Beta Systems Software AG

EANS-Adhoc: Restructuring of the Beta Systems Group leaves its mark on the provisional results for the fiscal year 2010

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  ad-hoc disclosure pursuant to section 15 of the WpHG transmitted by euro
  adhoc with the aim of a Europe-wide distribution. The issuer is solely
  responsible for the content of this announcement.
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Preliminary Key Financial Data for fiscal 2010

04.03.2011

• Group generates positive result: net income with non-recurrent effects through the disposal of the ECM business and with special factors influencing continued operations • Termination of sales partnerships and adjusted business model result in revenues declining by EUR 4.6 million to EUR 47.7 million in continued operations • Expenses for reorganization and restructuring following the ECM sale burden the results of 2010 in an amount of EUR 4.6 million in continued operations • Socially responsible adjustments to personnel structures almost completed • Permanent savings of up to EUR 5.0 million expected per fiscal year • Application for switching the stock exchange segment to General Standard

Berlin, March 4, 2011 - The sale of the ECM business and the subsequent start to the process of reorganizing and restructuring the company were factors influencing the course of business of Beta Systems Software AG (BSS, ISIN DE0005224406) and its results to varying degrees, both positive and negative, in 2010. Based on provisional figures and subject to the audit of the annual accounts pursuant to IFRS, the sum total of these overlapping effects resulted in the company delivering a consolidated pre-tax profit, including the results from continued and discontinued operations, of EUR 0.7 million in 2010. A positive result for the year was also generated in respect of Beta Systems Aktiengesellschaft (separate financial statements drawn up under the German Commercial Code (HGB)).

The major factors of influence were the non-recurrent effects from the ECM sale which came to EUR 5.4 million (before taxes and including the results of the ECM business through to May 31, 2010), provisions of EUR 4.6 million formed for reorganization and restructuring, and the decline in sales of EUR 4.6 million in continued operations. The downturn in revenues resulted from the termination of less profitable sales partnerships and the gradual realigning of the business model, initiated in 2010. In order to achieve a more even and usage-dependent cost burden, many customers followed the trend of preferring flexible, modular, subscription-based usage and price models to high, one-off investments for software licenses. Beta Systems has taken account of these market trends by adjusting its business model accordingly.

Other provisional key data for the fiscal year 2010 at a glance (pursuant to IFRS)

•       EBIT prior to reorganization and restructuring: EUR 1.0 million (2009:
EUR 2.4 million)
•       EBITDA prior to reorganization and restructuring: EUR 3.9 million (2009:
EUR 5.2 million)
•       EBIT including reorganization and restructuring: EUR -3.5 million (2009:
EUR 2.4 Mio.)
•       Consolidated pre-tax profit including the result 

of discontinued ECM operations: EUR 0.7 million (2009: EUR 1.9 million)

Socially responsible adjustments to personnel structures As a result of cost optimization following the sale of the ECM business, a decision was made to scale back up to 20% of jobs in general central administration and support functions as well as in downstream functions in sales and development both in Germany and abroad. The relevant discussions with employee representatives and employees have already reached an advanced stage. In order to carry out this redimensioning in as socially a responsible fashion and as efficiently as possible, measures take account of the whole range of instruments available for making suitable offers, such as severance payments, early retirement, reducing working hours or supplementary benefits. The process is expected to have been concluded by the first quarter of fiscal 2011. The respective provisions of EUR 4.6 million have been included in the results of continued operations in 2010.

Permanently high level of savings The Management Board anticipates an increasing level of savings of up to EUR 2.5 million in operating expenses over the course of the year as against the fiscal year 2010. In subsequent years, there will be a permanent savings effect in the range of up to EUR 5.0 million, again in comparison with 2010.

Financing through funds received from the ECM sale In this context, the proceeds received by the company from the ECM sale through to the end of 2011 will be used primarily to fund the restructuring and reorganization and, in addition, to secure investments in building up the software and solutions portfolio.

