GFT Technologies SE — Interim / Quarterly Report 2013

May 8, 2013

quarterly financial report as of 31 March 2013

ing neer pio digi tal

Key figures according to IFRS

(unaudited)

		1st quarter
		01/01/– 31/03/2013	01/01/– 31/03/2012	Change
Income Statement
Revenue	€m	55.51	57.65	-3.7%
Earnings before interest, taxes, depreciation and amortisation (EBITDA)	€m	1.86	1.51	23.2%
Earnings before interest and taxes (EBIT)	€m	1.51	1.14	32.5%
Earnings before taxes (EBT)	€m	1.55	1.27	21.8%
Net income as of 31 March	€m	1.14	0.63	82.6%
Balance Sheet
Other non-current assets	€m	47.38	45.49	4.1%
Cash, cash equivalents and securities	€m	29.76	27.52	8.1%
Other current assets	€m	54.92	57.86	-5.1%
ASSETS	€m	132.06	130.87	0.9%
Non-current liabilities	€m	6.72	9.80	-31.4%
Current liabilities	€m	45.91	45.52	0.9%
Shareholders´ equity	€m	79.43	75.55	5.1%
SHAREHOLDERS' EQUITY AND LIABILITIES	€m	132.06	130.87	0.9%
Equity ratio	%	60	58	2%-points
Cash flow
Cash flow from operating activities	€m	-9.29	-12.59	-26.2%
Cash flow from investing activities	€m	-2.18	-0.14	1,446.1%
Cash flow from financing activities	€m	0.87	0.09	845.7%
Employees
Number of permanent employees (as of 31 March)	no.	1,457	1,346	8.2%
Share
Earnings per share	€	0.04	0.02	82.6%

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

Following the scheduled progress of business in the first quarter, the Executive Board confirms its annual forecast for the GFT Group. The Executive Board expects the GFT Group to make good progress in 2013 with revenue growth of 3% to €238 million and pre-tax earnings of €12 to €13 million. With a more focused profile, the Group aims to achieve profitable and sustainable growth in the coming years.

Contents

Group Management Report

of GFT Technologies AG as of 31 March 2013 (unaudited)

Business environment

Economic environment

Macroeconomic development

In its Economic Outlook of April 2013, the International Monetary Fund (IMF) reports that the global economy became far more stable towards the end of the first quarter of 2013 – despite its persistent crises and fresh turbulence. The Organisation for Economic Cooperation and Development (OECD) also believes that the situation is now less tense. According to leading economists, this is partly due to action taken by the USA to combat its financial crisis and partly the result of monetary measures taken by the European Central Bank.

According to the IMF, however, there is a growing divergence between the industrialised nations, which have displayed more or less consistently weak growth since the financial crisis: in America, the upswing is becoming noticeably stronger, while the eurozone has remained firmly in recession during 2013. The greatest worry is now France, which is threatening to slide into recession. This is also confirmed by the OECD's experts, who at the same time praise the efforts of Greece, Ireland, Portugal and Spain to introduce reforms. So far, however, these efforts have failed to produce any significant recovery in Europe's economy.

The only exception is Germany: economic growth here continues to outpace that of its major European rivals and the OECD forecasts an upswing. Compared to the negative growth of its neighbours, both the OECD and IMF put growth in Germany at 0.6% for the first quarter of 2013 – following growth of 0.9% for 2012 as a whole.

Sector development

According to the latest business confidence survey of the German Federal Association for Information Technology, Telecommunications and New Media (BITKOM) in February, the German IT sector got off to a strong start in 2013. Three quarters of all IT and telecommunication companies currently expect rising revenues. Software firms and IT service providers are particularly upbeat: 87% and 82% of these companies, respectively, anticipate revenue growth in the current year.

This also means good prospects for the labour market. More than half of all companies (57%) are looking to hire new staff in the course of the year. The shortage of skilled labour continues to be a dominant topic in the sector. According to BITKOM, 53% of all ICT companies believe this issue to be the greatest obstacle to further growth.

In its annual survey of ICT trends in January 2013, BITKOM reported that Big Data has now firmly established itself as the most important high-tech topic, together with Cloud Computing. Two further key strategic focus areas of GFT, Mobile Applications and Social Media, were also high in the BITKOM rankings.

Course of business GFT share

Despite the ongoing weakness of the eurozone economies, the GFT Group started well in its financial year 2013. With consolidated revenue of €55.51 million (prev. year: €57.65 million), the Group fell 4% short of the prior-year figure. Adjusted for the planned reduction of revenue from its low-margin Third Party Management business (amounting to €4.25 million in the first quarter), however, the Group's core business grew by 4% in the first three months. Pre-tax earnings (EBT) improved by 22% to €1.55 million (prev. year: €1.27 million). This figure includes costs for the CODE_n innovation drive amounting to €0.77 million (prev. year: €1.25 million).

There was particularly encouraging growth in the GFT Solutions division, which achieved revenue of €32.40 million and thus exceeded the prior-year figure (€30.49 million) by 6%. This positive development of revenues was helped by stable sales of banking solutions and growing demand for outsourcing services and compliance solutions. Growth rates were particularly high in the regions Germany and the UK. Thanks to positive margin effects and a high level of capacity utilisation, earnings in this segment increased by 33% to €2.41 million (prev. year: €1.81 million).

The emagine division, which is continuing its realignment process in 2013, posted revenue of €23.09 million – 15% down on the previous year (€27.16 million). Although activities involved with helping companies recruit highly skilled IT and engineering specialists for technology projects achieved slight growth in revenue to €22.45 million (prev. year: €21.93 million), the division's Third Party Management business only contributed €0.64 million to segment revenue (prev. year: €5.23 million). For fiscal 2013, the planned reduction in revenue from this business will amount to around €15 million. Segment earnings of the emagine division were burdened by realignment costs and amounted to €0.10 million (prev. year: €0.68 million).

