Quarterly Report • May 12, 2010
Quarterly Report
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Interim Report for the first quarter 2010
| Key Figures | Q1/2010 | Q4/2009 | Q1/2009 | |
|---|---|---|---|---|
| Total income | in € million | 12.60 | 11.88 | 10.75 |
| EBITDA | in € million | 3.30 | 3.02 | 3.40 |
| EBITDA margin | in % | 26 | 25 | 32 |
| Result for the period | in € million | 1.26 | (4.20) | 1.68 |
| Operating cash flow | in € million | 9.20 | 4.40 | 5.41 |
| Operating cash flow per share | in € | 1.74 | 0.84 | 1.06 |
| Earnings per share (undiluted) | in € | 0.24 | (0.82) | 0.33 |
| Equity | in € million | 54.31 | 52.69 | 54.31 |
| Liquid assets | in € million | 49.96 | 42.86 | 37.23 |
| Members | in millions | 9.17 | 8.75 | 7.48 |
| thereof paying members | in thousands | 708 | 687 | 606 |
| Number of contacts | in millions | 183 | 172 | 136 |
| Employees | 293 | 265 | 239 |
A person with contacts will go far. A person with good contacts will go even further. What was once the province only of select societies is now available to everyone, thanks to the Internet. Thanks to XING, the online network for business contacts. Over 9 million professionals use the XING global business network to do business, make deals, and further their careers. XING offers custom-tailored networking features and services to help them create their networks and stay in touch. XING hosts about 38 thousand expert groups and assists its members in organizing over 150 thousand networking events every year around the globe. With XING Jobs, the network also features job ads to enable its members to leverage their professional contacts for creating real value.
XING. Powering Relationships.
6 XING share
9 Consolidated interim management report
After an eventful 2009 defined by change and a number of key strategic moves, XING made a positive start to the financial year in the first quarter of 2010. Revenues increased from €10.8 million to €12.6 million, which represents a 17 percent rise over figures for the same period last year. As planned, we gradually improved our operating result (EBITDA). Since the second quarter of 2009, profitability rose step by step from €2.5 million in Q2/2009 to €3.3 million in Q1/2010, which in turn indicates that 2010 will be a year of profitable growth.
The number of members on XING increased from 7.5 to 9.2 million (+23 percent) over the past 12 months, with 420 thousand new members signing up to our platform during the first quarter of 2010. XING witnessed a 17 percent increase in Premium Members in the last 12 months, taking the total to 708 thousand with 21 thousand new paying members signing up in the first quarter of this year. We have more than 3.9 million members in German-speaking countries alone, which proves our dominance on the German market where XING is the best-known and most popular online business network.
This is backed up by a representative Forsa survey conducted among experts and managers in Germany during the first quarter of 2010. According to the survey, 75 percent of managers active in a professional online network use XING. 15 percent of all experts and managers in Germany actively use XING, making it seven times more popular in German-speaking countries than other comparable Internet platforms. Of all the managers surveyed who are active in a professional online network, three quarters of them use XING.
XING's first ever appearance in the AGOF Internet Facts in March 2010 proved to be a key milestone in boosting XING's position among advertisers while also helping to drive revenues in the "Advertising" sector. XING tops the list of IVW-approved business sites both in terms of visits and page impressions with more reach than capital.de, FTD.de, Handelsblatt.com, impulse.de, manager-magazin.de or wiwo.de. Our target group is also top class and, at the time of our first AGOF listing in March 2010, we had 2.1 million unique users. Of those, 1.06 million users are college-educated professionals or households with a monthly net income of at least €3,500, which in turn makes them highly attractive to advertisers. These results also highlight the fact that XING is a vital platform for advertisers wanting to attract business professionals.
In March, XING's high brand recognition and excellent positioning was put to excellent use by teaming up with Microsoft Deutschland at the CeBIT 2010 trade fair in Hanover to announce the companies' partnership in the form of the Outlook Social Connector. As a result, the Outlook inbox will become the message headquarters for German users, helping them to find out the latest on their business contacts. The XING Connector (www.xing.com/outlook) will most probably be available for download at the same time as Microsoft Office 2010 is released, which is scheduled for June 2010.
