StepStone sees mixed performance in Q4

StepStone ASA (“StepStone” or the “Company”), a leading international provider of software and services for the Human Capital Management (“HCM”) sector, today announced that its Online and Solutions businesses are experiencing differing trading conditions for their products and services

StepStone ASA (“StepStone” or the “Company”), a leading international provider of software and services for the Human Capital Management (“HCM”) sector, today announced that its Online and Solutions businesses are experiencing differing trading conditions for their products and services:

• Strong momentum in Solutions, with 57 new contracts signed in the quarter to date
• Online experiencing reduced customer confidence in the macro-environment:  action taken on costs
• Encouraging growth in number of existing customers expanding their commitments during the quarter across and continued progress in Asia-Pacific region
• Strong balance sheet with published €18.8m of net cash as at 30 September 2008 and €40 million credit facility
• Focus on performance and maintaining cashflow generation

Colin Tenwick, CEO of StepStone, commented:

“As communicated previously, we expect to report fourth quarter revenues that exceed the same period last year but the economic outlook in our major European markets has deteriorated significantly during the last six weeks.

Our Solutions business has experienced continued demand, especially for performance management and succession planning products, with 57 new customers contracted so far in the quarter. Solutions diverse product portfolio, substantial recurring revenue stream and solid pipeline of opportunities positions it for continued progress in 2009.

However, confidence amongst Online customers continues to deteriorate and the year-on-year trend in quarterly Online sales has turned downwards. Declining demand for Online listings and services will lead to declining Online revenue.

Action has been taken to resize the cost base of our Online business and reduce the impact of declining Online sales on future Online margins. These actions will reduce the prospective Online cost base by €2m per quarter and result in a charge of approximately €3m, the majority of which will impact the fourth quarter of 2008.”

Operational highlights for the fourth quarter includes:

• 57 new customers have so far contracted for StepStone HCM software and services and StepStone has continued to achieve cross selling and an encouraging 98 existing customers have expanded their commitments.
• New and renewing customers in Europe include; Robert Walters Group (Belgium), Getronics, Prink Roccade (Benelux) AP Møller Mærsk and Legoland ApS (Denmark), Sony and Société Genéralé (France), EADS and Werkstatt Frankfurt (Germany), Wolters Kluwer (Italy), Philips (Netherlands), Yara and Praxair (Norway), TetraPak and Cision (Sweden), Sika (Switzerland), De Beers and Mayer Brown (UK).
• Continued demand from Asia Pacific with new customers who include BP Maritimes (Singapore) and Masterskill College (Malaysia).

Tenwick concluded:

“Whilst the extent and depth of the Global recession is unclear, StepStone has acted quickly to reduce its on going cost base, maintain profitability in Online and position the Company for continued generation of operating cash flow.

The Company remains well financed with over €18.8m net cash as at 30 September 2008 and access to €40m of bank facilities. StepStone’s focus remains on maintaining profitability and positioning the Company to take advantage of opportunities that may arise in the current market circumstances.”

StepStone will announce its results for Q4 2008 on 26th February 2009.