vwd Vereinigte Wirtschaftsdienste AG / Release of an announcement according to Article 37x of the WpHG [the German Securities Trading Act] 11.11.2010 08:05 Interim report according to Article 37x of the WpHG, transmitted by DGAP - a company of EquityStory AG. The issuer is solely responsible for the content of this announcement. --------------------------------------------------------------------------- vwd hurt by financial industry's unwillingness to invest - new phase of growth planned for 2011 vwd AG/interim statement/forecast - Sales and EBITDA slip during the first nine months of 2010 - Strong fourth quarter expected - Market environment for acquisitions favorable - Sales outlook of EUR 75 million for the full year of 2010 confirmed - Predicted EBITDA margin slightly below 10 % Frankfurt am Main, November 11, 2010 - The vwd Vereinigte Wirtschaftsdienste AG, a leading provider of financial-market information in Europe, reports the following financial results (IFRS) for the Group during the first nine months of 2010: Key financial figures:|[![CDATA[|[pre|]]]|] in EUR '000 Q3 2010 Q 3 2009* 9M 2010 9M 2009* Sales 18,267 19,185 55,575 58,750 EBITDA 1,686 1,972 5,512 7,053 EBIT 578 1,062 2,227 4,212 Net income 144 636 977 2,554 Earnings per share in 0.001 0.015 0.023 0.079 |[![CDATA[|[/pre|]]]|]*Adjusted Business trends: With a slight lag, the vwd group felt the full impact of the global economic and financial crisis during the first nine months of 2010. While the company was able to increase both sales and earnings in recent years as the global financial crisis peaked, it is now experiencing the delayed impact. The first nine months continued to be characterized by the financial industry's widespread unwillingness to make capital expenditures, a trend that has prevented the vwd group from continuing the previous years' strong business performance. In particular, the company's sale of software licenses and its project business fell sharply. vwd customers have put off installing new systems or delayed projects that were already under way in an effort to optimize their cost structures. Demand for cross-media publication and communication concepts remained anemic as well. In addition, some contract terminations made at the height of the financial crisis were felt for the first time during the period under review. In spite of the large number of new contracts, not all terminated agreements could be completely offset. Overall, the number of new contracts was below the company's expectations. Advertising income from the online portal 'finanztreff.de' operated by vwd has not yet begun to approach the very good levels achieved in recent years. During the reporting period of January - September 30, 2010, sales fell by EUR 3,175.9 thousand (- 5.4 %) to EUR 55,574.6 thousand (previous year: EUR 58,750.5 thousand). Including internally produced and capitalized assets, the vwd group generated total sales of EUR 55,734.4 thousand (previous year: EUR 58,846.1 thousand). Even though sales dropped, consolidated earnings remained clearly positive. Earnings before interest, taxes, depreciation and amortization dropped by EUR 1,540.5 thousand to EUR 5,512.2 thousand (previous year: EUR 7,052.7 thousand). The 21.8 % decrease was due to lower sales and substitution effects as high-margin business activities were replaced by lower-margin ones. The company's earnings strength was also sapped by higher depreciation, amortization and impairments, which rose by EUR 444.8 thousand (15.7 %) to EUR 3,285.3 thousand (previous year: EUR 2,840.5 thousand). This rise is largely attributed to purchase-price allocations (PPA) totaling EUR 1,318 thousand (previous year: EUR 1,125 thousand) for companies acquired in recent years. EBIT fell by EUR 1,985.3 thousand (- 47.1 %) to EUR 2,226.9 thousand (previous year: EUR 4,212.2 thousand). In consideration of fictional interest expenses of EUR 459.9 thousand related to an existing put option, net income decreased by EUR 1,576.7 thousand (- 61.7 %) to EUR 976.9 thousand (previous year: EUR 2,553.7 thousand). During the third quarter, the vwd group generated sales of EUR 18,267.0 thousand, compared with EUR 19,185.0 thousand in the same quarter last year. This represents a drop of EUR 918.0 thousand (- 4.8 %). Quarterly EBITDA amounted to EUR 1,685.5 thousand, EUR 286.7 thousand (- 14.5 %) below the total of EUR 1,972.2 thousand produced in the same quarter last year. During the third quarter of 2010, depreciation, amortization and impairments were taken on purchase-price allocations (PPA) totaling EUR 585.8 thousand (previous year: EUR 422 thousand). Overall, third-quarter EBIT dropped by EUR 483.9 thousand (- 45.6 %), decreasing from EUR 1,062.1 thousand to EUR 578.2 thousand. At EUR 143.5 thousand, net income was EUR 492 thousand (- 77.4 %) less than the total of EUR 635.5 thousand reported in the same period last year. The performance of the individual segments: Segment Market Data Solutions (MDS) In the MDS Segment, sales of market-data systems, browser-based applications and portfolio-management solutions decreased by EUR 1,626 thousand (- 5.9 %) to EUR 26,125 thousand (previous year: EUR 27,751 thousand). In this segment, recurring revenues remained at the previous year's level, while non-recurring income from the implementation of major projects was lacking. Furthermore, business with private customers eased, causing segment EBITDA to fall by EUR 744 thousand (- 19.8 %) to EUR 3,010 thousand (previous year: EUR 3,754 thousand). Segment Technology Solutions (TS) Business fell most sharply in the TS Segment, an area in which vwd offers technology and transaction solutions as well as consulting and outsourcing assistance. The transaction business suffered from lower trading turnover, the direct result of the general capital-market situation, and performed below the previous year's level. Business remained stable only in the provision of financial data to the print media, an area in which vwd is the market leader in several European countries. While business with current customers remained stable in the TS Segment, non-recurring income also was well below expectations as a result of the strong reluctance to make capital expenditures. The segment's sales dropped by EUR 787 thousand (- 5.2 %) to EUR 14,275 thousand (previous year: EUR 15,062 thousand). EBITDA fell by EUR 831 thousand (- 45 %) to EUR 1,017 thousand (previous year: EUR 1,848 thousand). Specialised Marketing Solutions (SMS) With target-group-specific publication and communication concepts in daily newspapers and business media as well as in online marketing, vwd