Executive Board letter
We also made significant progress in the key "e-Recruiting" segment. The first quarter of 2010 saw new offerings such as "fixed-price job ads" and "Recruiter Memberships", with the remaining vacant posts in the sales team filled in order to provide sufficient resources going forward. In spite of the somewhat slow economic conditions in the first three months of 2010, revenues in this segment totaled €1.44 million, which actually equates to a 26 percent increase over the figure for Q4 2009.
Within the scope of Hubert Burda Digital GmbH's 25.1 percent investment in XING AG in December 2009, the company witnessed a change to its Supervisory Board with Fritz Oidtmann replacing Lars Hinrichs, who stepped down on January 22, 2010. Fritz Oidtmann (49) is Managing Director at Burda Digital Commerce GmbH and CHIP Holding GmbH. At the same time he is also spokesman for the Executive Board at Cyberport GmbH and computeruniverse.net GmbH. Previously, he was a founding partner and Executive Board member at OnVista, and prior to that he worked at the international management consultancy firm McKinsey & Company for 12 years before becoming a partner at the office in Cologne where he headed the German trading sector. He also worked for the firm's offices in Düsseldorf, Sao Paulo and Paris. Fritz Oidtmann studied economics at the University of Bonn, Germany, and UC Berkeley, USA.
Over the last few months we have taken a number of key strategic steps and created a broader earnings base for XING AG. "Subscriptions" is an excellent example of this, forming a solid basis on which we intend to rapidly grow our "e-Recruiting" and "Advertising" segments going forward. We expect the overall economic situation to improve, particularly in German-speaking countries, so when combining this with our new sources of income we should see an increase in growth levels. Against this backdrop, we and everyone at XING is looking forward to a successful second quarter in 2010.
Thank you for the trust you've placed in us!
Hamburg, May 2010
Dr. Stefan Gross-Selbeck Ingo Chu CEO CFO
CTO CCO
Michael Otto Dr. Helmut Becker
| Number of shares | 5,272,447 |
|---|---|
| Type of share | Registered share |
| IPO | December 7, 2006 |
| Trading symbol | O1BC |
| German securities identification number (WKN) | XNG888 |
| ISIN | DE000XNG8888 |
| Bloomberg | O1BC |
| Reuters | OBCGn.DE |
| Market segment | Prime Standard |
| Stock exchanges | Berlin, Bremen, Dusseldorf, Frankfurt, Munich, Stuttgart |
XING share
| Figures of XING shares at a glance | Q1/2010 | Q1/2009 |
|---|---|---|
| XETRA closing price end of period | €28.80 | €28.90 |
| High | €31.79 | €30.50 |
| Low | €27.40 | €24.25 |
| Market capitalization end of period | €151.8 million | €150.33 million |
| Average trading volume per trading day | 12,722 | 6,170 |
| Ranking in TecDAX | ||
| Based on trading turnover | 36 | 27 |
| Bawed on market capitalization | 37 | 24 |
| Earnings per share (undiluted) | €0.24 | €0.33 |
| Operating cash flow per share | €1.74 | €1.06 |
| Equity per share | €10.30 | €10.67 |
| XING share vs. indices in % | Q1/2010 |
|---|---|
| (6) | |
| TecDAX | 0 |
| DAX | 3 |
| SDAX | 10 |
for the first quarter from January 1 to March 31, 2010
9 Business development
15 Product development and Engineering
17 Risk report Consolidated interim financial statements
18 Consolidated income statement
19 Statement of income and accumulated earnings
20 Consolidated balance sheet
22 Consolidated cash flow statement
24 Consolidated statement of movements in shareholder equity
Notes to the consolidated interim financial statements
To our shareholders Financial information Service 9
Interim report
for the first quarter from January 1 to March 31, 2010
In the first three months of the new financial year, XING acquired 420 thousand new members. A total of 1.7 million business professionals logged into XING for the first time in the last 12 months, increasing the member base to 9.2 million as of March 31, 2010. The number of paying Premium Members also increased in Q1, to 708 thousand on March 31. The continued strong member growth demonstrates that the Company was able to considerably expand its market leadership position in German-speaking markets vis-à-vis all other business markets.
