Ctac N.V. — Earnings Release 2008

Mar 12, 2009

Total no. of pages: 10

PRESS CONFERENCE / ANALYST MEETING

The combined press conference / analyst meeting will be held today at 13.30 hrs at the offices of Citigate First Financial, Assumburg 152a in Amsterdam.

P R E S S R E L E A S E

Ctac books strong turnover and profit growth in 2008

's-Hertogenbosch (the Netherlands), 12 March 2009 - SAP/ ERP service provider Ctac N.V. (Ctac) (Euronext: CTAC) today announced its annual results 2008.

Key figures

EUR x mln (unless otherwise stated)	2008	2007	%	Q4 2008	Q4 2007 %
Turnover	72.3	50.3	44	19.8	15.4	29
Operating result	7.7	3.7	↑	1.8	1.5	20
Net result	4.9	1.7	↑	1.2	0.7	71

	2008	2007
Net result per share (in EUR)	0.44	0.19	↑
Dividend per share (in EUR)	0.13	0.06	↑
Number of staff at year-end (headcount)	480	412	17

Key points

• Turnover up 44%, of which 38% organic growth; higher level of activity at all business units
• Operating result more than doubled; operational margin improved strongly to 10.7% in 2008, from 7.3% in 2007
• Net profit up at EUR 4.9 million; proposed dividend of EUR 0.13 per share, a pay-out ratio of 33%

Bart Hogendoorn, CEO of Ctac: "Ctac can look back at a very good year, in which the company, on the basis of a new organisational model, devoted considerable attention to further boosting Ctac's profile as an ERP specialist and in which the company took clear steps to expand market positions and utilise cross-selling opportunities between the divisions. As a result, in 2008 Ctac recorded the highest turnover and profit in its history, with growth across all its activities.

In the fourth quarter of 2008 there was a slight pressure on turnover and results which continued in the first two months of 2009. But Ctac is a sound company. We are well positioned in the ERP market, have a healthy financial position and a flexible cost base, which should enable us to counter a potential further weakening in demand for our services in 2009."

Turnover

Ctac realised a strong growth in turnover in 2008 to EUR 72.3 million, up 44% from EUR 50.3 million in 2007. All Ctac business units recorded a higher level of activity, both from existing clients and through the acquisition of projects from new clients. Organic growth was 38%. The remaining 6% in turnover growth was due to the acquisitions of IFS-Probity, Crossverge and Alpha One. Of total turnover, EUR 7.6 million consisted of sold licences and maintenance contracts, compared with EUR 4.9 million in 2007.

Turnover per employee, based on the annual average FTEs, rose 14% in 2008 to EUR 174,000, while the turnover per billable employee was up 15% at EUR 192,000.

Turnover of the Dutch operations increased 38% to EUR 60.6 million in 2008, from EUR 44.1 million in 2007. The turnover from the business launched in Belgium in 2006 almost doubled to EUR 11.4 million. The activities in Germany, launched in the fourth quarter of 2008, recorded turnover of EUR 0.3 million.

Turnover per division (excluding intercompany-turnover)

2008	2007	%
7,519	5,481	37
26,424	20,042	32
7,099	5,087	40
19,606	13,471	46
60,648	44,081	38
11,364	6,219	83
308	-	↑
		44
	72,320	50,300

(x EUR 1,000)

Purchase value turnover

The composition of the turnover changed in 2008 compared to 2007. The purchasing of software licences and maintenance contracts rose by 44% to EUR 4.6 million in 2008. The strong increase in demand on various projects also led to an increase in the deployment of external staff. In 2008, 19% of total capacity demand was hired in, which is in line with Ctac's policy of filling between 15% and 20% of its capacity needs with external staff. The ensuing costs were EUR 10.7 million in 2008, up 43% compared with 2007. The purchase value of turnover rose by a total of 45% to EUR 16.2 million.

