1 Quarterly Report P&I AG Inhaltsverzeichnis Lagebericht KONZERNBILANZ MORE VALUE 3-MONTHLY REPORT P&I PERSONAL & INFORMATIK AG 1 APRIL JUNE 2006
2 3-monthly Report P&I AG Foreword Dear shareholders, ladies and gentlemen, P&I s motto for the fiscal year ahead of us is P&I fit for the future. The 2005/2006 fiscal year just finished end of March 2006 can rightly be considered remarkable in the history of the P&I group. It was a year of superlatives: total sales, licensing sales and results were the best in the history of P&I. Group sales increased by 11 % compared to the same period last year, amounting to 50 million euros, licensing business (without software maintenance) improved by 9.2 % to 13.3 million euro and the EBIT value also improved by 87.1% to 9.8 million euro. This excellent year s results were not a one-off, on the contrary, they were the result of a long-term strategy which will continue into the new fiscal year under the motto P&I fit for the future. The first quarter demonstrates that this tendency will continue in the future. Orders received were slightly above forecast at 5.2 million euros, sales increased as planned by 5.6 % to 11.6 million euros. What is P&I s formula, in increasing our success from year to year, while our competitors are almost all stagnating or publishing decreasing results? Why does P&I win over 100 new customers for its software every year, almost all of which employ a workforce of more than 500, while competitors generally have to content themselves with maintenance charges and consulting sales for new releases? Many factors contribute to P&I s success. P&I possesses excellent software, which is clearly superior to competitive offers in terms of scope of services and technology. In connection with this, a wide spectrum of high-value services are offered which, when combined with the software, represent the central premise of our business. In addition, we have slimmed-down structures, the resulting flat hierarchies enabling us to benefit from fast-track decision making, essential for the fast and flexible reactions required in the marketplace. Our internal processes have reached a level of efficiency on which it is virtually impossible to improve. In addition to success in the sales area, this has also had a major influence on our cost structure. The sales increases over the past two years were attained with a below-average cost increase, which led to a corresponding increase in margin at the bottom line. The - in part drastic - measures introduced almost two years ago to increase the group s value pursued three objectives: faster product innovation, a slim-down of the organisation by creating flexible structures and the improvement of internal processes to increase efficiency. In order to implement these strategic goals, all pending everyday operating decisions are made with a view to fulfilling these strategic objectives.
3 3-monthly Report P&I AG Foreword The quality and performance of our product range is central to these three objectives. We cover virtually the whole area of personnel management with the functional areas payroll, time management and personnel management. Our software technology is cutting edge and able to support all-encompassing company processes on the most modern integration platforms due to the provision of portals and web services. P&I has now established a clear profile and our software products enjoy an outstanding reputation in the market. Today, the main brand P&I LOGA stands for quality, performance and innovation, maybe even for fascination. Our vitality is unmistakable and is part of P&I s image. We have created all conditions for consistently pursuing the path first taken almost two years ago, to make P&I more profitable in the medium and long-term. P&I is fit for future! Yours faithfully Vasilios Triadis P&I AG CEO / Chairman of the Board
4 3-monthly Report P&I AG Key Figures Group KEY FIGURES - GROUP Change Change in 000 euro percent Group sales 11,576 10, % Earnings before depreciation (EBITDA) 2,839 2, % Earnings before interest and taxes (EBIT) 2,017 1, % Group result (DVFA/SG) 1,435 1, % Number of Employees (average) % Earnings per share (DVFA/SG) % Highlights EBIT increase in the first quarter of the 2006/2007 fiscal year As a result of a 5.6 % sales increase, P&I has increased its EBIT result compared to last year from 1.6 to 2.0 million euros, thereby achieving an EBIT margin of 17.4 % (last year 14.8 %). Transparent processes strengthen confidence P&I s software supports companies which are setting up internal monitoring systems. The basis fort his is provided by our solution s central data model. Share price increases to euros The P&I share price (Frankfurter Stock Exchange) continues to show positive development. It started at euros and closed on June 30th at 18.23, an increase of 8.5 %.
