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Plenum AG

Quarterly Report Nov 28, 2007

5446_10-q_2007-11-28_717a56cb-491e-4681-80c4-dc130122a96d.pdf

Quarterly Report

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Q3 according to Quarterly Report 3/2007

International Financial Reporting Standards (IFRS) as of September 30, 2007

Overview

Key fi gures
€ thousands
Q3 2007 Q3 2006 Jan. 1 –
Sept. 30, 2007
Jan. 1 –
Sept. 30, 2006
Sales revenues 6,264 6,769 17,481 19,522
Gross profi t 2,002 1,111 5,291 3,060
EBITDA 767 107 364 – 197
EBIT 658 – 13 28 – 624
Group net result 532 – 4 15 – 646
Earnings per share in € (diluted and undiluted) 0.04 0.00 0.00 – 0.07
Key fi gures
€ thousands
Sept. 30, 2007 June 30, 2007 March 31,
2007
Dec. 31,
2006
Equity ratio 63.4 % 54.9 % 43.5 % 44.6 %
Net liquidity*, in €
thousands
3,319 1,755 2,860 3,384
Employees 174 172 170 188

* Cash and cash equivalents / securities less short-term bank liabilities and advance payments received

plenum AG
plenum FZ LLC
Dubai (VAE)
DOM Digital Online Media GmbH
Köln
plenum Management Consulting GmbH
Wiesbaden
in:sight customer information
management GmbH, Ulm

Organizational structure as of September 2007

Revenue development (in € millions)

* after transfer of implementation and software development business (subgroup Leinfelden) to NovaTec GmbH at the end of 2006

Revenue allocation for the period January 1 – September 30, 2007

Letter to our Shareholders

Dear Shareholders,

We successfully pushed ahead our growth strategy during the fi rst nine months of the year under review. The core business – Management Consulting – saw a 35 % jump over the comparative period in 2006 and the gross margin also leaped from 16 % to 30 %.

Hartmut Skubch, Chairman of the Management Board plenum AG, Wiesbaden

These excellent key fi gures demonstrate that our decision in 2004 to position plenum once again as a pure consulting fi rm and to dispose of business segments not belonging to our core business was not only correct, but was also consequently implemented and now bears fruit step by step.

Well-positioned and known on the market as "The Consulting Partner for the industrialization of (fi nancial) service providers", with our four core competencies

  • Marketing strategy and Customer Interaction Management
  • Business process optimization & outsourcing
  • IT-Architecture, IT Effi ciency & IT Sourcing
  • Strategic Skill Management

we can strongly support the realignment of entire sectors such as banks, insurances and energy suppliers in important future issues.

Whether we provide support to a major bank in the outsourcing of its securities business to a transaction bank or assist in the set-up of a credit facility, whether we outsource the receivables management of an insurance company to a subsidiary or design internet

compatible processes for a newly formed health insurer, whether we conceptualize the IT-Governance of an international fi nancial service provider or escort the strategic cooperation of several energy providers, the subject matter is always providing solutions to important future issues during the profound transformation of entire sectors – our objective is the industrialization of services. In this respect, we are your competent consultant and trusting partner – the specialist in demand – we successfully distinguish ourselves from the competition.

Following the fi nal step from the successful disposal of the agency, "stoll & fi schbach", as of September 30, 2007 as part of the focus placed on a pure consulting fi rm, we are concentrating our entire efforts on the further implementation of our growth strategy, but with perception.

Our consulting business has soared by 35 % during the fi rst nine months of the year under review. This is not only an excellent sales performance, but an outstanding integration performance as well. Consulting for strategic issues is also a question of trust and the integration of new consultants into existing core teams is an important task thus assuring the quality of consulting services and sustained customer satisfaction. We will continue to grow in 2008 and anticipate organic growth of about 20 %. Since our fi xed costs with this growth are allocated even more favourably and since the gross margin has reached an outstanding percentage of 30 %, the EBIT will gradually develop towards our goal of 12 %. For 2008 we expect the EBIT to reach at least 6 %.

Wiesbaden, November 2007

Hartmut Skubch Chairman of the Management Board plenum AG

Interim Management Report

A. Market and Industry Development

The positive development of the German economy intensifi ed even further: the gross domestic product (GDP) was higher by 0.7 % in Q3 2007 than in the prior quarter. Compared to the fi rst half-year, growth experienced further momentum: economic performance rose by 0.5 % in Q1 2007 and by 0.3 % in Q2. The forecast for the entire year anticipates growth in the GDP of between 2.4 % and 2.6 %. Consequently, eco-nomic growth also remains intact in Germany in the coming year. The somewhat weaker estimation by experts for 2008 compared to the semiannual prognosis is around 2.0 %.

The growth expectations in the consulting and hightech sector in Germany for 2007 have been confi rmed by the fi rst nine-month period based on the associations' estimations. Accordingly, demand for management consulting – following a climb of approximately 11.5 % in 2006 – will grow by up to 15 % in the current year. Industry revenues in the IT-Service sector will rise by about 5 % in 2007 compared with the last year (+4.5 %).

B. Sales revenues and new orders

Following a stabile revenue development in the fi rst two quarters of the current year, sales revenues for Q3 2007 saw a signifi cantly 10 % jump or EUR 576 thousand from EUR 5,688 thousand in the prior quarter to EUR 6,264 thousand.

