
investments, but receives the equivalent
types of statistical reports for the various
functionality as provided by large
"levels" available in SONAR. These range
from company and department levels,
through to agent level. Information is
available on: number of inbound calls, the
number answered, the response
percentage, the average waiting time (for
callers, including queued time), average call
duration, longest call duration, average ring
time (to agent). In addition, reports are
generated that show details of menu use,
queues and caller’s point of origin. In
Consorte PULSE solutions, the agents’
logins/logouts to the call-centre can also be
displayed.
Consorte PORTAL
A telephony portal organised around a
customer-selected phone number makes it
The screen shows the agent
view of Consorte´s network
based call sentre solution,
Consorte PULSE
26
client-installed solutions. PULSE is suited to
easier for customers to get in contact, and
all types of businesses and organisations.
creates a unified interface with the
PULSE gives the agents an overview of the
company's market. A solution of this kind
telephony queue, while the supervisor can
offers identity and accessibility. Callers are
at any time manage the call centre on the
answered quickly and are rapidly put
through to the right person.
specific transactions over the telephone.
Traditional solutions for this functionality
Consorte SURVEY
entail major investments. Consorte now
Consorte can offer customised and relevant
organises this type of solution through the
phone-based consumer surveys to
telecoms network, and this breaks the cost
businesses. Two variants of SURVEY are
barriers. Consorte designs menus and
available from Consorte: one in which the
information, and implements RESPONSE in
survey is conducted completely automatically,
close cooperation with the client – who
and one where Consorte SURVEY picks out
avoids the need for investment in new
respondents who volunteer, in order to call
equipment. The client's own systems are
them up again at a later time.
integrated into the overall solution for simple
The performance of the survey itself requires
data transfer.
no resources on the part of the business –
unless it opts to do it itself. The business
Consorte CONNECT
gets the right respondents, since they will
Having Consorte’s home-based office
be customers who are surveyed in connection
solution in place simplifies the working day
with incoming customer inquiries. Consorte
for many employees. A company sets up a
adds the survey facility to the business's
number which the employee’s home PC
existing inbound telephony solution, and
calls in order to establish contact with the
sets parameters for which callers to survey,
internal network or the Internet. Consorte
when/how frequently, and how the
offers security solutions that prevent
responses are to be reported.
unauthorised access – prior to logging on to
the network. The advantage of Consorte’s
Consorte RESPONSE
CONNECT is that it eliminates internal
Interactive Voice Response is a solution in
processing of employees’ telephone bills for
which information is coordinated for
which a proportion of the amount is be
customers by means of recorded messages,
refunded.
and/or callers have the opportunity to execute
Consorte´s product portefolio
contributes to a strong
increase in traffic minutes
27
Use of Consorte solutions
Refreshing savings at Coca-Cola
Coca-Cola Drikker AS took less than six
months to recoup its investment in
Consorte PULSE – its new call centre
solution. The company is now saving an
annual NOK 300,000, but on top of that,
PULSE has made life that much simpler
for customers and staff alike.
“The simplicity and flexibility
of PULSE has enhanced the
quality of our work. Added to
which the reliability of the
solution is unique.”
Bjørn Gunnlaugsson,
Head of CRM System and
Processes at Coca-Cola
Drikker AS
Core competency to the fore
Originally the Coca-Cola Drikker AS call
centre was operated via a standard in-house
exchange. But the basic functionality of this
solution did not permit Coca-Cola to invite
callers to make use of voice menus and
skills-based call routing. Consequently,
customer care was suffering, since callers
regularly ended up talking to new customer
service staff without the necessary insights
into special trade issues. So, Coca-Cola was
faced with a choice: of investing in new
functionality for the in-house exchange, or
buying in call centre functionality as a
service, i.e. outsourcing the technical side of
the call management system. The final
equation proved decisive: in terms of
investment costs, the upgrade option would
be considerably more expensive than
outsourcing the service – in fact, it
amounted to a difference of several hundred
thousand Norwegian Kroner. And so the
Coca-Cola call centre went on to become a
client with Consorte PULSE – and was now
able to devote all its energies to its core
28
competency: giving its customers maximum
Saves costs!
care and attention.
The difference between buying incoming
telephone services, or operating your own
The ultimate in reliable service
service is appreciable. Coca-Cola saves
Coca-Cola opted for a step-by-step
NOK 300,000 net a year by “leasing” the
introduction to make absolutely sure that
functionality from Consorte. This is because
they were doing the right thing. They started
the costs of leasing lines and call transfers
by setting up a standard call queuing
are radically reduced since Consorte deals
module, and following a successful trial
with the routing, rather than the locally
period, rolled out a full PULSE solution. A
installed in-house exchange.
five-digit number was created and duly
"At the same time we were able to cut a
publicised.
number of other costs we had back in ‘the
The transition from an in-house exchange
old days’. This means that the investment
solution to an outsourced service was no
was recouped within just six months. In
small feat, but Call Centre Manager, Anita
addition, the call centre has become a far
Brudberg is delighted with the new
easier workplace for our staff. Thanks to
processes. "Training and customer care are
skills management, the 30 customer service
now far more flexible than before. Consorte
agents now enjoy better working conditions.
