Cologne, August 3, 2012 - Sedo Holding (ISIN DE0005490155) adjusted its earnings forecast for the 2012 financial year on June 5, 2012, due to a confirming negative revenue and margin trend in the Domain Marketing segment at the beginning of the second quarter 2012. Contrary to expectations, this trend towards weaker business in domain parking worsened further. An acceleration of this development in the second quarter has prompted Sedo Holding to make a fundamentally new and more pessimistic assessment of the development of the parking business. The Company also identifies no future turnaround in this context, and intends to continue to operate the business profitably through adjusting structures, as well as through exploiting all remaining opportunities. In the Affiliate Marketing segment, positive effects were registered on the German market, while foreign markets lagged expectations. Among other factors, this is attributable to activities with major customers, which have started up later and more slowly than originally planned. As part of this, the segments' prospects, together with the goodwill of the cash-generating units, were reviewed based on results for the first half of 2012. This has resulted in EUR 57.1 million of goodwill impairment charges within the Sedo subgroup, and of EUR 3.2 million at affilinet France.
At Group level, the Company generated 5.9% growth in sales
revenues to EUR 66.6 million, compared with
EUR 62.9 million in the previous year. Of this amount,
EUR 16.5 million of sales revenue was reported in the
Domain Marketing segment, following EUR 20.1 million
in the prior year. Sales revenues in the Affiliate
Marketing segment were up by 17.3% in the first half of
2012, rising from EUR 42.7 million in the previous
year to EUR 50.1 million. The expansion of the
business with major customers, and the advancing
internationalization within Affiliate Marketing, were the
main growth-drivers in this context, although both segments
fell short of expectations. The Group generated
EUR 3.3 million of earnings before interest, tax,
depreciation, amortization and write-downs on domains
(EBITDA), compared with EUR 4.2 million in the
previous year, reflecting a 21.4% decline. As a result the
first half of the year reflects the consequences of changes
to the customer structure, a shift in the regional
distribution of sales revenues, and in the structures that
have been established within the Affiliate Marketing
segment, which are already oriented towards stronger
growth.
Due to the aforementioned developments in both segments,
EUR 57.1 million of goodwill impairment charges were
necessitated in the Sedo subgroup cash-generating unit, and
of EUR 3.2 million in the affilinet France
cash-generating unit. As a consequence, earnings before tax
(EBT) fell to EUR -57.6 million, compared with
EUR 3.7 million in the previous year. EBT before
one-offs amounted to EUR 2.7 million. After deducting
EUR 1.4 million of taxes on income (previous year:
EUR 1.8 million), the Group reports net income of
EUR -59.0 million (previous year: EUR 1.9
million). The resultant consolidated net income before
one-offs amounts to EUR 1.2 million. Earnings per
share were standing at EUR -1.94, compared with
EUR 0.06 in the prior year.
The Management Board now expects sales revenues to grow by
between 5% and 10% for the full 2012 year (previous year:
EUR 124.5 million), and positive EBT before one-offs,
which will be below the present objectives. It had
previously been assumed that sales revenue growth of around
10% would be achieved 2012, and that EBT before one-offs
would amount to between EUR 5.0 million and
EUR 6.0 million.
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