HALF-YEARLY REPORT 01.04.2005 30.09.2005
Dear Shareholders, Friends and Partners of P&I The results of the first two quarters of the current fiscal year once again show a successful realisation of our targeted growth rate. With sales of 22.3 million euros, we have achieved an increase of 13.8 % compared with the same period in the preceding year. The operating result (EBIT) improved, increasing by 2.4 million euros to 3.8 million euros compared with the previous year. The development in sales of software licensing is particularly satisfying. This corresponds to 5.8 million euros, an increase of 45 % compared to the same period in the previous year. Despite the tight situation in the public sector and the fact that volume per project has clearly fallen back, the figures show that we have managed to generate greater software licensing revenue with an unchanged consulting outlay. This is a crucial factor influencing the massive rise in the EBIT margin. We have been able to achieve this, because for one, we are constantly endeavouring to make our software as user-friendly as possible in spite of its constantly expanding functionality. A second element is that the measures we have taken to slim down our organisational structure are taking effect. In order to streamline and speed up the decision-making process, we have shed two layers of the hierarchy in sales and marketing. To enhance our market presence, we have redesigned our trade marks and logos, with the assistance of a management consultancy agency. However, modernisation is not the only distinguishing feature of our new company image, but also transparency. Our software solutions grew over the years, with new modules being created and added. In the end, we had a somewhat confusing range of possibilities. We have now given our extensive product palette a
more streamlined structure, pulling all our solutions together under the four trademark products - P&I LOGA, P&I HCM, P&I PLUS and P&I SMART. Our underlying concept is that we are more than just software developers: we are "Your partner for integrated HR solutions" - suppliers of future-oriented solutions for human resources work which comprise software, systems integration, support and training. In undertaking these changes, we have been conscious that the future IT landscape in companies will be focused on three discrete areas - ERP, CRM and HR systems. All three areas will be served by fully integrated systems in the future, with connections between these three areas being secured by application and integration platforms. P&I solutions now completely cover all HR needs - personnel management, payroll accounting and time management. We are looking ahead with optimism in this second half of the fiscal year. Our mid-year results, P&I's rising importance in the HR systems-providers market and the expansion of our product range into time management, in conjunction with the emerging revitalisation of the economy, allow us to predict a successful second halfyear with confidence. Our optimism and confidence are not least derived from the fact that after 12 months under its new leadership, P&I has not only coped with the change, but has developed into a dynamic new company. Yours faithfully Vasilios Triadis P&I Personal & Informatik AG CEO, Chairman of the Board
P&I AG I Consolidated Balance Sheet Compiled according to IAS- 30.09.2005 31.03.2005 accounting principle (in '000 euro, commercially rounded) not verified not verified Assets Short term assets Cash and cash equivalents 28,362 33,788 Short term security investments 0 0 Trade receivables 7,947 8,320 Accounts due from affiliated companies 0 0 Inventories 203 50 Prepaid expenses and other short term assets 698 633 37,210 42,791 Long term assets Tangible assets 807 809 Goodwill 0 0 Customer base 11,433 12,017 Intangible assets 1,521 395 Financial assets 23 23 Deferred taxes 301 271 14,085 13,515 Total assets 51,295 56,306
P&I AG I Consolidated Balance Sheet Compiled according to IAS- 30.09.2005 31.03.2005 accounting principle (in '000 euro, commercially rounded) not verified not verified Equity and Liabilities Short term liabilities Other short term liabilities 5,685 5,947 Trade payables 1,004 1,178 Advanced payments received / PRAP 102 730 Deferred sales 4,687 12,082 Obligations from taxes on income 1,867 1,186 Total short term liabilities 13,345 21,123 Long term liabilities Long term finance lease obligations 96 124 Deferred taxes 1,416 1,034 Accruals for pensions 2,503 2,492 Total long term liabilities 4,015 3,650 Sharholders' equity Subscribed capital 7,700 7,700 Capital reserve 18,351 18,351 Revenue reserve 85 84 Balance sheet profit / loss 8,070 5,640 Other equity - 271-242 Total shareholders' equity 33,935 31,533 Total equity and liabilities 51,295 56,306
