GFT Technologies SE — Interim / Quarterly Report 2012

Nov 8, 2012

QUARTERLY FINANCIAL REPORT AS OF 30 SEPTEMBER 2012 Q3

Key figures according to IFRS (not certified)

		9 months
		01/01/– 30/09/2012	01/01/– 30/09/2011	Change
Income Statement
Revenue	€m	174.61	207.87	-16.0%
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	€m	8.81	9.49	-7.2%
Earnings before interest and taxes (EBIT)	€m	7.65	8.53	-10.3%
Earnings before taxes (EBT)	€m	7.80	9.05	-13.8%
Net income	€m	5.10	6.76	-24.6%
Balance Sheet
Other non-current assets	€m	45.62	35.24	29.5%
Cash, cash equivalents and securities	€m	29.08	28.16	3.3%
Other current assets	€m	56.78	64.75	-12.3%
ASSETS	€m	131.48	128.15	2.6%
Non-current liabilities	€m	5.56	2.24	148.2%
Current liabilities	€m	48.88	51.90	-5.8%
Shareholders´ equity	€m	77.04	74.01	4.1%
SHAREHOLDERS' EQUITY AND LIABILITIES	€m	131.48	128.15	2.6%
Equity ratio	%	59	58
Cash flow
Cash flow from operating activities	€m	-6.00	-0.36	1566.7%
Cash flow from investing activities	€m	-0.40	-1.21	-66.9%
Cash flow from financing activities	€m	-3.60	-3.95	-8.9%
Employees
Number of permanent employees (as of 30 September)	no.	1.371	1.321	3.8%
Share
Earnings per share	€	0.19	0.26	-24.6%

(Rounding differences in the Consolidated Interim Management Report due to presentation in € million possible)

In the first nine months of 2012, the GFT Group made good progress in its core business. However, the Executive Board of GFT believes that the growth originally forecast for 2012 as a whole is no longer within reach. The Executive Board now expects revenue of €233 million and earnings before taxes of €11 million.

Contents

Consolidated Interim Management Report

of GFT Technologies AG as of 30 September 2012

Business environment

Economic environment

Macroeconomic development

The debt crisis and political uncertainties in the European Union continue to cast their shadow on the global economy. Government spending cuts in almost all western countries have placed a burden on global demand. This situation is also having a negative impact on economic growth in the emerging nations and dampening confidence in further global growth. In its September report, the International Monetary Fund (IMF) warned that the Euro crisis was currently the greatest threat to the global economy. Moreover, the ailing US economy and the expiry of numerous tax breaks risk placing further recessionary pressure on global growth. In view of these developments, the IMF lowered its global growth forecast for 2012 from 3.5% in July to 3.3% in its latest World Economic Outlook.

The unstable economic development of the Euro zone was dominated by the financial crisis in the third quarter. The IMF believes that the situation can only be calmed if governments swiftly implement measures such as the banking union, in order to create a standard framework and thus guarantee financial stability. The IMF has called for further harmonisation of the Euro zone's financial systems and the implementation of the permanent ESM rescue fund. The IMF's experts forecast an economic decline of 0.4% for the Euro zone. This is 0.1 %-point less than the fund announced in June. There were particularly strong downgrades in the forecasts for Italy, Spain and the UK.

The IMF has upheld its 2012 forecast for Germany of 0.9% but adjusted its outlook for the coming year from 1.4% to 0.9%. In their latest autumn survey, Germany's leading economic institutes have also downgraded their growth forecasts: the economists now anticipate growth of 0.8% for the current year. Six months ago, they forecast 0.9%. The same experts have also revised their growth outlook for the year ahead – which stood at 2.0% in spring – and now predict economic growth of 1.0%.

Sector development

Despite the European finance and banking crisis, the German Federal Association for Information Technology, Telecommunications and New Media (BITKOM) believes the mood among companies in the German market for Information and Communication Technology (ICT) is still upbeat. According to its latest business confidence survey in September, however, the proportion of high-tech companies reporting increased revenues in the third quarter fell by 4 %-points to 65%. In the field of IT service providers, 76% reported revenue growth compared to 85% in April.

As a consequence, BITKOM strongly downgraded its sector index – the balance of revenue expectations for the current quarter compared to the prior-year quarter – to 44 points. As of 30 June, the index stood at 63 points. For many German ICT companies the acute shortage of skilled staff remains a key factor. The sector also feels it is being hindered increasingly by a lack of political support to provide the necessary conditions.

Nevertheless, BITKOM has upgraded its economic outlook for the current business year: the association now expects the total ICT market to grow by 2.8% to €152.0 billion in 2012 – 1.2 %-points more than its annual forecast published in March. In the field of IT services, revenues are expected to grow by 2.1% to €34.2 billion in 2012.

In its »ICT Market Report 2012/13« published in July, the European Information Technology Observatory (EITO) upheld its forecast of 5.1% growth in total revenue of the global ICT market for 2012. EITO expects the German IT market to reach year-on-year growth of 3.1%.

Course of business in the first nine months

Business of the GFT Group remained stable in the first nine months of 2012. The GFT Group posted earnings before taxes (EBT) of €7.80 million (prev. year: €9.05 million). This 14% decline compared to the same period last year was due to non-recurring expenses for the »CODE_n12« innovation initiative. These amounted to €1.35 million and were charged mainly to the first quarter, in which EBT amounted to €1.27 million. After achieving an EBT result of €2.51 million in the second quarter, the figure was raised once again to €4.02 million in the third quarter. In the same period of 2011, EBT amounted to €3.53 million.

In the period under review, total revenue was 16% down on the previous year at €174.61 million (prev. year: €207.87 million). This was due to the planned withdrawal from the lower-margin Third Party Management business of the Resourcing segment started in late 2011. €58.23 million of total Group revenue was generated in the third quarter, compared to €57.65 million in the first and €58.73 million in the second quarter.

In the first nine months of financial year 2012, the Services division accounted for revenue of €90.48 million; an increase of 5% over the previous year (€86.26 million). The reasons for this slight growth were stable revenues from outsourcing services and somewhat firmer demand from corporate and investment banking clients in the UK and USA. Furthermore, there was additional revenue from acquisitions in Switzerland and the USA made in 2011 which were fully included for the first time in the current financial year.

In the Resourcing division, segment revenue amounted to €84.13 million (prev. year: €121.41 million). This 31% decline is due to the loss of revenue in Third Party Management. Although GFT's Resource Management business made progress with revenue growth of 4%, this was not sufficient to compensate for the withdrawal from its lower-margin business. Whereas high growth rates were recorded in France, expectations for GFT's other Resourcing locations could not be met in the third quarter. Uncertainty in some industrial sectors led to more cautious demand for

freelance IT and engineering specialists in Switzerland, the UK and Germany. As a result, segment earnings in the Resourcing division fell short of expectations at €1.59 million (prev. year: €2.66 million).

There was encouraging growth in earnings of the Services division with an EBT result of €7.93 million for the first nine months of 2012 (prev. year: €7.40 million). This resulted from better manpower utilisation and the positive development of business. The year-on-year increase amounted to 7%.

