Investors / Media room / Corporate news / Danware Sales Channels Primed For the Future

Danware Sales Channels Primed For the Future

New subsidiaries in the USA, the UK and Germany mark an important step in software company Danware’s plans to develop strong business partner channels in its core markets. As expected, setting up the subsidiaries impacted both revenue and profit, causing Danware to lower its FY 2006 forecasts. The full effects of the new sales and distribution strategy are expected to feed through in 2007.

Copenhagen, Denmark, 21 November 2006 – Danish software company Danware released its profit announcement for the third quarter of 2006 earlier today. The financial highlights for the three months to 30 September were as follows:

  • Q3 revenue was DKK 19.1m against DKK 21.7m in Q3 2005.
  • 9M 2006 revenue was DKK 68.1m, a 2.4% increase from the 9M 2005 figure of DKK 66.5m.
  • EBIT was a loss of DKK 5.2m in Q3 2006 compared with a profit of DKK 6.6m in the same period of last year.
  • The 9M 2006 EBIT was a loss of DKK 3.9m against a profit of DKK 13.9m in the year-earlier period.

Danware continued the realignment of its sales and distribution strategy in the third quarter. The company has now completed the changeover from generating sales through external distributors to using wholly owned subsidiaries in the USA, the UK and Germany. In addition, Danware has signed new contracts with distributors in countries where the company does not have a sales subsidiary, while also renewing agreements with OEM customers.

“A major realignment of a sales strategy will always involve substantial costs, so there’s nothing dramatic or surprising about our Q3 performance. By setting up our new sales subsidiaries, we’ve paved the way for large and powerful business partner channels in our core markets, creating a long-term platform for Danware’s sales and earnings. By the end of the third quarter, we had already generated good momentum in our US revenue, and it won’t be long before we’ll see sales starting to climb,” says Danware CEO Peter Grøndahl.

Danware launched a new product in the third quarter: The NetOp® Mobile facilitates remote control of mobile devices such as PDAs and smartphones. The market for mobile devices is expanding and Danware has strong expectations for the new product.

Integration progressing to plan
In April 2006, Danware agreed with Topnordic/Ementor to acquire the rights to the M-Net products, a set of tools to standardise the implementation and operation of Microsoft-based networks and to minimise resource requirements in day-to-day operations.

Also in April, Danware acquired Cursum, a software business that has developed a recognised technical platform enabling organisations to develop, implement and manage courses, training programmes and questionnaires to employees, customers and business partners via the Internet, and which also allows companies to keep track of their employees’ qualifications. The work to integrate the M-Net activities and the Cursum product is progressing to plan.

Based on the performance in the third quarter of 2006, Danware has lowered its full-year sales and profit forecasts. For the full year of 2006, the company now forecasts revenue in the DKK 95–100m range, down from the previous forecast of DKK 105-120m, and EBIT of around DKK 0m, down from approximately DKK18m.

About Danware A/S
Danware A/S develops and markets software products based on the NetOp® technology: a technology enabling the swift, stable and secure transfer of screen images, sound and data between two or more computers. Danware’s three product areas are Desktop Management, Education and Security. NetOp® Remote Control enables remote control of one or more computers, while NetOp® School is used for computer-based classroom teaching.

The Security business includes the NetOp® Netfilter and the NetOp® Desktop Firewall, a distributed firewall for monitoring process execution and communications on PCs. Danware’s products are sold in more than 80 countries. In 2005, the company generated revenue of DKK 91.3m. Listed on the Copenhagen Stock Exchange, Danware is a component of the SmallCap+ index.