Announcement No. 2 -2009
10 March 2009
To NASDAQ OMX Nordic Exchange Copenhagen
Netop Solutions A/S releasing Annual Report 2008
Summary:
The year 2008 was one of major structural changes. Netop Solutions has
implemented a new sustainable platform for future growth. The acquisition of
GenevaLogic strengthened the Education business area, and a new business area,
Communication, was set up following the conclusion of a global, exclusive
distribution agreement with Medianet. Based on the many initiatives launched in
2008, we expect revenue and earnings improvements in 2009.
(This announcement should be read in conjunction with the enclosed 2008 Annual
Report for Netop Solutions. The Annual Report is also available from Netop
Solutions' web site, www.netop.com.)
Highlights of the 2008 financial year
The year 2008 was a challenging year for Netop Solutions. Throughout the
reporting period, the company underwent a comprehensive business turnaround
process, which is expected to be completed by the end of 2009.
With effect from 1 July 2008, Netop Solutions signed an agreement with
GenevaLogic to acquire all shares in the company.
With effect from 1 July 2008, Netop Solutions signed a global, exclusive
partnership agreement with software business Medianet Innovations and
subsequently set up the Communications business area. Netop Solutions' business
areas now comprise Administration, Education and Communication.
The organisation was adjusted in 2008 and all of the company's development
activities were relocated to a development centre in Romania with a view to
achieving a more cost-efficient and flexible organisation.
Total revenue for the year was DKK 92.1m, compared with DKK 85.3m in 2007. The
increase was largely attributable to acquisitive growth, and the 2008 revenue
fell significantly short of expectations at the beginning of the year.
We incurred an operating loss before depreciation and goodwill amortisation
(EBITDA) of DKK 38.3m in 2008 against a loss of DKK 20.6m last year.
Cash resources amounted to DKK 48.1m at year-end 2008.
Highlights for the fourth quarter of 2008
Consolidated revenue was DKK 27.4m in Q4 2008, up from the year-earlier level of
DKK 18.4m. Revenue was strongly affected by the negative economic developments,
especially in the UK, but sales also slowed in the US market in the fourth
quarter 2008. On the other hand, we generated considerable Y/Y-growth in the
very important Nordic market during the fourth quarter.
EBIT represented a loss of DKK 12m in Q4 2008 compared with a loss of DKK 17.5m
in Q4 2007.
Events after the balance sheet date
After the end of the financial year, we have resolved to close the Frankfurt and
Berlin offices. As part of the decision, we have entered into a distribution
agreement with a former Netop Solutions business partner in Germany. The process
of transferring the business to the new main distributor is expected to be
completed by the end of the first quarter of 2009.
Outlook for 2009
One of our primary goals for 2009 will be to generate revenue growth, while
maintaining strict cost management. Management is optimistic with respect to our
2009 performance: We optimised our organisation and our in-house and external
business procedures throughout 2008 and are thus poised for growth. At the same
time, we are in the midst of a global economic crisis which has made many
companies focus on reducing costs. Our solutions are extremely well suited to
this end, as they are designed to reduce costs in connection with travel and
meeting activities.
Apart from the recruitment of a few sales assistants, our sales organisation is
in place, and we expect to finalise the relocation of development departments
from four different locations to the low-cost country of Romania in the first
half of 2009 without any anticipated adverse quality and delivery implications.
Finally, we expect business combination synergies to feed through in the first
three months of 2009, thereby achieving a cost reduction of about 25% relative
to the overall costs of GenevaLogic and the Medianet agreement.
Against this background, we expect to generate growth in revenue and financial
results in 2009. On the basis of our forecast of successively declining costs
and rising revenue throughout 2009, we expect to generate an operating profit in
the second half of 2009. However, it would not be realistic to expect an
operating profit for the full year 2009. Finally, management expects the
turnaround process initiated in the spring of 2008 to be finalised in the second
half of 2009 without requiring additional capital contributions for the company.
Contact:
CEO Kurt Bager CFO Claus Finderup Grove
Tel.: +45 45 90 25 25 Tel: +45 45 90 25 25
E-mail:kgb@netop.com Email: cfg@netop.com
Investor and analyst presentation
Netop Solutions will host an investor and analyst presentation on Thursday, 19
March at 12.00 at Carnegie Bank A/S, Ovengaden neden Vandet 9B, DK-1414
Copenhagen K. Representing Netop Solutions will be Kurt Groth Bager, CEO, and
Claus Finderup Grove, CFO. To register for the presentation, send an e-mail to
Maya Koch, Event Manager, at events@carnegie.dk by Wednesday, 18 March.
About Netop Solutions A/S
Netop Solutions A/S, formerly Danware A/S, develops and markets software
solutions enabling swift, stable and secure transfer of screen images, sound and
data between two or more computers. The company has three core business areas:
Administration, Education and Communication. The core product within
Administration is Netop Remote Control, which enables remote control of one or
more computers. Education consists of the Netop and Vision software solutions
for e.g. computer-based classroom teaching. Communication is a modern unified
communications solution integrating web, video and audio conferences, secure
chat, single-click talking and desktop and file sharing. Netop Solutions has
subsidiaries in the US, the UK, Romania, Germany and Switzerland, and Netop
solutions are sold in more than 80 countries. Netop Solutions A/S is listed on
the Nasdaq OMX Nordic Exchange Copenhagen and is a component of the SmallCap+
index. For more information, go to www.netop.com.
