9-Month Report of COR&FJA AG

Transcription

1 9-Month Report of COR&FJA AG Contact COR&FJA AG Humboldtstraße 35 D Leinfelden-Echterdingen Investor Relations Phone: Fax:

2 Key Figures as of 30 September 2012 (9-month period) euros 000 euros Turnover 101,606 95,788 EBITDA (Operating result before depreciation and amortisation) -1,145 2,801 EBITDA margin -1.1% 2.9% EBIT (Operating result) -4, EBIT margin -4.0% -1.0% EBT (Result before income taxes) -5,069-3,445 9-month result -4,048-3,699 Earnings per share in euros Equity 72,528 73,320 Equity ratio 55.7% 58.7% Total assets 130, ,950 Cash flow from operating activity -5,325-5,706 Employees as at ,210 1,181 Key Figures as of 30 September 2012 (3rd Quarter) euros 000 euros Turnover 33,596 35,983 EBITDA (Operating result before depreciation and amortisation) 739 3,813 EBITDA margin 2.2% 10.6% EBIT (Operating result) ,553 EBIT margin -0.7% 7.1% EBT (Result before income taxes) Quarterly result Earnings per share in euros Dear shareholders, customers, business associates and colleagues, In the period to 30 September 2012, COR&FJA AG generated aggregate turnover of million euros (30 September 2011: 95.8 million euros), representing an aggregate increase of 6.1 per cent over the corresponding period last year. At the same time, this aggregate turnover is the highest turnover for this period since the merger to establish COR&FJA AG in Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the first nine months of 2012 amount to -1.1 million euros (previous year: 2.8 million euros). A positive third quarter in 2012, which developed according to plan with EBITDA of 739,000 euros, contributed to this figure, which represented an improvement compared with the first half of 2012 (-1.9 million euros). Parallel to the economic trend, COR&FJA has launched a programme to reduce its costs. It is intended that the programme will come to fruition from as early as 2013 onwards and significantly improve our company s costs and revenues situation. In so doing we will be laying the foundation for COR&FJA s return to operating profitability by 2014 at the latest, an objective which is just as important to us as it is to you, the company s shareholders. This programme has two central pillars. Firstly, we are going to replace a large proportion of the services rendered by external IT service providers with our own resources. We will be able to accomplish this by reducing the massive product investments of past years to a normal level and those employees who were previously tied to the investment projects will be available for billable projects. Secondly, we are striving to achieve significant reductions and consolidations in overhead costs, including management and sales, as well as for our administrative areas. Here too, we are expecting considerable cost-saving effects. 1

3 In August 2012, the renowned market research and analysis company Gartner published the report Magic Quadrant for European Life Insurance Policy Administration Systems, which investigated 15 policy management systems from a diversity of European software manufacturers. As in the previous years, our software products COR.FJA Life Factory and COR.FJA Life occupied top positions. COR.FJA Life Factory was even chosen as one of just three systems in the Leader Quadrant. This result once again underlines the leading role that our management systems play on the European market, as well as the competitiveness of our company as a whole. Thank you for the trust you have placed in COR&FJA AG. We will do everything in our power to justify it. Yours faithfully, Ulrich Wörner (Chairman of the Management Board) Milenko Radic Volker Weimer Rolf Zielke (Members of the Management Board) Interim Management Report In August 2012, COR&FJA AG announced that it had agreed on a collaboration with AktuInf GmbH and plenum AG to define the Facharchitektur Leben 2020 (FAL 2020) project. The objective is to offer life insurance companies an orientation and action framework for the current challenges and the changes that will occur in the years ahead. The three cooperation partners will each contribute their own mutually complementary special fields of competence in order to develop FAL2020 as the most comprehensive and systematic overall view possible of actuarial business-process- and IT-related issues and aspects of strategic portfolio management. The thought processes for defining FAL2020 were initially prompted by topics such as Solvency II, the current low interest rate phase and its effects, the challenge of coping with the steadily growing number of regulatory frameworks, the strengthening of consumer protection and adjustments to changed consumer behaviour. In the years to come, all of these factors will lastingly shape and change both the existing product environment and the existing life-insurance business model. This will bring about a situation where the functional architecture of life insurance, having been oriented strongly towards operational policy management for many years, will have to be scrutinised closely in almost every area and redefined in many fields. With, in particular, the many and renowned customers of COR&FJA AG being included, the cooperation partners made it their objective to follow up the previous establishment of the two virtual market standards COR.FJA Life Factory and COR.FJA Life by adopting an equally rigorous approach to the topic of Facharchitektur Leben Depending on the needs-specific starting situation of the respective life insurer, the intention is to offer functional and management-side consulting services, conceptual blueprints and via the consistent and parallel further development of COR&FJA s market-leading standard software solutions partial solutions and service-oriented software components in modern JEE technology within the framework of FAL2020. The partners also intend, as far as possible, to integrate further life insurance companies from German-speaking countries into the development of FAL

