Pressemeddelelse: StepStone ASA offentliggør 4. kvartal 2008

Balanced product portfolio delivers revenue growth in uncertain markets Highlights: Q4 2008 vs. Q4 2007 • Revenue up 9 % to €31.0m • Solutions delivers 17 % revenue growth with 84 new customers • Online revenue growth slows to 3 % • Underlying EBITDA of €4.6m compared to €5.6m • Action taken in November to reduce Online cost base by €2m per quarter • EBITDA of €2.5m, after €2.1m reorganisation charge • €2.3m cash generated from operations

Summary

Company
Q4 2008 revenue was €31.0m, up 9 % from €28.6m in Q4 2007. Underlying organic revenue growth excluding acquisitions was 6 %. StepStone's strategy is to have a portfolio of products delivered to a wide geographic base of customers. The Software as a Service products generate predictable revenues whilst the online products, which clearly benefit from the long term structural shift from traditional media to online search and matching, are more affected by cyclical changes in demand. There was continued strong demand for the talent management solutions during the quarter, especially performance management and succession planning. As predicted, demand for the Online products decreased as customer confidence continued to be impacted by uncertainty about future employment levels.

StepStone continued to invest in Europe and in Asia - regions where the company is
experiencing growth. In Europe the focus was on product development and customer facing functions. In Asia both sales capability and operations were expanded. In January 2009 StepStone acquired the remaining 30 % of the Chinese subsidiary. In contrast, action was taken in November to reduce the cost base, primarily in the Online product group and lessen the impact of decreasing Online sales on future Online margins. These actions are expected to reduce the cost base by €2 million per quarter from its run rate at the start of Q4 2008. The savings are expected to be realised by Q2 2009 and will cost between €2.5 and €3.0 million to achieve. €2.1m of this cost has been recorded in the fourth quarter of 2008. Fourth quarter underlying EBITDA, before the reorganisation charge, was €4.6m, compared to €5.6m a year ago. Underlying EBITDA margin was 15 % compared to 19 % a year ago. Fourth quarter EBITDA, after the reorganisation charge, was €2.5m and EBITDA margin was
8 %.

Online
Whilst the proportion of existing customers who continued to renew with StepStone remained very healthy, the renewal levels were lower than the same period last year. As a result the number of listings has declined. This trend has been experienced across all Online markets but the magnitude of the change was most marked in Germany, the last of our major operations to be affected by the global change in business sentiment. Sales of Online products, which convert to Online revenue over the contract life, were 11 % lower than in the fourth quarter of 2007, as customers sought to delay or scale back future commitments. Online revenue in Q4 2008 was €17.4m, 3 % higher than the same quarter in 2007. Underlying organic revenue growth was flat. A charge of €1.3m was recorded in Online in respect of the November reorganisation. Underlying Online EBITDA, before the reorganisation charge, for Q4 2008 was €5.1m compared to €5.2m in Q4 2007. The margin was 29 %, compared to 31 % in Q4 2007. Online EBITDA, after the reorganisation charge, for Q4 2008 was €3.8m and the EBITDA
margin was 22 %.

Solutions
Demand for StepStone's solutions products continued through the fourth quarter with 84 new customers contracting for talent management products. This compares to 88 in Q4 2007. Encouragingly an additional 96 existing customers expanded their financial commitment as a result of increasing their usage of current products or contracting for new products. At the end of December there were approaching 1,600 customers using StepStone's talent management products. The unprecedented global economic turmoil is clearly impacting confidence and we have observed that many customers are far more reluctant to accelerate up front commitments and are far more likely to conduct a more thorough due diligence process. This we believe plays to our strength's of proven delivery of complex projects within timescales and budget. StepStone continued to invest in the Solutions business in Q4 2008 and will do so again in Q1 2009. The focus is on further enhancing the product development and customer facing functions in Europe and on expanding operations and increasing sales capability in Asia. This investment, which will strengthen our business and benefit our customers, increased the cost base in Q4 2008 by €0.8m a quarter. Solutions revenue was €13.7m in the quarter, 17 % higher than the same period in 2007. The underlying organic growth rate was 15 %. Solutions EBITDA was €1.6m, compared to €1.9m in Q4 2007. EBITDA margin was 11 %
compared to 16 % in Q4 2007.

Financial position
StepStone remains in a strong financial position with a €29.7m cash balance and another
quarter of solid positive operating cash flow. €2.3m of operating cash was generated in the quarter bringing the total for the year to date to €19.3m. This compares to €15.8m for 2007. During Q4 2008 €1.3m was invested in capital assets (primarily servers and capitalised development) and the remaining €3.7m of subordinated loan notes issued by StepStone Deutschland AG in 2004 were repaid. Both the Norwegian Kroner and Sterling devalued significantly against the Euro during the quarter. The company has 40 million Norwegian Kroner of Loan Notes outstanding and holds an equivalent amount of its cash in Norwegian Kroner to hedge the exchange risk on this debt. During the quarter the Loan Note liability and the Norwegian cash balances both devalued by €1.0m.
Borrowings are limited to €4m of Loan Notes, repayable in late 2010, and €10m drawn down on the revolving credit facility, repayable in 2011.

Outlook
StepStone is a well financed and profitable provider of software and services for the Human Capital Management ("HCM") sector. We have a portfolio of software products and services delivered to a wide geographic base of customers. 2008 has been the company's most successful year ever during which we have continued to focus on cash and profitability. However, economic conditions are tightening in all our markets and customer confidence is being adversely impacted. 2009 is expected to be a challenging year, with reduced overall visibility and continued softening of demand, particularly in the Online business. Having already taken action to reduce the cost base, StepStone will continue to closely monitor and manage both costs and
cash through 2009.

The Board
25 February 2009

Emner