Quarterly Report • May 28, 2008
Quarterly Report
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International Financial Reporting Standards (IFRS) as of March 31, 2008
| Key fi gures | Jan. 1 – | Jan. 1 – |
|---|---|---|
| € thousands | March 31, 2008 | March 31, 2007 |
| Sales revenues | 4,602 | 5.529 / 3,122* |
| Gross profi t | 1,646 | 1,457 |
| EBITDA | 278 | – 235 |
| EBIT | 216 | – 349 |
| Group net result | 253 | – 321 |
| Thereof attributable to: | ||
| – equity holders of the parent | 241 | – 321 |
| – minority interests | 12 | 0 |
| Earnings per share in € (undiluted) |
0.02 | – 0.03 |
| Average number of shares outstanding | ||
| (undiluted, in thousands) | 11,757 | 9,577 |
| Key fi gures | ||
|---|---|---|
| € thousands | March 31, 2008 | Dec. 31, 2007 |
| Equity ratio | 63.8 % | 59.2 % |
| Net liquidity in € thousands | 4,306 | 3,980 |
| Employees | 112 | 114 |
* Revenues development as adjusted for the sale of the agency, stoll & fi schbach GmbH, in € thousands.
Organizational structure as of March 31, 2007
Dear Shareholders, The start into the new fi nancial year 2008 proved to be successful for our company.
Hartmut Skubch, Chairman of the Management Board plenum AG, Wiesbaden
Based on the results of the fi rst quarter 2008, we could once again reconfi rm not only our return to profi tability, but our growth strategy in the core business as well. Sales revenues saw a 21.4 % jump to EUR 4.6 million compared with EUR 3.8 million* in Q1 2007 and with EBIT at EUR 0.22 million (prior period: minus EUR 0.35 million), the EBIT margin climbed to 4.7 % (prior period: – 6.3 %). Consequently, the gross margin posted an outstanding 35.8 %. As a result, the second quarter closed with positive results following the sale of the agency, stoll & fi schbach, as of September 30, 2007.
plenum's decision in 2004 to focus on the core business – Management Consulting – has proven to be correct on a lasting basis. Strong earnings and growth potential lie in the plenum trademark in the consulting business. Our positioning as – The Consulting Partner for the Industrialization of (Financial) Service Providers – has been favorably accepted by the market, but also indicates a further rise in the order backlog to EUR 5.8 million as of March 31, 2008 (12/31/2007: EUR 5.0 million).
The new project in the United Arab Emirates from Daman, the fi rst national health insurance in Emirates Abu Dhabi contributed to the order backlog, in which plenum was commissioned to provide guidance in the implementation of the eBusiness strategy that was also developed by plenum. The order counts as the largest current consulting client of plenum and will extend into 2009. Daman is a Joint Venture between the Government of Abu Dhabi and Münchner Rück, which locally provides the Top-Management. This engagement demonstrates to us how we can make use of our excellent reputation in Germany to successfully tap into additional growth markets.
But we also posted important successes in our home market in Germany in the fi rst quarter 2008. On the whole, approximately 80 consulting projects with a broad customer base have been launched since the beginning of the year and new, important clients were gained, particularly in the banking and insurance sectors.
On the basis of the pleasant start into 2008, we adhere to our prognosis for 2008 and assume earnings of nearly EUR 20 million and EBIT of about EUR 1.2 million (EBIT margin about 6%). After deduction of the revenues of the agency, stoll & fi schbach, as of September 30, 2007, this translates into growth of between 15 % and 20 %. We even plan annual organic growth of between 15 % and 20 % for the coming years. The subsequent and more favorable fi xed cost allocation in conjunction with the target gross margin of about 30% already reached in 2008 has launched the possibility of gradually increasing the EBIT margin to about 12 %.
Also, our stock's development has taken the right path during the fi rst three months and has risen by 70 % after the all-tine low in march. Since the beginning of 2008 the increase of the stock exchange price amounts to approximately 20%. Although, in my opinion a business value of 13.5 Mill. Euro and the current 2008 price/ earnings ratio of 11 does not suffi ciently refl ect the positive business development. There is abundant potential here and with corresponding IR activities, this potential can be raised further.
