Earnings Release • Mar 17, 2011
Earnings Release
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Annual Results 2010 Qurius NV – in line with earlier announcement Qurius now in the midst of 3-year restructuring-plan
ZALTBOMMEL, 17 March 2011 - IT solutions provider Qurius NV reports a net result of EUR –7.9 million. This is the result of structural changes in portfolio and management in 2010 and challenging market conditions in most of the operating countries. The company is now in the midst of a fundamental 3-year restructuring plan that was initiated by CEO Leen Zevenbergen who arrived new to the company in January 2010. This plan accounts for the substantial restructuring costs of almost EUR 4,0 million that were made in 2010. During this year Qurius restructured its business in all of its operating countries thus considerably downsizing its cost base. Also part of this restructuring is the appointment of new managing directors in UK and Belgium and the recent announcement of the arrival of a new MD for Qurius' German subsidiary per April 1st, 2011. The company also streamlined its business portfolio by selling its Infor business in Germany, Spain and Italy back to Infor.
The sell off of the Infor-practice was based on Qurius' strategic decision to build its integrated solutions with Microsoft technology platforms at the core. Qurius is differentiating itself by making successful integrations between hard core ERP-systems and the world of CRM, BI, cloud based solutions, web portals and social media. In line with this strategic choices Qurius starts taking in new specialized staff in CRM, BI and AX.
In Q1 2011 the company has won substantial contracts (ERP, CRM, BI and integrated solutions) in all of its geographies. And on February 8th, 2011 Qurius announced the commencement of exclusive talks about a strategic cooperation with Prodware from France, whereby both companies announced that the outcome of these discussions will be presented to the shareholders before beginning of September 2011. Immediately after the announcement a synergy project was started. The first effects of this project are expected in Q2 2011.
"In the course of 2010 we have clearly assessed the situation of Qurius and midyear 2010 we were able to define a clear path towards the future. For the short term this implied further strong adjustments of the cost base and hiring experienced and more entrepreneurial management. New management is now in place in UK, Belgium and as of 1 April 2011 also in Germany.
In the Netherlands we are making clear market focus decisions, while simplifying the organization. For the longer term we have developed a two-stream strategy. This strategy consists of reshaping our ERP-portfolio with state-of-the-art solutions (on premise, hosted and cloud based) while building a strong portfolio with IT-disciplines like CRM, BI, portals and infrastructures.
All together this will make an offering to our customers of a complete interactive environment around solid and integrated ERP-solutions based on Microsoft Dynamics technology platforms (NAV and AX). We will invest in people and quality for 2011 and 2012. In The Netherlands we are actually initiating
a recruitment campaign to hire new professionals in CRM, BI, AX and several other technical disciplines. This is necessary to create our future growth.
During the whole year 2010 Qurius felt the effects from the economic crisis which had a strong negative impact on the investments of medium sized businesses in Western-Europe. Investments in new ERP-sites came almost to a standstill. We delivered growth in some prestigious projects and applications such as BI and CRM. These market developments urged Qurius to further restructure its cost base in all countries, invest in BI (acquisition of Evidanza consultancy in Germany), CRM and cloud services and desinvest its non-strategic Infor business line. Besides this we made changes in senior management in almost all countries.
Qurius has also started to coordinate and invest in its own Product Development, because it has substantial Intellectual Property (IP). For 2011 the company plans to invest at least EUR 2 million in further development of this IP, to strengthen its position in the European mid-market. These steps all fit in the bigger plan towards a healthy and profitable company that was initiated mid 2010. We are now in the midst of the change process that I announced during the annual shareholders meeting in May 2010. This process sets our agenda for the whole of 2011 while we are building up strong local business successes and start picking fruits from our strategic cooperation with Prodware.
The cooperation with Prodware fits our strategy of creating larger international customer bases for Qurius owned Intellectual Property, combined with a substantial group of specialists and a smooth support organization. It is our vision that in the market for medium to larger businesses, implementation and support power will make the difference. Size of scale, a broad technology and competences portfolio combined with vertical market knowledge are the answer to actual market demands. Prodware shares this vision with us as well as our vision to become 100% sustainable in 2014. Cooperation with Prodware furthermore complements our geographical presence, product portfolio and business competences. This certainly leads to a further intensifying our cooperation.