For the last three months of the year, the GFT Group expects to achieve operating growth, compared to 2011, in both EBT and revenue. The finance sector's increasing propensity to invest during the year so far has resulted in more orders, which will benefit the Services division in the fourth quarter of 2012. Growing demand from customers in corporate and investment banking and the rising need for IT solutions to comply with regulatory requirements are having a positive impact on segment revenue. In the Resourcing division, however, more sluggish demand for flexible IT employees, especially in Switzerland and the UK, will once again impact segment revenue in the fourth quarter.

The Executive Board of GFT believes that the growth originally forecast for 2012 as a whole is no longer within reach. The Executive Board now expects revenue of €233 million and earnings before taxes of €11 million for the financial year 2012. Measures have already been taken to improve the development of the Resourcing division. These are expected to have a positive impact in financial year 2013.

GFT share

2012 began with an upward trend for the international stock markets which was reversed towards the end of the first quarter. Falling stock prices in April and May were largely due to the escalating sovereign debt problem. Further uncertainties, such as the loss of economic momentum in China, led investors to show more caution in the first half of the year. In the third quarter, early indicators dampened growth expectations in the Euro zone – above all among the more robust core states of the monetary union. The Euro crisis, however, and especially the recession in peripheral nations such as Italy and Spain, had only an occasional impact on share prices.

Despite isolated weak spells, the stock markets have been mostly bullish since the beginning of summer. The German blue-chip DAX index exceeded 7,000 points at times – and thus almost succeeded in recovering the ground it lost in spring. Around three quarters of Germany's DAX-listed companies published positive half-year reports, helping lift the index further. The DAX closed the reporting period at 7,216.15 points, corresponding to growth of 19% over its year-opening value. However, against the backdrop of the Euro debt crisis, a delicate economic environment and downgraded economic forecasts – also for Germany – analysts at LBBW believe the current upbeat mood on the stock markets could quickly change.

The general volatility of the capital market in the first half-year also affected the GFT share price, which proved highly unstable in the first nine months. After beginning 2012 at €2.75, the share grew steadily in value over the first quarter and almost reached a year-high of €3.20. On publication of figures for the first quarter of 2012, the share price fell back to its year-opening level in May, but returned to growth again in the remaining course of the reporting period: in line with developments on the international stock exchanges, the downward trend stopped before publication of the half-yearly figures. Although the share price dipped slightly in August, it recovered soon after. As of 30 September 2012, the GFT share was quoted at €3.25.

After publication of the half-yearly financial report as of 30 June, the analysts at LBBW and Warburg Research upheld their upside target of €4.00 and €5.00 and maintained their »buy« recommendation for the GFT share. Analysts at equinet Bank AG lowered their upside target from €4.40 to €4.30 and maintained their »buy« recommendation. Hauck & Aufhäuser upgraded its upside target for the GFT share from €4.70 to €5.00 and also recommended purchasing.

Shareholder structure

There were no significant changes in the shareholder structure of GFT Technologies AG in the period under review. 28.08% of shares are held by company founder Ulrich Dietz. Maria Dietz owns 9.68% of voting shares. Dr Markus Kerber, a former member of GFT's Supervisory Board, holds 5.00% of shares. The free float portion amounts to 57.24%.

Shareholder structure

Share performance indexed

Information on the GFT share

	Q1–3 2012	Q1–3 2011
Year-opening quotation (Xetra)*	€2.75	€4.33
Closing quotation on 30 September (Xetra)*	€3.25	€3.03
Percentage change since year-opening	+18%	-30%
Highest price (Xetra)*	€3.25 (27/09/2012, 28/09/2012)	€4.86 (18/01/2011)
Lowest price (Xetra)*	€2.75 (02/01/2012)	€2.90 (06/09/2011)
Market capitalisation as of 30 September	€85.56 million	€79.77 million
Earnings per share	€0.19	€0.26
Average daily trading volume in shares (Xetra and Frankfurt)*	12,521	37,244

* daily closing prices

ISIN	DE 0005800601
Market segment	Prime Standard
Designated sponsors	Landesbank Baden-Württemberg (LBBW) equinet Bank AG
Number of issued bearer shares with no par value	26,325,946

Development of revenue

In the first nine months of its financial year 2012, the GFT Group generated total revenue of €174.61 million (prev. year: €207.87 million). Revenue in the third quarter amounted to €58.23 million and was thus similar to the first two quarters. In the first three months, revenue reached €57.65 million and in the second quarter €58.73 million. The Services division accounted for the largest share of revenue with €90.48 million in the first nine months of 2012 (prev. year: €86.26 million). Segment revenue of the Resourcing division amounted to €84.13 million in the period under review (prev. year: €121.41 million).

Revenue by segment

In the first nine months of 2012, there was a shift in the breakdown of revenue by segment in favour of the Services division. As of 30 September, it accounted for 52% of the GFT Group's total revenue (prev. year: 42%). There was a corresponding fall in the Resourcing division's contribution to total revenue which stood at 48%, compared to 58% in the same reporting period 2011. Whereas Third Party Management business accounted for 9% of Group revenue (prev. year: 27%), the Resource Management business accounted for 39% (prev. year: 31%).

The complete reduction of cooperation with a major client and corresponding planned decline in revenue resulted in a year-on-year fall in revenue of 31% in the Resourcing division. In the first nine months of 2012, this segment generated total revenue of €84.13 million (prev. year: €121.41 million). This decline is due solely to the low-margin Third Party Management business, which generated revenue of €16.55 million as of 30 September (prev. year: €56.73 million). Revenue of the higher-margin Resource Management business, however, grew by 4% from €64.68 million last year to €67.58 million.

In the first three quarters of 2012, the Services division achieved year-on-year revenue growth of 5%. In the period under review, the segment raised revenue to €90.48 million (prev. year: €86.26 million). This growth was mainly due to acquisitions in Switzerland and the USA made in the previous year which had a noticeable impact on revenue in 2012. The segment also benefited from stable demand in the finance sector for outsourcing services, core banking solutions and IT solutions to implement regulatory requirements.

Revenue by segment

	Q1–3 2012	€ million
Resourcing	48%	84.13
Services	52%	90.48

Revenue by country

	Q1–3 2012	€ million
Germany	39%	68.10
France	18%	31.32
UK	16%	27.45
Spain	11%	20.06
Switzerland	5%	9.14
USA	5%	8.35
Other countries	6%	10.19

Revenue by country

Within the GFT Group, Germany remains the largest sales market with revenue of €68.10 million. At the same point in the previous year, revenue stood at €113.75 million – corresponding to a decline of 40%. This is due to the strategic withdrawal from low-margin Third Party Management business. As a result of largely positive revenue developments in other countries where the Group is represented, Germany's share of total revenue as of 30 September 2012 amounted to 39% (prev. year: 55%).

An increase in revenue of 26% in the first nine months of 2012 has helped France establish itself as the GFT Group's second largest sales market. An amount of €31.32 million was generated in the reporting period (prev. year: €24.91 million). As a result, France accounted for 18% of Group revenue. The increase in revenue was achieved in the Resourcing segment and above all with clients in the industrial and service sectors, where existing projects were expanded and new clients added. Compared to the previous year, there was a growing shift in revenue towards higher-margin Resource Management business.