33 Therefore, dear stockholders, I wish that you will continue to show us your loyalty and that you will escort our company along this successful path over the coming years.
Wiesbaden, May 2008
Hartmut Skubch Chairman of the Management Board plenum AG
The upswing in Germany has slowly progressed according to the federal government. The research institutes confi rmed their prognosis in the spring report and have reduced the autumn projection (over 2 %) to 1.8 %. The predominant reasons for the continued deteriorated perspectives lie in the spread of the American real estate and fi nance crises and the permanent increases in oil prices and the euro exchange rate. In contrast, positive effects are felt from the development of the domestic economy, which continues to carry growth.
4 4 According to the Federal Association of German Management Consultants (BDU), the industry's growth trend will be unbroken in 2008 as well: Following a rise of 11.8 % to EUR 16.4 billion in 2007, a rise of approximately 11 % is expected for 2008. Demand is mostly directed towards consulting projects to strengthen growth and optimize the client's organization. Powerful impulses are anticipated to come from the chemicals and pharmaceuticals industry, from machine and equipment construction and from energy and water utilities. On the contrary, low growth is expected from fi nancial providers.
The German Association for Information Technology, Telecommunications and New Media e.V. (BITKOM) envisions the business development with confi dence for 2008: investments in modern ITC-Systems continue, the positive development in the order backlog provides a good mood in the industry and supports the growth prognosis of approximately 1.6 %. According to a current survey from BITKOM, 79 % of suppliers of software and IT services anticipate higher revenues in 2008 and nearly 75 % count on higher profi ts.
A stabile upwards trend is also demonstrated in the German Online advertising market: according to Nielsen's advertising statistics, the gross advertising revenues in classical media was at the prior year's level during January to March 2008; while online advertising posted a plus of EUR 87 million or 41.1 % for the fi rst three months in 2008 versus the prior period and advertising volume of EUR 298.6 million.
| Order backlog | Order backlog | Calculated lifespan | ||
|---|---|---|---|---|
| € thousands |
New orders | Revenues | € thousands |
of the order backlog |
| Jan. 1, 2008 | € thousands |
€ thousands |
March 31, 2008 | in months |
| 5,025 | 5,367 | 4,602 | 5,790 | 3.8 |
Following the sale of the agency, plenum stoll & fi schbach GmbH, with effect from September 30, 2007, plenum is once again a pure consulting fi rm. As part of the consulting business, DOM Digital Online Media GmbH, offers progressively higher services and solutions in interactive marketing and consultancy services in marketing und communications. The presentation of segments shown in 2007 is therefore no longer applicable in 2008.
Compared with the prior period, revenues fell by about 17 % or TEUR 927 from TEUR 5,529 to TEUR 4,602 for Q1 2008. This sales decline was predominantly due to the sale of the agency, stoll & fi schbach GmbH, as of September 30, 2007. The adjusted sales development shows a rise of almost 21 % or TEUR 812 in Q1 2008 versus Q1 2007. Compared with the last quarter of 2007, sales revenues in Q1 2008 are below the prior quarter's fi gure by about 6 % or TEUR 319. This mostly relates to the
lower capacity utilization as a result of the use of vacation outstanding taken during the fi rst three months.
The order backlog as of March 31, 2008 was higher than the fi gure at the end of 2007 by about 15 % or TEUR 765 and has now increased to TEUR 5,790. A comparison of the order backlog at the end of Q1 2008 and Q1 2007 (adjusted for the share in the agency, stoll & fi schbach), shows an increase of approximately 53 % or TEUR 2,003. This positive development in the order backlog is due to the continued consolidation process for banks and insurances and the positive development in our international activities.
