Ctac N.V. — Earnings Release 2007

Mar 8, 2007

CTAC
CTAC POWERHOUSE
Total number of pages: 9

PRESS RELEASE

's-Hertogenbosch, 8 March 2007

Ctac books strong growth in turnover and profit in 2006

SAP-services provider Ctac N.V. (Ctac) today reports its annual results for 2006. The performance in 2006 is the result of the strategy launched in 2004. This strategy is built on a business model ("Powerhouse" concept) which focuses heavily on entrepreneurship combined with specialist product and market know-how, with which Ctac clearly distinguishes itself in the ICT services market.

Key points

• Turnover up 68% to EUR 38.1 million; organic growth of 52%
• Operating result more than doubled to EUR 3.9 million; operating margin rises to 10.2% from 7.9%
• Doubling of the net profit to EUR 2.1 million
• Dividend proposal of EUR 0.12 per share (pay-out ratio 50%)
• Number of employees rises to 278 at year-end 2006 from 191 at year-end 2005

Outlook:

• Focus on further strengthening of market positions of specialist business units
• Expectations for 2007: turnover increase and improvement of returns

EUR million (unless otherwise stated)		2006	2005
Turnover		38.1	22.7
Operating result		3.9	1.8
Net profit		2.1	1.0
Net earnings per share (in EUR)*		0.24	0.12
Dividend per share (in EUR)		0.12	0.12
Number of employees at year-end (headcount)		278	191

• The tax rate in 2006 was 34% (2005: 30%). This deviation from the prevailing rate in the Netherlands (29.6%) was due to the change in the deferred tax asset relating to the tax loss carry-forward. Due to the reduction of the Dutch corporate tax (vpb) rate after 2006, the value of the tax loss carry-forward is lower. This reduced the net profit by EUR 0.2 million. As a result, net earnings per share decreased by EUR 0.02 in 2006.

Wil Huijben, Chairman of the Executive Board of Ctac: "In the past year, we have made a great deal of progress right across the board of our activities. We are satisfied with the considerable organic growth of 52% and the further improvement of our operating margin to the current level of more than 10%. In the past year, we have added three new business units to our organization. This puts the total number of business units at 11. At the centre of these business units, the holding company has ensured closer reciprocal cooperation.

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The business model, based on the Powerhouse concept such we launched several years ago, is the basis of the strong growth we are now experiencing. Entrepreneurship plays a central role in this concept, in combination with specialist product and market know-how in those SAP functionalities in which Ctac can provide the most added value. This is how we distinguish ourselves clearly from other companies in the ICT services market, and we are seeing increasing interest for our services and our approach, both among (potential) clients and among employees. As in the past year, in 2007 we will focus on further strengthening our market position and improving our returns."

Turnover and result: improved results in all business units

Turnover

In 2006, all Ctac business units recorded a higher level of activity. This resulted in organic turnover growth of 52%. Combined with the turnover from the acquisitions of Ytool (as per 1 September 2005) and Ctac Belgium (as per January 2006), plus the turnover from the newly launched business units Yanta (1 April 2005), CValue (1 January 2006), NetIT Services (1 January 2006) and Hitch (1 January 2006), total turnover increased by 68% to EUR 38.1 million. Turnover included EUR 4.4 million in licences sold and maintenance contracts (2005: EUR 2.7 million).

Turnover per business unit (excluding inter-company turnover)

(in EUR x 1,000)	2006	2005
Application Management & Improvements, Bigrip, Cims, Ytool, Cvalue	23,593	15,368
mYuice (small and medium sized businesses) and Yanta (small and medium sized businesses Logistics)	4,632	2,701
Re-Spect (Retail)	3,471	3,375
Alphalologic (Logistics)	2,921	1,260
NetIT Services (Management, Security and Infrastructure)	452	-
Hitch (Training and Change Management)	237	-
Ctac Belgium	2,814	-
Total	38,120	22,704

Purchase value

In line with Ctac's policy, the composition of the turnover changed in 2006 compared with 2005. Purchasing of software licences and maintenance contracts increased to EUR 3.1 million in 2006, from EUR 2.1 million in 2005. Because of the strong increase in demand Ctac also used more external workers on various projects (for EUR 6.2 million in 2006, compared with EUR 2.9 million in 2005), which also increased the purchase value of the turnover.