Costs

Personnel costs rose by 37% in 2008, largely due to the growth in staff numbers. The average number of employees in 2008 was 415, up 26% compared with 2007. Personnel costs also rose due to an increase in wage costs and higher provisions for bonuses. The increased activity levels led to an increase of 24% in other operating expenses to EUR 10 million, from EUR 8.1 million in 2007. Depreciations were 53% higher at EUR 2.4 million as a result of a higher level of tangible and intangible fixed assets. This in turn was partly due to the investment in new back office systems, most of which were made in 2007.

Operating result

Ctac realised an operating result of EUR 7.7 million in 2008, from EUR 3.7 million in 2007. This translated into an increase in the operational margin to 10.7% in 2008, from 7.3% in 2007. The strong improvement in profitability is primarily the result of an increase in demand for Ctac services and greater levels of capacity utilisation and efficiency. In the first three quarters of 2007, the results were also pressured by investments in back office systems, which were necessary due to the continuing strong growth of the organisation.

Net profit and earnings per share

In the course of the first quarter of 2008, Ctac accelerated the acquisition of its minority stakes in a number of subsidiaries, with the aim of further encouraging the cooperation between business units. The disappearance of the minority stakes has an impact on the third party share in the results. This means that in 2008 a greater proportion of the result is attributed to Ctac as net profit than in 2007.

Net profit after deduction of the third party share was EUR 4.9 million in 2008, from EUR 1.7 million in 2007. This translates into net profit per weighted average outstanding ordinary share of EUR 0.44, on the basis of 11,069,062 shares. The total number of outstanding ordinary shares as of 31 December 2008 was 11,526,459.

Cash flow and investments

The cash flow from operations was positive at EUR 10.6 million in 2008, compared with EUR 3.2 million in 2007. In 2008, Ctac invested a total of EUR 4.8 million in tangible and intangible fixed assets.

The investments in tangible fixed assets totalled EUR 2.2 million and were used to replace the ICT infrastructure, as well as for new computers, servers and storage capacity for clients for hosting and management activities.

The investments in intangible fixed assets amounted to EUR 2.6 million. This pertained to the accelerated acquisition of the remaining minority interests in the business units Alphalogic, Re-Spect and Ctac Belgium. In addition, Ctac expanded the interests in subsidiaries mYuice and Yanta and acquired the companies Crossverge and mYuice Business One (formerly Alpha One).

A total of 2,228,976 Ctac shares were issued and a sum in cash of EUR 1 million paid for the expansion of the stakes in Alphalogic, Re-Spect, Ctac Belgium, mYuice and Yanta. This represents a total value of EUR 7.2 million.

A total of 607,958 Ctac shares were issued and a sum of EUR 1.8 million in cash paid to acquire 100% of the shares in Crossverge. This represents a total value of EUR 4 million. Ctac has agreed an additional payment with the Crossverge shareholders, with the amount of this payment linked to future results. Ctac has the option of meeting this obligation in either Ctac shares or in cash.

A further 50,000 Ctac shares were issued for the acquisition of 100% of the shares in Alpha One.

The net cash flow was positive in 2008 at EUR 1.9 million, from a negative EUR 7.8 million in 2007. This was partly due to the positive result and to the fact that the financing of acquisitions was largely realised through share issues.

Balance sheet structure

The balance sheet total increased to EUR 51 million, from EUR 45.8 million due to the growth of the operating activities and the accompanying investments. Ctac uses credit from banks to a relatively limited extent.

The positive result and the partial financing of acquired minority stakes in shares led to an increase in the solvency ratio to 43%, from 23%. Also in comparison to sector peers, this provides for a healthy financial structure.

On balance, the total debt with the bank fell to EUR 1.9 million at year-end 2008, compared with EUR 3.1 million a year earlier. The debt ratio (net debt versus EBITDA) stood at 0.19, from 0.6 a year earlier. Ctac has a credit facility of EUR 10.2 million at its disposal.