The positive upwards trend on the stock markets continued in the first quarter of 2013. Encouraging economic data and corporate results helped create stable conditions around the world in the first three months. Although the eurozone was unsettled in February by the forthcoming Italian elections, this was offset by very good export figures for Germany and China and a more upbeat business climate: the IFO business confidence index published on 22 February 2013 reached its highest level since July 2010. In March, the German blue-chip DAX30 index briefly climbed to a five-year-high of over 8,000 points. The discussions surrounding a rescue package for Cyprus, however, led to renewed uncertainty on the world's financial markets. The DAX closed at 7,795 points on 28 March 2013 – representing growth of 2.4% in the first quarter.

The TecDAX index also made good progress. Instead of lagging behind the DAX, as in recent times, it posted growth of 12.6% in the first three months – and rising. The tech stock barometer had previously suffered considerable fluctuations due to the poor performance of solar energy shares.

In this positive stock market environment, shares in GFT Technologies AG also performed strongly at the beginning of 2013, climbing to a year-high to date of €3.50 on 21 January. The upward trend which began in late 2012 was thus successfully continued with further growth again in Xetra trading volumes. After peaking early in the year, there followed a period of consolidation with sideways trends at a high level. On publication of the preliminary annual results on 28 February, the share price fell below the supporting 38-day line (€3.42). The GFT share did not recover until late March when it rose again to €3.50. All in all, the share recorded quarterly growth of 6.17%.

Share performance indexed

Information on the GFT share

	Q1 2013	Q1 2012
Year-opening quotation (Xetra)	€3.18	€2.75
Closing quotation on 31 March (daily closing prices Xetra)	€3.44	€3.10
Change in share price compared to year-closing quotation (2012: €3.24, 2011: €2.72)	+6%	+14%
Highest price (daily closing prices Xetra)	€3.50 (21/01/2013)	€3.20 (02/03/2012, 13/03/–16/03/2012 20/03/–21/03/2012)
Lowest price (daily closing prices Xetra)	€3.20 (03/01/2013, 07/01/2013)	€2.75 (02/01/2012)
Number of shares at end of quarter	26,325,946	26,325,946
Market capitalisation at end of quarter	€90.56 million	€81.61 million
Average daily trading volume in shares (Xetra und Frankfurt)	19,476	15,266
Earnings per share	€0.04	€0.02

ISIN	DE 0005800601
Initial stock market quotation	28/06/1999
Market segment	Prime Standard

Shareholder structure

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

Shareholder structure

%
Ulrich Dietz	28.08
Maria Dietz	9.68
Dr Markus Kerber	5.00
Free float	57.24

Revenue by segment

	Q1 2013	€ million
GFT Solutions	58%	32.40
emagine	42%	23.09
Others	0%	0.02

Development of revenue

In the first quarter of 2013, the GFT Group generated consolidated revenue of €55.51 million, some 4% below the prior-year figure (€57.65 million). The planned reduction in Third Party Management business amounted to €4.25 million in the first three months. Adjusted for this discontinued revenue contribution, the Group's core business grew by 4% year on year.

In its GFT Solutions division, GFT achieved revenue growth of 6% to €32.40 million in the first quarter of 2013 (prev. year: €30.49 million). Revenues in this division were driven by growing compliance requirements in the finance sector and especially projects relating to the introduction of the Single Euro Payments Area (SEPA). Growth was helped further by rising demand for mobile banking solutions. The division's share of consolidated revenue rose to 58% (prev. year: 53%).

In the emagine division, revenue was 15% down on the previous year at €23.09 million for the first three months of 2013 (prev. year: €27.16 million). This figure includes the planned reduction of revenues in the lower-margin Third Party Management business of €4.25 million. With its consultancy services for the staffing of technology projects with highly skilled IT and engineering experts, revenues of the emagine division grew slightly to €22.45 million (prev. year: €21.93 million). All in all, this division's share of consolidated revenue fell to 42% (prev. year: 47%).

Revenue by country

Germany, which is affected most by the withdrawal from Third Party Management business, reported a fall in revenue of 15% to €18.26 million (prev. year: €21.43 million). The region remained the GFT Group's largest sales market with a share of total revenue of 33% (prev. year: 37%).

The GFT Group recorded its strongest first-quarter revenue growth in the UK with an increase of 27% to €11.80 million (prev. year: €9.30 million). This positive development was driven by the GFT Solutions division, while the emagine division fell just short of its prior-year revenue figure. This region's share of Group revenue rose to 21% (prev. year: 16%).

There was also encouraging progress in the Group's business in France. Driven by demand for IT and engineering specialists in the industrial and service sectors, revenue grew by 13% to €10.99 million (prev. year: €9.75 million). The region's share of Group revenue rose to 20% (prev. year: 17%).

Revenue by country

Q1 2013	€ million
33%	18.26
21%	11.80
20%	10.99
12%	6.91
4%	2.23
4%	2.01
6%	3.32

In Switzerland, revenue reached €2.23 million and was thus down 35% on the previous year (€3.45 million). The region's share of Group revenue amounted to 4% (prev. year: 6%). The decline is mainly due to the discontinuation of local emagine business in the third quarter of the previous year.

In Spain, the GFT Group posted revenue of €6.91 million, which corresponded to slight year-on-year growth of 4% (€6.65 million). The region accounts for 12% of Group revenue (prev. year: 12%).

In the USA, revenue fell by 23% to €2.01 million (prev. year: €2.60 million). Revenue from »Other countries« reached €3.32 million (prev. year: €4.48 million), corresponding to a decline of 26%.

