realTech signs letter of intent with software and IT consulting firm Walldorf, June 30th, 1999
realTech AG's Earnings Jump in Q1 1999 Frankfurt am Main/Walldorf, May 31, 1999
realTech AG: Subscription price 54 Euro per share Frankfurt Main/Walldorf, April 23rd 1999
The subscription period for realTech AG stocks has begun Frankfurt on Main/Walldorf, April 19th, 1999
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realTech signs letter of intent with software and IT consulting firm
Walldorf, June 30th, 1999
realTech AG of Walldorf signed a letter of intent with a software company last evening, stating that realTech will take over 100 percent interest in the software firm. This is seen as part of realTech’s growth-oriented strategy and more importantly, as part of its goal to expand its software palette in the area of IT consulting. The name of the software company will not be made public at the present time. This agreement is dependent on the successful completion of a due-diligence check, which will begin in the next few days. The signing of the final agreement is scheduled for the end of July 1999. With this step, realTech, a leading technical consulting firm specializing in technical R/3 consulting, IT consulting, and software development, rounds out its software palette and its IT consulting business. The company to be purchased has 35 employees and is expected to have sales of more than 5 million DM in the current fiscal year.
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realTech AG's Earnings Jump in Q1 1999
Frankfurt am Main/Walldorf, May 31, 1999
Stock Exchange Newcomer Generates 62% of Prior-Year Net Income in 3 Months - an "Entrepreneur of the Year" Finalist Yet Again
Frankfurt am Main/Walldorf, May 31, 1999 --- realTech AG, the Walldorf-based specialist in technical SAP R/3 consulting, IT consulting and software development, generated net income (US GAAP) of more than DM 1 million in the first quarter of 1999, almost 62% of the entire 1998 figure. realTech AG, which was founded at the end of 1994 and is now a holding company with nine subsidiaries in eight countries worldwide, increased its consolidated sales in the same period to about DM 11 million (annual sales in 1998: DM 33.7 million), corresponding to a net return on sales of 9%.
The significant year-on-year sales increase in the first quarter of 1999 is due to a consistently positive order situation. Although the first quarter is usually the weakest in the year due to seasonal fluctuations, realTech's sales in this period already amounted to 32.6% of total sales for the previous year. .
The recruitment target for this period (28) was well exceeded with 50 new employees hired in Q1 1999. This already accounts for around 45% of the total planned recruitment for 1999 (112 new employees). According to realTech, recruitment will have particularly positive effects for the later quarters of fiscal year 1999 in which the new employees will contribute to increasing earnings for the first time. However, it affects earnings in the first quarter due to higher personnel expenses.
Despite this, the realTech Group was able to record an EBIT of DM 1.728 million - already 31.5% of the value for the whole of 1998. The net income of DM 1.006 million for the first quarter of 1999 even reached 61.9% of the net income for the entire previous year. This corresponds with earnings per share of DM 0.50 in the first quarter of 1999, while earnings per share for the whole of fiscal year 1998 amounted to DM 0.82 (based on 2 million shares
According to realTech, there is a clearly defined growth trend, especially with regard to sales of software products developed in-house: in the first quarter of 1999, this area generated approximately DM 740,000 - more than 60% of last year's entire sales. realTech plans to increase the portion of its in-house product sales from about 5% in fiscal year 1998 to over 50% in 2010. These products already account for an above-average share of sales.
Daniele Di Croce, realTech AG's Chief Financial Officer, indicated that the company believes it has an excellent chance to reach its target sales of around DM 50 million in fiscal year 1999 and double its EBIT to around DM 11 million. This assessment is based on market developments and the continued expansion of realTech's activities. The group's global expansion will be accelerated in line with this development.
This year, realTech was again among the five finalists in the "start-up" category of the third consecutive "Entrepreneur of the Year" competition, held by Schitag Ernst & Young, SAP and the German manager magazin. The jury was particularly impressed that realTech has become one of the leaders in the market for technical SAP R/3 support within a few short years and has been able to create 250 jobs in eight countries. realTech is the first publically listed company to be awarded a prize in the "start-up" category.
