Exact reports low single digit revenue and EBITDA growth on a like-for-like basis for full-year 2011.
Delft, February 15, 2012 – Dividend secured despite Longview impairment charge

Total reported revenue decreased from € 228.2 million in 2010 to € 215.6 million in 2011, primarily due to the divestment of Siigo in 2010 and unfavorable currency impact. Total revenue increased by 0.6% on a like-for-like 1 basis.
All regions, except for the International region, showed revenue growth on a like-for-like basis. The revenue decline in International was foreseen and was driven by the rationalization of the route to market and the related closing of 20 entities.
Ongoing strong growth of Exact Online with the number of commercial administrations growing to 71,700 and the related committed annual revenue amounting to € 11.6 million (YE 2010: € 7.9 million). Successful launch of Exact Online Trade and Time & Billing propositions in the Benelux.
Step-up realized in R&D momentum with initiatives having been launched in all of the selected strategic market segments.
Recurring revenue increased by 2.4% on a like-for-like basis to € 137.7 million (FY 2010: € 134.4 million) and increased to 63.8% of total revenue (FY 2010: 62.7%).
On a reported basis EBITDA decreased by 4.1%, from € 52.4 million in 2010 to € 50.2 million in 2011, representing an EBITDA margin of 23.3% (FY 2010: 23.0%). EBITDA increased by 2.5% on a like-for-like basis to € 50.2 million (FY 2010: € 49.0 million).
An impairment charge of € 18.4 million has been taken in relation to Longview. As a consequence, reported EBIT decreased by 43.0% to € 23.8 million (FY 2010: € 41.8 million) and net income decreased to € 14.8 million (FY 2010: € 33.4 million).
Earnings per share (EPS) amount to € 0.65 (FY 2010: € 1.45). EPS corrected for the Longview impairment would have amounted € 1.46 per share. The proposed total dividend for FY 2011 amounts € 1.46 per share; a final dividend of € 0.87 per share will therefore be paid on top of the interim dividend of € 0.59.
For FY 2012 Exact expects low single digit like-for-like revenue and EBITDA growth.
Mr. Erik van der Meijden was announced today as candidate CEO, to succeed Max Timmer, who will step down from the Board of Managing Directors on April 26, 2012.
(in € thousands) reported Like-for-like adjustments from reported
to like-for-like
FY 2011 FY 2010 Change FY 2010 Change Divestments FX Rates
License revenue 42,693 48,251 (11.5%) 43,576 (2.0%) 3,816 859
Maintenance revenue 136,492 140,694 (3.0%) 134,245 1.7% 4,921 1,528
Service revenue 36,420 39,255 (7.2%) 36,414 0.0% 2,082 759
Total revenue 215,604 228,200 (5.5%) 214,236 0.6% 10,819 3,146
EBITDA 50,249 52,398 (4.1%) 49,007 2.5% 2,194 1,197
EBIT 23,812 41,754 (43.0%) 38,700 (38.5%) 1,905 1,149
Profit for the year 14,843 33,386
EPS (in €) 0.65 1.45
One-time additional dividend (in €) 0.81 0.57
Final dividend (in €) 1.46 2.02

1 Figures on a like-for-like basis are the figures corrected for the impact of the divestment of Siigo and hardware business in the Netherlands in 2010, the deconsolidation of Exact’s joint venture in the Middle East on January 1, 2011 and foreign exchange rates.

Max Timmer, CEO Exact Holding:
"The results we have delivered for 2011 are in line with expectations. During 2011 Exact went through a transformation for growth along the lines of the strategic review presented at the end of 2010. In its quest to become more market driven and focused on specific market segments, Exact changed its organization accordingly and launched market segment specific propositions based on Exact Online, Exact Globe and Exact Synergy. Furthermore, the rationalization of the route to market in the International region was completed and the number of entities around the globe was reduced from 33 to 13 as a consequence.

Exact Online continued to show strong growth and, going forward, has differentiated its offerings based on specific propositions for bookkeeping, small businesses and accountants. Last but not least, customer retention improvements were realized in some of the key regions including Benelux and Specialty Brands.

