Stepstone ASA results for quarter ended 31 March 2006

Highlights
- Continued growth in revenue and EBITDA
- Record operating cash flow of Ä2.0m
- Overall profitability for Group
- Strong increase in deferred revenue
- Solutions Division continues momentum - 50 new customers

Q1 2006 compared with Q1 2005
Revenues Ä10.8m up 63%
EBITDA Ä0.5m against Ä0.7m loss
Deferred Revenue Ä11.2m up 50%
Cash Ä20.2m up Ä3.9m

The progress that was evident throughout 2005 continued in the first quarter of the current financial year. Both operating divisions StepStone Online and StepStone Solutions increased their revenues and profitability.

The Group generated Ä2.0m of cash from operations in Q1 2006 and deferred revenue increased by Ä2.0m over the preceding quarter to Ä11.2m, its highest level since 2001. The group ended Q1 2006 with over Ä20m of cash.

StepStone Online
StepStone Online operates one of Europeís largest online classified recruitment advertising businesses.

The success of the division is demonstrated in the operational statistics. User sessions reached a record 17.8m in the quarter, 34% higher than in Q1 2005. The number of listings carried on our websites continued to show steady growth and at 31 March 2006 amounted to 39,777. This was more than 15,000 or 62% higher than at the same date last year. Vacancies increased by 48% from 37,599 at 31 March 2005 to 55,544 at 31 March 2006.

HR JobbSverige AB, which was acquired in December 2005, has been successfully integrated into the division. The website properties have been transitioned to the StepStone Online technology platform and our Swedish operation is starting to reap clear benefits.

StepStone Solutions
StepStone Solutions offers on demand hosted and managed e-recruitment solutions and continue to strengthen its position as the clear European market leader. The divisionís main product offerings are I Grasp and EasyCruit.

Q1 2006 was an encouraging start to the year. The division gained 50 new customers with sales in all territories.

Group Results
Group revenue increased 63% to Ä10.8m compared with the same quarter last year.

The EBITDA profit for Q1 2006 was Ä0.5m from a Q1 2005 loss of Ä0.7m EBIT improved to Ä0.2m from a loss of Ä0.9m.

Overall StepStone improved the Q1 result year on year by Ä1m, delivering a profit of Ä36,000 for the quarter compared to a loss of Ä0.9m in Q1 2005.

The group balance sheet strengthened during the quarter. During Q1 2006 the group generated positive cash flow from operations of 2.0m and used Ä0.5m to acquire assets. This compares to Q1 2005 when the group generated Ä0.2m positive cash flow from operations, generated Ä6.1m proceeds from issue of shares and transferred Ä1.8m to restricted cash. Cash and bank deposits at 31 March 2006 were Ä20.2m compared with Ä16.3m at end Q1 2005. In April 2006 Ä1.3m of cash was used to further reduce the amount due to the former shareholders of i-GRasp and Ä1m was released from the restricted cash. No further payments in respect of i-GRasp or Obvious are expected until 2007. Discussions with Axel Springer are taking place regarding future potential use of the cash balance in StepStone Deutschland AG.

Deferred revenue at the end of the quarter increased strongly to Ä11.2m, up 50% from Ä7.5m at the end of Q1 2005.

Outlook
The company remains positive with respect to the development of both StepStone Online and StepStone Solutions. Both divisions continue to grow their revenues and have delivered increasing profitability.

The Boardís focus for 2006 continues to be on growth, both organically and by selected acquisitions. The programme of investment in country specific sales, marketing and infrastructure, embarked on in Q4 2005, is expected to continue under current market conditions.

The summer is traditionally the quieter trading period. However, the Board believes that momentum and growth achieved over the last two quarters leaves the company in a strong position to move the business forward over the remainder of 2006.