2 Earnings position
In 2007, consolidated earnings before taxes were up 21.0% on the previous year, rising from € 26.5 million to € 32.0 million. In this context, development in the individual business divisions was uneven, as the following overview of earnings according to segments shows:
Although it has increased, the Credit segment’s contribution to earnings was encumbered by the continued pressure on margins in the leasing sector, and even more by start-up costs for setting up the factoring business, which amounted to approx. € 1.4 million in 2007.
Earnings before taxes in the Collection division rose significantly. The leveling of the growth rate compared to the sales side is due to a basis effect from the previous year. In the fourth quarter of 2006, the reversal of negative goodwill from the initial consolidation of INKASSO BECKER WUPPERTAL GmbH & Co. KG made a positive contribution to earnings amounting to € 5.6 million. Adjusted by this effect, earnings before taxes in the collection segment were 152.1% up on the previous year.
The leap in earnings in the Software segment was due to the very good contribution to earnings made by ABIT AG and the acquisition effect from the takeover of ID Innovative Datenverarbeitung GmbH in February.
An examination of the marked drop in earnings in the Systems division reveals a slight decline in operating business. Consideration must also be given to a special payment made by a third party to ADA – Das SystemHaus GmbH amounting to € 2.0 million, which increased the comparative figure from the previous year accordingly. Earnings before taxes in this year included a special effect in the form of other operating income from the sale of a building at a price of € 1.2 million. It must also be emphasized that the new remarketing business generated good gross earnings, contributing to a marked improvement in the earnings position in the trade goods sector.
As of December 31, 2007, the Group holding disclosed a deficit including consolidation amounting to € -16.6 million (previous year € -8.3 million). When comparing the two years, it must be considered that GFKL Financial Services AG’s earnings for 2006 were positively influenced by a book profit of € 4.8 million from the sale of has program service GmbH.
While consolidated earnings before taxes increased, the consolidated net income for the year after taxes fell by 20.5% from € 21.9 million to € 17.4 million. Factors responsible for this include the assessment of deferred taxes on the assets and liabilities sides amounting to € -0.8 million, as these affect the result; these arose in connection with the Corporate Tax Reform Act of 2008 (cf. information in the Notes).