5 3-monthly Report P&I AG Consolidated Balance Sheet Consolidated Balance Sheet not verified verified in 000 euro Assets Short term assets Inventories Trade receivables 9,816 10,543 Cash and cash equivalents 22,613 25,240 Short term security investments 14,855 14,874 Prepaid expenses and other short term assets Total short term assets 48,057 51,741 Long term assets Customer base 9,731 10,298 Other intangible assets 1,188 1,311 Tangible assets Financial assets Deferred taxes Total long term assets 12,108 12,716 Total assets 60,164 64,457
6 3-monthly Report P&I AG Consolidated Balance Sheet Consolidated Balance Sheet not verified verified in 000 euro Equity and Liabilities Sharholders' equity Subscribed capital 7,700 7,700 Capital reserve Revenue reserve Other equity Balance sheet profit / loss 33,250 31,815 Total shareholders' equity 40,225 38,799 Long term liabilities Deferred taxes Accruals for pensions 0 0 Long term finance lease obligations 0 0 Total long term liabilities Short term liabilities Other short term liabilities 5,571 6,743 Trade payables 976 1,662 Obligations from taxes on income 3,486 3,070 Advanced payments received / PRAP Deferred sales 8,759 13,175 Total short term liabilities 19,292 25,062 Total equity and liabilities 60,164 64,457
7 3-monthly Report P&I AG Consolidated Statement of Income 3-monthly Report P&I AG Consolidated Statement of Income Consolidated Statement of Income 3-monthly report 3-monthly report 3-monthly report 3-monthly report in 000 euro / not verified Sales 1 1,576 10, ,576 10,960 Cost of sales 3,241 3,204 3,241 3,204 Gross profit from sales 8,335 7,756 8,335 7,756 Research and development expenses 2,519 2,397 2,519 2,397 Sales and distribution expenses 2,045 1,821 2,045 1,821 Administrative expenses 1, , Write-down of goodwill Other operating income Other operating expsenses Result of ordinary activities (EBIT) 2,017 1,624 2,017 1,624 Other income from investments Other financing expenses Currency translation gains Currency translation losses Result of ordinary activities before tax 2,238 1,832 2,238 1,832 Tax expense *) Net income for the year acc, To DFVA/SG 1,435 1,073 1,435 1,073 Average number of shares issued (undiluted) 7,700,000 7,700,000 7,700,000 7,700,000 Durchschnittliche Anzahl an Aktien (diluted) 7,700,000 7,700,000 7,700,000 7,700,000 Earnings per share in euro, undiluted/diluted *Taxes paid or due on corporate income and earnings are shown as taxes on income, as well as tax accruals and deferrals,
8 3-monthly Report P&I AG Cash Flow Statement, Group Cash Flow Statement, Group 3-monthly report 3-monthly report in 000 euro / not verified Consolidated result before taxes on income and interest 2,017 1,624 Depreciation on fixed assets Additions to accruals for pensions 0 33 Depreciation / appreciation on short term investments 0 0 Changes in inventories, trade receivavles and other assets 1, Changes in liabilities and other equity and liabilities -5,999-4,923 Changes in other items not affecting payments Funds received from operating activities Net funds from operating activities * -2,417-2,746 Net funds from investing activities ,342 Net funds from financing activities 0-2 Decrease/increase in liquid resources -2,627-4,090 Liquid resources at the beginning of the reporting period 25,240 19,393 Liquid resources at the end of the reporting period 22,613 15,303 Breakdown of funds at the end of the fiscal year Cash on hand and in bank balances 22,613 15,303 Securities with an expiry date > 1 year 14,855 14,442 Liquidity 37,468 29,745 *Cash flow statement as at restated after reclassification of securities with an expiry date > 1 year
