CREALOGIX reports substantially higher net profit

With the acquisition of Abaxx e-banking activities in Germany in July 2011, the CREALOGIX Group took a big step towards growth and internationalisation. It now has excellent opportunities for market access to the banking industry in Germany and throughout Europe. CREALOGIX will continue to look at attractive acquisition opportunities both in Switzerland and abroad. The Board of Directors of the CREALOGIX Group will be proposing to the Annual General Meeting a further distribution from the reserves set aside from capital contributions of CHF 15 per share.

Trend of operating revenues and results
The consolidated operating revenues of CREALOGIX for the financial year 2010/2011 stood at CHF 52.8 million (previous year: CHF 52.5 million). This figure reflects rising demand for the software products supplied by CREALOGIX. On the other hand, the software service provision sector had to contend with falling market prices because users are increasingly relying on the recruitment of temporary personnel. CREALOGIX therefore reorganised these activities in the course of the financial year. The capacities of software engineers with outstanding training released in that way were used to effectively strengthen the development departments of the different product segments.

For the financial year 2010/2011, the CREALOGIX Group EBIT stands at CHF 5.1 million (previous year: CHF 3.3 million), equivalent to an EBIT margin of 10 per cent (previous year: 6 per cent). Including the net proceeds of the disposal of subsidiary companies, this gives a financial profit of CHF 0.2 million and a net profit for the year of CHF 4.7 million with a profit margin of 9 per cent (previous year: CHF 3.2 million, profit margin 6 per cent).

The continuing robust financial strength of the CREALOGIX Group is reflected in its cash resources which rose in the period under review by CHF 5.3 million, and in the equity capital whose value increased from CHF 54.5 million to CHF 57.1 million. Even after the distribution of CHF 2 per share from the reserves set aside from capital contributions in January 2011, the equity ratio still stands at an impressive 82 per cen (previous year 80 per cent).

E-banking: strong demand and innovations
In the year under review, the e-banking business at CREALOGIX developed very satisfactorily and substantially increased sales and profitability, and most CREALOGIX clients brought their software up to date by changing over to the latest releases. The Group took an important strategic step forward by gaining a major foreign bank as a new client for the CLX.Sentinel online security solution. CREALOGIX also invested a total of more than twenty person-years in the development of new products – in mobile banking, but also for our standard CLX.Ebanking product range, and for online security solutions built around CLX.Sentinel.

At the end of July 2011, i.e. already in the new financial year, CREALOGIX took over the entire e-banking and portal client business of Cordys Deutschland AG. This business unit - widely known as ‘Abaxx’ - is an e-banking pioneer on the German software market and makes an admirable addition to the CREALOGIX product portfolio. With Abaxx the Group has strengthened its presence on the German market and gained an established client base and attractive products, together with an experienced and proven team.

E-payment: expectations exceeded
Demand for CREALOGIX products for Swiss payment transactions remains as strong as ever. To defend its market leadership, CREALOGIX invested some ten person-years in the renewal of the product range and further extended the relevant software development capacities. The Group also entered into an exclusive partnership with the ETH Dacuda spin-off and developed a special payment app for recognizing Swiss payment slips for ScanMouse, a unique product. The market launch is scheduled for autumn 2011. Fortunately, the client relationship managers of the Swiss financial institutions actively recommend CREALOGIX hardware and software products.

Education: concentration of energies in the educational sector
By concentrating energies, CREALOGIX achieved a significant improvement of its market position in the education and further education sectors. The Group invested in mobile learning and launched a new product with a pilot client. In Germany, CREALOGIX adjusted its marketing strategy slightly: the CLX.Evento planning module is now available as a stand- alone product. This in turn enables German manufacturers of campus management software to be acquired as distribution partners.

Personnel matters
The sale of three business units during the financial year had an impact on the Group’s work force. This fell from 265 employees at the end of June 2010 to 236 at the end of June 2011.

Outlook
The CREALOGIX strategy of developing proprietary software products for the finance industry and marketing them both at home and abroad has proved successful. Specific forecasts for the financial year 2011/2012 are hard to make. But CREALOGIX expects to be able to increase its sales through further acquisitions and maintain earning power. The acquisition of Abaxx in July 2011 opens up good opportunities for CREALOGIX to access the banking industry market in Germany and elsewhere in Europe.

Fifteen years of CREALOGIX – exceptional distribution of CHF 15 per share planned
In the past fifteen years the CREALOGIX Group has earned substantial profits and generated high free cash flows. The Board of Directors has therefore decided to propose to the Annual General Meeting on 2 November 2011 an exceptional distribution of CHF 15 per share from the reserves set aside from capital contributions. Following the Corporation Tax Reform which took effect on 1 January 2011, the distribution will be paid out without any deduction of withholding tax and will be tax-free for private shareholders.

The CREALOGIX growth strategy remains unchanged and can still be financed in full from its own resources, even after this distribution. After deduction of the amount to be distributed, cash and cash equivalents in excess of CHF 23 million are still stated in the balance sheet and will permit further attractive distributions and dividend yields in the future. With an equity ratio in excess of 76 per cent, the business continues to benefit from an extremely robust financial base.

Contact
Crealogix Holding AG Baslerstrasse 60 Postfach 112 8066 Zürich Tel. 058 404 80 00 Fax 058 404 80 90 info@crealogix.com