Even in the third quarter, the sales revenue comparison with the prior year depicts the effect from the transfer of the implementation and software development business concluded at the end of 2006. The segment's share in revenues for Q3 2006 amounted to EUR 975 thousand (Jan. – Sept. 2006: EUR 3,254 thousand). Consequently, sales receded by 7.5 % or EUR 505 thousand compared with the prior year's period from EUR 6,769 thousand to EUR 6,264 thousand. This effect is also illustrated on a nine-month basis: revenues of EUR 17,481 thousand for the fi rst nine months of 2007 saw a 10.5 % drop or EUR 2,041 thousand compared to the prior year's comparative period (EUR 19,522 thousand).

The business in consulting compared to last year underscores our success from the growth strategy launched at the beginning of 2007: Compared to EUR 7,888 thousand in 2006 sales improved by EUR 2,769 thousand or 35 %. In addition the repeated boost in the Q3 order backlog in Management

Q1– Q3 cumulative Calculated
Order Order lifespan of the
backlog New Sales backlog order backlog in
€ thousands Jan. 1, 2007 orders revenues Sept. 30, 2007 months
Consulting 1,848 13,842 10,657 5,033 4.1
Communications 2,991 4,255 6,824 422* 1.8
Total 4,839 18,097 17,481 5,455 3.7

* adjusted order backlog after the sale of the agency, stoll & fi schbach

Consulting of 25 % to EUR 5.0 million (end of Q2: EUR 4.0 million) underpinned the on-going very positive trend in the consulting business.

Net revenues from the communications segment declined by EUR 1,556 thousand or 19 % versus the prior year's comparative period and remained signifi cantly below our expectations. This development confi rmed our strategic decision to focus on our core business – Consulting – and the separation from stoll & fi schbach.

Overall, the order backlog increased by 13 % or EUR 616 thousand to EUR 5,455 thousand as of September 30, 2007 compared with the end of 2006; whereby the positive development is substantially underscored from the adjustment effects in the order backlog following the sale of stoll & fi schbach.

Important projects during the fi rst nine months of 2007

4 4 Skill management and continued education represent important ingredients for the development and success of a modern entity. plenum possesses over 20 years of experience in this area and has been engaged by an international Group for the rollout of the plenum-Solution PISA for the Shared Service Center for all of Europe. The Learning Management System PISA is a solution that supports the entire education segment of Seminar and Events management ranging from cost accounting up to Internet presence and Online catalogs. PISA simplifi es and automates routine work in the planning, organizing and managing of education measures. The project is based on the concept of standardizing the processes and solutions for our customers as far as possible both within the Shared Service Centers as well as in relation to the solutions existing at the corporate headquarters.

Complexity increases in the architecture of the business processes, information and applications of our clients. plenum supports companies with the group wide design of interfaced components from professional areas and IT. Hence, plenum has been engaged by a large nationwide energy provider with a strategy project for Service-Oriented Architecture (SOA). The project's objective includes the defi nition of SOA-Governance taking into account the necessary roles and guidelines, the development of a Roadmap for the coordinated planning of measures and the carrying forward of the SOA-Strategy into the future, the creation of methods for the calibration of services and the description of appropriate reference-architecture for SOA in the client's IT-environment.

As a result of the gradual opening of the Swiss energy market together with the ensuing competitive pressure in the "tri-country corner", the municipal energy providers in Switzerland are faced with the task of consequently developing to a nationwide acting and modern service companies. plenum has guided its clients since 2002 along this path with diverse focal points. Thus, a strategy was developed for a Swiss energy provider together with management and other key executives from IT and Telecommunications for the linking of Information and Telecommunications Technology (ICT). plenum has now been appointed to implement this ICT-strategy. An ICT construction plan has been mutually developed during the project's initial start-up weeks, which will extend up through 2014. A new ICT organisation implemented in September will assure the implementation of this project with support of plenum consultants.

plenum has been able to further anchor its position in the United Arab Emirates (UAE). A project for developing an Internet strategy for the fi rst national health insurance of UAE was successfully concluded. The

project's aim was to systematically align the insurance products and processes to the internet in a uniform concept taking into consideration the client's needs.

C. Earnings Performance and Cost Development

The concentration on the margin-strong consulting business and favorable utilization of our consulting capacity – thanks to the persistently benefi cial economic mood – is refl ected in the signifi cant rise in gross profi t. Compared with the prior year's comparative period, the gross profi t saw a 73% jump or EUR 2,231 thousand for the fi rst nine months of 2007 despite overall lower sales revenues. The gross profi t margin virtually doubled by a rise from 16% to 30% . Compared to Q2 2007, the rise in revenues of EUR 576 thousand depicts an improvement in the gross profi t of EUR 170 thousand in Q3 based on an unchanged high margin of 32% .

Based on the focus placed on the consulting business, we also substantially intensifi ed our selling activities during the year under review: The positive development in the new orders confi rms the success of these endeavors and is simultaneously shown in the development of selling costs. Selling costs for the fi rst nine-month period of 2007 of EUR 2,195 thousand increased by about 35% compared with the prior period (EUR 1,626 thousand). Versus the prior quarter (EUR 772 thousand) the selling costs of EUR 697 thousand slightly dropped in Q3.

