PRESS RELEASE
Paris, 31 August 2009
Results of GFI Informatique Group for the first half of 2009
Good resistance at revenue level, down only 2.9% to €367 million
Operating profit on ordinary activities of €11 million, equivalent to a 3% operating margin
Net debt contained and sharp improvement in working capital
Paris, 31 August 2009
GFI Informatique is publishing its first-half accounts, which were approved on 31 August by the Board of Directors under the chairmanship of Vincent Rouaix.
Statement by Vincent Rouaix, Chairman and Chief Executive Officer of GFI Informatique, concerning the results for the six months ended 30 June 2009: “What with the first half being a period of transition that bore the imprint of the economic crisis, the results reported by GFI Informatique Group underscored its strengths in many markets, notably France, with commercial success at large corporates that justified the strategic plan announced in July.
Of note was the good resistance displayed by recurrent activities, whereas services and software activities were affected more markedly.
The implementation of the strategic plan aimed at improving the Group’s margins by concentrating its operations in Southern Europe and adopting an integrated sector approach will therefore continue at a brisk pace in the second half.
Combined with an improvement in the economic environment, this plan should start to yield perceptible results towards the end of the year.
The Group is delighted at the appointment of Cyril Malher as Chief Financial Officer of GFI Informatique. His past experience at international companies will contribute significantly to the efficient application of the strategic plan and to the achievement of the ambitious financial objectives which the Group has set itself,
bearing in mind further recruitments are planned to strengthen the management team.
Revenue
Consolidated revenue of €367.0m was reported by the Group for the first half of 2009, down 2.9% year-on-year (-7% organic) Broadly speaking domestic activities were brisk whereas international activities posted contrasted performances.
Review of activity
France recorded a good performance, with revenue just about holding steady at €248.4m compared with €256.9m, bearing in mind there was an unfavourable 1.6% calendar effect for second quarter (two working days less). Commercial successes at EDF, Caisse d’Epargne, Société Générale, CNAV, EADS and the French Foreign Affairs Ministry support the commercial approach defined by the Group and will ensure a ramping up of activities at the Casablanca nearshore centre. In partnership with Infosys, GFI Informatique signed a major framework agreement with EDF for SAP-related integration projects. This contract shows the strategic move of the Group through its partnerships on major international projects. In these sharp economic conditions, operating profit on ordinary activities came to €10, 3 m giving an operating margin of 4,1%.
Spain and Portugal contributed revenue of respectively €36.8m and €13.2m. In Spain, negative organic growth was recorded, but this was contained at 3.8% thanks notably to the ERP integration activities developed with Oracle in the industrial, services and public sectors. In Portugal, negative organic growth of 13.0% was recorded because of a sharp downturn in projects in new technologies, electronic transactions and payment systems. Cumulated operating margin in these two countries was 3,2%.
Italy recorded a sharp 22.5% decrease in revenue due on the one hand to the Group’s decision to discontinue the hardware and software reselling activity and, on the other hand, to the sharp economic slowdown, notably in the public sector. An important cost-cutting plan has been launched and the Group keeps up reinforcing its financial control of the subsidiary with the objective of improving the working capital and the level of trade receivables.
Germany Belgium and Switzerland. In a severe economic climate namely in automobile and finance sectors, the German branch contributed revenue of €11.3m showing a limited negative organic growth of -6,3%. In Belgium, the revenues were affected by the sharp slowdown of the automobile sector, which is the main source of business for the Group’s local subsidiary. The Swiss branch achieved its objectives in the first half, which were to stabilise revenue and turn around results.
Canada contributed revenue of €23.2m in the first half of 2009, which includes Fortsum that is consolidated since 21 May 2009. Activities slowed sharply in software (ERP) and electronic transactions because the significant volume of business generated by the rollout of the EMV interoperability standard has dried up, affecting GFI Conseil. Acquired in July 2008, the Bell Group contributed first-half revenue of €12.6m, in line with the Group’s expectations.
Morocco enjoyed stronger growth in the second quarter, with revenue up nearly 30% at constant exchange rates, so that the local subsidiary posted very satisfactory results.
Comments on the first-half accounts
Operating profit on ordinary activities came to €11m, equivalent to 3% of revenue. This reflects once again the relatively good performances of France, Spain and Portugal in the context of an economic crisis, whereas Canada and especially Italy did not fare as well.
Other non-current operating charges reached €17.6m in the first half of 2009 out of which €13,7m concerned Italy, with mainly a €10m impairment loss in respect of the goodwill recognised for the local subsidiary.
Net finance costs declined sharply to €1.8m in the first half of 2009 from €3.2m in the first half of 2008, reflecting mainly the easing of short-term interest rates since the end of 2008 .
The loss attributable to equity holders of the parent came to €11.0m in the first half of 2009 compared with a profit of €10.6m in the first half of 2008. But for the nonrecurrent charges recorded in respect of Italy, the Group would have reported a profit. Diluted earnings per share amounted to a loss of €0.20 in the first half of 2009 compared with a profit of €0.19 in the first half of 2008.
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