vwd Vereinigte Wirtschaftsdienste AG / Release of an announcement according to
Article 37x of the WpHG [the German Securities Trading Act]
10.11.2011 07:25
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.
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International business fuels growth at the vwd group
Third quarter gives new boost to profitability
- Sales (nine months) climb by 4.3% to EUR 57,941 thousand
- EBITDA (nine months) jumps by 9.2% to EUR 6,022 thousand
- Market entry in Italy successfully carried out
- Guidance for 2011 confirmed
Frankfurt am Main, November 10, 2011 - vwd Vereinigte Wirtschaftsdienste
AG, a leading provider of financial information in Europe, announces the
group's financial results for the first nine months of 2011:
In the face of challenging business conditions created by the euro crisis,
the vwd group was able during the third quarter to continue the positive
trend of the first six months of 2011. By entering the Italian market, the
vwd group began to generate new growth for the company and expand its
international business operations. Both sales and EBITDA rose during the
first nine months of 2011. But interest payments and higher similar
expenses related to an existing put option hurt the company's earnings.
Key financial figures:
|[![CDATA[|[pre|]]]|]
in EUR '000 Q3 2011 Q3 2010 Nine Nine months
months2011 2010
Sales 20,989 18,267 57,941 55,575
EBITDA 1,996 1,686 6,022 5,512
EBIT 832 578 2,786 2,227
EBT 419 329 1,673 1,493
Net income 62 144 975 977
Earnings per share in -0.002 0.001 0.027 0.023
EUR
|[![CDATA[|[/pre|]]]|]
Economic and industry trends: difficult business conditions
The protracted effort to save the euro triggered a wave of uncertainty
during the third quarter of 2011. Lower economic forecasts added to the
feeling of foreboding on international markets. The major concern is that
the negative reverberations experienced in 2008 could return. At the same
time, the debate about increasing financial-market regulations continued.
This debate also gave rise to the question about which business models the
financial industry would use to meet the new challenges.
Business performance (first nine months of 2011): vwd generates profitable
growth again
During the first nine months of 2011, sales totaled EUR 57,941 thousand
(previous year: EUR 55,575 thousand). This represents an increase of 4.3%.
Two major reasons for this growth were the company's expanding
international operations and the business with product and risk
assessments. These developments show that the decisions to increasingly
focus on financial-market information were the correct ones and that this
shift in direction is having a stabilizing effect on vwd's business in an
uncertain financial-market environment. By contrast, the vwd group had to
deal with changing market conditions in the area of publication and
communication services. After about six months of the year, though, a
bottom began to form. The advertising income generated by the vwd group's
financial portal finanztreff.de rose as well. The increased attractiveness
created by new user-friendly content for people interested in financial
markets paid off in particular. By entering the market in Italy, the vwd
group succeeded in producing growth in the area of traditional market-data
provision. Only sales produced by the transaction business fell short of
the previous year's level. On the other hand, sales in the area of IT and
consulting services rose. Nonrecurring income from the project business
increased, but fell short of the company's expectations. This demonstrates
that the financial industry's willingness to make capital expenditures
remains too low. In the group's business with private customers, sales rose
slightly above the previous year's level.
During the first nine months of the year, earnings before interest, taxes,
depreciation and amortization (EBITDA) climbed by 9.2% to EUR 6,022
thousand (previous year: EUR5,512 thousand). By achieving an EBITDA margin
of 10.1%, the vwd group is nearing the goal of 15% that it set for this
metric. While material costs fell slightly by 2.2% to EUR 19,530 thousand
(previous year: EUR 19,977 thousand) due to optimal contract structuring in
procurement, personnel expenses climbed by 8.5% to EUR 25,860 thousand
(previous year: EUR 23,840 thousand). The major reasons for this increase
were the establishment of company's operations in Italy, new employees, the
permanent hiring of employees who had been working as freelancers and
salary increases. Rising sales and acquisition-related ancillary costs
caused other operating expenses to rise by 2.1% to EUR 8,077 thousand
(previous year: EUR 7,907 thousand). Depreciation, amortization and
impairment of tangible and intangible assets fell slightly by 1.5% and
totaled EUR 3,236 thousand (previous year: EUR 3,285 thousand). A large
share of depreciation, amortization and impairment was related to a
purchase-price calculation involving companies acquired in the past.
