Earnings Release • Mar 27, 2009
Earnings Release
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| (in EUR x 1,000) | 2008 | i 2007 |
|---|---|---|
| Net sales | 143,888 | 114,758 |
| EBIT (excl. restructuring costs and impairment charges) | 1,937 | 4,729 |
| Non-recurring restructuring costs | -1,430 | 0 |
| Impairment charges | -19,004 | 0 |
| EBIT | -18,497 | 4,729 |
"In 2008 Qurius absorbed the acquisitions made in 2006 and 2007 and saw its top line net sales grow to EUR 144 million. The integration of the acquired companies required significant management attention. Even though our net result shows a loss for 2008, the basis of our operations going forward is cash positive. Net result has suffered from impairment charges and non-recurring restructuring costs. We believe that adequate corrective actions have been taken in Germany and Spain, and that we have created a stronger foundation for the future in those countries. In the current economic downturn, companies will be looking for IT solutions and services that can help improve the efficiency of their organisation and consequently save costs. This is exactly what Qurius offers its customers. In addition, our strong installed base presents us with lots of business opportunities. The economic outlook obviously remains uncertain for both our customers as well as for us. Management will response quickly if further measures would be necessary."
In the fourth quarter Qurius reported net sales amounting to EUR 37.7 million (2007: EUR 36.3 million). In the course of the fourth quarter we experienced increasing customer caution and delayed decision making on IT investments in some of our markets. This lead to net license revenue undershooting our initial expectations.
| By category | 2008 | 2007i | % Change |
|---|---|---|---|
| Licenses | 18,844 | 19,720 | -4% |
| Maintenance | 24,198 | 19,043 | 27% |
| Services | 89,601 | 67,685 | 32% |
| Hardware | 11,245 | 8,310 | 35% |
| 143,888 | 114,758 | 25% |
| By country | 2008 | 2007i | % Change |
|---|---|---|---|
| Germany | 29,529 | 12,742 | 132% |
| Netherlands | 62,991 | 59,954 | 5% |
| Spain | 15,596 | 13,898 | 12% |
| Other | 35,772 | 28,164 | 27% |
| 143,888 | 114,758 | 25% |
Total revenue growth for 2008 amounted to EUR 29.1 million or 25%, including 7% organic growth. Organic growth was achieved mainly in the first half of 2008 in the Netherlands and Spain. In our traditionally strong home market, the Netherlands, we experienced further revenue growth to EUR 63.0 million (2007: EUR 60.0 million). Following consolidation of our recent acquisitions of Wilhelm + Zeller and Cabus, the German operation realised sales growth to EUR 29.5 million (2007: EUR 12.7 million). Our Spanish operation grew to EUR 15.6 million (2007: EUR 13.9 million).
| 2008 | 2007i | |
|---|---|---|
| Germany | -240 | 128 |
| Netherlands | 3,289 | 5,195 |
| Spain | -309 | -198 |
| Other | -803 | -396 |
| 1,937 | 4,729 |
Excluding non-recurring restructuring costs and impairment charges, the recurring EBIT margin (excl. restructuring costs and impairment charges) realised in 2008 amounted to EUR 1.9 million (2007: EUR 4.7 million). The decrease in this recurring EBIT margin was caused by lower license revenue in 2008 as well as service delivery issues at some of our operations. We are investing in harmonisation of service delivery and have put in place a uniform modular method for serving our customers. We will continue to invest in service delivery and expect to see the benefits of our investments in this area in improved EBIT margins in 2009 and beyond.
Non-recurring restructuring costs have impacted EBIT for an amount of EUR 1.4 million (2007: EUR 0 million). These costs, which were incurred in operational restructuring in Germany, Spain, Sweden and at the corporate head quarters, comprised of one-off severance payments for rightsizing the respective operations, and management replacements.
Changing economic conditions and lower than expected earnings resulted in an impairment charge of EUR 19.0 million on the carrying value of some of our operations acquired in 2005, 2006 and 2007. The main reason for this impairment charge was the lower long-term growth rates due to the deterioration of the overall economic situation.
Lower than expected earnings have resulted in a derecognition of part of the Deferred Tax Assets. This charge amounts to EUR 2.2 million and has been accounted for in the tax line in the Profit and Loss account.
On 31 December 2008, our net debt position amounted to EUR 17.9 million. In the course of the second half of 2008, the development of our EBIT meant that Qurius was unable to meet all of its financial debt covenant ratios. This situation was monitored closely by our lender (NIBC) and Qurius. The current facility has initially been set up to finance the Watermark acquisition and may not be best fitted to the needs of the business going forward. Both parties are working constructively to restructure the current facility, taking into account the current operational performance of Qurius.
