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Delft, 22-07-2010

Exact reports EBITDA margin before one-off’s of 20.3 %

Exact Holding N.V. (Exact) announces its results for H1 2010.

Financial and Operational Highlights

  • In line with management expectations the effects of the global downturn started to slow down in the second quarter of H1 2010, with license revenue in the second quarter resuming growth compared to prior year.
  • Total revenue amounted to € 111.7 million (H1 2009: € 117.6 million), a decline of 5.0%. On an organic1) basis total revenue (H1 2009 organic: € 117.1 million) declined 4.6%. The revenue decline in Q1 2010 on an organic basis was 7.1%.
  • License revenue amounted to € 25.5 million (H1 2009: € 26.0 million), a decline of 2.2%. On an organic basis license revenue (H1 2009 organic: € 26.1 million) declined 2.6%. During the second quarter 95% of the business showed license revenue growth and this trend is expected to continue in the coming quarters.
  • Maintenance revenue declined 1.3% to € 67.0 million (H1 2009: € 67.9 million). On an organic basis maintenance revenue (H1 2009 organic: € 68.2 million) declined 1.7%. Contrary to previous years there was no CPI increase of maintenance contracts. Furthermore the maintenance base in the Netherlands was negatively impacted by bankruptcies and business that ceased to exist in the SME segment.
  • Service revenue amounted to € 19.3 million (H1 2009: € 23.7 million) a decrease of 18.8%. On an organic basis service revenues (H1 2009 organic: € 22.8 million) declined 15.6%. Service revenues have almost stabilized during the last four quarters and are expected to follow, with a time lag, the license revenue development.
  • As a result of increased prudency caused by the economic downturn the provision for bad debt at June 30, 2010, has been increased to € 10.3 million (June 30, 2009: € 8.0 million), resulting in a bad debt expense for the first half year of € 3.2 million (H1 2009: € 2.7 million).
  • Total operating costs without depreciation and amortization, but including onetime restructuring costs of € 0.9 million, amounted to € 89.9 million (H1 2009: € 93.9 million), a decrease of 4.3%.
  • EBITDA amounted to € 21.9 million (H1 2009: € 23.7 million), representing an EBITDA margin of 19.6%
  • (H1 2009: 20.1%). Excluding the onetime restructuring costs, EBITDA amounted to € 22.7 million, a decrease of € 1.0 million compared to H1 2009, representing an EBITDA margin excluding onetime restructuring costs of 20.3% (H1 2009: 20.1%).
  • EBIT amounted to € 16.3 million (H1 2009: € 19.5 million), representing an EBIT margin of 14.6% (H1 2009: 16.6%). EBIT excluding onetime restructuring costs and a onetime write off on the company airplane amounted to € 18.2 million, representing an EBIT margin excluding one off’s of 16.3% (H1 2009: 16.6%).
  • Net income amounted to € 11.9 million (H1 2009: € 15.0 million), representing a decrease of 21.0% mainly
  • as a result of the onetime restructuring costs and the onetime write off on the company plane.
  • Operating cash flow decreased by 1.7 % to € 27.3 million (H1 2009: € 27.7 million). The relatively small decrease in operating cash flow indicates an ongoing strong profit to cash conversion.
  • With a net cash position of € 49.8 million as per June 30, 2010 (June 30, 2009: € 43.3 million), Exact continues to have a very strong and debt free balance sheet.
  • EPS amounted to € 0.52 (H1 2009: € 0.66), representing a decrease of 21.2%. EPS before one-off’s amounted to € 0.60 per share.
  • An interim dividend of € 0.52 per share, representing 100% of the net profit, will be paid out on Friday August 13, 2010 to holders of ordinary shares on July 28, 2010 close of business. The shares will become ex-dividend on July 26, 2010.
  • Exact Online continues to show strong growth. The total number of Exact Online subscriptions grew by 48%
  • to over 15,000, leading to more than 37.000 administrations being accounted with Exact Online.
  • Exact moved to its new headquarter in Delft, the Netherlands.
  • On July 1, 2010 the Supervisory Board announced the appointment of Martijn Janmaat as CEO nominee, to succeed Raj Patel. Mr. Janmaat will be nominated for appointment as member of the Board of Managing Directors in the Extraordinary General Meeting of Shareholders on August 23, 2010.

Outlook
In light of the continued uncertain economic and business climate, Exact does not provide a specific guidance for 2010.

Exact believes that the effect of the global economic downturn has reached its bottom in the first half of 2010 and believes that the recovery of the economy will be gradual over the next 18 to 24 months. On the back of the expected improvement of the business climate in the second half of 2010, Exact believes that license revenue will continue to show growth versus 2009, thereby driving further operating leverage.

Exact‘s ambitions and plans for the remainder of 2010 are geared towards top line development and driving operating leverage. However, until the improvement of the current economic situation translates in structural overall revenue growth, EBITDA and cash flow protection will stay high on the management agenda.

Link: Full Financial Results

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