Earnings Release • May 12, 2009
Earnings Release
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Report on the 1st Quarter of 2009
| Earnings Data | 1-3/2009 | 1-3/2008 | Chg. in % | Ultimo 2008 | |
|---|---|---|---|---|---|
| Revenues | in € million | 22.29 | 25.33 | -12 | 106.21 |
| EBITDA | in € million | 1.05 | 1.62 | -35 | 7.79 |
| EBIT | in € million | 0.11 | 0.61 | -82 | 3.83 |
| Profi t before tax | in € million | -0.04 | 0.44 | >100 | 2.38 |
| Profi t after tax | in € million | -0.33 | 0.16 | >100 | -2.10 |
| Earnings per share | in € | -0.02 | 0.01 | >100 | -0.14 |
| Adjusted earnings per share 1) | in € | -0.01 | 0.01 | >100 | 0.09 |
| Capital expenditure | in € million | 0.62 | 0.66 | -7 | 2.45 |
| Acquisitions | in € million | 0 | 0 | - | 2.22 |
| Employees 2) | 1,074 | 1,107 | -3 | 1,153 |
| Balance Sheet Data | 31.3.2009 | 31.12.2008 | Chg. in % | |
|---|---|---|---|---|
| Equity | in € million | 23.79 | 24.15 | -1 |
| Net debt | in € million | 6.45 | 4.89 | +32 |
| Capital employed | in € million | 30.06 | 28.86 | +4 |
| Working capital 3) | in € million | 7.17 | 5.62 | +28 |
| Balance sheet total | in € million | 61.22 | 66.31 | -8 |
| Equity ratio | % | 39 | 36 | - |
| Gearing | % | 27 | 20 | - |
| Stock Exchange Data 4) | 1-3/2009 | 1-12/2008 | Chg. in % | |
|---|---|---|---|---|
| Share price high | in € | 2.19 | 2.58 | -15 |
| Share price low | in € | 1.02 | 1.01 | +1 |
| Closing rate (ultimo) | in € | 1.53 | 1.89 | -19 |
| Shares outstanding (weighted) | 1,000 | 15,387 | 15,387 | 0 |
| Market capitalization (ultimo) | in € million | 23.54 | 29.08 | -19 |
| Segments 5) 1-3/2009 in € million |
Germany | Central East Europe | South West Europe | North Europe | Holding and Other | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | 10.55 | (-10%) | 3.02 | (-17%) | 6.49 | (-7%) | 2.23 | (-24%) | 0 | - |
| EBITDA | 0.79 | (-22%) | -0.13 | (>100) | 0.66 | (-8%) | 0.22 | (-55%) | -0.48 | (+43%) |
| EBIT | 0.52 | (-14%) | -0.40 | (>100) | 0.46 | (-17%) | 0.02 | (-93%) | -0.50 | (+42%) |
| Capital expenditure | 0.24 | (+25%) | 0.05 | (+23%) | 0.17 | (-37%) | 0.13 | (-3%) | 0.02 | (-8%) |
| Employees 2) | 452 | (+8%) | 158 | (-12%) | 370 | (-9%) | 84 | (-9%) | 10 | (0%) |
1) Adjusted for non-recurring income and expense
2) Average number of employees during the period
3) Current assets excl. cash minus current liabilities excl. financial liabilities and minus current provisions for earn-out payments
4) Vienna Stock Exchange
5) Due to the first-time availment of IFRS 8 the reporting of segment earnings (EBITDA and EBIT) is carried out without taking into account the settlement costs for brand licensing costs and intercompany charges; the 2008 figures were correspondingly adjusted
4 North Europe 10%
2 Business Solutions 24%
Günter Pridt, CEO of BRAIN FORCE HOLDING AG
Dear shareholders,
Following the record results achieved in 2008, BRAIN FORCE was well prepared when it entered the 2009 fi nancial year, which, as expected, has been diffi cult. But we are also not immune to the negative effects of the global fi nancial and economic crisis. Accordingly, we posted a decline in revenues and earnings in the fi rst three months of 2009. Nevertheless, we began to take measures to counteract the signifi cantly deteriorating market environment at an early stage, based on the optimization of our cost structure and the consistent exploitation of cost savings potentials.