Costs

Due to effective cost control total operating expenses increased less quickly than turnover. The personnel costs showed an increase of 57%. This increase was largely due to a rise in staff numbers due to the acquisition of Ytool and Ctac Belgium, the expansion of personnel within existing Ctac business units and the launch in 2006 of the business units CValue, NetIT Services and Hitch. The total number of employees at Ctac increased to 278 at year-end 2006, from 191 at year-end 2005. Personnel costs also increased as a result of ordinary wage cost increases, higher training costs and higher recruitment costs. As a result of the increased activity level, other operating expenses increased by 51% to EUR 5.8 million (2005: EUR 3.8

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million). Depreciations increased by 40% as a result of investments in ICT (infrastructure, storage capacity for clients) mainly to facilitate further growth.

Operating result and operating margin

In 2006, Ctac saw its operating result more than double to EUR 3.9 million, from EUR 1.8 million in 2005. The considerable improvement is a direct result of the growth, a slightly improved capacity utilisation level, a small rise in rates and cost controls. Due to the relatively low operating costs, the operating margin (operating result as a percentage of turnover) increased to 10.2%, from 7.9% a year earlier.

Interest income and tax rate

Interest income increased due to a higher average cash position. The tax rate in 2006 was 34%, up from 30% in 2005. This deviation from the prevailing rate in the Netherlands (29.6%) was due to the change in the deferred tax asset relating to the tax loss carry-forward. Due to the reduction of the Dutch corporate tax (vpb) rate after 2006, the value of the tax loss carry-forward is lower. This reduced the net profit by EUR 0.2 million. As a result, net earnings per share decreased by EUR 0.02 in 2006.

Net profit and earnings per share

The net profit for 2006, after deduction of taxes and third-party share (relating to the minority stakes in the business units mYuice, Yanta, Re-Spect, Alphalogic, NetIT Services and Ctac Belgium) was EUR 2.1 million. This translates into net earnings per share of EUR 0.24, compared with EUR 0.12 in 2005.

Balance sheet structure

Ctac's balance sheet remains strong. The shareholders' equity, expressed as a percentage of the total capital as per year-end 2006, stood at 49%, compared with 56% at year-end 2005. As a result of the strong growth of activities, the balance sheet total increased to EUR 19.4 million from EUR 15.2 million. Despite the positive result and increased shareholders' equity (to EUR 9.6 million from EUR 8.5 million), solvency decreased. Ctac has only short-term debt and no long-term debts. Cash and cash equivalents as per year-end 2006 stood at EUR 4.7 million, from EUR 5 million at year-end 2005. The strong financial position offers Ctac sufficient potential to further develop its strategy and business model ("Powerhouse" concept) in the coming years. In 2006, Ctac increased its interest in mYuice BV (mYuice) to 74% from 51%. mYuice Groep BV has an interest in mYuice BV (80.4%), as well as a 51% interest in Yanta. The respective minority interests are held by the management, similar to other participations.

Cash flow

The cash flow from operating activities was positive and stood at EUR 2.6 million in 2006, from EUR 2.8 million in 2005. In 2006, a total of EUR 2.7 million was invested in tangible and intangible fixed assets. The investments in tangible fixed assets related primarily to the ICT infrastructure and storage capacity for hosting and management activities. Investments in intangible fixed assets related to internally worked hours in our own SAP environment (administration and service processes) and the amounts paid for the purchase of shares in mYuice and Ctac Belgium. In addition, Ctac paid a dividend of EUR 1.1 million related to the 2005 financial year. The net cash flow in 2006 was a negative EUR 0.3 million, from a positive EUR 2.6 million in 2005. At year-end 2006, cash and cash equivalents was positive at EUR 4.7 million, from EUR 5 million at year-end 2005.

Dividend

The General Meeting of Shareholders will be asked to approve a dividend payment of EUR 0.12 per ordinary share over the financial year 2006, which is equivalent to 50% of the net profit.

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Key developments in 2006

New business unit CValue

In early 2006, Ctac launched the business unit CValue, which focuses on Customer Relationship Management (CRM). The aim of this business unit is to meet future demand for customer-targeted SAP functionalities. Ctac's clients see CRM as a way of organising the knowledge about their clients more effectively and improving commercial processes and customer satisfaction.

New business unit NetIT Services

The business unit NetIT Services, geared towards the management of technical infrastructure, was launched to meet the growing demand in the field of management and maintenance of networks and connections. Together with the business unit Application Management & Improvements, responsible for SAP management and hosting, Ctac can now cover the entire spectrum of ICT-management for its clients.