Revenue by industry

At the beginning of financial year 2013, revenue by industry was reclassified in order to reflect business in the relevant target markets more accurately. Prior-year figures were adjusted accordingly. With a 61% share of the GFT Group's total revenue (prev. year: 60%), the Financial service providers sector remained the most important industry for GFT in the first quarter of 2013. Revenue losses from discontinued Third Party Management business were almost completely offset in this sector by revenue growth in the GFT Solutions segment. As a result, revenue remained largely unchanged at €33.58 million (€34.35 million).

There was a strong increase of 11% to €13.94 million (prev. year: €12.52 million) in revenue generated by the »Other industries« segment, especially with industrial clients. This sector accounted for 25% of total revenue (prev. year: 21%). The growth in revenue resulted mainly from increased demand for IT experts and engineers for staffing technology projects as well as from increased revenues in the emagine segment.

Revenue in the »Other service providers« sector fell by 26% to €7.99 million (prev. year: €10.78 million), due to reduced revenues in both the emagine segment and GFT Solutions segment. The sector's percentage contribution to revenue amounted to 14% (prev. year:19%).

Revenue by industry

	Q1 2013	€ million
Financial service providers	61%	33.58
Other industries	25%	13.94
Other service providers	14%	7.99

Earnings position

In the first quarter of 2013, earnings before taxes (EBT) of the GFT Group amounted to €1.55 million and were thus 22% down on the previous year (€1.27 million). The operating margin before taxes was improved by 0.6 % points from 2.2% in the previous year to 2.8% at present.

Earnings before interest and taxes (EBIT) amounted to €1.51 million in the reporting period and were thus up 32% on the prior-year figure (€1.14 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 23% to €1.86 million (prev. year: €1.51 million).

Net income of the GFT Group in the first quarter of 2013 amounted to €1.14 million. This represents year-on-year growth of €0.51 million or 83% (prev. year: €0.63 million). The reason was a reduction in the calculated tax ratio from 51% in the previous year to 26% now, as a result of a balanced distribution of earnings among the national companies.

In line with this increased net income for the quarter, earnings per share improved by €0.02 in the reporting period to €0.04 per share (prev. year: €0.02 per share). These figures are based on an average of 26,325,946 outstanding shares.

Consolidated earnings position by segment

In the first quarter of 2013, earnings of the GFT Solutions segment rose by 33% to €2.41 million (prev. year: €1.81 million). Its operating margin reached 7.4%, corresponding to year-on-year growth of 1.5 %-points (prev. year: 5.9%). This rise in earnings results mainly from the generally positive development of business.

Earnings in the emagine segment were burdened by expenses involved with the realignment of the division and amounted to €0.10 million after the first three months of 2013 (prev. year: €0.68 million). The operating margin deteriorated by 2 %-points to 0.4% (prev. year: 2.4%).

Earnings position by segment

The »Others« category comprises costs of the holding company and consolidation amounts which cannot be directly charged to either of the two aforementioned divisions. At €-0.96 million, pre-tax earnings of this division were up on the previous year (€-1.22 million). The largest individual items in this category were the costs for the CODE_n project and CeBIT fair presence totalling €0.77 million (prev. year: €1.25 million). Thanks to optimised cost management and higher external partner contributions, total expenses for the project were reduced by 38% compared to the previous year.

Consolidated earnings position by income and expense items

In the first quarter of 2013, other operating income increased slightly to €1.01 million (prev. year: €0.98 million). This was mainly due to other operating income – especially income from CODE_n partner contracts – as well as currency gains.

The item cost of materials and purchased services – mainly comprising the use of external manpower – fell by €3.26 million to €24.21 million (prev. year: €27.47 million). The higher prior-year figure results from greater revenues in Third Party Management business and the resulting purchase of external employees. As a proportion of revenue, the cost of materials consequently fell year on year by 4 %-points to 44% (prev. year: 48%).

At €23.33 million, personnel expenses remained virtually unchanged from the previous year (€23.23 million). As a proportion of revenue, personnel expenses were up slightly to 42% (prev. year: 40%). This moderate increase was a result of the increased revenue share of the more labourintensive GFT Solutions segment to 58% (prev. year: 53%) and the related increase in headcount in this division.

Depreciation of intangible and tangible assets

amounted to €0.36 million in the first quarter and was thus almost unchanged from the previous year (€0.37 million). However, this item had only a minor impact on ordinary operating profits.

Other operating expenses increased to €7.12 million in the first quarter of 2013, corresponding to a year-on-year increase of 11% (prev. year: €6.43 million). The main cost elements are operating, administrative and selling expenses, which rose by €0.72 million to €6.67 million (prev. year: €5.95 million). This item also includes other taxes and exchange rate losses.

Income taxes amounted to €0.40 million in the first quarter and were thus €0.24 million below the prior-year figure of €0.64 million. The calculated tax ratio fell strongly by 25 %-points in the reporting period to 26% (prev. year: 51%). This is due to a more even distribution of profits among the various national subsidiaries.

Financial position

As of 31 March 2013, cash, cash equivalents and securities amounted to €29.76 million and were thus €10.66 million below the corresponding figure at the end of 2012 (€40.42 million). The decline was due to a significant fall in liquid funds, mainly due to the payment behaviour of certain clients, the distribution of bonuses for 2012 and the reduction of payables.

Due to the delayed receipt of payments, trade receivables rose by €7.64 million to €51.85 million as of the reporting date, compared with year-end 2012 (€44.21 million).

As of 31 March 2013, trade payables amounted to €18.05 million – corresponding to a reduction of €1.78 million since the end of 2012 (€19.83 million). Compared to the strong reduction in the previous year, liabilities have remained relatively stable since the beginning of the year.