The shares of realTech AG were listed on the Neuer Markt of Frankfurt Stock Exchange for the first time on April 26, 1999. Although, there are no formal requirements for the company to prepare quarterly financial statements for January 1, 1999 to March 31, 1999, to guarantee continuity of information from the outset and offer all shareholders, prospective investors and market participants a transparent information policy, realTech is already marking a new era in the history of the young company with the publication of its figures for Q1 1999.
Download First Quarter Results
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realTech AG: Subscription price 54 Euro per share
Frankfurt Main/Walldorf, April 23rd 1999
Volume of 54 million Euro, oversubscribed many times over – Initial listing on April 26th, 1999 – New growth in Walldorf: Proceeds from stocks will help market leader in technical SAP R/3 consulting finance sales oriented growth – Independent of SAP
Frankfurt Main/Walldorf, April 23rd 1999 --- The initial price of realTech AG stocks was set at 54 Euro on April 22nd, 1999 at the end of the subscription period. realTech AG is a technical consulting firm specializing in the conception, implementation, and operation of SAP R/3 Systems. The price was thus set at the upper limit of the initial price range of the public offering. A total of one million shares of stock were placed by this increase in capital. The stocks have a calculated face value of 1.27 Euro (2.48 DM) per stock, corresponding to shareholder‘s equity of 1.27 million Euro (20 percent of the initial capital of 6.350 million Euro). The placed volume will initially be 6.350 million Euro. As part of the bank consortium‘s option to distribute more stocks (greenshoe), an additional 100,000 preferred stocks are available for sale from the holdings of the founding stockholders. The stocks introduced in the new market will be entitled to full dividends for the fiscal year 1999.
Initial placing oversubscribed The subscription rate as part of the book building process was placed at a range between 49 to 54 Euro, and the subscription phase from the 19th to the 22nd of April for realTech AG stocks was oversubscribed many times over. Up to 50,000 shares of the newly issued stocks were reserved for employees and business friends.
Initial listing on April 26th, 1999 realTech AG‘s entire base capital of 6.350 million Euro is authorized for trade on the frankfurter stock exchange in the new market (Neuer Markt). The stock will be listed under the stock identification number 700 890 in the new market of the Frankfurter Stock Exchange, April 26th, 1999 being the first day of trading. The underwriting group consists of the HypoVereinsbank as the prime underwriter along with DG Bank and WestLB.
Greenshoe of 100,000 stocks from the holdings of the original stockholders The offer consists of a public subscription offer in Germany as well as private placement within Europe. In addition to the one million stocks offered in the subscription for the capital increase prior to going public, the original stockholders have given the bank consortium a multiple allotment option of up to 100,000 additional stocks, which corresponds to two percent of the previous base capital, and is defined as "Greenshoe." If the greenshoe is exercised, the subscription volume will increase to a total of 59.4 million Euro.
The proceeds from the stocks being sold will be used to finance the growth-oriented strategy of continual company expansion, especially for developing new markets internationally. As part of this strategy, realTech plans to establish an additional 10 to 15 subsidiaries in the next five years as well as acquisitions both domestically and internationally. Additionally, funds will be invested in R&D to increase the software palette in the area of application management tools.
realTech AG has the long-term goal of having 50 percent of their sales coming from their own software developments (currently five percent) and hopes to reach this goal by the year 2010. In retrospect of the innovative projects already implemented, realTech already has a portfolio of application management tools that simplify the use of R/3 software in operation.
Independent of SAP growth realTech AG sales come mostly from implementing ERP (Enterprise Resource Planning) standard software, integrating it into existing systems, and maintaining and updating systems. realTech AG plays a major role in helping companies take full advantage of complex software, such as R/3. Based on market trends, the company sales forecasts are mostly independent of SAP, due to the independent demand for consulting services. In addition, realTech AG has made alliances with leading computer and software companies, which will allow expansion in new business fields.