4 In COR&FJA s Insurance segment, a new and in functional terms significantly enhanced component for group policy management was created in close cooperation with two major customers; the component is compatible with the current release 4.10 of the policy management system COR.FJA Life Factory (LF). In the course of the third quarter, further prospective customers also with their own policy management systems have expressed a fundamental interest in this solution. The new standard collective management component in COR.FJA Life Factory offers insurers who are strongly focused on group pension schemes and other group insurance a considerably higher level of automation and therefore greater cost efficiency. The plans for the upcoming release 4.11 have already been drawn up and their content has been discussed and agreed on jointly with the existing customers. The plans were adopted within the framework of the user group in October 2012 and should be implemented by the beginning of the second quarter of This release will again be characterised by numerous regulatory requirements and, for many companies, a resultant reform of the classical tariff spectrum. The installation project involving COR.FJA Life Factory at the Colognebased insurance company DEVK Versicherungen is currently in the final stage of phase 1. Both the integration of the policy management system into the DEVK system environment and the implementation of the new unisex tariff generation have almost been completed. It is scheduled to go live at the beginning of This means that as planned the first important milestone will be reached after a project period of only twelve months. As part of the LF system installation is also guided by the reinstallation of relevant peripheral systems, thereby additionally increasing the complexity of the overall project, the likelihood of its reaching this milestone successfully is all the more remarkable. In addition, relevant parts of the tariff generations from TG 2005 onwards have also been implemented in LF already, thereby establishing the preconditions for a successful first migration tranche in March All in all, COR&FJA and DEVK have jointly succeeded in positioning COR.FJA Life Factory very well in this extremely complex and highly time-critical project within short project cycles. The technical enhancement of COR.FJA Life Factory on the basis of modern JEE technology and the completion of LF JEE Contract are still proceeding on schedule and to our utmost satisfaction. The development of LF JEE Product began in the first quarter of this year and is continuing parallel to the completion of JEE Contract. COR&FJA continues to attract a great deal of interest among insurance companies in this new technology platform. As part of the collaboration with IBM, LF JEE will also be integrated as effectively as possible with the existing IBM technologies so that a solution proposal can be made to the joint customer with minimised integration risks. The main focus of COR&FJA s attention is the retention of its own solutions platform independence. In the course of this development work a diversity of technical aspects are being tracked intensively, including porting to Websphere 8 and Websphere 8.5; the integration of Websphere Batch with the large-scale data processing of LFJEE; the set-up, test and certification of an LF JEE PureSystems installation; performance and load tests on various IBM platforms and integration with Websphere portal technology. Together with COR&FJA, a German life insurance company is currently examining the use of COR.FJA Life Factory under the specific overall conditions prevailing at the insurance company in question. In addition to the implementation of extensive training measures pertaining to LF, a feasibility study is scheduled to be completed by the end of the year, which will include the overall planning of an installation project. With the current release of the policy management system COR.FJA Life having been completed on schedule and passed on to the appropriate customer projects in the second quarter, themes were defined and the scope of their content as well as further coordination with the customers for the upcoming 3.15 version were dealt with in the third quarter. This release is scheduled for delivery in the first quarter of Within the annual cycle, there are plans to deliver the follow-up version 3.16 to customers at the start of