Subsequent to the successful development of the Internet strategy for the fi rst national health insurance company in the United Arab Emirates Abu Dhabi, plenum has now been appointed to implement the concepts into practice until the end of 2009 and to guide the complete transition during the entire planning period. The tasks for the future are very diverse. In addition to the bidding process or selection for outsourced development and operative services for the future internet platform – which have already been largely concluded – plenum assumes all tasks that will be necessary in the successful set-up of online services in the future. This ranges from the designing of necessary organizations in the company, to guiding in employee recruitment, to defi ning processes within the entire organization as well as an interface to the provider, to supporting the development of the governance structure, for the program manager and right up to the implementation of all planned releases of functions. The order currently belongs to plenum's largest projects of all and further affi xes the market position of plenum in the United Arab Emirates (UAE).
Today, IT is confronted with measurable effi ciency and effectiveness demands. The demand for transparency and monitoring of IT progresses. In addition to budget, sales, costs and capacity utilization ratios a state-ofthe-art IT-Monitoring must make complex relations between IT projects as well as requirements, products and processes of the business controllable and must deliver a total overview of the IT. KPI's are centralized monitoring indicators in plenum's IT-Management Cockpit , which take into account both quantitative sizes as well as qualitative aspects. The IT-Management-Cockpit, which was developed by plenum for a large insurance fi rm is currently in the migration of
becoming a standard applications tool and has demonstrated such overwhelming positive resonance in the preliminary results, that plenum plans the customer-tailored IT-Management Cockpit to be used as a basis in implementing or further developing this outside of IT within a business context, i.e. for the integral monitoring of the entire group.
In order to successfully confront the challenges over the coming years, the introduction of a strategic skill management gain in importance for many IT service providers. The central focus of skill management is in Human Capital as a friction point between the market and business sides for defi ned budget requirements and individual actual profi les, potential and development requests. Both sides must be maintained in balance by constant comparisons. plenum possesses many years of experience in the area of staff development and in effective "staffi ng". As a result, plenum has been commissioned by an IT service provider of an insurance company with the fi nal defi nition phase of a successfully developed concept for strategic personnel development and human resources planning. The goal is an analysis of the actual situation and a comparison to the target concept for determining the extent of implementation. After the service analysis and skill comparison, additional phases are planned for the implementation and the fi nal optimization.
Despite the substantially lower sales revenues over the comparative prior quarter, the Q1 gross profi t climbed by TEUR 189. The gross profi t margin rose from 26.4 % to 35.8 %. The main reasons for this considerable increase in gross margin are due to the sale of the communications business with weak margins on one hand, which was still included in the Q1 2007 fi gures, and to the positive overall development of the market on the other hand. A comparison between Q1 2008 and Q4 2007 demonstrates a slightly higher gross profi t of TEUR 1,646 and a rise in the margin by nearly 5 percentage points (Q4 2007: 30.8 %).
Selling costs of TEUR 381 (8.3 % of sales) signifi cantly dropped versus Q1 2007 (TEUR 726) and remained at an almost constant level versus Q4 2007 (TEUR 421 or 8.6 % of sales). The reasons for the predominant drop over the prior year's quarter is in part due to the selling costs for the agency, stoll & fi schbach, which were still included as of March 31, 2007, and in part to the lower order backlog at the end of 2006, which necessitated intensifi ed sales activities in Q1 2007.
The administrative costs declined during the fi rst months of 2008 by TEUR 421 to TEUR 840 quarter-onquarter. This considerable drop was also due to the differing fi gures since the administrative costs for the agency, stoll & fi schbach, which were still included in Q1 2007. Compared with the prior quarter (TEUR 839), which is the fi rst quarter without the agency, stoll & fi schbach, the administrative costs remained at a constant level.
The development of new themes in Consulting has been further intensifi ed. Consequently, research and development costs rose in relation to sales by 5.3 percentage points (TEUR 238) to TEUR 317 versus the prior quarter.
The fi rst quarter 2008 profi ted by TEUR 87 from the book gains of a sold fi nancial asset, the net balance of which is presented under other operating income and expenses ( TEUR 108).
