A strong start into 2004

5/25/2004, 7:00 AM (Source: GlobeNewswire)
1Q04: Solid growth on all reporting lines Net Sales : € 37.7 million (+19%) EBITA : € 3.6 million (+6%) Current profit: € 2.7 million (+31%) Net profit: € 1.7 million (+57%)

Brussels, 25 May 2004
ARINSO International (Euronext Brussels: ARIN) is proud to announce
strong financials over the first quarter of 2004. Consolidated net
sales exceed € 37.7 million, up 19% compared to 1Q03. At
stable exchange rates, sales growth, which is entirely internal,
would have been 21%. Although market conditions in IT Services remain
unstable, ARINSO witnessed increasing activity in its HR & Payroll
Outsourcing activities across most regions - contributing to solid
topline and bottomline growth.

ARINSO reports EBITA of € 3.6 million - a margin of 9.5%,
slightly lower than over the previous quarter & year. Net current
profit, after tax & before depreciation on consolidation goodwill,
was € 2.7 million (+31%), while net profit exceeded
€ 1.7 million - up 57%.

As of the first quarter of 2004 ARINSO publishes full results under
International Financial Reporting Standards (IFRS) - using 2003 IFRS
reference figures.
The IFRS valuation rules and the converted financials for 2003 with
full reconciliation can be downloaded as a separate section from the
ARINSO 2003 Annual Report:
http://www.arinso.com/investor/annual_index.cfm

First quarter investments in HR BPO Business Development were close
to EUR 1 million. Thanks to these investments ARINSO People Services
is now firmly established as an important player in HR Services. With
market activity in HR Outsourcing increasing on both sides of the
Atlantic, ARINSO is confident that continued investments will
generate additional outsourcing contracts. The global HRO deal
announced in January constitutes a strong business case towards US
headquarters wanting to leverage best practices worldwide. The recent
important wins in pan-European Payroll Services (Kone & Schindler),
as well as a $16 million full BPO contract in North and South America
prove that ARINSO is building a strong position in this high-growth
industry.
The HR WORKSPACETM, ARINSO's leading edge HR Service Delivery
platform has proven to be a success in rolling out the hub&spokes HR
Service Center infrastructure.

OUTLOOK for 2004:
ARINSO expects double digit sales growth for the year. Margins will
depend partly on market conditions and ARINSO's capacity to close new
HR & Payroll outsourcing deals.
Q1 2004 : CONSOLIDATED PROFIT & LOSS STATEMENT (unaudited)


International Financial Reporting
Standards Q1 Q1 Growth
(IFRS) - in EUR 2003 2004
Net sales 31.727.351 37.723.972 19%
Rebilled expenses 1.880.225 1.392.139
Other operating income 157.950 459.899
Purchases 3.020.469 3.417.463
Personnel costs 19.416.645 23.250.416
Services and other goods 7.110.756 8.576.717
Depreciation and amortisation expenses 1.436.882 1.445.650
Depreciation on fixed assets 465.900 464.873
Depreciation on goodwill 970.982 980.777
Other operating expenses 356.156 265.147
PROFIT FROM OPERATIONS 2.424.618 2.620.617
EBIT 3.395.600 3.601.394 6%
Financial revenue 559.097 376.837
Financial costs 468.656 304.377
PROFIT BEFORE TAX 2.515.059 2.693.077
Taxes 1.410.343 955.866
Income taxes 1.291.485 1.116.708
Changes in deferred taxes 118.858 -160.842
PROFIT AFTER TAX 1.104.716 1.737.211
Minority Interest
NET PROFIT for the period 1.104.716 1.737.211 57%
CURRENT PROFIT * for the period 2.075.698 2.717.988 31%
Number of shares 14.550.823 13.992.539
Number of shares after dilution 15.119.505 14.771.344
Earnings per share 0,08 0,13
Diluted earnings per share 0,07 0,12
Current earnings per share 0,14 0,19
Diluted current earnings per share 0,14 0,18


(*) Net Current profit = after tax before depreciation on
consolidation goodwill
Q1 2004 : CONSOLIDATED BALANCE SHEET (unaudited)