5 With regard to the COR.FJA Insurance Suite, the user interface in COR.FJA Life was converted to a web-based technology. In the process, the existing business logic is being made available to the new interfaces via web services. The result of this planned system modification will be the new system line COR.FJA Life 4 as the main release. As well as simplifying the maintenance possibilities for the interfaces, the intention is to facilitate versatile and flexible use by customers. Also worth mentioning in connection with this is the potential for integrating the screens into existing portal solutions and the services directly into the existing system environment at the customers premises, In the enhancement process for the current release 1.4 of COR.FJA P&C, the policy management system for non-life insurance, the main focus in the third quarter was on the systematic realisation of the CCC concept ( core-country customer ). It provides the COR&FJA standard software with a core system which, by using the country layer, is enhanced with country-specific special features (e.g. divisional characteristics), meaning that the product can be used in a variety of countries. In addition, the customer layer depicts customer-specific functionalities (e.g. changes to the core or customer layer, for example due to customer-specific processes, etc.). for example within the framework of an automatic application data transfer. As part of the further functional and technical enhancement of the solution, COR&FJA is using the advantages of standard software to make it possible for existing customers of the current COR.FJA Life version to switch quickly and simply to these new technologies. COR.FJA Life 4 is scheduled for completion in The first-time deployment of the web-based broker portal COR.FJA Sales & Service in a customer project on the German market is progressing: phase 1 was enhanced with a component (relating to the motor insurance division) that was brought forward from phase 2. This extended phase has now been completed and underwent its accept - ance test before the end of the third quarter. The final inspection and In view of the specific COR.FJA Life product spectrum, a customer in the German-language environment has opted to use this policy management system in the future. The volume of turnover represented by this order is in the lower seven-figure range and the project might acceptance is scheduled for the fourth quarter. Meanwhile, the work on phase 2, involving the implementation of functionalities for selling liability and accident insurance products, is continuing parallel to the above. also encompass the migration of the previous system. COR&FJA is expecting this customer relationship to produce further orders of an appropriate magnitude over the next few years. The new standard software COR.FJA ilis for the centralised and automatic provision of the financial reporting applications was enhanced as planned in the third quarter of 2012 and, in cooperation with the existing The current release 3.14 of COR.FJA Life, including a number of customer-specific requirements, went live on schedule and without any major problems on the premises of the existing customers R+V Luxemburg and AXA Pensionskasse Pro bav. Within the scope of the collaboration with IBM, moreover, an internal project was launched with the aim of making COR.FJA Life fully DB2-enabled, as well as having the currently available databases at its disposal, by the first customers, gradually adapted to new requirements. The main focal points in this process were the requirements in relation to Solvency II, while the spectrum previously planned is going to be expanded at the customers request by means of an add-on for the low-cost and automatic calculation of a Solvency II standard model (with no further projection tools and straight from the portfolio). The add-on will be available in mid-2013 in time for the application for Solvency II. quarter of next year. 6 The approach behind COR.FJA ilis to strive for an automatic and service-oriented networking of the operational and planning systems on the basis of modern standard technologies is meeting with a highly positive reaction on the markets. The 1.0 release will be available and marketable by the end of the year at the latest. As an open application that can also be used by companies without COR&FJA policy management systems, COR.FJA ilis offers standard interfaces to the commonly-used projection tools (for example Prophet or COR.FJA ALAMOS). 7

6 Also in the third quarter of 2012, a new client was acquired for COR.FJA Zulagenverwaltung (a system for the management of plans subsidised through the Riester system). In addition, the company is involved in final negotiations with two large providers regarding the deployment of this COR&FJA system for the management of plans subsidised through the Riester system from 2013 or 2014 onwards. This has steadily enhanced the leadership of COR.FJA Zulagen - verwaltung on the market. A new customer for the pension settlement and documentation system COR.FJA RAN was acquired during the course of the third quarter. Furthermore, the successful installation of the performance component pension settlement on the premises of a first-time customer is imminent and final tests are proceeding highly satisfactorily. In view of the steadily increasing number of ongoing pensions in the life insurers insurance portfolios, COR&FJA s standard software solution continues to offer great business potential. In this respect, we are planning to enter into a partnership agreement with BearingPoint the company that manufactures ABACUS/DaVinci to expand our good and constructive collaboration and already establish CORBAS ReCon as the comprehensive platform for modern bank controlling in the medium term. As COR&FJA is expecting further regulatory requirements and as a result additional reporting obligations to be introduced as a consequence of the persistent financial crisis, the company regards itself as being particularly well positioned in this segment with its CORBAS ReCon product and is anticipating a positive response from the market. As far as the two new liquidity coverage ratio (LCR) and net stable funding ratio (NSFR) indicators are concerned, which are subject to statutory reporting requirements, COR&FJA s existing RiskEngine (to determine and standardise cash flows) is currently being integrated into CORBAS ReCon and is scheduled to be used from the beginning of the new year. In COR&FJA s Migration division, another successful and punctual migration was carried out in the quarter just ended and a licence was placed on the German market for the software tool COR.FJA MigArchiv. Furthermore, the beginning of the fourth quarter saw the launch of another major migration project in which not only the COR&FJA process model, but also the licensed products COR.FJA MigSys and COR.FJA MigArchiv are used. The company is also involved in a number of promising canvassing processes for concrete migration projects on the premises of renowned life insurers. TopDesk COR&FJA s communication and integration platform for bank applications also continues to be in high demand. COR&FJA expects to have at least a test version of TopDesk installed on the premises of all existing customers by the end of the year and the final rollout at the banks is scheduled for the fourth quarter of 2012 or for TopDesk is a central component of the COR.FJA Banking Suite (CORBAS) and when it goes live, it will permit even better integration and enable more options in the core modules that constitute the COR.FJA Banking Suite (CORBAS) in the future. 8 In the Banking segment, we were able to carry forward the numerous projects launched for the purpose of linking CORBAS ReCon (Reporting & Controlling) to ABACUS/DaVinci for existing COR&FJA customers successfully during the third quarter of the year and some customers are now already working in parallel with the new application. The projects are scheduled for completion by the end of the year when the test phase finishes and normal operation commences. This means that COR&FJA is ensuring that these customers will then be fully compliant with all regulatory reporting requirements on schedule, while establishing the foundation to meet upcoming requirements, such as Basel III and the Europeanisation of reporting procedures, at the same time. In view of the planned introduction of the FATCA (Foreign Account Tax Compliance Act) in the USA, more existing customers decided in favour of what is referred to as Component I of COR&FJA s FATCA solution during the third quarter of the year. The FATCA solution is being developed and made available in the form of three completely separate and freely available components. Component I contains all of the functions and data fields required to determine the extent to which bank customers are FATCA-relevant or not. Component II is used to calculate the penalty tax based on the customer s status in respect of US tax liability. Component III will contain the procedures for statutory reporting to the US authorities or European authorities as applicable. Apart from the most recently placed orders, COR&FJA is continuing to experience a positive market response to this new solution and is anticipating the placement of further orders. 9