Group revenues were down 12% in the fi rst quarter to € 22.29 million. EBITDA amounted to € 1.05 million, a decline of 35% from the previous year, and EBIT fell from € 0.61 to 0.11 million. The operating result of the fi rst three months includes restructuring costs of € 0.15 million. All subsidiaries were subject to the revenue and earnings decrease, which can be attributed to the reluctance on the part of our customers to initiate new IT investments at the current time.
The Professional Services area weakened slightly in Germany, featuring a negative development in demand for IT experts following a good performance in 2008. In addition, Professional Services and the Business Solutions area, intensively involved in further developing FINAS Suite, were faced with a considerable downward pressure on margins. In the Infrastructure Optimization area, the Berlin branch once again posted a negative operating result. In addition, it is important to note the lack of a revenue and earnings contribution from BRAIN FORCE Hamburg GmbH, which was sold to the Talanx Group as of September 30, 2008 following expiration of the Managed Services contract. In contrast, our subsidiary in Frankfurt developed very positively, operating at full capacity and once again achieving a signifi cant growth in revenues and EBIT due to the roll-out project for a globally operating airline. In the light of the particularly diffi cult economic situation in Germany, the 14% EBIT decline in Germany to € 0.52 million stayed in a reasonable range.
In South West Europe, BRAIN FORCE Italy was confronted with a perceptible decline in demand for ERP and CRM licenses as well as lower IT infrastructure investments. Within this context, the operating result was still relatively good, decreasing by 17% to € 0.46 million. However, we had to report a signifi cant drop in revenue and earnings in the Central East Europe and North Europe regions. In the Central East Europe
Consistent use of cost savings potentials
Positive EBIT despite of restructuring costs
Moderate decline of EBIT in Germany
Noticeable downturn in the first quarter
segment, the BRAIN FORCE subsidiary in the Czech Republic and the Professional Services business in Austria developed satisfactorily, whereas the Infrastructure Optimization (SolveDirect) area faced a signifi cant slump in license sales, thus posting a negative operating result. Accordingly, EBIT in Central East Europe was down from € -0.02 to -0.40 million. Following very good results generated in 2008, North Europe was also subject to a signifi cant weakening of demand. Nevertheless, despite a 24% drop in revenues, our subsidiary in the Netherlands still managed to generate a slightly positive EBIT of € 0.02 million, down from an EBIT of € 0.32 million in the fi rst quarter of the preceding year.
Restructuring measures depend on further revenue development
In expectation of a diffi cult market environment, we initiated measures at an early stage to guide the company relatively unscathed through the recessionary year 2009. This includes a series of consistently implemented measures to cut current operating costs, as well as the transfer of the corporate headquarters in Austria to a much cheaper location. Beside that we are able to partially compensate for revenue declines by means of ongoing capacity adjustments with subcontractors. In addition, we created a group-wide cash pooling system for purposes of internal liquidity balancing, and also launched a project designed to optimize working capital within the BRAIN FORCE group. Together with our local managing directors, we developed scenarios featuring short-time work and potentially a downsizing of staff, depending on the further development of revenues in the course of 2009. From today's perspective, total restructuring costs ranging between € 0.7 and 2.5 million will be required in the second and third quarters of the 2009 fi nancial year.
Focus on improving cost structure and optimizing cash flow in 2009
I confi dently look ahead to the future thanks to the restructuring and optimization of the group already implemented in 2007 and 2008, even if we will have to continue adjusting to a diffi cult market environment in the next quarters. BRAIN FORCE boasts a solid balance sheet structure and has no foreseeable fi nancing shortfalls at the present time. For this reason, our target continues to be the achievement of a positive operating result in 2009 (excluding restructuring costs), and to position the Group to generate long-term growth after the end of the economic crisis. In the current year, we will sustainably improve the cost structure of the BRAIN FORCE Group, and focus on optimizing the cash fl ow from operating activities. Based on the development of tailor made solutions, we will assist our customers to optimally take advantage of their IT resources.
Yours
In the fi rst three months of the fi nancial year 2009, the BRAIN FORCE Group generated revenues of € 22.29 million, down 12% from the previous year. All operating companies posted a decline in revenues, which is related to the restraint shown by companies in respect to new IT investments, a development which has been evident since the beginning of 2009.