New business unit Hitch

In May 2006, Ctac launched the new business unit Hitch (High Impact Training & Change management). Hitch offers practical SAP training courses and training consultancy. In addition, Hitch provides support in SAP projects in the field of change management. Hitch meets the demand for highly trained people and thus also for good training possibilities.

Re-Spect

In 2006, Re-Spect, the retail specialist within the Ctac Powerhouse, launched an entirely new retail solution. This new solution – the Crossverge Retail Suite (XV Retail) – uses new technology to offer clients the possibility of increasing the effectiveness and efficiency of operating processes via various sales channels in a simple fashion. XV Retail is an online application which connects the shops real-time with the central ERP system.

Ctac "GOLD partner" of SAP Nederland.

In the second half of 2006, SAP and Ctac signed the new VAR (Value Added Reseller) contract. In this contract, Ctac was awarded the status of "GOLD-partner". In SAP's partner-edge programme, VAR's are continually assessed on a number of issues, such as: number of new clients/implementations, expansions at existing clients, number of certifications, success stories and marketing activities. Depending on these, a partner may subsequently be awarded the status "associate", "silver" or "gold". This partnership confirms Ctac's leading position, in combination with SAP, in the approach to the market for small and medium-sized businesses.

Ctac most successful SAP All-in-One-partner

In December 2006, Software supplier SAP handed out its annual partner awards. Ctac received the award for the most successful reseller for its achievements in the small and medium-sized business segment with the ERP package mySAP All-in-one. It is the fifth time that Ctac has been named the best reseller of the German software company SAP AG in the Netherlands. Ctac previously won that title in 1997, 1998, 1999 and 2004.

Ctac Application Management & Improvements (AMI) opens a second data centre

Ctac AMI, in collaboration with Easynet, opened a second data centre in the second half of 2006. This data centre allowed Ctac AMI to provide more facilities in its hosting services. There is room for more critical systems and quicker and more flexible operations. The second data centre also offers more efficient opportunities for disaster recovery.

Ctac in Belgium

In 2006, Ctac completed the acquisition of $50.01\%$ of the shares in Alpha Belgium. The combination will continue under the name Ctac Belgium. The majority stake in Ctac Belgium

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also enables Ctac to better serve clients in Belgium based on its Powerhouse strategy. From the current Ctac Belgium structure a comparable business model to that in the Netherlands will also be introduced in Belgium.

Specialisations in the field of SAP will be set up and developed. In this context, the various business units in the Netherlands and Belgium will strengthen each other. Ctac Belgium is currently active in the Belgian market with specialisations: Alphalogic for SAP Supply Chain Management, Planning & Execution, Alpha Square for SAP Service Management and Customer Relationship Management, Alpha Intelligence for Data Warehousing, including SAP Business Intelligence, AMI for management, hosting and improvement and Re-Spect for Retail-solutions (AMI and Re-Spect are launched in 2006).

The operational execution of hosting and technical management will be coordinated from the Dutch Ctac business unit Application Management & Improvement. The functional management will be carried out by Ctac Belgium.

New house style

With the introduction of the Powerhouse concept, the entire Ctac organisation has undergone a structural change. This concept, a deliberate choice to operate in specialist niches, meets a clear demand in the market. Under the umbrella of the Powerhouse, Ctac has successfully launched various new business units, each with their own specific product-market combination. The new house style, launched in May 2006, projects an image which fits in well with the chosen business model and the organisation of 'new style Ctac'.

Outlook

In the coming years, SAP will further penetrate the market for small and medium-size companies in the Netherlands and Belgium, which is where Ctac's primary focus lies. The development of new-targeted applications, for smaller companies and particularly in the form of new templates, will contribute to this. In addition, the general trend towards outsourcing of application management will continue both in the Netherlands and in Belgium.

Ctac strengthened its market position in the course of 2006. For 2007, Ctac expects a continuing positive economic climate in the Netherlands and Belgium. Based on its sound financial foundation, the company continues to be optimistic about its growth chances in the short and longer term. Ctac will in 2007 continue to focus on further strengthening of its market positions, turnover growth and improvement of returns.

This growth will be partly organic but expectations are that growth will also be generated through new strategic alliances and acquisitions. In this context, Ctac will continue to assess the competencies present within the company and the extent to which these fit in with opportunities arising in the market.

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Profile Ctac

Ctac is an ICT services provider specialising in SAP solutions. Activities include implementation, integration and management of SAP systems and related activities such as system upgrades and system optimisations. The company is a SAP Gold partner and the largest SAP reseller for medium-sized enterprises in the Netherlands. Ctac's clients include approximately 200 organisations in trade and industry, business services, retail, (semi) government organisations and universities.