5 Following an operating result (EBIT) of TEUR – 349 in Q1 2007 and EBIT of TEUR 155 in the prior quarter, the operating result for the fi rst three quarters in 2008 once again climbed to TEUR 216 and reached an EBIT margin of 4.7 %. Based on a fi nancial result of TEUR 31, tax income of TEUR 6 and deduction of minority interests of TEUR 12, the Group net result for the fi rst three months in 2008 amounted to TEUR 241.
Compared with December 31, 2007, the cash and cash equivalents balance rose by TEUR 17 to TEUR 4,466 as of the end of the fi rst quarter 2008. Overall, the balance sheet total slightly fell by 3.9 % to TEUR 12,749 versus December 31, 2007. The low reduction is due to low fl uctuation in working capital relations as of the closing date and mostly affected the assets side: decline in receivables of TEUR 4,512 to TEUR 4,173; and on the liabilities side with a decline in accounts payable of TEUR 1,222 to TEUR 600 and a reduction in advance payments received from TEUR 469 to TEUR 160 .
The equity ratio climbed from 59.2 % as of December 31, 2007 to 63.8 %. While the long-term fi nancial position (the ratio of non-current assets to non-current equity) remained unchanged, the shortterm fi nancial position (the ratio of current assets to non-current equity) improved over the end of 2007. 15 % and 20 %. The subsequently, more favorable fi xed 6
Only minimum replacement investments were conducted during the fi rst three-month period 2008. As disclosed in the Company Annual Report 2007, material capital spending is not planned for 2008.
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 March 31, 2008.
Corresponding to the growth targets, plenum invests in specifi c training and in the expansion of our employees in the core business - Consulting. The focus of recruiting is placed on both the Junior Consultant and the experienced consultant with credentials in client contact.
In all, the number of employees totaled 112 as of March 31, 2008 (12/31/2007: 114).
No changes have taken place in the risk situation of plenum AG and its subsidiaries since those stated in the Company Annual Report 2007.
Due to the grand start into 2008, the management board confi rms the prognosis for 2008 and assumes growth of between 15 % and 20 %– after deduction of revenues from the sold agency, stoll & fi schbach, as of September 31, 2007 – earnings of nearly EUR 20 million and EBIT of about EUR 1.2 million (EBIT margin of about 6 %). plenum anticipates revenues of approximately EUR 4.8 million and EBIT of about EUR 0.3 million for the second quarter 2008.
Even in the coming year, the company assumes continued annual organic growth of approximately cost allocation together with the target gross margin of about 30 % already reached in 2008 opens up new possibilities in gradually raising the EBIT margin to approximately 12 %.
Events of signifi cant importance for the operations of the company occurring after the balance sheet date have not been identifi ed.
The stock price course of the plenum stock during the fi rst quarter 2008 was marked by a continued downward trend. Based on the Xetra-opening rate of EUR 0.92 on January 2, 2008, the stock lost in value reaching an all-time low of EUR 0.72 or nearly 28 % on March 10, 2008 – in particular, due to the worldwide turbulences on the stock markets together with the credit crises.
The stock price has since then signifi cantly recovered and closed at EUR 1.12 (Xetra closing rate) on May 7, 2008 based on good, higher trading volume.
The foundation of the stock and the stock price recovery during the fi rst months of the year are the result of the refocusing strategy on the core business – Management Consulting – concluded in 2007 and the associated positive, operative outlook. This has supported management as part of the published annual projections and in discussions with investors, analysts and capital market conferences during the current fi nancial year.
On the whole, management is optimistic that plenum following the diffi cult restructuring phase – will continue to post solid growth in the consultancy market. Therefore, we are confi dent that the capital market of plenum AG will allow the business value to rise in a constant manner during the course of 2008.
As usual, private investors can download all relevant information concerning investor relations via the company's website: www.plenum.de/investorrelations.