In Germany, customer demand for IT experts weakened in comparison to the good situation in the prior year. Moreover, Professional Services and the Business Solutions area, which was intensively involved in further developing FINAS Suite, were impacted by a signifi cant downward pressure on margins. The Berlin branch of the Infrastructure Optimization area once again posted a negative operating result. In addition, there was no contribution from BRAIN FORCE Hamburg GmbH, which was sold to the Talanx Group effective September 30, 2008, following expiration of the Managed Services contract. In contrast, business at the Frankfurt offi ce developed very positively, operating at full capacity and generating a considerable improvement in revenues and EBIT again. On balance, revenues in Germany fell by 10% to € 10.55 million, whereas EBIT was down 14% to € 0.52 million.
In the South West Europe region, revenues declined by 7% to € 6.49 million, and EBIT decreased 17% to € 0.46 million. BRAIN FORCE Italy was confronted with a perceptible downturn in demand for ERP and CRM licenses as well as lower IT infrastructure investments. Revenues and earnings fell even more drastically in the North Europe and Central East Europe regions. In the Central East Europe segment, the BRAIN FORCE subsidiary in the Czech Republic performed well and the Professional Services area in Austria developed satisfactorily. However, the Infrastructure Optimization area (SolveDirect) faced a signifi cant decrease in revenues due to missing license sales, generating a clearly negative operating result. Accordingly, EBIT in Central East Europe declined from € -0.02 to -0.40 million. Following a very good year 2008, North Europe was also subject to a signifi cant weakening of demand. Nevertheless, despite a 24% drop in revenues, the BRAIN FORCE subsidiary in the Netherlands still managed to generate a slightly positive EBIT of € 0.02 million in the fi rst quarter of 2009 (previous year: € 0.32 million).
Group EBITDA fell by 35% during the period under review to € 1.05 million, whereas total Group EBIT was down from € 0.61 to 0.11 million in the fi rst three months of 2009. The primary reason for this development was the lower proceeds from license sales, which usually make an important contribution to earnings. The fi rst quarter operating result also includes restructuring costs of € 0.15 million. Due to the optimization of internal fi nancing processes, the fi nancial result improved slightly from € -0.17 to -0.15 million. As a result, profi t before tax in the fi rst quarter of the fi nancial year 2009 amounted to € -0.04 million, down from € +0.44 million. Profi t after tax totaled € -0.33 million, down from € +0.16 million in the previous year. This corresponds to earnings per share of € -0.02 (previous year: € +0.01). Earnings per share adjusted for restructuring costs amounted to € -0.01 per share, compared to € +0.01 per share in the previous year.
Despite the revenue decline and the negative profi t after tax, the gross cash fl ow in the fi rst quarter of 2009 remained clearly positive, at € 0.97 million (previous year: € 1.53 million). The cash fl ow from operating activities fell from € -0.16 to -0.98 million. On the one hand, the cash outfl ow relating to trade payables was largely compensated by the cash infl ow from trade receivables. The lower level of trade payables was the consequence of a reduction in the number of subcontractors and the overall decline in trade receivables resulting from lower revenues and efforts made to optimize working capital. On the other hand, other current liabilities decreased signifi cantly, which can be attributed to the lower sales tax payable arising as a result of the revenue decline as well as bonus payments for the record operating result achieved in 2008.
Decline of profit after tax in Q1 from € +0.16 to -0.33 million
Gross cash flow clearly positive
Reduction of current financial liabilities
The cash fl ow from investing activities amounted to € -1.77 million (previous year: € -1.52 million), of which € -0.62 million relate to capital expenditure and € -1.18 million for investments in available-for-sale securities. The cash fl ow from fi nancing activities totaled € -2.21 million (previous year: € -0.13 million), refl ecting the successful reduction of current fi nancial liabilities through means of cash pooling. Scheduled repayment of fi nancial liabilities was not planned in the fi rst quarter of 2009. Of the non-current fi nancial liabilities amounting to € 10.98 million, a total of € 1.0 million is due for payment between 2010 and 2012, with € 9.9 million fi rst maturing in the year 2014. At the end of the fi rst quarter 2009, cash and cash equivalents were € 3.84 million. Including the current available-for-sale securities, BRAIN FORCE has a total of € 5.03 million in liquid assets at its disposal.