As of March 31, 43 percent of all XING members are based in Germany, Austria, or Switzerland. A total of 3.9 million professionals in German-speaking countries are active on the platform, making XING the most heavily used and fastest growing online professional network in its home markets by a considerable margin. A recent TNS poll among 6,000 people (thereof 3,000 XING members) confirms that XING in particular is very popular among social networks in Germany. Of the networks listed, XING was only to receive a positive net promoter score.
Concurrent to its solid growth in the German-language markets, the so called DACH-region XING is continuing to expand its international presence. In the first quarter of 2010, XING acquired 257 thousand new members living outside German-speaking regions. In accordance with corporate strategy, growth was concentrated in Turkey and Spain. In particular, the offices in Barcelona and Istanbul helped drive the international expansion of the business network in Europe. At the end of September, 5.3 million members lived outside of German-speaking countries. The Mediterranean countries, in particular, have very active XING communities.
In Q1/2010, XING AG continued to expand its total revenues including other operating income. With €12.6 million quarterly revenues for Q1/2010 were 17 percent above those of Q1/2009, and 6 percent above revenues of Q4/2009. In contrast to past quarters, the increase in revenues in Q1 was not attributable to an increase in paying members, rather to revenue generating by the new strategic segments "e-Recruiting" and "Advertising". Revenues for the "Subscriptions" business unit amounted to €10.07 in Q1/2010, with a short 28-day February among others influencing the flat revenue development for the quarter. In the first quarter of the year, XING AG gained 21 thousand new paying members, bringing the total of Premium Members to 708 thousand at the end of Q1.
To our shareholders Financial information Service 11
in € million 0.58 Q1/ 2009 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0 in € million Revenues from e-Recruiting 1.20 Q1/ 2009 Q2/ 2009 Q4/ 2009 1.03 1.04 Q3/ 2009 1.14 1.44 Q1/ 2010 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 0
Interim report
"e-Recruiting" segment revenues have developed very positively since the beginning of the year. By optimizing its product range to include services such as single-price job ads and Recruiter Membership, and by expanding its Sales Team, XING AG has created the framework and basis for growing its e-Recruiting revenues by convincing new customers of the advantages of recruiting new employees on XING. In the future, the Company will increase its presence at HR and recruiting trade fairs, plan more marketing and PR campaigns to complement these activities, and organize its own seminars for recruiters to show this target group methods for using social networking to make recruiting more efficient and effective. Already, recruiters have reported back to us that applicants from the XING Jobs site are more qualified than on standard online job platforms, which is further reflected by revenue development in the segment.
Accordingly, the Company increased its revenues in this area by 20 percent over the previous year, from €1.20 million in Q1/2009 to €1.44 million in Q1/2010. In comparison with the last quarter, the increase amounted to 26 percent.
The Company also boosted its revenues in the "Advertising" segment this quarter. Revenues in this segment stem from the sale of advertising spots on the XING platform, the sale of "Enterprise Groups", "Company Profiles", and the postings in "Best Offers". The Company recognized a 34 percent boost in revenues in this segment, for a total of €0.77 million in Q1/2010 (Q1/2009: €0.58 million). These figures represent an increase of 18 percent from Q4/2009. The positive development in the first quarter is largely attributable to the initial reporting of revenues from the sales of "Company Profiles" and "Enterprise Groups". For the segment "Display Advertising", quarterly revenues are on par with those of the previous quarter, due to the slowness of the first quarter season.
Already with the publication of the interim report for the first six months of 2009, the XING AG Executive Board first set the clear objective of successively increasing the Company's profitability based on the earnings in that second quarter. After a conscious focus on hiring qualified employees in the first half of 2009, which necessarily had a short-term negative effect on reported profits, XING AG is already beginning to increase its profitability successively. Accordingly, following the Q2/2009 low of €2.5 million EBITDA (with a 23 percent margin), the Company improved its EBITDA to €3.3 million and a 26 percent margin in Q1/2010. Recognized depreciation decreased in Q1/2010, due to one-off depreciations in Q4/2009 amounting to €5.4 million and the extension of the useful life of the XING platform to €1.23 million (10 percent of revenues). Accordingly, the group net income increased considerably from last quarter's result (Q4/2009: €-4.20 million) to €1.26 million.