7 Supported by the TopEase business engineering tool supplied by the Swiss software company pulinco engineering, we were successful in mapping a comprehensive model of all bank processes, which is now being used as an integral element in the development of software components along the value-added chains for financial service providers. The aim of this partnership is to take another significant step forward in the support that we already provide for workflow processes so that they can be used to improve the definition of automatic and manual processes in future and enable their integration into an overall process model. COR&FJA continues to regard itself as being in a good position with respect to several acquisition projects in the Banking sector and the company is expecting more orders to be placed for components from the COR.FJA Banking Suite (CORBAS) up to the end of the year. Demand in the payment transactions sector remains high, for example, as a result of the changeover of payment transactions within Germany to the SEPA standard. COR&FJA is also attracting a great deal of interest in both product business and in the consulting segment. The supporting services currently provided in these areas are not only being given to existing customers, but are attracting new customers as well. Regular expert panel meetings were again convened with COR&FJA s existing customers during the third quarter of the year to discuss the targeted further development of the COR&FJA product spectrum in accordance with the main customer requirements and these resulted in numerous new orders. Within the framework of a large-scale sales project at the premises of an automotive bank, the feasibility analysis has now been completed and the main project has been launched on the basis of a letter of intent (LOI). At the same time, negotiations are being conducted with another potential new customer with respect to a 10-year service agreement and supplementary maintenance agreement. COR&FJA is expecting them to be concluded successfully before the end of the year. Earnings, financial and assets position Last year, the Group acquired shares in plenum AG, COR&FJA Metris GmbH and Wagner & Kunz Aktuare AG. The only results of the acquired companies to be included in the Group s consolidated financial statements for 2011 were those generated from the respective acquisition date onwards. As a result, a number of key statistics in the current earnings, financial and assets position are comparable only to a limited extent with those from the corresponding period last year. The reporting currency is the euro, and the rounding is done to thousands or millions of euros. This can give rise to rounding differences of up to one arithmetical unit. Income position Turnover as of 30 September 2012 totalled million euros, an increase of 5.8 million euros over the comparable period last year. This represents an improvement of 6.1 per cent. 3.7 million euros of this turnover growth results from the change in the consolidated group in Measured against the comparable period last year, the turnover structure has changed only slightly. As of 30 September 2012, the services invoiced within the framework of fixed-price orders and at cost accounted for 72.0 per cent of aggregate revenue, 5.0 percentage points higher than the corresponding period last year. Licensing revenue, on the other hand, declined by some 2.4 percentage points to 6.6 per cent of aggregate turnover. Maintenance revenue fell by 2.3 percentage points to 18.7 per cent. The proportion of aggregate turnover accounted for by revenue from merchandise and computing centre services also showed a downward trend, falling by 0.4 percentage points to 2.6 per cent. The other operating income, which was generated primarily from rental income and charges for the use of company cars, declined by 0.2 million euros compared with the previous year to 2.1 million euros