In comparison to the same period last year, cash flows from operating activities improved to €-9.29 million (prev. year: €-12.59 million). This is mainly due to the much smaller change in trade payables and other liabilities, which amounted to €-0.45 million in the reporting period. In the same period last year, the figure was €-9.91 million. At €-7.72 million, changes in trade receivables were well above the prior-year figure (€-4.25 million). Working capital (the difference between current assets and current liabilities) amounted to €35.62 million as of the quarterly reporting date and was thus slightly down on year-end 2012 (€37.26 million).

At €-2.18 million, cash flows from investing activities were well below the prior-year level (€-0.14 million). This is due to the previously announced purchase of a new administration building in Stuttgart as the company's future head office for a purchase price of €1.9 million. This item also includes smaller investments in tangible assets, including IT procurements.

As of 31 March 2013, cash flows from financing activities amounted to €0.87 million and were thus slightly above the prior-year figure (€0.09 million). This figure concerns the use of short-term credit lines by a foreign subsidiary.

Asset position

The requirements of IAS 19 (revised) were applied for the first time in the financial statements for the first quarter of 2013. As a consequence, actuarial gains and losses must now be recognised in equity without an effect on profit or loss. This necessitates the retroactive adjustment of various balance sheet items as of 31 December 2012. Further details on this topic are provided in the Notes to the Interim Consolidated Financial Statements.

As of 31 March 2013, the balance sheet total of the GFT Group was down slightly by €0.42 million and stood at €132.06 million. At the end of the financial year 2012, the total amounted to €132.48 million.

In terms of asset there was a significant change in current assets and especially in cash and cash equivalents.

Compared to 31 December 2012 (€48.17 million), noncurrent assets were up by €2.37 million to €50.54 million. This was largely due to additions to tangible assets resulting from the purchase of the new administration building.

As of 31 March 2013, current assets were well below their year-end 2012 level (€84.31 million), falling by €2.79 million to €81.52 million. The decline was mainly due to the sharp fall in liquid funds of €10.67 million to €25.24 million. By contrast, trade receivables increased by €7.64 million to €51.85 million.

At the end of the quarter, equity amounted to €79.43 million and was thus €1.19 million above the corresponding figure on the balance sheet date of 31 December 2012 (€78.24 million). The change was mainly due to a reduction in the balance sheet loss from €-3.83 to €-2.68 million. As a consequence of this reduction, the equity ratio also rose from 59% as of 31 December 2012 to 60% at the end of the first quarter 2013.

There was a decline in current liabilities of €1.15 million, mainly as a result of the fall in other provisions amounting to €1.84 million. This was due to the payment of bonuses from the previous year and the resulting reduction in provisions. Trade payables fell by €1.78 million to €18.05 million, compared to €19.83 million as of 31 December 2012. There was an opposing increase in other liabilities of €1.36 million to €9.05 million in total.

There was only a slight change in non-current liabilities during the period under review. As of 31 March 2013, they stood at €6.72 million and were thus down by €0.47 million. This decrease was due to a reclassification of noncurrent to current liabilities due to maturity.

The equity/non-current assets ratio – the yardstick for solid balance sheet structures – fell to 157% at the end of the quarter (year-end 2012: 169%). This ratio expresses the relationship between the balance sheet items »equity« and »non-current assets« and provides information about the company's financial stability.

Group balance sheet structure

Employees

As of 31 March 2013, the GFT Group employed a total of 1,457 people. This corresponds to an increase of 111 persons or 8% compared to the same date last year. The upward trend since late 2012 was thus continued – at year-end there were already 1,386 employees. Headcount is calculated on the basis of full-time staff, whereby parttime staff are included on a pro rata basis.

In the GFT Solutions division, the number of employees rose by 10%: from 1,199 as of 31 March 2012 to 1,313 on 31 March 2013. There was a particularly strong increase in Spain (up 125 persons or 15% to 932 employees). The emagine division employed 95 people. The decrease of 6 persons corresponds to a 6% decline compared to the same date last year. The »Others« category, which comprises staff of the holding company, remained virtually unchanged with an increase of 3 persons (7%) to 49 employees.

As of 31 March 2013, 279 people were employed in Germany (prev. year: 275). The proportion of GFT staff employed outside Germany (1.178 people) amounted to 81% (prev. year: 80%).

Employees by country as of 31 March 2013

	2013	2012
Germany	279	275
Brazil	129	149
France	18	17
UK	34	31
Switzerland	44	49
Spain	932	807
USA	21	18
Total	1,457	1,346

Employees by division as of 31 March 2013

	2013	2012
GFT Solutions	1,313	1,199
emagine	95	101
Others	49	46
Total	1,457	1,346

The number of freelance staff fell year on year by 28 to 913 persons (- 3%).

Research and development

The GFT Group invested a total of €0.40 million in research and development during the reporting period and thus 46% less than in the previous year (€0.74 million). The largest share of this total (€0.32 million or 80%) was accounted for by personnel expenses (prev. year: €0.45 million or 61%). The GFT Group concentrated its R&D efforts on the following strategic initiatives:

At the SAP Competence Centre, experts develop tailored solutions for financial institutes, which help them integrate SAP software into their existing IT platform. One of the key topics in the first quarter of 2013 was the further development of possible uses for in-memory databases based on SAP HANA technology. This technology is integrated into client solutions in order to significantly reduce the computing time for complex simulations, thus enhancing its use in consultation sessions.

GFT's Mobile Finance activities comprise the development of key applications for mobile devices in the financial services sector. In the first quarter, investments were made for example in development and integration services for the field of Mobile Finance in order to design and implement tailored IT solutions and services for the finance sector.

In its internal Applied Technologies Group, GFT pools all R&D activities in the field of applied innovation management. Based on the open innovation approach, the Group initiates and coordinates innovation projects in line with the current solution needs of our clients.