In the first quarter of 2010, XING AG continued its strategy of constantly increasing profitability and earnings, and also significantly increased its operating cash flow. In Q1/2010, XING AG achieved cash flow from operations of €9.20 million, in comparison with €4.40 million in Q4/2009 and €5.44 million in Q1/2009. This increase is largely attributable to structural improvements in the net working capital. Upon presentation of the results for Q2/2009 in August 2009, the Executive Board pointed out that the Management is working in particular on optimizing contractual terms with the credit card acquirer acting on behalf of XING with the aim of accelerating the collection of membership fees from Premium Members in future. As of Q1/2010, the new conditions have gone into effect, and the Company recognized a one-time inflow of €3.5 million. The free cash flow has improved as well, to €7.1 million in the first quarter.
Interim report
XING moved into the limelight again by announcing its cooperation with Microsoft Deutschland at the CEBIT 2010 trade show in Hanover. With its platform made up of more than 9.2 million business professionals, XING has developed over the years to become a key component of working life. This collaboration unites XING with Microsoft Outlook and represents a successful forwards step for both companies in terms of providing their customers with the tools they need for professional business correspondence. User benefits are based on five features:
• You can invite colleagues, business partners, and contacts from your address book to join XING • Personal privacy
• The general settings and privacy settings defined for each individual contact on XING are transferred to Outlook so users retain full control over data
The link between a XING member's personal network and their inbox simplifies business correspondence while also giving them the opportunity to utilize their working time and resources more effectively.
Microsoft Deutschland will be offering the Outlook Social Connector in the final version of Outlook 2010 during the first half of the year, at which time the XING plugin will also be available for download to users in Germany by visiting www.xing.com/outlook.
In February 2010, XING launched its new testimonial campaign "Und es hat XING gemacht..." (Yet another XING moment) to follow on from the "MyNetworkValue" umbrella campaign that proved highly successful on an international level. Firstly, the microsite was launched with banner advertising appearing on portals and media sites with excellent range. This was then rolled out to the XING community in a second step.
Right from the very beginning, XING's long-standing success is based on the positive history of its excellent business target group. With more than 9 million members, XING offers countless opportunities around the clock and anywhere in the world. It doesn't matter whether users want to actively plan their career, drive their business, hire new employees, or get in touch with former colleagues — XING is the place to be and helps users to get the latest on other people, technical developments, and their potential influence on working society.
For this reason, the campaign puts the spotlight on members by allowing them to share their personal XING moments with members photographed in front of their computer screen showing their emotions at the precise moment when they e.g. found their dream job, concluded a long-awaited agreement, or found experts who helped them to solve a problem or confirmed their expertise. In the first five weeks alone, more than 2,500 enthusiastic customers provided an insight into their XING environment via the microsite (or on banner motifs). Viewers and members are both part of the campaign (due to run until June 13, 2010), which is proving popular due to its high viral spread.
Interim report
The previous financial year and the first quarter of 2010 returned impressive figures that prove just how popular and successful official XING Events are among members all over the world. In the first three months alone, 4,279 members attended more than 109 events organized on an internatioanl level by 227 regional XING Ambassadors.
XING is unique in that its members are not just highly active on the platform, they are also pro-active in real life. More than 500,000 members in 46 countries attend offline networking events every year to share knowledge and meet other people.
The event microsite was launched in four languages (Spanish, Turkish, English and German) at the start of March and gives users a condensed overview of scheduled regional, expert and multi-topic events. The Ambassador program also incorporates Google Maps, which allows users to view and contact moderator profiles and groups. And this doesn't just make it easier to find a group in a certain country — the microsite also coordinates all of the information from the three columns of offline networking: Regional Ambassador programs, Xpert Ambassador activities, and XING Seminars.
During the first quarter of 2010, the tried-and-tested agility that goes into developing and realizing the entire spectrum of products was intensified with SCRUM activities being expanded even further. In order to make continual maintenance and further development more agile, XING also introduced the KANBAN method which in turn ensures the platform's top quality and reliability.
