adesso SE

Earnings Release • Nov 11, 2013

News Details

Ireland | 11 November 2013 07:00

adesso AG: Successful third quarter of 2013 with sales, earnings and margin growth

adesso AG / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act]

11.11.2013 07:00

Interim report according to Article 37x of the WpHG, transmitted by
DGAP - a company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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adesso AG: Successful third quarter of 2013 with sales, earnings and margin
growth

• Q3 sets new sales and EBITDA records of EUR 35.6 million and EUR 3.3
  million; EBITDA margin of 9.4 %

• Sales up 15 % to EUR 100.9 million in the first nine months, 11
  percentage points of which organic

• EBITDA up 46 % in the first nine months to EUR 6.3 million despite high
  investments in internationalisation (EUR 1.0 million)

• Earnings per share amounted to EUR 0.50 after nine months (previous
  year: EUR -0.18)

• Guidance for full year is confirmed

adesso AG considerably increased sales, earnings and margin in the third
quarter of 2013 compared to the previous two quarters and year on year.
Germany's dynamic business developments in particular sent sales climbing
by 15 % in the first nine months of the year to EUR 100.9 million. Despite
EUR 1 million in investments in internationalisation, profitable large
projects, successes in the restructuring of the energy industry segment,
which has since been concluded, as well as stable capacity utilisation
caused the operating result to rise by 46 % in the first nine months to EUR
6.3 million. Based on expected stronger sales and earnings in the second
half of the year as well as the positive third quarter of 2013 guidance for
the full year is confirmed.

Business development

In the third quarter, adesso increased sales from IT consulting, software
development and licenses for its own products by 8 % compared with the
previous quarter and by 13 % year on year in a largely positive market
environment to EUR 35.6 million, setting a new quarterly record. The higher
number of working days as well as organic headcount growth of 6 %, or 67,
to 1,201 employees in the quarter resulted in rising IT Services segment
sales revenues, especially in Germany. IT Solutions licence sales were up
EUR 0.5 million on the previous quarter. The units being established in the
USA, England and Turkey in the course of internationalisation did not
generate any significant sales in the third quarter. adesso Group secured a
number of important project orders in the third quarter and currently finds
itself in a number of proposal situations. This means that adesso can
gather good growth momentum in a positive market environment. The new
Business Intelligence, Cloud Computing und Hosting business areas launched
in 2012 and 2013, as well as E-Commerce, are developing well; however,
telecommunication activities are progressing less quickly.

Mobile Solutions once again grew strongly by 30 %. adesso is now one of the
largest and most profitable providers of solutions and services for
mobilising digital content and processes in the German-speaking countries.
For the first time ever, the company secured a number of large consulting
projects for the development of a mobile strategy for a group's IT
department.

Income development

Stable capacity utilisation and the higher number of working days, greater
licence sales and profitable fixed-price projects led to a rise in the
operating result in the third quarter overproportional to sales, as well as
an increase in the profit margin. The since-concluded restructuring of the
energy industry segment, which was completely legally integrated into
adesso AG in the third quarter, also had a positive effect. The investments
in internationalisation rose in the third quarter following the start of
operations by adesso's Turkish subsidiary.

Personnel costs increased at a slightly lower rate than sales by 10 % to
EUR 21.9 million, and other operating expenses climbed at an above-average
rate compared to sales by 28 % to EUR 6.9 million. Operating earnings
(EBITDA) rose by EUR 0.4 million, or 14 % in the third quarter, compared to
the previous year and reached a new quarterly record of EUR 3.3 million.
The EBITDA margin increased to 9.4 % in the third quarter.

Depreciation and amortisation amounted to EUR 524 thousand (previous year:
EUR 718 thousand; Q2 2013: EUR 587 thousand), of which EUR 174 thousand
pertained to scheduled amortisation on purchase price allocations. Income
from financing and investment activities of EUR -55 thousand (previous
year: EUR -65 thousand; Q2 2013: EUR -63 thousand) resulted in earnings
before taxes of EUR 2.8 million in the third quarter (previous year: EUR
-2.1 million; Q2 2013: EUR 0.8 million). Consolidated earnings came to EUR
1.9 million compared to EUR 1.4 million in the previous year and EUR 0.4
million in the second quarter. Earnings per share amounted to EUR 0.31 in
the third quarter.

The first nine months of the year

Sales increased by 15 % year-on-year to EUR 100.9 million in the first nine
months of 2013, 11 percentage points of which were organic. At the same
time, the average number of employees went up by 129, or 12 %, due to new
hires. adesso Group employed 1,201 people as of the reporting date.
Personnel costs amounted to EUR 65.7 million compared to EUR 57.5 million
in the previous year. The gross income margin went up by 1 percentage point
to 90 %. Other operating expenses increased by 16 % to EUR 20.0 million.
Operating earnings (EBITDA) came to EUR 6.3 million in the first nine
months of 2013 after EUR 4.3 million in the previous year. This figure
includes EUR 1 million in charges as a result of internationalisation,
especially in the USA, the UK and Turkey.

Earnings before taxes came to EUR 4.4 million (previous year: EUR 0.8
million) and consolidated earnings totalled EUR 3.0 million (previous year:
EUR -1.5 million). Earnings per share amounted to EUR 0.50 (previous year:
EUR -0.18).

Additional figures

On 30 September 2013, adesso held liquid assets of EUR 15.1 million
(previous year: EUR 17.6 million; 31 December 2012: EUR 21.4 million).
Liquid assets rose by EUR 1.7 million in the third quarter of 2013. The net
cash position remained unchanged at EUR 9.2 million. The equity ratio is 48
%. These figures provide adesso with a solid balance sheet structure and
financial position. In the fourth quarter, liquid assets created by
positive cash flow from operating activities are expected to rise further
and one of the company's largest customers is expected to settle its final
invoice of EUR 2.5 million.

Outlook

At the time of this report, both order situation and volume of business
activities could be regarded as positive in view of the remaining weeks of
2013. As the third quarter was a strong one, it is expected to achieve its
guidance for the full year. There is also further potential for possible
initial international licence sales.

These and additional figures for the first nine months of 2013 are
available on the adesso website under Investor Relations:
http://www.adesso-group.de/en/investorrelations/.

The Executive Board

Contact person for Investor Relations:
adesso AG
Christoph Junge
Member of the Executive Board
Stockholmer Allee 24
44269 Dortmund
Germany
T: +49 231 930-9330
F: +49 231 930-9331
ir@adesso.de
www.adesso-group.de/en/ | www.adesso.de/en/

11.11.2013 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de

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Language: English
Company: adesso AG
Stockholmer Allee 24
44269 Dortmund
Germany
Internet: www.adesso-group.de

End of Announcement DGAP News-Service

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