P&I AG I Consolidated Statement of Income Consolidated Statement of Income (in '000 euro, commercially rounded) SALES Cost of sales Gross profit from sales Research and development expenses Sales and distribution expenses Administrative expenses Write-down of goodwill Other operating income Other operating expenses Result of ordinary activities (=EBIT) Other income from investments Other financing expenses Currency translation gains Currency translation losses Result of ordinary activities before tax Taxes on income Net income/loss for the year acc. to DVFA/SG Earnings per share in euro, undiluted/diluted Average number of shares issued (undiluted) Average number of shares issued (diluted)
P&I AG I Consolidated Statement of Income Quarterly report Quarterly report 2005/06 2005/06 01.07.05-30.09.05 01.07.04-30.09.04 01.04.05-30.09.05 01.04.04-30.09.04 not verified not verified not verified not verified 11,294 10,342 22,254 19,548 3,410 3,213 6,615 6,205 7,884 7,129 15,639 13,343 2,269 2,271 4,666 4,545 1,945 2,166 3,766 4,112 836 985 1,798 1,931 567 585 1,134 1,170 38 48 72 96 101 167 520 229 2,204 1,003 3,827 1,452 193 99 402 142 2 4 5 16 1 0 2 0 0 0 0 2 2,396 1,098 4,226 1,576 1,036 390 1,795 561 1,360 708 2,431 1,015 0.18 0.09 0.32 0.13 7,700.000 7,700.000 7,700.000 7,700.000 7,700.000 7,773.000 7,700.000 7,773.000
P&I AG I Consolidated Cash Flow Statement Consolidated Cash Flow Statement acc. to IAS accounting principles 01.04.05-30.09.05 01.04.04-30.09.04 (in '000 euro, commercially rounded) not verified not verified Consolidated result before taxes on income and interest 3,827 1,452 Depreciation on fixed assets 1,636 1,670 Additions to accruals for pensions 11 190 Changes in inventories, trade receivavles and other assets 549 7,621 Changes in liabilities and other equity and liabilities - 9,284-7,208 Changes in other items not affecting payments - 46-76 Funds received from operating activities - 357-1,351 Net funds Net funds from operating activities - 3,664 2,298 Net funds from investing activities -1,758-192 Net funds from financing activities - 4-892 Decrease/increase in liquid resources - 5,426 1,214 Liquid resources at the beginning of the reporting period 33,788 19,618 Liquid resources at the end of the reporting period 28,362 20,832 Breakdown of funds at the end of the fiscal year Cash on hand and in bank balances 14,014 5,300 Available-for-sale securities of the current assets 14,348 15,532 Subtotal 28,362 20,832 Securities with an expiry date > 1 year Liquidity 28,362 20,832 P&I AG I Change in Shareholders' Equity Change in Half-yearly financial Half-yearly financial Annual financial Shareholders`Equity statement as at statement as at statement as at in '000 euro 01.04.05-30.09.05 01.04.04-30.09.04 01.04.04-31.03.05 Shareholders' equity at the beginning of the fiscal year 31,534 28,221 28,221 Subscribed capital 0 0 0 Capital reserve 0 0 0 Revenue reserve 0 0 1 Other shareholder's equity - 29-45 - 69 Balance sheet result 2,431 1,015 3,381 Shareholder's equity at the end of the period 33,936 29,191 31,534
P&I AG I Notes including Segment Reporting Orders Orders on hand for the next twelve months, amount to 30.3 million euros as at 30 September 2005. Of these, 18 million euros attributable to maintenance business. Cost development Operating costs for the first six months of the current fiscal year 2005/2006 amount to 17.4 million euros compared to 17.0 million euros in the same period for the previous year. This means that costs in the P&I Group increased by 2.0%, which however is set against a 13.8% increase in sales. Research & Development In Research and Development, 4.7 million euros have been invested for product improvement, updates for changes in legislation and collective bargaining arrangements as well as new technical developments. Main emphasis of product development is the development of employee and management portals, enabling companies to create more efficient business processes for human resource management using Internet technology, the integration of human resource capacity planning into the P&I LOGA product family and the new P&I LOGA user interface. Investments Fixed investments amounting to 574,000 have been made. Acquisitions P&I Personal & Informatik AG acquired the ZHS group with headquarters in Wiesbaden from 1st April by notarial contract: P&I Personal & Informatik AG acquired all limited shares for ZHS Verwaltungs GmbH & Co. KG. ZHS Verwaltungs GmbH & Co. KG holds all limited shares for ZHS Zeitmanagementsysteme Hard- and Software GmbH & Co. KG, which was created by a change of group on March 10, 2005 from ZHS Zeitmanage mentsysteme Hard- und Software GmbH. P&I Beteiligungs GmbH, a 100% percent subsidiary of P&I Personal & Informatik AG is full partner of both companies. The purchase price was paid in cash.