In the first nine months of 2012, business in the UK developed more positively than originally assumed at the beginning of the year – especially in the Services segment. Despite a volatile market environment in the banking sector targeted by GFT, the high revenue level of the previous year (€27.99 million) was almost maintained at €27.45 million. As a result, the UK increased its share of the GFT Group's total revenue to 16% in the period under review (prev. year: 14%).

Despite the ongoing difficulties of the finance sector, GFT also succeeded in raising revenue in Spain during the first three quarters of 2012. Stable long-term projects and consistently strong demand from financial institutes for outsourcing services played a major role in this development. At €20.06 million (prev. year: €18.88 million), Spain accounted for 11% (prev. year: 9%) of Group revenue.

In the period up to 30 September 2012, revenue in Switzerland remained largely unchanged from last year. A total of €9.14 million was generated (prev. year: €9.10 million), corresponding to 5% (prev. year: 4%) of total revenue. Growth from the acquisition of Asymo AG was offset by a downturn in Resourcing business. As a consequence, GFT's Executive Board has decided to steer Resourcing activities with clients in Switzerland from its base in Germany in future.

In the USA, the GFT Group achieved year-on-year revenue growth of 68%. In the period under review, revenue reached €8.35 million compared to €4.97 million at the same time in 2011. As a result, the USA now accounts for 5% of Group revenue (prev. year: 2%). In addition to organic growth in corporate and investment banking, this increase resulted from acquiring the consultancy division of G2 Systems, which was included in Group revenue for the first time in 2012.

The remaining 6% of total revenue was generated by »Other countries« in the first nine months of 2012. This category includes clients in Brazil, Italy and the Benelux states. In total, these countries contributed revenue of €10.19 million (prev. year: €8.27 million), corresponding to year-on-year growth of 23%.

Revenue by industry

The financial services industry remains the GFT Group's most important sector. However, due to the planned withdrawal from Third Party Management business with a major client, its share of total revenue in the first nine months of 2012 fell by 5 %-points compared to last year. As of 30 September 2012, it still accounted for 61% with revenue of €106.94 million (prev. year: €138.11 million).

Weaker demand in Germany led to a year-on-year decline of 54% in revenue generated in the postal and logistics industry during the period under review. Revenue of €6.62 million (prev. year: €14.37 million) accounted for 4% of the GFT Group's total revenue (prev. year: 7%).

Clients comprised in the »Others« category generated revenue of €61.05 million in the first nine months of 2012 (prev. year: €55.39 million) and thus accounted for 35% of total Group revenue (prev. year: 27%). In the year so far, GFT has benefited from demand for freelance IT experts and engineers in the industrial and telecommunication sectors.

Earnings position

As of 30 September 2012, earnings before taxes (EBT) of the GFT Group were down on the previous year at €7.80 million (prev. year: €9.05 million). Nevertheless, the operating margin before taxes increased slightly from 4.4% last year to 4.5%. Adjusted for non-recurring costs for the innovation project »CODE_n12«, the operating EBT margin for the first nine months of 2012 amounted to 5.2%.

On 30 September 2012 earnings before interest and taxes (EBIT) totalled €7.65 million, some €0.88 million less than in the previous year (€8.53 million). Earnings before interest, taxes and depreciation/amortisation (EBITDA) on property, plant and equipment and intangible assets were also down on the previous year at €8.81 million (prev. year: €9.49 million).

Net income of the GFT Group as of 30 September 2012 amounted to €5.10 million. Earnings after taxes were thus down by €1.66 million (prev. year: €6.76 million). The calculated tax ratio rose from 25% in the previous year to 35%.

Earnings per share fell by €0.07 in the period under review to €0.19 per share (prev. year: €0.26 per share). These figures are based on an average of 26,325,946 outstanding shares.

Revenue by industry

	Q1–3 2012	€ million
Financial service providers	61%	106.94
Post/logistics	4%	6.62
Others	35%	61.05

Earnings position by segment

Earnings position by segment

At the end of the third quarter of 2012, the Services segment contributed €7.93 million to earnings (prev. year: €7.40 million), representing a year-on-year increase of 7%. Its operating margin rose by 0.2 %-points to 8.8%. In the third quarter of 2012, the segment result amounted to €3.68 million (prev. year: €2.83 million). The strong year-on-year improvement in earnings is due to better utilisation of staff in this segment and the positive development of business.

Earnings in the Resourcing segment amounted to €1.59 million as of 30 September 2012 and were thus down on the previous year (€2.66 million) as a result of the current adverse market conditions. The operating margin deteriorated by 0.3 %-points to 1.9% (prev. year: 2.2%).

Earnings from Third Party Management activities fell short of the prior-year level at €0.04 million as of the balance sheet date (prev. year: €0.35 million). In the Resource Management business, earnings amounted to €1.55 million (prev. year: €2.31 million).

The »Others« category comprises balance sheet effects as well as non-allocated costs of the holding company and consolidation amounts which cannot be directly charged to either of the two aforementioned divisions. Due in particular to expenses in connection with the »CODE_n12« project and CeBIT fair presence, earnings were below the prior-year figure at €-1.72 million (prev. year: €-1.01 million).

Earnings position by income and expense items

As of 30 September 2012, other operating income amounted to €1.64 million and was thus well below the prior-year figure (€2.81 million). The main changes were in the field of currency gains and the write-up of short-term securities.

As of 30 September 2012, the cost of materials – mainly comprising the purchase of external manpower – amounted to €83.03 million and was thus 32% below the prior-year figure of €122.20 million. This decline resulted from the planned reduction in Third Party Management revenue and the respective purchase of external manpower. As a proportion of revenue, the cost of materials consequently fell by 11 %-points year on year to 48% (prev. year: 59%).

Personnel expenses increased to €66.85 million (prev. year: €61.49 million). This 9% increase in expenses year on year was mainly due to recruitment in the Services division, the rise in headcount following acquisitions and salary increases granted in 2012. As a proportion of revenue, personnel expenses were up by 8 %-points to 38% (prev. year: 30%). This was a result of the increased revenue share of the more labour-intensive Services segment to 52% in the first three quarters of 2012 (prev. year: 42%).

Depreciation of intangible and tangible assets amounted to € 1.16 million as of 30 September 2012 and was thus € 0.19 million above the prior-year figure (€ 0.97 million). However, this had only a minor impact on ordinary operating profits.

Other operating expenses increased to € 17.53 million in the first nine months of the financial year, corresponding to a year-on-year increase of 1% (prev. year: € 17.29 million). The main cost elements are operating, administrative and selling expenses, which rose by € 1.24 million to € 16.54 million (prev. year: € 15.30 million). This was mainly due to costs attributable to the »CODE_n12« project. This item also includes other taxes and exchange rate losses.

As of 30 September 2012, income taxes amounted to €2.70 million and were thus €0.41 million below the prior-year figure of €2.29 million. The calculated tax ratio increased by 10 %-points in the period under review to 35% (prev. year: 25%). This is due to a far more uneven distribution of profits among the various GFT national subsidiaries compared to last year.

Financial position

At the end of the third quarter, cash, cash equivalents and securities amounted to €29.08 million and were thus €10.60 million below the corresponding figure at the end of 2011 (€39.68 million). The decline was due to a significant fall in liquid funds, which decreased by €9.92 million to €22.55 million mainly as a result of payments to external employees.

