Nýherji hf. - Company Announcement

- New business model for Nyherji

The Board of Directors of Nyherji has decided to adopt a new business model and
structure for the company. The goal is to sharpen the company's focus by
clearly defining the specialisations of its subsidiaries in particular fields
while integrating and increasing efficiency in company operations. 

The principal changes are as follows:

•  Nyherji hf. will be the parent company of six main subsidiaries. Nyherji hf.
   will also be responsible for sales and product development of computer and
   technical equipment. 

•  Each subsidiary will specialise in a defined area of services, software or
   consultancy, with the goal of meeting client needs in that specialist field. 

•  The subsidiaries will be:

   o  Skyggnir ehf., specialising in the field of IT systems optimisation,
      communications solutions integration and operating services. 
   o  Sense ehf., for digital solutions, such as for audio and video equipment.
   o  TM Software ehf., focusing on more extensive software development and
      systems integration. 
   o  Applicon ehf., focusing on business software, financial solutions and
      specialised sector-based solutions. 
   o  A new company will be established for the entire group's joint support
      services and will, in the future, offer such services to other clients. 
   o  ParX ehf., which will continue to specialise in the field of quality
      business consultancy. 

•  The operation will, for the most part, move to Urdarhvarf 6 in Kópavogur,   where TM Software is currently located, although the company will continue to
   have operations in Nyherji's premises at Borgartún 37. 

•  The new business model of the Nyherji group will be implemented in November. 


The principal tasks of the employees of Nýherji and its subsidiaries involve
working closely with clients in achieving greater flexibility, lowering costs
or other benefits in their operation. The changes mean that focus on these
goals will be sharpened even further to ensure that employees achieve optimal
results in co-operation with clients. 

Nyherji has a staff of around 550, 500 of whom are employed by its subsidiaries
and 50 in the parent company. Overseas employees number approximately 180 and,
as a result, there are a total of around 730 people working for Nyherji and its
subsidiaries. 

Important step in Nyherji's development

Since it was established in 1992, Nyherji has been one of Iceland's most
dynamic companies in the field of information technology. The company emerged
as a result of the merger of IBM á Íslandi and Skrifstofuvélar-Sund hf. It has
been listed on the stock exchange in Iceland since 1997. 

The last few years have seen significant changes in Nyherji's operations based,
on the one hand, on the company's policy of expansion through the acquisition
of technology, consultancy and software companies and, on the other hand, on
the substantial internal growth of the company's core operations. 

In October 2005, Nyherji acquired the Danish company Applicon AS, a specialist
consulting company in the field of SAP software. At the same time, Nyherji's
own consultancy work in SAP and related software here in Iceland was
transferred to a separate subsidiary, Applicon ehf. 

In March 2007, Nyherji bought the company Link ehf., which subsequently took
over the Sony Setrid in Kringlan. Around that time, the Sense retail outlet
opened, offering digital solutions and equipment for homes and companies. 

In January 2008, Applicon in Sweden contracted to buy the company Marquardt &
Partners AB, which later merged with Applicon in Sweden to form an organisation
with almost 40 consultants. An Applicon company was established in the UK
offering SAP consulting. 

At the end of January this year, Nyherji signed an agreement to acquire the
company TM Software hf. which, along with subsidiaries offers a diverse range
of solutions in the field of operational services and software. TM Software
hf., with its workforce of 230, is located in the new buildings at Urdarhvarf 6
in Kópavogur. 

The wide range of operations now provided by Nyherji and its subsidiaries in
Iceland brings a need for changes in the business model and structure of the
Nyherji group. The objective of the changes is to operate separate companies
that focus on customer needs in well-defined and demarcated fields. In the
Nyherji group's business model, each subsidiary provides quality solutions and
specialist knowledge to meet the needs of customers and implements those
solutions in a satisfactory manner for each client. 



Companies in the new business model:


1. Nyherji hf. will operate as the parent company with six main subsidiaries in
Iceland along with other subsidiaries abroad. The company will also sell
computers and related equipment from leading manufacturers such as IBM, Lenovo,
Avaya, Canon, Cisco and others, as previously. Nyherji will have a staff of 50.
Nyherji's senior executives are: 

Thórdur Sverrisson, Managing Director of Nyherji and Chairman of the Boards of
the company's main subsidiaries. Thórdur has been Managing Director of Nyherji
since 1 April 2001. His previous position was Director of Transport for Hf.
Eimskipafélags Íslands. He holds a degree in business administration from the
University of Iceland and postgraduate qualifications from Gothenburg
University. 
Emil Einarsson will be Director of Sales and Marketing and therefore
responsible for supply and services at Nyherji. He will also co-ordinate
commercial links with the group's largest customers. Emil has been Director of
Sales at Nyherji hf. since 2005. He has worked for the company since it was
established in 1992, and before that he worked for IBM á Íslandi. He holds a
degree in business administration from the University of Iceland, and an MBA
from George Washington University. 