8 Total capacity-driven expenses for external services and personnel as of 30 September 2012 amounted to 87.1 million euros, 8.6 million euros above the figure for the comparable period last year. The companies acquired in 2011 contributed 4.1 million euros to this sum. At Group level, the proportion of turnover accounted for by these costs increased by 3.8 percentage points compared with the same period last year to 85.7 per cent. Financial position Liquid funds decreased by 5.1 million euros in the first nine months of 2012 and amounted to 10.4 million euros as of 30 September In addition, short-term financial liabilities (mainly bank loans and overdrafts) increased by 2.0 million euros and amounted to 17.8 million euros as of 30 September The resultant net cash position is -7.1 million euros. Compared with the first nine months of the previous year, other operating expenses increased by 1.2 million euros to 18.2 million euros, with the acquired companies contributing 1.3 million euros to this sum. As a proportion of turnover, this constitutes an increase of 0.2 percentage points from 17.7 per cent to 17.9 per cent. Earnings before interest, taxes, depreciation and amortisation (EBITDA) totalled -1.1 million euros, 0.1 million euros below the comparable figure last year. Depreciation and amortisation as of 30 September 2012 amounted to 3.0 million euros, 0.8 million euros below the comparable figure from last year. This difference results from the decrease of 0.9 million euros in the amortisations of the hidden reserves of identified intangible assets from shareholdings, which are subjected to scheduled amortisation and amounted to 1.1 million euros as of 30 September The financial result has improved by 1.6 million euros to -1.0 million euros, a development which can be attributed primarily to the amortisation through profit or loss of the shares in B+S Banksysteme Aktiengesellschaft, which are reported in accordance with IAS 39. All in all, the COR&FJA Group generated a Group result of -4.0 million euros as of 30 September 2012 (corresponding period last year: -3.7 million euros). Earnings per share totalled euros, a deterioration of 0.01 euros against the comparable result from last year. Earnings before interest, taxes, depreciation and amortisation (EBITDA) plus the change in provisions and non-cash share and currency effects in the first nine months of 2012 amounted to -0.4 million euros (free cash flow). Investments amounting to 1.1 million euros were made. The change in receivables and liabilities has resulted in a cash outflow of 3.1 million euros. Tax payments amounting to 1.8 million euros had to be made in the first nine months of the year. Assets position Current assets decreased slightly by 0.1 million euros to 63.6 million euros. Trade receivables increased by 3.0 million euros to 23.1 million euros. In relation to turnover, the receivables average days sales outstanding (DSO) came to 62 days (31 December 2011: 54 days). The PoC receivables not covered by progress payments increased by 1.4 million euros to 26.3 million euros. Their average DSO, in relation to turnover, was 71 days as of 30 September 2012 (31 December 2011: 66 days). Other current assets increased by 0.2 million euros to 1.1 million euros, mainly as a result of increased accruals/deferrals. In a contrary development, liquid funds decreased by 5.1 million euros in the first nine months

9 Non-current assets increased by 0.2 million euros to 66.7 million euros in the reporting period, thanks mainly to the capitalisation of deferred taxes on loss carryforwards, which increased by 2.2 million euros to 13.0 million euros. As a result of the amortisations, which do not reflect any corresponding investments, and the depreciation of property, plant and equipment and amortisation of intangible assets in excess of the investments made, the other intangible assets and property, plant and equipment decreased by 2.0 million euros to 16.9 million euros. Current liabilities increased by 4.0 million euros to 42.2 million euros. 4.3 million euros of this sum resulted from the deferral of advance payments, especially from maintenance contracts. These are being reversed over the course of the financial year. On the other hand, the financial debts, trade receivables and other financial liabilities decreased by 0.3 million euros to 31.9 million euros in the first nine months of the financial year Expenses incurred for central functions (management, selling, central services) are charged to the operating segments under costs and allocated according to their actual origin and cause. The segment result constitutes the earnings before income taxes, as the income taxes are not subject to segment allocation due to their being centrally controlled. The amortisation of intangible assets identified in the course of the merger is classified as amortisation costs and charged to the respective segments according to actual origin and cause. The valuation methods used in segment reporting correspond to those used for the consolidated financial statements as of 31 December At 67.4 million euros, the Life Insurance segment accounted for 66.3 per cent of aggregate turnover and generated EBITDA of 5.1 million euros. Before the allocation of 7.5 million euros in selling and admin - is tration overheads, operating EBITDA in the segment came to 12.6 million euros, a return of 18.7 per cent. Non-current liabilities increased by 0.1 million euros to 15.6 million euros. Segmental reporting The segment results are based on the company s internal national and pan-company profit centre statement of profit and loss in accordance with which the Group is managed. In the process, services exchanged between the segments are accounted for as internal sales within total operating performance or as intracompany expenses in the segment result. At 17.0 million euros, the Non-Life Insurance segment generated 16.7 per cent of the Group s aggregate turnover and EBITDA of -5.5 million euros. Operating EBITDA before the allocation of selling and admin - istration overheads totalling 2.3 million euros amounted to -3.2 million euros