The administrative costs for the fi rst nine months 2007 climbed by EUR 1,488 thousand to EUR 3,644 thousand versus the comparative prior period. The main cause of this increase is the growth course experienced since the end of 2006 as a result of new hires in Germany and abroad. The anticipated improved utilization of new hires led to a decline in administrative costs in Q3: the costs for Q3 totaled EUR 1,033 thousand (Q1: EUR 1,261 thousand; Q2: EUR 1,350 thousand).

We substantially intensifi ed the development of new topics in consulting during the fi rst half-year. Consequently, the research and development (R&D) costs for the months from January to September 2007 climbed to a total of EUR 949 thousand, which represents a rise of about 2.7 percentage points to 5 % in relation to sales versus the prior year (Jan. – Sept. 2006: EUR 525 thousand). The R&D costs for Q3 amounted to EUR 191 thousand (approx. 3% of sales), which are at a normal level for the consulting sector.

Income was generated during the fi rst nine-month period 2007 from the release of provisions no longer required in the total amount of EUR 911 thousand (thereof Q3-2007: EUR 16 thousand), which is reported under other operating income and expenses. The net balance for the period from January to September totaled EUR 1,525 thousand and EUR 577 thousand for Q3. A main portion (EUR 556 thousand) of the balance generated in Q3 is mainly the result of the special effect from the separation from the agency, stoll & fi schbach.

Hence, the EBIT improved in Q3 to EUR 658 thousand, while an operative loss of EUR – 281 thousand was generated in Q2. Even taking into account the special effect from the separation, plenum was able to return to an operative profi t zone with EBIT of about EUR 100 thousand in Q3. In all, this led to an operating result of EUR 28 thousand for the nine-month period 2007; while in the prior year, EBIT was reported at EUR – 624 thousand after three quarters.

Overall, the Group net result of EUR 15 thousand signifi cantly improved during the fi rst nine-month period 2007 based on a fi nancial result of EUR 95 thousand and a tax result of EUR – 108 thousand compared to the prior year's period (EUR –646 thousand). In Q3, the Group result totaled EUR 532 thousand (Q2 2007: EUR –196 thousand).

D. Consulting

Gross sales revenues saw a 32.6 % jump or EUR 2,751 thousand for the fi rst nine-month period 2007 versus the comparative prior period from EUR 8,430 thousand to EUR 11,181 thousand. In comparison with the prior quarter (EUR 3,804 thousand), the gross sales revenues in Q3 once again rose by about 4 % to EUR 3,957 thousand. The consulting segment's share in total gross revenues represented 61 % as of September 30, 2007, which was considerably above the prior year's share of 41.6 %.

The segment result of EUR 453 thousand for the fi rst nine-month period 2007 is at the prior year's level (EUR 454 thousand). While the prior year's result and the Q2 segment result (EUR 271 thousand) profi ted from the release of warranty provisions, the segment EBIT of EUR 152 thousand in Q3 was completely realized from the current project business.

E. Communications

5 Compared with the fi rst nine-month period 2006, gross sales revenues from communications fell by EUR 1,458 thousand or 17 % to EUR 7,134 thousand. Compared with the very weak prior quarter (EUR 2,128 thousand) the gross revenues of EUR 2,615 thousand recovered in Q3, but were still signifi cantly below the prior year's fi gure and our growth expectations. The communications segment's share in total gross revenues is 39 % as of September 30, 2007 (comparative prior period 2006: 42.4 %).

Contrary to the sales development for the fi rst ninemonth period 2007 the segment result of EUR 1,223 thousand depicted a strong improvement over the prior year and on a quarter-on-quarter basis. The signifi cantly positive EBIT of EUR 1,466 thousand in Q3 primarily arose from the bookkeeping special effects from the separation from stoll & fi schbach. In particular, this also includes the retroactive deconsolidation of the share in Group reserve belonging to stoll & fi schbach.

F. Net Assets and Financial Position

Compared with December 31, 2006, cash and cash equivalents as of September 30, 2007 slightly declined by EUR 74 thousand to EUR 3,507 thousand. In comparison with the end of the second quarter, cash and cash equivalents rose by EUR 1,352 thousand. This rise mainly results from the net infl ows from remaining funds (EUR 1,856 thousand) from the capital increase in the prior period's fi nancial statements, which was still accounted for under other current assets. Consequently, the change in this position in the interim fi nancial statements was also strong.

Other material changes in the balance sheet versus the prior quarter mostly arose from the deconsolidation activities with respect to the separation from the agency, stoll & fi schbach, the effects of which have been taken into account in the presentation of the net assets and fi nancial position as of September 30, 2007. The affected balance sheet positions there from include property, plant and equipment, intangible assets,

fi nancial assets and current personnel provisions, which resulted in outfl ows.

In all, total assets rose by 4 % to EUR 11,783 thousand compared to December 31, 2006. A rise reported in the fi rst half year as a result of the capital increase was partially compensated in Q3 from the separation from stoll & fi schbach.

Correspondingly, the equity ratio of 63.4 % signifi cantly increased over December 31, 2006 (44.6 %). Also, the long-term fi nancial position (the ratio of non-current assets to non-current equity) and the short-term fi nancial position (the ratio of current assets to noncurrent equity) noticeably improved over the end of 2006.

