GFT Technologies SE — Earnings Release 2011

Nov 9, 2011

News Details

Corporate | 9 November 2011 07:16

GFT Technologies AG: GFT grows in third quarter despite volatile market environment

GFT Technologies AG / Key word(s): Quarter Results

09.11.2011 / 07:16

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• **Year-on-year revenue growth of 16 percent to EUR 207.87 million

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  - **Pre-tax earnings (EBT) up on previous year at EUR 9.05 million

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  - Revenue growth of 31 percent in Resourcing division

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  - Despite adverse finance sector environment, revenue of Services division remains firm at prior-year level

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  - **Weaker demand from corporate and investment banking clients burdens operating result in third quarter

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  - New revenue and earnings targets defined for 2011: revenue expected to reach EUR 270 million with pre-tax earnings of EUR 11 million

Stuttgart, 9 November 2011 – The GFT Group made stable progress in the first nine months of 2011. Following a strong performance in the first half of the year, growth began to lose momentum in the third quarter. The main cause was the ongoing uncertainty on the financial markets. Despite a growing tendency for banks to postpone their investments as of September, revenue in the first nine months grew by 16 percent to EUR 207.87 million. The Group's strongest division in terms of revenue, Resourcing , posted growth of 31 percent to EUR 121.41 million. Revenue in the Services segment remained unchanged from the previous year at EUR 86.26 million. Earnings before taxes in the period under review were slightly up on the previous year at EUR 9.05 million. 'In the third quarter we were able to compensate for adverse market trends in the finance industry with a positive development in the industrial sector. With our full range of products and services, we are excellently positioned to react flexibly to fluctuations in the investment behaviour of various sectors,' says GFT's CEO Ulrich Dietz. In view of the current uncertain economic situation, GFT's Executive Board has adjusted its expectations for the financial year as a whole to the market environment and now expects revenue of EUR 270 million and an EBT result of EUR 11 million.

Revenue: 16 percent up on the previous year; encouraging growth for Resourcing segment in Germany and France

In the first nine months of 2011, the GFT Group generated total revenue of EUR 207.87 million and thus grew by 16 percent over the same period last year (EUR 178.74 million). The third quarter accounted for EUR 66.07 million of this total (prev. year: EUR 64.06 million). Increased revenue resulted mainly from the positive development of the Resourcing division, which posted segment revenue of EUR 121.41 million – up 31 percent on the prior-year figure of EUR 92.57 million. This segment benefited from consistently high demand for freelance IT specialists in all countries. Demand for IT experts and engineers was particularly strong in the industrial sector. This had a positive impact on the segment's Resource Management business, which continued to gather pace in the period under review with revenue growth of 44 percent to EUR 64.68 million (prev. year: EUR 45.07 million). In its Third Party Management business, the segment raised revenue by 19 percent to EUR 56.73 million. Due to the expansion of Resourcing activities – above all via the successful acquisition of new customers – there were significant increases in revenues generated in Germany and France: Germany posted year-on-year growth of 15 percent, while revenue in France climbed by 67 percent.

Despite the clear tendency in September for finance sector clients to postpone their investments, the Services division was able to keep segment revenue firm at EUR 86.26 million (prev. year: EUR 86.14 million). Stable revenue from outsourcing services and long-term projects in the field of core banking solutions more or less compensated for the weaker demand for IT solutions in corporate and investment banking. Following dynamic growth in the first half of the year, revenue generated in the UK and USA returned to the prior-year level in the period under review. There was slight growth in revenue of 9 percent generated with clients in Spain. In Switzerland, there was a significant increase in revenue of 91 percent. In addition to the acquisition of Asymo AG in June 2011, this strong growth resulted from the successful expansion of activities by both divisions during the reporting period.

EBT: slight year-on-year growth; operating result burdened by lower revenue of Services division

In the period under review, earnings before taxes reflected the uncertainty of the financial markets which led to falling revenues from corporate and investment banking clients. In the first nine months of 2011, the GFT Group achieved an EBT result of EUR 9.05 million (prev. year: EUR 8.76 million). Falling revenues placed a burden on the operating result of the Services division. Segment earnings remained almost unchanged from the previous year at EUR 7.40 million (prev. year: EUR 7.71 million). Increased segment revenue and successful measures to raise efficiency helped boost earnings of the Resourcing division by 73 percent in the period under review to reach a segment result of EUR 2.66 million (prev. year: EUR 1.53 million).

