Earnings Release • May 6, 2010
Earnings Release
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| C 1st Quarter of 2010 at a Glance | $Q1$ 2010 | $Q1$ 2009 | |
|---|---|---|---|
| Revenues and income | TEUR | $\Delta$ % | TEUR |
| Revenues | |||
| Revenues consulting | 14.358 | (9) | 15.695 |
| Revenues software | 11.690 | (13) | 13.366 |
| Revenues Germany | 2.668 | 15 | 2.329 |
| Revenues foreign countries | 6.283 | 6 | 5.943 |
| Earnings before interest, taxes, depreciation and amortization (EBITDA) | 8.075 | (17) | 9.751 |
| Earnings before interest and taxes (EBIT) | 299 | 136 | (829) |
| Earnings before taxes (EBT) | 22 | 102 | (977) |
| Net income | 129 | 113 | (959) |
| Earnings per share (in EUR) | (78) | 95 | (1.503) |
| Investments and depreciation | (0, 01) | 95 | (0, 29) |
| Investments in intangible and tangible assets | |||
| Depreciation | 167 | (27) | 230 |
| Key figures | 277 | 8 7 | 148 |
| Gross margin (in %) | |||
| EBITDA margin (in %) | 29,4 | 29,0 | |
| EBIT margin (in %) | 2,1 | (5,3) | |
| Cash flow from operating activities | O,2 | (6,2) | |
| Cash flow from investing activities | 1.979 | 2.702 | |
| Cash flow from financing activities | (170) | (580) | |
| 123 | $\circ$ | ||
| 31.03.2010 | 31.03.2009 | ||
| Assets, shareholders' equity and liabilities (end of quarter) | TEUR | $\Delta$ % | TEUR |
| Total assets | |||
| Non-current assets | 44.801 | (5) | 47.397 |
| Current assests | 14.070 | $\circ$ | 14.123 |
| Net cash and cash equivalents | 30.731 | (8) | 33.274 |
| Shareholders' equity | 9.228 | $\overline{4}$ | 8.867 |
| Equity ratio (in %) | 28.788 | $\overline{\mathbf{3}}$ | 27.945 |
| Noncurrent liabilities | 64,3 | $\overline{9}$ | 59,0 |
| Current liabilities | 341 | (11) | 384 |
| Employees (end of quarter) | 15.672 | (17) | 18.986 |
| 665 | (8) | 710 |
EXAMINA
WARDER WILLIAM WARDER
I
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Despite the subdued order book situation, which continued to prevail worldwide in the first three months of the current fiscal year, the Group was able to improve income considerably. The global economic crisis hit the subsidiaries in Spain and Italy somewhat later than elsewhere. In contrast, all other REALTECH subsidiaries performed at a better level. REALTECH Germany assumes the role of leading subsidiary and contributes accordingly to the improvement in income. The details are as follows:
In the first quarter of 2010, REALTECH recorded revenues of EUR 14,358 thousand, thus falling 9 percent below the previous year's figure (EUR 15,695 thousand).
The Consulting business field accounted for revenues of EUR 11,690 thousand, which was 13 percent down on the previous year (EUR 13,366 thousand). Revenues in the Software business field were, in contrast, 15 percent higher in the first
quarter, rising from EUR 2,329 thousand to EUR 2,668 thousand. The contribution made by Software towards total revenue increased to 19 percent (previous year: 15 percent).
In Germany, revenues increased by 6 percent to EUR 6,283. The share of Group revenue generated in Germany thus rose to 44 percent (previous year: 38 percent). The proportion of revenue generated by foreign business was 56 percent (previous year: 62 percent), with the region comprising the rest of Europe again making the greatest contribution. Nonetheless revenues fell by 17 percent to EUR 8,075 thousand. This was due to the downturn of 27 percent in Italy to EUR 2,663 thousand and Spain falling by 30 percent to EUR 2,627
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Net income amounted to minus EUR 78 thousand (previous year: minus EUR 1,503 thousand). The fact that this figure was higher than in the previous year is in particular due to the effect described above with regard to EBIT. The earnings per share were minus EUR 0.01 (previous year: minus EUR $0.29$ ).
Cash flow from operating activities in the first quarter of 2010 was EUR 1,972 thousand (previous year: EUR 2,702 thousand). This fall can primarily be attributed to a EUR 1,149 thousand rise in trade receivables compared to the same key date the previous year.
The cash flow from investing activities in the period under review gave rise to a cash outflow of EUR 170 thousand. The cash outflow the previous year was EUR 580 thousand. This change was essentially the result of the reduction in the number of securities compared with the previous year. Investments in intangible assets and property, plant and equipment amounted to EUR 167 thousand (previous year: EUR 230 thousand). This particularly involved procuring replacements.