Trade receivables rose by €2.84 million to €53.80 million, compared with the year-end figure of €50.96 million. As of 30 September 2012, trade payables amounted to €19.15 million and were thus well below the corresponding figure on 31 December 2011 (€28.63 million). This reduction resulted mainly from the significant decrease in Third Party Management revenue and the related purchase of external staff.

Compared to the same period last year, cash flows from operating activities were down and amounted to €-6.00 million as of 30 September 2012 (prev. year: €-0.36 million). This is mainly due to a deterioration of working capital in the third quarter of 2012.

At €-0.40 million, cash flows from investing activities were well above the prior-year level (€-1.21 million). Compared to last year, there was an increase in capital expenditure, including IT procurements, of €0.74 million to €1.23 million. This was opposed by a positive effect from the disposal of financial investments.

As of 30 September 2012, cash flows from financing activities amounted to €-3.60 million. There was thus a slight improvement over the previous year (€-3.95 million). Apart from the annual dividend payment, the main item is the use of short-term credit lines by foreign subsidiaries.

Asset position

As of 30 September 2012, the balance sheet total of the GFT Group was down €6.80 million at €131.48 million. At the end of the financial year 2011, the total stood at €138.28 million.

On the asset side there was a significant change in current assets and especially in cash and cash equivalents.

As of 30 September 2012, current assets were well below their year-end level (€86.71 million), falling to €80.64 million. This was mainly due to the sharp fall in liquid funds of €9.92 million to €22.55 million. By contrast, trade receivables increased by €2.84 million to €53.80 million.

Non-current assets, however, were largely unchanged. Compared to 31 December 2011, they fell by €0.73 million to €50.84 million, mainly as a result of a decrease in securities belonging to financial assets.

On the liabilities side the most notable changes were among the current liabilities. At the end of the quarter, equity amounted to €77.04 million and was thus €1.43 million below the corresponding figure on the balance sheet date of 31 December 2011. This was mainly due to the change in the balance sheet loss to €4.56 million. The equity ratio rose to 59%, compared to 55% on 31 December 2011.

In terms of debt, there was a decrease in non-current liabilities of €3.04 million due mainly to the use of other provisions of €3.01 million. As of 30 September 2012, non-current liabilities amounted to €5.56 million compared to €8.59 million at year-end 2011.

ASSETS in €million	31/12/2011	30/09/2012	30/09/2012	31/12/2011	EQUITY & LIABILITIES in €million
Cash, cash equivalents and securities	39.68	29.08	48.88	54.07	Current liabilities
Other current assets	53.25	56.78	5.56	8.59	Non-current liabilities
Other non-current assets	45.35	45.62	77.04	75.62	Equity capital
	138.28	131.48	131.48	138.28

Group balance sheet structure

There was also a decline in current liabilities during the period under review, which fell by €5.19 million from €54.07 million to €48.88 million. Within this item, there was a strong reduction in trade payables to €19.15 million, compared with €28.63 million as of 31 December 2011. In contrast, other provisions rose to €20.26 million (31 December 2011: €17.07 million) and current income tax liabilities increased to €2.29 million (31 December 2011: €1.33 million).

The equity/non-current assets ratio – the yardstick for solid balance sheet structures – improved to 152% at the end of the quarter (year-end 2011: 147%) and is thus at a very healthy level. This ratio expresses the relationship between the balance sheet items »equity« and »non-current assets« and provides information about the company's financial stability.

Employees

At the end of the reporting period, the GFT Group employed a total of 1,371 people. Compared to the same date last year, this represents an increase of 4% or 50 employees. The number of employees is calculated on the basis of full-time staff, whereby part-time staff are included on a pro rata basis. On 31 March 2012, GFT had 1,346 employees and on 30 June 2012 the number was 1,371.

The increase is mainly due to increased headcount in the Services segment. Compared to the same date last year, there was a rise of 3% or 40 persons to 1,225 employees. The increase was mainly in Spain. The acquisition in October 2011 of the consulting division of G2 Systems in the USA led to the addition of 17 new employees.

In the Resourcing division, the number of employees rose from 92 last year to 100 on 30 September 2012.

The »Others« category comprises 46 people employed by the holding company; this represents an increase of two employees compared to the reporting date last year.

Employees by division as of 30 September

	2012	2011
Services	1,225	1,185
Resourcing	100	92
Others	46	44
Total	1,371	1,321

As of 30 September 2012, 274 people were employed in Germany – a decline of 5% or 14 persons compared to last year. Staff employed outside Germany therefore amounted to 1,097 (prev. year: 1,033). As a result, the proportion of total GFT staff employed outside Germany amounts to 80% (prev. year: 78%).

There was a decrease in the number of freelancers employed. Compared to 1,289 persons on 30 September 2011, the number was 1,034 at the end of the third quarter of 2012. This change was due to the reduction in activities for a major client in the field of Third Party Management.

Employees by country as of 30 September

2011
288
153
17
32
53
774
4
1,321
78%
80%

Research and development

In the third quarter of 2012, the GFT Group spent €1.45 million on research and development activities (prev. year: €1.51 million). This represents a decrease of 4% compared to the same period last year.

These expenses can be mainly attributed to the following initiatives:

GFT mobile sales & advisory (formerly a-touch) refers to the IT-aided solution for advisors in the field of private banking and wealth management, which GFT continued to develop in the first nine months of 2012. Special security components ensure that the application can be used on mobile devices. It provides system-supported implementation of all compliance requirements.

At the SAP Competence Centre, experts develop tailored solutions for financial institutes, which help them integrate SAP software into their existing IT platform.

GFT's Mobile Finance activities comprise the development of key applications for mobile devices in the financial services sector. At its Mobile Finance Competence Centre, GFT pools support services, development and integration services in the field of Mobile Finance in order to design and implement tailored IT solutions and services for the finance sector.

Since May 2011, the company's internal »Applied Technologies Group« has been responsible for all R&D activities in the field of applied innovation management.

In order to ensure consistently high quality in its global development efforts, software development processes were further optimised in accordance with the international CMMI© (Capability Maturity Model Integration) standard.

Subsequent events

No events occurred after the balance sheet date as at 30 September 2012 that are of major significance to GFT.

Opportunity and risk report

In the first nine months of 2012, there were no material changes with regard to the comprehensive discussion of opportunities and risks provided in the Management Report accompanying the Consolidated Financial Statements for 2011. The risk position of the GFT Group is thus unchanged.

Forecast report

Macroeconomic development

The prospects for global economic growth continue to be dominated by uncertainty and scepticism. The outlook for the global economy already took a turn for the worse in the summer of 2012: measures aimed at containing the Euro crisis failed to have the desired effect and – together with the precarious budget situation in the USA – the growing debt led economists to downgrade their forecasts, even for emerging economies such as China and Brazil. Investors reacted to this unstable situation with caution. In its World Economic Outlook published in September 2012, the International Monetary Fund (IMF) forecasts global growth of just 3.6% for the coming year – a downgrade of 0.3 %-points. According to the IMF, there is a 17% danger that global growth may fall rapidly below the 2% mark.