International Financial Reporting
Standards
(IFRS) - in EUR
ASSETS December 31 2003 March 31 2004
Non-current Assets 13,515,905 12,324,066
Property, plant and equipment 2,272,936 2,372,073
Goodwill 6,902,710 5,921,931
Intangible assets 4,115 5,565
Long term receivables 3,114,131 2,514,066
Deferred tax Assets 1,222,013 1,510,431
Current Assets 87,558,351 91,827,202
Tax assets 1,119,567 1,108,029
Trade and other receivables 46,718,419 49,460,297
Cash and Cash equivalents 39,720,365 41,258,876
Total Assets 101,074,256 104,151,268
LIABILITIES December 31 2003 March 31 2004
Equity 70,527,989 71,839,674
Capital 60,654,923 60,654,923
Reserves 12,075,786 17,634,222
Result of the year 5,558,436 1,737,211
Translation differences -274,325 -72,317
Treasury shares -7,486,832 -8,114,365
Third parties 2,500 2,500
Non-current liabilities 107,412 229,186
Interest bearing liabilities 8,490 2,653
Provisions 0 0
Deferred Tax liabilities 98,922 226,533
Current Liabilities 30,436,355 32,079,908
Interest bearing liabilities 0 621,621
Tax liabilities 1,338,330 1,873,692
Trade and other liabilities 28,362,927 29,084,496
Provisions 735,098 500,099
Total Liabilities 101,074,256 104,151,268



Q1 2004 : EQUITY RECONCILIATION (unaudited)


December 31
(IFRS) - in EUR 2003 + - March 31 2004
Equity 70,527,989 71,839,674
Capital 60,654,923 60,654,923
Reserves 12,075,786 5,558,436 17,634,222
Result of the year 5,558,436 1,737,211 5,558,436 1,737,211
Translation differences -274,325 202,008 -72,317
Treasury shares -7,486,832 -627,533 -8,114,365


BALANCE SHEET (IFRS)
The ARINSO consolidated balance sheet per 31 March 2004 remains
extremely solid, with a solvency ratio (equity vs. total assets) of
69%, no financial debts and a cash position in excess of €
41 million, allowing the group to fulfill its strategic ambitions.

STAFFING

Per 31 March 2004, ARINSO International employed 1,471 staff in 22
countries. Compared to 1Q03, this is an increase of 20%.

RELATED PARTY TRANSACTIONS
Related party transactions at the end of the first quarter consisted
of the directors' and the worldwide executive management's
remuneration of € 0.6 million.

Q1 2004: CASH FLOW STATEMENT (unaudited)


in EUR Q1 2004 Q1 2003
OPERATING ACTIVITIES
Profit before tax 2.693.077 2.515.059
Finance income and expense -72.460 -90.441
Depreciation and write-offs 464.873 465.900
Depreciation on consolidation goodwill 980.777 970.982
Profit and loss on sale of fixed assets -773 981
Operating cash flow 4.065.494 3.862.481
Taxes Paid -569.818 -3.817.731
Changes in trade and other assets -2.141.813 -5.309.559
Changes in trade and other liabilities 721.569 1.585.680
Change of provision -234.999 108.231
Currency translation differences -37.587 8.332
NET CASH FLOW FROM OPERATING ACTIVITIES 1.802.846 -3.562.566
INVESTING ACTIVITIES
Investments in Tangible and Intangible Fixed
Assets
Investments in tangible and intangible fixed
assets (-) -560.348 -567.800
Income from the sale of fixed assets (+) 13.812 8.664
Net cash flow from investments in FA -546.536 -559.136
Investments in Financial Fixed Assets
Net cash flow from investments in FFA 240.075 258.947
NET CASH FLOW FROM INVESTING ACTIVITIES -306.461 -300.189
FINANCING ACTIVITIES
Long and short term financing 615.784 -709
Acquisition of own shares -627.533 0
Interest paid on debts (-) -34.603 -40.665
Other financial income and charges -133.012 -127.840
NET CASH FLOW FROM FINANCING ACTIVITIES -179.364 -169.214
TOTAL NET CASH FLOWS 1.317.021 -4.031.969
EFFECTS OF EXCHANGE RATE CHANGES 221.490 -168.774
ON CASH AND CASH EQUIVALENTS
NET INCREASE OF INVESTMENTS AND CASH
Beginning of the period
Total cash and cash equivalents at beginning of
the period 39.720.365 49.350.345
End of the period
Total cash and cash equivalents at end of the
period 41.258.876 45.149.602
NET INCREASE OF INVESTMENTS AND CASH 1.538.511 -4.200.743



