Weak technology sector and US business exerting pressure on revenues and earnings
Support services still advancing
As in the previous quarters, the decline is chiefly due to Technology Sales, which with revenues of € 47.6 million (previous year € 65.5 million) contributed €17.9 million to the shortfall of €18.3 million.
On the other hand, the steady growth in Support Services emerging in the course of the year continued. At € 50.0 million (previous year € 47.8 million), this segment again made the greatest contribution to consolidated revenues.
The Consulting, Integration and Training segment generated revenues of € 15.5 million (previous year € 17.1 million) as of the end of the third quarter.
Managed Security Services contributed € 7.8 million (previous year € 8.9 million) to consolidated revenues.
Despite the general decline in revenues, recurring income from Support and Managed Services rose to € 57.8 million (previous year € 56.7 million), with its relative share in total revenues widening by over seven percentage points to almost 48 percent.
At € 55.3 million, UK revenues were down slightly (previous year € 57.6 million)
chiefly as a result of cyclical effects in technology sales in the first half of the year, whereas revenues stabilised again in the third quarter. Recessionary tendencies are still in evidence in the United Kingdom, while there are significant signs of a more pronounced cost-cutting mentality in the corporate sector. EBITDA contracted to € 0.6 million, down from € 2.1 million in the previous year.
Revenues in Germany, Austria and Switzerland (GAS) remained very stable at € 35.7 million (previous year € 35.6 million), although the momentum seen in the first half of the year weakened due to the fact that various customer projects were postponed until the fourth quarter in this region. Despite a decline to € 1.6 million (previous year € 1.8 million), this region made the greatest contribution to consolidated EBITDA.
In the United States, the loss of a major customer in the first quarter is continuing to exert heavy strain on the top and bottom line as it has not been possible to find replacement business in the course of the year. Accordingly, revenues contracted by 39 percent to € 19.7 million (previous year € 32.7 million), resulting in a loss of € 4.3 million at the EBITDA level (previous year EBITDA of € 0.6 million). As already explained in the report on the first half of the year, management responded to the expected deterioration in technology business by implementing a portfolio adjustment process in 2010.
Reflecting the more favourable revenue structure with a high proportion of recurring income, gross profit came to € 42.0 million and was thus only slightly down on the previous year (€ 44.8 million) despite the reduced top line. The gross margin widened to 34.7 percent (previous year 32.2 percent).
Personnel costs rose to € 34.0 million at the end of the third quarter (previous year € 30.5 million), reflecting the increase in headcount to 555 (previous year 509).
Other operating expenses rose to € 14.2 million (previous year € 12.4 million). A loss of € 5.5 million was recorded at the EBITDA level (previous year EBITDA of € 3.1 million). After slightly higher depreciation/amortisation of € 1.9 million (previous year € 1.8 million), Integralis sustained a loss of € 7.4 million at the EBIT level (previous year EBIT of € 1.3 million). With net finance income/finance expense almost balanced (previous year net finance expense of € 0.1 million), loss before tax came in at the same amount (previous year earnings before tax of € 1.2 million). However, post-tax loss contracted slightly to € 7.3 million (previous year post-tax profit of € 1.8 million) due to the recognition of deferred income tax assets of € 0.1 million (previous year € 0.6 million).
At € 23.9 million, the order backlog in the first nine months of the year was above the figure for the previous year (€ 22.3 million).
With a greater focus on consulting and the Group's own Managed Security Services, Integralis has already made substantial advance outlays in recruiting highly qualified staff. At the same time, a medium-term renewal and extension programme has been put in place for Managed Security Services and will involve heavy spending on the next-generation services.
The fourth quarter is traditionally one of the strongest for the Group in terms of both revenues and earnings, although this effect has weakened somewhat over the past few years.
The Management Board reaffirms its guidance, which it altered in the report on the first half of 2011, of a greater than 10-percent decline in revenues in the current year.
The earnings situation will remain negative in view of the aforementioned necessary investments. In addition, the annual impairment review planned for the fourth quarter may also exert further strain on EBIT.
The full interim report on the first nine months of 2011 can be downloaded from http://www.integralis.com/en/investor-relations/financial-reports/.
NTT Security (Germany) GmbH
As a leading international provider of IT security solutions, Integralis offers its customers skilled consulting and bespoke solutions for protecting their critical business processes. Incorporating leading technologies, skills, experience and strategic partnerships, the Integralis product portfolio is targeted at planning, implementing and operating enterprise-wide information security architectures. With its structured methodical and technical consulting and implementing services, the Integralis consulting team supports customers' IT security projects. Integralis offers its customers multilingual support in the ongoing operation of their security systems all around the world on a 7/24 basis. The range of services comprises a telephone hotline, remote monitoring and administration as well as on-site support. With a global network of branches, Integralis serves a large number of bluechip companies, government authorities and many national and international enterprises. Integralis AG is listed in Deutsche Börse AG's Prime Standard. With over 500 employees, it generated revenues of EUR 188.2 million in 2010. In early October 2009, NTT Communications Corporation (NTT Com), a subsidiary of Nippon Telegraph and Telephone Corporation (NTT), indirectly acquired more than 75 percent of Integralis' capital. Further information on Integralis is available on the Internet at www.integralis.com.