Birkeroed, Denmark, 2011-03-15 08:42 CET (GLOBE NEWSWIRE) --
Announcement No. 2-2011
15 March 2011
For NASDAQ OMX Copenhagen A/S
Netop Solutions A/S releasing Annual Report 2010
Summary: Netop Solutions had a good year in 2010. The goal of a positive financial performance was achieved after a successful effort to strengthen and streamline the company. Revenue was DKK 92.1 million in 2010, an increase of 8% relative to 2009, and EBITDA was DKK 8.2 million in 2010 against an EBITDA loss of DKK 34.5 million in 2009. Revenue and EBITDA were higher than the Group's most recent forecast for 2010 and also exceeded the expectations originally expressed in the annual report for 2009. Profit for the year after tax was DKK 0.9 million against a loss of DKK 82.5 milllion in 2009. Management considers the financial results to be satisfactory and is pleased to see that Netop Solutions entered 2011 significantly stronger, backed by an improved equity ratio, positive cash flows from operating activities and no interest-bearing debt. Accordingly, Netop Solutions stands prepared for future growth.
(This announcement should be read in conjunction with the enclosed 2010 Annual Report for Netop Solutions. The Annual Report is also available from Netop Solutions’ web site, www.netop.com.)
Highlights of the 2010 financial year
- Our main objective in 2010 was to create a stable and sustainable platform, and achieve positive EBITDA, positive cash flows from operating activities and revenue growth. Netop Solutions surpassed these goals in all three areas.
- Consolidated revenue for the year was DKK 92.1 million against DKK 85.3 million in 2009, an increase of DKK 8%. The development in revenue was satisfactory in light of the fact that we have continued to feel an impact from the economic crisis, especially in the Education segment. Revenue for 2010 was higher than the Group's most recent forecast and also exceeded the expectations expressed in the annual report for 2009.
- EBITDA was DKK 8.2 million in 2010, against a loss of DKK 34.5 million in 2009. In 2010, we reduced the cost base by 26% compared to 2009 and EBITDA improved continuously throughout 2010. The performance exceeds both the most recent forecast of DKK 7-8 million and, by a wide margin, the original guidance of DKK 0-5 million expressed on the release of the annual report for 2009.
- Cash flows from operating activities were DKK 5.6 million in 2010 against an outflow of DKK 29.3 million last year.
- Profit for the year after tax was DKK 0.9 million against a loss of DKK 82.5 milllion in 2009. The improved performance is considered to be satisfactory.
- In the Administration segment, we experienced strong growth in 2010, and revenue was DKK 53.0 million against DKK 42.8 million in 2009, corresponding to an increase of 24%. The revised strategy of focusing on the Enterprise segment in which a number of large orders have been won, combined with the improved market conditions contributed to the stronger performance in the segment. In the important US market, Administration revenue was up by 25%.
- Revenue in the Education segment amounted to DKK 36.6 million in 2010, against DKK 36.2 million in 2009, corresponding to an increase of about 0.1%. In 2010, we maintained our position as the largest player in the market for classroom management solutions. The sale of upgrade and maintenance agreements was the main contributor to maintaining the level of revenue, whereas the sale of new licenses has still not recovered to pre-crisis levels.
- Revenue in the Communication segment, in which the Netop Live Guide product is our only product, was DKK 2.6 million in 2010 against DKK 1.4 million in 2009. Revenue growth was very high in this segment in 2010 at 86%, but only accounted for about 2% of consolidated revenue in 2010. The number of customers increased considerably and new customer groups have discovered the significant benefits available from using the product. In 2010, we facilitated more than one million chat sessions for our customers. The Netop Live Guide product is sold as cloud-based Software-as-a-Service (SaaS), which means that it primarily generates subscription-based revenue.
Highlights for Q4 2010
- Revenue in Q4 2010 ended at DKK 25.9 million, against DKK 17.0 million in Q4 2009, corresponding to an increase of about 52%.
- EBITDA was a profit of DKK 2.5 million in Q4 2010, against a loss of DKK 0.6 million in the same period of last year.
- Cash flows from operating activities amounted to DKK 4.8 million against an outflow of DKK 0.1 million in the same period of last year.
Outlook for 2011
After an extensive restructuring process in 2009 and 2010, we are now ready to exploit the growth potential in our markets.
In the Administration segment, we will continue to focus on the Enterprise area. Due to the recently allocated sales resources, mainly in the USA, and with the launch of Version 10 of Netop Remote Control, our main product, we expect to win market share and to generate double-digit revenue growth relative to 2010.
Our goal for the Education segment in 2011 is to become even better at communicating the significant improvements to classroom teaching that schools experience when using our classroom management solutions. We expect slight revenue growth in the Education segment.
The Communication market, which is currently experiencing rapid growth, will have additional sales resources allocated to it in 2011. We expect significant revenue growth in 2011 now that Netop Live Guide is also sold through the Netop Solutions web shop.
Based on our initiatives and a general improvement in market conditions, we expect revenue of DKK 97–102 million, corresponding to an expected revenue improvement of 6–11%. Based on strict cost management and necessary investments in future growth, we expect EBITDA to be DKK 7–12 million. Our revenue guidance for 2011 is based on an average USD/DKK exchange rate of DKK 5.60. To illustrate our exchange rate exposure, a presumed average USD/DKK exchange rate of 5.70 for 2011 would increase our revenue by about DKK 1.0 million and EBITDA by about DKK 0.5 million.
Netop Solutions A/S
Netop develops and sells software solutions enabling swift, stable and secure transfer of video, screen images, sound and data over the Internet. The company has three core business areas: Administration, Education and Communication. Netop’s unique and cost-saving Administration solutions makes work easier for IT professionals through secure remote control solutions. Netop’s market-leading Education solutions for classroom management and corporate e-learning help students and teachers achieve optimum results through virtual teaching. Netop’s Communication solutions allow customers, business partners and colleagues to meet easily and safely in virtual space through chat, video or voice over the Internet. At 31 December 2010, Netop had 122 employees and subsidiaries in the USA, the UK, Romania and Switzerland. The company sells its solutions to public and private sector customers in more than 80 countries. Netop Solutions A/S is listed on NASDAQ OMX Copenhagen A/S. Netop generated revenue of DKK 92.1 million in 2010. For more information, go to: www.netop.com.
Translation In the event of any inconsistency between this document and the Danish language version, the Danish language version shall be the governing version.
Kurt Bager (CEO)
Tel. +45 45 45 90 25 25
E-mail: kgb@netop.com