In line with the economic climate, we saw market conditions become somewhat more challenging in the second half of 2011, with customers becoming more cautious in relation to investment decisions and increasingly requesting pay-per-use-based models. We are confident that with our current strategic focus, organizational readiness and financial health, we will be able to deliver on our long-term ambition."

Outlook
To further stimulate revenue growth, in 2012 Exact will continue to step up investments in R&D and commercial route to market. For 2012 Exact expects, contingent on the economic situation not deteriorating compared to H2 2011, ongoing low single digit like-for-like revenue and EBITDA growth.

Revenue
Total revenue on a reported basis declined by 5.5% to € 215.6 million (FY 2010: 228.2 million). The decline was driven by the divestment of Siigo in 2010 (impact € 8.0 million), the divestment of hardware business in the Netherlands (impact € 1.2 million), the deconsolidation of the Middle East joint venture (impact € 1.7 million) and exchange rate fluctuations (impact € 3.1 million). On a like-for-like basis, however, a revenue increase of 0.6% to € 215.6 million was realized (FY 2010: € 214.2 million) with all regions but International contributing to the growth. In general, market conditions in the second half of 2011 were somewhat more challenging than in the first half of 2011.

Recurring revenue increased on a like-for-like basis from € 134.4 million in 2010 to € 137.7 million in 2011, equaling 63.8% of total revenue (FY 2010: 62.7%). The increase in recurring revenue was primarily driven by the growth of Exact Online in the Benelux, improved maintenance attrition rates in especially the Benelux and the Specialty Brands, and a step up of recurring outsourced payroll services (“BPO”) at both Lohn XL and Orisoft. The committed annual revenue of Exact Online as at December 31, 2011 amounted to € 11.6 million (December 31, 2010: € 7.9 million).

License revenue on a like-for-like basis decreased by 2.0% to € 42.7 million (like-for-like FY 2010: € 43.6 million). The decline in license revenue was mainly caused by a disappointing performance in the reseller channel in the Netherlands. Despite a solid performance of the direct sales force in the Netherlands, overall license revenue in the Benelux declined by 13.1%. In the International region license revenue was impacted by the restructuring and slightly declined by 3.4% as a result. In the Americas license revenue increased by 16.9%, primarily driven by new logo sales of JobBOSS and cross- and deep sell across all propositions. License revenue of the Specialty Brands increased by 3.7%.

Maintenance revenue on a like-for-like basis increased by 1.7% to € 136.5 million (FY 2010: € 134.2 million). The growth was mainly driven by lower maintenance attrition rates in the Benelux and the Specialty Brands combined with the strong growth of Exact Online in the Benelux. Maintenance revenue declined slightly in the International region (-2.5%) and remained stable in the Americas region (-0.2%), in this respect the situation in the second half of 2011 improved significantly in the Americas compared to the first half. Maintenance revenue of the Specialty Brands increased by 2.8%.

Service revenue on a like-for-like basis was flat and amounted to € 36.4 million (FY 2010: € 36.4 million). In the Benelux service revenues increased by 4.5%. Service revenue declined by 14.8% in the International region as a result of the restructuring and increased by 10.1% in the Americas region as a result of the increased license revenue. Service revenue of the Specialty Brands increased slightly by 2.2%, primarily driven by a step-up in BPO revenues at Lohn XL and Orisoft.

EBITDA and EBIT
Reported operating expenses (excluding depreciation and amortization) decreased by € 10.4 million or 5.9% to € 165.4 million (FY 2010: € 175.8 million). Similar to revenue, the decline was primarily driven by the effects of the divestment of Siigo in 2010, the divestment of hardware in the Netherlands, the deconsolidation of the Middle East joint venture and exchange rate fluctuations (total combined impact € 10.6 million). Furthermore, bad debt related expenses declined by € 2.0 million compared to 2010. On a like-for-like basis operating expenses increased by 0.1% to € 165.4 million (FY 2010: € 165.2 million).