Price move and trading volume from April 2007 through March 2008
Price move from April 2007 through March 2008 (index-linked)
| Jan. 1 – | Jan. 1 – | |
|---|---|---|
| € thousands | March 31, 2008 | March 31, 2007 |
| Sales revenues | 4,602 | 5,529 |
| Cost of revenues | –2,956 | – 4,072 |
| Gross profi t | 1,646 | 1,457 |
| Selling expenses | –381 | – 726 |
| General and administrative expenses | –840 | – 1,261 |
| Research and development expenses | –317 | – 228 |
| Other operating income and expenses | 108 | 409 |
| Operating result | 216 | – 349 |
| Financial result | 31 | 18 |
| Result from continuing operations before income taxes | 247 | – 331 |
| Income taxes | 6 | 10 |
| Group net result | 253 | – 321 |
| Thereof attributable to | ||
| – Equity holders of the parent | 241 | -321 |
| – Minority interests | 12 | 0 |
| Earnings per share (in €, diluted and undiluted) |
0,02 | – 0,03 |
| Average number of shares outstanding | ||
| (in thousands, undiluted) | 11,757 | 9,577 |
| Average number of shares outstanding | ||
| (in thousands, diluted) | 11,757 | 9,600 |
(unaudited)
| Assets | ||
|---|---|---|
| € thousands | March 31, 2008 | Dec. 31, 2007 |
| Cash and cash equivalents/securities | 4,466 | 4,449 |
| Trade accounts receivable | 4,173 | 4,512 |
| Loans | 1,270 | 1,258 |
| Prepaid expenses and other current assets | 1,017 | 1,282 |
| Total current assets | 10,926 | 11,501 |
| Property, plant and equipment | 374 | 402 |
| Intangible assets | 49 | 54 |
| Financial assets | 576 | 592 |
| Non-current tax receivable | 658 | 658 |
| Deferred tax asset | 166 | 59 |
| Total non-current assets | 1,823 | 1,765 |
| Total assets | 12,749 | 13,266 |
| Liabilities and stockholders' equity | ||
|---|---|---|
| € thousands | March 31, 2008 | Dec. 31, 2007 |
| Trade accounts payable | 600 | 1,222 |
| Advance payments received | 160 | 469 |
| Current provisions | 2,464 | 2,336 |
| Income tax payable | 7 | 2 |
| Other current liabilities | 407 | 522 |
| Total current liabilities | 3,638 | 4,551 |
| Deferred tax liabilities | 150 | 43 |
| Pension provision | 822 | 816 |
| Total non-current liabilities | 972 | 859 |
| Capital stock | 11,757 | 11,757 |
| Capital reserves | 14,494 | 14,464 |
| Treasury stock | – 83 | – 83 |
| Accumulated losses brought forward | – 18,070 | – 18,335 |
| Minority interests | 41 | 29 |
| Total stockholders' equity | 8,139 | 7,856 |
| Total stockholders' equity and liabilities | 12,749 | 13,266 |
| € thousands | March 31, 2008 | March 31, 2007 |
|---|---|---|
| Group net result | 253 | – 321 |
| Minority interests | – 12 | 0 |
| Depreciation | 62 | 114 |
| Income taxes | – 6 | – 10 |
| Gain/loss from disposal of intangible assets | ||
| and property, plant and equipment | – 2 | 4 |
| Gain from disposal of fi nancial assets | – 87 | 0 |
| Financial result | – 31 | – 18 |
| Other non-cash income and expenses | – 18 | – 13 |
| Changes in working capital | ||
| Inventories | 0 | 4 |
| Receivables | 339 | 120 |
| Prepaid expenses and other assets | 152 | – 331 |
| Trade accounts payable | – 622 | – 260 |
| Other liabilities | – 115 | 43 |
| Changes in provisions | 133 | 106 |
| Changes in other assets and liabilities | – 243 | 22 |
| Interest proceeds | 19 | 8 |
| Income tax proceeds | 113 | 0 |
| Cash outfl ow for operating activities | – 65 | – 532 |
| Proceeds from the disposal of intangible assets | ||
| and property, plant and equipment | 6 | 18 |
| Proceeds from the disposal of fi nancial assets | 103 | 0 |
| Payments for the purchase of intangible assets and property, | ||
| plant and equipment | – 32 | – 46 |
| Cash infl ow/outfl ow for investing activities | 77 | – 28 |
| Change in minority interests | 12 | – 0 |
| Cash infl ow/outfl ow for fi nancing activities | 12 | 0 |
| Change in cash and cash equivalents / securities | 24 | – 560 |
| Changes due to foreign exchange rates | – 7 | 0 |
| Cash and cash equivalents/securities at the beginning of the period | 4,449 | 3,581 |
| Cash and cash equivalents/securities at the end of the period | 4,466 | 3,021 |