Following our information sent out in October of 2008, the acquisition process of Bíndar in Spain is on hold until further notice.
| FTE as at 31 December | 2008 | 2007 |
|---|---|---|
| Germany | 216 | 223 |
| Netherlands | 402 | 386 |
| Spain | 160 | 150 |
| Other countries | 296 | 301 |
| 1,074 | 1,060 |
On 31 December 2008 Qurius employed 1,074 FTEs (2007: 1,060 FTEs). The total number of employees was broadly stable throughout 2008. The drive towards and integrated organisation with increased sales effectiveness and operational efficiency led to reorganisations in the Spanish, German and Swedish operations. Besides the retention and recruitment of high-quality staff, other top priorities have been the correct staff allocation, an improved utilization rate and a better ratio of fee earners to overhead staff.
Qurius will publish its digital 2008 annual report on 3 April 2009 and its first quarter results on 23 April 2009. The Annual General Meeting of Shareholders will take place on 24 April, at 10.00 a.m. in Grand Hotel Karel V in Utrecht. Under the current practice rules of chartered accountants, the company reports that the annual results have not been audited. The consultations with the accountant give no reason to expect material changes.
End of press release
Qurius provides architecture, realisation and systems management of Microsoft technology based business and IT solutions, including infrastructures. Qurius has over 1,000 staff members and is headquartered in Zaltbommel, the Netherlands. Its offices in Belgium, Denmark, Germany, Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom serve over 2,800 clients. Qurius has been publicly listed on Euronext Amsterdam since 1998 and is included in the AScX-index. Currently Qurius has 105,432,619 listed shares. Qurius was recognised by Microsoft as the 2007 global Microsoft Dynamics Partner of the Year. For more information, visit www.qurius.com.
Qurius, Suzanne Schaapman, Investor Relations Manager: tel. +31 (0)418 683 500 or [email protected]
| (in EUR x 1,000, except percentages) | 2008 | 2007i | Change |
|---|---|---|---|
| Net sales | 143,888 | 114,758 | 25% |
| Cost of sales | -45,019 | -33,096 | 36% |
| Gross margin | 98,869 | 81,662 | 21% |
| (as % of net sales) | 69% | 71% | |
| Costs of personnel | 79,320 | 63,474 | 25% |
| Other operating expenses | 13,883 | 10,570 | 31% |
| Sales result of Magnus Management Consultants |
0 | -50 | |
| Operating expenses | -93,203 | -73,994 | 26% |
| EBITDA | 5,666 | 7,668 | -26% |
| (as % of net sales) | 3.9% | 6.7% | |
| Depreciation and amortisation | -3,729 | -2,939 | 27% |
| EBIT (excl. restructuring and impairment charges) |
1,937 | 4,729 | -59% |
| (as % of net sales) | 1.3% | 4.1% | |
| Restructuring costs | -1,430 | 0 | |
| Amortisation of goodwill | -19,004 | 0 | |
| EBIT | -18,497 | 4,729 | |
| Financial income and expenses | -1,508 | -1,126 | 34% |
| Result before taxation | -20,005 | 3,603 | |
| Taxation | -2,451 | -976 | 151% |
| Third party interest | -39 | -22 | 76% |
| Net result | -22,495 | 2,605 | |
| (as % of net sales) | -15.6% | 2.3% |
| (in EUR x 1,000) | 31 December 2008 | 31 December 2007i | ||
|---|---|---|---|---|
| ASSETS Fixed assets Intangible fixed assets Tangible fixed assets |
48,448 5,385 |
69,419 4,176 |
||
| Financial fixed assets | 6,047 | 59,880 | 8,138 | 81,733 |
| Current assets Receivables Liquid funds |
54,724 3,759 |
58,483 | 52,747 4,375 |
57,122 |
| TOTAL ASSETS | 118,363 | 138,855 | ||
| EQUITY AND LIABILITIES Group equity Group equity Third party interests Group equity |
48,547 144 |
48,691 | 71,140 177 |
71,317 |
| Provisions | 1,618 | 1,930 | ||
| Long term liabilities | 5,480 | 10,362 | ||
| Current liabilities | 62,574 | 55,246 | ||
| TOTAL EQUITY AND LIABILITIES | 118,363 | 138,855 |
| (in EUR x 1,000) | 2008 | 2007i |
|---|---|---|
| Net profit | -22,495 | 2,605 |
| Depreciation and amortisation | 22,741 | -2,939 |
| Movements in provisions | -312 | 79 |
| Gross cash flow | -66 | -255 |
| Adjustments for movements in | -722 | -3,191 |
| working capital | ||
| Cash flow from operating activities | -788 | -3,446 |
| Cash flow from investment activities | -6,057 | -17,168 |
| Cash flow from financing activities | 6,229 | 20,169 |
| -616 | -445 |
i 2007 figures have been adjusted
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