Dividend

The year 2008 ended with a net profit of EUR 4.9 million, which amounts to earnings per share of EUR 0.44. Ctac will ask the General Meeting of Shareholders to approve the payment of a cash dividend of EUR 0.13 per share over the year 2008. This is equivalent to 31% of the 2008 net profit and is therefore in line with Ctac's dividend policy of paying out, in principle, 30% to 40% of the profit to its shareholders.

Key developments in 2008

In the past year, Ctac took various significant steps to further implement its strategy. There were also various developments in the field of technology partnership which underline that strategy. As of 1 May 2008, Ctac is also operating on the basis of a new organisational model in order to use the increased scale of its operations to respond most effectively to future market demand. The new organisational model will also allow the company to more effectively utilise cross selling opportunities.

Acquisition minority stakes Alpha Holding

The acquisition of Alpha Holding's minority stakes in Ctac's subsidiaries Re-Spect, Alphalogic and Ctac Belgium were completed on 11 March 2008. Ctac also acquired the minority holdings from the other management members in Re-Spect and Alphalogic. This means Ctac is now the full owner of Re-Spect and Alphalogic. Ctac held a 91.25% interest in Ctac Belgium on 11 March 2008 (this was 50.01%). On 22 April 2008, Ctac also acquired the remaining minority interest of 8.75%, which was held by other management members. With the acquisition of the minority stakes, Ctac wants to further stimulate mutual cooperation between the business units and the opportunities for cross selling. The total transaction was largely financed through the issue of 2.2 million Ctac shares. The parties have agreed a lock-up scheme for the shares issued. The acquisitions made a positive contribution to earnings per share.

Acquisition mYuice Business One (formerly Alpha One)

By the end of September 2008, Ctac acquired the activities for small and medium-sized companies of Alpha Holding (previously co-owner of Ctac's subsidiaries Alphalogic, Re-Spect and Ctac Belgium), and integrated these in the Ctac organisation. In 2007, these activities represented a turnover of approximately EUR 1.5 million. In October the Alpha One name was changed to mYuice Business One.

Expansion stake in mYuice and Yanta

At the end of April 2008, Ctac expanded its holdings in mYuice and Yanta. Ctac increased its stake in mYuice, which focuses on SAP solutions for small and medium-sized companies, to 94.5%, from 87.9%. The stake in Yanta, which offers specialist total solutions for logistics management in the small and medium-sized businesses sector, was increased to 83.6%, from 67.5%. The remaining minority stakes in mYuice and Yanta are held by the management.

Acquisition Crossverge

In June 2008, Ctac completed the acquisition of Crossverge. Crossverge has developed the successful software product XV Retail, a solution for retail companies. Various well known retailers, including KPN Retail, Blue Blood, Perry Sport and Agerland (Boerenbond) have now closed software contracts for XV Retail. The acquisition price is paid partly in Ctac shares to be newly issued, with the ultimate sum being largely dependent on the future results of Crossverge. The parties have agreed on a lock-up arrangement with respect to the shares to be issued. Crossverge realised turnover of EUR 0.5 million in 2008 with 3 employees and contributed to earnings per share.

New specialist tool aimed at housing corporations

In June 2008, Ctac announced that it had developed an ERP environment, in close cooperation with the The Hague housing corporation Haag Wonen and consultancy firm Avecres. The ERP environment is fully geared towards the operations of housing corporations. This SAP system supports all primary processes for property management. The jointly developed ERP solution is being used successfully at Haag Wonen. After the balance sheet date, on 20 January 2009, Ctac announced that it will provide housing corporation Ymere with a central ERP platform to support the primary processes for the management of its rental accommodations. Ymere's choice of Ctac and SAP represents the definitive breakthrough for this relatively young part of Ctac.

Expansion services portfolio Microsoft

In October, Ctac announced that it will expand its services portfolio with two corporate solutions from Microsoft. These are Microsoft Dynamics NAV (formerly Navision) for Enterprise Resource Planning, and Microsoft Dynamics CRM for customer relationship management. The Microsoft Dynamics CRM-solution will be combined with the SAP solutions for the small and medium-sized business sector. For Ctac, the Microsoft corporate software is an important addition to its existing portfolio for this sector.

