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OpenLimit Holding AG: Group Interim Announcement within 2nd Half-Year of 2010 in accordance with Article 37x WpHG
- Revenue increases by 36% in the first nine months of 2010 compared to the same period in the preceding year to CHF 3.26 million. In the same period, total income increases by 28% to CHF 5.77 million.
- OpenLimit and impuls systems GmbH form a close strategic cooperation to build an authentication server for electronic identity (eID) cards.
- OpenLimit and ]init[ agree on a cooperation to offer eID service providing.
- OpenLimit and E&E information consultants AG have signed a partnership agreement in order to provide a unique technology solution.
- OpenLimit announces that starting 01.01.2011 the Group will switch its financial reporting from Swiss Francs to Euro.
During the third quarter of 2010, OpenLimit was able to successfully introduce the new electronic identification (eID) server technology to the market. The eID server complements the client solution "AusweisApp" to enable secure authentication / validation of the new ID card (nPA) in Germany. Since the start of the testing phase for the new ID card, the eID server was tested successfully by approximately 200 companies and public authorities as part of a service provided by the Bundesdruckerei. Since November 1st, the launch date of the new electronic identity card in Germany, OpenLimit's eID server has entered live operation and can be purchased for commercial use. Initial orders for the eID server from private and public institutions demonstrate the strong interest in the new ID card and the security infrastructure behind it.
With the order of an eID server by impuls GmbH, OpenLimit was able to initiate a considerable business relationship in the insurance market. The assignment will run for several years and includes consulting, planning and implementation of an eID server, which allows easier, faster and more secure online authentication for the customers of impuls based on the new ID card. In addition OpenLimit was able to win further public administration customers for the eID server among the Federal States in Germany.
Also of great importance is the cooperation between OpenLimit and ]init[ GmbH as well as with the Bundesdruckerei to establish services in connection with the eID-server. From now on customers can subscribe to a highly secure eID-service provided by Bundesdruckerei and ]init[ for eGovernment and eBusiness applications. Furthermore, on October 28th OpenLimit set up a cooperation with Siemens in relation to eID-servers and services.
Moreover OpenLimit was able to sign a partnership agreement with E&E information consultants AG. Through the combination of both companies' respective know-how, a unique technology solution, which combines automatic document creation with electronic signatures, was developed.
After the reporting period, OpenLimit accomplished another important milestone in delivering the AusweisApp, the application software for the new ID card, on schedule. This event marks the beginning of the eID era in Germany and the successfully initiation of the first e-card project in the country. For OpenLimit, it creates a solid base for future revenues across industry and public sectors.
Financial development of the OpenLimit Group
During the first nine months of 2010, OpenLimit generated revenues of CHF 3.26 million, an increase of 36% over the same period of the previous year (9-months 2009: CHF 2.39 Mio.). For the same period total income grew by 28% from CHF 4.51 million to CHF 5.77 million. As of September 30th, 2010, OpenLimit had 58 employees, compared to 55 employees twelve months earlier. Due to the hiring of new employees and, in particular, our policy to deploy contract workers for specific non-core tasks in order to maintain a lower fixed cost base, personnel expenses increased by 65% to CHF 5.35 million (9-months 2009: CHF 3.17 million). As expected, depreciation and amortization charges increased by 27% to CHF 1.85 million, mostly due to the activation of company produced additions to software development, which is amortized over five years. In the first nine months, operating expenditures increased by 14% to CHF 1.66 million to support growth in personnel, but also as a result of higher expenditures for marketing and investor relations. Because of substantial upfront investments during the first nine months of the current financial year, an EBITDA of CHF -1.19 million and an EBIT of CHF -3.04 million resulted. The weakness of the Euro relative to the Swiss Franc yielded a negative financial result of CHF -0.65 million. Since both our earnings and expenditures are mostly denominated in EUR, cash flow streams are well matched, but the Company has to record a foreign exchange loss when translating results back into Swiss Francs. As a consequence and to enhance transparency, OpenLimit will start reporting in Euro from the 1st of January 2011. At the end of the first 9-months, OpenLimit is looking at a net loss of EUR -3.74 million. Due to the fact that several major projects can only be settled in the fourth quarter - for instance the AusweisApp with the recent handover on November 1st, we will be able to book a significant part of our revenues during the last 3 months of the year. Therefore, we maintain our forecast for 30% revenue growth for the fiscal year 2010.