10 The Banking segment generated a turnover of 17.2 million euros, thereby accounting for 17.0 per cent of aggregate turnover, and posted EBITDA of -0.8 million euros. Before the allocation of 1.4 million euros for selling and administration overheads, operating EBITDA was 0.6 million euros, which corresponds to a return of 3.3 per cent. Selling and administration costs, including in-house IT, accounted for 10.8 per cent of the Group s total costs in the first three quarters of Turnover Intersegment EBITDA turnover Life Insurance ,372 13,865 5, ,540 8,253 6,500 Non-Life Insurance ,005 3,323-5, ,333 3,526-1,400 Banking ,229 1, , ,300 Total ,606 19,039-1, ,788 12,010 2,800 Employees At the end of September 2012, the COR&FJA Group had 1,210 permanent employees (30 September 2011: 1,181). Distribution by region: Germany: 916 Austria: 32 Switzerland: 30 Benelux: 8 Slovakia: 107 Slovenia: 29 USA: 73 Portugal: 10 Poland: 2 Czech Republic: 2 Denmark:

11 Further outlook for the current financial year 2012 The financial year to date has not conformed to COR&FJA s expectations, with the result that on 10 August, the company had to revise its budgeted figures for 2012 downwards. At the moment, COR&FJA AG is working on the assumption that the turnover targets that it has consequently redefined, as well as the correspondingly lower limit of the adjusted earnings range, namely an EBITDA figure of 3.5 million euros, will be achieved. Factors contributing to this will include several of the company s divisions, in particular the Life segment which has overshot its targets, but also the reduction in large-scale investments in the product area as scheduled and the planned costcutting measures. COR&FJA s stable existing customers segment, moreover, regularly generates follow-up orders and can compensate at least partly for the current hesitant state of new business. In the German-speaking and wider European environments alike, COR&FJA offers the COR.FJA Insurance Suite and the COR.FJA Banking Suite as two of the current leading industry platforms in the field of standard software for financial services providers. In addition to this, the company believes that the newly-expanded Consulting segment offers substantial business potential because not only insurance companies, but also banks are facing fundamental processes of change relating to corporate management optimisation in the short and medium term due to new statutory requirements in areas such as Solvency II, MaRisk and Basel III. As a proven and reliable supplier of themes and projects with experience from many successful consulting projects not tied to specific products, COR&FJA supports its customers in a spirit of partnership in these areas as well. As one of Europe s leading providers of integrated solutions for the entire financial services sector, COR&FJA covers almost the whole range of customer requirements in relation to modern and flexible standard software solutions, as well as management and process consulting in the IT environment, with its product and service portfolio. With almost 1,200 employees in twelve countries and an extensive product range for life, healthcare and non-life insurance as well as for private and regional banks, automobile finance companies, mortgage lending institutions and financial groups, the company has outstanding market opportunities and occupies an excellent competitive position. COR&FJA is therefore expecting to benefit from a positive turnover and earnings trend over the next few years. In respect of the future opportunities and risks, COR&FJA refers to the relevant parts of the condensed management report and consolidated financial statements for the 2011 financial year, as we currently estimate that there have been no significant changes in this area. Related party disclosures In the reporting period, there were no significant transactions with related parties that would require separate reporting

12 Consolidated Income Statement 9-Month Period 2012 and 2011 Turnover Changes in inventory of finished and unfinished services Capitalised own services for developments Other operating income Cost of purchased services Personnel expenses Other operating expenses Depreciation of property, plant and equipment and amortisation of intangible assets Operating result Interest income Interest expenses Income from participating interests Earnings before income taxes Taxes on income and revenues Consolidated earnings Of which: Shareholders of the parent company Non-controlling shares Consolidated earnings Earnings per share (undiluted) in euros Earnings per share (diluted) in euros Average shares outstanding (undiluted/diluted) euros 000 euros 101,606 95, ,056 2,264-13,879-12,969-73,182-65,480-18,172-16,939-2,958-3,718-4, ,098-5,069-3,445 1, ,048-3,699-4,073-3, ,048-3, ,895,861 40,895,861 Consolidated Statement of Comprehensive Income 9-Month Period 2012 and 2011 Consolidated earnings Unrealised profits and losses from currency differences Profits/losses from the revaluation of available-for-sale financial assets Deferred taxes related to profits/losses from the revaluation of available-for-sale financial assets Amounts recognised in the income statement for available-for-sale financial assets, before taxes Deferred taxes on amounts recognised in the income statement for available-for-sale financial assets Other comprehensive income Total comprehensive income euros 000 euros -4,048-3, ,698-3,568 Of which: Shareholders of the parent company -3,723-3, Non-controlling shares