SONAR tells us that we’ve also upped the
Before, callers were often on hold for
quality and speed of our service”, Brudberg
several minutes, whereas the waiting time
enthuses.
now is well within our target of 10 seconds.
The flexibility has also increased compared
Consorte SONAR is a web tool that
with before. We can now log on via mobile,
provides an overview of how calls and
fixed line or the web, while we can also
conversations are handled at the call centre.
draw on local resources elsewhere as soon
This is because PULSE enables calls to be
as we see call volumes start rising,"
routed based on skills criteria. In this way,
Brudberg explains.
customer service agents have the chance to
acquire expertise gradually, rather than being
required to know it all in one go.
Bjørn Gunnlaugsson, Head of CRM System
and Processes at Coca-Cola, stresses that
the key requirement from a new solution
About Coca-Cola:
Coca-Cola Drikker AS produces, distributes and
sells Coca-Cola on the Norwegian
market. The company was established in 1996,
and is today one of Norway’s 200
was a reliable service and flexibility. "Even if
biggest industrial companies with some 1,200
someone severs a cable at our end, we can
employees. The company is wholly owned by
still log on directly via our mobile phones
The Coca-Cola Company,
and carry on our business as usual. The
the world’s largest supplier of soft drinks,
reliability of the service is unique”, says
and the owner of more than
Gunnlaugsson.
100 brands worldwide.
Coca-Cola also avoided having to scrap the
old in-house exchange. The Consorte
services and the existing infrastructure can
be readily combined. Gunnlaugsson adds:
"Consorte also makes sure that we get new
functionality, and saves us having to think
about upgrades and hardware” .
29
Use of Consorte solutions
Directory Enquiries Service Saved Millions
1880 Nummeropplysning were seeking
to position themselves as the main
challenger to the Norwegian public
directory enquiries service provided by
Telenor. 1880 saved NOK 4-5 million on
start-up costs by opting for a web-based
call-centre solution, and with Consorte’s
help are now poised to become one of
the leading operators in Norway.
"The biggest benefit has to be
that Consorte’s services
saved us several million NOK
in infrastructure investments,
while the flexibility of their
solution meant lower
operating costs."
Roar Johansen,
General Manager,
1880 Nummeropplysning
Cost-effective solution
In competition with 5 other contenders,
1880 Nummeropplysning decided to tender
for a licence to provide directory enquiries
services when the Norwegian Post and
Telecommunications Authority announced in
the autumn of 2001 that directory enquiries
in Norway were to be provided competitively
on an open market.
The directory enquiries market in Norway is
worth around NOK 650 million, and even
with just a small share of the market, 1880
stood to generate profits with the right
choice of cost structure. This dictated a keen
focus on costs and maximum use of
existing resources. The company also faced
technical, organisational and process-related
challenges in the start-up period.
Consequently, 1880 had exacting
requirements in terms of flexibility and
capacity – while looking to stem investment
and operating costs.
Priority given to flexibility and simplicity
1880 wanted the service to be capable of
30
handling calls at multiple geographical
locations in order to maximise their existing
employee pool. Availability and rapid
response times were critical success
factors. 1880 would have needed to make a
minimum investment of NOK 4-5 million if
they wanted to buy an advanced in-house
exchange, but this would have required all
locations to run off the same hardware –
which would have pushed up the start-up
costs even further.
PULSE transfers the caller to the next
available agent, no matter where the
customer happens to be calling from. For
1880’s administrator, monitoring queues on
the system is easy thanks to online web
reports in the Consorte SONAR service.
These provide an overview of the number of
queued callers, waiting times, number of
calls taken, etc. 1880 has achieved all of this
without having to invest in its own
hardware, software or additional infrastructure.
1880 started using Consorte PULSE, a
web-based call-centre solution which
offered the company high flexibility and low
start-up costs. This solution also permits
calls to be transferred without acquiring new
lines. In addition, 1880 employs Consorte
SONAR, which provides overviews and
information as to how inbound calls are
managed. "If we’d had to buy our own
equipment, we would also have had to
install a dedicated connection to our
locations. We saved several million by
buying the call centre solution as a service
from Consorte”, explains Roar Johansen,
General Manager at 1880.
Reduces operating costs with PULSE
At all time, 1880 has between 150 and 200
agents taking calls from customers across
four geographical locations. This has meant
efficient use of resources, and the possibility
of directing traffic to call sites where capacity
is highest. In this way, 1880 Nummeropplysning has established itself as one of
the leading operators in directory enquiries
services after the release of new numbers.
