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Home > Financial Press Releases > 3Q05: Solid Growth in Net Sales & Profitability
3Q05: Solid Growth in Net Sales & Profitability
Atlanta, GA (PRWEB) November 16, 2005 -- ARINSO International (Euronext Brussels: ARIN), a global HR Services partner offering innovative HR business solutions, announced 3Q05 net sales of €44.3 million, an increase of 18% compared to the same quarter last year. Current profit over the quarter grew 30%, resulting in diluted current net profit per share of €0.20 per share, up 33% compared to 3Q04.
The net sales increase is realized entirely through organic growth. 3Q05 is the 9th consecutive double digit growth quarter in Net Sales for ARINSO. All three business lines show important increases in net sales: HR Strategy, HR Integration and HR Outsourcing, accounting for respectively 5%, 63% and 32% of group sales. Quarter on quarter, ARINSO is moving closer to its strategic objective, which is to balance long-term recurring services with consultancy revenues.
ARINSO reports quarterly earnings before amortization, interest & taxes (EBITA) of €3.5 million (up 18%) and resulting in a margin of 8.0% on net sales. This margin is in line with ARINSO’s guidance for 2005.
Net profit for the period (€3.0 million) equals current net profit as ARINSO, in accordance with IFRS, no longer depreciates the positive consolidation differences as from January 2005. In line with IAS 36, a yearly impairment test will be performed on the consolidation goodwill. The net book value of the remaining goodwill is €3.0 million.
Year-to-date results demonstrate strong growth in all reporting lines: solid net sales growth of 16% compared to 9M04, increase in EBITA of 17% and current profit growth of 26%. Net sales over the first 9 months of 2005 amounted to €129.1 million, EBITA €10.4 million (8.1% margin) with current net profit of €8.7 million.
In all regions, ARINSO witnesses strong demand both in HR Integration and HR outsourcing activities. ARINSO offshore activities in Asia Pacific confirmed in 3Q05 solid growth and sustainable margins and ARINSO’s off-shore offering becomes a key commercial differentiator as many clients seek to lower cost of HR services, using a seamless blended model between local and off-shore service provision.
ARINSO recently announced that it has completed its SAS 70 Type II audit for the HR outsourcing and payroll services under the responsibility of its Belgian Service Center. Developed by the American Institute of Certified Public Accountants (AICPA), SAS 70 is the standard for design and operating effectiveness of a service organization’s internal controls. This internal certification will help clients to save time and money on audits; the SAS 70 audit process helped ARINSO rendering high quality services more efficiently to its clients. By the end of 2006, ARINSO expects to achieve a worldwide SAS 70 certification for all Service Centers.
ARINSO’s consolidated balance sheet per 30 September 2005 remains extremely solid, with a solvency ratio (equity vs. total assets) of 67% and a cash position exceeding €61 million, allowing the group to independently invest in its strategic HRO ambitions.
Since the start of the year, ARINSO has generated €8.8 million cash flow from operating activities. After the net cash flow of €2.6 million from investing & financing activities, ARINSO generates sufficient cash to realize its business plan ambitions for the foreseeable future. In view of the long-term outsourcing contracts, ARINSO continues to invest considerably in capital expenditure and pre-financing leveraging. The balance sheet at 30 September 2005 contains long and short-term receivables related to pre-financed contracts amounting to almost €6 million.
STAFFING
Per 30 September 2005, ARINSO International employed 1,981 staff in 23 countries. Compared to 2004, this is an increase of 18% in headcount.
RELATED PARTY TRANSACTIONS
Related party transactions over the reporting period consisted of the directors’ and the worldwide executive management’s remuneration of €1.9 million.
Update on the ARINSO share buy-back program:
Per 30 September 2005 ARINSO owned 35,145 treasury shares. ARINSO aims to continue the execution of its share buy back program in the months to come.
ARINSO International (Euronext Brussels: ARIN) is a global HR Services partner offering innovative HR business solutions to the world’s largest employers. ARINSO is dedicated to HR Excellence through Strategic Consultancy, Outsourcing Services and Technology Integration Services. ARINSO was founded in 1994 and currently employs close to 2,000 staff in 23 countries: Belgium, Luxembourg, the Netherlands, France, Spain, Portugal, Italy, United Kingdom, Germany, Austria, Sweden, Switzerland, Finland, Poland, US, Canada, Argentina, Brazil, Mexico, Singapore, Malaysia, Thailand & Morocco.
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