P&I AG I Notes including Segment Reporting The purchase price for the acquisition can be apportioned as follows: Liquid assets 502 Trade receivables 181 Stock and work-in-progress 169 Tangible fixed assets 18 Other assets 51 Deferred expenses and accrued income 6 Liabilities from accounts payable for supplies -132 Other liabilities -373 Deferred income and accrued expenses -321 Additional value of net capital 101 Established customer value 550 Software 1.054 Purchase price 1.705 Cash inventory on take-over -502 Outflow of funds for purchase of company 1.203 The recoverability of the balance positions was checked. There are no sleeping reserves or debts. There are no contingency debts. The established customer value acquired will be depreciated over ten years, the software purchased over five years. ZHS Zeitmanagementsysteme Hard- und Software GmbH & Co. KG manufactures, sells and maintains human resource capacity planning software, supplies consultancy and training services in association with this offer, and produces terminals for time recording. The ZHS solution AZEA includes time registration, human resource planning, working time (flexi-time) accounts, company data entry and access control. The acquisition enables P&I to expand its LOGA software to an all-round solution for human resource activities until now, the solution contained components for payroll and human resource management. Human resource capacity planning now completes the product portfolio as the third pillar of human resource core processes. Here, P&I is drawing on the consequences of the current trend within companies and administration, that the different areas of human resource management are becoming more closely intertwined. Users are increasingly looking for integrated solutions representing the continuous operative processes within human resource management without interruption.
P&I AG I Notes including Segment Reporting Shareholdings by the company and executive bodies As at 30 September 2005, neither P&I Personal & Informatik 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 September 2005. As at 30 September 2005, Members of the Board of Directors or of the Supervisory Board are not holding any P&I shares or stock options. Segment reporting The increase in sales compared to the same period for the previous year amounts to 2.7 million euros, representing a growth of 13,8%. 4.2% of Group sales were achieved with the new product human resource capacity management. Non-acquisition related sales have increased by 9.1 %. The growth catalyst for the first six months is the licensing business, with 5.8 million euro sales. This is an increase of 1.8 million euro or 44.5 compared to the previous year. The Licensing business sector contributed 26 % of total group sales. Sales development for the PI group continues to be characterized by maintenance income: at 9.1 million euro (comparative period in previous year: 8.0 million), P&I achieves 41 % of its sales from the Maintenance business sector and demonstrates growth as planned. The Consulting/SI business sector is the second strongest sales category. P&I achieves 31 % of its sales, 6.8 million euro, from the Consulting business sector. A good three quarters of sales, or 17.2 million euros were generated in the payroll accounting area. One fifth of sales were gained through HRMS products (Human Resources Management Systems) and other. One fifth of sales were gained through HRMS products (Human Resources Management Systems) and other. The first six months of 2005/2006 are set out as follows. '000 euro Germany Foreign Group Sales 19,423 2,831 22,254 Result 4,103-276 3,827
P&I AG I Notes including Segment Reporting Employees As at 30 September 2005, P&I employed 274 staff, 235 in Germany and 39 abroad. If part-time jobs are taken proportionally into account, this represents an average FTE (employment quotient) of 252 in the reporting period, with 213 employed in Germany and 38 abroad. Miscellaneous The annual general meeting for this year took place on September 6. All decisions were taken in line with the recommendations of the management. In particular, a share buyback scheme and several amendments to the memorandum and articles of association were approved. The focus of the changes lay on the conversion from tied to distributable capital. The acts of the Supervisory Board and Board of Directors for fiscal 2004/05 were ratified with near unanimity. Selected facts and figures The Group annual financial statements for P&I Personal & Informatik 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 were the same as those applied in the preparation of the Annual Report of March 31, 2005. The interim report complies with the requirements of IAS 34, 19. Risks There has been no significant change in the risk profile as outlined in the Annual Report of March 31, 2005. P&I Personal & Informatik AG has a company-wide risk-management system in place to monitor and control manageable risk. Outlook No amendments to the forecast for P&I Group for fiscal 2005/2006 as presented to the AGM have been made since then. P&I anticipates an increase in sales of between five and ten percent. The emphasis remains on growing licensing business, with a double-digit increase in sales being targeted. The aim is to push operating result (EBIT) to above ten percent, representing an increase in earnings of the order of 6 million euros. Since September 2005, P&I has been on the scene as "Your partner for integrated HR solutions", with a new look and a new brand concept. Aside from modernisation, the keyword is transparency, presenting a clearly-defined structure for our extensive product palette, aligned to the HR transactions of our users.
