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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Stepstone Ord | LSE:STPS | London | Ordinary Share | NO0010010473 | ORD NOK 0.40 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 96.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 0145R
StepStone ASA
23 April 2009
StepStone ASA
Report 1st Quarter 2009
StepStone ASA
Strong operating performance in Q1 despite challenging economic conditions - 16%
EBITDA margin and EUR4.6m cash from operations in Q1 2009
Highlights
* Revenue of EUR26.9m
* EBITDA of EUR4.2m - 16% margin
* EUR4.6m cash generated from operations
* Recurring revenues from talent management products up by 30% year on year
* 32% Online EBITDA margin - maintained at 2008 levels
* Operating cost base reduced by EUR3.8m (14%) between Q4 08 and Q1 09
Results for the quarter
StepStone has continued to progress by delivering another profitable quarter
generating EUR4.6m of cash from operations whilst continuing to experience
challenging market conditions across all markets in which the company operates.
There was continued demand for the enterprise solutions products i-GRasp and
ETWeb as customers increasingly sought to maximise returns from their investment
in people. Demand for the Online recruitment products, as in the prior
quarter, continued to decline as customers review their overall staffing levels.
The important monthly recurring revenue from Solutions' customers has increased
30% between Q1 2008 and Q1 2009, driven by a combination of the growing customer
base and minimal churn in the monthly subscriptions. Recurring revenue growth is
significantly outpacing growth from licence fees and professional services.
Online revenue has declined for the second successive quarter, in line with the
reduced number of job vacancy listings carried on our sites. Customers continue
to implement headcount freezes, re-deploy and reduce their workforce as they
wrestle with the current economic downturn.
The swift action on costs during Q4 2008 and into 2009 has enabled the company
to maintain Online and Solutions EBITDA margins at similar levels to those
delivered in 2008. Group operating costs have been reduced by EUR3.8m between Q4
2008 and Q1 2009.
As a result, Q1 2009 Online EBITDA margins were 32%, the same as Q1 2008, whilst
Solutions EBITDA margins were 10% compared to 12% in Q1 2008. Total company
Adjusted EBITDA for the quarter was EUR4.2m representing a 16% margin.
The company generated EUR4.6m cash from operations in Q1 2009, compared to EUR6.8m
in Q1 2008.
During the quarter StepStone acquired the remaining 30% of its Chinese operation
and settled the remaining EUR0.6m liability in respect of the acquisition of
Recruiter AS in 2008.
The company ended Q1 2009 with EUR33.5m of cash and only EUR13.8m of interest
bearing debt. In addition the company has access to over EUR20.0m of undrawn
banking facilities.
Outlook
StepStone remains a cash generative, well financed and profitable provider of
software and services for the Human Capital Management ("HCM") sector. We have a
portfolio of software products and services delivered to a wide geographic base
of customers.
Q1 2009 was a solid operating start to what is expected to continue to be a very
challenging year - a year with reduced overall visibility and high expectations
of continued softening of demand, particularly in the Online sector.
The company remains focussed on market share and careful management of cash and
costs. Given the current market conditions, StepStone has already taken actions
to resize the company and reduce its cost base and will continue to closely
manage both costs and cash through 2009.
The Board
22 April 2009
Operating Results
Online
Economic conditions continued to deteriorate during the quarter across all
markets in which Online operates and as a result, demand for Online recruitment
products continued to weaken.
Online revenue in Q1 2009 was EUR14.1m, 22% lower than the EUR18.0m the same quarter
in 2008.
Actions were taken in November 2008 to resize the Online cost base and minimise
the effect of declining sales on margins. The Online cost base for Q1 2009 was
EUR9.5m, down 22% from EUR12.3m in Q1 2008.
Online EBITDA margin was 32%, the same as Q1 2008 and higher than both Q3 and Q4
2008.
Online EBITDA for Q1 2009 was EUR4.6m compared to EUR5.8m in Q1 2008.
In March 2009 StepStone published a major global research report of business
leaders' views, The Cold War for Talent, which was researched and prepared by
the Economist Intelligence Unit.
This report painted a picture of a very different job market from a year ago,
with organisations recruiting talent for key posts on one hand while making
redundancies on the other. Pools of retrenched workers are being scoured for
top talent and benefits are being reworked to keep talented employees motivated
and performing during a tough time.
This new report has showed that the war for talent is not over, it has just
changed.
Key statistics from the report which characterise the new employment environment
include:
* 59 per cent of respondents agreed or strongly agreed that the slowdown presented
an opportunity to streamline their business through redundancy;
* 36 per cent of respondents said that in the next three years, redeploying talent
will be an important strategy for their organisation in recruiting and retaining
employees; and
* 53 per cent of respondents agree or strongly agree that it is becoming
increasingly difficult to recruit and retain talented employees.
The Online operating statistics reflect the impact of the rapidly changing
global economic conditions: User sessions were 24.5m in the quarter, 7% lower
than in Q1 2008. The number of listings carried on our websites decreased and at
31 March 2009 amounted to 51,460. This was 28% lower than on the same day in
2008. Vacancies decreased by 29% to 63,919 at 31 March 2009 from 89,445 at 31
March 2008.
Solutions
Solutions revenue was EUR12.8m in the quarter, 9% higher than the EUR11.8m in Q1
2008.
Recurring revenue increased by 30% whilst licence and professional services
revenues increased by 12% and 6%, respectively.
A total of 61 new customers contracted for talent management products in the
quarter, compared to 86 in Q1 2008 and an additional 77 existing customers
expanded their financial commitment in Q1 2009 as a result of increasing their
usage of current products or contracting for new products.
Cancellation of contracts amongst the existing customer base remains minimal at
around 1% per quarter.
At the end of Q1 2009 there were over 1,700 customers using StepStone's talent
management products.
New customers contracting during the quarter included: VDK Spaarbank in Belgium;
Simcorp A/S in Denmark; Banque de France in France; Munich Re in South Africa;
Carglass Italia in Italy; Capgemini Nederland BV in the Netherlands; Bioforsk AS
in Norway; Eurest Services AB in Sweden; Hottinger and Cie in Switzerland; and
Balfour Beatty Workplace and BG Group plc in the UK.
Current economic conditions are resulting in increasing demand for hosted, on
demand subscription products; reducing demand for on-premise licensed products;
and causing longer decision making cycles.
Despite challenging economic conditions, Solutions is providing an increasingly
diverse and predictable revenue stream. In Q1 2009, approximately 30% of revenue
came from the UK, 30% from Central and Eastern Europe, 30% from Nordics, Benelux
and Italy and 10% from Asia and the US.
Within that diverse geographic mix, 53% of revenue was recurring, 9% was from
licences and 38% was from professional services. This compares to 48%, 10% and
42%, respectively, in Q1 2008. Finally, within licence and professional services
revenue, in the order of 50% is from existing customers whilst the balance is
from new customers.
Hence there is a high degree of predictability of revenue from existing
Solutions customers and a manageable level of predictability of revenue from
future Solutions customers.
In February 2009 StepStone was positioned in the 'Leaders' quadrant in Gartner
Inc's 2009 "Magic Quadrant for Employee Performance Management Software".
According to the report: "Leaders had strong product functionality and superior
customer experience with the vendor and its products. In addition, leading
vendors had strong or emerging multinational solutions (with corresponding
service and support)."
