A tale of two continents

Some of Europe's business application vendors have delivered strong results in an otherwise dour technology market. Executives attributed their double-digit sales growth to a strong domestic following and their mid-market appeal.

Dutch business applications vendor Unit 4 Agresso, for example, claimed top-line growth across all its divisions, posting a 17% rise in sales in the second half of its financial year. But there was a downside. A rapid deterioration in trading and pricing pressures prompted a profits warning in December 2001. Net income in the second half slipped 11% to €6.3 million. For the year to December 2001, profits also tumbled, by 17% to €2.4 million. This was due to significant increases in personnel and operating costs and taxation offsetting the 23% leap in sales to €208.2 million.

It was a similar story at one of its compatriots, Exact, an enterprise resource planning (ERP) vendor that generates 48% of its revenues in the Netherlands. Despite a 23% leap in sales to €104.3 million, net income slipped to €18.7 million from €19.2 million for the second half of 2001 as operating costs rose rapidly. Results for the year to December 2001 were stronger, reflecting a more buoyant first half and the acquisition of US rival Macola in February 2001. Sales and net profits both jumped 25% to €206.3 million and €49.3 million respectively. The 27% hike in revenues from licence sales to €74.5 million was due to the introduction of a new accounting ERP product line and a web-based alternative e-Synergy, as well as the contribution of Macola.

Navision, a much smaller business applications vendor, reported particularly strong top- and bottom-line growth in the first half of its financial year to December 2001. Net profits more than doubled to €10.3 million as sales rose 19% to €71.3 million. In the second quarter alone, sales climbed 23% to €43.2 million. Navision, which generates 23% of its revenues in its home market of Denmark, said that businesses' conversion to the euro contributed to the strong performance of its European divisions. Sales in the US were up just 2% by comparison.

In the US, dismal results from the sector's giants dashed hopes that the IT spending downturn had bottomed out.

Compaq Computer blamed economic uncertainty and competitive pricing pressures for a fall in sales across all its divisions. The steepest fall in sales occurred at its computing division, where revenues fell 19% to $2.4 billion (€2.7bn). Overall, sales fell 16% to $7.7 billion (€8.6bn) in the first quarter to March 2002. However, thanks to a cost-cutting initiative, the PC group pulled itself $44 million (€49.3m) into the black from losses of $131 million (€146.9m) in the same period for 2001.

At Accenture, second quarter net profits plunged a whopping 87% to $10.6 million (€11.9m), as the consultancy took a $212 million (€237.7m) charge on losses from the sale of its venture capital and investment businesses. Sales nudged ahead by less than 1% to $3.4 billion (€3.8bn), as corporate spending on IT services failed to pick up. This proved particularly embarrassing for Accenture, which had earlier said it was seeing some signs of improvement in the market. However, the company pointed to the 12% sales growth in Europe, Middle East and Africa as evidence for its earlier claims.

Fresh results from Oracle signalled continued difficulties for the database and applications giant. A steep fall in new licence revenues across its product range pushed net income down 13% to $508 million (€569.5m) for the third quarter to the end of February 2002. Sales fell 17% to $2.2 billion (€2.5bn).

Oracle's applications business was hardest hit, with licence sales falling 25% to $276.2 million (€309.6m). Overall, applications revenues fell by 15% to $612.3 million (€686.4m). Its applications business has been plagued by problems surrounding the latest version, Oracle 11i, which has been criticised for suffering from too many bugs. Unless this decline is arrested, Oracle will soon face a challenge from rival PeopleSoft for its number-two position in the enterprise applications market.


European results reported in March/April 2002 (All figures in € millions)
Company   Activity   Country   Period   Period End   Revenue   Change   Net inc   Prev n.i  
Arc International Plc Processor designer UK 3Q01 31-Dec 3.7 -35% -8 -7.6
ARM Holdings Plc Chip designer UK 1Q02 31-Mar 67.8 30% 17.2 12.4
Beta Systems Software AG Systems mgmt s/w Germany 2001 31-Dec 45 9% -10.5 -1.6
Bookham Technology Plc Optical semiconductors UK 4Q01 31-Dec 3.4 -82% -69.8 -13.7
Brain International AG Mid-range ERP s/w Germany 4Q01 31-Dec 27.9 -9% n/a n/a
Business Objects SA Business intelligence s/w France 1Q02 31-Mar 120.4 9% 12.3 11.8
Day Interactive Holding AG Content management s/w Switz 4Q01 31-Dec 3.1 -34% -15.2 -12.5
Dicom Group Plc Document capture s/w UK 1H02 31-Dec 121.8 12% 4.3 3.8
Esker SA Web integration s/w France 4Q01 31-Dec 8.3 5% n/a n/a
Exact Software NV Business applns s/w Neth 2H01 31-Dec 104.3 23% 18.7 19.2
Fantastic Corp Data broadcasting s/w Switz 4Q01 31-Dec 1.7 -29% -13 -15.1
GL Trade Connectivity s/w France 4Q01 31-Dec 30.7 44% n/a n/a
Graphisoft NV Design software Hungary 2001 31-Dec 29.4 -8% -4.1 4.3
Gresham Computing Plc Electronic commerce UK 2001 31-Dec 39.9 6% -2.3 -6.4
Groupe Bull SA Systems &IT services France 4Q01 31-Dec 757.5 -21% n/a n/a
Iona Technologies Plc Object middleware s/w Ireland 1Q02 31-Mar 44.3 -7% -7.4 -0.5
Izodia Plc Ecommerce s/w UK 2001 31-Dec 6.2 42% -118.4 -58
Knowledge Mgmnt S/w Plc Knowledge mgmnt s/w UK 1H02 31-Dec 6.6 39% -10 -9.3
Mercury Interactive Corp Programme testing s/w Israel 1Q02 31-Mar 101.4 0% 17 18.1
Meta4 Group Human resources s/w Spain 4Q01 31-Dec 13.6 -8% n/a n/a
Navision Business applns s/w Denmark 2Q02 31-Dec 43.2 23% n/a n/a
Netlife AG Internet financial s/w Germany 4Q01 31-Dec 3.3 -24% -0.2 -4.3
Poet Holdings Inc Catalogue management s/w Germany 4Q01 31-Dec 2.7 -31% -2.6 -3.1
Scala Business Solutions NV Business applns s/w Neth 4Q01 31-Dec 22.6 15% 2.2 -5.5
SCM Microsystems Inc Smartcard/security systems US 4Q01 31-Dec 52.4 -11% -47.8 -6.9
Sherwood International Plc Insurance industry s/w UK 2H01 31-Dec 47.8 -2% -15.2 5.7
T-Online International Internet service provider Germany 4Q01 31-Dec 330.6 30% -132.4 -157
TietoEnator Oyj IT services Finland 4Q01 31-Dec 314.9 1% 124.6 14.7
Unit 4 Agresso NV Business applications s/w Norway 2H01 31-Dec 105.6 17% 6.3 7.1
WM-data AB IT services Sweden 4Q01 31-Dec 256.4 -20% 18.2 11.6
All currencies converted to euros at current exchange rates.