From a product perspective, this quarter saw additions to our Company Profiles, XING Jobs, and XING Partner Ecosystems with a focus on improving interaction and growth levels. Here is a list of our main product development work during the first quarter of 2010:
adding new pages and optimizations for search engines
XING Partner Ecosystems (OpenSocial)
In order to ensure operations and further platform development, XING uses the seasoned technology Perl as well as the innovative web development framework Ruby on Rails. XING is one of the leading employers in this sector and actively supports the Rails community through sponsoring and by writing articles. In order to meet the growing challenges of the future, XING has expanded its product and development team by hiring a number of user interaction specialists.
Interim report
Permanent monitoring and risk management are key tasks for any listed company. To this end, XING implemented the risk early warning system as prescribed by section 91 (2) AktG and will continue to develop the system against the backdrop of current market conditions and circumstances within the Company. As was the case in the previous year, the functionality of the system has again been confirmed by the auditors of the consolidated financial statements.
Every single employee is requested to actively get involved in order to prevent any potential damage from occurring to the Company. Employees need to swiftly eliminate any risk within their scope of responsibility and point out any hint of emerging or existing risk to the relevant person. Here, employees need to understand how the risk management system works and be aware of risk insofar as possible. For this reason, XING organizes regular introductory events for its employees and provides them with information materials in order to help them understand how the risk management system works while also raising awareness for the importance of risk management.
The Company continually works on identifying and analyzing potential risk by systematically classifying identified risks according to the probability of occurrence and the level of damage they could cause. In 2009, two extensive risk inventories took place with the aim of analyzing and, in part, reclassifying existing risk, as well as identifying additional potential risk. On top of this, risk owners and managers are regularly surveyed to determine the status of existing risk and identify new risk.
During the previous quarter, the Company did not identify any major additional risk factors not already stated in the most recent Annual Report.
for the first quarter from January 1 to March 31, 2010
for the first quarter from January 1 to March 31, 2010
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| Service revenues | 12,317 | 10,374 |
| Other operating income | 281 | 381 |
| Total income | 12,598 | 10,755 |
| Cost of materials | 0 | (4) |
| Personnel expenses | (4,744) | (3,300) |
| Marketing expenses | (1,628) | (787) |
| Other operating expenses | (2,923) | (3,264) |
| EBITDA | 3,303 | 3,400 |
| Depreciation | (1,234) | (1,095) |
| EBIT | 2,069 | 2,305 |
| Interest income | 19 | 221 |
| Interest expenses | 0 | (30) |
| EBT | 2,088 | 2,496 |
| Taxes on income | (831) | (812) |
| Total result for the period | 1,257 | 1,684 |
| Earnings per share (undiluted) | 0.24 | 0.33 |
| Earnings per share (diluted) | 0.24 | 0.33 |
Consolidated interim financial statements
ffor the first quarter from January 1 to March 31, 2010
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| Total result | 1,257 | 1,684 |
| Currency translation adjustment | 7 | (72) |
| Other result | 7 | (72) |
| Total result for the period | 1,264 | 1,612 |
as of March 31, 2010
| Assets in € thousand | 03/31/2010 | 03/31/2009 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | ||
| Purchased software | 2,888 | 2,952 |
| Self-developed software | 6,652 | 6,354 |
| Goodwill | 13,440 | 13,440 |
| Other intangible assets | 4,276 | 4,592 |
| Property, plant and equipment | ||
| IT hardware and other business equipment | 2,567 | 2,317 |
| Financial assets | ||
| Equity participations | 50 | 50 |
| Other financial assets | 24 | 24 |
| Deferred tax assets | 346 | 346 |
| 30,243 | 30,075 | |
| Current assets | ||
| Receivables and other assets | ||
| Receivables attributable to services | 3,498 | 6,478 |
| Tax refund assets | 131 | 92 |
| Other assets | 1,100 | 1,241 |
| Cash and cash equivalents and other current deposits | 49,964 | 42,862 |