"The solution enables us to establish call
centres at sites where the workforce is
more stable, which has meant reduced
spending on training and administration.
The flexibility of PULSE therefore offers
lower operating costs over time,” Johansen
tells us. In addition, Consorte PULSE is
scalable, which means that 1880 can now
boost staffing levels with additional agents
in response to increased traffic without
incurring extra costs from running PULSE.
About 1880 Nummeropplysning:
1880 Nummeropplysning, a directory
enquiries service, is owned and operated by
Current AS – a private company with a
number of Norwegian shareholders. Current AS is
also one of Norway’s largest call
centre operators, and serves a number of
Norwegian companies and organisations.
Basically, 1880 has outsourced the handling
of inbound telephony from Consorte.
Currently the company has agents at
Kristiansand, Grimstad, Flisa and Oslo to
answer the stream of calls, while Consorte
deals with routing the calls and making sure
that conversations get set up. Consorte
The 1880 Nummeropplysning service
provides information about fixed line and mobile
telephone numbers, and subscriber address
details in Norway via telephone or SMS.
31
10
Annual accounts 2002
Profit and Loss Account
Consorte Group ASA
Amounts in NOK 1000s
Parent company
2000
Group
2001
2002
Note
2002
2001
2000
125 871
58 095
31 129
0
0
0
125 871
58 095
31 129
Operating revenues and costs
13 256
0
0
2
Sales
8 343
21 372
26 293
2
Other operating revenues
21 599
21 372
26 293
Total operating revenues
2 897
0
0
Variable sales costs
62 573
12 411
6 803
4 588
483
969
Infrastructure costs
19 302
18 932
11 359
15 631
20 544
19 303
Labour costs
38 485
44 632
27 647
1 190
1 188
1 989
5
Ordinary depreciation
7 120
5 575
2 495
22 461
14 899
8 681
19
Other operating costs
19 031
32 655
33 501
3/9
46 767
37 113
30 941
Total operating costs
146 511
114 206
81 805
-25 167
-15 741
-4 648
Operating profit(+)/loss(-)
-20 640
-56 111
-50 676
2 840
2 806
517
1 636
1 575
2 951
63
1 535
1 413
0
0
0
Financial income and costs
71
740
345
-118
-752
-1 443
2 856
4 329
831
-22 311
-11 412
-3 818
-6 226
-3 180
0
-16 085
-8 232
-3 818
-16 085
-8 232
-3 818
-16 085
-8 232
-3 818
-16 085
-8 232
-3 818
Other interest received
Interest from subsidiary companies
Other financial income
356
2 288
134
-1 041
-857
-144
888
3 007
2 941
-19 752
-53 104
-47 734
1 299
-10 167
-13 511
Ordinary profit(+)/loss(-)
-21 050
-42 937
-34 223
Net profit(+)/loss(-) for the year
-21 050
-42 937
-34 223
Other financial costs
Net financial profit(+)/loss(-)
Ordinary profit(+)/loss(-) before tax
13
Tax on ordinary profit(+)/loss(-)
Transfers
11
Transferred from premium fund
Total transferred
18
Earnings per share
-1.03
-2.32
-2.34
18
Diluted earnings per share
-1.03
-2.32
-2.34
33
Annual accounts 2002
Balance Sheet at 31. December
Consorte Group ASA
Amounts in NOK 1000s
Parent company
2001
Group
2002
Note
Assets
2002
2001
Deferred tax benefit
30 039
31 891
Total intangible fixed assets
30 039
31 891
Fixed assets
Intangible fixed assets
17 841
17 841
17 841
17 841
3 525
3 826
3 525
3 826
13
Tangible fixed assets
5
Operating equipment
9 879
13 800
Total tangible fixed assets
9 879
13 800
Financial fixed assets
68 761
81 420
0
0
68 761
81 420
90 127
103 087
7
0
0
Other receivables
Investments in subsidiaries
388
412
Total financial fixed assets
388
412
40 306
46 103
15 179
10 274
Total fixed assets
Current assets
Receivables
0
0
8
18 018
17 957
12
0
0
954
1 708
Other receivables
12 670
3 017
18 972
19 664
Total receivables
27 850
13 292
29 161
8 978
Bank deposits, cash and cash equivalents
16 851
38 434
48 134
28 642
Total current assets
44 701
51 725
138 260
131 729
Total assets
85 006
97 828
34
Trade debtors
Intra-group loans
Consorte Group ASA
Amounts in NOK 1000s
Parent company
Group
2001
2002
Note
Equity and liabilities
2002
2001
10 244
10 244
Share premium fund
116 653
120 470
Total subscribed equity
126 897
130 715
Other equity
-70 801
-53 218
Total retained equity
-70 801
-53 218
Total equity
56 096
77 497
Shareholder equity
Subscribed equity
10 244
10 244
10 / 11
11
120 470
116 653
130 715
126 897
0
0
0
0
130 715
126 897
Nominal share capital
Retained equity
11
Liabilities
Current liabilities
2 158
628
18 358
7 350
2 200
1 552
Public taxes and contributions owed
Creditors
4 292
4 431
3 188
2 652
Other current liabilities
6 260
8 550
7 545
4 832
Total current liabilities
28 910
20 331
7 545
4 832
