SLIEDRECHT, Netherlands, July 18, 2002 (PRIMEZONE) -- Unit 4 Agresso shows a clear organic growth in turnover in the first six months of 2002. As expected, the results do not equal those obtained in the first half of 2001. The expected recovery of the Internet & Security division was attained.
In spite of the worsening economic situation in the first half of 2001, Unit 4 Agresso succeeded again in expanding its market share and turnover. Turnover increased with 8% organically to 105.5 million euros (H1 2001: 102.6 million euros. In the results of the first half of 2001, turnover and results of Bestmate were consolidated. This organization was sold to the management at the end of 2001). Especially the Internet & Security division realised a growth beyond expectation. The results for the first half of 2001 were exceptionally well. Because of the change in the economic climate at the end of 2001, the Internet & Security division saw its margins drop to a level of 25.2%. Besides expanding its market share in the first six months of this year, the Internet & Security division also succeeded in improving its margins.
The net result of the entire Unit 4 Agresso group after taxes and goodwill amounts to 3.1 million euros. As expected, this is well below the result obtained in the first six months of 2001 (6.1 million euros). This difference can be accounted for as follows:
-- The gross margin of the Internet & Security division in the first half of 2002 was below the level attained in the similar period in 2001; -- In the results of the first half of 2001 the positive result of Bestmate was consolidated; -- The second half of 2001 saw an increase in operational costs of more than 4 million euros compared to the first half of 2001. This was due to, among others, investments in employees and resources. Unit 4 Agresso was able to stabilize its cost level in the first half of 2002 compared to the second half of 2001; -- In los smaking subsidiaries in Germany, France, Sweden and the Netherlands, additional measures were taken with regard to the work force. The costs of these measures are calculated in the first half of 2002.
The management of Unit 4 Agresso anticipated a weak first half of the year. At the beginning of 2002 expectations were that the market would particularly recover in the second half of 2002. As a consequence of the continuing insecurity in the market regarding an economic recovery, Unit 4 Agresso thought it wise to further intervene in the costs. In France, Germany and Sweden the work force was reduced by 25%, 15% and 8% respectively. Additional measures were taken in the Benelux as well. A number of subsidiaries will be integrated at an accelerated pace, cutting down mainly on overhead expenses. At least 40 jobs are to disappear in the Benelux.
The result of these measures was that the operational costs in the first half of this year did not rise further compared to the second half of last year, in spite of the reorganization costs involved.
The first half of 2002 was successful for the Internet & Security division. The second half of 2001 showed a strong pressure on margins and the gross margin decreased to 25.2%. In the first half of 2002 the Internet & Security division managed to increase the margin with 1.5% to 26.7%. In line with the expectations Unit 4 Agresso was able not only to improve the profitability of this division in the first half of 2002 compared to the second half of 2001, but also to realise a stable growth in market share. Especially the value added distribution saw its margins rise due to increased services and added value during the sales process, and the expected shakeout among competitors. Turnover of the Internet & Security division rose by 11% organically and amounted to 40.1 million euros.
The sales pipeline of the Business Software division grew steadily in the first half of 2002. However, many companies were forced to put of investments because of the worsening economic situation. Particularly the markets in Germany and France were faced with hesitant customers. The Benelux market weakened as well, especially affecting the production companies segment. However, Unit 4 Agresso was able to increase its market share, mainly in the core markets defined (public sector and professional services), in which the international product line Agresso Business World played an important role. The subsidiaries in Norway and the United Kingdom showed a strong increase in profitability and turnover in the first half of this year. Turnover of the Business Software division grew 6% organically to 65.3 million euros. The gross margin stabilized at the level attained in the first half of last year (88,8%).
Outlook
To further optimise the profitability Unit 4 Agresso will take more measures in the second half of the year to reduce the operational costs. Besides the measures already mentioned, Unit 4 Agresso intends to further cut down on the work force. Expectations are that the number of employees will be reduced to 1,330 (2001: 1,391). In spite of the uncertain situation in the market, Unit 4 Agresso expects turnover to rise in the second half of the year as well, and that a positive result will be attained.
The announcement of the definitive semiannual results will take place on August 22.
Unit 4 Agresso is an international developer and distributor of secure ebusiness solutions. Unit 4 Agresso NV, with headquarters in the Netherlands, is listed on the Dutch Stock Exchange, The organization provides services for its customers worldwide through its subsidiaries and distributors in the Netherlands, Norway, France, the United Kingdom, Sweden, Germany, Italy, Spain, Belgium, Iceland, Canada and the United States.