IDS Scheer Revenue Essentially Flat Year over Year
NOTE: ebizQ does not typically cover investor-relations announcements but we will publish the annual results of business process management (BPM) related software suppliers as they are released during the first calendar quarter of 2009. We are publishing this material not to cover investment issues but in order to review the health of the BPM software market in 2009 both in and of itself and in context with the overall economic downturn.
There are typically two types of announcements. The major, usually publicly traded, software suppliers announce their actual financial results but BPM is such a small part of their overall total that they do not break it out separately, but simply make mention of trends in their BPM line(s). Smaller, usually not publicly traded, software suppliers give more details but do not provide actual financial results. Estimates of BPM financial results for all BPM market participants in 2009 will be available from IT Investment research (www.itinvestmentresearch.com) after March 1, 2009.
ebizQ has received the following:
In fiscal 2008, IDS Scheer AG generated revenue of EUR 399.1 million after EUR 393.5 million in the previous year. This corresponds to revenue growth of 1%, or 2% after currency adjustment effects. Operating earnings before interest, taxes and amortization of intangible assets (EBITA) including restructuring expenses amounted to EUR 16.4 million (previous year: EUR 39.6 million). EBITA includes one-time expenses of around EUR 12 million. In fiscal 2008, IDS Scheer had announced to invest a total of up to EUR 14 million in restructuring expenses for cost-cutting measures and for the reorientation of the company. As a result, the EBITA margin declined to 4.1% (previous year: 10.1%). Thus, IDS Scheer outperformed its forecast for the year slightly (revenue to stabilize at the previous year's level, EBITA margin of between 3% and 4%).
The net profit for the year of the IDS Scheer Group was EUR 8.9 million after EUR 23.4 million in the previous year. Earnings per share (undiluted) were EUR 0.26 after EUR 0.71 in the previous year. In order to continue the course of dividend continuity, the Executive Board and the Supervisory Board will propose to the annual shareholders' meeting of IDS Scheer AG a dividend equal to that of the previous year for fiscal 2008 of EUR 0.22. Measured against the year-end share price on XETRA trade on December 30, 2008 of EUR 6.00, this corresponds to a dividend yield of 4%.
At the start of December 2008, IDS Scheer initiated a share buyback program on the basis of a resolution of the annual shareholders' meeting. By the end of January, 383,000 own shares worth over EUR 2.05 million were bought back on the stock exchange. The acquired shares can be used for the strategic purposes provided for in the authorization resolution of the annual shareholders' meeting.
"With the annual results published today, we have met our own forecasts. We reacted to the changes in the global market environment early on and geared our global organization accordingly. By merging sales and delivery for products and consulting, our customers are in future profiting from holistic support. We have also streamlined our internal processes and thereby increased customer coverage while reducing costs. The restructuring measures will allow a cost-savings potential for 2009 of around EUR 12 million,' explained Peter Gérard, CEO of IDS Scheer AG.
"Process intelligence and process management are the challenges facing many companies today, which provides excellent conditions for IDS Scheer's business prospects. This is because there are two rules: Firstly, if you do not know your processes, you will not cope with the crisis. Secondly, if you optimize your processes, you will emerge from the crisis in a stronger condition."
The consulting area expanded by 4% to EUR 273.4 million in fiscal 2008. The order backlog in consulting climbed to EUR 107 million as of December 31, 2008 compared to EUR 80 million in the previous year. The products area, consisting of licenses, maintenance and product-related services for the ARIS Platform, a software solution for business process management, generated revenue of EUR 125.7 million after EUR 129.5 million in the previous year. At the end of 2008, the German Armed Forces acquired a general ARIS license as part of the modernization of its organization and information technology, providing IDS Scheer with one of the largest ARIS orders ever. In addition to further focusing on technological partners, international consulting companies are increasingly using the ARIS products as BPM (business process management) standard.