Total liabilities
28 910
20 331
138 260
131 729
Total equity and liabilities
85 006
97 828
Oslo, 6 March 2003
The Board of Consorte Group ASA
Jan E. Engebretsen
Trond S. Storbråten
Morten Neeb
Chairman of the Board
Board member
Board member
Bjørge Gretland
Stein Holst Annexstad
Marit E. Døving
Board member
Board member
CEO
35
Cash Flow Statement
Consorte Group ASA
Amounts in NOK 1000s
Parent company
2001
Group
2002
2002
2001
-19 752
-53 104
7 120
5 575
184
-113
0
21
Cash flow from operations:
-11 412
-3 818
Ordinary profit(+)/loss(-) before tax
1 188
1 989
Ordinary depreciation
0
0
Effect of exchange rate fluctuations
15
0
Gain/loss on disposals of fixed assets
67
0
Items classified as investment or financing activities
0
67
440
0
Change in trade debtors
-4 905
-2 702
887
-1 530
Change in trade creditors
11 008
1 157
-14 895
61
0
0
-571
-1 937
Changes in intragroup balances
Change in other current assets and other liabilities
-12 058
1 574
-24 281
-5 234
Net cash flow from operations
-18 404
-47 526
185
0
34
239
Cash flow from investment activities
Receipts from sale of tangible fixed assets
-3 430
-2 290
Payments for purchase of tangible fixed assets
-3 213
-10 405
-31 137
-12 659
Payments for purchase of financial fixed assets
0
0
-34 382
-14 949
Net cash flow from investment activities
-3 179
-10 166
Cash flow from financing activities
46 501
0
Payment of shareholder equity
0
46 501
46 501
0
Net cash flow from financing activities
0
46 501
-12 162
-20 184
Net change in bank deposits, cash and cash equivalents
-21 583
-11 191
41 323
29 161
Bank deposits, cash and cash equivalents at 1 January
38 434
49 625
29 161
8 978
Bank deposits, cash and cash equivalents at 31 December
16 851
38 434
36
37
Notes to the accounts 2002
Note 1
Accounting principles
The accounts for Consorte Group ASA have been prepared in accordance with the Norwegian
Accounting Act of 1998 and generally accepted accounting principles in Norway.
The accounting principles are described below.
All amounts are expressed in 1000s of Norwegian kroner unless otherwise stated.
Consolidation principles
The consolidated accounts cover Consorte Group ASA with the wholly-owned subsidiaries
Consorte Norge AS, Consorte Sverige AB, Consorte Danmark A/S and Consorte UK Ltd.
Subsequently, the parent company's functions have consisted of ordinary Group functions,
but also international business development, product development and operation of the
international network.
Service and licence agreements have been made with the subsidiaries, which are settled
concurrently.
Uniform accounting principles have been applied in the accounts of the Group companies.
All material transactions and intra-group accounts between the Group companies have been
eliminated.
Foreign companies' profit and loss accounts are converted to NOK using average rates, while
assets and liabilities are converted using the rates on the balance date. Conversion
differences are posted directly against the Group's equity.
Use of estimates
Preparation of the accounts involves the use of estimates. The company's management uses
the best available information as the basis for such estimates and makes an assessment of
their material size. The actual results may differ.
Principles for posting to income
Income from the sale of services are posted in the period the service is used by the customer.
For telephony traffic, income is posted for the month in which the telephony service is
supplied. Subscription income is invoiced over the period the subscription applies to. Income
from setting up new solutions is posted once the set-up has been completed.
Sales are posted at gross value. Accordingly, reported Total Operating Revenue represents
sum total of invoices to interconnect partners and services invoiced directly to our clients.
All cost of goods sold are posted as Variable sales costs, comprising costs relating to
interconnect agreements, commissions and subcontractors to content and service delivery.
This principle applies to all services; no differentiation is made here between the content of
the various deliverables.
Main rule for classification and valuation of assets and liabilities
Assets intended for permanent ownership or use are classified as fixed assets. Other assets
are classified as current assets. Receivables that are to be repaid within one year are classified
as current assets. Equivalent criteria are employed to classify short-term and long-term liabilities.