In the Euro zone, the IMF's experts envisage problems in particular for Spain, which will clearly miss its deficit targets. Due to delays in spending cuts, measures aimed at restructuring the Greek government's budget are insufficient. The IMF predicts economic growth of 0.2% for 2013 and has thus downgraded its summer forecast by 0.5 %-points.

The IMF has also strongly reduced its economic forecast for Germany in the coming year: from 1.4% to 0.9%. Germany's leading economic research institutes made a similarly pessimistic forecast in the autumn survey 2012 and now expect German gross domestic product (GDP)

to grow by just 1.0% in 2012. Half a year ago, the same economists were predicting growth of 2.0%. Experts blame this deterioration in the country's outlook on market uncertainty.

Sector development

According to the German Federal Association for Information Technology, Telecommunications and New Media (BITKOM), the German Information and Communication Technology (ICT) sector intends to counter the adverse economic conditions and negative outlook with its innovative drive and thus help stabilise the economy. The high-tech association believes that sales will be driven by demand for mobile devices and data services, as well as intelligent networks and the growing digitisation of business.

In October 2012, BITKOM raised its forecast both for the current and coming business years: in 2013, it expects the ICT sector as a whole to generate revenue of €154.3 billion – €3.3 billion more than it expected in March. Compared to the equally upgraded forecast for 2012, this corresponds to growth of 1.6%. Growth in the IT sector will be above the sector average: the association forecasts revenue growth of 3.0% to €74.9 billion for 2013.

Revenue and earnings forecast

For the remaining three months of the financial year 2012, the GFT Group expects to continue the positive trend of the third quarter on the whole. Adjusted for special items for the innovation initiative »CODE_n12«, earnings before taxes at year-end are likely to be above the prior-year figure.

The reasons for this include increased demand from the financial services sector, especially in the field of corporate and investment banking. This will continue to strengthen growth in the Services segment in the fourth quarter. Consistently strong demand for modern core banking solutions and customer management systems, as well as outsourcing services, will have a positive impact on both revenue and earnings. The GFT Group also assumes that financial institutes will once again invest more heavily in future-oriented topics, such as mobile financial services, and will increasingly need IT solutions to meet compliance requirements.

The more modest outlook for the economy as a whole, however, will also impact the GFT Group – and in particular the Resourcing segment. Due to adverse market conditions and weaker demand for freelance IT specialists and engineers in industrial sectors, growth in this segment will be slower than originally forecast at the beginning of the year. As a consequence, the GFT Group has already taken initial steps to optimise the division. As of 1 October 2012, the company's Resourcing business in Switzerland will be coordinated from Germany. In the UK, improvements to the unit's operations will be stepped up once more over the coming months. Together with the increased focus on higher-margin Resource Management activities, already launched at the beginning of the year, a number of activities have thus been introduced to enhance business effi ciency. Moreover, at the end of the third quarter of 2012, measures were initiated to improve the market image of the Resourcing segment. These will become effective at the beginning of 2013. The Resourcing division expects these measures to give it a more focused and effective market positioning.

The Executive Board of GFT expects that on an operational level both revenue and earnings before taxes in fi nancial year 2012 will be above the respective prior-year fi gures. Based on the developments stated above, however, the Executive Board feels compelled to adjust the forecasts for fi nancial year 2012 which it made in the Consolidated Financial Statements 2011: it now expects revenue of € 233 million and an EBT result of € 11 million. At the same time, there is cause to be optimistic about 2013. In the Re sourcing segment, the measures already instigated are expected to help the division to effi ciently utilise its specifi c opportunities. In the Services segment, we assume that the current dynamic growth will continue.

Stuttgart, 8 November 2012

GFT Technologies Aktiengesellschaft

The Executive Board

Ulrich Dietz Jean-François Bodin Marika Lulay Dr Jochen Ruetz Executive Board (Chairman) Executive Board Executive Board Executive Board

Consolidated Statement of comprehensive Income

for the period from 1 January to 30 September 2012 GFT Technologies Aktiengesellschaft, Stuttgart (not certified)

Partial Statement Affecting Net Income: Consolidated Income Statement

	9 months		Third quarter
€	01/01/– 30/09/2012	01/01/– 30/09/2011	01/07/– 30/09/2012	01/07/– 30/09/2011
Revenue	174,604,538.26	207,873,143.40	58,222,314.78	66,069,810.56
Other operating income	1,641,389.03	2,810,315.14	181,922.80	1,425,612.73
	176,245,927.29	210,683,458.54	58,404,237.58	67,495,423.29
Cost of materials:
a) Expenses for raw materials and supplies and for purchased goods	3,641.79	48,047.55	1,112.74	43,192.40
b) Costs of purchased services	83,028,471.33	122,148,669.74	28,040,853.84	37,668,535.75
	83,032,113.12	122,196,717.29	28,041,966.58	37,711,728.15
Personnel expenses:
a) Salaries and wages	55,811,069.99	50,704,128.75	16,715,209.77	15,932,812.47
b) Social security and expenditures for retirement pensions	11,041,547.93	10,782,294.89	3,719,667.94	3,597,996.03
	66,852,617.92	61,486,423.64	20,434,877.71	19,530,808.50
Depreciation on non-current intangible assets and of tangible assets	1,164,692.42	967,540.86	401,602.33	334,018.56
Other operating expenses	17,528,672.45	17,288,879.41	5,529,525.10	6,423,687.24
Result from operating activities	7,667,831.38	8,743,897.34	3,996,265.86	3,495,180.84
Income from participations	0.00	20,000.00	0.00	20,000.00
Other interest and similar income	340,385.18	527,071.70	101,783.05	121,791.72
Profit share from associates	-19,284.00	1,040.23	-6,973.46	-506.11
Depreciation on securities	0.00	218,023.93	0.00	96,500.00
Interest and similar expenses	186,821.22	23,200.04	71,574.68	10,752.57
Financial result	134,279.96	306,887.96	23,234.91	34,033.04
Earnings before taxes	7,802,111.34	9,050,785.30	4,019,500.77	3,529,213.88
Taxes on income and earnings	2,697,920.03	2,290,039.93	1,275,578.49	400,833.37
Net income	5,104,191.31	6,760,745.37	2,743,922.28	3,128,380.51
Net earnings per share – undiluted	0.19	0.26	0.10	0.12
Net earnings per share – diluted	0.19	0.26	0.10	0.12

Partial Statement Not Affecting Net Income: Consolidated Income Statement

	9 months		Third quarter
€	01/01/– 30/09/2012	01/01/– 30/09/2011	01/07/– 30/09/2012	01/07/– 30/09/2011
Net Income	5,104,191.31	6,760,745.37	2,743,922.28	3,128,380.51
Financial assets available for sale (securities):
– Change of fair value recognised in equity during the period	148,140.00	-180,339.49	75,369.25	-246,300.00
	148,140.00	-180,339.49	75,369.25	-246,300.00
Exchange differences on translating foreign operations:
– Profits/losses during the period	130,954.86	85,943.95	-235,905.63	-51,978.24
	130,954.86	85,943.95	-235,905.63	-51,978.24
Income taxes on components of other result	-8,235.50	21,599.06	-8,235.50	5,040.00
Other result	270,859.36	-72,796.48	-168,771.88	-293,238.24
Total result	5,375,050.67	6,687,948.89	2,575,150.40	2,835,142.27
– thereof attributable to non-controlling shareholders	0.00	0.00	0.00	0.00
– thereof attributable to shareholders of parent company	5,375,050.67	6,687,948.89	2,575,150.40	2,835,142.27