Compared to December 31, 2009, total assets increased by 8 percent to EUR 44,801 thousand.
Trade receivables rose to EUR 19,138 thousand (December 31, 2009: EUR 17,990 thousand). These therefore accounted for 43 percent of assets (December 31, 2009: 44 percent). The rise of 6 percent was caused by the longer payment targets in individual cases as a result of the crisis.
Net cash and cash equivalents increased compared to December 31, 2009 (EUR 7,304 thousand) to EUR 9,228 thousand. These represented 21 percent of assets (December 31, 2009: 18 percent).
At EUR 28,788 thousand shareholders' equity was almost unchanged compared to December 31, 2009 (EUR 28,566 thousand). The company's equity ratio on March 31, 2010, at 64.3 percent, was lower than at the end of the previous year (69.1 percent).
Compared to December 31, 2009, provisions decreased by EUR 776 thousand to EUR 4,907 thousand
At the end of the first quarter of 2010, REALTECH had 652 employees worldwide - 8 percent fewer than at the end of the first quarter of 2008 (710). A total of 232 of these employees worked in Germany (previous year: 257). The percentage of REALTECH employees working in Germany remained at 36 percent.
The number of employees working at REALTECH companies in other countries fell 7 percent from 453 to 420. This development can be attributed to the European region excluding Germany, where an 8 percent fall from 379 to 347 employees was recorded. The headcount in the USA
Employees by regions (end of quarter)
● Rest of Europe ● Germany ● Asia Pacific ● USA
fell slightly to 16 (previous year: 17), whereas the number of employees in the Asia-Pacific region remained at 57.
Looking at the divisions, the following movements could be seen at the key date of March 31: in Consulting the number of consultants fell 8 percent from 497 to 455. The number of product consultants at 15 remained almost unchanged compared to the previous year (16). In sales and distribution the headcount fell by 5 percent from 75 to 71. The number of people working in development decreased by 12 percent from 49 to 43 employees As for administration, the headcount fell by 7 percent from 73 to 68.
REALTECH will also experience tremendous challenges in 2010. However, the Executive Board is confident that it is well equipped for the future with its existing products and services. Even in economically challenging times, an IT infrastructure that delivers optimum performance provides an important basis for companies to operate successfully in the market place. The two segments of Consulting and Software offer a portfolio of products and services which have been tried and tested in practical applications.
In times of crisis particular attention again focuses on accurate cost management and efficiently organized cooperation across departments and
sites. Customers therefore endeavor to make a critical appraisal of existing company processes and to optimize these with the help of external advisers and appropriate IT solutions. With our solutions they have concrete proof of the benefits gained through investments made in their IT infrastructure.
The most important capital a consultancy business but also a software company can have is motivated and well trained staff. REALTECH is still of the opinion that its highly qualified employees are the crucial success factor so that it can expand its position in the market further. This is particularly true in an economic environment dominated by continuing uncertainty. For this reason, REAL-TECH considers that, in the future too, it is of crucial importance to protect the investment made in employees over a number of years.
Europe will be the geographical focus of business activities in Europe in 2010. The Group is in a strong position in Germany, Italy and Spain in both qualitative and quantitative terms and is established as a trusted partner in the market.
The priorities set in 2009 will continue to be important in the 2010 fiscal year. REALTECH is concentrating on achieving moderate growth and positive cash flow. The Group managed to increase its EBIT by around EUR 1.0 million while revenue in the first quarter of 2010 fell by EUR 1.3 million. The global project situation and emerging prospects confirm the Executive Board's outlook for the 2010 fiscal year of achieving over 20 percent EBIT growth.
Responsibility statement by the Executive Board
To the best of our knowledge, and in accordance with the applicable reporting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the net assets, financial position and earnings of the Group, and the interim management report of the Group includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group for the remaining months of the financial year.
Best regards,
The Executive Board REALTECH AG
REALTECH AG has prepared its (non-audited) quarterly financial statements in accordance with the accounting standards of the International Accounting Standards Board (IASB), i.e. the International Financial Reporting Standards (IFRS) as applicable in the EU. The IAS, IFRS, and corresponding interpretations of the International Financial Reporting Interpretations Committee (IFRIC) applicable as of March 31, 2010 have been taken into account. The figures for the previous year were also determined based on the same standards.
The consolidation and valuation methods used to prepare the quarterly financial statements and establish the comparative figures for the previous year were basically the same as those used in the consolidated financial statement as of December 31, 2009. A detailed description of the individual methods is published in the notes of the 2009 annual report.
No matters of particular significance that may affect the company's income or circumstances that have affected business development are known other than those listed here.
rsorgung Oberhausen AG
Oberhausen AG
Energiev
The CeBIT opened its gates in Hanover for the 25th time in early March. Around 500,000 visitors were expected at the world's leading digital industry expo.
