3rd quarter 2009 sales: down 14.4% on a constant exchange rate basis
Linedata Services reported 3rd quarter sales of € 31.7 million, a decline of 14.4% excluding the impact of exchange rate variation (down 16.7% as reported, due to a € 0.9 million negative exchange rate impact).
This is due to a significant decline in consulting in all regions during this 3rd quarter 2009 and the change of the operating model of the NOEE employee savings software in Southern Europe.
Over the first 9 months of the year, the relative weight of the consulting business was reduced to 25% of total sales, compared to 37% in 2008, and the unfavourable base effect for NOEE accounted for around € 9 million.
Analysis of quarterly performance by geographic region:
SOUTHERN EUROPE (Q1: € 19.7 million, down 13.5%; Q2: € 19.3 million, down 20.6%; Q3: € 15.8 million, down 17.3%)
In this region, Linedata Services achieved 3rd quarter sales of € 15.8 million, a decrease compared to 2008. Half of this downturn was due to the Employee Savings business and half to Leasing & Credit Finance (more significant impact of Summer vacations on consulting in France).
NORTHERN EUROPE (Q1: € 7.8 million, down 14.5%; Q2: € 8.1 million, down 18.8%; Q3: € 8.3 million, down 18.3%)
Quarterly sales in Northern Europe were down 18.3%, as reported, to € 8.3 million, but only decreased by 10.9% on a constant exchange rate basis.
Over the 3rd quarter, the region signed 11 new deals out of a total of 24 for the entire Group.
NORTH AMERICA (Q1: € 8.6 million, up 4.3%; Q2: € 9.3 million, up 17.4%; Q3: € 6.6 million, down 18.6%)
With a 16.5% decline on a constant exchange rate basis, sales were affected over this quarter by weak consulting activity from existing clients, as well as by the postponement of certain investment decisions by clients.
Over the first nine months as a whole, the American region posted a 1% increase in sales, thereby validating the relevance of the integrated front to back offering and its business model, which is over 85% recurring.
ASIA (Q1: € 0.8 million, up 24.2%; Q2: € 1.0 million, down 29.5%; Q3: € 1.0 million, up 44.0%)
The Asia region continued to perform well, featuring sustained marketing activity. The total of signings for the year to date is 18, of which 8 over the 3rd quarter, for a total contract value of € 1.4 million over the period.
The Group forecasts a decline in sales of around 10% over the full 2009 financial year, compared to 2008.
However, the cost reduction steps implemented since the end of last year should enable the Company, as previously announced, to improve its operating profit to sales ratio in 2009.
In addition, the Company is continuing to reduce its debt and set itself the objective of bringing net debt down to less than € 15 million by the end of the year.
Shareholders’ agenda: Linedata Services will publish its 2009 full-year sales on 11 February 2010 after close of trading.