Core business revenues grow 6 percent in first half-year

Earnings before taxes raised by 46 percent to EUR 5.50 million

2013 revenue forecast of EUR 260 million following Sempla acquisition

Full-year guidance for pre-tax earnings raised to EUR 15 million

Stuttgart, 8 August 2013 - The GFT Group (GFT) closed the first six months of 2013 with solid revenue growth and a strong improvement in earnings. Consolidated revenue of EUR 114.19 million fell just short of the prior-year figure (EUR 116.38 million). Adjusted for the planned reduction in revenue from Third Party Management business of EUR 9.03 million, core business grew by 6 percent in the first six months. Pre-tax earnings (EBT) improved by 46 percent to EUR 5.50 million (prev. year: EUR 3.78 million). The acquisition of Sempla announced on 30 May 2013 was closed on 3 July 2013 so that the effects from the takeover will become effective as of the third quarter of 2013. After raising its revenue forecast for 2013 to EUR 260 million on 30 May, the company now expects pre-tax earnings of at least EUR 15 million for the year as a whole.

“The first half-year was very encouraging for the GFT Group. We strengthened the strategic position of our GFT Solutions division with the acquisition of Sempla and now have 500 additional employees in Europe’s fourth-largest IT market,” says GFT’s CEO Ulrich Dietz.

Revenue: GFT Solutions division grows strongly in first six months 
Dedicated to delivering IT solutions for the finance sector, the GFT Solutions division raised revenues by 14 percent to EUR 69.14 million in the first six months (prev. year: EUR 60.85 million). Revenues in this division were driven by growing compliance requirements, especially in connection with the introduction of the Single Euro Payments Area (SEPA). Growth was helped further by rising demand for solutions in the field of investment banking and mobile banking. High growth rates were achieved in the regions UK and Germany. This division’s share of consolidated revenue rose to 61 percent (prev. year: 52 percent).

In the emagine division, which is being realigned in 2013, revenue was 19 percent down on the previous year at EUR 45.04 million for the first six months (prev. year: EUR 55.53 million). Due to a planned reduction of revenues, the division’s Third Party Management business (TPM) contributed just EUR 1.34 million to total segment revenue (prev. year: EUR 10.94 million). With its consultancy services for the staffing of technology projects, the emagine division reported a slight decline in revenue of 2 percent to EUR 43.70 million (prev. year: EUR 44.59 million). All in all, this division’s share of consolidated revenue fell to 39 percent (prev. year: 48 percent).

EBT: consolidated result up 46 percent to EUR 5.50 million
The GFT Group posted pre-tax earnings of EUR 5.50 million in the first six months, corresponding to year-on-year growth of 46 percent (EUR 3.78 million). This figure includes income of EUR 1.18 million from the adjustment of the expected purchase price for Asymo AG, Switzerland, acquired in 2011, as well as costs for the CODE_n12 innovation drive of EUR 0.90 million (prev. year: EUR 1.32 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 37 percent to EUR 6.09 million (prev. year: EUR 4.43 million).

The strong increase in revenue and healthy earnings of the GFT Solutions division had a positive impact on the consolidated result. Due to margin effects and high capacity utilisation, the segment’s contribution to earnings rose by 63 percent to EUR 6.93 million (prev. year: EUR 4.25 million) with an operating margin of 10.0 percent (prev. year: 7.0 percent). Earnings of the emagine division were burdened by expenses involved with its realignment and fell to EUR 0.00 million (prev. year: EUR 1.15 million).

In the first six months of 2013, the GFT Group raised earnings after tax (EAT) by 85 percent to EUR 4.36 million (prev. year: EUR 2.36 million). This was mainly due to an increase in the operating margin to 4.8 percent (prev. year: 3.3 percent) and a lower calculated tax ratio of 21 percent (prev. year: 38 percent) due to a more balanced distribution of earnings among the national companies. Earnings per share improved to EUR 0.17 (prev. year: EUR 0.09).

Other key figures: headcount passes 1,500 mark
As of 30 June 2013, cash, cash equivalents and securities amounted to EUR 27.71 million (prev. year: EUR 30.40 million). The equity ratio stood at 59 percent (31 December 2012: 59 percent). Due to high capacity utilisation and the strong project position of the GFT Solutions division, the GFT Group’s headcount increased by 10 percent to 1,503 persons at the end of the first half-year (prev. year: 1,371). A total of 274 people were employed in Germany as of 30 June (prev. year: 271).

Outlook: full-year guidance for pre-tax earnings raised to EUR 15 million
Following the encouraging progress made in the first six months, the GFT Group continues to expect a positive development of business for the year as a whole. In the GFT Solutions division, the Executive Board anticipates further solid organic growth in the second half of the year with an additional growth impetus from the acquisition of the Italian company Sempla.

With the announcement of the Sempla acquisition on 30 May 2013, the revenue forecast for the full year was raised from EUR 238 million to at least EUR 260 million. The Executive Board has now upgraded its forecast for earnings before taxes (EBT) to at least EUR 15 million (formerly EUR 12 to EUR 13 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) are expected to reach at least EUR 19 million.

Detailed financial figures are available in the Investor Relations section of the GFT website at http://www.gft.com/ir.