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proALPHA Still on a Winning Streak

Financial Year Ended with a Clearly Positive Result

Sep 22, 2010

During the annual shareholder’s meeting on September 21, 2010 proALPHA Software AG presented the results of the past fiscal year. The ERP provider focussing on medium-sized industrial, trade and service businesses was able to positively develop turnover and profit despite the continuing economic crisis during the reporting period. The group revenue, for instance, increased by 2.4 % to 49.3 million euros (previous year: 48.1 million euros). The EBIT of 7.7 million euros has increased by 0.6 million euros versus last year's result (7.1 million euros). Thus the proALPHA group has proved to be stable even in periods of economic crisis. It even strengthened its position in the market.

In the product-related field of software revenues and revenues for software-related services a result of 30.6 million euros was achieved. This corresponds to an increase of 8.7 % versus the previous year. Revenues for services have barely reached last year's result, i.e. they decreased from 18.9 million euros in 2008/09 to 17.9 million euros in 2009/10. Services include consulting- and project-related development and the portfolio of the proALPHA Academy. This shift can be explained by the fact that the past fiscal year was characterized by the update business and the installation of current software releases for existing customers. Therefore, the service components classified as pure services were assigned to the category of software-related services. Even during the recession proALPHA made every endeavor to gain new employees and train existing staff. The number of employees increased by 4.5 % to an average of 462. Thus personnel expenses, the biggest part of operational costs, have increased by 1.7 million euros to 23.8 million euros.

According to the US market research company Gartner the global IT market decreased by 5.0 % in the year 2009. According to the intertrade organization BITKOM the IT order volume in Germany decreased by about 2.6 %. During this period, however, the business service provider proALPHA continued its positive development and in 2009 raised in rank among the Luenendonk top 10 medium-sized standard software businesses in Germany. But the recession did leave its mark on proALPHA, too and real growth turned out lower than expected. CFO Jürgen Brand explains the reasons: "Many of our customers, too postponed their IT projects due to the continuously unstable markets. Especially the mechanical engineering and automotive sector that belongs to our core target group was considerable affected by the economic crisis."

The intertrade organization BITKOM assumes a stabilization of the German IT market in the year 2010. The mood has considerably brightened and according to BITKOM already 71 % of the IT and telecommunications providers expect business to run successfully and demand to increase by mid-year 2010. For the ERP specialist with headquarters at Weilerbach, proALPHA CEO Leo Ernst sees a similar forecast: "We expect ourselves to be in a good position on the ERP market for medium-sized business solutions and for 2010/11 we expect further growth. It becomes more and more evident that existing and potential proALPHA customers have taken courage to invest in IT technology and consulting."

According to BITKOM many companies plan new hires because of positive business prospects. Every third company states to be slowed down in its activities due to a lack of experts. proALPHA, too will meet this challenge in the current financial year and endeavor to recruit and train personnel because it is the staff who is decisive for the innovational power of the business.

The proALPHA group at a glance

Note: proALPHA has a deviating financial year ending on March 31.

2009/102008/092007/08
Revenue (in million euros)49.348.145.7
EBIT (in million euros)7.77.17.6
Cash flow (in million euros)5.53.17.0
Investment (in million euros)1.42.01.9
Balance sheet total (in million euros)49.145.744.5
Equity ratio43.8 %38.4 %37.6 %
Employees Ø462442403

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