StepStone's profitable financial position, strong global footprint presence,
best-in-class capabilities and high quality customer support rating solidified
its leading position.
StepStone also was named a 'Leader' in Gartner's most recent Magic Quadrant for
E-Recruitment Software 2008, based on the company's completeness of vision and
ability to execute.
Solutions EBITDA was EUR1.3m, compared to EUR1.4m in Q1 2008. EBITDA margin was 10%
compared to 12% in Q1 2008.
Group Results
Income statement
Revenue for the quarter was EUR26.9m, a decrease of 10% compared to revenue of
EUR29.8m in Q1 2008.
Total costs (excluding Group share option charge and depreciation and
amortisation) in Q1 2009 were EUR22.6m, down 6% from EUR24.1m a year ago.
Adjusted EBITDA was EUR4.2m compared to EUR5.7m a year ago. Adjusted EBITDA margin,
was 16% compared to 19% in Q1 2008.
Deferred revenue was EUR26.5m at the end of Q1 2009 compared to EUR27.5m at the end
of Q1 2008.
The Group share option charge was EUR1.6m in the quarter compared to EUR1.2m in Q1
2008.
Depreciation and amortisation for Q1 2009 comprised EUR1.0m in respect of
depreciation of Assets at historic cost (compared to EUR0.8m in Q1 2008) and EUR0.4m
in respect of amortisation of Intangible assets arising on acquisition (EUR0.3m in
Q1 2008).
The company reviewed the carrying value of its goodwill and other intangible
assets for the 2008 annual report and updated that review for Q1 2009. It does
not consider that there has been any impairment during Q1 2009.
A charge of EUR0.2m was incurred in respect of EUR4m of Loan Notes 2010 and EUR10m
drawn on the Revolving Credit Facility 2011. This compares to EUR0.3m in the same
quarter last year in respect of EUR10m of Loan Notes 2010.
The company expects to incur a tax charge in 2009, primarily arising from
profits in StepStone Deutschland AG that cannot be covered by tax losses, and
record a deferred tax credit, primarily arising from further partial recognition
of tax losses in excess of EUR200m held by StepStone ASA. In accordance with the
company's established practice, deferred and current tax for the parent and the
majority of the Group will be accounted for in the fourth quarter. Due to the
need to accurately reflect the minority interest in Germany current tax of EUR0.8m
and a reduction in the deferred tax asset of EUR0.4m in respect of German Online
operations have been taken through the Income Statement in Q1 2009.
The loss after tax for the quarter was EUR0.7m, compared to a profit of EUR3.0m in
Q1 2008.
After taking account of the credit to reserves of EUR1.6m in respect of share
options, the company has reported an increase in Total Equity for Q1 2009 of
EUR6.0m of which EUR1.2m is attributable to minorities.
Financial position
The company continues to be prudent in the management of its financial position.
In the first quarter StepStone generated EUR4.6m from operations. This compares to
EUR6.8m in Q1 2008.
During Q1 2009 the company settled the deferred consideration in respect of the
prior acquisition of Recruiter, utilising EUR0.1m of cash and issuing 1,125,000
shares of StepStone ASA. The company also purchased the remaining 30% minority
interest in its Chinese subsidiary for EUR0.2m in cash. It expects to settle the
remaining deferred consideration for Sourcea and LVE acquisitions in Q2 2009
resulting in usage of approximately EUR2.5m of cash.
Following these transactions the company has no further cash based liabilities
for past acquisitions. The only outstanding deferred consideration in respect of
past acquisitions is EUR3m to be settled by the issue of 1.8m shares due at the
end of 2009. This payment is due to the ex-shareholders of ExecuTRACK at the
previously agreed value of NOK 13.2 per share and is included within Deferred
Consideration.
During the quarter the company invested EUR1.2m in fixed assets.
At the end of March the company had EUR33.5m of cash at bank. Borrowings were
limited to EUR4.5m of Loan Notes, repayable in late 2010, and EUR9.3m drawn down on
the revolving credit facility, repayable in 2011.
Trend data
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| EUR 000 | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | Q1 | Q4 | Q3 | Q2 | Q1 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| By Line of Business | 2009 | 2008 | 2008 | 2008 | 2008 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Online | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Revenue | 14,098 | 17,364 | 18,514 | 18,355 | 18,029 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Operating expenses | 9,532 | 12,279 | 12,687 | 12,295 | 12,259 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Online EBITDA | 4,566 | 5,085 | 5,827 | 6,060 | 5,770 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Solutions | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Revenue | 12,773 | 13,677 | 13,241 | 12,582 | 11,757 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Operating expenses | 11,485 | 12,045 | 11,171 | 10,939 | 10,342 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Solutions EBITDA | 1,288 | 1,632 | 2,070 | 1,643 | 1,415 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Corporate and Other | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Operating expenses | 1,610 | 2,136 | 1,822 | 1,655 | 1,484 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Reorganisation costs3 | - | 2,106 | - | - | - |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Group share option charge | 1,605 | 1,049 | 846 | 1,540 | 1,169 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Corporate EBITDA | (3,215) | (5,291) | (2,668) | (3,195) | (2,653) |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Total Group | Q1 | Q4 | Q3 | Q2 | Q1 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | 2009 | 2008 | 2008 | 2008 | 2008 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Total revenue | 26,871 | 31,041 | 31,755 | 30,937 | 29,786 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Total operating expenses | 22,627 | 26,460 | 25,680 | 24,889 | 24,085 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Operating profit before | 4,244 | 4,581 | 6,075 | 6,048 | 5,701 |
| Reorganisation costs; | | | | | |
| Group share option charges; and | | | | | |
| Depreciation and amortisation | | | | | |
| ("Underlying EBITDA") | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Reorganisation costs3 | - | 2,106 | - | - | - |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Operating profit before Group | 4,244 | 2,475 | 6,075 | 6,048 | 5,701 |
| share option charges and | | | | | |
| Depreciation and amortisation | | | | | |
| ("Adjusted EBITDA") | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Group share option charge | 1,605 | 1,049 | 846 | 1,540 | 1,169 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Total EBITDA | 2,639 | 1,426 | 5,229 | 4,508 | 4,532 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Depreciation and amortisation | 1,361 | 1,467 | 1,448 | 1,298 | 1,074 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Operating profit ("EBIT") | 1,278 | (41) | 3,781 | 3,210 | 3,458 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| StepStone Online Operational | Q1 | Q4 | Q3 | Q2 | Q1 |
| Statistics | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| | 2009 | 2008 | 2008 | 2008 | 2008 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Listings (End of quarter) | 51,460 | 52,631 | 65,869 | 73,245 | 71,792 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| Vacancies (End of quarter) | 63,919 | 56,042 | 79,658 | 89,641 | 89,445 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| CVs - Total (End of quarter) | 1,655,547 | 1,604,799 | 1,598,001 | 1,503,536 | 1,324,792 |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
| User Sessions (Quarterly | 24,537,162 | 21,809,813 | 20,210,416 | 27,177,560 | 26,254,267 |
| numbers)6 | | | | | |
+-----------------------------------+------------+-------------+-------------+------------+-------------+
Notes to Trend Data
1. The trend data is not part of the quarterly financial statements and is
unaudited.
