Tom Tinsley, chairman and CEO of Dutch ERP vendor Baan Company NV says both the top and bottom lines were ‘according to plan’ in the second quarter of this year. The company reported second quarter net profits up, 1.1% at $17.1m on sales up 46% at $230m, while the net for the first half was […]
Tom Tinsley, chairman and CEO of Dutch ERP vendor Baan Company NV says both the top and bottom lines were ‘according to plan’ in the second quarter of this year. The company reported second quarter net profits up, 1.1% at $17.1m on sales up 46% at $230m, while the net for the first half was down 35%, at $19.2m, on revenues up 40% at $409.5m. Baan pointed out that the net income was negatively affected by a $14.4m restructuring costs incurred as a result of its $86.6m acquisition of UK financial software house Coda Group plc, carried out in May, (CI No 3,409). Tinsley explained that the company has recently taken steps in order for its performance to be more readily comparable with that of German rival and market leader SAP, which has different business model and reporting requirements. SAP does not currently separate out its revenues from maintenance, so that to make its own results comparable, Baan has developed what it calls the ‘retail value of product revenues’, which is the sum of maintenance revenues, direct sales and the estimated end-user value of indirect license sales. This, he went on, means counting each 40-45 cents earned by Baan on indirect sales as a full dollar. In presenting the company’s results, Tinsley made frequent reference to Baan’s German competitor, arguing, for instance, that SAP had benefited considerably from currency movements, whereas Baan hadn’t. He also said SAP had been using its ‘impressive’ revenue growth to argue that it had already won the ERP battle, he said that while 85% of revenues were from new customers, the retail value of product revenues was up 83% during the first half. The markets were less than impressed by Baan’s results, however, possibly influenced by its having to revise downward its already disappointing first-quarter figures only last week. The company’s stock closed down 5.48% at the equivalent of $38.98, while on Nasdaq, it was down 3.31% at $38.37 in late morning trading.