Announcement no. 8-2009
18 August 2009
Profit announcement for the second quarter and first half-year of 2009
In the second quarter of 2009, Netop Solutions felt the impact of the global
economic recession in the form of a slowdown in IT investments in its core
markets. Expectations for improved earnings for the full year 2009 are retained
and the company maintains its guidance for a profit in the second half-year,
although it will be lower than previously anticipated.
In the second quarter of 2009, we continued our efforts to strengthen and
optimise our distribution channel, and the closer relationships to business
partners and customers have given us a better insight into our markets.
Management remained focused on the final part of the turnaround process
initiated in 2008, but after an anticipated revenue improvement in the first
quarter of 2009, Netop Solutions experienced a dramatic market slowdown in the
second quarter as a direct consequence of the global economic recession. By
focusing on process and cost optimisation, we reduced our cost base by around
30%, and in the second half-year additional efforts will be made to reduce the
cost base by around 10-15%.
In Q2 2009, revenue totalled DKK 21.6against DKK 23.5m in Q2 2008, while H1
revenue totalled DKK 47.7m in 2009 against DKK 40m in H1 2008. Revenue in the
second quarter fell significantly short of expectations, and during the period
Netop Solutions felt a dramatic slowdown in all markets and within all
segments. Management believes this slowdown was owing to the reluctance of many
organisations and businesses to make IT investments in the midst of a global
economic recession. It is not our impression that business was being lost to
the competition but rather that the total volume of business in the market
dropped significantly.
The Q2 Administration revenue was DKK 8.3m, compared with DKK 17.1m in Q2
2008. The Q2 Education revenue was DKK 10.8m against DKK 6.4m in the same
period of last year, while revenue from Communication, which is a relatively
new business area for Netop Solutions, amounted to DKK 1.2m. The Communication
license model is based on the customer paying for the use of products in the
form of regular payments under agreements made for an indefinite term, thereby
generating a small but regular cash inflow for Netop Solutions.
Revenue in the EMEA/APAC region was DKK 11.9m in Q2 2009, compared with DKK
17.6m in the same period of 2008. US revenue totalled DKK 9.7m against DKK 5.9m
in Q2 2008.
EBITDA was a loss of DKK 13.8m in Q2 2009, against a loss of DKK 6.2m in the
same period of last year. EBIT was a loss of DKK 16.9m in Q2 2009, compared
with a loss of DKK 7.6m in the year-earlier period. Netop Solutions recorded a
net loss of DKK 15.6m in Q2 2009 against a DKK 6.2m loss in Q2 2008.
Management has found it necessary to revise the guidance for 2009: Full-year
revenue is expected to increase, while the outlook for a significantly improved
EBIT performance is retained, although revenue growth will be at a lower level
than previously anticipated. Management expects that market conditions will
continue to be subject to significant uncertainty during the remainder of 2009
and that Netop Solutions will continue to feel an impact from the global
economic recession. Management remains confident that it is realistic to
maintain the guidance for an operating profit (EBITDA) in the second half of
2009, although it will be lower than previously anticipated.
Contact
Kurt Bager (CEO) Claus Finderup Grove (CFO)
Tel.: + 45 45 90 25 25 Tel.: + 45 45 90 25 25
E-mail:kgb@netop.com E-mail: cfg@netop.com
About Netop Solutions A/S
Netop develops and sells software solutions enabling swift, stable and secure
transfer of video, screen images, sound and data over the Internet. The company
has three core business areas: Administration, Education and Communication.
Netop's unique and cost-saving Administration solutions makes work easier for
IT professionals through Remote Control and IT Asset Management. Netop's
market-leading Education solutions for classroom management and corporate
e-learning help students and teachers achieve optimum results through virtual
teaching. Netop's Communication solutions, including unified communications,
allow customers, business partners and colleagues to meet easily and safely in
virtual space through video conferences, chat, audio and file sharing over the
Internet. Netop has 152 employees and subsidiaries in the USA, the UK, China,
Romania and Switzerland. The company sells its solutions to public and private
sector customers in more than 80 countries. Netop Solutions A/S is listed on
NASDAQ OMX Copenhagen and is a component of the SmallCap+ index. Netop
generated revenue of DKK 92.1m in 2008. For more information, go to
www.netop.com.
Translation In the event of any inconsistency between this document and the
Danish language version, the Danish language version shall be the governing
version.
