April 24, 2018 at 9:13 AM CEST

Interim Management Statement Q1 2018

Release no. 11/2018

 

Columbus delivers 75% growth in EBITDA* 
In the first quarter of 2018 Columbus delivers revenue growth of 51% and increases EBITDA* by 75%. The growth in EBITDA is primarily driven by the iStone acquisition.

In accordance with the regulations for listed companies' submission of interim statements, Columbus A/S hereby submits the interim management statement for the period 01.01.2018-31.03.2018 (3 months).

 

EBITDA growth driven by acquisitions

Revenue in Q1 2018 amounted to DKK 469m (2017: DKK 310m), corresponding to an increase of 51% compared to the same period last year.

The revenue growth is primarily driven by the acquisition of the Swedish company iStone, which was acquired on 2 January 2018, and secondarily by the acquisition of HiGH Software on 9 February 2018.

EBITDA* amounted to DKK 51m (2017: DKK 29m), corresponding to an increase of 75% compared to the same period last year.  

The increase in EBITDA* is driven by the previously mentioned acquisitions.

The result before tax increased by 92% to DKK 32m. Besides the increase in EBITDA* the result before tax is affected by a currency gain of DKK 11.5m arising from currency adjustment of the residual purchase price related to the iStone acquisition. Futher, the result before tax is negatively affected by extraordinary depreciation of Columbus Software of DKK 15m.

 

Currency rate effect

Revenue and EBITDA* are negatively affected by the decline in the USD rate, which affects the revenue by DKK -13.3m and EBITDA* by DKK -1.1m. The decline in GBP and RUB rates have less effect on the results. In total, the declining currency rates affect the revenue by DKK -17.7m and EBITDA* by DKK -1.3m.

 

Progress in the services business

In Q1, the service revenue increased by 64%, from DKK 225m to DKK 370m, and chargeable hours increased from 55% to 57% compared to the same period last year.

The increase in the service revenue is primarily driven by the iStone acquisition.

 

Recovery of Columbus US

During 2017, the US business adjusted cost levels to compensate for the decline in sales. The recovery plan is executed according to plan.

 

Progress in the sale of Columbus Software

The sale of Columbus Software has come off to a good start with a total revenue growth of 38%. The sale of software maintenance services increased by 39% as a consequence of a satisfactory renewal rate and an emerging positive effect of the cloud conversion. The sale of licenses increased by 9% due to heavy demand in Q1. The sale of own cloud software products showed good progress.

 

Columbus Care and cloud drive growth in recurring revenue

In Q1 2018 recurring revenue increased by 29% and constituted 21% of the total revenue. The progress is driven by a considerable increase in sale of Columbus Care of 52% as well as an increase in total cloud revenue of 234%.

DKK ´000 Q1 2018 Q1 2017 2017
Columbus Software licenses 6,959 6,387 26,673
Columbus Software subscriptions 16,907 12,195 50,258
Columbus Cloud 2,752 664 6,248
External licenses 17,774 16,967 94,629
External subscriptions 43,401 41,493 190,119
External Cloud 4,485 1,502 9,215
Services 369,601 225,089 822,551
Other 7,510 5,755 19,069
Total net revenue 469,389 310,053 1,218,762
       
EBITDA before share-based payment 51,453 29,454 148,510
Share-based payment -837 -597 -2,302
EBITDA 50,616 28,857 146,208

 

 

Expectations to 2018

Columbus maintains the announced expectations to 2018:

  • Revenue in the level of DKK 2bn
  • EBITDA* in the level of DKK 200m
  • Columbus Software revenue in the level of DKK 90m
  • 10% dividend on nominal share capital
     

Latest developments

No events or transactions with a material effect on the company's financial position have occurred since the balance sheet date.

"Columbus started the year with two significant acquisitions of iStone and HiGH Software and progress within a range of our strategic business areas such as cloud,  Columbus Care and Columbus Software. iStone and HiGH Software come with a range of exciting solutions and competencies which will strengthen our market position and we look forward to creating even great value for our customers and reaching our strategic business goals", says CEO and President in Columbus, Thomas Honoré.

