DATAGROUP continues its strong growth in Q1

• Revenue up +19.3 %
• EBITDA +4.4 % (before one-off effects +34.2 %)
• Many new customers

Pliezhausen, February 25, 2020. DATAGROUP SE (WKN A0JC8S) today publishes its figures for the first quarter of FY 2019/2020 and continues the good development of the last fiscal year. A good order intake in the core business with the CORBOX IT Services Suite contributes to the positive start to the new fiscal year.

In the first quarter of the fiscal year (01.10.-31.12.2019) revenue was up 19.3 % to EUR 82.8m (previous year EUR 69.4m). The proportion of service revenue improved to 82.8 % (PY 81.1 %).

Operating earnings before taxes, interest, depreciation and amortization (EBITDA) were very strongly influenced by one-off effects and improved by 4.4 % to EUR 9.5m (PY EUR 9.1m), the EBITDA margin was 11.4 % before one-off effects (PY 13.0 %). Earnings before interest and taxes (EBIT) came in at EUR 2.7m before one-off effects (PY EUR 4.1m), corresponding to an EBIT margin of 3.3 % (PY 5.8 %). Earnings per share amounted to 17 cents before one-off effects compared to 27 cents in the previous year.

The one-off effects were caused by the first-time consolidation of the assets of IT-Informatik Ulm, which were acquired from insolvency in August 2019. This company had suffered massive losses in the last years. Following the acquisition of the assets from insolvency, this business had to be completely restructured. In this respect, extraordinary charges such as personnel expenses due to cutbacks in staff, increased selling expenses and a slower restart in terms of customers had a particularly high impact. Excessive rents and other costs had to be reduced as well. We were highly successful in doing so. After extremely high start-up losses in the first three months (Q1) in the amount of EUR 1.3m, the company is making small profits by now.

"We are confident we will succeed in making the company a profitable member of DATAGROUP within the next 12 months and raising margins to group level", says Max H.-H. Schaber, CEO of DATAGROUP.

Additional extraordinary charges incurred in the context of the start-up of operating situations in major projects. In this respect, we recognized start-up losses in the total amount of EUR 1.1m, which have been largely processed to date. These operating situations are expected to deliver positive earnings contributions in the course of the current fiscal year. The extraordinary charges are also reflected in the cash flow statement. Cash flow from operating activities has been negatively impacted by pre-financing costs in Ulm by approximately EUR 2.5m. Additionally, approximately EUR 7.3m is due to project ramp-up costs and customer pre-financing for newly won projects. The cash flow from investing activities, on the other hand, improved significantly, in particular due to a decrease in investments in property, plant and equipment by around EUR 5m.

When eliminating the adverse one-off effects on profits, EBITDA would have grown by 34.2 % to EUR 12.2m, corresponding to an EBITDA margin of 14.6 %. EBIT would have increased by 33.2 % to EUR 5.4m, thus achieving a rate of 6.5 %. EPS would have arrived at 39 cents per share after elimination of these one-off effects.

"Taking into consideration that Q1 is traditionally weaker than the following quarters, we are looking to the future with great confidence in terms of the overall situation of the current fiscal year", summarizes Max H.-H. Schaber.
 

CORBOX ENSURES STABLE ORDER INTAKE

In the first quarter, DATAGROUP has acquired eleven new customers and was able to upsell products to seven existing customers on the basis of the CORBOX. CORBOX is a modular and combinable suite of IT services covering all areas of IT operations in companies. Thanks to standardization and highest quality standards, DATAGROUP makes IT simple for its customer. The CORBOX is extended by new services on a regular basis, e.g. SAP on Azure or Robots-as-a-Service. Overall, ~83 % of gross margins are generated by long-term contracts with terms of between three and seven years. This ensures planning certainty and sustainability for the business.
 

ACQUISITIONS COMBINE EXPERTISE IN FINANCIAL SERVICES AND AUTOMATION

In January, the IT service provider announced the 24th acquisition since its IPO in 2006. Subject to the approval by the German antitrust authorities, DATAGROUP will acquire 68 % of the shares in Diebold Nixdorf Portavis (Portavis). Portavis has around 200 employees providing IT services to customers in the financial services sector. Last year, the company generated revenue of some EUR 60m, the first-time consolidation into the DATAGROUP Group is scheduled for March 1. "With DATAGROUP Financial IT Services we have a dedicated center of competence for IT services for the financial sector, which we can continue to expand with the help of the experts from Portavis", says Chief Officer Peter Schneck, who is responsible for DATAGROUP's M&A.

The strengthening of the IT financial sector is not the only organizational change in the first quarter. In January, DATAGROUP Mobile Solutions AG and Almato GmbH merged to become Almato AG. The new subsidiary combines expertise in the areas of software development, automation and Artificial Intelligence. The center piece is the new CORBOX service, Robots-as-a-Service, an AI-enabled platform for the automation of business processes.

"We are delighted about the positive sales growth in the first quarter. We have laid the foundation for further growth with these acquisitions, both in the financial sector and in the area of Artificial Intelligence. The numerous new customers are proof that our model of making IT simple has hit a nerve", Max H.-H. Schaber, CEO of DATAGROUP, summarizes the outcome of the first quarter. Traditionally, an outlook for the fiscal year will be provided at the Annual General Meeting which will be hosted in Pliezhausen near Stuttgart on March 3.

An overview of the most important key figures for the first quarter of 2019/2020 can be found on the DATAGROUP website at datagroup.de/publications

For the first time, DATAGROUP offers all investors and interested participants to get in contact with the Management Board during a conference call on quarterly earnings. The conference call will take place on 10.03.2020 at 2:00 pm. Please find the dial-in details below.

FINANCIAL CALENDAR

ABOUT DATAGROUP

DATAGROUP is one of the leading German IT service companies. Over 2,700 employees at locations across Germany design, implement, and operate IT infrastructures and business applications such as SAP. With its CORBOX product, DATAGROUP is a full-service provider, supporting over 600k global IT workplaces for medium and large enterprises as well as public authorities. The company is growing organically and through acquisitions. The acquisitions strategy is particularly noted for its optimal integration of new companies. DATAGROUP is actively participating in the IT service market's consolidation process with its "buy and turn around" and its "buy and build" strategy.

CONTACT

Claudia Erning
Investor Relations
T +49 7127 970-015
[email protected]