I see 2011 as a year of further investments and preparing Qurius for a healthy and profitable growth. The year 2011 started with substantial ERP- and non-ERP-contracts in Q1 well spread over our geographies."
| (in EUR x 1,000) | 2010 cumulative |
2009 cumulative |
Q4 2010 | Q4 2009 |
|---|---|---|---|---|
| Net sales | 98,465 | 117,201 | 22,812 | 29,672 |
| EBIT (excl. restructuring costs and impairment charges) | -3,080 | 944 | -1,711 | -281 |
| Restructuring costs | -3,793 | -2,157 | -1,632 | -1,249 |
| Impairment charges | 0 | -2,043 | 0 | -2,043 |
| EBIT | -6,873 | -3,256 | -3,343 | -3,573 |
| Net result for the period | -7,922 | -8,983 | -3,821 | -7,143 |
| Earnings per share (in EUR) | -0.07 | -0.09 |
| By category | 2010 | 2009 | Q4 2010 | Q4 2009 | ||
|---|---|---|---|---|---|---|
| (in EUR x 1,000) | cumulative | cumulative | % Change | % Change | ||
| Licenses | 10,873 | 13,042 | -16.6% | 3,431 | 3,544 | -3.2% |
| Maintenance | 16,074 | 19,111 | -15.9% | 3,270 | 4,736 | -31.0% |
| Services | 60,008 | 74,691 | -19.7% | 13,232 | 18,900 | -30.0% |
| Hardware | 11,510 | 10,357 | 11.1% | 2,879 | 2,492 | 15.5% |
| 98,465 | 117,201 | -16.0% | 22,812 | 29,672 | -23.1% |
| By country | 2010 | 2009 | Q4 2010 | Q4 2009 | ||
|---|---|---|---|---|---|---|
| (in EUR x 1,000) | cumulative | cumulative | % Change | % Change | ||
| Germany | 25,425 | 31,179 | -18.5% | 6,007 | 7,856 | -23.5% |
| Netherlands | 49,849 | 58,080 | -14.2% | 11,920 | 14,386 | -17.1% |
| Spain | 12,936 | 14,248 | -9.2% | 2,746 | 3,424 | -19.8% |
| Other | 10,255 | 13,694 | -25.1% | 2,139 | 4,006 | -46.6% |
| 98,465 | 117,201 | -16.0% | 22,812 | 29,672 | -23.1% |
Total revenue decreased in 2010 with an amount of EUR 18.7 million, or 16%. New license revenue was impacted by adverse market conditions in all countries. Most affected was the Netherlands (EUR - 2.4 million). Germany realized an increase in license revenue of EUR 0.8 million. Services revenues show a decrease of EUR 14.7 million, mainly caused by The Netherlands (EUR - 7.0 million) and Germany (EUR - 5.4 million).
| (in EUR x 1,000) | 2010 cumulative | 2009 cumulative | Q4 2010 | Q4 2009 |
|---|---|---|---|---|
| Germany | -754 | -886 | -686 | -1,234 |
| Netherlands | -1,154 | 3,585 | -448 | 1,598 |
| Spain | 554 | -1,247 | -407 | -1,065 |
| Other | -1,726 | -508 | -170 | 420 |
| -3,080 | 944 | -1,711 | -281 |
Excluding non-recurring restructuring costs and impairment charges, the EBIT margin realized in 2010 amounted to EUR - 3.1 million (2009: EUR 0.9 million). In 2011 the effects of restructuring in Q3 and Q4 will positively impact the EBIT.
Restructuring costs impacted EBIT to an amount of EUR 3.8 million (2009: EUR 2.1 million). These costs, which were incurred in operational restructuring in all countries, comprised EUR 2.6 million in one off severance payments for rightsizing the respective operations and management replacements, and EUR 1.2 million for closing offices and other related expenses.
On 31 December 2010, our net debt position (long-term debt minus cash at hand) amounted to EUR 3.9 million (2009: EUR 5.6 million). The total debt to NIBC amounts to EUR 11.6 million at 31 December 2010 (2009: 13.5 million). The performance in 2010 has caused that the company was unable to meet the debt covenants agreed with NIBC. Qurius is in a constructive dialogue with NIBC to resolve this situation.
| FTE as at 31 December | 2010 | 2009 |
|---|---|---|
| Germany | 189 | 198 |
| Netherlands | 342 | 393 |
| Spain | 125 | 148 |
| Other countries | 111 | 143 |
| 767 | 882 |
On 31 December 2010, Qurius employed 767 FTEs (2009: 882 FTEs). The total number of employees decreased throughout 2010. The divestment of Infor business included 60 FTEs.
Qurius will publish its digital 2010 annual report on 14 April 2011 and its first quarter 2011 results on 28 April 2011. The Annual General Meeting of Shareholders will take place on 27 May 2011, at 10.00 a.m. in the Qurius Inspirience Center in Zaltbommel. Under the current practice rules of chartered accountants, the company reports that the annual results have not been audited. Consultations with the auditor give no reason to expect material changes.