Fixed assets are valued at original cost, but are written down to real value when the decrease
in value is expected to be other than transitory. Fixed assets with limited economic life are
subject to planned depreciation.
Current assets are valued at original cost or real value, whichever is the lower. Short-term
liabilities are posted in the balance sheet at the nominally received value at the time of their
creation.
Certain items are valued on different principles, as explained below.
38
Currency
Monetary items in foreign currency are converted at the rate on the balance sheet date.
Investments
Investments in subsidiary companies are valued at historical cost in the company accounts.
Receivables
Trade debts and other receivables are posted at face value after an allowance for expected
bad debts. Allowances for bad debts are made on the basis of an individual valuation of the
individual receivables. In addition, an unspecified allowance is made for other trade debtors to
cover estimated bad debts.
Bank deposits, cash and cash equivalents
Bank deposits, cash and cash equivalents include cash in hand, bank deposits and other
means of payment with a due date that is shorter than three months from acquisition.
Placements in money market funds are valued at real value on the balance sheet date and
classified as bank deposits, cash and cash equivalents.
Research and development
Expenses for own research and development are accounted for as they accrue.
Taxes
Tax costs are grouped with accounting profit/loss before tax. Tax related to equity capital
transactions is posted against equity capital.
Tax costs consist of taxes due (tax on the year's directly taxable income) and changes in net
deferred tax. Deferred tax and deferred tax benefit are presented net in the balance sheet.
Subscription rights and shares for employees
Consorte uses the intrinsic value method for accounting for wages and salaries costs through
allocation of subscription rights to employees. According to this method, wages and salaries
costs are posted to the profit and loss account if the market price of the company's shares at
the time of allocation is higher than the option's exercise price. Intrinsic value on allocation is
amortised over a period from the allocation date until the exercise of the option.
Note 2
Sales
Parent company
2000
2001
13 256
0
0
8 343 21 372 26 293
21 599 21 372 26 293
Parent company
2000
2001
Group
2002
2002
By business area:
Intelligent network services
Service and licence income
Total
Group
2002
2002
21 599 21 372 26 293
0
0
0
0
0
0
0
0
0
21 599 21 372 26 293
125 871
0
125 871
By geographical market:
Norway
Denmark
Sweden
UK
Total
116 489
6 527
2 659
196
125 871
2001
2000
58 095 31 129
0
0
58 095 31 129
2001
2000
54 385 31 031
2 734
98
976
0
0
0
58 095 31 129
39
Note 3
Wages and salaries, number of employees, other remuneration, loans to employees etc.
Wages and salaries
Parent company
2000
2001
2002
13 153 16 360 16 069
2 059 2 596 2 931
419 1 587
303
15 631 20 544 19 303
20
26
28
Wages and salaries
NI contributions
Other employee costs
Total
Average number of employees
Group
2002
31 607
5 123
1 755
38 485
59
2001
2000
36 004 23 544
5 216 3 363
3 412
740
44 632 27 647
65
48
Other Directors' emoluments
Salary
Other
remuneration
CEO
Board
2 334
13
220
0
The CEO receives no contractual compensation on cessation of employment over and above
salary in the period of notice.
Neither the Chairman of the Board nor any other members of the Board receive contractual
compensation on stepping down from the Board.
Parent company
2001
Group
2002
2002
2001
514
514
Security furnished on behalf of:
514
514
Employees
Auditor
For the parent company, auditor's fees for the year 2002 in the sum of NOK 175 000 have
been charged to costs. Other auditor related services were charged at NOK 168 000
For the group, auditor's fees for the year 2002 in the sum of NOK 394 000 have been
charged to costs.
Other auditor related services were charged at NOK 238 000.
Note 4
Subscription rights for employees
The company has issued subscription rights to employees, each of which gives subscription
entitlement to a single share. A new subscription programme was approved in 2002 under
which previously issued subscription rights are replaced by new standardised agreements.
The individual size of the agreement is negotiated, but the duration of the agreement is
standardised and expires in January 2005.
The number of rights that could be exercised at 31 December 2001 was 424 000, at an
subscription rate of NOK 25.68.
No subscription rights were redeemed in the course of 2002. In 2002, 421 500 new
subscription rights were allocated, at an average redemption price of NOK 6.06. The number
of expired subscription rights in the course of 2002 was 502 000, such that the total
allocation of subscription rights at 31 December 2002 was 343 500, at an average redemption
price of NOK 5.97.