13 Consolidated Income Statement 3rd Quarter 2012 and 2011 Turnover Changes in inventory of finished and unfinished services Capitalised own services for developments Other operating income Cost of purchased services Personnel expenses Other operating expenses Depreciation of property, plant and equipment and amortisation of intangible assets Operating result Interest income Interest expenses Income from participating interests Earnings before income taxes Taxes on income and revenues Consolidated earnings Of which: Shareholders of the parent company Non-controlling shares Consolidated earnings Earnings per share (undiluted) in euros Earnings per share (diluted) in euros Average shares outstanding (undiluted/diluted) euros 000 euros 33,596 35, , ,159-4,852-24,207-22,087-5,999-6, , , , ,895,861 40,895,861 Consolidated Statement of Comprehensive Income 3rd Quarter 2012 and 2011 Consolidated earnings Unrealised profits and losses from currency differences Profits/losses from the revaluation of available-for-sale financial assets Deferred taxes related to profits/losses from the revaluation of available-for-sale financial assets Amounts recognised in the income statement for available-for-sale financial assets, before taxes Deferred taxes on amounts recognised in the income statement for available-for-sale financial assets Other comprehensive income Total comprehensive income euros 000 euros Of which: Shareholders of the parent company Non-controlling shares

14 Consolidated Statement of Financial Position Assets Current assets: Cash and cash equivalents Securities Trade receivables Invoiced receivables PoC receivables Receivables from affiliated companies Inventories Ongoing income tax claims Other financial receivables Other short-term assets Short-term assets, total Non-current assets: Goodwill Other intangible assets Property, plant and equipment Shareholdings accounted for using the equity method Financial investments Deferred tax claims Ongoing income tax claims Other financial receivables Long-term assets, total Assets, total euros 000 euros 10,356 15, ,461 45,078 23,130 20,158 26,331 24, , , ,611 63,522 30,779 30,779 12,762 13,883 4,091 4, ,851 4,686 12,958 10,769 1,064 1, ,705 66, , ,988 Table continued on following page 24 25

15 Consolidated Statement of Financial Position Equity and liabilities Current liabilities: Financial liabilities Trade payables Amounts owed to affiliated companies Current income tax liabilities Other provisions Other current liabilities Other financial liabilities Short-term liabilities, total Non-current liabilities: Other provisions Other financial liabilities Deferred tax liability Pension provisions Other long-term liabilities Long-term liabilities, total Liabilities, total Equity: Subscribed capital of COR&FJA AG Capital reserve of COR&FJA AG Group retained income Equity held by the shareholders in the parent company Non-controlling shares Equity total Equity and liabilities, total euros 000 euros 17,772 15,730 3,133 4, ,611 2,056 7,144 2,857 10,981 12,102 42,170 38, ,063 8,084 6,604 6, ,618 15,476 57,788 53,681 40,896 40,896 33,601 33,601-4, ,476 74,239 2,052 2,068 72,528 76, , ,

16 Consolidated Cash Flow Statement Consolidated earnings Minority interests Income taxes Earnings before income taxes Adjustments for the transfer of earnings to the cash flow from operational activities: Depreciation of property, plant and equipment and amortisation of intangible assets Earnings from disposal of property, plant and equipment and of intangible assets Depreciation of financial assets Other expenses/income with no impact on earnings Change in provisions for pensions recognised in profit or loss Interest income Interest expenses Income taxes paid less reimbursed payments Change in: Trade receivables Inventories Other assets / other financial receivables / ongoing income tax claims Other provisions Trade payables Other debts / financial liabilities Cash flow from operating activity euros 000 euros -4,073-3, , ,069-3,445 2,958 3, , , ,407-8, , ,263-2,673 3,157 2,132-5,324-5,706 Table continued on following page 28 29

17 Consolidated Cash Flow Statement Cash flow from investment activity: Sale of securities Investments in tangible assets Investments in intangible assets Incoming payments from disposal of tangible assets Cash outflows from the acquisition of consolidated companies Cash outflows from the acquisition of non-controlling shares in consolidated companies Cash flow from investment activity Cash flow from financing activity: Repayment of short-term financial liabilities Assumption of short-term financial liabilities Interest received Interest paid Cash flow from financing activity Changes due to the exchange rate with no impact on earnings Change in cash and cash equivalents Cash and cash equivalents at the start of the reporting period Addition of cash and cash equivalents due to change in consolidation group Cash and cash equivalents at the end of the reporting period euros 000 euros , ,089-5, ,041 8, ,284 7, ,079-3,945 15,435 15, ,501 10,356 13,