2. Adjusted EBITDA is EBITDA before Group share option charges. Adjusted EBITDA is
not defined under IFRS and has been shown as the directors consider this to be
helpful for a better understanding of the performance of the group's underlying
business. It may not be comparable with similarly titled profit measurements
reported by other companies and is not intended to be a substitute for, or
superior to, IFRS measures of profit.
3. Reorganisation costs are the costs of downsizing the business in Q4 2008 in
response to the significant change in global economic conditions that occurred
in that quarter. They have been shown as a single line item in the trend data in
order to better allow the reader to understand the underlying trends in
Operating expenses, Online EBITDA and Solutions EBITDA. In the IAS 34 Quarterly
Statements they have been allocated to Online and Solutions.
4. Share options are awarded by the Board and managed within StepStone as a
Corporate cost. Group share option charge comprises the cost of equity-settled
share-based payment transactions calculated in accordance with IFRS 2 and the
group's potential tax liability on vested but unexercised share option at the
balance sheet date, for all employees in all divisions. For the purposes of this
Trend data, Group share option charges are considered to be a Corporate expense
5. In this Trend data, Online EBITDA and Solutions EBITDA include only the tax
charge in respect of vested and exercised share options of employees in those
divisions.
6. From Q4 2008 the user sessions data now excludes Borsen traffic. Q3 2008 has
been restated.
StepStone ASA
Q1 2009 Quarterly Financial Statements
We confirm, to the best of our knowledge, that the condensed set of financial
statements for the period 1 January to 31 March 2009 has been prepared in
accordance with IAS 34 - Interim Financial Reporting, and gives a true and fair
view of the Group's assets, liabilities, financial position and profit or loss
as a whole. We also confirm, to the best of our knowledge, that the interim
management report includes a fair review of important events that have occurred
during the first three months of the financial year and their impact on the
condensed set of financial statements, a description of the principal risks and
uncertainties for the remaining nine months of the financial year, and major
related parties transactions.
The Board
Oslo, 22 April 2009
Quarterly financial statements - 1st Quarter 2009
Consolidated condensed income statement
+--+--------------------------------+------+----------+----------+----------+
| EUR000 | | 1st Quarter | Full |
| | | | Year |
+-----------------------------------+------+---------------------+----------+
| | |Note | 2009 | 2008 | 2008 |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Revenue | | 26,871 | 29,786 | 123,519 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Personnel costs | | 16,688 | 16,516 | 69,912 |
+-----------------------------------+------+----------+----------+----------+
| Other operating expenses | | 7,544 | 8,738 | 37,912 |
+-----------------------------------+------+----------+----------+----------+
| Depreciation and amortisation | 2 | 1,361 | 1,074 | 5,287 |
+-----------------------------------+------+----------+----------+----------+
| Total operating expenses | | 25,593 | 26,328 | 113,111 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Operating profit (loss) | | 1,278 | 3,458 | 10,408 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Analysis of Operating profit: | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Operating profit before: | | 4,244 | 5,701 | 22,405 |
| | Re-organisation costs; Group | | | | |
| | share option charges; and | | | | |
| | Depreciation and amortisation | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Re-organisation costs | | - | - | (2,106) |
+--+--------------------------------+------+----------+----------+----------+
| | Operating profit before: Group | | 4,244 | 5,701 | 20,299 |
| | share option charges; and | | | | |
| | Depreciation and amortisation | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Group share option charge | 3 | (1,605) | (1,169) | (4,604) |
+--+--------------------------------+------+----------+----------+----------+
| | Depreciation and amortisation | 2 | (1,361) | (1,074) | (5,287) |
+--+--------------------------------+------+----------+----------+----------+
| | Operating profit | | 1,278 | 3,458 | 10,408 |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Financial income | | 53 | 158 | 1,527 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Fair value adjustment of | | - | - | (423) |
| | subordinated loan | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Imputed interest on | | - | (172) | (541) |
| | subordinated loan | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Imputed interest on deferred | | (126) | (73) | (487) |
| | consideration | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | Notes payable | | (171) | (281) | (1,125) |
+--+--------------------------------+------+----------+----------+----------+
| | Other financial expenses | | (411) | (43) | (259) |
+--+--------------------------------+------+----------+----------+----------+
| Financial expenses | | (708) | (569) | (2,835) |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Profit before tax | | 623 | 3,047 | 9,100 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Tax | | (1,279) | - | (3,718) |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Profit (loss) for the period | | (656) | 3,047 | 5,382 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Allocations of profit for the | | | | |
| period* | | | | |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Attributable to equity holders of | | (1,821) | 3,047 | 2,678 |
| the parent | | | | |
+-----------------------------------+------+----------+----------+----------+
| Attributable to minority | | 1,165 | - | 2,704 |
| interests | | | | |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Profit (loss) for the period | | (656) | 3,047 | 5,382 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| * The Statement of changes in equity has further details regarding the |
| minority interest and allocations of profit |
+---------------------------------------------------------------------------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Earnings per share | | | | |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Basic earnings per share | | (0.01) | 0.02 | 0.02 |
+-----------------------------------+------+----------+----------+----------+
| Diluted earnings per share | 8 | (0.01) | 0.02 | 0.02 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
Consolidated condensed balance sheet
+--+--------------------------------+------+----------+----------+----------+
| EUR000 | |31 March |31 March | 31 |
| | | | |December |
+-----------------------------------+------+----------+----------+----------+
| | |Note | 2009 | 2008 | 2008 |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| Non - current assets | | | | |
+-----------------------------------+------+----------+----------+----------+
| Property, plant & equipment | | 3,882 | 3,843 | 3,675 |
+-----------------------------------+------+----------+----------+----------+
| Intangible assets | 4 | 65,189 | 66,409 | 60,489 |
+-----------------------------------+------+----------+----------+----------+
| Deferred income tax assets | 6 | 11,190 | 12,545 | 10,749 |
+-----------------------------------+------+----------+----------+----------+
| Long term receivables | | 392 | 407 | 391 |
+-----------------------------------+------+----------+----------+----------+
| Total non - current assets | | 80,653 | 83,204 | 75,304 |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| Current assets | | | | |
+-----------------------------------+------+----------+----------+----------+
| Trade receivables | | 28,405 | 33,573 | 34,810 |
+-----------------------------------+------+----------+----------+----------+
| Other current assets | | 4,171 | 4,037 | 3,936 |
+-----------------------------------+------+----------+----------+----------+
| Cash and bank deposits | 7 | 33,544 | 29,818 | 29,690 |
+-----------------------------------+------+----------+----------+----------+
| Total current assets | | 66,120 | 67,428 | 68,436 |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| Total assets | | 146,773 | 150,632 | 143,740 |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| Equity and Liabilities | | | | |
+-----------------------------------+------+----------+----------+----------+
| Shareholders' equity | | | | |
+-----------------------------------+------+----------+----------+----------+
| Share capital | 8 | 6,406 | 6,343 | 6,355 |
+-----------------------------------+------+----------+----------+----------+
| Share premium reserve | | 36,183 | 35,290 | 35,623 |
+-----------------------------------+------+----------+----------+----------+
| Accumulated profits | | 35,237 | 25,052 | 35,451 |
+-----------------------------------+------+----------+----------+----------+
| Foreign currency translation | | (2,318) | 7,082 | (6,729) |
| differences | | | | |
+-----------------------------------+------+----------+----------+----------+
| Other reserves | | - | 6,454 | - |
+-----------------------------------+------+----------+----------+----------+
| Total shareholders' equity | | 75,508 | 80,221 | 70,700 |
+-----------------------------------+------+----------+----------+----------+
| Minority interest* | | 3,869 | - | 2,704 |
+-----------------------------------+------+----------+----------+----------+
| Total equity | | 79,377 | 80,221 | 73,404 |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| Non current liabilities | 9 | 14,053 | 21,491 | 15,520 |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| Current liabilities | | | | |
+-----------------------------------+------+----------+----------+----------+
| Trade payables | | 3,517 | 4,263 | 3,678 |
+-----------------------------------+------+----------+----------+----------+
| Current deferred and invoiced | 10 | 26,207 | 27,249 | 27,081 |
| revenue | | | | |
+-----------------------------------+------+----------+----------+----------+