Only minimum replacement investments were conducted during the fi rst nine-month period 2007. As disclosed in the Company Annual Report 2006, material capital spending is not planned for 2007.

plenum AG did not pay or propose to pay any interim dividends or make any other distribution for the reporting period from January 1 to September 30, 2007.

G. Employees

Based on 188 employees at the end of 2006 (including 20 employees at the subgroup Leinfelden) and 172 at the end of the fi rst half of 2007, the plenum Group employed 114 persons following the separation from stolll&fi schbach (60 employees).

Based on the focus of activities on the core consulting business and the separation from Leinfelden and stoll & fi schbach, the number of employees signifi cantly declined. However, if the number of employees would be adjusted at year end corresponding to these activities and would take into account the realignment of administration in favor of consultant capacities, the result would show that plenum experienced growth in employees of 20 % in the core consulting segment which is analogous to growth expectations.

H. Development of the Risk Situation

The following changes have taken place in the risk situation of plenum AG and its subsidiaries since those stated in the Company Annual Report 2006:

The receivables risk arising from international activities reported at the end of 2006 has signifi cantly receded as a result of the full collection of the respective receivables.

As part of the third quarter Management Buy Out of the agency, stoll & fi schbach, loans were granted to the former managing directors. The associated risk therefrom is limited by contractual obligations and collateral made available according to customary

In conclusion it is noted that based on the assessment of risks, the estimation of probability of occurrence and assessment of effectiveness of contra-measures carried out, management deems that the risks in comparison to the situation presented in the annual report 2006 have declined. In all, there are no risks from today's standpoint that could impair the going concern of plenum AG and its subsidiaries.

I. Outlook

The consequent focus on the core business – Management Consulting – and the implementation of our growth strategy have already demonstrated its effects after the nine-month period ended September 30, 2007. With a view to on-going positive development in sales revenues and the order backlog also in the third quarter, we anticipate that the business trend in the consulting core business will also successfully continue into the fourth quarter of 2007. We also expect that our growth objective of 20 % strived for at the beginning of the year for this segment will not only be reached, but will be noticeably surpassed.

The Group's sales development and total result for the fi nancial year 2007 however will be affected on the whole by the separation from stoll & fi schbach.

The objective for 2008 is further organic growth of approximately 20 %. The EBIT will be gradually directed toward our aim of 12 %; in 2008 we assume the EBIT to reach at least 6 %.

J. Subsequent Events

Events of signifi cant importance occurring after the balance sheet date have not been recognized.

plenum Stock

7 On July 13, 2007 the DAX climbed to a new all time high of 8,151 points in Q3 2007. And even after a hefty adjustment to 7,190 points on August 17, 2007, the German index recovered its stock losses to a large ex-tent by the end of the third quarter and has been in extremely good form since the beginning of the year, both in the M-DAX and TEC-DAX.

In all, it remains to be concluded that the main focus of players on the capital market in 2007, except for a few exceptions, concentrates on large capitalized corporations quoted on an index.

In contrast, the segment of German Small-Caps has been marked by persistently weak rates for over 18 months.

The downward trend in the stock rate of the plenum stock since the beginning of the year continued into the third quarter 2007. At the end of July 2007 the rate dropped below the mark of EUR 1.14, which is the rate of the capital increase that plenum AG successfully placed on the market at the end of June 2007.

plenum AG continues to inform the Financial Community about the company's developments in a timely and comprehensive manner and intensively continues discussions with stockholders.

plenum stock

Price move and trading volume from October 2006 through September 2007

Price move from October 2006 through September 2007 (index-linked)

Consolidated Income Statement (unaudited)

Jan. 1 – Jan. 1 –
€ thousands Q3 2007 Q3 2006 Sept. 30, 2007 Sept. 30, 2006
Sales revenues 6,264 6,769 17,481 19,522
Cost of revenues – 4,262 – 5,658 – 12,190 – 16,462
Gross profi t 2,002 1,111 5,291 3,060
Selling expenses – 697 – 413 – 2,195 – 1,626
General and administrative expenses – 1,033 – 911 – 3,644 – 2,156
Research and development expenses – 191 – 133 – 949 – 525
Other operating income and expenses 577 333 1,525 623
Operating result 658 – 13 28 – 624
Financial result 28 47 95 87
Result from continuing operations before taxes 686 34 123 – 537
Income taxes – 154 – 38 – 108 – 109
Group net result 532 – 4 15 – 646
Therof to:
– equity holders of the parent 487 – 35
– minority interests 45 50
Earnings per share (in €, diluted and undiluted)
from Group net result 0.04 0.00 0.00 – 0.07

Consolidated Balance Sheet*

(unaudited)

Assets
€ thousands Sept. 30, 2007 Dec. 31, 2006
Cash and cash equivalents 3,507 3,581
Trade accounts receivable 4,109 4,138
Inventories 0 4
Loans 1,244 1,207
Prepaid expenses and
other current assets 1,001 507
Total current assets 9,861 9,437
Property, plant and equipment 433 797
Intangible assets 64 142
Financial assets 587 90
Non-current tax receivables 731 731
Deferred tax assets 107 98
Total non-current assets 1,922 1,858
Total assets 11,783 11,295
Liabilities and stockholders' equity
€ thousands Sept. 30, 2007 Dec. 31, 2006
Trade accounts payable 595 814
Advance payments received 188 197
Current provisions 2,026 3,411
Other current liabilities 439 834
Total current liabilities 3,248 5,256
Deferred tax liabilities 134 107
Pension provisions 931 892
Total non-current liabilities 1,065 999
Capital stock 11,757 9,577
Capital reserves 14,434 14,224
Treasury stock – 83 – 83
Accumulated defi cit – 18,713 – 18,678
Minority interests 75 0
Total stockholders' equity 7,470 5,040
Total liabilities and stockholders' equity 11,783 11,295

,, * The effects from the separation from stoll & fi schbach have already been taken into account.