The decrease in reported operating expenses could, however, not fully offset the decrease in revenue and as a result EBITDA declined by 4.1% to € 50.2 million (FY 2010: € 52.4 million). On a like-for-like basis the EBITDA, however, increased by 2.5% (FY 2010: € 49.0 million).

Contrary to previous years, the majority of the corporate costs, including research and development costs and the costs for corporate product lines, have been allocated to the regions. In total an amount of € 27.7 million was allocated to the regions. The only costs remaining as corporate costs are holding costs, which amounted to € 8.1 million in 2011 (FY 2010: € 7.9 million). The 2011 corporate costs included the one-time € 3.1 million restructuring costs related to International (FY 2010 one-time costs: € 2.7 million).

The costs of research and development increased to € 24.9 million (FY 2010: € 23.6 million), which represents 11.5% of revenue (FY 2010: 10.3%). The step-up was primarily driven by Exact Online, which demonstrated an increase to € 4.3 million (FY 2010: € 3.5 million).

Due to the impairment charge in relation to Longview of € 18.4 million, depreciation and amortization increased to € 26.4 million (FY 2010: € 10.6 million). During 2011 Longview showed a satisfactory performance, among others demonstrated by a 10.2% like-for-like license revenue growth. Furthermore, significant progress was made in relation to Longview’s future tax offering. An impairment was nevertheless considered to be necessary after careful evaluation of historic financials (including an evaluation of the anticipated synergies at the time of the Longview acquisition back in 2007) and a valuation analysis of the projected financials following the 2011 Longview strategic review.

As a result of the Longview impairment charge, the EBIT amounted to € 23.8 million (FY 2010: € 41.8 million).

Interest and tax
Total finance expenses amounted to € 0.7 million (FY 2010: € -1.5 million). The difference was fully driven by the inclusion of a € 2.1 million book profit in relation to the divestment of Siigo in 2010.

The average tax rate further decreased from 22.9% in 2010 to 19.8% (as adjusted for impairment of Longview) in 2011, mainly as a result of the gradual application of the Dutch innovation box program (three-year vesting period) as well as further improvements in the intercompany finance structure.

Cash flow
The net cash position decreased to € 53.8 million as at December 31, 2011 (December 31, 2010: € 58.1 million). The net cash position was positively impacted by repayments under the Siigo 2010 vendor loan, a sale and leaseback of the Dutch car fleet, the sale of the corporate airplane, and the sale of three apartments in Delft (total combined amount € 6.5 million). On the other hand, a one-time excess cash driven dividend payment of € 13.0 million was made. The continued focus on cash collection resulted in a further improvement of the average days sales outstanding to 46 (FY 2010: 48).

Net income and EPS
Net income attributable to shareholders amounted to € 14.8 million (FY 2010: € 33.1 million), the difference primarily being caused by the Longview impairment charge. Earnings per share (EPS) as a result amounted to € 0.65 (FY 2010: € 1.45). The impact of the Longview impairment on the 2011 EPS is € 0.81. Based on the dividend policy a final dividend of € 0.06 would be paid in relation to 2011. In view of the Longview impairment and taking the company’s strong cash position in consideration, the Board of Managing Directors will, however, propose a final dividend of € 0.87 per share at the General Meeting of Shareholders on April 26, 2012.

Search for new CEO
In a separate press release today, Exact announced the nomination of Mr. Erik van der Meijden as candidate CEO. Mr. Van der Meijden will start in his position on March 19, 2012 and will be proposed for appointment as CEO and member of the Board of Managing Directors to the General Meeting of Shareholders on April 26, 2012. Mr. Max Timmer, who has been CEO on interim basis since July 2011 and CFO and member of the Board of Managing Directors since April 2010, will step down as member of the Board of Managing Directors on April 26, 2012. More information and the press release can be found on www.exact.com/investors.

Operational results of the regions
Benelux
(in € thousands) Reported Like-for-like
FY 2011 FY 2010 Change FY 2010 Change
Total revenue 97,006 97,585 (0.6%) 96,422 0.6%
EBITDA 39,663 37,635 5.4% 37,382 6.1%
EBITDA margin 40.9% 38.6% 2.3 pts. 38.8% 2.1 pts.

