Annual results 2009

Markedly improved profitability in 2009

€ millions - IFRS – Consolidated data 2008 2009 % Change
Sales 160.7 144.5 -10.1%
EBITDA
% sales
21.6
13.4%
23.1
16.0%
+7.1%
Operating profit (EBIT)
% sales
7.8
4.9%
15.4
10.6%
+98.1%
Net profit
% sales
5.3
3.3%
9.1
6.3%
+72.5%

Rounded figures

EBITDA: the Group’s key indicator, defined as operating profit before net amortisation, depreciation and provision charges

“We achieved good results in 2009 within a difficult environment. Our sound economic model, combined with our rigorous management policy enabled us to moderate the effects of the crisis and significantly increase our profitability levels. Due to the strength of this model and the steps taken to bring about the conditions for renewed growth, we are starting this new financial year with confidence”, Anvaraly Jiva, CEO of Linedata Services, stated.

Good business resilience against a difficult background

Linedata Services reported 2009 sales of € 144.5 million, a decline of 10.1% (down 9.7% at constant exchange rates).
The negative trend was primarily due to the exceptional effect on turnover relating to the NOEE migration and lower consulting revenue from existing customers, as a short-term consequence of the 2009 financial crisis.
Over the financial year, Linedata Services was able to contain the effects of the crisis due to its diversified solutions portfolio, its ASP expertise and a sound customer base.
Recurring sales (monthly licences, maintenance and ASP) totalled € 97.5 million, an increase of € 1.1 million compared to 2008.

Cost cutting plan bearing fruit

2009 EBITDA was € 23.1 million, an increase of € 1.5 million compared to 2008. EBITDA represented 16.0% of sales and can be analysed by region as follows:

EBITDA as % of sales 2008 2009
Southern Europe 11.7 % 11.5 %
Northern Europe 9.8 % 14.7 %
North America 22.7 % 27.4 %
Asia 7.2 % 7.0 %
Total 13.4 % 16.0 %

The operational restructuring plan aimed at reducing costs, including in particular staff cutbacks and rigorous process management, resulted in a marked improvement in profitability.
As a result EBITDA as a % of sales in Northern Europe and North America increased by nearly 5 percentage points.
Profitability remained stable in Southern Europe, in spite of continuing investments in the development of the Master-i solution for life insurance.
EBITDA for the Asia region was basically flat compared to 2008. It included marketing investments aimed at supporting future growth in this market.

Operating profit as % of sales doubled

In 2009, the Group recorded strong growth in operating profit (EBIT) to € 15.4 million, compared with € 7.8 million in 2008. EBIT thus represented 10.6% of sales, a significant increase of 5.7 percentage points.
In spite of an income tax charge of € 5 million, much more significant than in 2008 (€ 0.2 million), net profit grew by 72.5% compared to the previous financial year to € 9.1 million. This represented 6.3% of sales, a 3 percentage points increase compared to 2008.

Sounder financial structure

Net debt totalled € 12.7 million at 31 December 2009 compared to € 19.9 million at end 2008. The gearing ratio (*) was accordingly 13%, compared to 22% at end 2008.
Linedata Services had cash and cash equivalents of € 21.1 million at end 2009.

Dividend

A cash dividend of € 0.20 per share will be proposed to the shareholders at the next Annual General Meeting, compared to € 0.12 per share in respect of 2008.

Trends

Following a 2009 financial year dedicated to improving profitability levels and despite an expected retraction in the first quarter of 2010, Linedata Services has now set itself the objective of gradually returning to growth.
In order to increase its sales order backlog, Linedata Services will draw on an ever more comprehensive range of solutions, combined with its capacity to sell additional services to its existing customers and a stronger selling organisation to attract new customers in all geographic regions.

(*) net debt / equity


Shareholders’ agenda: 1st quarter 2010 sales: 22 April 2010 after close of trading.