QlikTech

In mid-March 2008, Ctac closed a cooperation agreement with QlikTech. QlikTech is the supplier of QlikView, an intuitive Business Intelligence solution which can be integrated into ERP environments for a relatively low investment. Re-Spect, the Ctac business unit which focuses on the wholesale and retail market, and is part of the Ctac Business Services division, was the first to implement QlikTech solutions with clients. Together with QlikTech, Re-Spect will also develop a special template which will allow retail companies to produce advanced analyses and reports quickly.

Partnerships

SAP

In January 2008, SAP Nederland granted awards to partners that focus on the small and medium-sized business sector. Ctac was awarded the title 'Partner of the Year' for SAP Business All-in-One. SAP quoted Ctac's turnover, focus, dedication and customer satisfaction as reasons for granting the award. Furthermore, the relationship with SAP was strengthened by an obtained Gold Partner status in both Belgium and Germany.

Microsoft

In December 2008, Ctac obtained Microsoft's Certified Gold Partner status in a record time of two months. Ctac launched the certification process in view of the expansion of its services portfolio. This means that Ctac also focuses on the sale and implementation of Microsoft corporate software, in particular Microsoft Dynamics NAV for Enterprise Resource Planning and Microsoft Dynamics CRM for customer relationship management. Ctac combines the Microsoft Dynamics CRM solution with its SAP solution for the small and medium-sized business sector.

This is a translation of a press release in Dutch. In case of any inconsistencies the Dutch version of the press release is leading. 5

Subsequent events

Acquisition Core Consulting

On 17 October 2008, Ctac signed a letter of intent regarding the acquisition of 100% of the shares in the Belgian company Core Consulting. Ctac completed this acquisition in January 2009. Core Consulting will be consolidated as of January 2009 and is expected to contribute to earnings per share in 2009. The acquisition strengthens Ctac's leading position in Belgium in the market for SAP specialists. Core Consulting will be integrated in the existing activities of Ctac Belgium in the field of SAP management. Core Consulting was profitable in 2008 and recorded a turnover of around EUR 5.9 million.

Outlook

Ctac is aware that it will be operating in much less positive economic conditions in 2009. In the last quarter of 2008, there was slight pressure on turnover and results, which continued in the first two months of 2009. At the moment it is not to be estimated to what extent the current economic circumstances will affect the development of Ctac's turnover and results in 2009.

Ctac is convinced that its good position in the ERP market will compensate, at least partly, for the effects of possibly reduced demand. Its efficient cost base and pragmatic approach allow the company to offer competitive prices and high quality. Moreover, Ctac has a conservatively financed balance sheet and a strong, variable and thus flexible cost structure, particularly as a result of a relatively high level of external staff deployment, which stood at 19% in 2008.

In 2009, Ctac will continue to pursue its outlined course. In addition, there will be a strong focus on management of operations. Ctac is following the developments in the market closely, to ensure that it can respond to opportunities and threats rapidly and effectively. Based on the new organisational model, considerable attention will be devoted to further strengthening Ctac's profile as an ERP specialist, expanding market positions and utilising cross-selling opportunities between the various divisions. In 2009, Ctac will also increasingly focus on further product development and product selling and on the expansion of its activities in the fields of hosting and management.

/ / / / / / / / / /

About Ctac

Ctac is an ICT services provider specialising in ERP solutions. Activities include implementation, integration and management of among other things SAP and Microsoft systems and related activities such as system upgrades and system optimisations. The company is a SAP Gold Partner and Microsoft Gold Partner in the Netherlands and Belgium. Furthermore, Ctac is the largest SAP reseller for medium-sized enterprises in the Netherlands. Ctac's clients include approximately 600 organisations, of each size and in several sectors. Ctac employed a staff of 480 at year-end 2008. Ctac is active in the Netherlands, Belgium and Germany with its corporate headquarters based in 's-Hertogenbosch (the Netherlands). Ctac is listed on Euronext Amsterdam (ticker: CTAC). For more information, please visit: www.ctac.nl.