40
Note 5
Tangible fixed assets
Parent company
Technical
Software &
Fixtures
infrastructure
computer
and fittings
Total
equipment
Original cost 1 January 2002
Additions
Original cost 31 December 2002
2 215
2 641
364
5 219
701
1 538
51
2 290
2 916
4 179
414
7 509
Accumulated depreciation 1 January 2002
959
661
75
1 694
Depreciation for the year
797
1 110
82
1 989
Accumulated depreciation 31 December 2002
1 756
1 770
157
3 683
Book value at 31 December 2002
1 160
2 409
257
3 826
3 years
5 year
Economic life
Depreciation method
3 years
Straight-line
Parent company
Technical
infrastructure
Straight-line Straight-line
Software &
Fixtures
computer
and fittings
Total
equipment
Accumulated depreciation 1 January 2002
Additions
Deletions
Original cost 31 December 2002
Accumulated depreciation 1 January 2002
Depreciation on deletions
Depreciations for the year
Accumulated depreciation 31 December 2002
Book value at 31 December 2002
Economic life
Depreciation method
14 762
6 061
2 200
23 024
1 638
1 540
35
3 213
0
-34
0
-34
16 400
7 567
2 235
26 202
6 192
2 404
627
9 223
0
-20
0
-20
4 414
2 270
435
7 120
10 607
4 655
1 061
16 323
5 793
2 912
1 174
9 879
3 years
3-5 years
3 years
Straight-line
Straight-line Straight-line
41
Note 6
Lease and other obligations
Parent company
At 31 December 2002, Consorte had minimum obligations for lease of digital switches and
rent, plus other obligations as follows:
2003
2004
2005
2006
2007
Total
Lease
obligations
switches
7 508
4 148
3 525
1 658
0
16 839
Operating
obligations
switches
3 442
0
0
0
0
3 442
Other
lease
obligations
3 656
62
0
0
0
3 718
Total
14 606
4 210
3 525
1 658
0
23 999
The annual lease of off-balance-sheet fixed assets in 2002 was 2 862
Group
2003
2004
2005
2006
2007
Total
Lease
obligations
switches
7 508
4 148
3 525
1 658
0
16 839
Operating
obligations
switches
3 442
0
0
0
0
3 442
Other
lease
obligations
5 095
1 671
917
346
38
8 067
Total
16 045
5 819
4 442
2 004
38
28 348
The annual lease of off-balance-sheet fixed assets in 2002 was 19 900
Note 7
Company
Consorte Norge AS
Consorte Danmark A/S
Consorte Sverige AB
Consorte UK Ltd.
Total
Note 8
Subsidiary companies
Acquisition
Business office
date
12.04.00
05.05.00
01.03.00
13.12.00
Oslo
København
Stockholm
London
Votes and
ownership
share
100%
100%
100%
100%
Book Equity capital
value at 31.12.02
19 095
29 804
19 133
13 388
81 420
4 654
4 146
1 432
386
10 618
Profit/loss
2002
3 119
-8 042
-5 054
-7 255
-17 233
Trade debtors
Group
42
2001
2002
26
26
-26
-26
0
0
Trade debtors - nominal
Allowance for bad debts
Total
2002
2001
15 395
10 450
-216
-176
15 179
10 274
Note 9
Research & development costs
Parent company and group
2002
2001
2000
Development costs
6 585
5 845
3 456
The group does no research of a substantial nature. Development costs are related to
product and technology development which is undertaken on own account and at own risk.
The group has no capitalised research and development costs.
Development costs consist primarily of wages, salaries and personnel costs and indirect
costs relating to the development department.
It is not possible to make a statement as to whether expected earnings are in proportion to
expenses incurred for research and development at 31 December 2002, 31 December 2001
and 31 December 2000.
Consorte Group ASA was allocated NOK 800 000 in SkatteFUNN (tax deduction) facilities in
2002. Treatment of these funds follows Norwegian Standard 4 concerning government
subsidies and they have accordingly been extracted from the costs they were in support of.
Note 10
Share capital and shareholder information
Share capital in the parent company at 31 December 2002 consisted of 20 488 595 shares of
NOK 0.50 each. Book value was NOK 10 244 297.50.
There are no restrictions on voting rights in the Articles of Association. There is only one class
of shares.
There exists an authorisation from the general assembly meeting to the Board to increase the
share capital by up to NOK 1 024 230 in connection with future capital expansion and
redemption of employee options. At 31 December 2002, there remained of this authorisation
NOK 1 024 230 and the authorisation expires on 27 March 2003.