| Income | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| and | |||||||||
| Number | expenses | Total | |||||||
| of | reognized | stock | |||||||
| shares in | Group | Capital | Capital | Treasury | directly in | Accumu - | Minority | holders' | |
| € thousands | thousands | net result | stock | reserves | stock | equity | lated loss | interests | equity |
| Jan. 1, 2007 | 9,577 | 9,577 | 14,224 | –83 | – 52 | – 18,626 | 0 | 5,040 | |
| Stock Options | 12 | 12 | |||||||
| Group net result | –321 | –321 | –321 | ||||||
| March 31, 2007 | 9,577 | 9,577 | 14,236 | –83 | –52 | –18,947 | 0 | 4,731 | |
| Jan. 1, 2008 | 11,757 | 11,757 | 14,464 | – 83 | 24 | – 18,335 | 29 | 7,856 | |
| Stock Options | 30 | 30 | |||||||
| Group net result | 0 | 241 | 12 | 253 | |||||
| March 31, 2008 | 11,757 | 11,757 | 14,494 | – 83 | 24 | – 18,094 | 41 | 8,139 |
Notes to the Interim Financial Statements for the fi rst quarter ended March 31, 2008
10 10 The consolidated fi nancial statements of plenum AG as at December 31, 2007 were prepared in conformity with International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB), London, which are endorsed by the European Union, in effect as of the balance sheet date. The consolidated interim fi nancial statements (interim report) as at March 31, 2008, 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 2007. Necessary adjustments did not arise. All binding Interpretations of the International Financial Reporting Interpretations Committee (IFRIC) have been recognized as at March 31, 2008. In addition, this interim report is consistent with the German Accounting Standard No. 6 (DRS 6) – Interim reporting of the German Accounting Standards Committee e.V. (DRSC). 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, 2007.
From management's standpoint, these unaudited consolidated fi nancial statements contain all customary, regular adjustments to be made to give a true and fair view of the company's business development during the interim reporting period. The results generated for the fi rst three months of the fi nancial year 2008 do not necessarily allow projections to be made about the development of further business trends.
plenum prepares and publishes its consolidated fi nancial statements in euros (€ or EUR). plenum is an international company based in Germany with a balanced portfolio of business activities in the consultancy market.
The consolidated financial statements of plenum AG as of March 31, 2008 include plenum AG, three domestic subsidiaries and one foreign subsidiary. A change in the scope of consolidated entities as of December 31, 2007 did not arise.
The preparation of consolidated fi nancial statements requires the use of estimates and assumptions that may affect the reported amounts of assets, liabilities, disclosure of contingent liabilities as of the balance sheet date(March 31, 2008) as well as the income and expenses during the reporting period (January 1 to March 31, 2008). Existing uncertainties are reasonably taken into account as of the balance sheet date. However, actual amounts could differ from those estimates.
The current income tax expense reported in the interim fi nancial statements has been determined on the basis of the expected tax rate for the entire year.
The other operating income comprises of the following positions:
| € thousands |
Q1 2008 | Q1 2007 | |
|---|---|---|---|
| Income from the release of | |||
| provisions | 32 | 332 | |
| Income from the reduction of | |||
| valuation allowances | 2 | 56 | |
| Book gains from the disposal of | |||
| financial assets | 87 | 0 | |
| Other | 7 | 38 | |
| 128 | 426 |
The income from the reversal of provisions relates to outstanding invoices in the amount of TEUR 32 (Q1 2007: TEUR 8) and to personnel-related provisions of TEUR 324 in the same period last year. The remaining other operating income items include gains from foreign currency translation of TEUR 30 for the fi rst quarter ended 2007.