| Other current liabilities and | 11 | 23,619 | 17,408 | 24,057 |
| provisions | | | | |
+-----------------------------------+------+----------+----------+----------+
| Total current liabilities | | 53,343 | 48,920 | 54,816 |
+-----------------------------------+------+----------+----------+----------+
| | | | | |
+-----------------------------------+------+----------+----------+----------+
| Total equity and liabilities | | 146,773 | 150,632 | 143,740 |
+-----------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| * The Statement of changes in equity has further details regarding the |
| minority interest and allocations of profit |
+---------------------------------------------------------------------------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+----------+
| The quarterly numbers are | | | | |
| unaudited | | | | |
+--+--------------------------------+------+----------+----------+----------+
Consolidated condensed cash flow statement
+--+--------------------------------+------+----------+----------+-----------+
| EUR000 | | 1st Quarter |Full year |
+-----------------------------------+------+---------------------+-----------+
| | |Note | 2009 | 2008 | 2008 |
+--+--------------------------------+------+----------+----------+-----------+
| | | | | | |
+--+--------------------------------+------+----------+----------+-----------+
| Cash flow from operating | | | | |
| activities | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Profit (loss) for period | | (656) | 3,047 | 5,382 |
+-----------------------------------+------+----------+----------+-----------+
| Adjustments for: | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Depreciation and amortisation | 2 | 1,361 | 1,074 | 5,287 |
+-----------------------------------+------+----------+----------+-----------+
| Share based compensation | 3 | 1,605 | 2,031 | 6,037 |
+-----------------------------------+------+----------+----------+-----------+
| Foreign exchange loss (gain) | | (307) | (40) | (582) |
+-----------------------------------+------+----------+----------+-----------+
| Interest income | | - | - | (945) |
+-----------------------------------+------+----------+----------+-----------+
| Interest expense | | 126 | 245 | 2,835 |
+-----------------------------------+------+----------+----------+-----------+
| Tax | | 656 | - | 3,718 |
+-----------------------------------+------+----------+----------+-----------+
| | | 2,785 | 6,357 | 21,732 |
+-----------------------------------+------+----------+----------+-----------+
| Changes in working capital and | | 1,825 | 441 | (47) |
| other adjustments | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Cash generated from operating | | 4,610 | 6,798 | 21,685 |
| activities | | | | |
+-----------------------------------+------+----------+----------+-----------+
| | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Cash flow from investing | | | | |
| activities | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Acquisition of subsidiaries, net | | (340) | (5,944) | (9,719) |
| of cash acquired | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Purchase of intangible assets | | (845) | (504) | (2,750) |
+-----------------------------------+------+----------+----------+-----------+
| Purchase of plant, property and | | (1,183) | (473) | (2,376) |
| equipment | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Net cash used in investing | | (2,368) | (6,921) | (14,845) |
| activities | | | | |
+-----------------------------------+------+----------+----------+-----------+
| | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Cash flow from financing | | | | |
| activities | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Proceeds from issuance of share | | - | 10 | 3 |
| capital | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Repayment of subordinated loan | | - | - | (7,491) |
+-----------------------------------+------+----------+----------+-----------+
| Repayment of loan notes | | - | - | (4,807) |
+-----------------------------------+------+----------+----------+-----------+
| Payment of SEB facility fee and | | - | - | (908) |
| associated costs | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Draw down of SEB facility | | - | - | 10,000 |
+-----------------------------------+------+----------+----------+-----------+
| Other financing activities | | (5) | (66) | (225) |
+-----------------------------------+------+----------+----------+-----------+
| Net cash from financing | | (5) | (56) | (3,428) |
| activities | | | | |
+-----------------------------------+------+----------+----------+-----------+
| | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Net increase (decrease) in cash | | 2,237 | (179) | 1,028 |
| and cash equivalents | | | | |
+-----------------------------------+------+----------+----------+-----------+
| | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Cash and cash equivalents at | | 28,677 | 29,087 | 29,087 |
| beginning of period | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Effect of exchange rates on cash | | 1,617 | (61) | (1,438) |
| and cash equivalents | | | | |
+-----------------------------------+------+----------+----------+-----------+
| Cash and cash equivalents at end | | 32,531 | 28,847 | 28,677 |
| of period * | | | | |
+-----------------------------------+------+----------+----------+-----------+
| | | | | |
+-----------------------------------+------+----------+----------+-----------+
| * Excludes restricted cash of EUR1,031 as of 31 March 2009 ( | |
| EUR971 as of 31 March 2008) | |
+--+--------------------------------+------+----------+----------+-----------+
Statement of changes in equity
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| EUR000 |Share capital |Share premium |Accumulated | Foreign | Other | Total |Minority | Total |
| | | | profits / | currency |reserves |shareholders |interest | equity |
| | | | (losses) |translation | * | equity | | |
| | | | |differences | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| 01 January 2008 | 6,272 | 34,587 | 22,005 | 8,435 | 4,423 | 75,722 | - | 75,722 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Net profit for the period | | | 5,382 | | | 5,382 | | 5,382 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Minority Interest | | | (2,704) | | | (2,704) | 2,704 | - |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Net profit for the period | | | 2,678 | | | 2,678 | 2,704 | 5,382 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Share based compensation | | | 6,037 | | | 6,037 | | 6,037 |
| *** | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Currency translation | 48 | 78 | 308 | (15,164) | - | (14,730) | | (14,730) |
| effects | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Items recognised directly | 48 | 78 | 6,345 | (15,164) | - | (8,693) | - | (8,693) |
| in equity | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Total recognised income | 48 | 78 | 9,023 | (15,164) | - | (6,015) | 2,704 | (3,311) |
| and expense for the period | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Transfer of other reserves | | | 4,423 | | (4,423) | - | | - |
| to accumulated profits ** | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Issuance of share capital | 35 | 980 | | | | 1015 | | 1015 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Cost of issuing new share | | (22) | | | | (22) | | (22) |
| capital | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| 31 December 2008 | 6,355 | 35,623 | 35,451 | (6,729) | - | 70,700 | 2,704 | 73,404 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Net loss for the period | | | (656) | | | (656) | | (656) |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Minority Interest | | | (1,165) | | | (1,165) | 1,165 | - |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Net loss for the period | | | (1,821) | | | (1,821) | 1,165 | (656) |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Share based compensation | | | 1,605 | | | 1,605 | | 1,605 |
| *** | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Currency translation | | | 2 | 4,411 | | 4,413 | | 4,413 |
| effects | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Items recognised directly | | | 1,607 | 4,411 | | 6,018 | | 6,018 |
| in equity | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Total recognised income | | | (214) | 4,411 | | 4,197 | 1,165 | 5,362 |
| and expense for the period | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| Issuance of share capital | 51 | 560 | | | | 611 | | 611 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| 31 March 2008 | 6,406 | 36,183 | 35,237 | (2,318) | - | 75,508 | 3,869 | 79,377 |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
| | | | | | | | | |
+----------------------------+---------------+---------------+-------------+-------------+----------+--------------+----------+----------+
+------------------------------------------------------------------------------------+
| * Other reserves is a credit to reserves in respect of share based compensation |
| charge in the Income Statement. |
+------------------------------------------------------------------------------------+
| ** In Q2 2008, in order to better reflect the distributable nature of the reserve, |
| other reserves in respect of share option costs were transferred to accumulated |
| profits. |
+------------------------------------------------------------------------------------+
| *** The debit in respect of the IFRS 2 element of the share option charge on the |
| face of the Income Statement is not a deduction from distributable reserves and is |
| therefore credited back to accumulated profits in the Balance Sheet and on the |
| face of the Statement of Changes in Equity. |
+------------------------------------------------------------------------------------+
Notes to the quarterly financial statements - 1st Quarter 2009
Note 1 - Basis of preparation, summary of significant accounting policies and
other information
Basis of preparation
These quarterly financial statements are prepared in accordance with the Interim
Financial Reporting Standard (IAS 34) issued by the International Accounting
Standards Board using the same accounting policies and principles as those
stated in the 2008 Annual Report.
