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Integralis breaking even on higher revenues

(PresseBox) (Ismaning, ) .
- Dynamic growth for Integralis MSS and Support services
- Earnings down due to exceptionals and start-up expenses
- Record total contract volumes achieved again
- Upbeat full-year outlook

Integralis AG, the leading Prime Standard-listed IT security solutions provider, achieved a 6.7 percent year-on-year increase in revenues despite the persistent difficult economic conditions which it faced. At constant exchange rates, this increase would have been as high as 10 percent.

At the end of the first quarter, Integralis achieved consolidated revenues of € 42.0 million (previous year € 39.4 million).

The transformation process being stepped up by management to harness greater growth for Integralis services was successfully continued. Recurring income rose by 21.5 percent in the Managed Services segment and by 9.5 percent in the Support Services segment. Consulting, integration and training expanded even more sharply, achieving growth of 26.7 percent despite industry experts' negative market forecasts. The strong growth testifies to the solid standing enjoyed by Integralis consultants. As expected, technology sales felt the effects of the adverse economic conditions, although the year-on-year decline of 0.7 percent was only marginal.

Regionally, the United Kingdom made the greatest contribution to revenues again. However, the weak pound led to a decline to € 14.7 million (previous year € 18.2 million). On the other hand, business was up solidly in the GAS (Germany, Austria and Switzerland) region and also in the United States. Whereas the GAS region posted a 35.9 percent increase in revenues to € 12.4 million (previous year € 9.1 million), US revenues surged by 44.0 percent to € 7.7 million (previous year € 5.3 million). The most dynamic region addressed by the Integralis Group proved to be the UA Emirates, where revenues rose by 82.5 percent to € 2.3 million (previous year € 1.2 million).

At 33.9 percent, the gross margin was up on the year-ago quarter (32.1 percent). As the cost of materials did not grow as quickly as revenues, the gross profit of € 14.2 million easily outstripped the previous year's figure of € 12.6 million.

However, earnings came under pressure in particular from the substantial increase in other operating expenses to € 4.4 million (previous year € 2.8 million). A large part of this added expenditure is due to exceptionals and currency-translation effects, which will not be recurring in this dimension in future periods. Comparing Q1 2009 with the same quarter last year, the net currency valuation variations had a negative EBIT impact of € 0.8 million.

At € 9.6 million (previous year € 8.7 million), the higher staff costs are due to the extensions to Integralis services in Singapore and the establishment of the Network Operation Centre (NOC) in the United States. The recently announced partnership with Telehouse in the United States should ensure that the start-up losses arising in the first half of the year are recouped by year-end.

As a result of this additional expense, EBITDA dropped to € 0.2 million (previous year € 1.1 million). An operating loss of € 0.3 million was sustained (previous year profit of € 0.7 million). Considering the combined effects of exceptionals, the normalised operating profit was actually positive € 0.5 million. The break-even threshold was reached after tax (previous year post-tax earnings of € 0.8 million) due to the recognition of deferred tax assets of € 0.4 million.

Despite the decline in earnings, CEO Georg Magg is upbeat about 2009. "Earnings in the first quarter were characterised by exceptionals and start-up expenses for our global IT services. Even against the backdrop of the further deterioration in economic conditions, we achieved solid top-line growth in the traditionally weak first quarter. For the year as a whole, I expect an increase in revenues and see a good chance of repeating the previous year's record earnings. Despite this encouraging outlook, however, 2009 will be a year of transition on our course towards substantially greater profitability in the years ahead."

NTT Security (Germany) GmbH

As a leading international IT security solutions provider, Integralis offers its customers expert consulting and tailored services to protect their critical business processes. The Integralis product portfolio is based on leading-edge technologies and strategic partnerships oriented to planning, implementing and operating overarching information security architectures. Backed by topquality skills and experience, the Integralis consulting team supports customers' IT security projects by offering structured methodical and technical consulting and implementation services. Integralis services provide 7/24 multilingual support for the day-to-day operation of customers' security systems around the world. Services comprise the telephone hotline, remote monitoring and administration as well as on-site support. Under the Integralis name, a global network of branches serves a large number of blue-chip companies and public authorities as well as many national and international businesses. Integralis AG is listed in Deutsche Börse AG's Prime Standard (ticker symbol AAGN, ISIN DE0005155030). Further information on Integralis is available on the Internet at www.integralis.com.