9 3-monthly Report P&I AG Change in Shareholders' Equity Change in Shareholders' Equity 3-monthly 3-monthly Annual report report report in 000 euro / not verified /2006 Shareholders' equity at the beginning of the period 38,799 28,221 31,534 Subscribed capital Capital reserve ,780 Revenue reserve Other shareholder's equity Balance sheet result 1,435 3,381 26,175 Shareholder's equity at the end of the period 40,225 31,534 38,799 Orders Orders on hand for the next twelve months, amount to 32.2 million euros as at 30 June, Of these, 19.6 million euros attributable to maintenance business. Sales growth compared to the same period last year amounts to 0.6 million euros, showing an increase of 5.6 % to a total 11.6 million euro sales. Financial situation and Cost development The operative result has increased by 0.4 million euros to 2 million euros. The EBIT margin has risen from 14.8 % to 17.4 %. Operating costs for the first three months of the current fiscal year 2006/2007 amount to 9.0 million euros compared to 8.8 million euros in the same period for the previous year. This means that costs in the P&I Group increased by 2.8 %, which however is set against a 5.6 % increase in sales. The EBIT increase results in the main from sales growth in product sales. Research & Development euros have been invested for product improvement, updates for changes in legislation and collective bargaining arrangements as well as new technical developments. The main focus points in product development have been the development of webbased personnel planning and time management in the C/S division and web portal, as well as the new project time management functionality. Web-based personnel planning is currently being expanded in two directions: shift oriented (e.g. hospitals) and demand oriented (e.g. high volume periods for call centres). Investments Fixed investments amounting to 200,000 euros have been made.
10 3-monthly Report P&I AG Notes including Segment Reporting Shareholdings by the company and executive bodies As at 30 June, 2006, neither P&I AG nor any other company have a shareholding in P&I s own shares pursuant to 160 Para. 1 No. 2 AktG (German Companies Act). No convertible bonds or similar securities pursuant to 160 Para. 1 No. 5 AktG had been issued as at 30 June, As at 30 June, 2006, Members of the Board of Directors or of the Supervisory Board are not holding any P&I shares or stock options. Segment reporting The growth catalyst for the first three month of the fiscal year 2006/2007 is the maintenance business with 5.0 million euros sales. This is an increase of 0.5 million euros or 11,2 % compared to the previous year. This demonstrates that increased licence sales over the past few years have had a positive effect on maintenance income. The maintenance business sector contributed 43 % of total group sales. Sales in the service division have increased by 8.8 % or 0.3 million euros. In the Consulting/SI division, P&I has achieved 30 % of its sales, increasing to 3.5 million euros (3.2 million euros in the same period last year). Licencing business was down slightly compared to this period last year, at a total of 2.8 million euros (same period last year: 2.9 million). In the first quarter of the 2006/2007 fiscal year, a large number of medium-sized and small projects were completed: in comparison, no major project was implemented comparable to that in the same period last year. The segment result expenses are set out as follows. '000 euro Q1, 2006/2007 Q1, 2005/2006 Sales Germany 9,692 9,686 International 1,884 1,274 Group 11,576 10,960 EBIT Germany 1,681 1,722 International Group 2,017 1,624 Employees As at 30 June, 2006, P&I employed 291 staff, 246 in Germany and 45 abroad. If part-time jobs are taken proportionally into account, this represents an average FTE
11 3-monthly Report P&I AG Notes including Segment Reporting (employment quotient) of 264 in the reporting period, with 219 employed in Germany and 45 abroad. Dividends The net profit shown in the annual financial statements of P&I Personal & Informatik AG is, pursuant to the German Companies Act, material to a dividend distribution. At the next Annual General Meeting, the Supervisory Board and Board of Directors intend to propose distribution of a dividend of 3.00 euros per share. The dividend will consist of two components: a one-off special dividend from a repayment from capital reserves of 18,780,000 euros, and approximately 50 % of the profit carried forward and P&I AG s net earnings for fiscal 2005/2006, at 4,320,000 euros. With 