The full year to 31 December 2008 figures are audited. All quarterly figures are
unaudited.
Principal activities
The activities of StepStone ASA and its subsidiaries (together "StepStone Group"
or the "Group") are the provision of software and services for the Human Capital
Management ("HCM") sector. StepStone ASA, the parent company (the "Company"), is
a corporation and is legally domiciled in Norway with its legal address at
Thunes vei 2, N-0274 Oslo. The Company has its listing on Oslo Børs (Oslo Stock
Exchange - OSE) "Main list" in Oslo, Norway. The Company also has a secondary
listing on the main list on the London Stock Exchange.
Other information
A description of the principle risks and uncertainties related to the company is
set out on pages 5 to 7 of the Registration Document filed by the company on 13
May 2008. This document is available from
http://www.stepstone.com/documents/StepStone%20ASA%20-%20Registration%20Documen
%20080509.pdf
The principle risks and uncertainties remain business risks, market and strategy
risks, operational and technology risks, financial risks and legal uncertainty
and risk factors relating to the shares.
Note 2 - Depreciation and amortisation
+--+--------------------------------+------+---------+---------+---------+---------+
| EUR000 | | | | | Full |
| | | | | | year |
+-----------------------------------+------+---------+---------+---------+---------+
| | | | |Q1 2009 |Q1 2008 | 2008 |
+--+--------------------------------+------+---------+---------+---------+---------+
| | | | | | | |
+--+--------------------------------+------+---------+---------+---------+---------+
| Depreciation of purchased | | | 996 | 780 | 3,639 |
| tangible and intangible assets | | | | | |
+-----------------------------------+------+---------+---------+---------+---------+
| Amortisation of intangible assets | | | 365 | 294 | 1,648 |
| arising on acquisition | | | | | |
+-----------------------------------+------+---------+---------+---------+---------+
| | | | 1,361 | 1,074 | 5,287 |
+--+--------------------------------+------+---------+---------+---------+---------+
IFRS requires the Company to attribute fair values to intangible assets of
acquired companies. The excess of the purchase price over the net tangible and
identifiable intangible assets is recorded as goodwill. A preliminary allocation
of the purchase price between tangible, intangible assets and goodwill is
undertaken after acquisition but subject to review and change over the next
twelve months.
When performing the preliminary purchase price allocation the company considers,
among other factors, the intention for future use of acquired assets, analyses
of historical financial performance and estimates of future performance of the
acquired company's products. The fair value of intangible assets may also be
based, in part, on valuations by independent professional values. Such
valuations require the company to make significant estimates and assumptions,
especially with respect to intangible assets.
The intangibles that the Company has recognised on recent acquisitions have been
regarding the value of the Intellectual Property Rights (IPR) associated with
software and platforms of the acquired entities and also the long term value of
the customer relationships (Customers) that the acquired entity has built up.
These intangibles are being amortised over 3-5 years for IPR and 5-8 years for
Customers. See also Note 4.
Note 3 - Group share option charge
+--+------------------------------------------+--+---+---------+---------+---------+
| EUR000 | | | | Full |
| | | | | year |
+---------------------------------------------+--+-------------+---------+---------+
| | | | |Q1 2009 |Q1 2008 | 2008 |
+--+------------------------------------------+--+---+---------+---------+---------+
| | | | | | | |
+--+------------------------------------------+--+---+---------+---------+---------+
| Group share option charge - fair value of | | | 1,605 | 2,031 | 6,037 |
| option grants | | | | | |
+---------------------------------------------+--+---+---------+---------+---------+
| Group share option charge - tax on vested | | | - | (862) | (1,433) |
| but not yet exercised options | | | | | |
+---------------------------------------------+--+---+---------+---------+---------+
| | | | 1,605 | 1,169 | 4,604 |
+--+------------------------------------------+--+---+---------+---------+---------+
Note 3 - Group share option charge (continued)
The Group offers share options, without payment, to employees. The options vest
over a period of 1 to 4 years, depending on the number granted. Initial grants
to employees normally vest over 4 years. Most additional grants ("Evergreen
grants") vest over 3 years. Once vested, they are generally exercisable once a
quarter. Each option will expire 10 years from the date of grant except for the
options granted to the CEO and CFO which expire 4 years from the date of
vesting. On leaving the company, an employee has a period of 6 months to
exercise any options that have vested up to the date employment terminated. The
fair value of the share options granted is calculated using the Black-Scholes
model. This is the indicative cost to the Company of each option issued,
calculated in accordance with IFRS 2 (Share-based compensation). The significant
input variables in the model are the share price at grant date, exercise price,
standard deviation of expected share price, expected option life (1 year after
vesting date) and risk free rate (daily NIBOR rates from the Norwegian Bank).
Expected volatility is based on statistical analysis of historical daily share
prices modified where identifiable factors may indicate that unadjusted
historical experience is a relatively poor predictor of future experience.
On 1 January 2009, staff were granted the right to surrender existing options in
return for a reduced number of new options and effective the same date, a
redistribution of options amongst the Executive Leadership Team occurred. The
new options were issued at the closing price of the day before the Board
approved the changes, being NOK 3.51
The new options will carry the same vesting rights as the options being
surrendered except that the vesting period has been extended to 4 years. The
majority of the options being surrendered vest over 3 years.
The IFRS 2 charge in Q1 consists of the fair value of the surrendered options
spread over the original vesting period, plus the incremental fair value of the
replacement options spread over the new vesting period. The fundamental approach
is in accordance with IFRS 2 and has been agreed with the auditors. The detailed
calculations of the incremental fair value will be reviewed in Q2.
