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secunet publishes its 2010 annual results
Group revenue declined by Euro 64.0m to Euro 59.5m year-on-year. This development was the result of two main factors. Firstly, large-scale projects planned by the German army, a major customer, were postponed due to the structural changes currently being implemented within the army organisation. Secondly, the projects awarded as a result of the German government's economic programme came to an end.
As a result of the Secure Inter-Network Architecture (SINA), the High Security business unit generated the largest proportion of group revenue, with a figure of Euro 33.6m (representing 57% of the total). The SINA solutions range allows the secure processing, storage and transmission of classified information and other sensitive data. The Government business unit accounted for 25% or Euro 14.9m of total revenue. This revenue was generated from a number of consulting projects, including the electronic tax return system ELSTER and biometrics. Consulting projects for the authorities in Germany on IT security issues and a major German infrastructure project also contributed significantly to revenue. The Government business unit only just failed to match 2009 revenue levels, with revenue 4% lower than in the previous year.
Overall, the secunet Group earned some 82% of its revenue from public sector customers. The previous-year figure was around 85%. Thus the Public Sector division plays a much bigger role than the Private Sector division in generating revenue.
Revenue increased in both the Business Security business unit and in the Automotive Security business unit. This shows the high extent to which both sectors are reliant on the state of the economy. The Business Security business unit recorded a slight increase of 3% in revenue, up from Euro 8.6m to Euro 8.8m. The impact of the state of the economy as a whole is particularly marked in Automotive Security. Revenue increased by 50% or Euro 0.6m from Euro 1.2m to Euro 1.8m.
Revenue generated abroad from secunet products and solutions fell slightly from Euro 4.9m in 2009 to Euro 4.8m in 2010. Foreign revenue as a proportion of Group revenue rose slightly, from its previous year's level of 7.7% to 8.0% during the 2010 financial year.
The cost of purchased materials and services fell sharply due to the decline in product business. As a result of the increase in other expense items, earnings before interest and tax (EBIT) fell from Euro 3.9m to Euro 3.6m. Net income fell from Euro 2.4m to Euro 1.8m and earnings per share also fell by 25% from Euro 0.37 to Euro 0.28.
"The 2010 financial year was extremely challenging for us from an operational perspective - along with changes at major customers, we were also badly affected by the work dealing with the fraud incident at our Czech subsidiary," said Dr Rainer Baumgart, Chairman of the Management Board of secunet Security Networks AG, adding: "Given the conditions in which we were operating, we are satisfied with our result."
Our modern environment with its dependence on information technology is subject to many threats. Incidents such as Stuxnet and Wikileaks are merely the visible aspects of this development. The market for IT security will continue to grow with new topics such as cyber security, de-mail, mobile security, automated border control, cloud computing, data loss prevention and smart grids. Public sector customers will respond to these challenges by investing in IT security. Companies are increasingly aware that IT security is a necessary requirement for sustainable growth.
"We have superb expertise and excellent references and the market for IT security continues to grow," says Dr Baumgart. "We will continue to optimise our structures at home and abroad to create the conditions to allow us to participate in this growth."
At 31 December 2010, the order book stood at Euro 26.2m, compared with Euro 30.3m in the previous year. This decline is also due to the postponement of major projects.
In terms of 2011, the Management Board of secunet Security Networks AG anticipates that revenue will be maintained at a stable level comparable with 2010, with a rise in earnings before interest and tax (EBIT) to 2009 levels. The planned improvement in earnings is to be primarily achieved by increasing capacity utilisation and through cost-saving measures.
You will find the Annual Report 2010 on the internet:
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