Qurius provides IT solutions: design, architecture, infrastructure, implementation and system management of Microsoft-based business and IT solutions. From our head office in Zaltbommel we serve clients throughout Europe, including Belgium, Germany, Austria, The Netherlands, Spain, the United Kingdom and the Czech Republic. In 2010, we openly communicated our objective of achieving 100% sustainable operations by 2014. In this way, we want to become the leading European organisation in sustainable IT. We work with clients and partners who are equally ambitious and have the same sustainability objectives. Qurius has been listed on the Euronext Amsterdam since 1998. For more information visit www.qurius.nl
Suzanne Schaapman, Investor Relations Manager: tel. +31 (0)418 683 500 or [email protected].
Geerd Schlangen, Chief Brand Officer: tel + 31 (0)418 683 500 or [email protected]
| (in EUR x 1,000, except for percentages) | 2010 | 2009 | Change % | Q4 2010 | Q4 2009 | Change % |
|---|---|---|---|---|---|---|
| cumulative | cumulative | |||||
| Net sales | 98,465 | 117,201 | -16.0% | 22,812 | 29,672 | -23.1% |
| Other Income | 2,969 | 0 | 166 | 0 | ||
| Cost of sales | -33,958 | -38,628 | -12.1% | -8,844 | -10,109 | -12.5% |
| Gross margin | 67,476 | 78,573 | -14.1% | 14,134 | 19,563 | -27.8% |
| (as % of net sales) | 68.5% | 67.0% | 62.0% | 65.9% | ||
| Cost of personnel | 56,290 | 62,849 | -10.4% | 11,960 | 14,899 | -19.7% |
| Other operating expenses | 10,746 | 10,426 | 3.1% | 3,070 | 3,376 | -9.1% |
| Operating expenses | -67,036 | -73,275 | -8.5% | -15,030 | -18,275 | -17.8% |
| EBITDA | 440 | 5,298 | -91.7% | -896 | 1,288 | -169.6% |
| (as % of net sales) | 0.4% | 4.5% | -3.9% | 4.3% | ||
| Depreciation and amortization | -3,520 | -4,354 | -19.2% | -815 | -1,569 | -48.1% |
| EBIT (exc. restructuring and impairment charges) (as % of net sales) |
-3,080 -3.1% |
944 0.8% |
-426.3% | -1,711 -7.5% |
-281 -0.9% |
508.9% |
| Restructuring costs | -3,793 | -2,157 | -1,632 | -1,249 | ||
| Amortization of goodwill | 0 | -2,043 | 0 | -2,043 | ||
| EBIT | -6,873 | -3,256 | 111.1% | -3,343 | -3,573 | -6.4% |
| Financial income and expenses | -653 | -2,064 | -68.4% | -209 | -1,179 | -82.3% |
| Result before taxation | -7,526 | -5,320 | 41.5% | -3,552 | -4,752 | -25.3% |
| Taxation | -253 | -1,961 | -87.1% | -126 | -2,119 | -94.1% |
| Income from subsidiaries | 31 | 0 | 31 | 0 | ||
| Result discontinued operations | -174 | -1,702 | -89.8% | -174 | -272 | -36.0% |
| Net result for the period | -7,922 | -8,983 | -11.8% | -3,821 | -7,143 | -46.5% |
| (as % of net sales) | -8.0% | -7.7% | -16.7% | -24.1% | ||
| Third party interest | -36 | -53 | -32.1% | -8 | -48 | -83.3% |
| Net result attributable to shareholders | -7,958 | -9,036 | -11,9% | -3,829 | -7,191 | -46.8% |
| (in EUR x 1,000) | 31-Dec-10 | 31-Dec-09 |
|---|---|---|
| ASSETS Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets |
41,588 4,509 2,712 |
41,874 4,382 3,669 |
| Current assets Receivables Cash and cash equivalents |
48,809 26,377 8,197 |
49,925 35,995 9,591 |
| 34,574 | 45,586 | |
| TOTAL ASSETS | 83,383 | 95,511 |
| EQUITY AND LIABILITIES Group equity Group equity Third-party interests Group equity |
34,488 0 34,488 |
40,661 131 40,792 |
| Provisions | 1,666 | 2,079 |
| Long-term liabilities | 274 | 2,500 |
| Current liabilities | 46,955 | 50,140 |
| TOTAL EQUITY AND LIABILITIES | 83,383 | 95,511 |
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