Ownership structure
The largest shareholders in the company at 31 December 2002 were:
No. of shares
Ownership and
voting share
NorgesInvestor II AS
NOR
2 775 387
13.55%
Helge Vangestad
NOR
2 250 000
10.98%
Anglo Irish Bank (Suisse) S.A
CHE
1 184 500
5.78%
NorgesInvestor Vekst AS
NOR
1 112 531
5.43%
Trond Storbråten
NOR
1 024 860
5.00%
Rolf Kvam
NOR
838 220
4.09%
KLP Forsikring Aksjer
NOR
766 667
3.74%
Maximal Invest AS
NOR
659 508
3.22%
Nettverk AS
NOR
578 840
2.83%
Frans Enger AS
NOR
531 430
2.59%
Verdipapirfondet K_S
NOR
341 100
1.66%
Jan E. Engebretsen
NOR
336 420
1.64%
Selvaag Invest AS
NOR
333 000
1.63%
Amalie AS
NOR
329 754
1.61%
Geir Kristoffersen
NOR
315 800
1.54%
43
Vital Forsikring ASA
Pollex AS
Camilla Sivesind Tokvam
Rosehip Investment
Per Herseth
Total > 1% ownership share
Total other shares
Total shares
NOR
NOR
NOR
MCO
NOR
293 350
258 189
250 000
242 700
222 000
14 644 256
5 844 339
20 488 595
1.43%
1.26%
1.22%
1.18%
1.08%
71.48%
28.52%
100%
Shares and subscription rights owned by members of the Board and the CEO.
Name
Office
Subscription rights
Jan E. Engebretsen Own shares
Chairman of the Board
0
Marit Døving
Own shares
CEO
0
Trond Storbråten
Own shares
Board member
0
Trond Storbråten
Connected person Mette Storbråten
Board member
0
Morten Neeb
Connected company Mobiteam AS
Board member
0
Stein Holst Annexstad Connected company Annexstad Hartvig
Wennberg AS
Board member
0
Note 11
No. of
shares
20 489
Share
capital
10 244
20 489
10 244
Share prem.
account
120 470
-3 818
116 653
Group
Equity capital at 1 Jan. 2002
Change in equity capital for the year:
Currency conversion differences
Profit/loss for the year
Equity capital at 31 Dec. 2002
14 300
181 217
Total
130 715
-3 818
126 897
77 497
-351
-21 050
56 096
Intra-group liabilities and receivables, etc.
Short-term receivables
Consorte
Consorte
Consorte
Consorte
Total
44
40 000
Shareholder equity
Parent company
Equity capital at 01 Jan. 2002
Profit/loss for the year
Equity capital at 31 Dec. 2002
Note 12
Shares
336 420
12 000
1 024 860
Norge AS
Sverige AB
Danmark A/S
UK Ltd.
2002
11 856
3 756
1 481
863
2001
15 698
44
1 118
1 157
17 957
18 018
Note 13
Tax costs
Parent company
Group
2000
2001
2002
0
The year's tax costs result from:
0
0
Tax due
-7 653 -5 463
0
Changes in deferred tax
1 426
2 283
0
Deferred tax posted directly against equity
0
0
0
Conversion differences
0
0
0
Effect of tax rule changes
-6 227 -3 180
0
Tax cost on ordinary profit
2002
2001
2000
0
0
0
1 852 -12 235 -14 938
0
2 283
1 426
-553
-322
0
0
107
0
1 299 -10 167 -13 512
Breakdown of tax costs - Norway and abroad:
Parent company
Norway
2000
Abroad
2001
2002
2002
2001
2000
-6 227 -3 180
0
Tax cost on ordinary profit
0
0
0
-6 227 -3 180
0
Total
0
0
0
Group
Norway
2000
Abroad
2001
2002
2002
2001
2000
-10 747 -5 391
1 299
Tax cost on ordinary profit
0
-4 776
-2 764
-10 747 -5 391
1 299
Total
0
-4 776
-2 764
2001
2000
Parent company
Group
Reconciliation from nominal to actual tax rate:
2000
2001
2002
-22 311 -11 412 -3 818
2002
Profit/loss for the year before tax
-19 752 -53 104 -47 734
Expected income tax
-6 247 -3 195 -1 069
at nominal tax rate of 28%
-5 531 -14 869 -13 366
Fiscal effect from the following items:
20
16
4
Non-deductible costs
65
91
32
0
0
0
Other items
726
107
0
0
0
0
Tax-rate difference
-305
-408
-222
0
0
1 065
Change in downgrading deferred tax benefit
6 344
4 913
45
-6 227 -3 180
0
Tax cost
1 299 -10 167 -13 511
27.9 % 27.9 % 0.0 %
Effective tax rate
-6.6 % 19.1 % 28.3 %
45
Parent company
Specification of the fiscal effect of temporary differences and loss to carry forward:
2002
Benefit
2001
Liability
Benefit
Liability
Fixed assets
80
0
0
2
Receivables
7
0
6
0
Current liabilities
140
0
140
0
Loss to carry forward
18 679
0
17 697
0
Total
18 906
0
17 843
2
Deferred tax benefit/liability
18 906
0
17 841
0
Deferred tax benefit not posted to balance
1 065
0
0
0
Net deferred tax benefit/liability in balance
17 841
0
17 841
0
Deferred tax benefit is posted on the basis of future income. At year end 2002 the parent company
had a loss to carry forward of NOK 66 711 000. The parent companys loss expires after 2007.