Total revenue on a like-for-like basis increased by 0.6% from € 96.4 million to € 97.0 million.

License revenue on a like-for-like basis declined by 13.1% to € 15.0 million (FY 2010: € 17.3 million), as a result of a disappointing performance in the Dutch reseller channel. A special program has been initiated aimed at restoring the license revenue coming from the reseller channel in the Netherlands.

Maintenance revenue on a like-for-like basis increased by 3.5% to € 74.5 million (FY 2010: € 72.0 million). The growth in maintenance revenue was primarily driven by the growth of Exact Online as well as by lower attrition rates.

The service revenue on a like-for-like basis increased by 4.5% to € 7.5 million (FY 2010: € 7.2 million), primarily driven by the increased license revenue generated by Exact’s direct sales force.

The operating expenses on a like-for-like basis decreased further from € 59.0 million to € 57.3 million. As a consequence the like-for-like EBITDA increased by 6.1%, from € 37.4 million to € 39.7 million.

Exact Online continued its strong growth, with the number of commercial administrations as at December 31, 2011 at 71,700 and the committed annual revenue as at December 2011 amounting to € 11.6 million (December 31, 2010: € 7.9 million).

In line with the focus on the chosen market segments, the first Exact Online propositions for companies with up to 20 employees in the Wholesale & Distribution and Professional Services segments have been successfully launched. At year end, Exact Online Trade and Exact Online Time & Billing had approximately 300 customers, together representing some € 0.5 million committed annual revenue.

Contract wins: Bruil Groep B.V., NCOI, PinkRoccade, Vapro, Faber Vlaggen, Stichting Mee Plus, Stichting Mee Gelderse Poort.

International
(in € thousands) Reported Like-for-like
FY 2011 FY 2010 Change FY 2010 Change
Total revenue 42,790 47,165 (9.3%) 45,222 (5.4%)
EBITDA 1,651 1,211 36.3% 673 (145.3%)
EBITDA margin 3.9% 2.6% 1.3 pts. 1.5% 2.4 pts.

Total revenue on a like-for-like basis decreased by 5.4% from € 45.2 million to € 42.8 million.

The decline in revenue was expected as result of the 2010 strategic review and the related decision to restructure Exact’s International subsidiary network (the total number of countries in which International operates was reduced from 33 to 13 during the year under review). The headquarter-rich countries (the Netherlands, Germany, UK and France) showed a 2.4% license revenue increase, whereas the non-headquarter-rich countries showed a 14.4% license revenue decline.

On a like-for-like basis, license revenue declined by 3.4% to € 10.8 million (FY 2010: € 11.1 million). Maintenance revenue on a like-for-like basis decreased by 2.5% to € 23.6 million (FY 2010: € 24.2 million), whereas service revenue on a like-for-like basis decreased by 14.8% to € 8.4 million (FY 2010: € 9.9 million).

Operating expenses decreased with € 3.4 million on a like-for-like basis, primarily as a result of the restructuring and lower bad debt expenses. On a net basis the like-for-like EBITDA increased from € 0.7 million to € 1.7 million (excluding € 3.1 million restructuring charges that have been taken into account at corporate level).

Contract wins: Polipak, Medsorg, XSPlatforms, Coates Signco, Guangzhou Hoshino Gakki Group.

Americas
(in € thousands) Reported Like-for-like
FY 2011 FY 2010 Change FY 2010 Change
Total revenue 44,764 44,509 0.6% 42,403 5.6%
EBITDA 12,171 12,729 (4.4%) 12,072 0.8%
EBITDA margin 27.2% 28.6% (1.4 pts.) 28.5% (1.3 pts.)

Total revenue on a like-for-like basis increased by 5.6% from € 42.4 million to € 44.8 million.

License revenue on a like-for-like basis increased by 16.9% to € 10.5 million (FY 2010: € 9.0 million). Strong cross- and deep sell across the portfolio as well as new logo sales of JobBOSS in particular contributed to the license revenue increase.

