Corporate | 31 March 2004 07:46

secunet – The year 2003

Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– secunet – The year 2003 secunet with restrained development in 2003 – Path for growth set with the new majority shareholder Giesecke & Devrient In fiscal year 2003, secunet Security Networks AG achieved sales of EUR 21.1 million in a very restrictive environment. This is a decrease of 9 percent compared to the year before (EUR 23.1 million). The operating income (earnings before interest and taxes, or EBIT) came in at a negative EUR -1.2 million, EUR 1.4 million less than in the year 2002 (EUR 0.2 million). The takeover of Secartis, a Giesecke & Devrient (G&D) subsidiary, will promote secunet into a magnitude of annual sales in the range of EUR 25 to 30 million. Additional growth potential arises from G&D, who aim at a majority interest in secunet. In detail: In fiscal year 2003, secunet achieved sales of EUR 21.1 million. This is a decrease of 9 percent compared to the year before (EUR 23.1 million). The orders on hand at the end of 2003 amounted to EUR 6.1 million. This is a decrease of 6 percent compared to the orders on hand as of 31 December 2002, which came to EUR 6.5 million. The cost side reflects the continuation of secunet’s aggressive course of cost reduction. Personnel expenses, which are the most important item on the cost side with 55 percent of sales, decreased by 9 percent compared to the year before and amounted to EUR 11.5 million (previous year: EUR 12.7 million). This percentage decrease largely corresponds to the reduction in the average number of employees. Other operating expenses stabilised at a low level of EUR 5.4 million in fiscal year 2003, after drastic reductions of 33 percent in 2002. Despite the cost savings, the operating income (earnings before interest and taxes, or EBIT) came in at a negative EUR -1.2 million. The EBIT in the previous year amounted to EUR 0.2 million. After interest income (EUR 0.2 million) and taxes, which include the reversal of deferred tax assets in the amount of EUR 4.0 million, the net income for the year 2003 came in at EUR -4.5 million (previous year: EUR 0.3 million). The reassessment of the realizability of existing tax loss carry-forwards was undertaken largely due to unfavourable changes in the utilization of loss carry-forwards on account of the minimum taxation introduced in the tax reform package of 2004. The (basic) earnings per share amounted to EUR -0.70 (previous year: EUR 0.04). The sales and earnings figures show that secunet was unable to distance itself from the sluggish economic environment. secunet was also considerably affected by the fact that Deutsche Telekom reduced its order volume in 2003 by over EUR 2 million compared to previous years. Without this effect, a balanced result could have been comfortably achieved in 2003. Total assets at the end of the reporting period amounted to EUR 17.6 million. This is a decrease of 27 percent compared to the total assets on 31 December 2002 (EUR 24.0 million). This decline was caused primarily by the reversal of deferred tax assets mentioned earlier. The equity ratio was 68 percent as of 31 December 2003 and therefore one percentage point below the level of the previous year (69 percent). The liabilities to banks amounted to EUR 0; secunet did not take out any loans in the reporting period. The cash and cash equivalents and current assets (with terms under three months) decreased by EUR 2.1 million in fiscal year 2003. The total of cash and cash equivalents and current assets amounted to EUR 8.9 million at the end of 2003, thus forming a solid financial foundation for fiscal year 2004. An isolated examination of the fourth quarter 2003 reveals sales of EUR 6.2 million, which corresponds to a decrease of 14 percent compared to the fourth quarter of 2002 (EUR 7.2 million). There was a positive EBIT of EUR 0.1 million in the fourth quarter of 2003 (fourth quarter 2002: EUR 0.6 million). secunet was thus able to achieve a slightly positive result in the fourth quarter. The fourth quarter has traditionally had the strongest sales and best result of the fiscal year, and this long-standing trend was confirmed overall in the fourth quarter of 2003. The net result from the fourth quarter of 2003 again reflected the reversal of deferred tax assets in the amount of EUR 4.0 million. The net result was EUR – 3.7 million (fourth quarter 2002: EUR 0.4 million), with (basic) earnings per share of EUR -0.58 (fourth quarter 2002: EUR 0.07). Outlook – Growth with new majority shareholder Giesecke & Devrient secunet was able to further expand its position on the highly interesting market for IT security in the year 2003. This strong position on the market will be consolidated further. The international technology group Giesecke & Devrient (G&D) is seeking to acquire a majority interest in secunet. At the same time, secunet is taking over 100 percent of the shares of the G&D subsidiary Secartis AG. In the new line-up, G&D will pool its activities in the area of IT security consulting with a larger and stronger secunet. G&D will take over the entire secunet share package owned by T-Systems International GmbH (25 percent plus one share), as well as approximately an additional 22 percent from the former secunet majority shareholder RWTÜV AG. G&D will therefore initially acquire 47 percent of secunet; RWTÜV AG will continue to hold around 30 percent of secunet. G&D made a public takeover bid to the minority shareholders of secunet AG in March 2004 in order to acquire the majority of secunet shares. An ideal line-up will be established when G&D holds a good 50 percent majority interest in secunet. On the one hand, secunet will operate under the umbrella of the G&D Group, which wants to actively expand its competence in the area of IT security, and on the other hand, secunet will retain its corporate independence. In this regard, plans are also being made for secunet to continue operating as a listed company. secunet will take over and integrate 100 percent of the G&D subsidiary Secartis AG, which also specializes in IT security solutions. As a result of the takeover, the number of secunet employees will increase by 45 to 220. The union will create a company with sales in the range of EUR 25 to 30 million. The union of the two companies will establish a very good starting point for secunet to take advantage of its market potential as an important provider of IT security services in Germany. The portfolios of secunet and Secartis complement each other in many respects. With an improved market presence, new sales potential can be tapped and new scaling effects can be achieved. end of message, (c)DGAP 31.03.2004 ——————————————————————————– WKN: 727650; ISIN: DE0007276503; Index: Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin- Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart 310746 Mär 04