18 Consolidated Statement of Changes in Equity Subscribed capital Capital reserve Group retained income Interim total Equity Currency compensation item Net investment Other Equity held Non-controlling by the shares shareholders in the parent company 000 euros 000 euros 000 euros 000 euros 000 euros 000 euros 000 euros 000 euros As of ,896 33,582 2,996-2, , ,582 Consolidated earnings ,673-3, ,699 Unrealised profit and loss Change in available-for-sale financial instruments Total comprehensive income ,625-3, ,568 Expenses for issuance of stock options Additions in non-controlling shares ,287 1,287 As of ,896 33,601 3,079-2,337-3,184 72,056 1,264 73,320-2,441 As of ,896 33,601 3,288-2,337-1,210 74,239 2,068 76,307 Consolidated earnings ,073-4, ,048 Unrealised profit and loss Change in available-for-sale financial instruments Total comprehensive income ,777-3, ,698 Additions in non-controlling shares As of ,896 33,601 3,342-2,337-5,027 70,476 2,052 72,528-4,

19 Notes Accounting principles These interim financial statements of COR&FJA AG as at 30. September 2012 were prepared in the Group currency of euros in compliance with IAS 34 Interim Financial Reporting with due regard to the International Financial Reporting Standards (IFRS) applicable as at the reporting date. The accounting and valuation methods, as well as the calculation methods, applied in the consolidated financial statement as at 31 December 2011 have not changed. For further explanatory notes, see COR&FJA AG s consolidated financial statement as at 31 December The reporting in accordance with IFRS 8 (Operating Segments) is carried out in line with the management approach to the management of the company for the Life Insurance, Non-life Insurance and Banking segments. Consolidation group Acquisition of further shares in plenum AG With effect from 28 February 2011, COR&FJA AG had acquired a 29.9 per cent (2,898,869 no-par-value shares) interest in plenum AG, Wiesbaden (Munich stock exchange M:access, ISIN DE000A0Z23Y9). In addition to this, COR&FJA AG acquired a further per cent of the shares in plenum AG up until 30 June On 6 February 2012, COR&FJA AG purchased an additional 92,965 shares, equivalent to 0.96 per cent of plenum AG, thus increasing its stake in the company to per cent. The purchase price amounted to 81,000 euros in cash. The book value in equity attributable to the additional shares purchased totalled 41,000 euros. The difference between the book value and the acquisition cost of 40,000 euros was posted as revenue reserves. Income from participating interests COR&FJA AG holds 1,498,462, or per cent, of the shares in B+S Banksysteme Aktiengesellschaft (B+S), Munich. In the consolidated financial statements as of 31 December 2011, the shares were accounted for as a financial instrument in accordance with IAS 39. In relation to this, we refer to the explanations in the VIII.11 Financial investments section of the notes to the consolidated financial statements for the financial year Due to the decline in the B+S share price, this shareholding, which is shown as a financial investment in the category of available-for-sale financial assets, underwent an unscheduled amortisation amounting to 0.2 million euros under income from participating interests as of 30 June The price of B+S shares rose again as of 30 September Pursuant to IAS 39 in conjunction with IFRIC 10, this equity instrument is not value-adjusted by reversing impairment with effect on income; the increase in the fair value after the impairment is recorded under equity with no effect on income. This appreciation in value amounted to 0.4 million euros during the third quarter of Nominal capital The subscribed capital is divided up into 42,802,453 no-par-value bearer shares of 1.00 euro each. As at 30. September 2012, the company holds 1,906,592 of its own shares, some 4.45 per cent of the total. 40,895,861 shares are in circulation. Contingent liabilities and contingent claims There are no contingent claims. With regard to the contingent liabilities, there have been no material changes since the reporting date as at 31 December Pursuant to the merger agreement and the shareholders decisions taken on 27 July 2012, COR&FJA Systems GmbH (transferring entity), Leinfelden-Echterdingen, has been merged with COR&FJA Deutschland GmbH (receiving entity), Munich, as per the entry in the respective commercial registers dated 4 September 2012 and with retroactive effect from 1 January Changes in the shareholdings structure In the reporting period, no disclosures were published in accordance with Section 21 Para. 1 or Section 26 Para. 1 of the German Securities Trading Act (WpHG)

20 Information on purchase or sale of shares by the members of the Management Board and the Supervisory Board No securities transactions in accordance with Section 15a of the German Securities Trading Act (WpHG) were reported in the reporting period. Events after the reporting period After the end of the reporting period (30. September 2012), there were no transactions of particular significance which would have to be reported separately here. The COR&FJA Share Market segment Prime Standard, Frankfurt Number of shares 42,802,453 ISIN DE German code (WKN) IPO Auditing procedure This nine-month report was not subjected to an auditing procedure. Leinfelden-Echterdingen, 15 November