SQS -1x Square

 

TIDMSQS 
 
RNS Number : 2194S 
SQS Software Quality Systems AG 
14 May 2009 
 
 
 
 
 
14 May 2009 
SQS Software Quality Systems AG 
("SQS" or "the Company") 
 
 
Trading Update 
 
 
SQS Software Quality Systems AG (AIM:SQS.L), the world's largest supplier in 
independent software testing and quality management services, is today providing 
an update on trading for the year to date. 
 
 
Trading in the early months of the year was in line with budgets. Latterly, 
however, tactical decisions by a number of clients to suspend live projects at 
short notice, often for a number of weeks, have meant that, despite new client 
wins, planned improvements in utilisation have not occurred. In addition, 
pricing levels have come under pressure, which has impacted margins. 
 
 
As a result, SQS now expects that its adjusted profit before tax for the six 
months ending 30 June 2009 will be approximately half of the level reported for 
the first half of 2008. The Company's turnover for the first half of 2009 is 
expected to increase by 2% (6% at constant exchange rates) year on year, 
continuing to outperform the 2% contraction in growth for the Computer Services 
sector that Gartner is now forecasting for 2009 (Gartner, April 2009). 
 
 
SQS continues to be cash generative and debt free and is therefore well 
positioned to deal with the current adverse market conditions. 
 
 
SQS has seen a significant recent tightening of demand in its core markets of 
Germany, the UK and the Nordic countries. The relatively benign conditions 
experienced in January and February giving way to a material change in market 
conditions as the impact of the global recession took hold. During the same 
period SQS has seen strong sales growth and improving profits in the Swiss and 
Austrian markets. In addition, its offshore business continues to record double 
digit top line growth. 
 
 
SQS's sales and lead generation functions remain strong, with 44 new client 
signings in the year to date, approximately the same number as at this time last 
year. Among the new client wins are telecoms operator Telenor, DIFI - a public 
service organisation in Norway, a federal finance ministry of a European country 
and one of the leading European airlines. 
 
 
Rudolf van Megen, Chief Executive Officer of SQS commented, "The pressure we 
have experienced to our margins is disappointing. However, prices and 
utilisation levels do appear to have bottomed out and we are actively taking 
steps to improve sales and utilisation going forward. We have taken, and are 
continuing to take, measures to reduce the average cost of sales per consultant 
by growing the offshore and near-shore test centres and by adjusting our onshore 
cost structure to better suit the current market. Our sales engine is strong and 
has helped us to grow business volumes in a receding market. As such, we are 
confident that operating margins will improve during the second half of 2009." 
 
 
 
 
Enquiries: 
 
 
+--------------------------------------------------+-------------------------------+ 
| SQS Software Quality Systems AG                  | Tel. +49 (2203) 91 54 0       | 
+--------------------------------------------------+-------------------------------+ 
| Rudolf van Megen, Chief Executive Officer        |                               | 
+--------------------------------------------------+-------------------------------+ 
| Rene Gawron, Chief Financial Officer             |                               | 
+--------------------------------------------------+-------------------------------+ 
|                                                  |                               | 
+--------------------------------------------------+-------------------------------+ 
| Altium                                           | Tel. +44 (0)20 7484 4040      | 
+--------------------------------------------------+-------------------------------+ 
| Tim Richardson                                   |                               | 
+--------------------------------------------------+-------------------------------+ 
|                                                  |                               | 
+--------------------------------------------------+-------------------------------+ 
| ICIS Limited                                     | Tel. +44 (0)20 7651 8688      | 
+--------------------------------------------------+-------------------------------+ 
| Tom Moriarty                                     |                               | 
+--------------------------------------------------+-------------------------------+ 
| Bob Huxford                                      |                               | 
+--------------------------------------------------+-------------------------------+ 
 
 
 
 
About SQS 
 
 
SQS is the world's largest supplier in independent software testing and quality 
management services. SQS consultants design and oversee quality management 
processes during software and IT systems development and test the resulting 
products for errors and omissions. 
 
 
Headquartered in Cologne, Germany, SQS has approximately 1,400 employees across 
Europe, Asia, North America and Africa. The Group has a strong presence in 
Germany (Cologne, Munich, Frankfurt, Stuttgart, Goerlitz and Hamburg) and in the 
UK (London, Woking, Birmingham, Manchester, Belfast), Ireland, the Netherlands, 
Switzerland, Austria, Sweden, Norway, Finland, India, Egypt, the United States 
and South Africa. SQS also has a minor stake in an operation in Portugal and a 
partnership operation in Spain. 
 
 
With more than 5,000 completed projects, SQS has a strong customer base 
including 36 FTSE-100 companies, half of the DAX 30 and nearly a third of the 
STOXX-50. It supports clients in a wide range of industries, including major 
corporations such as Deutsche Bank, Deutsche Telekom, Deutsche Post, Barclays, 
Allianz, Meteor, BP, JP Morgan, Volkswagen, and Daimler. 
 
 
www.sqs-group.com 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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