generated sales of EUR 16,195 thousand during the first nine months of the year, or EUR 596 thousand (- 3.5 %) less than last year (previous year: EUR 16,791 thousand). On the one hand, the steep drop in sales produced by the company's business with fund management companies could be offset with new partnerships. On the other hand, the EDG Group was fully consolidated for the first time, enabling segment EBITDA to slightly rise by EUR 35 thousand (2.4 %) to EUR 1,485 thousand (previous year: EUR 1,450 thousand) in spite of the sharp decrease in the distribution business. Financial and asset situation On September 30, 2010, the vwd group had cash and cash equivalents of EUR 8,823.9 thousand (December 31, 2009: EUR 9,293.1 thousand). As of September 30, 2010, total assets had fallen to EUR 78,618.3 thousand, compared with EUR 80,952.6 thousand as of the reporting date of December 30, 2009. The equity ratio rose from 37.0 % to 38.2 %. As a result, the vwd group remains solidly financed. Report of the Management Board Edmund J. Keferstein, Chairman of the Management Board of vwd vereinigte Wirtschaftsdienste AG, said of the period under review: 'The first nine months of fiscal year 2010 did not live up to our expectations. We have used this period to further tap the synergy potential created by the company acquisitions we made in the past. One major focus of our work is streamlining the group's structure. We will take advantage of every opportunity to organizationally optimize the vwd group and to further cut costs. From today's perspective, the year of 2010 marks the bottom of business trends. Drawing on the continuing stable company situation, we are reviewing how we can further strengthen our operating business through acquisitions. The increasing regulation of financial markets makes the use of refined data and new IT systems essential for the securities business. Over the mid- and long-term, we will profit disproportionately from this trend. We are convinced of this.' Risks A new risk and opportunity review has found no new changes related to the statements contained in the Annual Report 2009. Outlook As it did last year, the company expects the fourth quarter to be much stronger than the third quarter because major ongoing projects are being completed. Despite the difficult business conditions in the first nine months of the year, the Management Board expects sales for 2010 will reach about EUR 75 million. Expected EBITDA will probably total slightly more than EUR 7 million. Forward-looking statements This document can contain forward-looking statements about vwd's business, financial and earnings position and earnings forecast. Such words as 'can,' 'will,' 'expect,' 'anticipate,' 'consider,' 'intend,' 'plan,' 'believe,' 'continue to' and 'estimate' as well as forms of these terms or similar words indicate such forward-looking statements. These forward-looking statements reflect our present assessments and assumptions, and are subject to risks and uncertainties. Our business activities, success, strategy and results are influenced by various factors, over many of which we have no control and which may cause actual results and trends to substantially deviate from our forward-looking statements. These factors include, for instance, the number of actual customer orders received by vwd; the extent of market demand for information, communications and technology solutions in the securities business; the point in time when customers take final possession of products; the situation on the financial market and the financing options of vwd; the general market terms for financial services; the macroeconomic environment; cancellations, changes or delays in product deliveries; limits to development capacity; lengthy sales and qualifying cycles; problems in the development process; increased competition; non-acceptance by vwd's target market of new products and services; challenges to integrating important acquisitions; exchange-rate fluctuations; interest-rate fluctuations and changes in available interest terms; delays in the development and marketing of new products; and a deterioration in the general economic situation as well as numerous other factors not limited to those that vwd has mentioned in public reports and announcements in the past. Forward-looking statements contained in this interim statement are based on the present assessments and forecasts of the Management Board as well as the information available to it. These forward-looking statements are valid at the time of publication. vwd assumes no responsibility for updating or correcting such forward-looking statements in light of new information, unexpected developments or for any other reason unless under express legal obligation to do so. Frankfurt am Main, November 2010 vwd Vereinigte Wirtschaftsdienste AG The Management Board Contact Investor Relations: Carsten Scharf Tel: +49 (0) 69-50701-270 Fax: +49 (0) 69-50701-114 E-mail: investorrelations@vwd.com http://www.vwd.com vwd Vereinigte Wirtschaftsdienste AG Tilsiter StraÃe 1 60487 Frankfurt am Main Regulated Market Frankfurt, General Standard ISIN: DE 000 520470 5 Profile vwd group: vwd group is a leading workflow solution provider for the European financial markets. The group concentrates on providing superior solutions around the investment process for money managers, wealth managers, advisors, media, corporate and private investors. With the company's content, software solutions, business process outsourcing services as well as multi-media distribution systems, it helps its customers to make better informed decisions, increase transparency and improve profitability. vwd's business is driven by innovation, flexibility, customer centricity and strong commitment to local needs. For more than 60 years the group enables its customers to become more successful and provide better service to their clients. The group's best-known brands are: finanztreff.de, vwd fonds service, vwd market manager, vwd portfolio manager, vwd PortfolioNet, TradeLink and Tai-Pan. With around 430 employees in 15 locations and 5 countries vwd is a public company, listed at the Frankfurt Stock Exchange. 11.11.2010 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: vwd Vereinigte Wirtschaftsdienste AG Tilsiter StraÃe 1 60487 Frankfurt am Main Deutschland Internet: http://www.vwd.com End of Announcement DGAP News-Service ---------------------------------------------------------------------------
DGAP-IRE: vwd hurt by financial industry's unwillingness to invest - new phase of growth planned for 2011
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