Ib Kunøe
Chairman
Columbus A/S

 
Thomas Honoré
CEO & President
Columbus A/S
For further information, please contact:
CEO & President, Thomas Honoré .: +45 70 20 50 00

 

*EBITDA before share-based payment

Translation: In the event of any inconsistency between this document and the Danish language version, the Danish language version shall be the governing version.


 

Customer Success — Taking care of our customers for life
Columbus' fundamental goal is to take care of our customers for life. Columbus aims to be widely recognized as a strategic business partner that enhances our customer's success by improving the value realization of   their ERP investments and by leading them in the digital transformation of their business 
This means that Columbus will intensify the focus on creating a unique customer experience and increase customer

 
  satisfaction from the customer meet Columbus for the first time to delivering unique solutions, high quality services and streamlined project delivery and support 24/7.
         
         
Digital Leadership — Accelerate business innovation
Columbus helps our customers in the digital transformation of their business. With Digital Leadership Columbus has two focus areas. Firstly, Columbus will continue to strengthen our leadership position within ERP by investing in new companies, applications,   methodologies and business processes that optimizes and improves the implementation of ERP-solutions. Secondly, Columbus will establish a leadership position within Digital Transformation. Many companies are about to or in the process of transforming their   business in order to succeed in the digital economy. Columbus will develop solutions and services within cloud, mobile, social, analytics and Internet of Things that help companies take advantage of the digital opportunities. 

 
         
         
Process Excellence — Quality in everything we do
In Columbus, we constantly strive to optimize and streamline our business operations in order to achieve strong sales excellence and deliver projects, services and support of high 

 
  quality to our customers. Our goal is to create the best customer experience in the industry. The focal point is quality in everything we do — from the initial contact with customers, 

 
  over sales and design of the business solution to the implementation process and lifetime support. This means an intense focus on optimizing and streamlining our processes globally.
         
         
Our People — Attract, develop and retain the best people
Columbus' greatest asset is our employees and therefore it is crucial that we attract and retain the best people in the industry. We want to attract highly skilled people by   providing challenging career opportunities, attractive working conditions and professional and personal growth. Columbus want to create a customer culture, where 

 
  meeting the customers' expectations sets the direction in everything we do. 
This means that Columbus always strives to deliver projects on time, within budget and at the highest quality. 

 

 


 

Income statement

 

DKK ´000 Q1 2018 Q1 2017 2017
       
Net revenue 469,389 310,053 1,218,762
External project costs -91,720 -60,371 -267,455
Gross profit 377,669 249,682 951,307
       
Staff expenses and remuneration -274,718 -178,584 -659,790
Other external costs -52,718 -41,669 -150,335
Other operating income 1,220 25 7,380
Other operating costs 0 0 -52
EBITDA before share-based payment 51,453 29,454 148,510
       
Share-based payment -837 -597 -2,302
EBITDA 50,616 28,857 146,208
       
Depreciation/amortization -28,295 -9,778 -39,479
Operating profit (EBIT) 22,321 19,079 106,729
       
Financial income 9,925 18 909
Financial expense -118 -2,388 -6,008
Profit before tax 32,128 16,709 101,630

 

 

Financial income and expenses

Financial income and expenses primarily concerns exchange rate adjustments in relation to group receivables and monetary items.

Balance sheet

 

DKK ´000 Q1 2018 Q1 2017 2017
       
ASSETS      
       
Goodwill 909,223 464,391 439,342
Customer base 72,398 34,370 27,674
License rights 1,127 19 1,173
Development projects finalized 64,004 64,541 68,934
Development projects in progress 6,884 5,310 5,558
Property, plant and equipment 25,257 15,975 12,645
Investments in associates 296 0 0
Deferred tax assets 22,549 21,086 23,786
Other receivables 6,474 4,239 5,162
Total non-current assets 1,108,212 609,931 584,274
       
Inventories 0 688 27
       
Trade receivables 276,579 136,582 148,900
Contract work in progress 13,985 13,815 7,577
Corporate tax receivables 3,659 6,429 3,397
Deferred tax assets 3,533 3,400 3,194
Other receivables 9,836 2,868 3,217
Prepayments 27,762 13,711 12,942
Receivables 335,354 176,805 179,227
       