| 54,693 | 50,673 | |
| 84,936 | 80,748 |
| Liabilities in € thousand | 03/31/2010 | 03/31/2009 |
|---|---|---|
| Shareholders' equity | ||
| Subscribed capital | 5,272 | 5,272 |
| Treasury stock | (3,041) | (3,041) |
| Capital reserves | 40,586 | 40,586 |
| Other reserves | 2,976 | 2,607 |
| Cumulative profit | 8,521 | 7,264 |
| 54,314 | 52,688 | |
| Non-current liabilities | ||
| Deferred tax liabilities | 2,801 | 2,646 |
| Deferred income | 1,345 | 1,275 |
| 4,146 | 3,921 | |
| Current liabilities | ||
| Trade accounts payable | 1,022 | 802 |
| Deferred income | 17,316 | 14,958 |
| Tax provisions | 3,395 | 2,750 |
| Other liabilities | 4,743 | 5,629 |
| 26,476 | 24,139 | |
| 84,936 | 80,748 |
for the first quarter from January 1 to March 31, 2010
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| Earnings before taxes | 2,088 | 2,496 |
| Depreciation on capitalized development costs | 427 | 294 |
| Depreciation | 807 | 801 |
| Personnel expenses stock option program | 362 | 230 |
| Interest income | (19) | (221) |
| Interest received | 19 | 221 |
| Interest expenses | 0 | 30 |
| Taxes paid | (70) | (104) |
| Change in receivables and other assets | 3,121 | (2,986) |
| Change in liabilities and other liabilities | 34 | 2,206 |
| Change in deferred income | 2,428 | 2,473 |
| Cash flow from operating activities | 9,197 | 5,440 |
| Capitalization of self-developed software | (726) | (825) |
| Purchase of other software | (175) | (923) |
| Purchase of other intangible assets | (700) | (3,363) |
| Result from the disposal of fixed assets | 0 | 0 |
| Purchase of property, plant and equipment | (502) | (370) |
| Purchase of consolidation companies (less cash acquired) | 0 | (4,619) |
| Investment in other finacial assets | 0 | (8) |
| Cash flow from investing activities | (2,102) | (10,108) |
Consolidated interim financial statements
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| Share buyback | 0 | (949) |
| Repayment of liabilities from finance leases | 0 | (44) |
| Interest paid | 0 | (30) |
| Cash flow from financing activities | 0 | (1,023) |
| Differences due to currency translation | 7 | 0 |
| Change in cash and cash equivalents | 7,102 | (5,691) |
| Cash and cash equivalents at the beginning of the period | 42,862 | 42,922 |
| Cash and cash equivalents at the end of the period1) | 49,964 | 37,231 |
1) Cash and cash equivalents are liquid assets.
for the first quarter from January 1 to March 31, 2010
| in € thousand | Subscribed capital |
Capital reserved |
Treasury stock |
|
|---|---|---|---|---|
| Balance 01/01/2009 | 5,202 | 38,517 | (2,092) | |
| Currency translation | 0 | 0 | 0 | |
| Total income and expense for the period recognized directly in the equity |
0 | 0 | 0 | |
| Net result for the period | 0 | 0 | 0 | |
| Total result for the period | 0 | 0 | 0 | |
| Share buyback | 0 | 0 | (949) | |
| Acquisition of minorities | 0 | 0 | 0 | |
| Planned issuance of equity instruments for acquisition | 0 | 0 | 0 | |
| Personnel expenses stock option program | 0 | 0 | 0 | |
| As of 03/31/2009 | 5,202 | 38,517 | (3,041) | |
| Balance 01/01/2010 | 5,272 | 40,586 | (3,041) | |
| Currency translation | 0 | 0 | 0 | |
| Total income and expense for the period | ||||
| recognised directly in the equity | 0 | 0 | 0 | |
| Net result for the period | 0 | 0 | 0 | |
| Total result for the period | 0 | 0 | 0 | |
| Personnel expenses stock option program | 0 | 0 | 0 | |
| As of 03/31/2010 | 5,272 | 40,586 | (3,041) |
To our shareholders Financial information Service 25
Consolidated interim financial statements
| Shareholders' | Cumulative | Other | ||
|---|---|---|---|---|
| equity, total | Minorities | Total | profit | reserves |
| 52,328 | (123) | 52,451 | 9,068 | 1,756 |
| (72) | 0 | (72) | 0 | (72) |
| (72) | 0 | (72) | 0 | (72) |
| 1,684 | 0 | 1,684 | 1,684 | 0 |
| 1,612 | 0 | 1,612 | 1,684 | (72) |
| (949) | 0 | (949) | 0 | 0 |
| 123 | (123) | (123) | 0 | |
| 1,093 | 0 | 1,093 | 0 | 1,093 |
| 230 | 0 | 230 | 0 | 230 |
| 54,314 | 0 | 54,314 | 10,629 | 3,007 |
| 52,688 | 0 | 52,688 | 7,264 | 2,607 |
| 0 | 7 | 0 | 7 | |
| 0 | 7 | 0 | 7 | |
| 1,257 | 0 | 1,257 | 1,257 | 0 |
| 1,264 | 0 | 1,264 | 1,257 | 7 |
| 362 | 0 | 362 | 0 | 362 |
| 54,314 | 0 | 54,314 | 8,521 | 2,976 |
for the first quarter ending March 31, 2010
The consolidated financial statements for the quarter ending on March 31, 2010, have been prepared in accordance with the International Financial Reporting Standard for Interim Financial Reports (IAS 34) as adopted by the EU.