Note 4 - Intangible assets
+----------------------------------+------+----------+------------+-------------+------------+
| EUR000 | |Goodwill | Purchased | Intangible | Total |
| | | |intangible | assets |intangible |
| | | | assets | arising on | assets |
| | | | |acquisition | |
+----------------------------------+------+----------+------------+-------------+------------+
| 01 January 2008 | | 54,451 | 2,818 | 5,335 | 62,604 |
+----------------------------------+------+----------+------------+-------------+------------+
| | | | | | |
+----------------------------------+------+----------+------------+-------------+------------+
| Related to Webjobb | | 1,358 | | 142 | 1,500 |
+----------------------------------+------+----------+------------+-------------+------------+
| Related to Level 4 | | 972 | | 100 | 1,072 |
+----------------------------------+------+----------+------------+-------------+------------+
| Related to Sourcea | | 2,904 | | 320 | 3,224 |
+----------------------------------+------+----------+------------+-------------+------------+
| Related to LVE | | 4,292 | 17 | 500 | 4,809 |
+----------------------------------+------+----------+------------+-------------+------------+
| Additions | | | 2,785 | 107 | 2,892 |
+----------------------------------+------+----------+------------+-------------+------------+
| Amortisation | | | (1,681) | (1,603) | (3,284) |
+----------------------------------+------+----------+------------+-------------+------------+
| Currency translation differences | | (11,832) | (643) | 147 | (12,328) |
+----------------------------------+------+----------+------------+-------------+------------+
| 31 December 2008 | | 52,145 | 3,296 | 5,048 | 60,489 |
+----------------------------------+------+----------+------------+-------------+------------+
| | | | | | |
+----------------------------------+------+----------+------------+-------------+------------+
| Related to Level 4 | | 272 | | | 272 |
+----------------------------------+------+----------+------------+-------------+------------+
| Additions | | | 845 | | 845 |
+----------------------------------+------+----------+------------+-------------+------------+
| Amortisation | | | (583) | (365) | (948) |
+----------------------------------+------+----------+------------+-------------+------------+
| Currency translation differences | | 4,203 | 296 | 32 | 4,531 |
+----------------------------------+------+----------+------------+-------------+------------+
| 31 March 2009 | | 56,620 | 3,854 | 4,715 | 65,189 |
+----------------------------------+------+----------+------------+-------------+------------+
| | | | | | |
+----------------------------------+------+----------+------------+-------------+------------+
The initial accounting for a business combination is determined provisionally in
the quarter in which the combination is effected because the fair values to be
assigned to the acquiree's identifiable assets, liabilities or contingent
liabilities and the cost of the combination can be determined only
provisionally. The company takes time to carefully assess the identifiable
assets, liabilities or contingent liabilities acquired. The Company recognises
any adjustments to those provisional values as a result of completing the
initial accounting within 12 months following the acquisition date.
Note 5 - Acquisitions
Level 4
On 17 March 2008, the Company announced an agreement to acquire LEVEL4
Performance Consulting Limited, a Hong Kong company and its subsidiary in
mainland China (together "LEVEL4"). The initial consideration was EUR0.8 m,
settled in cash, for 70% of the issued share capital. There was a put and call
option over the remaining 30% with the price dependent on future financial
performance. The options were exercisable from 2011 to 2012. The minority
shareholder retained their right to share in profits until the option was
exercised.
On 8 January 2009 StepStone announced that it had increased its stake in Level4
to 100% through the acquisition of the 30% minority interest. StepStone had an
option to acquire the remaining 30% in 2011 for a price that was dependent upon
results between 2008 and 2011 but agreement was reached to accelerate the
acquisition. The purchase price of EUR0.2m was paid in cash in January 2009.
+-------------------------------------+------+---------+
| The balance sheet of Level 4 at | | EUR 000 |
| acquisition comprised: | | |
+-------------------------------------+------+---------+
| | | |
+-------------------------------------+------+---------+
| Non current assets | | 64 |
+-------------------------------------+------+---------+
| Current assets | | 338 |
+-------------------------------------+------+---------+
| Cash | | 110 |
+-------------------------------------+------+---------+
| Equity | | 124 |
+-------------------------------------+------+---------+
| Current liabilities | | (636) |
+-------------------------------------+------+---------+
| | | |
+-------------------------------------+------+---------+
| | | |
+-------------------------------------+------+---------+
The Company is undertaking a process of assessing the accounting policies and
procedures and identifying any intangible assets of the acquisitions. For
Level4 EUR0.1m has been ascribed to customer relationships and this asset is being
amortised over 8 years.
Recruiter
In Q1 2008, the Company settled its final liabilities to the former shareholders
of Recruiter. The liabilities were settled by issuing EUR611 of shares at an
agreed price of NOK 4.80 per share and by payment of EUR68 in cash.
Note 6 - Deferred tax asset
In Q4 2007 the German deferred tax asset was decreased from EUR7,000 to EUR5,500 to
reflect the expected utilisation in 2007. At the same time an asset of EUR6,500
was recognised in StepStone ASA, which was due to an increased expectation that
some of the Norwegian tax losses will be realised in the foreseeable future.
Additionally smaller assets have been recognised in the UK, Swedish and Danish
operations.
The movement in the deferred tax in Q1, Q2 and Q3 2008 is due to the revaluation
of local currency balance sheets to Euro.
In Q4 2008 the German deferred tax asset was reduced by EUR4,000 to EUR1,500 to
reflect the expected utilisation in 2008. At the same time the asset in
StepStone ASA was increased by EUR2,000 to EUR8,500 on the expectation that further
tax losses will be realised in Norway.
In Q1 2009 the German deferred tax asset was reduced by EUR400 to EUR1,100 to
reflect the expected utilisation in 2009. All other movements are due to the
revaluation of local currency balance sheets to Euro.
Note 7 - Cash and bank deposits
+----------------------------------+------+------+---------+----------+----------+
| EUR000 | | | 31 |31 March | 31 |
| | | | March | 2008 |December |
| | | | 2009 | | 2008 |
+----------------------------------+------+------+---------+----------+----------+
| | | | | | |
+----------------------------------+------+------+---------+----------+----------+
| Cash and cash equivalents | | | 32,531 | 28,847 | 28,677 |
+----------------------------------+------+------+---------+----------+----------+
| Restricted bank deposits | | | 1,013 | 971 | 1,013 |
+----------------------------------+------+------+---------+----------+----------+
| | | | 33,544 | 29,818 | 29,690 |
+----------------------------------+------+------+---------+----------+----------+
Cash and cash equivalents includes EUR9,672 (EUR7,576 at 31 March 2008 and EUR6,640 at
31 December 2008) held by StepStone Deutschland AG.
Note 8 - Share capital
+----------------------------------+------+---------+---------+-----------+---------+
| Number of shares in 1 000, | | | | Ordinary Shares |
| values in EUR 000 | | | | |
+----------------------------------+------+---------+---------+---------------------+
| | | | | Number | Issued |
| | | | | | and |
| | | | | | fully |
| | | | | | paid |
+----------------------------------+------+---------+---------+-----------+---------+
| 01 January 2008 | | | | 127,076 | 6,272 |
+----------------------------------+------+---------+---------+-----------+---------+
| | | | | | |
+----------------------------------+------+---------+---------+-----------+---------+
| Correction to historic exchange | | | | | 48 |
| rates | | | | | |
+----------------------------------+------+---------+---------+-----------+---------+
| Issuance of new shares for | | | | 268 | 13 |
| financing | | | | | |
+----------------------------------+------+---------+---------+-----------+---------+
| Issuance of new shares in | | | | 449 | 22 |
| business combinations | | | | | |
+----------------------------------+------+---------+---------+-----------+---------+
| 31 December 2008 | | | | 127,793 | 6,355 |
+----------------------------------+------+---------+---------+-----------+---------+
| | | | | | |
+----------------------------------+------+---------+---------+-----------+---------+
| Issuance of new shares in | | | | 1,125 | 51 |
| business combinations | | | | | |
+----------------------------------+------+---------+---------+-----------+---------+
| 31 March 2009 | | | | 128,918 | 6,406 |
+----------------------------------+------+---------+---------+-----------+---------+
Q1 2009
On 25 March 2009 the Company issued 1,125,000 shares at an agreed price of NOK
4.80 as part of the purchase price paid to acquire Recruiter.