Maintenance revenue on a like-for-like basis decreased by 0.2% to € 24.4 million (FY 2010: € 24.5 million). The declining trend in maintenance revenue experienced in the first half of 2011 was reversed in the second half of 2011. Service revenue on a like-for-like basis increased by 10.1% to € 9.9 million (FY 2010: € 9.0 million), driven by the increase in license revenues.

Operating expenses on a like-for-like basis increased by 7.5% to € 32.6 million (FY 2010: € 30.3 million) in line with the increase in revenue as a result of a step-up in commercial activities across all categories. As a result the EBITDA on a like-for-like basis increased only slightly with 0.8% to € 12.2 million (FY 2010: € 12.1 million).

Contract wins: Omni Aerospace, General Plastics & Composites LP, Multi Parts Supply USA Inc., SMTC Corporation, Neucel Specialty Cellulose Ltd., DeBrand Fine Chocolates.

Specialty Brands
(in € thousands) Reported Like-for-like
FY 2011 FY 2010 Change FY 2010 Change
Total revenue 31,045 30,969 0.2% 30,206 2.8%
EBITDA 4,895 7,255 (32.5%) 6,747 (27.4%)
EBITDA margin 15.8% 23.4% (7.6 pts.) 22.3% (6.5 pts.)

Because of the different nature of their businesses, the operating companies Longview, Lohn XL and Orisoft were separated from the other operating regions as of January 1, 2011.

Total revenue on a like-for-like basis increased by 2.8% to € 31.0 million (FY 2010: € 30.2 million). Operating expenses, excluding depreciation and amortization, increased by 11.5% from € 23.5 million to € 26.2 million, among others as a result of a step-up in both commercial investments as well as R&D investments at both Longview and Lohn XL. As a result the like-for-like EBITDA decreased with 27.4% from € 6.7 million to € 4.9 million.

Longview showed a satisfactory performance during 2011, among others demonstrated by a 10.2% like-for-like license revenue growth. In the second half of 2011 a strategic review of Longview was performed. The review confirmed the market potential of CPM and tax solutions and identified a specific opportunity for an out-of-the box tax solution aimed at companies between € 250 - € 2,000 million revenue. This solution is currently being developed in cooperation with PwC and is targeted to be launched in the second half of 2012.

After some years of declining revenues, Lohn XL showed 2.6% revenue growth in 2011. The increase was driven by a step-up in both sales and marketing expenditures and a successful entry into the BPO services market. Furthermore R&D investments were increased, and as a result the next generation Lohn XL proposition will be brought to market in 2012.

Contract wins Longview: Northbridge Financial Corporation, Manulife, First Federal, Translink.

Contract wins Lohn XL: Uponor GmbH, die Fernsehwerft GmbH, Dienes Werke für Maschinenteile GmbH & Co. KG.

Contract wins Orisoft: The Empire Hotel and Country Club, Berli Jucker Public Company Limited, Four Seasons Resort Chiang Mai.
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Exact. And it all comes together.
Exact is a leading global supplier of business software. Since the beginning in 1984 the focus has developed from supporting financial processes to developing a complete ERP offering for small and medium enterprises. Innovative solutions like Exact Globe, Exact Synergy and Exact Online support over 100,000 customers – local and international companies – with the daily management of their business.

Exact develops industry-specific on premise and SaaS solutions for manufacturing, wholesale & distribution, professional services, small business and accountancy. Exact is headquartered in Delft, the Netherlands and has been listed on the NYSE Euronext Amsterdam since June 1999. The company’s revenues in 2011 amounted to € 215.6 million.

For further information about Exact visit www.exact.com



Exact Holding N.V.
P.O. Box 5066
2600 GB Delft
The Netherlands

T: +31 (0)15 711 5000
F: +31 (0)15 711 5010

www.exact.com
unaudited consolidated financial information under ifrs 2012-02-14 650.79 KB

Press release - Financial results FY 2011 2012-02-14 71.87 KB
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