Further key figures:

Net income for the first nine months amounted to EUR 6.76 million as of 30 September 2011 and was thus EUR 0.06 million above the prior-year figure of EUR 6.70 million. Earnings per share improved slightly to EUR 0.26 in the period under review, compared to EUR 0.25 in the previous year. Cash, cash equivalents and securities fell to EUR 28.16 million (prev. year: EUR 32.68 million). This was mainly due to the acquisition of Asymo AG and higher dividend payments in June 2011. The number of employees as of 30 September 2011 amounted to 1,321. This corresponds to growth of 4 percent or 53 persons compared to the same date last year and is mainly due to the acquisition of Asymo. In Germany, there were 288 employees at the end of the reporting period – an increase of 9 percent over the previous year.

Outlook: new revenue and earnings targets defined for 2011 as a whole

'In a volatile third quarter, the GFT Group demonstrated that it is flexible enough to overcome the current challenges and grasp the opportunities which such developments offer,' says GFT's CEO Ulrich Dietz. 'Although the finance sector is currently rather reluctant to invest, there is still a strong need for intelligent IT solutions in the field of customer management and the implementation of compliance regulations. Further growth opportunities are expected for our Resourcing division in the fourth quarter. We are determined to fully utilise such opportunities and finish our financial year 2011 strongly'. In view of a slowdown in growth, it now seems unlikely that the company can meet the targets set at the beginning of the year. The Executive Board has therefore defined new revenue and earnings targets: it expects to achieve revenue of EUR 270 million and an EBT result of EUR 11 million in the current financial year. 'We will uphold our strategy of sustainable growth by means of organic development and targeted acquisitions. We have already taken a further step in this direction during 2011 with the acquisition of Asymo AG and the consulting business of G2 Systems,' states Ulrich Dietz.

Detailed financial figures are available in the press section of the GFT website at www.gft.com/ir .

Key figures in accordance with IFRS 5*:

Key figures acc. to IFRS in EUR million	01.01.-30.09.2011	01.01.-30.09.2010
Revenue	207.87	178.74
EBITDA	9.49	9.12
EBIT	8.53	8.26
Earnings before taxes (EBT)	9.05	8.76
Net income from continued operations as of 30 September	6.76	6.70
Earnings per share acc. to IAS 33 in EUR	0.26	0.25
Equity ratio in percent	58	57
Number of employees as of 30 September	1,321	1,268

* Deviations possible due to rounding differences

GFT Technologies AG:

The GFT Group, headquartered in Stuttgart, Germany, is an international provider of innovative IT solutions and services. As a strategic IT partner, GFT supports its clients in the optimization of their business processes through intelligent IT systems and specialists and thus sustainably improves their competitive positions.

GFT is among the world's leading IT service providers in the financial services sector. The company combines established technology experience with a wide range of industry expertise, in order to develop, implement and maintain customized IT solutions ( Services division).

GFT recruits and places IT freelancers across a range of industries and locations. It also oversees the complete management package for its clients. The basis for this is a worldwide reserve of experts, consisting of over 180,000 freelance IT specialists ( Resourcing division).

Ulrich Dietz founded GFT in 1987 and is now CEO and principal shareholder of the Group which, in 2010, achieved revenues of around EUR248 million. It has over 1,300 employees at locations in seven countries. The GFT share is listed on the Frankfurt Stock Exchange (Prime Standard: WKN 580 060, GEX).

Contact:

Andrea Wlcek

Director Global Marketing, Media & Investor Relations

GFT Technologies AG

Filderhauptstraße 142

70599 Stuttgart

Germany

T +49 711 62042-440

F +49 711 62042-301

andrea.wlcek@gft.com

www.gft.com

End of Corporate News

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Language:	English
Company:	GFT Technologies AG
	Filderhauptstr. 142
	70599 Stuttgart
	Germany
Phone:	+49 (0)711/62042-0
Fax:	+49 (0)711/62042-301
E-mail:	Investor-Relations@gft.com
Internet:	www.gft.com
ISIN:	DE0005800601
WKN:	580060
Listed:	Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart

End of News	DGAP News-Service

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