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Ctac employed 278 people as per 31 December 2006. The company is based in 's-Hertogenbosch (the Netherlands).

Ctac is listed on the Eurolist of Euronext Amsterdam and is included in Euronext's Next Economy segment

PRESS CONFERENCE / ANALYSTS MEETING

The combined press conference / analysts meeting will be held today at 14:00 at the offices of Citigate First Financial, Assumburg 152a in Amsterdam.

For more information, please contact :

Ctac N.V.
Goudsbloemvallei 30
Postbus 773
5201 AT 's-Hertogenbosch
Tel. +31 (0)73-6920692
Internet: www.ctac.nl
E-mail: info@ctac.nl
Contact person: Wil Huijben - CEO
Jan Willem Wienbelt - CFO

Key dates :

8 March	2007	Publication annual results 2006
19 April	2007	Publication annual report 2006
24 May	2007	General Meeting of Shareholders
24 May	2007	Publication first quarter results 2007
28 May	2007	Share ex dividend
31 May	2007	Dividend payable
30 August	2007	Publication first half results 2007
15 November	2007	Publication third quarter results 2007
13 March	2008	Publication annual results 2007
22 May	2008	General Meeting of Shareholders

Addenda:

• Consolidated profit and loss account
• Consolidated balance sheet
• Consolidated cash flow statement
• Statement of changes shareholders' equity

Reporting methods

The accountant (HLB Van Daal & Partners, Accountants & Belastingadviseurs) has issued a statement of approval on the drawn up annual accounts. The applied principles for financial reporting remained unchanged in 2006.

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CONSOLIDATED PROFIT AND LOSS ACCOUNT
(amounts in EUR 1,000)

	2006	2005
NET TURNOVER	38,120	22,704
Purchase value of turnover	(9,944)	(5,207)
GROSS MARGIN	28,176	17,497
Personnel costs	17,785	11,320
Depreciations	716	510
Other operating costs	5,771	3,833
TOTAL OPERATING COSTS	24,272	15,663
OPERATING RESULT	3,904	1,834
Interest revenue / interest expenses	71	30
RESULT FROM ORDINARY OPERATIONS
BEFORE TAXES	3,975	1,864
Taxes on result from ordinary operations	(1,356)	(560)
RESULT FROM ORDINARY OPERATIONS
AFTER TAXES	2,619	1,304
EXTRAORDINARY RESULT AFTER TAXES	-	-
Third-party share	(496)	(281)
NET PROFIT	2,123	1,023

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CONSOLIDATED BALANCE SHEET
(amounts in EUR 1,000)

	year-end 2006	year-end 2005
ASSETS
FIXED ASSETS
Intangible fixed assets	1,843	558
Tangible fixed assets	1,838	1,179
Financial fixed assets	1,031	1,933
	4,712	3,670
CURRENT ASSETS
Work in progress	346	-
Receivables	9,679	6,538
Cash and cash equivalents	4,668	4,958
	14,693	11,496
	19,405	15,166
	——	——
LIABILITIES
GROUP EQUITY
Shareholders' equity	9,597	8,534
Third-party share	955	512
	10,552	9,046
SHORT TERM DEBTS	8,853	6,120
	19,405	15,166
	2006	2005
Number of outstanding ordinary shares	8,830,879	8,580,446
Net earnings per share (Amount in * EUR 1)	0.24	0.12

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CONSOLIDATED CASH FLOW STATEMENT

According to the indirect method (amounts in EUR 1,000)

	2006	2005
CASH FLOW FROM OPERATING ACTIVITIES
Operating result	3,904	1,824
Depreciation on tangible fixed assets	720	479
	4,624	2,313
Changes in working capital	(754)	1,020
Cash flow from business operations	3,870	3,333
Interest received / interest paid	71	30
Profit tax paid	(1,356)	(560)
Extraordinary charges after taxes	-	-
	(1,285)	(530)
Cash flow from operating activities	2,585	2,803
CASH FLOW FROM INVESTMENT ACTIVITIES
Cash flow from investment activities	(1,762)	(1,137)
KASSTROOM UIT FINANCING ACTIVITIES
Cash flow from financing activities	(1,113)	977
NET CASH FLOW	(290)	2,643

STATEMENT OF CHANGES SHAREHOLDERS' EQUITY

Shareholders' equity per 31/12/2005	8,534
Dividend paid	(1,060)
Result 2006	2,123
Shareholders' equity per 31/12/2006	9,597