The balance sheet total of the BRAIN FORCE Group was € 61.22 million as at March 31, 2009, and equity amounted to € 23.79 million. Accordingly, the equity ratio improved to 39% after 36% at the end of 2008, which can be attributed to the further reduction of the balance sheet total. Net debt as at March 31, 2009 was € 6.45 million, up from € 4.89 million as at December 31, 2008. This increase is related to capital expenditures in property, plant and equipment and intangible assets as well as the reduction in other current liabilities, which correspondingly led to a decrease in the cash fl ow from operating activities. Gearing (net debt to equity) in the BRAIN FORCE Group amounted to a solid 27% as at March 31, 2009, and the ratio of net debt to EBITDA was 0.9x calculated over the last 12 months.
The business activities of BRAIN FORCE are subdivided into the following segments:
4 North Europe 10%
Revenues by Segments Revenues by Business Areas
| 31.3.2009 | |
|---|---|
| 23.79 | |
| 31.12.2008 |
24.15
In the fi rst quarter of 2009, sales in Germany declined 10% to € 10.55 million, representing 47% of total Group revenues. EBITDA fell by 22% to € 0.79 million, whereas EBIT declined by 14% to € 0.52 million.
The generation of new business in the Professional Services area was signifi cantly hampered by the decision on the part of customers to postpone their IT investments and reduce outsourcing to external service providers. Moreover, downward pressure on margins has increased. BRAIN FORCE deployed additional IT consultants to a large existing customer in the cell phone industry, and won new service contracts on behalf of a long-term customer in the banking sector. The Infrastructure Optimization area obtained a larger contract from the public sector for the network solution Net Organizer, and also sold upgrade versions of BRAIN FORCE ICT Suite to several customers. However, on balance this business area posted a negative operating result.
The marketing of Packaging Robot developed by our Dutch subsidiary proceeded positively in Germany. Initial customer projects were successively launched, which are designed to lead to follow-up contracts. Thanks to the economic stability in the insurance sector, the Business Solutions area did relatively well under the circumstances. A long-term existing customer placed several new orders. Moreover, the new marketing approach for calculation kernel aroused considerable interest, leading several customers to order licenses designed to manage their consultant applications. However, the further development of FINAS Suite in the fi rst quarter resulted in higher development expenses and pressure on margins.
In the Central East Europe region, revenues amounted to € 3.02 million in the fi rst quarter of 2009, a decline of 17% from the previous year, and equaling a share of 14% of Group revenues. EBITDA totaled € -0.13 million during the period under review, down from € +0.25 million in the preceding year, whereas EBIT worsened from € -0.02 to -0.40 million.
The Professional Services area in Austria performed quite well. In addition to numerous existing customers, BRAIN FORCE experts worked for a technology company for the fi rst time, implementing an IT infrastructure project. In addition, two new public sector customers decided to reply on BRAIN FORCE's expertise. In contrast, the diffi cult business environment took its toll on SolveDirect. Numerous customers delayed planned license purchases, thus leading to a considerable decline in revenues. However, the subsidiary in the Czech Republic managed to win several new customers, and meet the budgeted earnings targets.
Revenues achieved by the Region South West Europe fell by 7% to € 6.49 million in the fi rst three months of 2009, accounting for 29% of total Group revenues. Within the same period, EBITDA was down 8% to € 0.66 million, and EBIT decreased 17% to € 0.46 million.
In such a tense economic environment prevailing in Italy, sales of ERP and CRM licenses have become more diffi cult, and customers are displaying greater reluctance to initiate new IT infrastructure investments. Nevertheless, BRAIN FORCE Italy managed to expand its good position in the fi nancial services sector. An important bank will rely on ERP solutions provided by BRAIN FORCE in the future. In the Infrastructure Optimization area, BRAIN FORCE attracted a Milan-based transport company as a new customer, and also won a new contract from the Italian branch offi ce of a large Swiss bank.
The North Europe region generated revenues of € 2.23 million in the reporting period, down 24% from the previous year, and accounts for 10% of Group revenues. Within the same period, EBITDA amounted to € 0.22 million (previous year: € 0.48 million), and EBIT was at € 0.2 million (previous year: € 0.32 million).
