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| Louvain-la-Neuve, 25 August 2011 Seasonality of results Our business has experienced and is expected to continue to experience some seasonality due to, among other things, budget decision and fiscal calendar purchasing patterns as well as holiday periods. This results in a heavier concentration of sales and gross margin in our business during the second half year and in particular in the fourth quarter. For example, we see that the Q3 is always impacted by the holiday season that decreases the services delivery in the industry. Also, due to budget decisions that are implemented at the end of the calendar year, the fourth quarter normally has higher hardware and license revenue than those of first three quarters. Therefore, since an important gross margin is realized during the fourth quarter, this also means a significant portion of the profitability is generated late in the year. |
| First half of 2011 (H1/2011) |
Denis Hermesse, CFO I.R.I.S. Group comments “Due to the excellent performance of our Products and Technologies division and despite some difficult market conditions for our Professional Solutions division during this first half year the total Gross Margin for H1/2011 reached EUR 29.6 million compared to EUR 27.3 million in H1-2010 (+8.6%), which can be considered as a good performance. The operating expenses increased compared to 2010 (+6.6%) primarily as a result of the acquisition of a Norwegian business (in June 2010) and as a result of salary indexation. As a consequence, the cash flow from operations (EBITDA) came to € 2.9 million (vs. € 2.0 million in 2010) a growth of 47.6 %. After deducting depreciation (€ 1 million), net financial expense (€ 0.3 million) and tax (€ 0.4 million), the net profit was € 1.2 million which is a growth of +45.1 %” Pierre De Muelenaere, President & CEO I.R.I.S. Group: “During this first half year, we signed and are delivering new projects with large customers like INTERIALE MUTUELLE (FR), SALZBURGER (AU), TRANSPORT OCEAN (FR), CETREL (LU), DEXIA (LU), DKV (BE), M-TEAM (BE), SNCB/ NMBS (BE), KLINGE HESS (GE), ARKOPHARMA (FR), OY TEBOILAB (FI), KOMATSU (FR), IOS INTERNATIONAL (BE), ROULARTA (BE), many government agencies such as Ministry of Justice (BE) Ministry of Finance (BE), Chambre des Métiers (LU), Chambre des Députés (LU), EPT (LU), or sizeable law firms such as SCHOENHERR (AU), CLAEYS & ENGELS (BE) WOLF THEISS (AU), P+P PÖLLATH (GE) and many more We have also announced the release of two new products: on the one hand our brand-new IRIScan™ Book 2, a cutting-edge portable scanner bundled with our flagship OCR software Readiris™ Pro 12, and on the other hand and following the success of our IRISnotes™ Executive worldwide, our brand‐new smartpen, the IRISNotes™ for Smartphones, that completes the existing IRISNotes™ family. The trends characterizing H1/2011 were as follows:
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| Perspectives for FY2011 |
Historically, I.R.I.S. has experienced a revenue seasonality geared towards a stronger second half year. This year, the Q4 will be critical as well. Some large deals could influence significantly (and positively) the performance during the last quarter. We believe in the mid-term growth potential for the company, due to a strong market demand for I.R.I.S. products and solutions, an excellent product offering with some proprietary technologies (OCR, compression, invoices, classification, etc.), outstanding expertise in IT infrastructure and Enterprise Content Management, and solid partnerships with key players such as IBM, Canon, Adobe, HP, etc. However, the current market conditions are unstable and difficult to predict and we might be impacted by the general economy instability, the exchange rate volatility and the risks in the banking sector which is a key market for I.R.I.S. At this point in time, the management believes that if no large deal is delayed due to the surrounding circumstances, we will achieve a good level of profitability with a performance in the same range as last year. Robust financial position The shareholders’ equity increased to € 60.8 million (€ 33.0 per share) ie. +5.5% and the net cash (after deducting short-term debt) increased to € 9.8 million, ie. +31.2%. The company generates a significant cash flow from operations (EBITDA) and has undrawn committed credit facilities of € 14.5 million. |
| IFRS Consolidated Key Figures (in EUR) |
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| Forward Looking Statements
This press release contains forward-looking statements with respect to the business, financial condition, and results of operations of I.R.I.S. and its affiliates. These statements are based on the current expectations or beliefs of I.R.I.S.'s management and are subject to a number of risks and uncertainties that could cause actual results or performance of the Company to differ materially from those contemplated in such forward looking statements. These risks and uncertainties relate to changes in technology and market requirements, the company’s concentration on one industry, decline in demand for the company’s products and solutions, inability to timely develop and introduce new technologies, products and applications, and loss of market share and pressure on pricing resulting from competition which could cause the actual results or performance of the company to differ materially from those contemplated in such forward-looking statements. I.R.I.S. undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. |
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