Consolidated Cash Flow Statement* (unaudited)

€ thousands Jan, 1 –
Sept, 30 2007
Jan, 1 –
Sept, 30 2006
Group net result 15 – 646
Depreciation 336 427
Income taxes 108 109
Gains on retirements of intangible assets and property,
plant and equipment 43 4
Financial result – 95 – 87
Other non-cash expenditures and income 44 35
Changes in working capital:
Inventories 4 – 160
Receivables 29 – 1,057
Prepaid expenses and other assets – 494 – 104
Trade accounts payable – 219 – 92
Other liabilities – 404 – 225
Change in provisions – 1,346 – 742
Change in other assets and liabilities 3 – 60
Proceeds from interest 57 34
Payments / Proceeds from income taxes 0 – 24
Cash fl ows used for operating activities – 1,919 – 2,588
Cash infl ows from the sale of intangible assets and property,
plant and equipment 251 1
Proceeds from the disposal of fi nancial assets 221 61
Cash outfl ow for purchases of intangible assets and property,
plant and equipment – 163 – 155
Cash outfl ow for purchases of fi nancial assets** – 720 0
Cash fl ows used for investing activities – 411 – 93
Retirements of debt 0 – 61
Net infl ow from capital increase 2,256 0
Cash fl ows provided by/used for fi nancing activities 2,256 – 61
Movement in cash and cash equivalents – 74 – 2,742
Cash and cash equivalents at the beginning of the period 3,581 5,834
Cash and cash equivalents at the end of the period 3,507 3,092

* The effects from the separation from stoll & fi schbach have already been taken into account.

** This includes EUR 481 thousand from loans which were granted to the former managing directors as part of the Management Buy Out (MBO).

Statement of Changes in Stockholders' Equity* (unaudited)

€ thousands Number
of
shares in
thousands
Group
net result
Capital
stock
Capital
reserves
Treasury
stock
Income
and
expenses
reognized
directly in
equity
Retained
earnings/
accumula
ted defi cit
Minority
interests
Total
stock
holders'
equity
Jan. 1, 2006 9,577 9,577 14,177 – 83 – 5 – 18,487 5,184
Stock Options 35 35
Group net result – 646 – 646 – 646
Sept. 30, 2006 9,577 9,577 14,212 – 83 – 5 – 19,133 4,573
Jan. 1, 2007 9,577 9,577 14,224 – 83 – 52 – 18,626 0 5,040
Stock Options 44 44
Capital increase 2,180 2,180 166 2,346
Contribution
from minority
interests 25 25
Group net result 15 – 35 50 15
Sept. 30, 2007 11,757 11,757 14,434 – 83 – 52 – 18,661 75 7,470

* The effects from the separation from stoll & fi schbach have already been taken into account.

Segment Information (unaudited)

Communi Implemen
€ thousands Consulting cations tation Total 1
Gross revenues Q3 2007 3,957 2,615 0 6,572
Q3 2006 3,120 2,990 975 7,085
Jan. 1 – Sept. 30, 2007 11,182 7,134 0 18,316
Jan. 1 – Sept. 30, 2006 8,430 8,592 3,254 20,276
Intercompany revenues Q3 2007 251 57 0 308
Q3 2006 254 62 0 316
Jan. 1 – Sept. 30, 2007 525 310 0 835
Jan. 1 – Sept. 30, 2006 542 212 0 754
Net revenues Q3 2007 3,706 2,558 0 6,264
Q3 2006 2,866 2,928 975 6,769
Jan. 1 – Sept. 30, 2007 10,657 6,824 0 17,481
Jan. 1 – Sept. 30, 2006 7,888 8,380 3,254 19,522
Depreciation Q3 2007 – 31 – 53 0 – 84
Q3 2006 – 40 – 52 0 – 92
Jan. 1 – Sept. 30, 2007 – 96 – 163 0 – 259
Jan. 1 – Sept. 30, 2006 – 141 – 161 0 – 302
Segment costs Q3 2007 – 3,523 – 1,039 0 – 4,562
Q3 2006 – 2,629 – 2,862 – 957 – 6,448
Jan. 1 – Sept. 30, 2007 – 10,108 – 5,438 0 – 15,546
Jan. 1 – Sept. 30, 2006 – 7,293 – 8,116 – 3,249 – 18,658
Segment results (EBIT) Q3 2007 152 1,466 0 1,618
Q3 2006 197 14 18 229
Jan. 1 – Sept. 30, 2007 453 1,223 0 1,676
Jan. 1 – Sept. 30, 2006 454 103 5 562
EBITDA Q3 2007 183 1,519 0 1,702
Q3 2006 237 66 18 321
Jan. 1 – Sept. 30, 2007 549 1,386 0 1,935
Jan. 1 – Sept. 30, 2006 595 264 5 864
Segment investments Q3 2007 42 41 0 83
Q3 2006 2 59 0 61
Jan. 1 – Sept. 30, 2007 47 87 0 134
Jan. 1 – Sept. 30, 2006 15 137 0 152
Segment assets Sept. 30, 2007 4,942 3,097 0 8,039
Dec. 31, 2006 3,798 2,252 763 6,813
Segment liabilities Sept. 30, 2007 – 4,200 – 2,816 0 – 7,016
Dec. 31, 2006 – 1,605 – 2,161 – 1,617 – 5,383