Consolidated Balance Sheet

as at 30 September 2012

GFT Technologies Aktiengesellschaft, Stuttgart (not certified)

Assets

€	30/09/2012	31/12/2011
Non-current assets
Intangible assets
Licences, industrial property rights and similar rights	819,030.51	945,085.00
Goodwill	36,096,391.92	36,399,830.18
	36,915,422.43	37,344,915.18
Tangible assets
Other equipment, office and factory equipment	3,118,848.09	2,752,150.63
Construction on foreign property	29,265.79	54,780.08
	3,148,113.88	2,806,930.71
Financial assets
Securities	5,216,059.07	6,225,839.07
Financial assets, accounted for using the equity method	28,072.10	47,356.10
	5,244,131.17	6,273,195.17
Other assets	527,749.43	433,155.26
Income tax assets	514,568.42	514,567.53
Deferred tax assets	4,489,676.81	4,201,543.60
	50,839,662.14	51,574,307.45
Current assets
Trade receivables	53,801,018.97	50,962,108.83
Securities	1,307,440.00	982,520.00
Current tax assets	501,363.15	582,758.96
Cash and cash equivalents	22,548,692.35	32,472,593.37
Other financial assets	123,721.73	402,304.83
Other assets	2,355,056.92	1,305,256.69
	80,637,293.12	86,707,542.68
	131,476,955.26	138,281,850.13

Shareholders' Equity and Liabilities

€	30/09/2012	31/12/2011
Shareholders´equity
Share capital	26,325,946.00	26,325,946.00
Conditional Capital €10,000,000.00
(prev. year: €7,500,000.00)
Capital reserve	42,147,782.15	42,147,782.15
Retained earnings
Other retained earnings	12,743,349.97	12,743,349.97
Changes in equity not affecting net income
Foreign currency translations	859,249.38	728,294.52
Reserve of market assessment for securities	-475,980.74	-615,885.24
Consolidated balance sheet loss	-4,558,403.51	-5,713,702.92
	77,041,943.25	75,615,784.48
Liabilities
Non-current liabilities
Provisions for pensions	805,718.38	769,718.38
Other provisions	4,223,497.92	7,235,803.15
Deferred tax liabilities	523,878.01	585,985.06
	5,553,094.31	8,591,506.59
Current liabilities
Other provisions	20,264,172.95	17,067,647.30
Income tax liabilities	2,286,504.91	1,333,795.95
Financial liabilities	352,944.89	0.00
Trade payables	19,153,998.00	28,632,433.78
Other financial liabilities	418,330.18	588,991.71
Other liabilities	6,405,966.77	6,451,690.32
	48,881,917.70	54,074,559.06
	131,476,955.26	138,281,850.13

Consolidated Statement of Changes in Equity

as at 30 September 2012 GFT Technologies Aktiengesellschaft, Stuttgart (not certified)

€	Subscribed	Capital	Retained
	capital	reserve	earnings
			Other
			retained
			earnings
As at 01/01/2011	26,325,946.00	42,147,782.15	10,243,349.97
Total income and expenses for the period 01/01/–30/09/2011
Dividend payment June 2011
As at 30/09/2011	26,325,946.00	42,147,782.15	10,243,349.97
As at 01/01/2011	26,325,946.00	42,147,782.15	10,243,349.97
Dividend payment June 2011
Total income and expenses for the period 01/01/–31/12/2011
Allocations to retained earnings 2011
– to other retained earnings			2,500,000.00
As at 31/12/2011	26,325,946.00	42,147,782.15	12,743,349.97
Dividend payment May 2012
Total income and expenses for the period 01/01/–30/09/2012
As at 30/09/2012	26,325,946.00	42,147,782.15	12,743,349.97

Non-controlling equity holders share capital	Equity attributable to	Consolidated balance sheet		Changes in equity not affecting results
	equity holders of the parent	loss	Market	Foreign
			assessment	currency
			for securities	translations
0.00 71,270,177.00	71,270,177.00	-7,554,412.13	-427,800.00	535,311.01
0.00 6,687,948.89	6,687,948.89	6,760,745.37	-158,740.43	85,943.95
0.00 -3,948,891.90	-3,948,891.90	-3,948,891.90
0.00 74,009,233.99	74,009,233.99	-4,742,558.66	-586,540.43	621,254.96
0.00 71,270,177.00	71,270,177.00	-7,554,412.13	-427,800.00	535,311.01
0.00 -3,948,891.90	-3,948,891.90	-3,948,891.90
0.00 8,294,499.38	8,294,499.38	8,289,601.11	-188,085.24	192,983.51
0.00	0.00	-2,500,000.00
0.00 75,615,784.48	75,615,784.48	-5,713,702.92	-615,885.24	728,294.52
0.00 -3,948,891.90	-3,948,891.90	-3,948,891.90
0.00 5,375,050.67	5,375,050.67	5,104,191.31	139,904.50	130,954.86
0.00 77,041,943.25	77,041,943.25	-4,558,403.51	-475,980.74	859,249.38

Consolidated Cash Flow Statement

for the period from 1 January to 30 September 2012 GFT Technologies Aktiengesellschaft, Stuttgart (not certified)

	9 months
€	01/01/– 30/09/2012	01/01/– 30/09/2011
Net income	5,104,191.31	6,760,745.37
Depreciation on non-current intangible and tangible assets	1,164,692.42	967,540.86
Changes in provisions	220,220.43	829,064.27
Other non-cash expenses/income	174,586.65	250,768.24
Profit/loss from the disposal of long-term tangible and intangible assets as well as financial assets	4,691.00	20,084.54
Changes in trade receivables	-2,838,910.14	-3,875,241.03
Changes in other assets	-1,072,549.59	31,655.96
Changes in trade liabilities and other liabilities	-8,812,454.46	-5,427,654.15
Other changes in equity	51,622.41	75,168.28
Cash flow from operating activities 1	-6,003,909.97	-367,867.66
Cash receipts from sale of tangible assets	0.00	450.00
Cash payments to acquire tangible assets	-1,228,284.74	-743,235.81
Cash payments to acquire non-current intangible assets	-175,091.75	-309,924.22
Cash receipts from sale of financial assets	1,000,000.00	6,226,500.00
Cash payments to/receipts from sale of consolidated companies net of cash and cash equivalents disposed of	0.00	-6,383,880.03
Cash flow from investing activities	-403,376.49	-1,210,090.06
Cash receipts from taking out short-term or long-term loans	352,944.89	0.00
Payments to shareholders	-3,948,891.90	-3,948,891.90
Cash flow from financing activities	-3,595,947.01	-3,948,891.90
Effect of exchange rate changes on cash and cash equivalents	79,332.45	10,775.67
Change in cash funds from cash-relevant transactions	-9,923,901.02	-5,516,073.95
Cash funds at the beginning of the period	32,472,593.37	26,232,995.13
Cash funds at the end of the period	22,548,692.35	20,716,921.18

1 Cash flow from operating activities includes cash flow from income taxes of €-1,085 thousand (net payment; prev. year: €-1,336 thousand). Cash flow from operating activities includes cash flow from interest paid of €5 thousand (prev. year: €22 thousand) and cash flow from interest received of €295 thousand (prev. year: €632 thousand).

