IDS Scheer turns record revenue, profit with ARIS, innovations, international business

According to preliminary figures, IDS Scheer closed out fiscal year 2003 with leaps in sales and results. Group revenue increased by 22% to more than 220 million EUR (previous fiscal year 2002: 181.4 million EUR). The internationally expanding software and consulting firm for business process management achieved an operating profit (EBIT) of approximately 28.7 million EUR (previous year: 23.7 million EUR) worldwide.

This represents an increase of over 20% compared to the previous year and an EBIT margin of approximately 13% (previous year: 13.1%). Net profit grew by 40% to nearly 19 million EUR (previous year: 13.5 million EUR). Based on its expanded global market position and innovative strength, IDS Scheer anticipates revenues of approximately 290 million EUR and an EBITA margin of at least 12% for fiscal year 2004.

Revenue in the International segment grew by nearly 70% to 112 million EUR (previous year: 66.2 million EUR) before segment consolidation - representing approximately half of group revenue (previous year: 36.5%). With the acquisition of the two consulting firms Groupe Expert in Western Europe and Plaut in North America and Eastern Europe in mid-2003, IDS Scheer strengthened its market positions in these regions.

The profitability of these two companies has developed better than expected, and integration costs were below projections. Integration ran smoothly thanks to intensive preparation measures and has already been completed. The new acquisitions contributed approximately 40 million EUR to segment revenue and achieved an EBIT of 1.2 million EUR. In this figure the acquisition-related expenditures in the amount of about 2 million EUR are already considered.

Compared to fiscal year 2002, the international segment more than tripled its operating profit, with an EBIT of 4.2 million EUR (previous year: 1.3 million EUR). This EBIT figure already contains all integration costs and regular amortisation.

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With its proven innovative strength and focus on customer benefits, the product area expanded its international leadership position and market share with the leading business process management software ARIS Process Platform. Compared to fiscal year 2002, the installed base of ARIS licences worldwide grew by 20% to 44 300 licences as of 31 December 2003 (previous year: 37 000). Revenue in the products and product-related services business area grew by almost 15% to over 56 million EUR (previous year: 48.8 million EUR). The segment earnings further increased by a strong rate, achieving an EBIT margin of approximately 20% (previous year: 15.5%).

The goal of business process improvement that ARIS has pursued for years is increasingly being recognised by companies of all sizes in all industries as a factor critical to the success of their enterprises. This trend toward process thinking is also being manifested in the new collaboration with long-time partner SAP. IDS Scheer anticipates great market potential in the coming years with the SAP agreement to jointly market ARIS in combination with SAP NetWeaver. Beginning in 2005, portions of ARIS Process Platform will be integrated into SAP NetWeaver, the open integration and application platform of SAP.

As part of a business process management (BPM) initiative begun in 2003, the unique selling points of ARIS will be increasingly used in all business areas in order to meet customer demands in all industries and all sizes of companies. Overall consulting activities will also focus on targeted BPM as a result of an IDS Scheer leadership directive. This focus on BPM and the area`s market-leading ARIS solution will sustain strong growth also on the international level.

In mid-2003, the US Army awarded a large contract for business process improvement to IDS Scheer after the Gartner market-research institute once again confirmed the leading role of ARIS, making it the de facto standard in the area of business process management.

Net profit grew by 40% to nearly 19 million EUR (previous year: 13.5 million EUR), representing earnings per share of approximately 0.60 EUR (previous year: 0.425 EUR) on the basis of 31.77 million shares. In order to have the shareholders participated in the company`s success of 2003, the executive and the supervisory boards will propose to the annual shareholders meeting to increase the dividend payments.

"The positive results produced by IDS Scheer during 2002/03 fiscal years, influenced the product growth not only in SA, but resulted in ARIS sales in other countries. CPI support IDS in the focus on customer benefits which is visible in the amount of new clients and ARIS products and components we delivered over the same period," says Dawie Jacobs from CPI.

Collaborative Process Integration (CPI) is the premium value-added reseller (VAR) for IDS Scheer AG in SA and the rest of Africa. CPI follows a very strong collaborative partnering approach in putting a total business process integration solution together. CPI is also a registered training partner at IDS Scheer in SA.