P&I AG I Notes including Segment Reporting P&I is oriented to producing comprehensive, integrated software solutions which support businesses and public administrative bodies efficiently and effectively in all their HR management processes. P&I invests in the further development of its existing products. The newly redesigned client interface for P&I LOGA now sports a Windows 2003 look and 'feel', plus providing considerably enhanced user comfort through improved navigation. Intelligent reporting tools will support P&I LOGA users in future when ascertaining key HR data. The second quarter of fiscal 2005/2006 saw P&I furthering the very satisfactory perfor mance of the first quarter, laying a firm foundation for the achievement of our annual targets. The outlook for the future is promising. P&I's healthy orders situation, the revitalisation of the economy, an outstanding product portfolio and a motivated team all place us in a strong position as we advance into the second half of the fiscal year. Wiesbaden, November 10, 2005 The Board of Directors
P&I AG I P&I Group in Figures Key figures acc. to IAS 30.09.2005 not verified '000 euro 30.09.2004 not verified '000 euro Changes '000 euro Changes Group sales 22,254 19,548 2,706 13.8 % Result before depreciation (EBITDA) 5,463 3,122 2,341 75.0 % Result before interest and taxes (EBIT) 3,827 1,452 2,375 163.6 % Consolidated result (DVFA/SG) 2,431 1,015 1,416 139.4 % Number of employees (average) 252 247 5 1.9 % Earnings per share (DVFA/SG) 0.32 0.13 0.19 139..4 % % P&I AG I Highlights Profits rise with growth in licensing sales in first half of fiscal 2005/2006 Growth in sales of 13.8 % for P&I boosts earnings before interest and taxes from 1.5 million euros to 3.8 million euros in comparison with the same period in the preceding year. P&I - an all-in-one solution for human resources work now with integrated time management. New P&I client Air Berlin has plumped for P&I's all-in-one solution for its HR management. Air Berlin s HR department will be using P&I software for all its personnel administration tasks, from job administration and travel expense accounting to time management, as well as personnel placement planning and applicant management P&I has a new look and a new brand concept: Your partner for integrated HR-solutions. Bestand durch Wandel: P&I erneuert den Firmenauftritt und strukturiert das Leistungsangebot neu. Die neue Ausrichtung zielt auf die HR-Prozessen der Anwender ab: mehr Kundennutzen durch prozessorientierte Lösungsansätze, mehr Transparenz in der Produktpalette, mehr Modernität im Produktdesign. P&I AG I Financial Calendar 9 February 2006 Publication of the 9-Monthly Report 2005/2006 22 June 2006 Publication of the Annual Financial Statement for 2005/2006 10 August 2006 Publication of the Quarterly Report FY 2006/2007 29/30 August 2006 Shareholders Meeting for 2006 in Wiesbaden P&I Personal & Informatik AG Investor Relations I Kreuzberger Ring 56 I D-65205 Wiesbaden Telefon:06 11-71 47 267 I Telefax:06 11-71 47 367 aktie@pi-ag.com I www.pi-ag.com I WKN: 691 340 I ISIN: DE 0006913403