The period under review began on January 1, 2010, and ended on March 31, 2010. The corresponding previous year period began on January 1, 2009, and ended on March 31, 2009.
The accounting principles applied to this consolidated interim financial statement are the same as those used for the annual consolidated financial statement for the financial year ending December 31, 2009.
The economic service life of the self-designed user platform of XING AG, estimated at five years on January 1, 2008, was reassessed on January 1, 2010. This reassessment led to an extension of the estimated economic service life by two years, until December 31, 2014. As a result, depreciation write offs for the platform for Q1/2010 were €213 thousand lower. Simultaneously, the recognized deferred tax liabilities increased by €69 thousand. The positive effect on the results amounted to €144 thousand in Q1/2010.
At the time of the consolidated interim reporting date, the group of consolidated companies included:
| Equity holding 03/31/2010 in % |
Equity holding 12/31/2009 in % |
Initial consoli dation |
Share holders' equity balance 03/31/2010 in € thousand |
Result Q1/2010 in € thousand |
|
|---|---|---|---|---|---|
| XING Hong Kong Ltd., Hong Kong, China | 100 | 100 | 2006 | (166) | (1) |
| openBC Network Technology (Beijing) Co. Ltd., Beijing, China |
100 | 100 | 2006 | 56 | (9) |
| Grupo Galenicom Tecnologías de la Informacíon (eConozco), S.L., Barcelona, Spain |
100 | 100 | 2007 | 1 | (1) |
| XING International Holding GmbH, Hamburg, Germany |
100 | 100 | 2007 | 9,608 | 56 |
| XING Networking, S.L., Barcelona, Spain1) |
100 | 100 | 2007 | (20) | (42) |
| EUDA Uluslararasi Danismanlik ve Bilisim Hizmetleri Limited Sirketi (XING Turkey), Istanbul, Turkey2) |
100 | 100 | 2008 | 101 | 6 |
| XING Switzerland GmbH, Sarnen, Switzerland1) | 100 | 100 | 2008 | 24 | 1 |
| XING Italy S.R.L., Milan, Italy1) | 100 | 100 | 2009 | 41 | 471 |
| Socialmedian Inc. Wilmington, Delaware, USA | 100 | 100 | 2009 | 320 | 0 |
1) 100 percent is held indirectly via shares of 100 percent in XING International Holding GmbH, Hamburg, Germany.
2) 99.5 percent of shares are held indirectly via XING International Holding GmbH, Hamburg, Germany, and 0.5 percent are held directly by XING AG.
Under the auspices of the existing stock option programs, new stock options have been issued. In the first quarter of 2010, total expenses of €362 thousand were recognized for four tranches and a single commitment.
The Stock Option Plan was evaluated by Mercer Deutschland GmbH, and is based on the same methods of evaluation and updated criteria as applied to the Stock Option Plan 2006.
No treasury shares were purchased in Q1/2010 (Q1/2009: €949 thousand).
In the first quarter of 2010, the Group did not acquire any companies.
In January 2009, XING AG purchased New York-based Socialmedian, Inc., a leading online news network. The purchase price was made up of cash and shares, and amounted to €2.9 million plus a profit-linked earn-out of up to €2.5 million, payable within the following three years.
On January 13, 2009, XING Italy Srl. was founded in Milan with equity of €25 thousand.
