SOURCE: ARINSO

November 14, 2006 01:13 ET

ARINSO confirms outlook for 2006

BRUSSELS, BELGIUM -- (MARKET WIRE) -- November 14, 2006 --

     Continued strong HR & Payroll outsourcing dealflow in 3Q06

         Solid 3rd quarter results:
         Net sales: EUR  50.3 million      (+ 13%)
         EBITDA: EUR  5.2 million          (+ 21%)
         EBITA:   EUR  4.3 million         (+ 20%)
         Net profit: EUR  3.0  million     (+ 0%)
Brussels, 14 November 2006

ARINSO International (Euronext Brussels: ARIN), a global HR Services partner offering innovative HR solutions, publishes third quarter results with continued solid sales and EBITA growth in line with half year results.

In 3Q06, ARINSO announces net sales of EUR 50.3 million (+13%), marking the 13th consecutive quarter of double-digit sales growth. Earnings before interest, taxes & amortization (EBITA) grew 20% to EUR 4.3 million, resulting in a margin of 8.5% compared to 8.0% in 3Q05. Net profit stabilized at EUR 3.0 million, resulting in net earnings of EUR 0.20 per share. The financial result is clearly impacted by the EUR 30 million capital reduction in July.

ARINSO increased revenues in all three business lines: HR Strategy, HR Integration & HR Outsourcing which account for respectively 4%, 58% and 38% of group sales. ARINSO expects to reach its long-term strategic goal of balancing recurring revenues with integration projects by the end of 2007.

Recent major contract wins such as Accenture/Unilever and Bank of America have led to significant sales and set-up costs, which are expensed as they occur. Traditionally, it takes a number of quarters before revenues generated by such contracts reach cruising speed. Hence, ARINSO is confident that it is on track to deliver continued solid topline growth with stable to increasing profitability.

Year to date results

ARINSO's first nine months confirm trends of the previous years: solid net sales growth of 15%, increase of EBITA with 19%. Net sales amounted to EUR 148.0 million, EBITA was EUR 12.4 million (8.4% margin) with net profit of EUR 8.9 million. The results were impacted by the start-up of operations in Australia and a second offshore service center in Manila, Philippines. Evolutions in unrealized exchange differences and the one-time costs related to the substantial capital reduction in July, are reflected in the financial results.

Global Reach

In Asia Pacific, Europe and the Americas, ARINSO continues its profitable growth path in the current year. European activities (+14%) account for 78% of group EBITA, while activities on the American continent (+20%) and in Asia Pacific (+52%) each account for 11% of group EBITA. The significance of offshoring in ARINSO's projects & service offering is steadily increasing. In October, ARINSO has started operations in Durban, South-Africa in order to support recent contracts. ARINSO SA opens as ARINSO's 26th country.

Update on acquisitions

OpenHR (acquired in Jan 06) has been fully integrated into the ARINSO organization. Its eHR offering has allowed ARINSO to take a leading position in all aspects of Self Service around HR and has allowed ARINSO to win new contracts such as Rolls Royce, Fortis, EDF and, Sanofi Aventis.

Lansdowne (acquired in March 06) still operates as a stand-alone unit for Recruitment Process Outsourcing (RPO) in the UK. A joint ARINSO-Lansdowne team is currently looking at ways to integrate both companies, in the light of changing market conditions.

Dealflow & Pipeline

2006 is proving to be a record year in terms of dealflow, both for large enterprises as for medium size international employers. A growing number of deals illustrate the market leadership of euHRekaâ, ARINSO's HR & Payroll services platform.

In Europe, ARINSO has been selected by a top-10 financial institution as a strategic partner to provide full Peoplesoft, SAP and SAS project support through a global blended offshore model. The contract will support 30,000 employees in Western Europe and will leverage upon ARINSO's global HR delivery model, supported by resources in the Netherlands, UK and the Philippines.

In the current year, ARINSO People Services has already won 15 new contracts, aimed at servicing 235,000 additional employees for a combined contract value of EUR 210 million. The total volume of booked outsourcing revenues for 2007 now exceeds EUR 90 million.

The contract pipeline for Q4 and the first half of 2007 reflects a strong increase in market demand in HR & Payroll Services across Europe, the Americas and Australasia.

More information
Luc Osselaer                       Marleen Vercammen
Vice President Investor Relations  Chief Financial Officer
Tel. +32 2 558 06 70               Tel. +32 2 558 06 70
Fax +32 2 558 06 80                Fax +32 2 558 06 80
luc.osselaer@arinso.com            marleen.vercammen@arinso.com
ARINSO confirms outlook for 2006: http://hugin.info/133950/R/1088069/190865.pdf

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