Announcement No. 16 - 2007
24 October 2007
Profit forecast for 2007 adjusted
In 2007, Danware has continued building up the subsidiaries in the USA, Germany
and the United Kingdom, and the development on this front was more or less as
expected during the first half. Unfortunately, Q3 revenue disappointed at DKK
15.2m, against DKK 19.1m in Q3 2006 and DKK 28.7m in the previous quarter. Thus
the growth that Management had expected for Q3 after the first half did not
materialise.
In Q3, revenue dropped in all regions but the Nordic region, and total revenue
in the two main business areas, Desktop Management and Education also fell back.
In the USA, however, sales continue to rise in Desktop Management in which Q3
revenue was up on Q3 2006. In Education, revenue was affected by the earlier
termination of agreements with the distributors in the principal markets as
Danware in the subsequent period focused mainly on developing business partner
channels for its Desktop Management products and, to a lesser extent, on
developing business partner channels for its Education products. Revenue for the
nine months to 30 September 2007 amounted to DKK 67.3m, compared with DKK 68.1m
in the same period of 2007, which did not meet expectations.
The challenges experienced in Q3 can be ascribed to internal factors as well as
to external market conditions. An internal factor is that Danware had to part
with its chief sales officer due to differing opinions on how to implement the
new sales and marketing strategy. As a consequence, Peter Grøndahl, CEO assumed
responsibility for sales and marketing and the subsidiaries, which now report to
him directly.
Based on the Q3 performance, Danware has initiated an analysis of the barriers
preventing the company from achieving the desired growth. Management has
furthermore resolved to take targeted measures to get sales in Education back on
track. Also, a number of measures have been taken to boost revenue growth.
Danware's main product, NetOp Remote Control was recently rated “Best in test”
by several of Germany's leading IT magazines - PC Professionell, PC Magazin and
Network Computing - which underlines the product's market leading position.
Similarly, Danware's other products are also among the leading in the market and
provide attractive market opportunities.
As a result of the lower revenue, the profit for Q3 is lower than expected.
Accordingly, EBITDA was a loss of DKK 12.9 million. In the nine months to 30
September 2007 EBITDA was a loss of DKK 9.1 million.
Based on the Q3 performance, revenue for 2007 is expected to amount to DKK
90-100m, against the previous forecast of DKK 130-135m. This amount includes the
effect of the lower USD exchange rate - a negative effect of approximately DKK 3
m on revenue. EBITDA for 2007 is expected to be a loss in the order of DKK 13
million, against the previously expected profit of approximately DKK 16 million.
The Q3 performance and the expectations for the remainder of the year will be
discussed in more detail in connection with the profit announcement for Q3 2007
on 20 November 2007.
Contact
Peter Grøndahl, CEO, tel. +45 4590 2525, e-mail pg@danware.dk
Danware's core business is to develop and market software products based on the
NetOp® core technology - a technology enabling swift, secure and seamless
transfer of screens, sound and data between two or more computers. The company's
three product areas are Desktop Management, Education and Security. The core
product in Desktop Management, NetOp® Remote Control, enables remote control of
one or more computers from another computer. NetOp® School, the core product in
Education, is a software application for computer-based classroom teaching. The
Security business products are NetOp® Desktop Firewall and NetOp® Netfilter. All
are plug ‘n play products offering extensive functionality, flexibility and
user-friendliness. Danware's products are sold in more than 80 countries.
Danware is listed on the OMX Nordic Exchange Copenhagen A/S (symbol DANW) and is
a component of the Small Cap+ index.
