- EASY SOFTWARE AG increases consolidated revenue by 9.1% to EUR 46.6 million
- EBITDA of EUR -0.9 million affected by restructuring measures and special effects of EUR 2.6 million
- Strong Q4 in 2018 with 13% sales growth compared to the previous year’s Q4 and EUR 2.7 million EBITDA before special effects
At 9.1%, EASY SOFTWARE AG increased its revenue in 2018 at an above-average rate compared to the previous year. This is shown in the annual report published today. This enabled EASY SOFTWARE AG to maintain its strong market position in Content Services.
This growth was driven by a strong performance in the DACH core market, especially in direct sales. In total, the international subsidiaries, Austria and Turkey in particular, also had a positive influence on the growth of the group.
With its EASY 21 strategy, EASY SOFTWARE AG has positioned itself as a partner for the digitization of business processes. The acquisition of Apinauten GmbH enabled the company to expand its cloud business and acquire one of the world’s leading platforms in the field of digitization and mobilization of customer applications (source: Gartner Critical Capabilities for Mobile App Development Platforms, September 18, 2018).
At the same time, earnings were impacted by restructuring measures. These are mainly one-time special effects (EUR 2.6 million) from a voluntary personnel program (EUR 1.0 million) to reduce personnel costs, restructuring expenses in the organizational structure (EUR 0.4 million), the implementation of the company’s own SAP system (EUR 0.2 million), one-time costs of EUR 0.25 million from the acquisition of Apinauten GmbH and effects relating to other periods (EUR 0.74 million), which are economically attributable to previous years.
Based on the successful restructuring measures, the EASY Group has already completed a strong fourth quarter with revenue of EUR 14.9 million and EBITDA of EUR 2.7 million before special effects and expenses relating to other periods. This equates to growth of 13% year-on-year in the fourth quarter of 2018 and EBITDA of EUR 2.7 million (+ 56%). The improvement in earnings was due in particular to the realignment of the Consulting division, which achieved positive results for the first time in Q4 2018 in the year under review.
Results of operations, financial position and net assets
Consolidated revenue of the EASY Group amounted to EUR 46.6 million in fiscal year 2018 (2017: EUR 42.7 million). This corresponds to an increase of 9.1%. Revenues from new license business grew at an above-average rate of 16.8%.
Adding own work capitalized and other operating income, total operating revenue amounted to EUR 47.3 million (2017: EUR 44.3 million). Own work capitalised was attributable to developments in the cloud business and was at the expected level of EUR 348 thousand (2017: EUR 895 thousand).
Against this background, earnings before interest, taxes, depreciation and amortization (EBITDA) in fiscal year 2018 amounted to EUR -0.9 million (2017: EUR 3.0 million). EBIT (earnings before interest and taxes) amounted to EUR -3.6 million (2017: EUR 0.9 million) and consolidated earnings before taxes (EBT) decreased to EUR -2.4 million (2017: EUR 1.6 million). Taking into account tax income of EUR 0.1 million (2017: EUR 0.2 million), the consolidated net loss (operating result) amounted to EUR -2.3 million (2017: EUR 1.9 million). This corresponds to earnings per share of EUR -0.43 (2017: EUR 0.36). Earnings were affected by one-time special effects from restructuring measures in the amount of EUR 2.6 million.
The net cash inflow from operating activities decreased to EUR -0.1 million in the past fiscal year (2017: EUR 1.2 million). This is primarily due to the lower consolidated net income. This resulted in a slightly negative total cash flow of EUR -0.3 million for the 2018 financial year (2017: EUR -0.1 million). Cash and cash equivalents amounted to EUR 1.5 million as of December 31, 2018 (December 31, 2017: EUR 1.7 million). The equity ratio was 61.0% (2017: 68.5%).
Thanks to the extensive restructuring measures from the inherited liabilities of previous years and adjustments to the overly high cost structure, it has already been possible to close the fourth quarter of 2018 with additional positive growth momentum and an improvement in earnings. The trend continued in the first quarter of 2019 and the EASY SOFTWARE Group’s revenue was significantly higher than in the same quarter of the previous year. The acquisition of Apinauten GmbH increases cloud revenue to 8.3% of total revenue. Thus, more than 60% of the group’s revenues are generated from recurring support revenues and cloud subscriptions.
Apinauten GmbH was already able to achieve incoming orders of more than EUR 1 million in the first months of the financial year, thus fulfilling its high expectations. The acquisition was partially refinanced through a capital increase placed in March 2019, which was oversubscribed five times and underlines the confidence of the shareholders in EASY’s corporate strategy. EASY SOFTWARE AG’s revenue grew by 23% in the first quarter of 2019.
New management team focuses on growth and profitability
Dieter Weißhaar, Chairman of the Management Board, has focused the company on growth since he took office in September 2018 and is thus consistently implementing the EASY 21 strategy.
With the appointment of Lisa Skelnik as Head of Corporate Communications, EASY SOFTWARE AG has completed its new management team for the time being. Since December 2018, the management boards of the subsidiaries have been reporting directly to the CEO and are staffed with industry experts. The German sales company is headed by Alfred Pfaff, a former CEO of Software AG, since February 1, 2019. Andy Boulton, former Oracle Executive for Application Sales in the UK, has led the UK subsidiary since September 2018. The US subsidiary is trimmed for growth by Michael Rennell, who has successfully developed and sold software vendors to VMware and Siemens in the past. Matthias Höfelmeyer, who has been a Partner Manager at the EASY Group for seven years and previously held a management position at Optimal Systems GmbH, was appointed to the global Partner Management from within the company’s own ranks. Werner Höllrigl, who previously headed Oracle’s DCH consulting division and held a responsible position at Microsoft and Xerox, has headed the global service division since November 1, 2018.
The founding team of Apinauten GmbH from Leipzig is now part of the management and brings with Marcel Etzel (GF), Michael Reiserer (Sales), Dr. Lutz Kohl (CTO), Andreas Fey (Development) an extensive competence gain for the EASY Group.
With the acquisition of Apinauten GmbH, EASY SOFTWARE AG has a technological eye on the future of digitizing business processes. With an experienced management team, the company is expanding in the growth market of content services. The management team leads EASY SOFTWARE AG to growth and operational excellence in order to expand its market-leading position.