Earnings before interest and taxes (EBIT) climbed by 25.1% to EUR 2,786
thousand (previous year: EUR 2,227 thousand). The negative financial result
rose by 51.6% to EUR -1,113 thousand (previous year: EUR -734). The
increase was primarily due to fictional interest expenses and similar
expenses related to the existing put option to acquire the remaining shares
of the EDG Group totaling EUR 804 thousand (previous year: EUR 460
thousand). The interest that was actually paid amounted to only EUR 332
thousand (previous year: EUR 291 thousand). During the first nine months of
the year, earnings before taxes (EBT) rose by 12.1% to EUR 1,673 thousand
(previous year: EUR 1,493 thousand). Despite higher tax expenses, earnings
before minority interests were virtually unchanged at EUR 975 thousand
(previous year: EUR 977 thousand). Earnings after minority interests rose
by 17.1% to EUR 699 thousand (previous year: EUR 597 thousand). Earnings
per share totaled EUR 0.027 (previous year: EUR 0.023).
Business developments (Q3 2011): market entry in Italy
In the third quarter of 2011, sales at the vwd group climbed by 14.9% to
EUR 20,989 thousand (previous year: EUR 18,267 thousand). At the same time,
the operating earnings power of the vwd group improved significantly.
EBITDA jumped by 18.4% to EUR 1,996 thousand (previous year: EUR 1,686
thousand). Depreciation, amortization and impairment totaled EUR 1,164
thousand in the reporting period and were 5.1% above the level reached in
the same quarter in 2010 (previous year: EUR 1,107 thousand). The increased
expenses resulted from a currency-related increase in fixed assets, among
other things. During the reporting quarter, the purchase-price allocation
for the newly acquired business in Italy had not yet been completed. During
the third quarter, EBIT leapt by 43.9% to EUR 832 thousand (previous year:
EUR 578 thousand). As a result of the increased valuation of the put option
to acquire the remaining shares in the EDG Group, the fictional interest
resulting from this transaction rose to EUR 288 thousand (previous year:
EUR 173 thousand). Earnings before taxes rose by 27.5% to EUR 419 thousand
(previous year: EUR 329 thousand). In the third quarter, tax expenses as a
percentage of profit before tax have increased due to higher tax burden and
the effects from the integration of market maker Software AG into vwd AG
during the fiscal year. Due to the increased tax expenses, net income
before minority interests fell by 56.9% to EUR 62 thousand (previous year:
EUR 144 thousand). Earnings per share totaled EUR - 0.002 EUR in the third
quarter compared with EUR 0.001 the previous year. Adjusted for the effect
of the purchase-price allocation and the fictional interest expense from a
put option, earnings per share would total EUR 0.028.
Segment Market Data Solutions (MDS): international business operations gain
significance
During the first nine months of the year, sales generated by the MDS
segment with market-data systems, browser-based applications and
portfolio-management solutions rose by 7.6% to EUR 28,024 thousand
(previous year: EUR 26,035 thousand). The driving force behind the
segment's growing sales was its new business operations in Italy that are
primarily assigned to MDS. The area of market-data supply was also able to
increase sales in Germany compared with last year. In addition, demand for
solutions and services related to portfolio management climbed. Only sales
with private customers were unable to fully reach the previous year's
level. As a result of the new activities in Italy, material expenses,
personnel costs and other operating expenses rose. Synergies will be
generated here only at a later point in time. The segment's EBITDA fell
slightly by 1% to EUR 2,982 thousand (previous year: EUR 3,010 thousand).
Segment Technology Solutions (TS): demand rises for IT services
Drawing on new technological solutions for the securities-advising process
and Internet-based services for the financial industry, the TS Segment of
the vwd group boosted its sales by 7.0% to EUR 14,278 thousand (previous
year: EUR 13,344 thousand). The higher sales figures reflect continued
stability in the business with current customers and an increase in
nonrecurring income from the project business. On the other hand, income
from the transaction business fell slightly. Despite the rise in material
and personnel expenses, the segment's EBITDA jumped by 66.4% and totaled
EUR 1,691 thousand (previous year: EUR 1,016 thousand).
Segment Specialised Market Solutions (SMS): market changes weigh on
business
The fading demand for cross-media publication and communication concepts
could not be offset by sales gains in the area of certificate ratings or
higher advertising income generated by the financial portal finanztreff.de.
Sales in the SMS Segment fell by 3.4% to EUR 15,639 thousand (previous
year: EUR 16,195 thousand). As sales decreased, material costs and other
operating expenses dropped. But personnel expenses rose as a result of the
permanent hiring of employees who had been working as freelancers and a
one-time wage-related payment to employees. The unfavorable business
conditions faced by the segment caused its EBITDA to fall by 9.2% to
EUR1,348 thousand (previous year: EUR 1,485 thousand).