Still a large increase in the number of employees< realTech AG currently has over 230 employees worldwide, 190 of them with hands-on experience from working on projects. Most of them are certified technical SAP R/3 consultants. The company also has 15 developers. As part of the continuing development, the company plans to increase the number of employees to around 400 by the end of the century and to 650 by the end of the year 2002. Performance-dependent compensation, an employee profit sharing plan, and an incentive plan for managers ensure a high level a motivation within the company.
Tripling the Revenues in a growth oriented market realTech AG had sales of 33.7 million German marks in 1998 (1997: 17.1 million marks) and an estimated pre-tax income of 5.5 (2.9) million marks. In light of the positive growth prognosis for the ERP software in the world, the market is expected to have an average growth of 30 percent per year through the year 2002. The company thus expects sales for 1999 to be around 50 million marks with a pre-tax income of 11.1 million marks. By the year 2002, the company expects to triple sales to nearly 150 million marks and increase pre-tax income to around 45 million marks.
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New Growth Stock from Walldorf listed on the new market: The subscription period for realTech AG stocks has begun
Frankfurt on Main/Walldorf, April 19th, 1999
Par value between 49 and 54 Euro per stock – Initial offering on April 26th, 1999 – Market leader for technical consulting of SAP R/3 Systems goes public – Proceeds will serve as financing for profit oriented growth – Independent of SAP – Company was founded in 1994 and has been profitable since it started
Frankfurt on Main/Walldorf, April 19th, 1999 --- The subscription rate for the face value of the realTech AG stocks being publicly offered will be fixed somewhere between 49 and 54 Euro per share. The subscription period begins today and runs until April 22nd 1999. The company, which was founded in 1994, is active worldwide as a technical consulting firm specializing in consulting in the areas of design, implementation, and operation of SAP R/3 Systems and has been profitable from day one. A total of one million common stocks will be offered in the form of individual share certificates with a calculated face value of 1.27 Euro (2.48 DM) per stock, corresponding to a share of stock capital of 1.27 million Euro (20 percent of the base capital of 6,350 million Euro). This represents an issue volume of about 49 to 54 million Euro.
From the stocks issued, a contingent of up to 50,000 stocks will be reserved for employees and business associates. The title will be introduced under stock number 700890 in the new market on the Frankfurt stock exchange and the first day of trading will be April 26th, 1999. The underwriting group consists of the HypoVereinsbank as the prime underwriter along with the DG Bank and the WestLB. The stocks that are introduced in the new market are entitled to full dividends for the fiscal year 1999.
Greenshoe of 100,000 Stocks from the Holdings of the Original Stockholders The offer consists of a public subscription offer in Germany as well as private placement within Europe. In addition to the one million stocks offered in the subscription for the capital increase prior to going public, the original stockholders have given the bank consortium a multiple allotment option of up to 100,000 additional stocks, which corresponds to two percent of the previous base capital, and is defined as "greenshoe." If the greenshoe is exercised, the subscription volume will increase from a total of 53,9 to 59,4 million Euro.
The proceeds from the stocks being sold will be used to finance the growth-oriented strategy of continuing company expansion, especially for developing new markets internationally. As part of this strategy, realTech plans the founding of an additional 10 to 15 subsidiaries in the next five years as well as acquisitions both domestically and internationally. Additionally, funds will be invested in R&D to increase the software palette in the area of application management tools.
As part of the public offering, realTech is increasing it stockholder‘s equity by one million shares of stock. This increase in capital will take place without loss of the stock rights of the previous stockholders. As part of the public offering, the entire base stock of the company will be introduced to the regulated market with trade being completed at the Frankfurt stock exchange.
20 to 22 percent of the shares will be in public control – No large stockholders outside of the company After the introduction of the stock, the remaining stocks of the company will be held to 72 percent (70 percent if the greenshoe is exercised) by the four members of the board and other initial stockholders, to four percent by employees and managers of the company, and up to four percent by relatives of the founding stockholders. Large stockholders outside of the company will not exist.