REALTECH presented its new ServicePortal software solution for the management of IT processes to the ITIL V3 standard (IT Infrastructure Library) for the first time at this year's CeBIT. This new solution expands REALTECH's theGuard! product family portfolio for enterprise-wide service management and secure business processes. IT departments have no option but to respond to the increasing demands being made by internal and external customers by reorganizing existing service processes. Although ITIL V3 regulations provide guideline recommendations for the organization of processes, the software tools needed to implement processes efficiently are often unavailable in practice.
REALTECH's ServicePortal solutions supports the introduction of new processes and facilitates the efficient organization of comprehensive IT operational service processes. In fact, theGuard! ServicePortal offers IT managers an all-round view of all IT-supported corporate business and service processes.
Faced with new legal requirements, ever higher expectations from specialist departments and the need to consistently align its IT to corporate objectives evo was forced to rethink its IT architecture from scratch.
High operational costs and longer and longer response times to business-critical applications soon motivated the company to consider migrating to Linux. Linux promised to eliminate existing problems and to bring about a noticeable reduction in operating costs. The migration from UNIX to Linux will generate a return on investment (RoI) within a period of between 9 and 30 months. Compared with the previously used HP-UX environment, evo's switch to Linux will enable the company to improve response times by 50 percent and to cut the total cost of ownership by around 30 percent.
Impressed by the good experience of a reference customer evo turned to REALTECH and commissioned the SAP consultancy with the migration and subsequent upgrade. REALTECH completed the final migration in a single weekend. This meant that evo had no downtime at all.
By choosing REALTECH evo has created an ideal setup for future IT projects. The migration and subsequent upgrade mean that the company can look forward in confidence to the challenges which tomorrow will bring. Lasting improvements have also been achieved in the cost structure and response times. Thanks to an up-to-date and flexible infrastructure evo's IT department is now able to position itself anew and support the company's specialist departments need for flexible company processes.
"REALTECH supported the company with its triedand-tested know-how, expertise and commitment of its consultants and highly developed communication strengths. Establishing IT as an internal company partner for flexible business processes was a milestone and important step for us", according to Roland Buschmann, from evo's Data Processing Department.
theGuard!
theGuard!
-
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Energieversorgung Oberhausen AG Energie
sorgung Oberhausen AD
theGuard!
MALVERN, Pa., Feb 26 - REALTECH, Inc., the North American affiliate of REALTECH AG, a longtime SAP(R) software and technology partner, today announced the successful upgrade of Hexion's SAP system from SAP R/3 4.6C to SAP ECC 6.0. During the same project timeframe, REALTECH also completed implementation of TransportManager for Hexion. is an easy-to-use software solution for the automated distribution of program and data modifications within SAP ABAP(R) and Java applications.
Hexion Specialty Chemicals is the world's largest producer of binder, adhesive, coating and ink resins for industrial applications. It has approximately 7,000 employees in 110 offices and manufacturing facilities across 23 countries. Hexion's system has nearly 4,000 SAP users with over 3 terabytes of data.
REALTECH began the project by migrating Hexion's operating system from HP Alpha Tru64 to the Microsoft Windows platform and their database from Oracle to Microsoft SQL Server. After the migration, REALTECH performed a (CU&UC) from SAP R/3 4.6C MDMP multi-code page to SAP ECC 6.0 EHP 4 Unicode. Despite the ERP database size exceeding three terabytes both projects had go-lives over a normal weekend.
"We are glad to help Hexion optimize their SAP applications. For every project, we are able to draw on the breadth of our SAP knowledge and the experience we've gained from hundreds of migrations and upgrades. As an experienced SAP
theGuard!
partner, we are here to deliver quality results," said Ralph Jacobus, President and CEO of REAL-TECH, Inc.
In addition to upgrading Hexion's SAP system, REALTECH also delivered a successful implementation of REALTECH's TransportManager. TransportManager is a leading SAP change management software application that helps SAP customers significantly reduce the cost of managing their SAP change processes. With more than 1,000 instances installed, there are more than 200 international SAP customers that are successfully using TransportManager.
"REALTECH TransportManager has really been the answer we've been looking for, for our SAP change management needs. We've had problems with a previous solution, but TransportManager has proved to be a superior product. It was very easy to install with the help from the team at REALTECH. We are very happy with just how easy it is to use. Hexion has been pleased with the performance of TransportManager in our environment," said Joshua Bailey, SAP Basis Administrator at Hexion
HE HON
HEXION
Specialty Chemicals
HEXION
Specialty Chemicals
HE
REALTECH shares began the current year at a price of EUR 7.51 only to fall over a period of seven weeks to EUR 6.61, the lowest figure in the first quarter of 2010, on February 23. REALTECH AG published its provisional consolidated figures for fiscal year 2009 the day before. The shares climbed steadily edged up over the five weeks that followed and ended the quarter at EUR 8.29, its highest level during the first quarter. Consequently, the company's market capitalization on March 31, 2010 was EUR 44 million (March 31, 2009: EUR 30 million), corresponding to 153 percent of book equity.