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 reporting date as at 31 March 2013 that are of major significance to GFT.

Opportunity and risk report

In the first three months of 2013, 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 2012. The risk position of the GFT Group is thus largely unchanged.

Forecast report

Macroeconomic development

In its World Economic Outlook published on 16 April 2013, the International Monetary Fund (IMF) downgraded its forecast for global economic growth slightly from 3.5% to 3.3% – its fourth consecutive downgrade. Although the global economy is becoming increasingly stable, Europe is still the main risk for global financial stability following its five rescue packages for member states so far. Experts are also concerned about France's impending slide into recession with an expected fall in economic output of 0.1%. The IMF was still forecasting growth of 0.3% in January.

Although the German economy continues to prove resistant to the eurozone debt crisis with expected growth of 0.6%, the pace of growth is likely to slow compared to last year (0.9%). This weak growth is increasingly restricting the ability of the eurozone's key states to provide help for the more marginal states where required. The IMF forecasts an overall decline in output for the eurozone of 0.3%. Its outlook for the coming year is somewhat more optimistic. The Fund expects the global economy to grow by 4.0% and the eurozone to return to growth of 1.1%. Its experts forecast as much as 1.5% growth in Germany.

Sector development

The industry association BITKOM believes that the hightech industry will continue to be an important driver of the global economy in 2013. According to its latest economic outlook of 4 March 2013, the global market for products and services in the IT and telecommunication sector is expected to grow this year by 5.1% to €2.7 trillion. With a share of 21.8% and expected growth of 0.9%, the EU is still the second-largest ICT market after the USA (26.8% share and 6.5% growth).

With growth of 1.8% to €141.3 billion, BITKOM believes that the German ICT market will easily outpace general economic growth. According to the BITKOM forecast, the IT services business (projects, consulting and outsourcing) will grow by 2.5% to around €36 billion in 2013, following growth of 2.1% in the previous year. Every second IT company states that a lack of skilled staff is the greatest hindrance to market growth. There are currently 43,000 vacancies for IT specialists in Germany. The most important trend topic is still Cloud Computing with revenue growth for business solutions alone of 53% to €4.6 billion this year and expected revenue of €13.7 billion in three years' time. According to the BITKOM, other trend topics closely linked to Cloud Computing – such as Big Data, Mobility, Security and Industry 4.0 – are likely to benefit from this strong growth.

Revenue and earnings forecast

In spite of the eurozone's continuing weakness, the GFT Group is upholding its positive assessment of business prospects for the financial year 2013 – providing there is no serious deterioration of the economic environment due to a further escalation of the debt crisis.

The GFT Solutions division is dedicated to delivering IT solutions for the finance sector and GFT expects further solid growth for this business in 2013. Demand for IT solutions to optimise core banking systems is expected to rise – especially in view of new compliance topics, such as the introduction of a Single Euro Payments Area (SEPA). Further growth is expected to arise from increased competitive pressure on banks, which are being forced to adapt their business models to new technological developments in order to compete with innovative financial service providers and new Internet platforms. GFT therefore expects banks to invest increasingly in new technologies for mobile payments and to use social media for enhanced client retention. In the field of mobile banking, financial institutes face the challenge of protecting their IT systems against rising fraud attempts with the aid of intelligent and user-friendly security solutions. With its many years of experience in the finance sector and a spectrum of services to address such future-oriented topics, the GFT Solutions division is excellently placed to exploit this growth potential. GFT therefore expects growth in this division to outpace the IT Services sector as a whole.

In 2013, the emagine division will drive its realignment as an expert for staffing technology projects with IT and engineering specialists. The division will focus on those growth industries in Germany, France and the UK which are expected to profit most from an economic upturn in the coming years. In the field of IT, emagine will concentrate on future topics and technology trends such as Big Data, Business Intelligence, Social Media, IT Security and Mobile Technologies, in order to tap new growth fields. In the field of

engineering, emagine expects growth to be driven by a rising demand for highly skilled engineers in the field of plant and machine construction, as well as renewable energies. GFT does not expect to be able to fully compensate for revenue losses from the further reduction of its low-margin Third Party Management business in the current financial year. In the first half of the current year, the emagine division will also be burdened by costs for repositioning business under its own brand and for the realignment of its internal structures.

Following the scheduled progress of business in the first quarter, the Executive Board confirms its annual forecast for the GFT Group which was announced on publication of the Annual Report on 28 March 2013. The Executive Board expects the GFT Group to make good progress in 2013. The loss of revenue from the further reduction of low-margin Third Party Management business amounting to around €15 million is to be offset by organic growth in other divisions during the current financial year. As a result of healthy growth prospects for the GFT Solutions division, the Executive Board continues to forecast revenue growth of 3% to €238 million and pre-tax earnings of €12 to €13 million for the GFT Group in 2013. With a more focused profile, the Group aims to achieve profitable and sustainable growth in the coming years. The Executive Board now expects total revenue of around €400 million and an operating pre-tax profit margin of over 6% in 2015. The underlying business plan assumes steady organic growth in combination with targeted acquisitions in both business divisions.