As of September 30th, non-current assets recorded an increase by 30% to CHF 5.64 million relative to the same date last year, particularly due to the capitalization of company produced additions to software development. Working capital management improved as well during the last 12 months. Current assets overall decreased slightly by 4% to CHF 4.87 million, thanks to a considerable reduction by 28% in trade and other receivables to CHF 3.47 million, while liquid assets increased considerably to CHF 1.12 million. Current liabilities declined by 58% to CHF 0.41 million. Equity was strengthened by 16% from CHF 8.44 million as at 30.9.2009 to CHF 9.83 million.
Since the closing of the third quarter, the amount of outstanding shares has increased to 18'106'885 shares (as at September 30, 2010: 18'086'885 shares) as a result of one employee exercising his options (20'000 options). Consequently, our share capital increased by CHF 6'000 from CHF 5'426'065.50 to CHF 5'432'065.50.
On 1.7.2010, a total amount of 695'000 options with a strike price of EUR 1.31 were given to the management and executive board members within the scope of the option program. These new options have a vesting period of three years, with one third of the options vesting each year. As a result of the new options issued, personnel expenses increased by CHF 0.07 million in the 3rd quarter.
In the 3rd quarter our engineers focused on the continued development of the AusweisApp to ensure that the software would be ready for release on November 1st. Online identification functionality, user friendliness and accessibility were reviewed and modified. . At the same time, the certification process according to the international standard Common Criteria and usability tests were continued.
Besides the ongoing development work, another test version of the AusweisApp was released to participants of the application test. Furthermore, numerous modifications were included into the current AusweisApp version as a result of change requests, user feedback and revisions of technical guidelines.
In context of the development cooperation with Fujitsu Technology Solutions (FTS) for the SecDocs product, a new version of the components MigSafe / OverSign and an update of the OpenLimit version 3 was delivered to the partner. In the course of the development process, a customer pilot phase is in the planning stage by FTS.
A major focus was the coordination and review of OpenLimit components in terms of requirements which were formulated by FTS in the implementation of the product SecDocs. This not only includes functional requirements, but also the revision of the OpenLimit middleware concerning the planned introduction as a server product.
The product S-TRUST Sign-it, which is distributed by the German Sparkassenverlag (DSV), was handed over to DSV in a new product version that supports other smart cards as well.
Currently, the completion of the evaluation process and the grant of security certification by the instructed inspection authority are pending.
The eID server was further enhanced within the scope of the overall product development effort. For instance, the eID server was revised based on new requirements issued by the Federal Office for Information Security (BSI) and thus now supports the technical guideline TR-03 130 in the latest specification level.
In addition to these key development topics, the daily tasks in the technical area with respect to software maintenance and support, which shall not be detailed further, have been realized.
The encouraging development in the eID market and a significant upswing in the demand for server technologies for electronic authentication and signature processes confirm the validity of our medium and long-term strategy. OpenLimit will focus its efforts and partner activities on the development of further server technologies which will be a major revenue driver. The joint development of the eID server together with the Bundesdruckerei, as well as the beginning of certification of the Fujitsu technology SecDocs, based on OpenLimit middleware technologies for long-term storage, are good examples of this.
OpenLimit also expects that existing cooperations can be extended to form strategic partnerships, where OpenLimit's products form an integral part of our partners' offering, and that new partnerships will follow as the market expands. This will also support the internationalization of the business.
For 2010, we still anticipate a revenue increase of 30% compared to 2009 and aim to achieve a positive operating result for the full year. However, this is very much dependent on potential exchange rate losses by the year's end, especially from the conversion of Euro to Swiss Franc, which already burdened the bottom line substantially at the end of the first 9-months.
With the rollout of the new identity card in Germany and the related software environments for both end users (AusweisApp) and institutions (eID Server) developed by OpenLimit, we have already achieved significant milestones this year and at the same time have overhauled our product range completely in the last 12 months. Based on our existing products, a highly motivated sales team and strong technology and distribution partnerships we believe the platform for enhanced revenue growth for the upcoming years is finally in place. The further development of our technologies in the next year should ensure that the technological advantage of the OpenLimit Group is preserved.
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