7,700,000 shares issued entitled to a dividend for fiscal 2005/2006, the distributable sum amounts to 23.1 million euros. Miscellaneous In fiscal 2006/2007, the Company received no announcements regarding investments as defined by 21 Para. 1 of the German Securities Trade Act (WpHG). Selected facts and figures The Group annual financial statements for P&I AG were prepared in compliance with the financial accounting standards of the International Accounting Standards Board (IASB) the International Financial Reporting Standards (IFRS). The accounting and valuation methods applied conform in general with those applied in the previous year. For the first time in the 2006/2007 fiscal year, the group is reporting its business according to areas of activity, due to modified product and marketing strategies, as provider of an integrated software solution and changed internal control mechanisms in operative areas, and within the framework of segment reporting. The areas of activity are defined as: product (licensing and maintenance); consulting/system integration and other. Areas such as Loga Payroll and Loga HRMS, which were previously organised specifically by product, have been merged, since product development, sales activity and consulting services of these previously separate business sectors became inseparable. Last year s figures were adjusted to the new segmentation. Risks There has been no significant change in the risk profile as outlined in the Annual Report of March 31, P&I AG has a company-wide risk-management system in place to monitor and control manageable risk. Outlook for 2006/2007 Sales and results for the first quarter meet expectations. They provide a good basis for achieving our objectives for the whole 2006/2007 fiscal year: increasing sales by way of organic growth of over 5 % and establishing the EBIT-margin in the region of 20 %.
12 3-monthly Report P&I AG Notes including Segment Reporting We are confident of achieving these goals at a high technological level With attractive product portfolio management, With an integrated HR software solution covering the core processes within personnel management: payroll, personnel management and time management, With solutions specific to individual industry sectors, With a European solution. The functional scope of our solutions already covers the requirements of tomorrow s market today. We are fit for the future. Wiesbaden, 10 August 2006 The Board of Directors Financial Calendar 29 August 2006 Shareholders' Meeting in Wiesbaden 9 November 2006 Publication of Half-yearly Report 2006/ February 2007 Publication of 9-Monthly Report 2006/2007 P&I AG Investor Relations Kreuzberger Ring Wiesbaden Telefon (06 11) Fax (06 11) Internet WKN ISIN DE
13 P&I YOUR PARTNER FOR INTEGRATED HR SOLUTIONS P&I is with more than 3,700 clients from all sectors one of the leading suppliers of innovative human resources managementsoftware solutions. P&I solutions encompass the entire spectrum of human resources management. P&I products can be used internationally and in all sectors. With its long-term experience, P&I is a reliable partner for system integration and system implementation. Moreover, clients also benefit from the advisory and training services offered by the P&I Academy. The company has more than 280 employees. The head office is located in Wiesbaden. In Germany, services are provided to our clients from six regional offices. P&I is present in other European countries both through national companies and through cooperation partners. P&I is listed in the Prime Standard on the Frankfurtstock exchange. GERMANY P&I AG Kreuzberger Ring Wiesbaden Telefon +49 (0) 611/ Telefax +49 (0) 611/ AUSTRIA P&I GmbH Ares Tower Donau-City-Straße 11 A-1220 Wien Telefon Telefax SWITZERLAND P&I AG Zürcherstrasse 66 CH-8800 Thalwil ZH Telefon +41(0) Telefax +41(0) THE NETHERLANDS P&I BV Kabelweg 37 NL-1014 BA Amsterdam Telefon +31 (0) Telefax +31 (0) CZECHIA P&I s.r.o. Na Safránce 43 CZ Praha 10 Telefon 420 (2) Telefax 420 (2) SLOVAKIA P&I s.r.o. Mickiewiczowa 16 SK Bratislava Telefon +421 (0) Telefax +421 (0)