Gudmar Gudmundsson is Director of Finances for the parent company and all
subsidiaries.  Gudmar has been Director of Finance for TM Software hf. since
1999. Gudmar has a business administration degree from the University of
Iceland. 

In addition to his position as Director of Custom Solutions for Skyggnir ehf.,
Thorvaldur Jacobsen will work on foreign commercial development for Nýherji and
Skyggnir. He sits on the board of Dansupport A/S, and will be responsible for
co-ordinating and developing co-operation between the different companies. 
Nyherji hf. expects earnings to be approximately ISK 3.5bn with a staff of 50.
Nyherji hf. operations will be based at Urdarhvarf 6. 

2. Skyggnir ehf. has provided hosting and operating services. All technical and
services departments currently operating within Nyherji will be transferred to
Skyggnir ehf. The company will specialise in meeting the needs of clients in
the form of consulting, hosting and operation services, and equipment
installation and maintenance services. Skyggnir's aim is to create unsurpassed
operational and service-oriented benefits for clients from IT solutions.
Nyherji's server services, network and telecom services, workshop and software
services will be moved there. Nyherji's senior executives are: 

Fridrik Th. Snorrason will be Managing Director of Skyggnir ehf. He has worked
for Nyherji since 2003, most recently as Director of Business Development.
Before that he was Marketing Manager for the company. Fridrik has an MSc in
international relations from the London School of Economics and a BA in the
same subject from the University of Wisconsin in Madison. 

Thorvaldur Jacobsen will be Director of the Custom Solutions Department.
Thorvaldur has worked for Nyherji since 2002, becoming Director of Core
Solutions in 2005.  His previous position was Sales Manager for Teymi hf. and
Opin Kerfi hf. He holds a degree in electrical engineering and a BSc in
computer science from the University of Iceland, and an MSc in engineering from
the University of Texas in Austin. 

The Director of Operational Services will be Sigurdur Thórarinsson, who has
worked for TM Software since 2004. Sigurdur has an MSc in industrial
engineering from the University of Washington and in mechanical and industrial
engineering from the University of Iceland. 

Skyggnir ehf. expects earnings to be approximately ISK 2.5bn with a staff of
210. Skyggnir hf. operations will be based at Urdarhvarf 6. 

3.  Sense ehf. All Links ehf. business and Nyherji operations that have been
carried out under the Sense brand will now become part of Sense ehf. Sense will
run consulting and design departments, technical services and a similarly named
retail outlet in Hlídarsmári. The Sony Setrid in Kringlan, a distribution
centre and sales department in Akralind. The company acts as commercial agent
for Sony, NEC, Panasonic and Creston control equipment, and handles sales and
distribution of their products along with products from Canon, Bose and others
for individuals, companies and resellers.  One of Sense's principal objectives
is to design and develop comprehensive technological solutions that are simple
to use. 

Erling Ásgeirsson will be Managing Director of Sense ehf. He was formerly
Nyherji's Director of User Solutions, and has been a senior manager since 1992.
Erling's previous position was as a technology specialist for IBM á Íslandi. He
has electronics qualifications. 

Sense ehf. expects annual income to be approximately ISK 2bn with a staff of
40. Sense will be based at Hlídarsmári 3 and Akralind 8, Kópavogur. 

4.  TM Software ehf. will merge with Origo ehf. and the company will operate
under the name TM Software ehf. In addition, operations involving IBM software
within Nyherji and part of Microsoft services at Applicon and Skyggnir will be
transferred to TM Software. TM Software specialises in providing its clients
with custom solutions, network solutions and the integration of large software
systems.  TM Software was established in 1986 under the name TölvuMyndir. 
Ágúst Einarsson will be Managing Director of TM Software. He has worked for TM
Software since 2003, and became leader of the company at the beginning of 2007.
Before that, he managed TrackWell Software, SAP and the IBM department at
Nyherji. Ágúst holds an MSc in industrial engineering from Aalborg University
and a BSc in mechanical engineering from the same university. 

