Successful year for the Telekurs Group

The Telekurs Group, active in the areas of card-based payment transactions, electronic payment systems and international financial information can look back on an overall successful year with satisfactory growth. The Group generated an operating result before taxes and interest of 53.5 (67.6) million francs in the year 2003. While this result is lower than in the previous reporting period, it was nevertheless generated despite declining demand in the financial information business and essential price reductions in our interbank services. As a result of an extraordinary profit from the sale of the Fininfo participation, the Telekurs Group's annual result is significantly higher than that of the previous year with 67.5 (52.6) million francs.

The Group's operating income increased by 3.2% or 22.5 million francs to 726.8 (704.3) million francs. This result is primarily influenced by the takeover of the VISA acquiring business in June 2003 from UBS Card Center Ltd. and the first full-year revenues from the 3C-Gruppe included in the company's financial statement. Turnover in the business areas Card-based Payment Systems and Electronic Payment Systems turnover increased by 39.3 million francs to 451.3 million francs. This is partly due to the fact that price reductions, some of which were considerable, were compensated for with positive volume increases. In the Financial Information Services business area, declining demand and massive price pressure led to a corresponding decrease in turnover of 18.8 million francs to 240.1 million francs.

Operating expenses for the Telekurs Group, with 673.3 (636.7) million francs, were 5.7% above the previous year. Despite an increase in turnover and the acquisitions made, personnel costs remained stable and numerous expense items decreased. The increase of the remaining operating expenses is due to greater compensation to the issuers in the credit card business.
At the end of 2003, the weighted number of Telekurs Group employees was 2,052 (2,075), 400 of which were outside Switzerland.

Telekurs Multipay consolidates strong market position
Telekurs Multipay Ltd. – formerly Telekurs Europay Ltd. – experienced significant growth in the year 2003, enabling it to reinforce its leading market position in the Swiss acquiring business. An essential contribution to this growth resulted from the take-over of the VISA acquiring business from UBS Card Center Ltd. as well as from a growth of approximately ten percent in the debit business.

In the credit card segment, the VISA transaction volume acquired at the beginning of June led to a significant increase to 53.5 (40.4) million transactions (MasterCard and VISA) with a total amount of 8.3 (6.7) billion francs, of which 6.4 billion francs were generated with Swiss cards and 1.9 billion francs with foreign cards. In the debit card area, 4.1 million Swiss ec/Maestro cards were used in Switzerland and abroad for a total of 145.3 million payments (+ 9.3%), with a total value of 13.1 billion francs (+ 7.6 percent). Among them in Switzerland, 115 million transactions (+ 9.8%) were conducted in the retail market and 28.5 million (+6.2%) at automated refueling stations. Transactions with the value card CASH decreased by 5.4% to 19.4 million.

One-stop-solutions drive Telekurs Card Solutions’ success
A leading provider in the field of technical processing of cashless payment transactions has been launched with the successful combination of Card Services, a business unit of the former Payserv Ltd., and 3C Holding into Telekurs Card Solutions Ltd. The fusion resulted in numerous synergies and an improved cost-basis.

As Switzerland's most important card processor, the company processed a total of 347.1 million transactions with debit cards, credit cards and value cards in the past year, representing 20.6 million transactions or a plus of 6.3% as compared to the previous year. In the EFT/POS and automated refueling segment, the number of transactions grew by 12 million (+ 6.1%) to a total of 207.5 million transactions. The ATM segment recorded a growth of 8.6 million (+ 6.6%) to 139.6 million transactions.

Swiss Interbank Clearing interbank business on solid ground
Once again Swiss Interbank Clearing managed to further extend its position as a hub for interbank payment traffic. The number of transactions increased by 4.6 percent as compared to the previous year.

SIC, the clearing system for Swiss francs, processed around 193 million transactions in the reporting year, or 8.8% more than in the previous year. With 767,000 (+ 9.9%) payments per day, the average daily turnover amounts to 178 billion francs. euroSIC, the clearing system for payments in euro, processed over 2 million payments, 788,000 of which were cross-border payments. In the DTA (data carrier exchange) and LSV (direct debit procedure) business segments, transaction volumes continued to develop in opposite directions: A reduction of 6% to 63 million transactions in DTA stands in contrast to an increase of 2.3% to nearly 37 million payments in LSV.

Acceptance of PayNet grows
For PayNet (Schweiz) AG, the year 2003 was a year of building up. The company managed to gain a foothold in three sectors with considerable importance for the expansion of PayNet: in B2B, in B2C and among the software producers. Numerous banks, large billers and important software producers were convinced by the advantages of Electronic Bill Presentment and Payment. Twelve banks with a total of over 1 million online customers will be connected to PayNet by mid-2004. Sectors such as health-care and agrochemicals are represented in the B2B area.

Telekurs Financial launches new generation of display products
Despite declining demand for financial information and massive price pressure, Telekurs Financial was able to further increase its market share. In the reporting year Telekurs Financial developed and successfully brought to market a new display product family with Telekurs iD.

The drop in demand particularly affected the display products in Switzerland. In contrast, demand for securities data information grew in comparison with the previous year. With the exception of Japan and Germany, all foreign subsidiaries were able to maintain or even increase their turnover as compared to the previous year’s levels.

Telekurs Services stands out through security and availability
Telekurs Services maintains one of the most modern and high-performance computer centers in Switzerland. As the service provider for Telekurs Group, it operates systems and applications, meeting the highest requirements in terms of security and availability. Increases in payment transaction volumes and financial data input required a further expansion of computer capacities. In the reporting year, large systems with a performance of approximately 2,500 (2,300) MIPS (Millions of Instructions per Second) were in use, as well as 660 (580) server systems.

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