On 31 March 2009 the Company had in issue 128,917,985 shares of NOK 0.40 each
and a registered share capital of NOK 51,567,194.00. There were 13,995,664
options outstanding with a weighted average exercise price of NOK 5.44 of which
2,781,796 were exercisable with a weighted average exercise price of NOK 9.03.
+----------------------------------+------+---------+---------+----------+----------+
| Earnings per share | | | | Basic | Diluted |
+----------------------------------+------+---------+---------+----------+----------+
| | | | | | |
+----------------------------------+------+---------+---------+----------+----------+
| Weighted average number of shares for 3 months to | | 127,869 | 141,864 |
| 31 March 2009 | | | |
+----------------------------------+------+---------+---------+----------+----------+
Note 9 - Non current liabilities
+----------------------------------+------+--------+---------+---------+----------+
| EUR000 | | | 31 | 31 | 31 |
| | | | March | March |December |
| | | | 2009 | 2008 | 2008 |
+----------------------------------+------+--------+---------+---------+----------+
| | | | | | |
+----------------------------------+------+--------+---------+---------+----------+
| Notes payable | | | 4,479 | 9,837 | 4,080 |
+----------------------------------+------+--------+---------+---------+----------+
| Revolving credit facility | | | 9,285 | - | 9,285 |
+----------------------------------+------+--------+---------+---------+----------+
| Subordinated loan | | | - | 6,699 | - |
+----------------------------------+------+--------+---------+---------+----------+
| Non current deferred and | | | 289 | 289 | 316 |
| invoiced revenue (Note 10) | | | | | |
+----------------------------------+------+--------+---------+---------+----------+
| Non current finance lease | | | - | 1 | - |
| liabilities | | | | | |
+----------------------------------+------+--------+---------+---------+----------+
| Deferred consideration | | | - | 4,664 | 1,839 |
+----------------------------------+------+--------+---------+---------+----------+
| Other non current liabilities | | | - | 1 | - |
+----------------------------------+------+--------+---------+---------+----------+
| | | | 14,053 | 21,491 | 15,520 |
+----------------------------------+------+--------+---------+---------+----------+
Notes payable
On 25 September 2006 the Company launched a NOK 150,000,000 program of senior
unsecured floating rate notes. These Notes payable carry a margin of 4.75% above
3-month NIBOR and are repayable on 27 September 2010. Interest is payable
quarterly. The company has given a limited number of covenants to note holders
the most significant of which are that dividend payments shall not exceed 50% of
profits after tax and total book equity shall exceed 40% of capital employed.
The Company issued NOK 100 million of notes. At the same time the Company
purchased NOK 20 million of the notes. During Q3 2008, the Company purchased NOK
39 million of the notes in the open market and a further NOK 1.0m in Q4 2008.
Net Notes payable outstanding at 31 March 2009 amounted to NOK 40 million which
are included in Non current liabilities.
Credit facilities
In June 2008 the Company entered into an agreement with Skandinaviska Enskilda
Banken ("SEB") that included provision of a revolving credit facility ("RCF") of
up to EUR30m and a term loan ("Term Loan") of up to EUR10m. The Term Loan is
available until October 2010 and the RCF until July 2011. Provided the Company
does not breach the agreement, amounts drawn down are not repayable, except at
discretion of the Company, until the relevant facility expires.
Note 9 - Non current liabilities (continued)
Subordinated loan
+----------------------------------+------+---------+---------+---------+---------+
| EUR000 | | | | | |
+----------------------------------+------+---------+---------+---------+---------+
| | | | | | |
+----------------------------------+------+---------+---------+---------+---------+
| 01 January 2008 | | | | | (6,527) |
+----------------------------------+------+---------+---------+---------+---------+
| | | | | | |
+----------------------------------+------+---------+---------+---------+---------+
| Repayment | | | | | 7,491 |
+----------------------------------+------+---------+---------+---------+---------+
| Fair value adjustment | | | | | (423) |
+----------------------------------+------+---------+---------+---------+---------+
| Financing cost | | | | | (541) |
+----------------------------------+------+---------+---------+---------+---------+
| 31 December 2008 | | | | | - |
+----------------------------------+------+---------+---------+---------+---------+
Axel Springer, as part of the transaction to acquire 49.9% of the shares of
StepStone Deutschland AG in 2004, acquired a Subordinated loan in that company
with a face value of EUR15.0m. StepStone ASA also held a Subordinated loan of
EUR15.0m.
These loans were issued between 1997 and 2001 to fund EUR30m of losses of
StepStone Deutschland AG and subordinated on 1 January 2002. To avoid over
indebtedness, repayments of both Subordinated loans were only payable from
future profits. Neither Subordinated loan holder had an automatic right to
repayment.
Both Subordinated loans were accounted for in accordance with International
Financial Reporting Standards (IAS 39). IFRS requires that each subordinated
loan acquired was, on initial recognition, recorded as a financial liability at
fair value. On the basis that there was no history of sustained profits in
StepStone Deutschland AG the fair value in 2004 of each EUR15m Subordinated loan
was estimated to be EUR2.5m. In accordance with IFRS the difference between this
amount and the face value of the Subordinated loan held by Axel Springer AG was
charged to the income statement as a Financial expense over the period it took
StepStone Deutschland AG to generate EUR30m of profits.
In Q4 2008 the final balance was paid to each subordinated loan holder. From the
date of final repayment, the interest of Axel Springer AG in StepStone
Deutschland AG is being accounted for as minority interest.
The historic revenues and net liabilities of StepStone Deutschland AG have
been:-
StepStone Deutschland AG
+----------------------------------+------+---------+---------+---------+----------+
| EUR000 | | 2005 | 2006 | 2007 | 2008 |
+----------------------------------+------+---------+---------+---------+----------+
| | | | | | |
+----------------------------------+------+---------+---------+---------+----------+
| Revenue | | 10,981 | 15,095 | 24,112 | 33,668 |
+----------------------------------+------+---------+---------+---------+----------+
| | | | | | |
+----------------------------------+------+---------+---------+---------+----------+
| Opening Net Liabilities | | 27,826 | 22,572 | 13,351 | 5,473 |
| [Negative Equity] | | | | | |
+----------------------------------+------+---------+---------+---------+----------+
| Retained Profits | | (2,654) | (4,821) | (9,378) | (14,751) |
+----------------------------------+------+---------+---------+---------+----------+
| Movement on Deferred Tax Asset | | (2,600) | (4,400) | 1,500 | 4,000 |
+----------------------------------+------+---------+---------+---------+----------+
| Closing Net Liabilities (Assets) | | 22,572 | 13,351 | 5,473 | (5,278) |
+----------------------------------+------+---------+---------+---------+----------+
The tax losses of StepStone Deutschland AG have sheltered profits from 2004 to
date. However, these losses were substantially utilised by the end of 2008,
resulting in expected tax charges in 2009.