1 Reconciliation to Group fi gures under note C9 regarding explanations to the interim fi nancial statements. Due to the exit from the implementation business, fi gures for the implementation segment do not apply in 2007.

Separation from stoll & fi schbach

The following positions in the segment presentation were affected by the separation from stoll & fi schbach (Segment Communications) and are still included in the presentation up to the third quarter ended September 30, 2007:

€ thousands
stoll&fi schbach GmbH
1
0
Q3 2007
1,913
Gross revenues
Q3 2006
2,447
Jan. 1 – Sept. 30, 2007
5,338
Jan. 1 – Sept. 30, 2006
6,897
Q3 2007
46
Intercompany revenues
Q3 2006
54
Jan. 1 – Sept. 30, 2007
267
Jan. 1 – Sept. 30, 2006
190
Q3 2007
1,868
Net revenues
Q3 2006
2,392
Jan. 1 – Sept. 30, 2007
5,070
Jan. 1 – Sept. 30, 2006
6,707
Q3 2007
1,431
Segment results (EBIT)
Q3 2006
50
Jan. 1 – Sept. 30, 2007
1,233
Jan. 1 – Sept. 30, 2006
151
10
Notes to the Interim Financial Statements

Notes to the Interim Financial Statements for the third quarter ended September 30, 2007

A. Basis of presentation

11 11 The consolidated fi nancial statements of plenum AG as at December 31, 2006 were prepared in conformity with International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB), London, which are recognized by the European Union in effect as of the balance sheet date. The consolidated interim fi nancial statements (interim report) as at September 30, 2007, which have been prepared according to International Accounting Standard (IAS) 34 "Interim Financial Reporting", primarily apply the same accounting principles as applied to the consolidated fi nancial statements for the fi nancial year ended 2006. Necessary adjustments did not arise. All binding Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) have been recognized as at September 30, 2007. In addition, this interim report is consistent with the German Accounting Standard No. 16 (DRS 16) – Interim reporting of the German Accounting Standards Committee e.V. (DRSC) (near fi nal draft). The interim fi nancial statements have been neither audited nor reviewed by the Group auditors, Deloitte & Touche GmbH, Wirtschaftsprüfungsgesellschaft. Regarding further information to the individual accounting and valuation principles, please refer to the consolidated fi nancial statements of plenum AG as at December 31, 2006.

The consolidated interim fi nancial statements of plenum AG as of September 30, 2007 include plenum AG, three domestic subsidiaries and one foreign subsidiary.

Change in the scope of consolidation

Effective September 30, 2007, the company sold plenum stoll & fi schbach GmbH located in Herrenberg as part of a Management Buy Out agreement. The disposal was structured so that assets not accounted for were sold as part of an Asset-Deal and then plenum AG's share in stoll & fi schbach GmbH was sold as part of a Share-Deal. The proceeds generated from both interconnected transactions have been reported in the income statement separately from the related costs of disposal under other operating income from continuing operations.

Accounting principles applicable for the fi rst time as of September 30, 2007

No new accounting pronouncements and interpretations became mandatory during the third quarter 2007.

Accounting standards and interpretations newly issued during the third quarter 2007

The following standards and interpretations were issued by IASB and IFRIC during the third quarter 2007:

B. Notes to the Consolidated Income Statement

B1. Other operating income and expenses

Other operating income comprises of the following positions:

Jan. 1– Jan. 1–

thousands
Q3 2007 Q3 2006 Sept. 30, 2007 Sept. 30, 2006
Income from the release
of provisions 16 277 911 464
Income from the reduction of valuation
allowance 1 57 62 85
Other 704 6 746 84
Thereof: special effect from separation
from pS&F 675 675
721 340 1.719 633

The income from the release of provisions for the fi rst nine-month period relates to personnel provisions in the amount of EUR 485 thousand (Q3 2007: EUR 0 thousand; Q1– Q3 2006: EUR 50 thousand) and provisions for warrantees of EUR 328 thousand (Q2 2007: EUR 328 thousand). The remaining other operating income items mainly include proceeds (EUR 675 thousand) from the separation from pS&F GmbH.

Other operating expenses amounted to EUR 194 thousand (Q3 2007: EUR 144 thousand; Q1– Q3 2006: EUR 10 thousand; Q3 2006: EUR 7 thousand). The largest portion thereof (EUR 119 thousand) represents non-recurring expenditures from the separation from pS&F GmbH.

– IAS 1 (Amendments to IAS 1 Presentation of Financial Statements) - effective starting January 1, 2009

– IFRIC 14 (IAS 19 – The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their In teraction) - effective starting January 1, 2008

These amendments do not have a material impact on the consolidated fi nancial statements of plenum.