Stuttgart, 7 May 2013

GFT Technologies Aktiengesellschaft

The Executive Board

(Chairman)

Ulrich Dietz Jean-François Bodin Marika Lulay Dr. Jochen Ruetz Executive Board Executive Board Executive Board Executive Board

Consolidated INCOME Statement

for the period from 1 January to 31 March 2013 GFT Technologies Aktiengesellschaft, Stuttgart, IFRS (unaudited)

	1st quarter
€	01/01/– 31/03/2013	01/01/– 31/03/2012 adjusted*
Revenue	55,510,355.98	57,649,528.39
Other operating income	1,007,177.24	984,160.19
	56,517,533.22	58,633,688.58
Costs of purchased services	24,213,275.58	27,469,592.86
Personnel expenses:
a) Salaries and wages	19,514,546.76	19,604,764.24
b) Social security and expenditures for retirement pensions	3,814,834.70	3,624,847.00
	23,329,381.46	23,229,611.24
Depreciation on non-current intangible assets and of tangible assets	355,588.92	370,535.90
Other operating expenses	7,117,157.81	6,425,400.28
Result from operating activities	1,502,129.45	1,138,548.30
Other interest and similar income	94,860.32	131,116.57
Income from participations	0.00	0.00
Profit share from associates	6,497.12	2,949.94
Depreciation on securities	0.00	0.00
Interest and similar expenses	56,123.97	3,084.99
Financial result	45,233.47	130,981.52
Earnings before taxes	1,547,362.92	1,269,529.82
Taxes on income and earnings	404,657.54	643,640.96
Net income	1,142,705.38	625,888.86
Net earnings per share – undiluted	0.04	0.02
Net earnings per share – diluted	0.04	0.02

Consolidated Statement of comprehensive Income

for the period from 1 January to 31 March 2013

GFT Technologies Aktiengesellschaft, Stuttgart, IFRS (unaudited)

	1st quarter
€	01/01/– 31/03/2013	01/01/– 31/03/2012 adjusted*
Net income	1,142,705.38	625,888.86
A.) Components never reclassified to the income statement
Actuarial gains/losses	0.00	-405,555.55
Income taxes on components of other result	0.00	113,555.55
Other (partial) result A.)	0.00	-292,000.00
B.) Components which could be reclassified to the income statement
Financial assets available for sale (securities):
– Change of fair value recognised in equity during the period	498.62	259,727.78
	498.62	259,727.78
Exchange differences on translating foreign operations:
– Profits/losses during the period	48,595.64	42,574.27
	48,595.64	42,574.27
Income taxes on components of other result	-139.62	0.00
Other (partial) result B.)	48,954.64	302,302.05
Other result	48,954.64	10,302.05
Total result	1,191,660.02	636,190.91

Consolidated Balance Sheet

as at 31 March2013

GFT Technologies Aktiengesellschaft, Stuttgart, IFRS (unaudited)

Assets

€	31/03/2013	31/12/2012 adjusted*
Non-current assets
Intangible assets	681,151.97	737,212.65
Goodwill	36,016,229.80	35,949,217.28
Tangible assets	5,168,080.04	3,208,376.73
Securities	3,159,279.07	3,189,680.45
Financial assets, accounted for using the equity method	36,688.44	30,191.32
Other assets	448,548.70	410,502.75
Income tax assets	415,212.93	415,212.93
Deferred tax assets	4,610,160.13	4,231,941.18
	50,535,351.08	48,172,335.29
Current assets
Trade receivables	51,846,302.97	44,206,480.67
Securities	1,355,150.00	1,316,100.00
Current tax assets	674,120.20	918,103.24
Cash and cash equivalents	25,244,632.52	35,911,786.55
Other financial assets	516,357.40	416,363.25
Other assets	1,883,162.03	1,542,577.73
	81,519,725.12	84,311,411.44
	132,055,076.20	132,483,746.73

Shareholders' Equity and Liabilities

€	31/03/2013	31/12/2012 adjusted*
Shareholders´equity
Share capital	26,325,946.00	26,325,946.00
Capital reserve	42,147,782.15	42,147,782.15
Retained earnings	15,243,349.97	15,243,349.97
Changes in equity not affecting net income
Actuarial gains/losses	-1,866,987.43	-1,866,987.43
Foreign currency translations	627,538.74	578,943.10
Reserve of market assessment for securities	-363,463.95	-363,822.95
Consolidated balance sheet loss	-2,684,641.85	-3,827,347.23
	79,429,523.63	78,237,863.61
Liabilities
Non-current liabilities
Provisions for pensions	3,760,447.83	3,663,192.40
Other provisions	2,523,800.79	2,934,677.79
Deferred tax liabilities	437,485.76	593,418.42
	6,721,734.38	7,191,288.61
Current liabilities
Other provisions	16,248,872.51	18,089,885.88
Income tax liabilities	1,350,591.65	752,481.50
Financial liabilities	873,399.08	0.00
Trade payables	18,046,298.02	19,834,818.88
Other financial liabilities	332,215.02	685,418.71
Other liabilities	9,052,441.91	7,691,989.54
	45,903,818.19	47,054,594.51
	132,055,076.20	132,483,746.73

Consolidated Statement of Changes in Equity

as at 31 March 2013

GFT Technologies Aktiengesellschaft, Stuttgart, IFRS (unaudited)

€	Subscribed	Capital	Retained
	Capital	reserve	earnings
			Other
			retained
			earnings
As at 1/1/2012	26,325,946.00	42,147,782.15	12,743,349.95
Retroactive adjustment acc. to IAS 19R
Adjusted amount as at 1/1/2012	26,325,946.00	42,147,782.15	12,743,349.95
Retroactive adjustment acc. to IAS 19R
Total income and expenses for the period 1/1-31/3/2012
As at 31/3/2012	26,325,946.00	42,147,782.15	12,743,349.95
As at 1/1/2013	26,325,946.00	42,147,782.15	15,243,349.97
Total income and expenses for the period 1/1-31/3/2013
As at 31/3/2013	26,325,946.00	42,147,782.15	15,243,349.97
* net income for the period

