Birkeroed,, 2013-03-05 14:38 CET (GLOBE NEWSWIRE) --  

Announcement No. 1-2013                                                                                                                    

To: NASDAQ OMX Copenhagen A/S

Netop Solutions A/S releasing Annual Report 2012

Summary: This was an eventful year for Netop Solutions. Our initial focus in 2012 was to execute the investment initiatives for sales, marketing and product development that were planned in late 2011. We began the year on a highly satisfactory note, reporting 12% revenue growth in the first quarter, but the following quarters were more challenging and as a result, we decided later in the year to scale down the company's investment activity. The full-year revenue for 2012 came to DKK 85.3 million, a 3% decline from 2011.

(This announcement should be read in conjunction with the enclosed 2012 Annual Report for Netop Solutions. The Annual Report is also available from Netop Solutions’ web site, www.netop.com.)

Highlights of the 2012 financial year

• The year 2012 proved more challenging for Netop Solutions than we expected, as market conditions began to deteriorate after a solid first quarter with improvements in both revenue and earnings. This was especially the case in the EMEA region, and we realized that we would not be able to achieve the growth targets we had defined at the beginning of the year. In the first half of 2012, we made a number of investments in all of our product areas, but due to our revenue performance, we decided to scale them down in the second half of the year, and instead focused on exercising the cost control necessary during that period.

• In the third quarter of 2012, we decided to combine the two business areas Secure Remote Control and Live Chat in a new business area, Customer Service.  The IT Helpdesk market showed growing interest in 2012 for integrating live chat functionality into remote control solutions. To accommodate this demand, we will in the future be positioning our Live Guide product, like Netop Remote Control, as a solution to improve and enhance efficiency in large corporate IT helpdesk functions or as a solution for large-scale corporate customer service centers, which is consistent with the focus we have had on the Enterprise segment in recent years.  

• Consolidated revenue for the year was DKK 85.3 million against DKK 88.3 million in 2011. The change in revenue was primarily ascribable to lower revenue in EMEA for Customer Service and a decline in the US for Education.

• EBITDA was a loss of DKK 5.7 million in 2012, against a profit of DKK 2.5 million in 2011. Accordingly, EBITDA fell slightly short of the company's guidance of EBITDA in the DKK 0 to DKK 5 million loss range.

• Cash flows from operating activities was an outflow of DKK 3.1 million in 2012, compared to an inflow of DKK 5.0 million in 2011.

• Netop Solutions incurred a loss for the year after tax of DKK 19.3 million against a loss of DKK 11.3 million in 2011.

• Revenue in the Customer Service segment, covering the two former business areas Secure Remote Control and Live Chat, amounted to DKK 49.4 million in 2012, a decline of 4.6% from DKK 51.8 million in 2011. Adjusted for exchange rate effects, the drop in revenue would have been 8.3%. Revenue from the US, Netop Solutions' largest single market, was up by 7% over 2011, but expressed in local currency, revenue was down by 1% on the year. Revenue from the Nordic market was up by 4% over 2011. The Customer Service segment accounted for 58% of total revenue, compared with 59% in 2011. We remain confident that the strategy of focusing on the Enterprise segment is the right way to go, as we believe that there is still an unmet potential on the Enterprise market, considering the strong position of Netop Solutions products.

• Revenue from the Live Guide segment of the Customer Service business area was DKK 5.4 million in 2012 against DKK 3.4 million in 2011, an increase of 47%. The realized revenue growth derived mainly from the American market and the Nordic market, where we are now seeing more businesses recognize chat as a real alternative to e-mail or telephony.

• Revenue in the Education segment amounted to DKK 32.2 million in 2012, a 5.6% fall from DKK 34.1 million in 2011. Adjusted for exchange rate effects, the drop in revenue would have been 9.7%. Education accounted for 39% of consolidated revenue in 2012, which was in line with the year before. In the company's largest market, the US, revenue was down by 13%. The US Education market is mature, with many customers having difficulty raising financing, but the lack of product updates in the version of Netop Vision we launched in early 2012 also meant that the company did not sell as many new licenses as expected. The EMEA region was largely unchanged relative to the year before. The UK and the French markets both declined, while two of the larger markets, Germany and Russia, both produced double-digit growth.

Q4 2012 financial highlights

• Revenue in Q4 2012 was DKK 22.3 million, against DKK 24.6 million in Q4 2011.

• The Q4 2012 EBITDA was minus DKK 0.3 million, against DKK 1.9 million in Q4 2011.

• Cash flows from operating activities amounted to DKK 0.1 million against DKK 2.7 million in the same period of last year.

Outlook for 2013

For the Customer Service business area, the Enterprise market will continue to be in focus, as our products are strongly positioned to provide solutions for IT helpdesks and customer service centers. We will also continue to expand the OEM/Embedded segment, especially on the US market, and we expect positive results from our new partnership program, especially in the second half of 2013. Against this backdrop, Netop Solutions expects a 6–10% revenue improvement in Customer Service in 2013.

We launched new versions of Education solutions for the iPad and other devices, and a student response system to meet customer demand. Setting up a dedicated Education organization targeting an entirely different market than what Customer Service does is also expected to boost Education revenue. The new initiatives relating to the partnership program are expected to support growth as well. Although the market continues to be affected by the difficulties schools are having in raising money, Netop Solutions expects a 4-8% revenue improvement in Education in 2013. 

We forecast that consolidated revenue for 2013 will be in the DKK 90–95 million range, a 5-9% improvement, and that EBITDA will be in the DKK 3-8 million range. Our revenue guidance for 2013 is based on a USD/DKK exchange rate of DKK 5.6. At a USD/DKK exchange rate of 5.7, revenue is expected to improve by about DKK 0.7 million, and EBITDA would be about DKK 0.3 million higher.

About Netop Solutions A/S

Netop develops and sells market leading software solutions that enable swift, secure and seamless transfer of video, screens, sounds and data between two or more computers. The company has two business areas: Customer Service and Education.  Used by half of the Fortune 100, Netop’s customer service solutions, including secure remote access and live chat, help businesses provide better customer service, reduce support costs and meet security and compliance standards. In Education, Netop is the world leader in classroom management software, helping teachers in 75 countries make teaching with technology easier and more effective. Headquartered in Denmark, Netop employs 144 people and has offices in the United States, Romania and Switzerland. The company sells its solutions to public and private clients in more than 80 countries. Netop Solutions A/S is listed on NASDAQ OMX Copenhagen. Netop generated revenue of DKK 85.3 million in 2012. 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.

         Kurt Bager (CEO)
         
         Tel.: +45 45 90 25 25
         
         E-mail:kgb@netop.com