TM Software has two subsidiaries. eMR ehf. specialises in meeting the needs of
clients in the healthcare services field through offering extensive patient
registration systems, and server and operation systems for pharmacists. The
Managing Director of eMR ehf. is Hákon Sigurhansson. SimDex ehf., a Nyherji
subsidiary, will also become a TM Software subsidiary. SimDex has developed and
sold specialist software, including telecoms solutions, all around the world.
The Managing Director of SimDex ehf. is Agnar Jón Ágústsson.
TM Software and its subsidiaries expect their annual income to reach ISK 1.1bn
with a staff of over 90 people. TM Software ehf. and its subsidiaries will be
based at Urdarhvarf 6. 

5.  Applicon ehf. specialises in the field of business software and financial
solutions built especially on SAP software. Applicon will continue to have a
clear vision of fulfilling the needs of its clients for business software and
financial solutions built on SAP and related software such as Calypso and
Microsoft software. 

Kristján Jóhannson is Managing Director of Applicon. He was Nyherji's Director
of Software Solutions from 1998, and prior to that he was a senior manager for
Hf. Eimskipafélag Íslands and an economist dealing with international affairs
for VÍS. Kristján holds an MSc and a business administration degree from the
University of Aarhus in Denmark. 

Vigor ehf., a TM Software subsidiary, will become a subsidiary of Applicon
ehf., and will continue to offer business software solutions such as software
systems for the Icelandic energy sector.  The Managing Director of Vigor is
Sigurdur Bergsveinsson. 

Applicon and its subsidiary expect their income to amount to approximately ISK
1.7bn with a staff of more than 90 people. The companies will be based at
Borgartún 37. 

6.  Joint services. A new company will be established to handle all financial
and human resources services for Nyherji and its subsidiaries. This company's
basic operation will be based on applying the standardised and quantifiable
business process Business Process Outsourcing, and the company's plans for the
near future include offering this service to other clients that are not part of
the group.  The company will also manage buildings and canteens for Nýherji and
its subsidiaries, and be responsible for operating the company's distribution
centre. 
Thorsteinn Thorsteinsson will be Managing Director of the new company. He was
formerly Managing Director of business consultancy ParX ehf. Thorsteinn has
worked for ParX and its predecessor IBM Business Consulting Services and for
PricewaterhouseCoopers since 1998. Prior to that he worked for Eimskip and also
for Danyard Aalborg in Denmark. Thorsteinn holds a master's degree in business
administration from Aalborg University. 

Financial services will be under the management of Thor Konrádsson and Sturla
J. Hreinsson will take control of human resources matters. 

7.  ParX ehf., IBM business consultants, will continue to provide quality
business consulting and specialise in fulfilling the needs of clients for
advice in the field of policy formulation and management structure, financial,
human resources and marketing consultancy. ParX ehf. will continue to work from
Borgartún 37. 

Kristinn Hjálmarsson will be Managing Director of ParX. He has worked for the
company and its predecessor IBM Business Consulting Services and
PricewaterhouseCoopers since 2000. Kristinn has a master's degree in change
management from Hawaii Pacific University and a BA in philosophy from the
University of Iceland. 

No changes to Nyherji's foreign operations

No changes will be made to the structure of Nyherji's foreign operations. The
company has subsidiaries in Denmark, Sweden and the UK. 

Denmark: Applicon AS specialises in software consulting and services for SAP
business software users, and Applicon Solutions AS develops software solutions
in the SAP field. The combined workforce of the two companies is 85. Dansupport
AS offers internal computer system services, hosting and related services,
similar to the services offered by Skyggnir ehf. 

Sweden: Applicon Consulting AB specialised in services for financial
institutions and banks, especially implementations of SAP and Calypso software. 

United Kingdom: Applicon Solutions Ltd. in London provides solutions and
service for financial institutions and companies with related operations, along
with other services. 

A total of 180 people work for the subsidiaries in the above-mentioned
countries, and the total income of the companies is expected to be ISK 2.8bn
this year. 


These changes, which will be implemented in phases during the next few weeks,
will be completed by the end of November. The implementation of Nyherji's new
business model is an important element in the company's policy to provide
quality solutions built on its staff's in-depth knowledge and broad experience
in the fields of information technology, business and administration. The
company aims to be one of the Nordic countries' leading enterprises in these
fields, and these changes are a vital step in that direction.