The business model of BRAIN FORCE Netherlands strongly focuses on attracting new customers, who are very restrained in respect to investments at the current time. Nevertheless, several new customers could be acquired, who will make use of the Packaging Robot, Workspace Manager and ID-Suite solutions in the Difficult business for new customers, but existing customers are loyal
Marketing of Packaging Robot in Germany had a promising start
Earnings decline in Central East Europe based on downturn of SolveDirect license sales
Large Italian bank to rely on ERP solutions supplied by BRAIN FORCE in the future
Expansion of market position in the public sector
future. Our subsidiary in the Netherlands once again demonstrated its strong position in the public sector, adding four new companies to its customer base. Software licenses were sold, amongst others, to an international manufacturer of baby carriages as well as an IT services provider.
Cost optimization leads to earnings improvement
The EBITDA relating to the Holding and Other segment improved signifi cantly, rising from € -0.83 to -0.48 million, and the EBIT from € -0.85 to -0.50 million. This positive development is based on strict cost savings measures carried out in the holding company, and the relocation of corporate headquarters to a new offi ce building with considerably lower rental costs.
Expected decline of order intake
As of March 31, 2009, the order volume at the Group level amounted to € 30.05 million, up 3% over the prior year's level of € 29.10 million. However, in comparison to the situation at December 31, 2008, the order volume fell by 8%, as expected.
As of March 31, 2009, the order volumes are attributable to the segments as follows:
4 North Europe 6%
In the fi rst quarter of 2009, BRAIN FORCE Germany further developed the modules Finanzanalyse Center (Financial Analysis Center), Risikoabsicherung (Risk Management) and Gesundheitsvorsorge (Health Care) for an HTML link, thus establishing the basis for the online capability of the system. Accordingly, fi nancial service consultants now have the opportunity to access all relevant customer data online and on location, which in turn improves the quality of consultations and increases customer satisfaction.
In the Netherlands, our subsidiary continued the ongoing further development of Packaging Robot, Workspace Manager, Infrastructure Framework and BRAIN FORCE ID-Suite. Moreover, the expanded demands on MSI packet assembling were put into practice, leading to a corresponding tailoring of the application interfaces to the new conditions. In Austria, SolveDirect started with the development of SD Release 2.5 in the fi rst quarter, which is scheduled to be marketed in May.
The total number of people working for the BRAIN FORCE Group as at March 31, 2009 amounted to 798 salaried employees, a decline of about 5% compared to the previous year. In addition, BRAIN FORCE employed 271 people on a freelance basis for various customer projects, a fi gure which is 3% lower than in 2008. Initial personnel adjustments had to be implemented due to the economic crisis and the accompanying drop in revenues, in particular in the South West Europe and North Europe regions. In Germany, the contracts with several free lance employees were not extended. All in all, the BRAIN FORCE Group employed 1,069 people as of March 31, 2009, a drop of 4%, or 46 people, from the comparable level of 2008.
The breakdown of staff (salaried and free-lance) by region as at March 31, 2009 is as follows:
On average, the staff of BRAIN FORCE was comprised of 806 salaried employees in the fi rst quarter of 2009 (previous year: 835) and 268 people on a free lance basis (previous year: 272). On balance, the average number of employees in the BRAIN FORCE Group declined by 3% to 1,074 people in the fi rst three months of 2009. This compares to the total headcount of 1,107 people in the preceding year.