B2. Financial result

The fi nancial result is broken down as follows:

Jan. 1– Jan. 1–

thousands
Q3 2007 Q3 2006 Sept. 30, 2007 Sept. 30, 2006
Income from other investment companies 12 13 29 68
Results from securities and loans 17 35 70 60
Interest and similar expenses – 1 – 1 – 4 – 41
28 47 95 87

B3. Income taxes

Income taxes of the Group are broken down as follows:

Jan. 1– Jan. 1–

thousands
Q3 2007 Q3 2006 Sept. 30, 2007 Sept. 30, 2006
Current taxes 0 0 0 – 28
Deferred taxes – 154 – 38 – 108 – 81
– 154 – 38 – 108 – 109

B4.Earnings per share

The earnings per share is calculated by dividing the Group net result by the weighted average number of ordinary shares outstanding during the period. Earnings per share have diluting effects when the average

number of shares increases by conversion of potential ordinary shares issued from option rights. No dilution effects were attributable in the concerned period.

Earnings
Earnings Shares per share
Profi t/loss attributable to ordinary equtiy holders for Q3 2007
(€ thousands) 487
Weighted average shares outstanding during Q3 2007, undiluted
(in thousands) 11,740
Earnings per share, undiluted (€) 0.04
Profi t/loss attributable to ordinary equity holders for the period
Jan. 1 to September 30, 2007 (€ thousands) – 35
Weighted average shares outstanding for the period
Jan. 1 to September 30, 2007, undiluted (in thousands) 10,298
Earnings per share, undiluted (€) 0.00

C. Notes to the Consolidated Balance Sheet

C1. Cash and cash equivalents/securities

The cash and cash equivalents comprise of cash and bank balances with original maturities of less than three months.

C2. Prepaid expenses and other current assets

The major portion of the rise in other current assets relates to the capital increase, which took place shortly before the end of the second quarter. The outstanding cash infl ow is still accounted for as a receivable under other current assets and was accounted for under cash and cash equivalents after cash receipt in the third quarter.

C3. Non-current assets

C4. Provisions

Current provisions include provisions for personnel costs in the amount of EUR 1,268 thousand (Dec. 31, 2006: EUR 2,130 thousand), for outstanding invoices of EUR 443 thousand (Dec. 31, 2006: EUR 517 thousand), for warranties of EUR 134 thousand (Dec. 31, 2006: EUR 462 thousand) and other provisions of EUR 236 thousand (Dec. 31, 2006: EUR 302 thousand).

C5. Stockholders' equity

Capital stock, capital authorized for issue and conditional capital at the beginning and end of the fi nancial year is as follows:

Other Disclosures to the Consolidated Income Statement, Balance Sheet and Cash Flow Statement

C6. Cost of sales

C7. Personnel expenses

Personnel expenses are broken down as follows:

Jan. 1– Jan. 1–

thousands
Q3 2007 Q3 2006 Sept. 30, 2007 Sept. 30, 2006
Wages and salaries 2,936 3,267 8,743 9,644
Social security costs 386 428 1,133 1,302
Expenses for pension benefits 34 21 101 83
3,355 3,716 9,976 11,029

C8. Stock-based compensation

For the plenum AG stock option plan, the stockholders' meeting of July 5, 2007 authorized the Management Board, based on approval of the Supervisory Board, to grant once or several times option rights of the capital stock of plenum AG within the stock option plan to company employees and management members as well as employees of affi liated companies of plenum AG for a period of fi ve years pursuant to Article 15 et seq. AktG. For the same period, the Supervisory Board was authorized to grant once or several times option rights on capital stock of plenum AG to members of the Management Board of plenum AG.

Effective August 3, 2007 (issue date), the company granted in Q3 2007 a total of 275,000 options as part of the stock option program 2007 to persons entitled to options of a plenum AG and its affi liated companies pursuant to §§ 15 et seq. AktG. In addition, 288,000 options were granted to members of the management board as resolved by the supervisory board.

In all, the following options were issued as part of the stock option program of plenum AG:

Number of options Shares
Jan. 1, 2007 235,000
Cancelled due to expiration or exit 0
June 30, 2007 235,000
Cancelled due to expiration or exit – 6,000
Granted (executives) 275,000
Granted (management board) 288,000
September 30, 2007 792,000

C9. Consolidated Cash Flow Statement

The consolidated cash fl ow statement takes into account the non-cash effect from the increase to capital reserves of EUR 35 thousand (Q3 2006: EUR 35 thousand).