Notes to the Interim Financial Statements

as at 30 September 2012 GFT Technologies Aktiengesellschaft, Stuttgart (not certified)

Fundamentals for the GFT Group's Interim Financial Statements ······························································································································· ··········

These unaudited Interim Financial Statements of GFT Technologies Aktiengesellschaft (»GFT AG«) and its subsidiaries have been prepared in accordance with section 37w (3) of the German Securities Trading Act (WpHG) and International Accounting Standard (IAS) 34 – Interim Financial Reporting. Compared to the Annual Financial Statements as at 31 December 2011, the Interim Financial Statements include condensed reporting in the Notes to the Financial Statements and comply with the International Financial Reporting Standards (IFRS) as adopted by the European Union.

With the exception of a minor disclosure change to the Cash Flow Statement, the same accounting and valuation methods were used in these Interim Financial Statements as in the last Consolidated Financial Statements as at 31 December 2011. New or amended standards and

interpretations to be applied as of the beginning of the financial year 2012 did not have any major effect on the Interim Financial Statements. The increasing importance of currency-related cash flows led us to list these separately in the Cash Flow Statement. The prior-year figures were adjusted accordingly.

In drawing up these Interim Financial Statements, the Executive Board made estimations concerning the application and interpretation of accounting regulations. Actual events may differ from these estimations. Future developments and results depend on a number of external factors involving risks and uncertainties, and are based on current assumptions which may prove inaccurate.

Changes to the consolidated group and comparability of prior-year figures ·········································································································

The following changes to the scope of consolidation have occurred since the Consolidated Financial Statements were closed on 31 December 2011:

On 13 April 2012, GFT Technologies AG acquired Neckarsee 254.VV GmbH and changed its name to GFT Beteiligungs-GmbH on 18 June 2012. The company's offices are located in Filderhauptstrasse 142, 70599 Stuttgart, Germany. Since its foundation, GFT Beteiligungs-GmbH has not conducted any significant operating activities. As a consequence, its initial consolidation did not have any major effect on the Group's assets, financial and earnings position.

On 3 July 2012, GFT AppVerse S.L.U. was acquired by GFT Iberia Holding S.A.U. GFT AppVerse S.L.U. has not yet commenced business operations and consequently its initial consolidation did not have any major effect on the Group's assets, financial and earnings position.

The comparability of the Income Statement and Cash Flow Statement for the first nine months of 2012 and the first nine months of 2011 is impaired for the following reason.

On 9 June 2011 (acquisition date), GFT AG acquired 100% of equity shares with voting rights in Asymo AG, Adliswil, Switzerland, and thus gained control of the acquired company. Asymo AG is a Swiss IT consultancy for the core banking solution »Avaloq«.

The company was included in the Consolidated Financial Statements for the first time on the date of acquisition, 9 June 2011. It was therefore included in the Income Statement and Cash Flow Statement for the first nine months of 2012 for a period of nine months, compared to just four months in the first nine months of 2011. Its contribution to revenue in the first nine months of 2012 amounted to €5.65 million (in the first nine months of 2011 €2.57 million for four months), with a contribution to net income of €1.00 million (in the first nine months of 2011 €0.52 million for four months).

The comparability of the Income Statement and Cash Flow Statement for the first half-year 2012 and the first half-year 2011 is thus impaired.

In the first half-year 2012, the following adjustment was made with regard to the business combination with GFT Financial Solutions AG, Opfikon, Switzerland (formerly Asymo AG, Adliswil, Switzerland): Compared to the parameters used in planning calculations, the expected value of the conditional consideration (not discounted) was reduced from CHF 6.0 million to CHF 5.5 million due to subsequent improved data.

Moreover, there were foreign exchange losses of €0.10 million with regard to the measurement of the conditional consideration.

Compared to 30 September 2012, the carrying value of the conditional consideration changed as follows:

Carrying value as of 1 January 2012	€4.64 million
Adjustment to the expected value as of 30 June 2012	€-0.40 million
Interest and currency effects	€-0.10 million
Payment of 1st tranche	€-1.23 million
Reversal	€0.08 million
Carrying value as of 30 September 2012	€2.99 million

The resulting goodwill from the acquisition of Asymo AG developed as follows:

Goodwill Asymo AG as of 1 January 2012	€10.9 million
Foreign exchange adjustment	€0.2 million
Adjustment to the expected value of the conditional consideration	€-0.5 million
Goodwill Asymo AG as of 30 September 2012	€10.6 million

The resulting goodwill from the acquisition of G2 Systems developed as follows:

Goodwill G2 Systems as of 1 January 2012	€5.05 million
Foreign exchange adjustment	€0.06 million
Goodwill G2 Systems as of 30 September 2012	€5.11 million

As of 30 September 2012, the carrying value of the conditional consideration changed as follows:

Carrying value as of 1 January 2012	€3.70 million
Interest and currency effects	€0.08 million
Payment of 1st tranche	€-0.75 million
Carrying value as of 30 September 2012	€3.03 million

Compared to 30 September 2011, the tax ratio increased from 25% to 35%. This was due to the initial carrying of deferred taxes on loss carryforwards in 2012 and a tax rebate of €500,000 received in 2011.

Changes in equity ······························································································································· ······························································································································· ··············

For the changes in equity capital between 1 January 2012 and 30 September 2012, we refer to the Consolidated Statement of Changes in Equity which is disclosed separately.

As of 30 September 2012, the Company's share capital of €26,325,946.00 consists of 26,325,946 non-par value individual share certificates (no change relative to 31 December 2011). These shares are bearer shares and all grant equal rights.

In May 2012, a dividend of €0.15 per share was distributed to shareholders, totalling €3,949 thousand, from the balance sheet profit of the parent company GFT AG (the prior-year dividend in September 2011 of €0.15 per share also totalled €3,949 thousand).

As of 30 September 20112, GFT AG did not hold any of its own shares, nor did it purchase or sell any of its own shares in the period 1 January 2012 to 30 September 2012.

The following changes in the Company's Conditional Capital were made between 1 January 2012 and 30 September 2012 relative to 31 December 2011:

Conditional Capital

By resolution of the Annual General Meeting on 22 May 2012, Conditional Capital II/2007 was cancelled and § 4 (6) of the Company's Articles amended and published in the Federal Gazette. By resolution of the Annual General Meeting on 22 May 2012, new Conditional Capital of €10,000,000.00 was created.

Segment reporting ······························································································································· ······························································································································· ···········

GFT has once again identified the two segments Services and Resourcing as reportable segments. The identification of these segments was mainly based on the fact that the products and services offered in these segments show differences, and that the GFT Group is organised, managed and controlled on the basis of these segments. Internal reporting to the Executive Board is based on the classification of Group activities in these segments.