Online link of BRAIN FORCE Financial Analysis Center
Ongoing adjustments of our solutions to market requirements
Restructuring measures of personnel resources
Average number of employees is 1,074 people
| Income Statement in EUR | 1-3/2009 | 1-3/2008 |
|---|---|---|
| Revenues | 22,289,705 | 25,334,305 |
| Cost of sales | -17,427,924 | -18,861,789 |
| Gross profit | 4,861,781 | 6,472,516 |
| Selling expenses | -2,513,562 | -2,821,206 |
| Administrative expenses | -2,415,177 | -2,845,495 |
| Other operating expenses | -159,155 | -286,935 |
| Other operating income | 334,399 | 90,215 |
| Operating profit (EBIT) | 108,286 | 609,095 |
| Financial income | 57,365 | 147,713 |
| Financial costs | -206,322 | -319,476 |
| Financial result | -148,957 | -171,763 |
| Profit before tax | -40,671 | 437,332 |
| Income taxes | -287,964 | -278,203 |
| Profit after tax | -328,635 | 159,129 |
| Result for the period attributable to Equity holders of the parent company | -328,635 | 159,129 |
| Earnings per share | -0.02 | 0.01 |
| Segment Reporting 1-3/2009 in EUR |
Germany | Central East Europe |
South West Europe |
North Europe | Holding and Other |
BRAIN FORCE Group |
|---|---|---|---|---|---|---|
| Revenues (consolidated) | 10,547,263 | 3,022,106 | 6,494,943 | 2,225,393 | 0 | 22,289,705 |
| EBITDA | 790,181 | -134,637 | 655,236 | 215,321 | -477,562 | 1,048,539 |
| Depreciation and amortization | -270,618 | -261,255 | -194,227 | -194,308 | -19,845 | -940,253 |
| EBIT | 519,563 | -395,891 | 461,009 | 21,013 | -497,408 | 108,286 |
| Capital expenditure | 242,320 | 49,365 | 171,223 | 134,941 | 17,704 | 615,553 |
| Segment assets | 17,980,863 | 16,299,625 | 18,113,727 | 8,449,847 | 380,886 | 61,224,948 |
| Segment liabilities | 6,944,874 | 3,687,647 | 10,109,298 | 1,559,566 | 15,134,165 | 37,435,550 |
| Segment Reporting 1-3/2008 in EUR |
Germany | Central East Europe |
South West Europe |
North Europe | Holding and Other |
BRAIN FORCE Group |
|---|---|---|---|---|---|---|
| Revenues (consolidated) | 11,765,258 | 3,662,875 | 6,990,313 | 2,915,859 | 0 | 25,334,305 |
| EBITDA | 1,010,456 | 249,952 | 713,256 | 483,015 | -832,124 | 1,624,555 |
| Depreciation and amortization | -407,361 | -268,175 | -154,653 | -165,234 | -20,037 | -1,015,460 |
| EBIT | 603,095 | -18,223 | 558,603 | 317,781 | -852,161 | 609,095 |
| Capital expenditure | 193,644 | 40,097 | 272,446 | 139,537 | 19,198 | 664,922 |
| Segment assets | 21,143,699 | 18,845,381 | 19,043,731 | 9,099,596 | 6,083,807 | 74,216,214 |
| Segment liabilities | 7,836,810 | 4,123,746 | 13,510,880 | 1,782,268 | 20,529,876 | 47,783,580 |
| Balance Sheet in EUR | 31.3.2009 | 31.12.2008 |
|---|---|---|
| ASSETS | ||
| Property, plant and equipment | 2,420,290 | 2,493,383 |
| Goodwill | 14,516,571 | 14,516,571 |
| Other intangible assets | 11,053,525 | 11,328,281 |
| Investments in associates | 11,466 | 11,466 |
| Financial assets | 184,619 | 183,128 |
| Other receivables and assets | 107,499 | 101,712 |
| Deferred tax assets | 12,179 | 50,723 |
| Non-current assets | 28,306,149 | 28,685,264 |
| Inventories | 259,802 | 185,787 |
| Trade receivables | 25,662,128 | 26,898,432 |
| Other receivables and assets | 1,966,704 | 1,741,880 |
| Financial assets | 1,192,573 | 0 |
| Cash and cash equivalents | 3,837,592 | 8,799,244 |
| Current assets | 32,918,799 | 37,625,343 |
| Total assets | 61,224,948 | 66,310,607 |
| EQUITY AND LIABILITIES | ||
| Equity attributable to Equity holders of the parent company | ||
| Share capital | 15,386,742 | 15,386,742 |
| Reserves | 15,214,013 | 15,245,099 |
| Retained earnings | -6,811,358 | -6,482,723 |
| Equity | 23,789,397 | 24,149,118 |
| Financial liabilities | 10,978,227 | 10,975,548 |
| Other liabilities | 141,374 | 144,891 |
| Provisions for post-employment benefits | 2,211,927 | 2,271,221 |
| Deferred tax liabilities | 2,645,038 | 2,613,772 |
