03.08.12|Sedo Holding AG publishes results for the first half of 2012: Adjustment of prospects 2012 and goodwill amortization of EUR 60.3 million

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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