Solid increase in revenues continuing

Corporate News

• Managed Security Services growing at a swifter rate
• Earnings dragged down by takeover costs and impairment expense
• New record reached in total contract volumes

Ismaning, 10 November 2009: Prime Standard-listed Integralis AG, the leading international IT security solutions provider, achieved an increase in consolidated revenues to € 124.3 million in the first nine months of the year (previous year € 120.9 million).

Accordingly, revenues continued to climb solidly by 2.9 percent.

With revenues up by more than 26 percent, Managed Security Services achieved the greatest top-line growth. However, as Supported Services business also widened by 7 percent, the proportion of recurring revenues again rose and now stands at 43 percent, while consulting, integration and training also achieved an aboveaverage increase. Only technology sales sustained a decline in revenues, although this had been expected. This is because this segment is more directly exposed to cyclical effects, with the depreciation in pound sterling amplifying this trend.

Regionally, the revenue structure in the UK with a high proportion of technology sales and the weak pound caused revenues to contract to € 47.7 million (previous year € 51.6 million). On the other hand, the GAS (Germany, Austria and Switzerland) region reported an increase in revenues to € 31.8 million (previous
year € 30.8 million). Significant top-line advances were achieved in the United States, which reported revenues of € 25.3 million at the end of the third quarter (previous year € 19.6 million). The UA Emirates expanded even more dynamically by more than 66 percent, with revenues rising to € 5.6 million (previous year € 3.4 million).
At 33.7 percent, the gross margin widened minimally as of 30 September (previous year 33.5 percent) as the percentage growth in the cost of materials was less than in revenues.

However, personnel expenses rose considerably to € 29.5 million as of the end of September (previous year € 26.8 million). This was due, on the one hand, to an increase in the annual average headcount from 479 to 525 employees and, on the other hand, to the payments due to management in connection with the sales
process. The greatest percentage increase was in other operating expenses, which climbed to € 14.7 million in the first nine months (previous year € 9.4 million) and include a large proportion of exceptionals.
The sum total of the exceptional expenses of € 5.5 million caused EBITDA to decline substantially, resulting in a loss at this level of € 2.2 million as of the end of September (previous year EBITDA of € 4.3 million).

Adjusted for these items, Integralis would have reported EBITDA of € 3.3 million, down from € 4.3 million in the previous year. As a number of major projects have been postponed until the fourth quarter, adjusted EBITDA came close to matching the year-ago figure.

After depreciation/amortisation of € 1.7 million (previous year € 1.3 million), Integralis sustained a loss of € 3.9 million at the EBIT level (previous year EBIT of € 3.0 million). Further expense arose from the remeasurement of the unused tax losses carried as deferred tax assets. With the entry of NTT Com as Integralis’ strategic partner and the acquisition of more than 50 percent of its capital, all existing unused tax losses are forfeited under German law. The deferred tax assets of € 3.1 million previously recognised must now be reversed in accordance with IAS 12. Consequently, the Company sustained a net loss before tax of € 7.1 million (previous
year earnings before tax of € 2.8 million).

At € 19.1 million, the order backlog within the Integralis Group remained at a high level but fell short of the previous year (€ 20.8 million). On the other hand, total contract volumes again reached the highest level ever in the Company’s history. This indicator of future and recurring revenues substantially exceeded the year-ago
quarter, coming to € 98.7 million (previous year € 89.1million).

Judging by the experience of the past few years, the Integralis Group should achieve by far the reatest revenue and earnings growth in the fourth quarter. At this stage, the Management Board expects this to be the case. With 2009 proving to be a year of transition for Integralis, the Management Board nonetheless faces 2010 with cautious optimism. Integralis should be able to generate solid growth against the backdrop of the expected moderate economic recovery and also thanks to its strengthened competitive position.
“The new partnership with NTT Com is progressing very well. Considerable advances are being made in the core strategic integration and transformation processes designed to harness synergistic effects on all levels of the Group and to generate new business,” says CEO Georg Magg.
“With its continued flexibility as a mid-size company backed by a strong global player in NTT Com as its strategic partner, the Integralis Group should be able to additionally enhance its visibility and attractiveness in the market which it addresses.”

About Integralis
As a leading international provider of IT security solutions, Integralis offers its customers skilled consulting and bespoke solutions for protecting their critical business processes. Incorporating leading technologies, skills, experience and strategic partnerships, the Integralis product portfolio is targeted at planning, implementing and operating enterprise-wide information security architectures. With its structured methodical and technical consulting and implementing services, the Integralis consulting team supports customers’ IT security projects. Integralis offers its customers multilingual support in the ongoing operation of their security systems all around the world on a 7/24 basis. The range of services comprises a telephone hotline, remote monitoring and administration as well as on-site support. With a global network of branches, Integralis serves a large number of bluechip companies, government authorities and many national and international enterprises. Integralis AG is listed in Deutsche Börse AG’s Prime Standard. With 511 employees, it generated revenues of EUR 169 million in 2008. Further information on Integralis is available on the Internet at www.integralis.com.

Contact:
Integralis AG
Peter Banholzer
Tel.: +49 (0)89-94573-178
peter.banholzer@integralis.com