23 April 2009

StepStone ASA

 

Strong operating performance in Q1 despite challenging economic conditions -

16% EBITDA margin and €4.6m cash from operations in Q1 2009

 

Highlights

• Revenue of €26.9m

• EBITDA of €4.2m – 16% margin

• €4.6m 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 €3.8m (14%) between Q4 08 and Q1 09

 

Results for the quarter

 

StepStone has continued to progress by delivering another profitable quarter generating

€4.6m 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 €3.8m 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 €4.2m representing a 16% margin.

The company generated €4.6m cash from operations in Q1 2009, compared to €6.8m in Q1

2008.

 

During the quarter StepStone acquired the remaining 30% of its Chinese operation and

settled the remaining €0.6m liability in respect of the acquisition of Recruiter AS in 2008.

The company ended Q1 2009 with €33.5m of cash and only €13.8m of interest bearing debt.

In addition the company has access to over €20.0m 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.

 

Enquiries:

StepStone

Ian Clapp, Director of Investor Relations

Tel: + 44 7850 128094 / Ian.clapp@stepstone.com

 

Financial PR

Hudson Sandler

Andrew Hayes / Wendy Baker

Tel: + 44 20 7796 4133 / stepstone@hudsonsandler.com

 

About StepStone

StepStone is a leading international provider of human capital management (“HCM”) software and services. Its

technology and services helps organisations attract, retain and develop their talent. StepStone was founded in

Norway in 1996 and listed on the Oslo Børs (Ticker@ STP.NO) in 2000 and the London Stock Exchange (LSE:

STPS) in 2008. The company is one of just ten businesses shortlisted as European Business of the Year for the

2009 European Business Awards.

 

StepStone operates some of Europe’s largest talent networks which match employers with potential employees

and provides a complete suite of HCM software solutions. Through its extensive talent network in Europe,

StepStone has privileged insight into the needs and demands of today’s workforce, allowing the company to

develop highly innovative HCM solutions.

StepStone’s comprehensive portfolio of software and services enable organisations to implement efficient HCM

processes. These services include; attraction and hiring, post-hire talent management, performance management,

compensation management, skills and competency management, career and succession planning, training and

development management.

 

As at Q4 2008 more than 16,000 organisations, including many of the world’s leading businesses, use StepStone

software and services. It operates in 17 countries and employs more than 850 people. Its global customers

include Deutsche Telekom, Aviva, PricewaterhouseCoopers, AstraZeneca, ThyssenKrupp, Fiat and Telefonica.

 

For more information see: www.stepstone.com.