Total equity	Consolidated balance sheet loss	Other result
		Actuarial	Market	Foreign
		gains/losses	assessment	currency
			for securities	translations
75,615,784.46	-5,713,702.92	0.00	-615,885.24	728,294.52
-698,987.45		-698,987.45
74,916,797.01	-5,713,702.92	-698,987.45	-615,885.24	728,294.52
-292,000.00		-292,000.00
928,190.91	625,888.86*		259,727.78	42,574.27
75,552,987.92	-5,087,814.06	-990,987.45	-356,157.46	770,868.79
78,237,863.61	-3,827,347.23	-1,866,987.43	-363,822.95	578,943.10
1,191,660.02	1,142,705.38*	0.00	359.00	48,595.64
79,429,523.63	-2,684,641.85	-1,866,987.43	-363,463.95	627,538.74

Consolidated Cash Flow Statement

for the period from 1 January to 31 March 2013 GFT Technologies Aktiengesellschaft, Stuttgart (unaudited)

	1st quarter
€	01/01/– 31/03/2013	01/01/– 31/03/2012 adjusted*
Net income	1,142,705.38	625,888.86
Taxes on income and earnings	404,657.54	643,640.96
Interest income	-45,233.47	-130,981.52
Interest paid	-8,827.58	-3,087.38
Income taxes paid	-275,516.55	-21,295.83
Depreciation on non-current intangible and tangible assets	355,588.92	370,535.90
Changes in provisions	-2,198,573.43	463,911.83
Other non-cash expenses/income	156,257.58	-167,300.13
Profit/loss from the disposal of long-term tangible and intangible assets as well as financial assets	11,726.00	689.00
Changes in trade receivables	-7,716,984.41	-4,252,895.79
Changes in other assets	-669,880.83	-217,975.71
Changes in trade liabilities and other liabilities	-445,882.45	-9,905,046.44
Cash flow from operating activities	-9,289,963.30	-12,593,916.26
Cash payments to acquire tangible assets	-2,228,559.88	-233,508.04
Cash payments to acquire non-current intangible assets	-23,904.27	-37,743.21
Interest received	73,998.34	130,106.95
Cash flow from investing activities	-2,178,465.81	-141,144.30
Cash receipts from taking out short-term or long-term loans	873,399.08	91,662.61
Cash flow from financing activities	873,399.08	91,662.61
Effect of exchange rate changes on cash and cash equivalents	-72,124.00	15,438.45
Change in cash funds from cash-relevant transactions	-10,667,154.03	-12,627,959.50
Cash funds at the beginning of the period	35,911,786.55	32,472,593.37
Cash funds at the end of the period	25,244,632.52	19,844,633.87

as at 31 March 2013

GFT Technologies Aktiengesellschaft, Stuttgart, IFRS (unaudited)

1. 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 2012, 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 the changes stated below, the same accounting and valuation methods were used in these Interim Financial Statements as in the last Consolidated Financial Statements as at 31 December 2012. New or amended standards and interpretations to be applied as of the beginning of the financial year 2013 had the following impact on the Interim Financial Statements:

As a result of the initial application of IAS 19 (revised), actuarial gains and losses were recognised in other comprehensive income in accordance with this standard.

Due to retroactive adjustments pursuant to IAS 19R, balance sheet items as of 31 December 2012 changed as follows:

There were actuarial gains and losses from performance-oriented plans of €-2,593 thousand less deferred taxes of €726 thousand. There was a corresponding increase in provisions for pensions of €2,593 thousand to €3,663 thousand. Deferred tax assets rose by €726 thousand to €4,231 thousand. Within the Consolidated Statement of Comprehensive Income, the actuarial gains and losses of the 1st quarter of 2012 were adjusted in other comprehensive income to €-406 thousand less €114 thousand deferred taxes.

Other comprehensive income was disclosed for the first time according to IAS 1.82A. The effects mainly concerned the disclosure of actuarial gains and losses in other comprehen-sive income, which are presented as non-recyclable.

Other new and revised standards to be adopted as of 1 January 2013 (IAS 7 / IFRS 7 / IFRS 13) have no material impact on the Interim Financial Statements.

In financial year 2012, the structure of the cash flow statement was amended in accord-ance with IAS 1.41 in order to improve presentation. The amounts for taxes paid and interest paid and received disclosed in the footnotes of the previous year were integrated into the calculation of the cash flow statement. Moreover, the item »Other changes in equity«, which includes currency translation differences of subsidiaries, was distributed among the changes in assets and liabilities in the reporting period while currency translation differences in cash and cash equivalents were disclosed separately.

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.

The Interim Financial Statements and the Interim Management Report as of 31 March 2013 have neither been audited according to section 317 HGB, nor been reviewed.

2. Changes to the consolidated group and its associated companies ·····························································································································

The following changes to the scope of consolidation have occurred since the Consolidated Financial Statements were closed on 31 December 2012:

On 26 February 2013, GFT Technologies AG, Stuttgart, purchased Neckarsee 283. VV GmbH. On 21 March 2013, the company's name was changed to GFT Beteiligungs-GmbH. Its initial consolidation did not have any major effect on the Group's assets, financial and earnings position.

In the course of the Two Brand Strategy, the following changes to company names were made in January 2013.

• a) emagine GmbH was renamed as emagine TPM GmbH as of 23 January 2013.
• b) GFT Resource Management GmbH was renamed as emagine GmbH as of 13 February 2013.
• c) GFT Flexwork GmbH was renamed as emagine Flexwork GmbH was renamed as of 11 January 2013.
• d) GFT Technologies S.A.R.L. was renamed as emagine S.A.R.L. as of 8 January 2013.

The registered office and purpose of the companies did not change as a result of the name changes.

3. Changes in equity ······························································································································· ······························································································································· ·······

For the changes in equity capital between 1 January 2013 and 31 March 2013, we refer to the Consolidated Statement of Changes in Equity which is disclosed separately.

As of 31 March 2013, 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 2012). These shares are bearer shares and all grant equal rights.