The other operating expenses amount to TEUR 20 (Q1 2007: TEUR 17).
The fi nancial result is broken down as follows.
| € thousands |
Q1 2008 | Q1 2007 |
|---|---|---|
| Interest income | 16 | 13 |
| Result from securities and loans | 16 | 5 |
| Interest and similar expenses | – 1 | 0 |
| 31 | 18 |
The breakdown of income taxes is as follows:
| € thousands |
Q1-2008 | Q1-2007 |
|---|---|---|
| Current taxes | 6 | 0 |
| Deferred taxes | 0 | 10 |
The earnings per share is calculated by dividing the net result attributable to the equity holders of plenum AG 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. There were no diluting effects in the fi rst quarter 2008.
The cash and cash equivalents comprise of cash and bank balances with original maturities of less than three months.
The securities under current assets include a short term deposit in a money market fund in the amount of TEUR 2,007.
An amount of TEUR 32 was invested in intangible assets and property, plant and equipment and TEUR 12 for fi nancial assets during the reporting period. The noncurrent assets declined by TEUR 62 during the same reporting period for depreciation and amortization and disposals totaling TEUR 20.
The current provisions include provisions for personnel costs in the amount of TEUR 1,841 (Q1 2007: TEUR 2,088), for outstanding invoices of TEUR 156 (Q1 2007: TEUR 690), for warranties of TEUR 138 (Q1 2007: TEUR 462) and other miscellaneous provisions of TEUR 329 (Q1 2007: TEUR 264).
Capital stock, capital authorized for issue and conditional capital at the beginning (January 1, 2008) and end of the interim reporting period (March 31, 2008) is as follows:
| Capital stock | 11,757 |
|---|---|
| Capital authorized for | 4,789 |
| Conditional capital | 235 |
| Conditional capital II | 3,832 |
| Conditional capital III | 722 |
In plenum AG's separate fi nancial statements according to German generally accepted accounting principles (HGB) as of March 31, 2008, stockholders' equity amounts to EUR 8.3 million (3/31/2007: EUR 6.1 million). This corresponds to a ratio of 70.2 % of capital stock.
plenum held 16,790 treasury shares as of March 31, 2008, which were acquired at a total price of TEUR 83 in 2001 and are offset directly in equity. No treasury shares were acquired, used or drawn during the fi rst quarter 2008.
In 2005 and 2007 new option rights were issued to employees of plenum AG and employees of affi liated companies. The capital reserves increased by TEUR 30 for the amount of personnel costs reported for the fi rst three months in 2008.
Cost of sales includes costs for purchased merchandise and services in the amount of TEUR 841 for the fi rst quarter 2008 (Q1 2007: TEUR 1,568).
| and services in the amount of TEUR 841 for the fi rst | services that would qualify as a segment. | |||
|---|---|---|---|---|
| quarter 2008 (Q1 2007: TEUR 1,568). | ||||
| C6. Personnel expenses | ||||
| The personnel expenses are broken down as follows: | ||||
| € thousands |
Q1 2008 | Q1 2007 | ||
| Wages and salaries | 2,311 | 2,904 | ||
| Social security costs | 251 | 371 | ||
| Expenses for pension benefits | 47 | 26 | ||
| 2,609 | 3,301 | |||
| The average number of employees for Q1 2008 was 113 (Q1 2006: 169). |
1 1 |
|||
| C7. Stock-based compensation | ||||
| Stock options were not issued in the fi rst quarter 2008. | ||||
| C8. Consolidated Cash Flow Statement | ||||
| The cash fl ow statement does not take into account non | ||||
| cash increases in the capital reserve of TEUR 30 (Q1 2007: TEUR 12). |
||||
| Notes to the Interim Financial Statements | 11 | |||
Following the disposal of plenum stoll & fi schbach GmbH, the plenum Group now focuses on the primary business segment: Management Consulting. The plenum Group does not currently have material, autonomous services that would qualify as a segment.
