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secunet AG: Nine-month report 2006 - Year's growth trend unbroken

[Essen, 9 November 2006] In the third quarter of 2006, secunet Security Networks AG, leading European supplier of products and services in the area of complex IT security solutions, further improved its sales and earnings compared to the year's two first quarters. Demand and orders on hand have clearly improved, though not enough to top last year's excellent results. For the year as a whole, the company expects a sales revenue of EUR 36 million and an EBIT of EUR 2 million.

In the third quarter of the 2006 financial year, the secunet group achieved sales of EUR 9.5 million. Sales increased clearly compared to both the first (+42 percent) and the second quarters (+13 percent) – so that the year's growth trend continues undiminished. Nevertheless the company was unable to match the excellent third-quarter figures achieved in 2005 (previous year: EUR 10.2 million, a 6-percent difference), nor could the cumulative figures for the January to September period be exceeded (EUR 24.7 million in 2006, EUR 26.5 million in 2005, a difference of 7 percent). This development is due to hesitant public-sector demand in the first half of 2006. Even though demand has meanwhile recovered, it has not been possible to make up the difference.

In spite of staff increases (220 as of 30 September 2006 vis-à-vis 206 last year at this time), personnel costs have declined by just under 4 percent. Depreciation (-12 percent compared to the previous year) and cost of materials (-5 percent) have dropped. The only increase was recorded in other operating expenses, which grew by 9 percent. Overall, secunet was thus able to reduce its costs for the first nine months of 2006 by 2 percent as compared to the previous year.

secunet remains a profitable company: the company's earnings before interest and taxes (EBIT) amount to EUR 0.8 million for the current year after a figure just below 2.9 million for January to September 2005. Profit for the accounting period is EUR 0.6 million (previous year: EUR 1.9 million). Earnings per share were thus EUR 0.10 as compared to EUR 0.29 for the first nine months of 2005.

The payment of variable salary components early in the year and the large build-up of accounts receivable as of reporting date led to a cash flow of EUR -7.6 million after nine months (previous year: EUR -2.3 million).

Since the federal budget was passed at mid-year, demand from public customers has once again experienced strong and sustained growth. This is reflected in the orders on hand: from EUR 15.3 million as of 30 June, order books showed EUR 17.4 million as of 30 September 2006.

“secunet is actively involved in IT security for large-scale infrastructure projects. As a result, we expect high sales volumes in future, even though decision-making processes in these areas are very lengthy”, explains Dr. Rainer Baumgart, CEO of secunet Security Networks AG. “At the same time, we will be adapting our internal structures more and more to the needs of our various customer groups, and we will pursue our foreign operations with great determination. This opens up a variety of positive prospects.”

Business figures for the first nine months of 2006 and the figures already gathered for the current fourth quarter of 2006 allow the company to forecast the overall result for the 2006 financial year. The Board of Management of secunet Security Networks AG no longer expects to be able to improve on last year's excellent results. On the basis of available data, the company expects sales of around EUR 36 million and an EBIT of EUR 2 million.


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