ROBUST GROWTH IN GROUP TURNOVER
ARKOON NETWORK SECURITY Group posted strong growth in turnover in the first half of 2011, with an increase of 16% compared with the year-earlier period. This growth represented a continuation of the favourable trend enjoyed in H2 2010, when ARKOON standalone turnover rose 13% compared with H2 2009.
Turnover (in € 000) H1 2011 H1 2010 Growth
ARKOON NETWORK SECURITY 4,602 4,063 +13.3%
SKYRECON SYSTEMS 646 477 +35.6%
Total Group 5,248 4,540 +15.6%
Turnover is shown excluding intra-group sales of products and services.

ALL BUSINESSES POSTED GROWTH
During the first half, ARKOON NETWORK SECURITY’s turnover advanced by 13.3% to €4,602K, vs. €4,063K in H1 2010:
- Growth in the “FAST” network security business was driven by version 5 and new product launches. Over the six-month period, this business expanded by 11% (up 25% in billings) and contributed €3,193K to total turnover. Growth was particularly robust in the sale of UTM appliances, which surged 40.4 demonstrating that the launch of new models has injected new vitality into the business.
- The “Security box” data protection business continued to see robust growth, posting an increase of 18.9% to €1,408K, vs. €1,185K in H1 2010. The position of this business vis-à-vis large, longstanding
customers was strengthened. 

Other operating revenue (intra-group sales and services) totalled €336K vs. €350K in the year-earlier period, bringing ARKOON’s total turnover to €4,938K vs. €4,413K over the first half of 2010.
Recurrent turnover from maintenance contracts, software updates and subscriptions to security services amounted to 51% of the total. Unearned revenue representing contract invoicing not recognised in first-halfturnover totalled €3,581K, up €602K over the period.
The portion of turnover deriving from abroad was up 14.8% from the first half of 2010.
These trends are expected to continue into the second half, which points to a significant increase in turnover for the full year.

SUCCESSFUL TURNAROUND AT SKYRECON
SKYRECON SYSTEMS was a driver behind the growth in turnover at ARKOON NETWORK SECURITY. This subsidiary is in a redeployment phase; in H1 2011 its turnover grew by 35.6% to €646K and its invoicing climbed by 41%.
Including invoicing for intra-group services of €109K vs. €218K in H1 2010, SKYRECON’s total turnover was €755K.
The action taken to inject fresh growth into SKYRECON’s StormShield endpoint software protection suite is paying off, with licence sales having tripled over the period. Alongside this growth, operating expenses were reduced by 40% between 2010 and 2011, indicating that a significant improvement in first-half earnings is in store. 

VERY SOUND BALANCE SHEET STRUCTURE
As of 30 June 2011, the financial structure of ARKOON NETWORK SECURITY was sound, with stable equity, cash of €4,082K and treasury net of financial debt of €1,766K, up €371K over the period.

IMPROVEMENT EXPECTED IN 2011 EARNINGS
In 2009 and 2010, the company took advantage of slower business conditions to concentrate on longer-term strategy and on developing technology around its “Security-as-a-Service” concept. This enabled it to return to growth and firm up its position as a major player in the field of security. 

2011 should see a clear turnaround, with a significant rise in turnover and earnings over the full year, both at ARKOON and its subsidiary SKYRECON. 

Earnings in 2011 should see the benefits of initiatives to lower structural costs throughout the group.
In addition, the company will be able to count on a contribution from recently launched products and services:
− P series FAST 360 UTM appliances,
− Smart SSL: secure access service for mobile workstations, including those not controlled by the
enterprise,
− Security Box for SharePoint V2.0 to make SharePoint environments secure,
− StormShield Server Side Edition: Windows server security (anti-intrusion),
and from numerous products and services related to virtualisation, online security services and cloud infrastructure security solutions.
The above figures were audited by the Statutory Auditors and presented to the company’s Supervisory
Board on 18 July 2011.
Next publication: H1 2011 earnings on 27 September 2011