In June 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. No dividends have yet been paid in financial

year 2013. At the Annual General Meeting to be held in May 2013, a proposal will be made to pay a dividend of €0.15 per share, totalling €3,949 thousand, from the balance sheet profit of GFT AG as of 31 December 2012.

There were no changes in Authorised Capital or Conditional Capital in the period 1 January 2013 to 31 March 2013 compared to 31 December 2012. As of 31 March 2013, 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 2013 to 31 March 2013.

4. Segment reporting ······························································································································· ······························································································································· ·····

GFT has identified the two segments GFT Solutions and emagine 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 GFT Solutions segment. The emagine segment focuses on the placement of freelance IT specialists.

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/– 31/03/2013	01/01/– 31/03/2012
Total segment revenue	56,171	58,774
Occasionally occurring revenue	16	3
Elimination of intersegment revenue	-677	-1,127
Group revenue	55,510	57,650
Total segment results (EBT)	2,507	2,488
Non-attributed expenses/income of Group HQ	-629	-2,183
Non-attributed income for elimination of interim results	2	888
Other	-332	77
Group result before taxes	1,548	1,270

€ thsd.	31/03/2013	31/03/2012
Total segment assets	118,747	116,224
Non-attributed assets of Group HQ	110	115
Securities	4,514	7,679
Assets from income taxes	6,062	5,488
Other	2,622	977
Group assets	132,055	130,483
Total segment liabilities	48,552	51,828
Non-attributed liabilities of Group HQ	260	378
Liabilities from income taxes	3,675	2,130
Other	339	979
Group liabilities	52,826	55,315

The reconciliation discloses items which per definition are not components of the segments. Non-attributed items of Group HQ, e.g. from centrally managed issues. Business transactions between the segments are also eliminated in the reconciliation.

Segment report

GFT Technologies Aktiengesellschaft, Stuttgart, IFRS (unaudited)

	GFT Solutions		emagine
€ thsd.	31/03/2013	31/03/2012	31/03/2013	31/03/2012
External sales	32,401	30,490	23,093	27,157
Inter-segment sales	213	0	464	1,127
Total revenues	32,614	30,490	23,557	28,284
Depreciation	-285	-292	-45	-63
Non-cash income/expenditure other than depreciation	-164	5	0	0
Interest income	29	22	0	2
Interest expenses	-30	-40	-4	-5
Share of net profits of associated companies
reported according to the equity method	6	3	0	0
Segment result (EBT)	2,406	1,809	101	679
Segment assets	86,144	80,266	32,603	35,958
Investment in associates reported according to the equity method	37	50	0	0
Investment in non-current intangible and tangible assets	321	240	2	23
Segment liabilities	28,173	27,300	20,179	24,528

Total			Eliminations		Consolidated
31/03/2013	31/03/2012	31/03/2013	31/03/2012	31/03/2013	31/03/2012
55,494	57,647	16	3	55,510	57,650
677	1,127	-677	-1,127	0	0
56,171	58,774	-661	-1,124	55,510	57,650
-330	-355	-26	-16	-356	-371
-164	5	8	162	-156	167
29	24	66	107	95	131
-34	-45	-22	42	-56
6	3	0	0	6
2,507	2,488	-960	-1,218	1,547	1,270
118,747	116,224	13,308	14,259	132,055	130,483
37	50	0	0	37
323	263	1,929	8	2,252
48,352	51,828	4,274	3,487	52,626	55,315

The table below shows information according to geographic regions for the GFT Group:

€ thsd.	Revenue from sales to external clients*	Non-current intangible and tangible assets
	01/01/– 31/03/2013	01/01/– 31/03/2012	31/03/2013	31/03/2012
Germany	18,256	21,426	34,882	33,048
UK	11,796	9,301	26	95
Spain	6,913	6,650	1,220	1,161
France	10,985	9,746	87	108
USA	2,012	2,600	5,222	4,981
Switzerland	2,228	3,446	104	394
Other countries	3,320	4,481	325	276
Total	55,510	57,650	41,866	40,063

* Determined by client location

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

	Revenue		Segments in which this revenue is gener-ated
€ million	01/01/– 31/03/2013	01/01/– 31/03/2012	01/01/– 31/03/2013	01/01/– 31/03/2012
Client 1	20.13	17.97	GFT Solutions, emagine	GFT Solutions, emagine

5. Changes to contingent liabilities ······························································································································· ·····························································································

As of 31 March 2013, there were no significant changes to contingencies and other financial commitments compared to the Consolidated Financial Statements as at 31 December 2012. As at 31 December 2012, there were no contingent receivables.

totalling €1.9 million.

During the period 1 January to 31 March 2013, the GFT Group invested €24 thousand in intangible assets (1 January to 31 March 2012: €60 thousand) and €2,228 thousand in tangible assets (1 January to 31 March 2012: €211 thousand). There were no significant disinvest-

7. Related party disclosures ······························································································································· ··················································································································

Compared to the disclosures made in the Notes to the Consolidated Financial Statements as at 31 December 2012, there were no significant transactions. There were also no changes in the composition of related parties nor in relations with such parties.

8. Events after 31 March 2013 ······························································································································· ············································································································

There have been no significant events with an effect on the Group's assets, financial and earnings position in the period up to 7 May 2013.

Stuttgart, 7 May 2013

GFT Technologies Aktiengesellschaft

The Executive Board

(Chairman)

Ulrich Dietz Jean-François Bodin Marika Lulay Dr. Jochen Ruetz Executive Board Executive Board Executive Board Executive Board

ments in the reporting period. Additions to non-current tangible assets mainly refer to the purchase of an administration building

Germany Financial Calendar 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 T +49 711 62042-440

F +49 711 62042-301

ir@gft.com

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