Financial and assets situation: liquidity increases
On September 30, 2011, the liquidity of the vwd group totaled EUR 10,590
thousand (as of December 30, 2010: EUR 7,666 thousand). The increase was
largely due to customer payments and the improved income situation. Total
assets amounted to EUR 84,443 thousand on September 30, 2011 (as of
December 31, 2010: EUR 77,932 thousand). As expected, the equity ratio fell
to 35.6% (as of December 31, 2010: 37.9%). The capital base of the vwd
group remains very stable. As experience has shown, the equity ratio will
rise sharply at the end of the year.
Risks and opportunities: financial markets between crisis and new
regulations
The customers of the vwd group are primarily financial-market players who
depend to a high degree on functioning capital markets. Should a European
country default as a result of the sovereign-debt crisis, this event would
have a dramatic impact on the financial system. As a result of this crisis,
the company faces risks that are difficult to predict at the moment. The
expected strengthening of financial-market regulations could make new
solutions for the financial markets necessary. With its technological
solutions for the securities-advising business, the vwd group could be
ideally positioned here and could take advantage of new market
opportunities. For a detailed analysis of the company's risks and
opportunities, we refer you to our Annual Report 2010.
Guidance: sales and earnings to rise
Fiscal year 2011 will be a growth year for the vwd group. The company
expects sales to climb to about EUR 81.0 million and EBITDA to rise to
approximately EUR 8.8 million. The vwd group confirms its previous guidance
for the full year of 2011. Business prospects for 2012 are clouded by
ongoing developments in the financial markets. But the company believes
that it will continue to grow.
Other developments: change on the Management Board
The Supervisory Board of vwd Vereinigte Wirtschaftsdienste AG and Mr.
Edmund J. Keferstein decided by mutual agreement on October 24, 2011, not
to extend the Management Board contract of Mr. Keferstein. Mr. Keferstein
is no longer associated with the company. During the Supervisory Board
meeting, the Management Board contract of Mr. Spencer Bosse was extended
ahead of schedule. In addition, the Management Board responsibilities of
Dr. Andreas Dahmen were expanded. Both board members have assumed Mr.
Keferstein's responsibilities and will represent the company in public as
board members of equal rank.
Frankfurt am Main, November 2011
vwd Vereinigte Wirtschaftsdienste AG
The Management Board
Forward-looking statements:
This interim statement contains forward-looking statements that reflect the
current views, expectations and assumptions of the vwd group and are based
on the information available to the company at the time of its preparation.
Forward-looking statements cannot guarantee that results and developments
will actually occur in the future, but are subject to risks and
uncertainties. Different factors may cause the future results and
development of the vwd group to deviate substantially from the expectations
and assumptions formulated in this statement. Changes in general economic
conditions, new legal parameters, the competitive situation and financial
market developments, in particular, can impact future results and
developments.
Additional information:
vwd Vereinigte Wirtschaftsdienste AG
Tilsiter StraÃe 1
60487 Frankfurt am Main
Investor Relations
Carsten Scharf
Telephone: +49 69 50701-270
Fax: +49 69 50701-114
E-mail: investorrelations@vwd.com
www.vwd.com
Abour vwd group:
vwd group offers customised information, communications and technology
solutions for the financial markets. As a leading European provider, it
specialises in meeting individual customer requirements in the areas of
asset management, retail banking, private banking and wealth management. It
offers innovative solutions for financial service providers, investors and
the media. vwd's business is driven by innovation, flexibility, customer
centricity and strong commitment to local needs. With around 470 employees
at 18 locations in 5 countries vwd is a public company, listed at the
Frankfurt Stock Exchange (ISIN DE0005204705). The group's best-known brands
are: finanztreff.de, vwd fonds service, vwd market manager, vwd portfolio
manager, vwd PortfolioNet, TradeLink and Tai-Pan.
10.11.2011 DGAP's Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Media archive at www.dgap-medientreff.de and www.dgap.de
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Language: English
Company: vwd Vereinigte Wirtschaftsdienste AG
Tilsiter StraÃe 1
60487 Frankfurt am Main
Germany
Internet: http://www.vwd.com
End of Announcement DGAP News-Service
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DGAP-IRE: International business fuels growth at the vwd group
| Source: EQS Group AG