The shareholder structure of REALTECH AG changed in the first quarter of 2010 compared with the end of 2009 in that the number of shares increased during this period. Accordingly, the company's free float increased to 38.62 percent on March 31, 2010.
On average, around 5,027 REALTECH shares were traded every day during Q1/2010 - 7 percent fewer than during the same quarter in the previous year $(5,411)$ . As in the previous year, 77 percent of the shares were traded in Xetra, while 23 percent were traded on the other stock exchanges.
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| SHAREHOLDERS' EQUITY AND LIABILITIES | 31.03.2010 EUR |
31.12.2009 EUR |
|---|---|---|
| Shareholders' equity | ||
| Subscribed capital | 5.318.452 | 5.295.952 |
| Additional paid-in capital | 13.578.464 | 13.455.889 |
| Other comprehensive income | 222.856 | 126.354 |
| Retained earnings | 8.830.580 | 8.908.687 |
| 27.950.352 | 27.786.882 | |
| Non-controlling interests | 838.081 | 778.776 |
| 28.788.433 | 28.565.658 | |
| Non-current liabilities | ||
| Deferred tax liabilities (non-current) | 340.586 | 383.687 |
| Current liabilities | ||
| Trade accounts payable | 2.153.140 | 1.925.525 |
| Income tax payable | 290.986 | 445.330 |
| Provisions | 4.906.485 | 5.682.514 |
| Other financial liabilities | 2.039.116 | 50.567 |
| Other liabilities | 6.281.914 | 4.301.440 |
| 15.671.641 | 12.405.376 | |
| Total shareholders' equity and liabilities | 44.800.660 | 41.354.721 |
STANDARD COMPANY AND REAL PROPERTY.
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$2.128$
$1.443$
| Q1 2010 EUR |
Q1 2009 EUR |
|
|---|---|---|
| Revenues | 14.358.297 | 15.694.624 |
| Costs of revenues | 10.132.877 | 11.144.640 |
| Gross profit | 4.225.420 | 4.549.984 |
| Selling and marketing expenses | 1.973.074 | 2.488.882 |
| General and administrative expenses | 1.520.909 | 1.891.181 |
| Research and development expenses | 915.163 | 1.096.078 |
| Other operating expenses | 304.059 | 527.978 |
| Other operating income | 509.817 | 476.778 |
| Operating income | 22.033 | (977.357) |
| Net interest | 3.469 | 17.514 |
| Foreign currency exchange gains/(loss) | 103.172 | 785 |
| Income before taxes and minority interests | 128.675 | (959.058) |
| Income taxes | 199.410 | 527.636 |
| Income before minority interests | (70.736) | (1.486.694) |
| Minority interests | 7.371 | 16.235 |
| Net income | (78.107) | (1.502.929) |
| Accumulated profit/loss carried forward | 8.908.687 | 10.349.783 |
| Retained earnings | 8.830.580 | 8.846.853 |
| Average number of shares outstanding - basic | 5.307.202 | 5.260.452 |
| Average number of shares outstanding - diluted | 5.546.402 | 5.540.452 |
| Earnings per share - basic | (0, 01) | (0, 29) |
| Earnings per share - diluted | (0, 01) | (0, 27) |
| Q1 2010 EUR |
Q1 2009 EUR |
|
|---|---|---|
| Consulting | ||
| Revenues | 11.690.046 | 13.366.083 |
| Costs of revenues | 9.792.275 | 10.671.993 |
| Gross profit | 1.897.770 | 2.694.090 |
| Software | ||
| Revenues | 2.668.251 | 2.328.541 |
| Costs of revenues | 340.602 | 472.647 |
| Gross profit | 2.327.650 | 1.855.894 |
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(May 21, 2010 Annual General Meeting, Palatin, Wiesloch, 10.00 a.m. O August 05, 2010 Qarterly Report 2 2010 O November 04, 2010 Qarterly Report 3 2010 • November 22. - 24, 2010 Deutsches Eigenkapitalforum, Frankfurt Annual Report 2010 O March 31, 2011 C May 05, 2011 Qarterly Report 1 2011 Qarterly Report 2 2011 August 04, 2011 November 03, 2011 Qarterly Report 3 2011
REALTECH AG Industriestraße 39c D - 69190 Walldorf
Tel.: +49.6227.837.500 Fax.: +49.6227.837.292 [email protected] www.realtech.com
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