Global results reported in March/April 2002 (All figures in $US millions)
Company   Activity   Country   Period   Period End   Revenue   Change   Net inc   Prev n.i  
3Com Corp Networking systems US 3Q02 01-Mar 356 -43% -236.1 -246
Accenture Ltd Consultancy and IT services US 2Q02 28-Feb 3,410.10 1% 10.6 n/a
Adobe Systems Inc Document s/w US 1Q02 01-Mar 267.9 -19% 49.8 69.8
Advanced Micro Devices Inc Microprocessors US 1Q02 31-Mar 902.1 -24% -9.2 124.8
American Software Inc Supply chain mgmnt s/w US 3Q02 31-Jan 19.1 -13% 1.1 -3.2
Andrew Corp Networking systems US 2Q02 31-Mar 199.7 -16% 3.3 8.2
Apple Computer Inc PCs US 2Q02 30-Mar 1,495.00 4% 40 43
AutoDesk Inc Comp-automated design s/w US 4Q01 31-Jan 254 5% 21.8 28.4
Cadence Design Systems Design automation s/w US 1Q02 30-Mar 344.7 0% 21.3 3.8
CMGI Inc Internet company operator US 2Q02 31-Jan 210.8 -37% 15.2 -2,537.70
Cognos Inc Business intelligence s/w Canada 4Q02 28-Feb 142.8 -1% 26.9 22.1
Commerce One Inc E-marketplace s/w US 1Q02 31-Mar 31.8 -81% -220.6 -228.5
Compaq Computer Corp PCs, systems &IT services US 1Q02 31-Mar 7,728.00 -16% 44 -131
Corel Corp Graphics &wp s/w Canada 1Q02 28-Feb 31.2 -4% -3.1 0.5
Crystal Decisions Data analysis &reporting s/w Canada 3Q02 29-Mar 56.2 28% n/a n/a
DataMirror Corp Data management s/w Canada 4Q02 31-Jan 14.3 -12% -1.4 -0.7
Descartes Systems Group Supply chain execution s/w US 4Q02 31-Jan 18.1 -14% -11.2 -0.8
Documentum Inc Content mgmt s/w US 1Q02 31-Mar 50.6 12% -1.7 -14.7
E.piphany Inc Customer interaction s/w US 1Q02 31-Mar 22.1 -44% -17 -295.4
Geac Computer Corp*** Business applications s/w Canada 3Q02 31-Jan 114.3 -17% 7.9 -137.9
Hewlett-Packard Co Systems &IT services US 1Q02 31-Jan 11,383.00 -8% 484 141
JD Edwards &Co Business applications s/w US 1Q02 31-Jan 200.6 -8% -4.1 -4.4
Novell Inc Networking s/w US 1Q02 31-Jan 271.1 11% 8.4 -7.8
Oracle Corp Database &applns s/w US 3Q02 28-Feb 2,229.30 -17% 508 582.7
Palm Inc Handheld computers US 3Q02 01-Mar 292.7 -38% 2.9 -1.9
Progress Software Corp Appln dev &DBMS tools US 1Q02 28-Feb 64.2 7% 2.5 2
QAD Inc Manufacturing s/w US 4Q02 31-Jan 53.5 -10% 1 2.4
Synopsys Inc Electronic design s/w US 1Q02 02-Feb 175.5 12% 14.1 9.5
Tibco Software Inc Appln integration s/w US 1Q02 28-Feb 74 -10% 3.4 -0.4
Verity Inc Text search s/w US 3Q02 28-Feb 25 -34% 2.3 9.2
All currencies converted to US dollars at current exchange rates.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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