Cash 92,000 64,918 88,235
       
Total current assets 427,354 242,411 267,489
       
TOTAL ASSETS 1,535,566 852,342 851,763

 

Balance sheet

 

DKK ´000 Q1 2018 Q1 2017 2017
       
EQUITY AND LIABILITIES      
       
Share capital 149,832 149,832 149,832
Reserves on foreign currency translation -54,706 -7,163 -28,779
Retained profit 450,021 360,454 428,059
Group shareholders equity 545,147 503,123 549,112
Minority interests 4,151 2,653 3,031
Equity 549,298 505,776 552,143
       
Deferred tax 33,346 10,619 17,808
Provisions 341,564 18,008 6,943
Debt to credit institutions 184,658 0 607
Non-current liabilities 559,568 28,627 25,358
       
Debt to credit institutions 6,089 20,607 8,810
Client prepayments 20,198 27,885 18,149
Trade payables 67,017 48,033 65,956
Corporate tax payables 1,721 19,209 2,266
Other liabilities 268,056 157,118 130,316
Accruals 63,619 45,087 48,765
Current liabilities 426,700 317,939 274,262
       
Total liabilities 986,268 346,566 299,620
       
TOTAL EQUITY AND LIABILITIES 1,535,566 852,342 851,763

 

Segment data

In order to support decisions about allocation of resources and assessment of performance of the segments, the Group's internal reporting to the Board of Directors of the Parent Company is based on the following grouping of operating segments:

Strategic business areas Description       Geographical segment
ISV (Independent Software Vendor) Development and sale of industry-specific software within Columbus' three focus industries: Retail, food and manufacturing No specific area
Consultancy Sale, implementation and service of standard business systems, Western Europe
Eastern Europe
North America
             
Information about the Group's segments is stated below,
             
    Consultancy    
DKK ´000 ISV Western
Europe
Eastern
Europe
North
America
HQ, GDC and Eliminations Total
             
Q1 2018            
             
Columbus Software licenses 5,619 2,343 281 890 -2,174 6,959
Columbus Software subscriptions 16,241 4,323 256 963 -4,876 16,907
Columbus cloud 2,318 1,180 49 0 -795 2,752
External licenses 886 10,121 1,634 5,524 -391 17,774
External subscriptions 2,276 16,377 3,299 22,349 -900 43,401
External cloud 105 1,653 39 2,688 0 4,485
Services 14,252 279,728 23,696 53,537 -1,612 369,601
Other 196 5,655 641 1,161 -143 7,510
Total net revenue 41,893 321,380 29,895 87,112 -10,891 469,389
             
Gross profit 34,607 247,065 24,406 58,177 13,414 377,669
EBITDA 17,944 30,763 3,320 7,022 -8,433 50,616
             
             
    Consultancy    
DKK ´000 ISV Western
Europe
Eastern
Europe
North
America
HQ, GDC and Eliminations Total
             
Q1 2017            
             
Columbus Software licenses 4,859 2,677 721 159 -2,029 6,387
Columbus Software subscriptions 10,020 4,151 449 1,257 -3,682 12,195
Columbus cloud 664 100 0 0 -100 664
External licenses 0 5,031 3,523 8,481 -68 16,967
External subscriptions 0 12,195 5,138 24,165 -5 41,493
External cloud 0 219 0 1,285 -2 1,502
Services 4,177 119,095 25,662 79,530 -3,375 225,089
Other 283 2,645 423 2,688 -284 5,755
Total net revenue 20,003 146,113 35,916 117,565 -9,545 310,053
             
Gross profit 16,949 114,996 28,095 82,783 6,859 249,682
EBITDA 9,679 18,055 4,279 3,941 -7,097 28,857

 

 

Attachment

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Investor Contact

Shareholders, financial analysts, bank representatives, brokerage firms and other investment professionals may address investor specific inquiries directly to:

 

Hans Henrik Thrane
CFO, Columbus

E-mail: hht@columbusglobal.com
Phone: +45 70 20 50 00