Change to General Standard Furthermore, Beta Systems intends to switch stock exchange segment and aims in future to be listed in the General Standard of the Frankfurt Stock Exchange. To this end, an application was made today to the Admission Board to rescind admission of the shares to the segment of the regulated market with post-admission obligations (Prime Standard). The reason for the switch is that companies listed on Prime Standard are first and foremost those targeting international investors. As, alongside the major shareholders, almost exclusively national investors and private investors currently hold shares in the company, the Management Board and the Supervisory Board have come to the conclusion that the financial and organizational effort involved in being listed on Prime Standard is not commensurate in terms of the benefit for the company and its shareholders and that these expenses could therefore be saved in future.

end of ad-hoc-announcement

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Information and explanations on this ad-hoc release by the issuer:

Procedure for switching the stock exchange segment 

The shares of Beta Systems Software AG are currently admitted for trading in the regulated market of the Frankfurt Stock Exchange, with parallel admission to the sub-segment of the Regulated Market entailing post-admission obligations (Prime Standard). With the approval of the Supervisory Board, the Management Board has today decided to switch from listing on Prime Standard of the Regulated Market to General Standard of the Regulated Market of the Frankfurt Stock Exchange. The withdrawal of the admission becomes effective upon expiration of three months after the decision on withdrawal by the stock exchange management has been published on the Internet (www.deutsche-boerse.com). The admission of the shares of Beta Systems Software AG to the Regulated Market (General Standard) remains unaffected.

Outlook for the fiscal Year 2011 and Annual Results Press Conference The aforementioned figures are contingent on the audit of the annual financial statements and the adoption and ratification of the financial statements at Company and at Group level by the Supervisory Board. The complete, adopted and audited 2010 annual financial statements and the outlook for the fiscal year 2011 will be explained by the Management Board as part of an online Annual Results Press Conference on March 31, 2011, and published on the website at http://www.betasystems.com under the Investor Relations/Financial Reports heading.

Final remark All amounts (e.g. figures in € million) cited in this information by the Company and information derived there-from (e.g. percentage figures) are figures fully rounded up to thousands of euros as presented in the provisional Consolidated Financial Statements as at December 31, 2010.

End of the press release Beta Systems Software AG Beta Systems Software AG (Prime Standard: BSS, ISIN DE0005224406) offers large corporations high-end infrastructure software which spans sectors. This software enhances the performance of a company’s IT in terms of its availability, scalability and flexibility. Data centers optimize their job and output management. Moreover, especially companies with high numbers of users are supported in the automation of their IT user administration. Improved security also serves to fulfill the requirements placed on business operations in respect of governance, risk management and compliance (GRC).

Beta Systems was founded in 1983, has been a listed company since 1997, and has a workforce of around 350 employees. The company’s principal place of business is Berlin. Beta Systems operates through Centers of Competence in Cologne and Calgary, as well as 14 subsidiaries worldwide and cooperations with numerous partner companies. Throughout the world more than 1,300 customers use the products and solutions of Beta Systems to improve their processes and security in more than 3,200 running installations. At present, Beta Systems generates 50 percent of its sales from international business. Around 200 of its customers are based in the USA and Canada. More information on the company and its products can be found under www.betasystems.com.

You can also visit Beta Systems at www.twitter.com/BetaSystems and www.facebook.com/BetaSystems as well as www.xing.com/companies/betasystemssoftwareag

end of announcement                               euro adhoc
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Contact:

Press contacts
Company contact:
Beta Systems Software AG
Stefanie Frey
Senior Manager Investor Relations
Tel.: +49 (0)30 726 118-171
Fax: +49 (0)30 726 118-800
e-mail: stefanie.frey@betasystems.com

Agency contact:
HBI PR&MarCom GmbH
Alexandra Janetzko
Tel.: +49 (0)89 99 38 87-32
Fax: +49 (0)89 930 24 45
e-mail: alexandra_janetzko@hbi.de

Branche: Software
ISIN: DE0005224406
WKN: 522440
Index: CDAX, Prime All Share, Technology All Share
Börsen: Frankfurt / regulated dealing/prime standard
Berlin / free trade
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade



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