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LHS Aktiengesellschaft: Strong growth continues unabated also in the second quarter of 2007

Revenues increased by 58.7 percent – 2007 revenue guidance now adjusted upward to EUR 95 million – award received by Frost & Sullivan

(PresseBox) (Frankfurt am Main, ) LHS Aktiengesellschaft (in the following “LHS”), a leading software provider of telecom billing and customer care systems across the wireless, wireline, and IP telecom markets worldwide, today announced the results for the second quarter of their fiscal year (ending on 30 June 2007).

The audited results have been established in accordance with the International Financial Reporting Standards (IFRS), which are mandatory for all companies borrowing on the capital market. The key figures and ratios for the ended business quarter are as follows:

LHS’ revenues increased to EUR 24 million in the second quarter of 2007. This corresponds to a rise by 58.7 percent compared to the relevant quarter of the previous fiscal year. Total revenues generated in the first six months of 2007 rose by 57.3 percent to EUR 45.8 million.

The adjusted earnings before income taxes, depreciation and amortization (adjusted EBITDA) rose once again about 174 percent to EUR 4.9 million because the operating expenses increased proportionately less than sales revenues. On aggregate, adjusted EBITDA achieved in the first half of 2007 rose by 154.5 percent to EUR 8.9 million.

The resulting increase in the adjusted EBITDA margin to 20.2 percent in the second quarter of 2007 reflects the strict cost management measures implemented by LHS. Altogether, the adjusted EBITDA margin continued to improve throughout the first six months of 2007 and amounts to 19.5 percent for the entire period.

Adjusted profit that was achieved in the accounting period under review doubled from EUR 1.7 million in the second quarter of the previous business year to EUR 3.5 million. Concerning the first half of 2007, adjusted profit was up by 219.5 percent and rose to EUR 7.2 million.

In the second quarter of 2007, adjusted earnings per share amounted to EUR 0.25 (basic) and EUR 0.24 (diluted) respectively. Accordingly, adjusted earnings per share amounted to EUR 0.51 (basic) and EUR 0.49 (diluted) in the first half of 2007.

Because of the positive business development and financial situation the free cash flow increased from EUR 1,4 million in the first half of 2006 to EUR 8.6 Million in the first half of 2007.

On Course for Continued Growth

The operational business of LHS, too, featured quite a number of highlights and milestones in the second quarter of 2007. Major measures and events, which will contribute to the sustained growth of the company, include:

In June 2007, LHS received the “2007 Stratecast Global Investment of R&D Resources to Address Core Billing Needs Award” of Frost & Sullivan’s Stratecast Research Group. Frost & Sullivan thus acknowledged the considerable R&D investments made by LHS for many years.

Overall the contracts for three migration projects were signed. The number of projects implementing the new BSCS iX Release 2, which was launched only in October 2006, now amounts to 11 already.

In the second quarter of 2007, LHS created 42 new jobs (19 jobs in the Frankfurt headquarters, 11 jobs in Sao Paulo, 6 jobs in Kuala Lumpur, and 6 jobs in Dubai). On 30 June 2007, LHS had a permanent staff of 590 employees all over the world.

Positive Development and Outlook

The positive development of LHS Aktiengesellschaft continued unabated also in the second quarter of 2007. The increase in sales revenues and earnings underlines and confirms the company’s strategic focus on sustained growth.

With respect to the entire 2007 fiscal year, LHS Aktiengesellschaft now expects slightly higher revenues amounting to approximately EUR 95 million – compared to the figure of EUR 90 to 93 million announced at the end of the first quarter of 2007. The adjusted EBITDA margin is expected to amount about 20 to 21 percent. For the third quarter 2007 LHS expects sales revenues of about EUR 24 to 25 million with an adjusted EBITDA margin of 20 percent.

“The excellent results achieved by LHS in the second quarter of 2007 are, once again, the outcome of our teams efficiently networking all over the world. On behalf of the entire board, I would like to thank all employees of our international locations and the Frankfurt headquarters for their commitment and dedication. Together with our partners, we will continue to work dedicatedly on realizing our targets”, says Wolfgang Kroh, Chief Executve Officer at LHS.

The quarterly report is available on our website: http://www.lhsgroup.com/internet/pages/investor_relations/ uk/home/thema.php

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Ericsson GmbH Deutschland

LHS ist der führende unabhängige Software-Anbieter für Abrechnungs- und Kundenverwaltungssysteme für die Telekommunikationsbranche. Die mit zahlreichen Awards ausgezeichneten Lösungen des Unternehmens werden weltweit bei den führenden Netzwerkbetreibern eingesetzt, um konsequent die Erlösstruktur zu verwalten und zu sichern. Die Business Support Systeme von LHS bieten volle Konvergenz auf verschiedenen Ebenen und unterstützen alle Geschäftsmodelle sowohl für Festnetz- und Mobilfunkdienste als auch für Prepaid- und Postpaid-Dienste.

LHS entwickelt innovative Systeme, die es Kunden ermöglicht neue Dienste bei minimalen Betriebskosten schnell einzuführen und damit ihre Gewinne zu steigern und die operativen Kosten zu minimieren. Der Hauptsitz von LHS ist in Frankfurt am Main mit weiteren Niederlassungen in Brasilien, Frankreich, Malaysia und den Vereinigten Arabischen Emiraten. LHS gehört zur LHS Gruppe. Die LHS Aktiengesellschaft als Gruppen-Holding ist ein an der Frankfurter Börse notiertes Unternehmen (LHS400). Für weitergehende Informationen besuchen Sie uns unter www.lhsgroup.com.