Group
Specification of the fiscal effect of temporary differences and loss to carry forward:
2002
Benefit
2001
Liability
Benefit
Liability
Fixed assets
955
0
637
0
Receivables
34
0
43
0
Current liabilities
140
0
140
0
Loss to carry forward
40 185
0
36 001
0
Total
41 314
0
36 822
0
Deferred tax benefit/liability
41 314
0
36 822
0
Deferred tax benefit not posted to balance
11 275
0
4 931
0
Net deferred tax benefit/liability in balance
30 039
0
31 891
0
Deferred tax benefit is posted on the basis of future income. At year-end 2002, the group
had a tax loss to carry forward of NOK 140 889 000. Of the group's tax loss to carry forward,
NOK 4 863 000 expires in 2005, NOK 12 163 000 in 2006 and the remaining
NOK 123 863 000 after 2007.
Note 14
Security and guarantees, etc.
Consorte Group ASA has provided a bank guarantee on behalf of Consorte Danmark A/S for
DKK 950 000.
As security for the guarantee, a lien on a monetary claim of NOK 1 200 000 has been taken,
deposited in a separate account.
This amount is intended to cover the equivalent in NOK of the guarantee's nominal value,
including a margin for currency fluctuations.
Note 15
46
Events after the balance sheet date
The group has in February 2003 signed a sale- and lease-agreement on software and
computer equipment without any actual accounting loss.
The agreed lease period is for 3 years with an annual cost of NOK 2 165 000.
No other significant events have occurred after the balance sheet date.
Note 16
Conditional transactions
At the end of the financial year 2002, there exists an accounting allocation of NOK 500 000 in
respect of potential disputes.
This allocation was accounted for in the 2000 accounts.
Note 17
Financial market risk
The company's currency risk relates to investments in foreign subsidiary companies and
intra-group accounting.
Note 18
Earnings per share
The calculation has been performed in accordance with Norwegian Accounting Standard
No. 7, Earnings Per Share. Earnings per share derive from the year's earnings for the group
divided by the average number of shares through the year.
For calculating the diluted earnings per share, the effect of potential shares is ignored, in
conformity with the principle of maximum dilution when reporting negative earnings.
Figures in NOK
Profit/loss after tax at 31 December 2002
Average number of shares outstanding
Average number of shares fully insipid
2002
-21 050 450
20 488 595
20 735 824
2001
-42 937 293
18 544 161
18 903 695
2000
-34 223 298
14 611 145
15 460 046
-1.03
-1.03
-2.32
-2.32
-2.34
-2.34
Earnings per share
Diluted earnings per share
Note 19
Connected persons and companies
Parent company
2000
Note 20
2001
Group
2002
2002
2001
2000
2 049
2 747
3 103
Costs of leases
7 010
6 663
4 329
12 813
7 478
2 307
External services
3 976
15 828
16 661
2 695
1 087
460
Marketing
2 266
5 060
4 465
4 904
3 587
2 812
Other costs
22 461
14 899
8 681
Total
5 779
5 105
8 046
19 031
32 655
33 501
Connected persons and companies
Mobiteam AS - Company registration no. 982 335 930
Mobiteam AS is 51% owned by Morten Neeb, a member of the Board of Consorte Group
ASA. Consorte Group ASA has, on normal commercial terms, employed Mobiteam AS to perform consultancy work throughout 2002. Mobiteam AS has invoiced services for a
total of NOK 528 767 in 2002. At 31 December 2002, Mobiteam had a balance in its favour of
NOK 37 851.
47
Auditor´s report
Translated version
48
Consorte Group ASA
Stortorvet 10
P.O. Box 170 Sentrum
NO-0102 Oslo, Norway
Phone: +47 21 49 40 00
Fax: +47 21 49 40 01
e-mail: post@consorte.com
www.consorte.com
Consorte Norge AS
Stortorvet 10
P.O. Box 170 Sentrum
NO-0102 Oslo, Norway
Phone: +47 03050
Fax: +47 21 49 40 01
e-mail: support@consorte.com
www.consorte.no
Consorte Danmark A/S
Vesterbrogade 149
DK–1620 København V
Denmark
Phone: +45 70 80 70 80
Fax: +45 33 27 08 10
e-mail: info-dk@consorte.com
www.consorte.dk
Consorte Sverige AB
Botkyrkavägen 4
SE–143 35 Vårby
Sweden
Phone: +46 (0)8-4000 4000
Fax: +46 (0)8-4000 40001
e-mail: support@consorte.com
www.consorte.se
Consorte UK Ltd.
East House
New Pound Common
Wisborough Green
West Sussex
RH14 OA2
United Kingdom
Phone: +44 (0) 845 080 3070
+44 (0) 1403 700 622
e-mail: support@consorte.com
www.consorte.co.uk
10