With stockholder’s equity of 25,000 DM, realTech was founded in 1994 by four former SAP employees and has been profitable since, as have the previously founded foreign and domestic subsidiaries. The expansion of subsidiaries as well as other investments have up until now been financed without any outside resources.
Diversification with their own software development The activities of realTech AG cover, in addition to consultation and support during conception, implementation and operation of SAP R/3 Systems in companies and the related software installation, project coordination as well as the long-term servicing of customer production systems. These services make up 90 percent of the company’s revenues.
Independent of the positive scenarios in the consulting market, realTech AG has set the long term goal of obtaining 50 percent of their revenue from the sale of their own software developments by the year 2010. With previously implemented, innovative projects, realTech AG already has a portfolio of application management tools that simplify the use of R/3 Software during operation.
Independent of SAP‘s company strategy realTech AG achieves most of their revenue by implementing ERP (Enterprise Resource Planning) standard software, integrating it into existing systems, and constantly maintaining and updating systems. Thus, realTech plays a major role in helping companies take full advantage of complex software such as R/3. Based on the need for consulting services and independent of economic trends, the company is independent of SAP for its own growth and profit forecasts. In addition, realTech AG has made alliances with leading computer and software companies, which will allow expansion in new business fields.
A continual increase in the number of employees realTech AG currently has over 230 employees worldwide, 190 of them with hands-on experience with projects, most being certified technical SAP R/3 consultants. The company also has 15 developers. As part of continuing development, the company plans to increase the number of employees to around 400 by the end of the century and to 650 by the end of the year 2002. Performance-dependent compensation, an employee profit sharing plan, and an incentive plan for managers ensure a high level a motivation within the company.
Tripling the Revenues in a growth oriented market The market for business-related ERP software, of which SAP has a 35 percent world market share, was estimated by market researchers to have had sales of 10.8 billion dollars in 1998. realTech, which has specialized in this field, had sales of 33.7 million German marks in 1998 (1997: 17.1 million marks) and an estimated pre-tax profit of 5.5 (2.9) million marks. In light of the positive growth prognosis for the ERP software in the world, the market is expected to have an average growth of 30 percent until the year 2002. The company thus expects sales for 1999 to be around 50 million marks with a pre-tax profit of 11.1 million marks. By the year 2002, the company expects to triple sales to nearly 150 million marks and increase pre-tax profit to around 45 million marks.
More specifically, the company expects to have sales of 70 million marks in Germany in 2002, with a pre-tax profit of 20 million marks. In Italy, they expect sales to be around 28 million marks with a pre-tax profit of eight million; in the US, sales should reach 25 million with a pre-tax profit of six million marks, and in Australia, twelve million in sales and a pre-tax profit of four million marks. Sales broken down by business area as per planning for the year 2002 see sales of 128.2 million marks in the R/3 consulting sector, 6.0 million marks in the IT consulting sector, and 15.3 million marks in the software tools sector.
Conception oriented, long term consulting commitment will create economic consistency Based on experience, there is a high demand and, up until now, insufficient supply of support in the area of technical consulting for R/3 Software. Thus, realTech‘s focus on technical consultation for all systems provides the optimal prerequisites for a long-term consulting commitment, not only in the implementation phase, but also during the operation of R/3 Systems. This distinguishes realTech AG from classical consulting firms, which mainly provide application consultation, that is, quite often for a specific project and thus limited to a certain time period.
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Worldcom World Young Business Achiever
realTech has been nominated finalist in the Worldcom World Young Business Achiver 1999 due to the great achievements in the Europe's 500 Award for percentage revenue growth.
The purpose of Worldcom World Young Business Achiever is to encourage, acknowledge and reward those young business people around the world who are shaping the future. This is done by holding an annual search for suitable nominees in participating countries, and then bringing them together for a three day meeting. This gives them the possibility to get to know young minded business people around the world and exchange experiences.
More Information: The Worldcom Group
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