The stock held and stock option rights of the executive bodies of plenum AG are presented as follows:
| Shares held by the Management Board | Hartmut | Klaus | Michael | |
|---|---|---|---|---|
| Number of shares | Skubch | Gröne | Rohde | Total |
| Jan. 1, 2008 | 1,891,253 | 20,453 | 6,700 | 1,918,406 |
| March 31, 2008 | 1,891,253 | 20,453 | 6,700 | 1,918,406 |
| Stock options of the Management Board Hartmut Klaus Michael Number of shares Skubch Gröne Rohde 118,000 80,000 90,000 Jan. 1, 2008 118,000 80,000 90,000 March 31, 2008 Shares held by the Supervisory Board Michael Dr. Wolfgang Norbert Number of shares Bauer Händel Rohrig 370,360 17,750 34,200 Jan. 1, 2008 370,360 17,750 34,200 March 31, 2008 C10. Subsequent events after the balance sheet date Important events occurring after the interim balance sheet date did not arise. |
1 2 Total 288,000 288,000 Total 422,310 422,310 |
||||
|---|---|---|---|---|---|
| Shares held by the Supervisory Board Number of shares |
Michael Bauer |
Dr. Wolfgang Händel |
Norbert Rohrig |
Total |
|---|---|---|---|---|
| Jan. 1, 2008 | 370,360 | 17,750 | 34,200 | 422,310 |
| March 31, 2008 | 370,360 | 17,750 | 34,200 | 422,310 |
| Liabilities arising | Expenses incurred | |||
|---|---|---|---|---|
| from services used | for services used | |||
| € thousands |
March 31, 2008 | March 31, 2007 | Q1 2008 | Q1 2007 |
| Informatik Consulting Bauer GmbH, Moos | 2 | 4 | 6 | 16 |
| KomPuls GmbH, Eltville | – 29 | – 7 | 63 | 110 |
| Norbert Rohrig | 87 | 18 | 110 | 35 |
| 60 | 15 | 179 | 161 |
With the approval of the Supervisory Board on October 9, 2002, plenum AG granted a loan on October 10, 2002 to Hartmut Skubch, Chairman of the Management Board of plenum AG, in the amount of TEUR 400. The loan is subject to an interest rate of 5 % p.a. due upon maturity and had an original term of three years. With the approval of the Supervisory Board on November 25, 2002, plenum AG granted Mr. Skubch another loan on December 6, 2002 in the amount of TEUR 600. 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 August 27, 2007, both loans have been extended until December 31, 2008. The loans including capitalized interest are secured by a personal guarantee from the Chairman of the Supervisory Board, Michael Bauer (TEUR 1,100), and by another guarantee.
We declare that, to the best of our knowledge and in accordance with the applicable reporting principles, the interim consolidated fi nancial statements give a true and fair view of the net assets, fi nancial position and results of operations of the Group, and the Group management report includes a fair review of the development and performance of the business and position of the Group, together with a description of the principal opportunities and risks associated with the future development of the Group for 2008.
The Management Board
Hartmut Skubch Klaus Gröne Michael Rohde
May 28, 2008 Publication of report for the fi rst quarter 2008
July 03, 2008 Annual Shareholder Meeting 2008
August 27, 2008 Publication of report for the fi rst half of 2008
November 26, 2008 Publication of report for the fi rst three quarters of 2008
13 13 This document is a free translation into English of the original German text. It is not a binding document. In the event of a confl ict in interpretation, reference should be made to the German version, which is the authentic text.
plenum AG Investor Relations Hagenauer Straße 53 D-65203 Wiesbaden Tel. + 49 611 9882-361 Fax + 49 611 9882-496 www.plenum.de/investorrelations [email protected]
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