| Non-current liabilities | 15,976,566 | 16,005,432 |
| Financial liabilities | 498,659 | 2,713,156 |
| Trade payables | 6,943,829 | 8,340,473 |
| Other liabilities | 12,208,649 | 13,105,463 |
| Income tax provisions | 1,078,512 | 824,561 |
| Other provisions | 729,336 | 1,172,404 |
| Current liabilities | 21,458,985 | 26,156,057 |
| Total equity and liabilities | 61,224,948 | 66,310,607 |
| Changes in Equity in EUR | Share capital | Share premium | Other reserves | Retained earnings | Total equity |
|---|---|---|---|---|---|
| Balance on 1.1.2009 | 15,386,742 | 15,536,020 | -290,921 | -6,482,723 | 24,149,118 |
| Fair value adjustments of securities | 0 | 0 | 1,491 | 0 | 1,491 |
| Currency translation differences | 0 | 0 | -32,577 | 0 | -32,577 |
| Profit after tax | 0 | 0 | 0 | -328,635 | -328,635 |
| Balance on 31.3.2009 | 15,386,742 | 15,536,020 | -322,007 | -6,811,358 | 23,789,397 |
| Cash Flow Statement in EUR | 1-3/2009 | 1-3/2008 |
|---|---|---|
| Profit before tax | -40,671 | 437,332 |
| Depreciation / amortization | 940,253 | 1,015,461 |
| Financial result | 148,957 | 171,763 |
| Gains/losses from the disposal of property, plant and equipment and intangible assets | -633 | 4,799 |
| Changes in non-current provisions and liabilities | -62,811 | 54,307 |
| Net interest paid | -52,188 | -131,409 |
| Income taxes paid | 34,485 | -19,153 |
| Gross cash flow | 967,392 | 1,533,100 |
| Changes in inventories | -74,015 | 107,332 |
| Changes in trade receivables | 1,236,304 | -1,118,685 |
| Changes in trade payables | -1,396,644 | -565,441 |
| Changes in other current assets and liabilities | -1,665,950 | -112,303 |
| Currency translation differences | -42,684 | -4,518 |
| Cash flow from operating activities | -975,597 | -160,515 |
| Acquisition of subsidiaries | 0 | 0 |
| Investments in property, plant and equipment and other intangible assets | -615,553 | -664,922 |
| Investments in financial assets | -1,182,459 | -862,556 |
| Sale of property, plant and equipment and other intangible assets | 23,775 | 9,698 |
| Cash flow from investing activities | -1,774,237 | -1,517,780 |
| Increase in financial liabilities | 169,168 | 2,103,339 |
| Repayment of financial liabilities | -2,380,986 | -2,230,833 |
| Dividends paid | 0 | 0 |
| Capital increase | 0 | 0 |
| Purchase of treasury stock | 0 | 0 |
| Cash flow from financing activities | -2,211,818 | -127,494 |
| Change in cash and cash equivalents | -4,961,652 | -1,805,789 |
| Cash and cash equivalents at the beginning of the period | 8,799,244 | 9,440,943 |
| Change in cash and cash equivalents | -4,961,652 | -1,805,789 |
| Cash and cash equivalents at the end of the period | 3,837,592 | 7,635,154 |
This interim report of BRAIN FORCE HOLDING AG as at March 31, 2009 has been prepared in accordance with the principles contained in the International Financial Reporting Standards (IFRS), as stipulated in IAS 34, "Interim Financial Reporting".
The accounting and measurement principles applied in preparing the consolidated fi nancial statements as at December 31, 2008 remain unchanged. The structuring of the balance sheet, income statement and cash fl ow statement correspond to that in the consolidated fi nancial statements for the 2008 fi nancial year. The presentation of the statement of changes in equity applies to the period January 1, 2009 to March 31, 2009. IFRS 8 "Operating Segments" was applied for the fi rst time as of the beginning of the 2009 fi nancial year.
For more information on accounting and measurement principles, we refer to the annual report and the consolidated fi nancial statements as at December 31, 2008.
All subsidiaries, including those companies in which BRAIN FORCE HOLDING AG directly or indirectly holds more than half of the voting rights or over which BRAIN FORCE exerts a controlling infl uence are included in the consolidated fi nancial statements.
