Ad-hoc | 31 August 2005 07:58

plenum AG: Outlook for 2005 and mid term developments up until 2007

Ad hoc announcement §15 WpHG Interim report plenum AG: Outlook for 2005 and mid term developments up until 2007 Ad hoc announcement transmitted by DGAP. The issuer is solely responsible for the content of this announcement. —————————————————————————— – Refocusing on the high margin consulting business – Heavy investment in core competences – Return to profitability in 2007 Wiesbaden, August, 31st 2005 plenum AG is consistently implementing refocusing strategy as presented in the Shareholders’ Meeting during 2005 and 2006. Refocusing means that the company returns to concentrate on consulting oriented business areas and is withdrawing from the low price segment of programming and the volume business of large projects. In the future plenum will concentrate its service offering on high margin consult-ing and the realisation of strategic tasks, which require the targeted deployment of innovation from the areas IT, business processes and market communications. This future oriented reorganisation of the company will be completed in 2007. On taking into account that the Phoenics project alone at EUR 17.0 million brought more than 40 % of the total revenue of EUR 40 million in 2004 and that this share will fall to around 25% in the current financial year 2005, it becomes clear which challenges the company is facing. As a result the Management Board is projecting total revenues of EUR 28.5 million for the financial year 2005, which represents a decline of around 30% relative to the previous year, and a further decline in 2006 to EUR 24 million. But our mid term planning for the strategic business areas already shows growth of around 12 % in core business (consultancy and agency) for 2006. In 2007 revenue will further increase by 15 %. The refocusing of the company will have significant impact on the results in 2005 and 2006. Alongside the `conversion costs` there is also a need for investment in our strategic business areas and therefore in the competitiveness of the company. For the current financial year we are therefore expecting a deficit of EUR 3.4 million and in 2006 losses of EUR 1.9 million. In 2007 the reorganisation will be completed and plenum will return to a positive result. The funding of the refocusing strategy from within is secured due to the current solid cash flow of EUR 6.9 million. The revenue development in the first half of the year was in accordance with the mid term planning at EUR 16.6 million. Relative to the previous year EUR 21.7 million) revenues reduced by 23 %, this decline in revenue is largely attributed to the Phoenics project which is running down. In comparison with the previous quarter revenues it remained virtually unchanged in the second quarter at EUR 8.2 million. The results trend was also as expected in the first half of 2005 with a group deficit of EUR -1.6 million. The result of EUR -0.8 million in the second quarter is nega-tively influenced by redundancy payments associated with the corporate refocusing strategy. The value creation (revenue with own employees) developed positively relative to the previous quarter with an increase of 12 %. This positive trend is also reflected in the development of gross results: They increased from TEUR 492 in the fourth quarter 2004 over TEUR 674 in the first quarter to TEUR 911 in the second quarter 2005. Booked business in the segments Management Consulting and Systems also showed signs of growth at 4 % above revenues after adjustment for the Phoenics project in the first half. The complete second quarter report 2005 can be found under http://www.plenum.de plenum AG Hagenauer Straße 53 65203 Wiesbaden Deutschland ISIN: DE0006901002 WKN: 690100 Listed: Geregelter Markt in Frankfurt (Prime Standard) und Stuttgart; Freiverkehr in Berlin-Bremen, Düsseldorf, Hamburg, Hannover und München End of ad hoc announcement (c)DGAP 31.08.2005 Issuer’s information/explanatory remarks concerning this ad hoc announcement: Further information: Hubert Sand Manager of Corporate Communication plenum AG Tel.: + 49 (0) 611 – 98 82 – 0 Fax: + 49 (0) 611 – 98 82 – 1 50 e-mail: aktie@plenum.de Information and explanations of the issuer on this ad hoc announcement: This announcement contains statements relating to the future, which are based on current expecta-tions, estimates, predictions and projections as well as assumptions made by the management of plenum AG. Such statements especially encompass statements on plans, strategies and projections. Words such as “expect”, “probably”, “provisionally” and similar expressions characterise such future oriented statements. These statements are not a guarantee for future results and risks, uncertainties and assumptions, which are sometimes difficult to predict. Thus the actual consequences and results could differ significantly from the future oriented statements. End of message (c)DGAP 310758 Aug 05