PRESS CONFERENCE / ANALYST MEETING

The combined press conference / analyst meeting will be held today at 13.30 hrs at the offices of Citigate First Financial, Assumburg 152a in Amsterdam (the Netherlands).

For more information, please contact:

Ctac N.V. Goudsbloemvallei 30 Postbus 773 5201 AT 's-Hertogenbosch (the Netherlands) www.ctac.nl

Bart Hogendoorn – CEO T. 073-692 06 92 E. info@ctac.nl

Jan-Willem Wienbelt – CFO T. 073-692 06 92 E. info@ctac.nl

Key dates:

16 April 2009	Publication annual report
20 May 2009	General Meeting of Shareholders
20 May 2009	Publication first quarter 2009 trading statement
22 May 2009	Ex-dividend
01 June 2009	Dividend payment
27 August 2009	Publication semi-annual results
	12 November 2009 Publication third quarter 2009 trading statement
11 March 2010	Publication annual results 2009
20 May 2010	General Meeting of Shareholders

Enclosed:

Consolidated profit and loss account 2008 Consolidated balance sheet 2008 Consolidated cash flow statement 2008 Consolidated statement of changes in equity 2008

CONSOLIDATED PROFIT & LOSS ACCOUNT 2008

(amounts in EUR 1,000)

		2008		2007
NET TURNOVER		72,320		50,300
Purchase value of turnover		(16,175)		(11,157)
GROSS MARGIN		56,145		39,143
Personnel costs Depreciation and amortisation Other operating costs	36,018 2,382 10,020		25,779 1,558 8,113
TOTAL OPERATING COSTS		48,420		35,450
OPERATING RESULT		7,725		3,693
Interest income / interest expense		(366)		(180)
RESULT FROM ORDINARY OPERATIONS BEFORE TAXES		7,359		3,513
Taxes		(1,950)		(948)
RESULT FROM ORDINARY OPERATIONS AFTER TAXES Third party share		5,409 (539)		2,565 (874)
NET PROFIT		4,870		1,691
Average number of oustanding ordinary shares Number of outstanding ordinary shares at		11,069,062		8,860,202
year-end Net earnings per share (Amount * EUR 1) Diluted net earnings per share		11,526,459 0.44 0.40		0.19

CONSOLIDATED BALANCE SHEET (31 DECEMBER 2008)

(amounts in EUR 1,000)

		Year-end 08		Year-end 07
ASSETS
FIXED ASSETS
Intangible fixed assets	25,808		24,364
Tangible fixed assets	3,566		3,166
Financial fixed assets	356		813
		29,730		28,343
CURRENT ASSETS
Receivables	20,180		17,438
Cash and cash equivalents	1,074
		21,254		17,438
		50,984		45,781
LIABILITIES
GROUP EQUITY		21,898		10,571
Provisions		855		481
Long-term debt		7,774		17,388
Short-term debt		20,457		17,341
		50,984		45,781

CONSOLIDATED CASH FLOW STATEMENT 2008

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

		2008		2007
Operating result Depreciation	7,725 2,401		3,693 1,565
		10,126		5,258
Changes in working capital
Receivables	(2,490)		(5,492)
Short-term debt	2,954	464	3,426	(2,066)
Cash flow from operations		10,590		3,192
Interest received	383		103
Interest paid	(761)		(283)
Taxes paid on profits	(1,493)	(1,871)	(730)	(910)
Cash flow from operating activities		8,719		2,282
Cash flow from investment activities		(4,776)		(9,574)
Cash flow from financing activities		(2,059)		(487)
NET CASH FLOW		1,884		(7,779)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 2008

(amounts in EUR 1,000)

Group equity at 1-1-2008	10,571
Dividend paid in 2008	(667)
Share repurchase	(1,967)
Share issue	9,091
Result 2008	4,870
Group equity at 31-12-2008	21,898