The consolidated group remains unchanged since the balance sheet date as at December 31, 2008. BRAIN FORCE Hamburg GmbH, Munich, Germany was still included in consolidation in the comparable period of January 1, 2008 to March 31, 2008. The contribution of BRAIN FORCE Hamburg to Group revenues amounted to € 0.76 million, generating an EBITDA of € 0.25 million. The shares in BRAIN FORCE Hamburg GmbH were sold at the closing date of the transaction effective September 30, 2008.
Group revenues fell to € 22.29 million, a decline of 12% from the comparable period of the previous year. EBITDA (operating result before depreciation) in the fi rst quarter of 2009 was down from € 1.62 to 1.05 million, whereas EBIT (operating result) totaled € 0.11 million (previous year: € 0.61 million). First quarter earnings were burdened by restructuring costs of € 0.15 million.
In accordance with the management approach contained in the stipulations of IFRS 8, "Operating Segments", BRAIN FORCE HOLDING AG reports according to geographic segments. The reporting of segment earnings (EBITDA and EBIT) is carried out for the fi rst time without taking into account the settlement costs for brand licensing costs and intercompany charges. These costs were still included in the previous year's segment reporting. The 2008 fi gures were correspondingly adjusted in the current reporting. Segment reporting can be found on page 4.
In the fi rst quarter of 2009, gross cash fl ow amounted to € 0.97 million, which represents a decrease of € 0.56 in a year-on-year comparison. The cash fl ow from operating activities was down from € -0.16 to -0.98 million, which is primarily related to the reduction of other liabilities. The cash fl ow from investing activities totaled € -1.77 million, of which € -0.62 million was related to capital expenditure for property, plant and equipment and other intangible assets, and € -1.18 million for investments in available-for-sale securities. The cash fl ow from fi nancing activities totaled € -2.21 million (previous year: € -0.13 million), refl ecting the reduction of current fi nancial liabilities.
Non-current assets made up 46% of total assets, amounting to € 28.31 million as of March 31, 2009. Investments in property, plant and equipment and other intangible assets totaled € 0.62 million in the reporting period, of which € 0.43 million comprised product development costs.
Current assets comprised 54% of total assets on the reporting date of March 31, 2009. Trade receivables amounted to € 25.66 million and comprised 42% of total assets. Working capital was € 7.17 million on the reporting date, a rise of € 1.55 million compared to the last balance sheet date of December 31, 2008. In contrast to the reporting for the consolidated fi nancial statements as of December 31, 2008, working capital as of 2009 does not include current provisions for earn-out payments.
On the reporting date of March 31, 2009, cash and cash equivalents totaled € 3.84 million. Including fi nancial assets, the currently available liquid assets reached a level of € 5.03 million. Net debt increased by € 1.56 million from December 31, 2008 to € 6.45 million. IFRS-based equity in the BRAIN FORCE Group was € 23.79 million, corresponding to an equity ratio of 39%.
As of March 31, 2009, the number of outstanding shares was 15,386,742. Authorized capital amounted to € 7,693,371.
No signifi cant business transactions were concluded with related companies or individuals during the period under review.
The Management Board of BRAIN FORCE HOLDING AG certifi es, to the best of its knowledge, that the unaudited consolidated interim fi nancial statements as at March 31, 2009, have been prepared in accordance with the International Financial Reporting Standards (IFRS), and give a true and fair view of the assets, liabilities, fi nancial position and profi t or loss of the BRAIN FORCE Group as at March 31, 2009.
Vienna, May 12, 2009
The Management Board
Günter Pridt Thomas Melzer
| Date | Event |
|---|---|
| May 12, 2009 | Report on the first quarter of 2009 |
| May 14, 2009 | 11th Annual General Meeting |
| May 18, 2009 | Ex-dividend day 2008 |
| May 19, 2009 | 1st dividend payment day for 2008 |
| August 21, 2009 | Six months 2009 report |
| November 10, 2009 | Report on the first three quarters of 2009 |
| Investor Relations: | Thomas Melzer |
|---|---|
| Telephone: | +43 1 263 09 09 12 |
| E-Mail: | [email protected] |
| Internet: | www.brainforce.com |
| Vienna Stock Exchange: BFC | |
| Reuters: | BFC.VI |
| Bloomberg: | BFC AV |
| Datastream: | O:BFS |
| ISIN: | AT0000820659 |
Telephone: +43 1 263 09 09 0 Fax: +43 1 263 09 09 40
[email protected] www.brainforce.com
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