Q1 2004: PRIMARY SEGMENT REPORTING (unaudited)


in EUR NET SALES EBIT EBIT %
Q1
Regions Q1 2003 Q1 2004 growth Q1 2003 Q1 2004 growth 2003 Q1 2004
Western 10,322,010 12,413,178 1,349,408 1,302,567 13.07% 10.49%
Europe 20% -3%
Central 8,804,535 11,637,439 1,311,187 2,220,822 14.89% 19.08%
Europe 32% 69%
Northern 3,295,979 5,079,606 448,961 412,380 13.62% 8.12%
Europe 54% -8%
Southern 3,907,076 4,114,718 423,287 473,804 10.83% 11.51%
Europe &
LatAm 5% 12%
North 6,438,276 5,454,990 509,216 43,050 7.91% 0.79%
America -15% -92%
Asia Pacific 827,810 524,952 -37% 144,787 -193,435 -234% 17.49% -36.85%
Not 110,782 87,270 -791,248 -657,794
allocated -21% -17%
Total 33,706,467 39,312,153 17% 3,395,598 3,601,394 6%
Intersegment 1,979,116 1,588,181
eliminations
ARINSO GROUP 31,727,351 37,723,972 19% 3,395,598 3,601,394 6% 10.70% 9.55%


Primary segment information is presented in accordance with the
Group's geographical segments based on the location of the servicing
company.

Update on the ARINSO share buy-back program launched on 30 April
2003:
Per 31 March 2004 ARINSO owned 691,193 treasury shares. As per 24 May
2004 this number has decreased to 588,408 shares, representing 3.9%
of the total outstanding shares or 3.8% on a fully diluted basis.

On May 18, 2004, the Board of Directors has decided to convene an
Extraordinary Shareholders' meeting on June 21, 2004, in order to
decide on the proposal to cancel 475,750 treasury shares held in
portfolio, reducing the total number of outstanding shares to
14,550,823 - being the number of shares before exercise of warrants
in 2003 and 2004.

The board confirms its intention to continue the share buy-back
program over the coming months.
The ARINSO shareholders have authorized the board to buy up to a
maximum of 10% of the outstanding shares.

About ARINSO International

ARINSO International (Euronext Brussels: ARIN) is a global HR
Services partner offering comprehensive 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 1,500 staff
in 22 countries: Belgium, Luxembourg, the Netherlands, France, Spain,
Portugal, Italy, United Kingdom, Germany, Sweden, Switzerland,
Finland, Poland, US, Canada, Argentina, Brazil, Mexico, Singapore,
Malaysia, Thailand & Morocco.

www.arinso.com

Information for Shareholders:

25 May 2004 1Q2004
Results (before
trading)
31 Aug 2004 1H2004
Results (before
trading)
16 Nov 2004 3Q2004
Results (before
trading)
28 Feb 2005 Full 2004
Results (before trading)


The 2003 Annual Report can be downloaded from www.arinso.com.
Should you wish to be on our distribution list for press releases,
please inform invest@arinso.com

Financial Service
Fortis Bank
Montagne du Parc 3
1000 Bruxelles
View document
More information
ARINSO International
Luc Osselaer
Vice President Investor Relations
Tel. +32 2 558 06 70
Fax +32 2 558 06 80
Luc.osselaer@arinso.com

Safe Harbor
This report contains statements which address key issues as ARINSO's
growth strategy, future financial results, market positions,
pipeline, and solutions development. Such statements, including but
not limited to the "Outlook", should be carefully considered, and it
should be understood that many factors could cause forecasted and
actual results to differ from these statements. These factors
include, but are not limited to price fluctuations, currency
fluctuations, developments in personnel costs, legal issues, and
legislative, fiscal, and other regulatory measures. Stated
competitive positions are based on management estimates supported by
information provided by specialized external agencies.
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