On February 5, 2009, the Group acquired the remaining 20 percent of voting rights of EUDA Uluslararasi Danismanlik ve Bilisim Hizmetleri Limited Sirketi (cember.net) per contract, for a payment of €2,180 thousand. The purchase had no effect on the consolidated, as cember.net was already fully consolidated.
In January 2009, the Group topped up its shares in XING Hong Kong Ltd. from 85 percent to 100 percent, for the price of €80 thousand. The purchase had no effect on the consolidated, as XING Hong Kong Ltd. was already fully consolidated.
In the three-month period ending March 31, 2010, the Group recorded payments of €726 thousand for selfdeveloped software (previous period: €825 thousand). The capitalized self-developed software includes costs for improvements and developments, and additional features and functions of the XING website.
In Q1, the Company invested a total of €502 thousand for the purchase of EDP software and hardware, and for other office equipment (previous period: €370 thousand).
The following table breaks down the primary items of sundry operating expenses:
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| IT services, management services and services for new markets | 882 | 1,363 |
| Legal advice, audit and accounting fees | 422 | 607 |
| Server hosting, management and traffic | 388 | 310 |
| Office costs | 336 | 178 |
| Payment costs | 324 | 335 |
| Travel, entertainment and other business expenses | 171 | 157 |
| Allowance for doubtful debts | 104 | 130 |
| Other | 296 | 184 |
| Total | 2,923 | 3,264 |
The category "Other" operating expenses primarily includes payments for office space, office supplies, and communications costs.
XING AG consists of one reportable segment with the business units Subscriptions (including revenues from memberships and Enterprise Groups), Advertising, Jobs, Best offers and Miscellaneous.
The segment revenues for the period under review are shown in the following table:
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| Subscriptions | 10,074 | 8,459 |
| e-Recruiting | 1,437 | 1,198 |
| Advertising | 774 | 578 |
| Other | 32 | 10 |
| Total | 12,317 | 10,246 |
The business unit "Jobs" was renamed "e-Recruiting". Earnings from returned bank transfers amounting to €80 thousand (previous year: €128 thousand) were not included under revenues in contrast to the previous year, but rather reported under sundry operating income. The figures from the previous year were adjusted accordingly. Furthermore, revenues from "Groups" amounting to €158 thousand (previous year: €93 thousand) were reclassified from the Subscription business unit to Advertising, and revenues from "BestOffers" amounting to €128 thousand (previous year: €112 thousand) were also reclassified to Advertising.
| in € thousand | 01/01/2010 – 03/31/2010 |
01/01/2009 – 03/31/2009 |
|---|---|---|
| DACH | 11,867 | 9,749 |
| International | 450 | 497 |
| Total | 12,317 | 10,246 |
As there are no considerable changes to long-term assets, these have not been listed in the table.
In Q1/2010, the Group did not lease any assets. In the previous year's reporting period, leasing payments amounting to €220 thousand were recognized.
There were and are no other contingent liabilities for the reporting period and the corresponding period the previous year.
In the period under review, payments amounting to €24 thousand were made to epublica GmbH (previous period: €213 thousand).
Furthermore, payments amounting to €90 thousand were made to DLD Media GmbH, which is owned by the Burda Group.
No significant events have occurred since the end of the first quarter 2010.
Hamburg, April 30, 2010
Dr. Stefan Gross-Selbeck Ingo Chu Dr. Helmut Becker Michael Otto
| Date | Disposition |
|---|---|
| May 12, 2010 | Interim Report for Q1/2010, Hamburg |
| May 27, 2010 | Annual General Meeting, Hamburg |
| August 11, 2010* | 2010 Half-year Report, Hamburg |
| November 11, 2010* | Interim Report for Q3/2010, Hamburg |
* Dates subject to change
This interim financial report is available in German and English. You can find both versions and additional press information on the Internet at: www.xing.com
For Annual Report, Interim Reports and current Financial information about XING AG please contact:
Patrick Möller Investor Relations Gänsemarkt 43 20354 Hamburg Phone +49 40 41 91 31 – 793 Fax +49 40 41 91 31 – 44
Further editors Daniela Hinrichs
POWERING RELATIONSHIPS WWW.XING.COM
For press enquiries and current information about XING AG please contact:
Phone +49 40 41 91 31 – 763 Fax +49 40 41 91 31 – 11 [email protected]
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