StepStone ASA: Demand for Talent Management Drives 25% Revenue Growth During Third...

StepStone ASA: Demand for Talent Management Drives 25% Revenue Growth During Third Quarter

Q3 2008 Highlights vs. Q3 2007

-- Revenue up 25% to EUR 31.8m

-- Increased EBITDA margin at 19%

-- Cash flow from operations up 33% to EUR 5.0m from EUR 3.8m

-- Signed a record single contract for Online: commitment in
excess of EUR 1.3m to end of 2009

-- Record third quarter demand for talent management products: 95
new customers and continued extension of customer commitments.
LONDON--(Business Wire)--
StepStone, a leading global provider of total talent solutions,
reported a 25% increase in third quarter revenues to EUR 31.8m, from
EUR 25.4m in Q3 2007. Underlying organic revenue growth excluding
recent acquisitions was a healthy 21%.

StepStone operates a unique business model. The "Software as a
Service" products generate predictable revenues and cash flows whilst
the online products continue to benefit from the ongoing structural
shift away from traditional media to online search and matching.

The company strategy is to have a portfolio of products delivered
to a wide geographic base of customers. The volume based online
products enhance the company's ability to take advantage of favourable
economic conditions, whilst the software as a service based talent
management products soften the impact of potential adverse economic
conditions due to the inherent predictability of the monthly revenue
streams from an increasing international customer base.

EBITDA for the third quarter was EUR 6.1m, up from EUR 4.5m a year
ago. EBITDA margin increased to 19% from 18%.

Online

Demand for the company's online products increased in September
after the traditionally slower summer months of July and August. Total
invoiced sales of online products in the third quarter of 2008 were up
24% versus the same period last year. The current quarter sales will
impact future quarter revenues due to the deferred revenue recognition
model which the company uses.

Online demand in European markets is however developing at
markedly different rates. StepStone's online sales in Germany
continued to grow at a rate consistent with that of the last few
quarters, whilst there is a clear deceleration of growth rate in most
other markets.

Online revenue in Q3 2008 was EUR 18.5m, 21% higher than the same
quarter in 2007. The underlying organic growth rate was 17%.

EBITDA delivered in the quarter was EUR 5.8m compared to EUR 4.6m
in Q3 2007. The margin was 31%, up from 30% in Q3 2007.

Solutions

Demand for the company's talent management products remained
robust during the quarter, attracting 95 new talent management
customers and the company continued to complete an increasing number
of cross sale and up sale transactions amongst its extensive customer
base.

By the end of September there were over 1,500 customers using
StepStone's talent management products - providing an increasingly
significant and predictable monthly recurring revenue stream.

Solutions revenue was EUR 13.2m in the quarter, 31% higher than
the same period in 2007. The underlying organic growth rate was 28%.

Solutions EBITDA was EUR 2.1m, up from EUR 1.4m in Q3 2007.
Margins improved to 16% compared to 13% in the same quarter of 2007.

Financial position

The company further strengthened its financial position during the
quarter as a result of generating strong operating cash flows and
completing a substantial new financing facility.

The company generated EUR 5.0m of operating cash in the quarter
bringing the total generated in the year to date to EUR 17.0m. This
compares to EUR 15.8m for the whole of 2007.

In July, StepStone entered into a three year, EUR 40m financing
facility with Skandinaviska Enskilda Banken AB ("SEB"). Draw downs
under this facility are at a small premium over Euribor.

During the third quarter the company took the opportunity to
repurchase at or around par value EUR 4.7m of the 2010 outstanding
Loan Notes, thus facilitating significant reductions in the future
monthly interest cost.

In addition the company settled EUR 3.2m in respect of past
acquisitions and repaid EUR 3.8m of the subordinated debt, with all
transactions being completed from existing cash balances.

At the end of September the company had EUR 23.7m of cash at bank
and EUR 5m of the 2010 Loan Notes payable. EUR 0.4m of the SEB
facility has been utilised.

Outlook

StepStone has a portfolio of software products and services
delivered to a wide geographic base of customers. Our business is well
financed and growing - third quarter revenue growth was 25%.

The final quarter of the year is traditionally the company's
strongest, and we see little reason at present to indicate any change
to this fourth quarter trend.

However, after the unprecedented economic turmoil of the last
three months, economic conditions are tightening across Europe which
is in turn impacting customer confidence.

Our expectation is that overall growth will continue to soften
into 2009. In anticipation, the company will continue to closely
manage its cost base and cash generation.

The Board looks forward to reporting further year on year
improvement in the final quarter of 2008.

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*T
The Board
22 October 2008
*T

About StepStone

StepStone is a leading international provider of human capital
management ("HCM") software and services. Its technology and services
helps organisations attract, retain and develop their talent.
StepStone was founded in Norway in 1996 and listed on the Oslo Bors
(Ticker@ STP.NO) in 2000.

StepStone operates some of Europe's largest talent networks which
match employers with potential employees and provides a complete suite
of HCM software solutions. Through its extensive talent network in
Europe, StepStone has privileged insight into the needs and demands of
today's workforce, allowing the company to develop highly innovative
HCM solutions.

StepStone's comprehensive portfolio of software and services
enable organisations to implement efficient HCM processes. These
services include; attraction and hiring, post-hire talent management,
performance management, compensation management, skills and competency
management, career and succession planning, training and development
management.

As at Q3 2008 more than 16,000 organisations, including many of
the world's leading businesses, use StepStone software and services.
It operates in 16 countries and employs more than 900 people. Its
global customers include Deutsche Telekom, Aviva,
PricewaterhouseCoopers, AstraZeneca, ThyssenKrupp, Fiat and
Telefonica.

For more information see: www.stepstone.com

Brands2Life
Robin Grainger / Catherine Moran
020 7592 1200
stepstone@brands2life.com
or
Financial:
StepStone
Ian Clapp, + 44 7850 128094
Director of Investor Relations
or
Ian Cole, CFO, +44 7808 946404
or
Hudson Sandler
Wendy Baker, 020 7796 4133
wbaker@hudsonsandler.com

Copyright Business Wire 2008