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EANS-Adhoc: Beta Systems realizes positive effects from the sale of the ECM business in the first half of 2010
-------------------------------------------------------------------------------- ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro adhoc with the aim of a Europe-wide distribution. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------------
Berlin, July 29, 2010 - Beta Systems Software AG (BSS, ISIN DE0005224406) achieved a result of EUR 2.2 million after taxes in the first half of 2010. A significant effect was the EUR 4.9 million disposal gain (before taxes) arising from the sale of the ECM business, which more than compensated for the negative result from the continued operations of EUR -1.4 million (after taxes), which reflected seasonal fluctuations.
Special effects arising from the sale of the ECM business in Q1-Q2/2010 Sale of net assets of EUR 10.9 million Disposal gain of EUR 4.9 million (before taxes) Sundry income of EUR 0.6 million
Assets of EUR 21.0 million (status as of May 31, 2010), which were allocated to the ECM segment, were sold as a result of the disposal. These were offset by liabilities of EUR 10.1 million connected with these assets (status as of May 31, 2010). A EUR 4.9 million disposal gain (before taxes) was incurred in the first half-year as part of the realization of all purchase price components that are not dependent on the occurrence of certain conditions. At the same time, sundry income of EUR 0.6 million was achieved as part of the transfer-related rendering of administrative services (including accounting, reporting, staff administration, and IT services) for the company Beta Systems ECM Solutions GmbH that was sold.
Operating trends in the continued business lines in Q1-Q2/2010 (DCI/IdM)
Moderate business progress with delays to important major projects in the continued infrastructure software business (following major orders in the prior-year period) Significant operating expense cost-savings of more than EUR 2.0 million Operating cash flow grows by EUR 1.4 million to EUR 7.9 million (Q1-Q2/2009: EUR 6.5 million) Operating profit (EBIT) falls to EUR -1.8 million (Q1-Q2/2009: EUR -0.3 million)
It proved impossible to fully repeat last year's extraordinarily good sales performance in the continued infrastructure software business (DCI/IdM lines of business) in the first half of 2010 due to reticence on the part of some customers, or delayed decisions relating to major projects. Consequently, revenue declined to EUR 20.7 million (Q1-Q2 2009: EUR 25.1 million).
Despite significant operating expense cost-savings of more than EUR 2.0 million, operating profit (EBIT) of EUR -1.8 million fell to below last year's level (EUR -0.3 million). At the same time, however, operating cash flow, which comprises an important key indicator, was again raised, by EUR 1.4 million to EUR 7.9 million. Therefore, the company's financial position was significantly improved compared to the end of 2009 through a EUR 9.3 million reduction in short-term loans.
Q3-Q4/2010 outlook Management Board adjusts forecast for continued business operations
The statements concerning the outlook for revenue and the result that were made at the start of the year have been reformulated for the ongoing business operations, although excluding one-off effects. As a consequence, the management currently anticipates a revenue level of around EUR 50 million in the DCI and IdM lines of business (2009: around EUR 52 million), and an EBIT margin in the mid-single-digit percentage range as part of cost-reductions (2009: around 4%).
Many key customers are currently continuing to critically scrutinize their major IT investments, and experience suggests that they will fail to place major project orders before the end of the year. The conclusion of significant contracts in the infrastructure business is consequently not anticipated until the fourth quarter. This is resulting in a shift in the timing of breakeven over the course of the year, and the dependency of the consolidated net result on these year-end license revenues is rising.
There is also additional positive earnings potential in the second half of 2010 arising from additional purchase price components for ECM of up to EUR 2.0 million, which are connected with the occurrence of certain conditions.
At the same time, and following an initial analysis, the Management Board anticipates one-off expenses of up to EUR 5.0 million for the second half of 2010 for the restructuring and re-positioning of the business.
end of ad-hoc-announcement
================================================================================ Information and explanations on this ad-hoc release by the issuer: Management Board comments
Jürgen Herbott, Chief Executive Officer of Beta Systems Software AG commented as follows: "The 'buy & build strategy' that we have opted for in the infrastructure business is working well, and proving correct. It nevertheless presupposes a fundamentally re-positioned and significantly profitable Beta Systems. To this end, and following the ECM sale, we must review, and, if required, optimize structures and processes. We will conduct the necessary conversations with the new Supervisory Board following the Annual General Meeting of Shareholders, and launch the requisite measures by the year-end."
"We have fundamentally and sustainably improved our financing and net asset positions through the ECM sale, and through stronger cash management in the continued business operations. This not only signifies a solid basis for our forthcoming re-positioning, but also creates the financial scope to exploit smaller acquisition opportunities as part of our 'buy & build' strategy," added Chief Financial Officer Gernot Sagl.
Complete report The full Report on the first six months of 2010 will be released on August 3, 2010 and posted on the company's website at http://www.betasystems.com under the heading Investor Relations/Financial Reports.
Disclaimer All amounts cited in this information by the Company and information derived therefrom (e.g. percentage figures) are figures fully rounded up to thousands of euros as presented in the summarized Consolidated Financial Statements as at June 30, 2010.
End of information and explanations Beta Systems Software AG Beta Systems Software AG (Prime Standard: BSS, ISIN DE0005224406) offers large corporations high-end infrastructure software which spans sectors. This software enhances the performance of a company's IT in terms of its availability, scalability and flexibility. Data centers optimize their job and output management. Moreover, especially companies with high numbers of users are supported in the automation of their IT user administration. Improved security also serves to fulfill the requirements placed on business operations in respect of governance, risk management and compliance (GRC).
Beta Systems was founded in 1983, has been a listed company since 1997, and has a workforce of around 350 employees. The company's principal place of business is Berlin. Beta Systems operates through Centers of Competence in Cologne and Calgary, as well as 18 subsidiaries worldwide and cooperations with numerous partner companies. Throughout the world more than 1,300 customers use the products and solutions of Beta Systems to improve their processes and security in more than 3,200 running installations. At present, Beta Systems generates 50 percent of its sales from international business. Around 200 of its customers are based in the USA and Canada. More information on the company and its products can be found under www.betasystems.com.
end of announcement euro adhoc --------------------------------------------------------------------------------
Further inquiry note:
Beta Systems Software AG
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