secunet reports on the first nine months of 2005: Record earnings and strong revenues growth

secunet's revenues increased from € 18.7 million during the first three quarters of 2004 to € 26.5 million in 2005. Organically, i.e. without taking the 2004 acquisition of Secartis AG into account, which was not included in the scope of consolidation until April 2004, revenues rose by more than 31% compared to the previous year. Organic growth in the third quarter alone was over 23%.
The positive performance in terms of earnings has also resulted in a sustained improvement of secunet's profitability. The company increased its earnings before interest and taxes (EBIT) to € 2.9 million. This compares to earnings of € -0.6 million in the first nine months of 2004. secunet's EBIT margin from January to September 2005 was 10.9%. Looking at the third quarter of 2005 alone, secunet more than doubled its EBIT from EUR 0.6 million to EUR 1.3 million compared to the previous year. secunet achieved an EBIT margin of 12.6% in the third quarter of 2005. Earnings per share in the third quarter were € 0.13. In the first nine months, secunet earned € 0.29 per share, compared to earnings per share of € -0.06 in 2004. secunet can thus report the best quarterly and nine-month result in its history.

"By delivering this record result, we have once again demonstrated the power of our business model," comments Dr. Rainer Baumgart, chief executive officer of secunet Security Networks AG. "As high-quality IT security will remain in high demand, we are very optimistic as regards our future."

Three factors have contributed to the positive result since the beginning of the year: high capacity utilization, increased licensing revenues, and a disproportionately low increase in variable expense items compared to revenues.

Personnel expenses rose by 17% year-on-year, from about € 10.8 million to € 12.6 million. In the third quarter, the increase in personnel expenses was about 6%. At 206, the number of employees as of 30 September 2005 was almost unchanged compared to 30 September 2004 (205). Amortization, depreciation and other operating expenses grew slower than revenues. Cost of materials were up about 71%, from € 4.3 million in 2004 to € 7.4 million in 2005.
The increase in other operating income compared to the same period last year is due to the reversal of provisions for follow-up costs from fiscal year 2004. A large portion of this operating income was already accounted for in the first quarter of 2005.

Earnings before taxes for the first nine months of 2005 were clearly positive at € 3.0 million, compared to earnings of € -0.5 million in the first three quarters of 2004. Positive earnings of € 1.3 million were also recorded in the third quarter of 2005. The nine-month result improved from € -0.4 million to € 1.9 million. Net income for the quarter (after tax) was € 0.8 million.

Orders on hand at secunet as of 30 September 2005 amounted to about € 21.5 million. This represents an increase of 21% compared to last year's figure of € 17.8 million.

The continued strong demand for consulting services and solutions from secunet and the generally positive outlook for the IT high-security market allow for further optimism as regards the future. The board of management of secunet Security Networks AG therefore specified its revenues forecast for 2005 and upped its earnings in mid-October. The board now expects to report revenues between € 38 and 40 million and an EBIT margin of about 10%.




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