GFT posts revenue growth in second quarter

• Services division achieves year-on-year revenue growth of 4 percent in first six months of 2012
• Resourcing division’s core business grows by 5 percent
• Total revenue of EUR 116.38 million in first half-year in line with expectations
• Pre-tax earnings of EUR 3.78 million reflect investments in innovation topics
• Positive development over course of year: Services division records quarter-on-quarter earnings growth of 35 percent in second quarter as well as increase in new orders
• Full-year 2012 guidance confirmed: Executive Board expects total revenue of EUR 250 million and pre-tax earnings of EUR 12 million

Stuttgart, 9 August 2012 – GFT Technologies AG (GFT) can look back on a dynamic development in the second quarter and closed its first half-year 2012 according to plan. At EUR 116.38 million, revenue was in line with expectations and below the prior-year figure of EUR 141.80 million due to the company’s strategic withdrawal from low-margin business in its Resourcing segment. EBT amounted to EUR 3.78 million (previous year: EUR 5.52 million) and included investments in the innovation initiative CODE_n12 amounting to EUR 1.32 million. Business made encouraging progress in the second quarter of 2012: in its consulting business, GFT raised earnings over the first quarter by 35 percent; there was also a strong increase in new orders. “We can feel a surge in demand from the finance sector. Our investments in future markets are already showing signs of success and laying the foundation for stronger growth in the second half of the year,” concludes GFT’s CEO Ulrich Dietz. “We see rising demand for the flexible staffing of technology projects with highly skilled personnel as well as for mobile financial services. We will continue to focus on such future-oriented topics and, in view of the second half-year ahead, are optimistic that we can reach the targets we set ourselves for the year as a whole.” GFT’s Executive Board still expects the company to reach revenue of EUR 250 million and EBT of EUR 12 million.

Revenue: segment revenue of Services division up 4 percent year on year; Resourcing segment down 34 percent on previous year

In the first six months of the year, GFT generated total revenue of EUR 116.38 million and thus 18 percent less than in the same period last year (EUR 141.80 million). Compared to the first quarter of 2012 (EUR 57.65 million), however, revenue rose to EUR 58.73 million in the second quarter.

The year-on-year decrease resulted from a fall in revenue in the Resourcing division. Due to the scheduled termination of cooperation with a customer from the financial sector in the low-margin Third Party Management business, segment revenue amounted to EUR 55.53 million (previous year: EUR 83.54 million). The decline in Third Party Management revenue to EUR 10.94 million (previous year: EUR 41.14 million) was offset in part by the positive development of the segment’s higher-margin Resource Management business. The latter raised revenue by 5 percent to EUR 44.60 million (previous year: EUR 42.40 million), due mainly to growing business with clients in the telecommunication sector and strong global demand for IT experts and engineers.

The Services division raised segment revenue by 4 percent year on year and contributed EUR 60.85 million to total revenue (previous year: EUR 58.26 million). This was due to the acquisitions in Switzerland and the USA made in 2011.

A comparison of the GFT Group’s national markets reveals that France achieved particularly strong organic growth in the period under review. Thanks to the dynamic development of its Resource Management business, revenue was raised here by 29 percent. The revenue reduction in Third Party Management had a particularly strong impact on business in Germany, where revenue fell by 44 percent. Switzerland and the USA displayed year-on-year growth of 28 percent and 72 percent, respectively. The aforementioned acquisitions had positive effects in both cases. In the USA, revenue growth was also fuelled by rising demand in the field of corporate and investment banking. This trend was also increasingly noticeable in the UK, which performed better than initially expected with a slight decline of 6 percent. Despite the ongoing adverse conditions for the finance sector in Spain, the high revenue level in this market was expanded further by 6 percent.

EBT: 32 percent down on previous year due to investments

In the first six months of 2012, pre-tax earnings amounted to EUR 3.78 million (previous year: EUR 5.52 million). This figure includes group-wide investments in innovation topics. Expenses of EUR 1.32 million incurred for the international innovation initiative CODE_n12, for example, had a dampening effect on EBT in the first quarter. In a quarterly comparison, EBT rose by 98 percent from EUR 1.27 million in the first to EUR 2.51 million in the second quarter.

Earnings in the Services division made particularly strong progress over the course of 2012: following EUR 1.81 million in the first quarter, earnings reached EUR 2.44 million in the second – an increase of 35 percent. All in all, the segment posted earnings of EUR 4.25 million in the reporting period and was thus just slightly below the prior-year figure of EUR 4.56 million. In the first six months of 2012, the Resourcing division contributed EUR 1.15 million to total earnings (previous year: EUR 1.65 million) and fell short of expectations due to weaker results in the UK and Switzerland.

Other key figures: balance sheet structure remains solid; rise in headcount

As of 30 June 2012, net income for the first half-year amounted to EUR 2.36 million and was thus below the prior-year figure of EUR 3.63 million. Cash, cash equivalents and securities rose by 68 percent to EUR 30.40 million (previous year: EUR 18.09 million). Earnings per share came to EUR 0.09 (previous year: EUR 0.14). As of the reporting date, the GFT Group had 1,371 employees – 54 persons more than on the same date last year (1,317). The main reasons for this increase were acquisitions in the USA and an expansion of activities in Spain. The number of people employed in Germany as of 30 June 2012 amounted to 271 (previous year: 280).

Outlook: full-year forecast for revenue and earnings confirmed; growth expected to gain pace in second half of year

“We expect growth to gain momentum in the second half of our financial year 2012,” explains GFT’s CEO Ulrich Dietz. Above all, the GFT Group anticipates a significant boost from its clients in corporate and investment banking, which will have a positive impact on business in the Services segment in the period up to year-end. In addition to outsourcing services, financial institutes are expected to invest more heavily in IT solutions which help meet compliance requirements as well as in mobile banking services. In its Resourcing division, GFT sees the greatest growth potential in the rising global demand for engineers and IT specialists for international technology projects. “The shortage of skilled personnel can become a hindrance to further growth in many industries. With our global network of experts, we can quickly meet the demand of numerous companies for flexible, highly qualified specialists,” says Ulrich Dietz. For the current financial year, the Executive Board of GFT has confirmed its guidance and continues to expect revenue of EUR 250 million and EBT of EUR 12 million.

Detailed financial figures are available in the Investor Relations section of the GFT website at www.gft.com/ir.

Key figures in accordance with IFRS*:

*Deviations possible due to rounding differences

Kate Warwick, kate.warwick@prsavvy.co.uk, 078 1069 7282

Jan Howells, jan.howells@prsavvy.co.uk, 0771 388 3773

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