The products and services with which the reportable segments generate their income can be characterised as follows: all activities in connection with IT solutions (services and projects) are aggregated in the Services segment. The Resourcing segment focuses on the placement of freelance IT specialists and engineers.

Internal controlling and reporting within the GFT Group, and thus also segment reporting, is based on IFRS accounting principles as applied in the Consolidated Financial Statements. The GFT Group measures the success of its segments by means of segment EBT (earnings before tax). Segment income and results also include transactions between the segments. Intersegment transactions take place at market prices on an arm's length principle.

As a general rule, the assets of the segments include all assets, except for those from income tax and assets attributed to the holding activity. The segment liabilities include all liabilities, except for those from income tax, financing, and liabilities in connection with the holding activity.

For detailed information about the business segments, please refer to the Appendix attached to the Notes to the Consolidated Financial Statements. It also includes disclosures concerning revenue from external clients for each group of comparable products and services.

The reconciliation of the segment figures to the corresponding figures in the Consolidated Financial Statements is as follows:

€ thsd.	01/01/–	01/01/–
	30/09/2012	30/09/2011
Total segment revenue	177,767	212,226
Elimination of intersegment revenue	-3,162	-4,557
Occasionally occurring revenue	0	204
Group revenue	174,605	207,873
Total segment results (EBT)	9,516	10,052
Non-attributed expenses/income of Group HQ	-814	-1,065
Non-attributed income for elimination of interim results	-879	76
Other	-21	-12
Group result before taxes	7,802	9,051

€ thsd.	30/09/2012	30/09/2011
Total segment assets	117,712	114,629
Non-attributed assets of Group HQ	116	99
Securities	6,523	7,441
Assets from income taxes	6,448	5,623
Other	678	356
Group assets	131,477	128,148
Total segment liabilities	50,881	50,832
Non-attributed liabilities of Group HQ	372	381
Liabilities from income taxes	2,816	2,802
Other	366	124
Group liabilities	54,435	54,139

The reconciliation discloses items which per definition are not components of the segments. In addition, this item includes non-attributed items of Group HQ, e.g. from centrally managed issues. Business transactions between the segments are also eliminated in the reconciliation. The table below shows information according to geographic regions for the GFT Group:

	Revenue from sales to external clients 1		Non-current intangible and tangible assets 2
€ million	01/01/– 30/09/2012	01/01/– 30/09/2011	30/09/2012	30/09/2011
Germany	68.10	113.75	32.93	34.74
UK	27.45	27.99	0.05	0.11
Spain	20.06	18.88	1.31	0.12
France	31.32	24.91	0.10	0.94
USA	8.35	4.97	5.24	0.00
Switzerland	9.14	9.10	0.13	0.16
Other countries	10.19	8.27	0.30	0.26
Total	174.61	207.87	40.06	36.33

1 Determined by client location

2 Group as a whole

Revenue from clients who account for more than 10% each of Group revenue is shown below:

	Revenue		is generated	Segments in which this revenue
€ million	01/01/– 30/09/2012	01/01/– 30/09/2011	01/01/– 30/09/2012	01/01/– 30/09/2011
Client 1	54.05	92.74	Services, Resourcing	Services, Resourcing

Segment report

GFT Technologies Aktiengesellschaft, Stuttgart (not certified)

	Services		Resourcing
€ thsd.	30/09/2012	30/09/2011	30/09/2012	30/09/2011
External sales	90,476	86,262	84,129	121,407
Inter-segment sales	29	18	3,133	4,539
Total revenues	90,505	86,280	87,262	125,946
Depreciation	-910	-761	-195	-176
Non-cash income/expenditure other than depreciation	-38	-33	0	0
Interest income	73	101	3	6
Interest expenses	-96	-31	-18	-55
Share of net profits of associated companies
reported according to the equity method	-19	1	0	0
Segment result (EBT)	7,929	7,396	1,587	2,656
Segment assets	77,851	67,795	39,861	46,834
Investment in associates reported according to the equity method	28	45	0	0
Investment in non-current intangible and tangible assets	1,250	7,183	108	271
Segment liabilities	25,631	20,611	25,250	30,221

Eliminations Consolidated		Total
30/09/2012 30/09/2011 30/09/2012	30/09/2011	30/09/2012
0 204 174,605	207,669	174,605
-3,162 -4,557 0	4,557	3,162
-3,162 -4,353 174,605	212,226	177,767
-937 -60 -31 -1,165		-1,105
-33 -137 -218 -175		-38
107 264 420 340		76
-86 -73 63 -187		-114
1 0 0 -19		-19
-1,714 -1,001 7,802	10,052	9,516
13,765 13,519 131,477	114,629	117,712
45 0 0 28		28
45 33 1,403	7,454	1,358
3,554 3,307 54,435	50,832	50,881

Changes to contingent liabilities and receivables ······························································································································ ······················································

As of 30 September 2012, there were no signifi cant changes to contingencies and other fi nancial commitments compared to the Consolidated Financial Statements as at 31 December 2011. As at 31 December, there were no contingent receivables.

Investments/disinvestments ······························································································································ ·················································································································

During the period 1 January 2012 to 30 September 2012, the GFT Group invested € 175 thousand in intangible assets (1 January to 30 September 2011: € 7,487 thousand), of which goodwill accounted for € 0 thousand (1 January to 30 September 2011: € 6,434 thousand), and € 1,228 thousand in tangible assets (1 January to 30 September 2011: € 743 thousand). There were no signifi cant disinvestments in the reporting period. In accordance with a notarised purchase agreement dated 21 August 2012, a payment obligation amounting to € 2 million was assumed for the purchase of land and property.

Related party disclosures ······························································································································ ··························································································································

Compared to the disclosures made in the Notes to the Consolidated Financial Statements as at 31 December 2011, there were no signifi cant new transactions. There were also no changes in the composition of related parties nor in relations with such parties.

Events after the interim reporting period ······························································································································ ············································································

On 19 October 2012, emagine Consulting Ltd., London, was founded by GFT UK Ltd., London. Business operations have not yet commenced.

There were no other signifi cant events after the interim reporting period which were not considered in the Interim Financial Statements.

Stuttgart, 8 November 2012

GFT Technologies Aktiengesellschaft

The Executive Board

Ulrich Dietz Jean-François Bodin Marika Lulay Dr Jochen Ruetz Executive Board (Chairman) Executive Board Executive Board Executive Board

Financial Calendar

Annual Report 2012 28 March 2013

Quarterly Financial Report as of 31 March 2013 8 May 2013

Annual General Meeting 15 May 2013

Half-Yearly Report as of 30 June 2013 8 August 2013

Quarterly Financial Report as of 30 September 2013 7 November 2013

German Equity Forum Frankfurt/Main November 2013

Further information

Write to us or call us if you have any questions. Our Investor Relations team will be happy to answer them for you. Or visit our website at www.gft.com/ir. There you can find further information on our company and the GFT share.

GFT Technologies AG

Investor Relations Andrea Wlcek

Filderhauptstrasse 142 70599 Stuttgart Germany

T +49 711 62042-440 F +49 711 62042-301

ir@gft.com

This Quarterly Financial Report as of 30 September 2012 is also available in German.The online versions of the German and English Interim Reports are available on www.gft.com/ir.

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