Difficult business environment in the short fiscal year, as expected
Group revenues from continuing operations in the short fiscal year 2009 declined 20% to € 61.69 million. Adjusted for BRAIN FORCE Hamburg, sold in 2008, the organic revenue decline amounted to 17%. Operating EBITDA fell 80% to € 1.18 million, and operating EBIT was down from € 3.00 to -1.50 million. After restructuring, Group EBITDA totaled € -0.20 million, and EBIT amounted to € -2.89 million. The improvement of the financial result from € -0.65 to -0.26 million is primarily due to the sale of the 30% stake in KEMP and reduced interest expenses related to the launch of a cash pooling system. Profit after tax for continuing operations amounted to € -2.41 million, compared to € 1.48 million in the first nine months of the prior year. The total result for the short fiscal year 2009 including the discontinued business area network management in Berlin was € -4.83 million.All BRAIN FORCE regions generate a positive operating EBITDA
BRAIN FORCE succeeded in achieving a positive operating EBITDA in all regions despite the overall revenue decline. In Germany, the largest market for the BRAIN FORCE Group, revenues decreased by 20% to € 28.90 million, and operating EBITDA fell from € 4.35 to 1.08 million. Revenues in the Central East Europe region were also down 20% to € 9.08 million, and operating EBITDA deteriorated from € 1.11 to 0.34 million. The North Europe region achieved revenues of € 6.48 million, down 24% from the prior year, whereas operating EBITDA fell from € 1.17 to 0.67 million. Revenues generated by the South West Europe region declined by 18% to € 17.23 million, and operating EBITDA declined from € 1.86 to 0.72 million. The Group holding company succeeded in reducing costs by € 0.92 million in the short fiscal year 2009.Consistent implementation of restructuring measures
“Due to the economic downturn, 2009 was the expected difficult year for BRAIN FORCE. However, we initiated the necessary restructuring measures at an early stage, closely working together with the local management of our subsidiaries to guide the company relatively unscathed through the crisis. In addition to consistently implemented cost cutting measures, our efforts included tough restructuring measures in Italy, the closing of the Berlin branch office, which had posted losses for many years, as well as short-time working in Germany”, says Michael Hofer, Chief Executive Officer of the BRAIN FORCE Group, commenting on the measures which were taken. In the first nine months of 2009, the Group dismissed 151 employees, or about 13% of the total staff. On a positive note, the stake in KEMP Technologies Inc. (New York) could be sold back to the company and the related convertible bond was cancelled, resulting in an unexpected cash inflow of € 0.36 million.Positive operating cash flow and solid balance sheet structure
“It is gratifying that we were able to generate a positive cash flow from operating activities of € 1.55 million based on our successful working capital project. In addition, the Group has a relatively low net debt of € 5.65 million (December 31, 2008: € 4.89 million)”, Chief Financial Officer Thomas Melzer explains. BRAIN FORCE has sufficient cash and unused lines of credit. Gearing (the ratio of net debt to equity) totals 29%, and the equity ratio is 35%. “Accordingly, the Group boasts a solid balance sheet structure and has no foreseeable financing shortfall”, Thomas Melzer adds.Positive operating results targeted for the new 2009/10 financial year
The BRAIN FORCE management is returning to a pro-active growth strategy in the new financial year. “Following the recessionary year 2009, we see indications that the economic downturn has bottomed out and demand has slightly picked up again. However, we continue to anticipate tough pricing and no quick recovery in IT expenditures. Our restructuring measures will show positive effects in the upcoming financial year. Today our portfolio of products and services is significantly more focused, and we reduced the cost basis by € 20 million compared to the record operating year 2008”, says CEO Michael Hofer. BRAIN FORCE will continue to position itself in Germany, Austria and the Netherlands as the specialist for IT infrastructure solutions, in particular software packaging and the Windows 7 rollout. Moreover, a powerful business unit for ERP solutions on the basis of Microsoft Dynamics is being developed in Austria, and the U.S. expansion of SolveDirect service management solutions is being promoted in cooperation with a financial investor. “Our clearly-defined target for the 2009/10 financial year is to generate positive operating results. In addition, the sale of our Professional Services business in Austria enables us to realize a non-recurring book gain, further strengthen our balance sheet and obtain cash we will use for investments in growth areas,” Michael Hofer concludes.The 2009 Annual Report is now available for downloading here.
2009 Final Results (9 months)
Earnings indicators | 1-9/2009 | 1-9/2008 | Chg. | 1-12/2008 | ||
| unaudited | in % | |||||
| Revenues | € million | 61.69 | 77.00 | -20 | 104.51 | |
| EBITDA | € million | -0.20 | 5.94 | >100 | 8.19 | |
| Operating EBITDA 1) | € million | 1.18 | 5.94 | -80 | 8.19 | |
| EBIT | € million | -2.89 | 3.00 | >100 | 4.30 | |
| Operating EBIT | € million | -1.50 | 3.00 | >100 | 4.30 | |
| Profit before tax | € million | -3.15 | 2.35 | >100 | 2.85 | |
| Profit after tax | € million | -2.41 | 1.48 | >100 | -1.58 | |
| Free cash flow 2) | € million | 0.07 | 0.68 | -90 | 4.83 | |
| Employees (average) | 1,026 | 1,136 | -10 | 1,153 | ||
Balance sheet indicators | Sept. 30, | Dec. 31, | Chg. | |||
| 2009 | 2008 | in % | ||||
| Equity | € million | 19.31 | 24.15 | -20 | ||
| Net debt | € million | 5.65 | 4.89 | +16 | ||
| Working Capital | € million | 2.83 | 5.64 | -50 | ||
| Equity ratio | in % | 35 | 36 | - | ||
| Gearing | in % | 29 | 20 | - | ||
| Net debt / EBITDA 3) | in % | 1.6 | 0.6 | - |
Note:
The earnings data provided in the tables above represent results from continuing operations. The previous year’s figures differ from those reported in 2008 due to the closing of the company’s branch office in Berlin, which must be defined as a discontinued operation pursuant to IFRS.
1) Adjusted for non-recurring restructuring costs in 2009
2) Cash flow from operating activities less cash flow from investing activities plus acquisitions
3) Calculated on the basis of operating EBITDA over the last 12 months