Segment Informationen

The segment fi gures are derived from the Group fi gures as follows:

Segments
€ thousands Total Reconciliation Group
Net sales revenues Q3 2007 6,264 0 6,264
Q3 2006 6,769 0 6,769
Jan. 1 – Sept. 30, 2007 17,481 0 17,481
Jan. 1 – Sept. 30, 2006 19,522 0 19,522
Depreciation Q3 2007 – 84 – 26 – 110
Q3 2006 – 92 – 28 – 120
Jan. 1 – Sept. 30, 2007 – 259 – 77 – 336
Jan. 1 – Sept. 30, 2006 – 302 – 125 – 427
Other costs Q3 2007 – 4,562 – 934 – 5,496
Q3 2006 – 6,448 – 214 – 6,662
Jan. 1 – Sept. 30, 2007 – 15,546 – 1,571 – 17,117
Jan. 1 – Sept. 30, 2006 – 18,658 – 1,061 – 19,719
Earnings before interest
and taxes (EBIT)
Q3 2007 1,618 – 960 658
Q3 2006 229 – 242 – 13
Jan. 1 – Sept. 30, 2007 1,676 – 1,648 28
Jan. 1 – Sept. 30, 2006 562 – 1,186 – 624
EBITDA Q3 2007 1,702 – 934 768
Q3 2006 321 – 214 107
Jan. 1 – Sept. 30, 2007 1,935 – 1,571 364
Jan. 1 – Sept. 30, 2006 864 – 1,061 – 197
Segment investments Q3 2007 83 – 12 71
Q3 2006 61 14 75
Jan. 1 – Sept. 30, 2007 134 28 162
Jan. 1 – Sept. 30, 2006 152 40 192
Segment assets Sept. 30, 2007 8,039 3,744 11,783
Dec. 31, 2006 7,891 2,820 10,711
Segment liabilities Sept. 30, 2007 – 7,016 2,702 – 4,314
Dec. 31, 2006 –7,152 1,014 – 6,138

C10. Executive bodies of the company

The shares and stock options held by the executive bodies of plenum AG are presented as follows:

Shares held by the Management Board
Number of shares
Hartmut
Skubch
Klaus
Gröne
Michael
Rohde
Total
Jan. 1, 2007 1,891,253 20,453 0 1,911,706
Sept. 30, 2007 1,891,253 20,453 6,700 1,918,406
Stock options of the Management Board
Number of shares
Hartmut
Skubch
Klaus
Gröne
Michael
Rohde
Total
Jan. 1, 2007 0 0 0 0
Sept. 30, 2007 118,000 80,000 90,000 288,000
Stock options of the Management Board Hartmut Klaus Michael
Number of shares
Jan. 1, 2007
Skubch
0
Gröne
0
Rohde
0
Total
0
Sept. 30, 2007 118,000 80,000 90,000 288,000
1 4
Shares held by the Supervisory Board
Number of shares
Michael
Bauer
Dr. Wolfgang
Händel
Norbert
Rohrig
Total
Jan. 1, 2007 370,360* 1,000 700 372,060
Sept. 30, 2007 370,360 17,750 34,200 422,310
* shares held indirectly up to July 2007
Notes to the Interim Financial Statements 14

C11. Related party transactions

1
5
services used
services used
Jan. 1–
Jan. 1–
Sept. 30,
Sept. 30,
Sept. 30,
Sept. 30,
2007
2006
Q3 2007
Q3 2006
2007
2006
in Tsd. €
Published by / Contact
20
10
23
33
80
90
Corporate calendar
Informatik Consulting Bauer GmbH, Moos
8
11
111
86
222
243
KomPuls GmbH, Eltville
April 29, 2008
plenum AG
0
0
0
0
0
4
Dr. Wolfgang Händel
Publication of Annual report 2007
Investor Relations
27
0
49
0
123
0
Norbert Rohrig
Hagenauer Straße 53
May 28, 2008
D-65203 Wiesbaden
Publication of report
With the approval of the Supervisory Board on October 9, 2002, plenum AG granted a loan on October 10, 2002 to
Tel. + 49 611 9882-361
for the fi rst quarter 2008
Hartmut Skubch, Chairman of the Management Board of plenum AG, in the amount of EUR 400 thousand. The
Fax + 49 611 9882-496
loan is subject to an interest rate of 5% p.a. due upon maturity and had an original term of three years.
www.plenum.de/investorrelations
July 03, 2008
With the approval of the Supervisory Board on November 25, 2002, plenum AG granted Mr. Skubch another loan
[email protected]
Annual Shareholder Meeting 2008
on December 6, 2002 in the amount of EUR 600 thousand. This loan is also subject to a 5% interest rate and had an
original term of four years. With the approval of the Supervisory Board on March 21, 2006, both loans were extend
August 27, 2008
We would be glad to include you in our
ed until September 30, 2007. Both loans have again been extended until December 31, 2008 as approved by the
Publication of report
investor relations mailing list. You will
Supervisory board on August 27, 2007. The loans including accrued interest are secured by a personal guarantee
for the fi rst half of 2008
from the Chairman of the Supervisory Board, Michael Bauer (EUR 1,100 thousand), and by another guarantee.
November 26, 2008
Publication of report
Assurance from the legal representative
the Web at: www.plenum.de
for the fi rst three quarters of 2008
To the best of our knowledge we assure that the accounting principles used in interim fi nancial reporting of the
Design & layout:
consolidated interim fi nancial statements give a true and fair view of the net assets, fi nancial position and results
plenum stoll & fi schbach GmbH
of operations of the Group and that the Group Management Report and result of the company and the Group's
Kalkofenstr. 51
position are so presented as to suitably present the opportunities and risks of future development for the
71083 Herrenberg
remaining fi nancial year.
The Management Board
Hartmut Skubch
Klaus Gröne
Michael Rohde
Liabilities arising from Expenses incurred for
then receive information about plenum.
Current information is also available on

Assurance from the legal representative

Corporate calendar

plenum AG

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