Note 10 - Deferred and invoiced revenue
+----------------------------------+------+--------+---------+---------+-----------+
| EUR000 | | | 31 | 31 | 31 |
| | | | March | March | December |
| | | | 2009 | 2008 | 2008 |
+----------------------------------+------+--------+---------+---------+-----------+
| | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| Balance to be recognised within | | | 26,207 | 27,249 | 27,081 |
| one year | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| Balance to be recognised after | | | 289 | 289 | 316 |
| one year | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| | | | 26,496 | 27,538 | 27,397 |
+----------------------------------+------+--------+---------+---------+-----------+
| | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| Segmental analysis of deferred | | | | | |
| revenue | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| EUR000 | | | | Online | Solutions |
+----------------------------------+------+--------+---------+---------+-----------+
| | | | | | |
+----------------------------------+------+--------+---------+---------+-----------+
| Q1 2008 | | | | 19,695 | 7,843 |
+----------------------------------+------+--------+---------+---------+-----------+
| Q2 2008 | | | | 19,653 | 8,546 |
+----------------------------------+------+--------+---------+---------+-----------+
| Q3 2008 | | | | 20,103 | 7,304 |
+----------------------------------+------+--------+---------+---------+-----------+
| Q4 2008 | | | | 19,780 | 7,617 |
+----------------------------------+------+--------+---------+---------+-----------+
| Q1 2009 | | | | 17,660 | 8,836 |
+----------------------------------+------+--------+---------+---------+-----------+
Note 11 - Other current liabilities
+----------------------------------+------+--------+---------+---------+----------+
| EUR000 | | | 31 | 31 | 31 |
| | | | March | March |December |
| | | | 2009 | 2008 | 2008 |
+----------------------------------+------+--------+---------+---------+----------+
| | | | | | |
+----------------------------------+------+--------+---------+---------+----------+
| Deferred consideration | | | 5,179 | 909 | 3,794 |
+----------------------------------+------+--------+---------+---------+----------+
| Public duties payable | | | 6,192 | 6,845 | 6,685 |
+----------------------------------+------+--------+---------+---------+----------+
| Other current liabilities | | | 11,250 | 9,146 | 13,578 |
+----------------------------------+------+--------+---------+---------+----------+
| Other short term debt | | | 998 | 508 | - |
+----------------------------------+------+--------+---------+---------+----------+
| | | | 23,619 | 17,408 | 24,057 |
+----------------------------------+------+--------+---------+---------+----------+
The current deferred consideration is the estimated amount payable within 12
months of the balance sheet date to the former ExecuTRACK, Sourcea and Les
Villages Emploi shareholders. The amounts to ExecuTRACK are payable in shares of
StepStone ASA the remainder are payable in cash.
Note 12 - Events after the balance sheet date
Les Villages Emploi
On 7 April 2009 the company paid EUR900 cash in final settlement to the former
shareholders of Les Villages Emploi.
Note 13 - Segment information by quarter
+--------------------------------+---------+---------+---------+---------+---------+
| EUR 000 | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| | Q1 | Q4 | Q3 | Q2 | Q1 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 2009 | 2008 | 2008 | 2008 | 2008 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Segment revenues (see below | | | | | |
| for analysis by geography) | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 14,098 | 17,364 | 18,514 | 18,355 | 18,029 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 12,773 | 13,677 | 13,241 | 12,582 | 11,757 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 26,871 | 31,041 | 31,755 | 30,937 | 29,786 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Segment personnel costs and | | | | | |
| other operating expenses | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 9,532 | 13,585 | 12,687 | 12,295 | 12,259 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 11,485 | 12,123 | 11,171 | 10,939 | 10,342 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 21,017 | 25,708 | 23,858 | 23,234 | 22,601 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Profit / (loss) from operating | | | | | |
| divisions before depreciation | | | | | |
| and amortisation and share | | | | | |
| option charge | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 4,846 | 3,779 | 5,827 | 6,060 | 5,770 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 1,008 | 1,554 | 2,070 | 1,643 | 1,415 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 5,854 | 5,333 | 7,897 | 7,703 | 7,185 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Segment share option charge | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 551 | 220 | (248) | 517 | 69 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 362 | 168 | 7 | 320 | 110 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 913 | 388 | (241) | 837 | 179 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Segment depreciation, | | | | | |
| amortisation and impairments | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 487 | 558 | 562 | 482 | 357 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 549 | 586 | 553 | 495 | 471 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 1,036 | 1,144 | 1,115 | 977 | 828 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Profit / (loss) from operating | | | | | |
| divisions after depreciation | | | | | |
| and amortisation and share | | | | | |
| option charge | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 3,808 | 3,001 | 5,513 | 5,061 | 5,344 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 97 | 800 | 1,510 | 828 | 834 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 3,905 | 3,801 | 7,023 | 5,889 | 6,178 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Enterprise level expenses | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Depreciation, amortisation and | 325 | 321 | 333 | 321 | 246 |
| impairments | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Share option charge | 692 | 661 | 1,088 | 703 | 990 |
+--------------------------------+---------+---------+---------+---------+---------+
| Personnel costs and other | 1,610 | 2,858 | 1,822 | 1,655 | 1,484 |
| operating expenses | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| | 2,627 | 3,840 | 3,243 | 2,679 | 2,720 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Operating profit / (loss) | 1,278 | (39) | 3,780 | 3,210 | 3,458 |
| ("EBIT") | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Note | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Group share option charge | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Online | 551 | 220 | (248) | 517 | 69 |
+--------------------------------+---------+---------+---------+---------+---------+
| Solutions | 362 | 168 | 7 | 320 | 110 |
+--------------------------------+---------+---------+---------+---------+---------+
| Enterprise level | 692 | 661 | 1,088 | 703 | 990 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 1,605 | 1,049 | 847 | 1,540 | 1,169 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Geographic segments | Q1 | Q4 | Q3 | Q2 | Q1 |
+--------------------------------+---------+---------+---------+---------+---------+
| EUR 000 | 2009 | 2008 | 2008 | 2008 | 2008 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Revenues | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| Nordic & UK | 9,064 | 10,222 | 11,956 | 12,624 | 11,967 |
+--------------------------------+---------+---------+---------+---------+---------+
| Northern | 5,277 | 6,109 | 6,032 | 5,960 | 5,769 |
+--------------------------------+---------+---------+---------+---------+---------+
| Central | 12,530 | 14,710 | 13,767 | 12,353 | 12,050 |
+--------------------------------+---------+---------+---------+---------+---------+
| | 26,871 | 31,041 | 31,755 | 30,937 | 29,786 |
+--------------------------------+---------+---------+---------+---------+---------+
| | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
| The quarterly numbers are | | | | | |
| unaudited | | | | | |
+--------------------------------+---------+---------+---------+---------+---------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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