April 30, 2019 at 9:47 AM CEST

Interim Management Statement Q1 2019

Release no. 11/2019

Columbus had a good start to the year

In the first quarter of 2019 Columbus delivers a revenue growth of 3% (adjusted for last year’s divestiture of the SAP ERP business the growth is 7%) and an increase in net result before tax of 11%. The growth is primarily driven by sale of Columbus Care services and growth in the services business. Columbus maintains guidance for the year.

 

In accordance with the regulations for listed companies’ submission of interim statements, Columbus A/S hereby submits the interim management statement for the period 01.01.2019-31.03.2019 (3 months).

 

Organic growth of 7%

Revenue in Q1 2019 amounted to DKK 482m (2018: DKK 469m), corresponding to an increase of 3% compared to the same period last year. Isolated for the SAP ERP Business and Columbus Latvia divested in 2018 (constituting DKK 19.8m), Columbus delivered an organic growth of 7.2%.

The revenue growth is mainly driven by increased sale of Columbus Care services, a general growth in the services business and increased sales of external software.

 

EBITDA increased from DKK 50.6m to DKK 60.5m, a growth of 19%.

EBITDA is impacted by a decline in EBITDA in the US Business of DKK 5.8m and continued integration cost of iStone of DKK 2m.

Q1 is in general characterized by increased investments in building new offerings (9 Doors to Digital Leadership®), digitalization, marketing and continued integration of iStone.  

The result before tax increased by 11% to DKK 35.7m.

 

Currency rate effect

Revenue and EBITDA were not significantly impacted by currency fluctuations. However, the USD has increased compared to 2018 and SEK has declined. The net effect of the changes in these two currencies are immaterial.

Progress in the services business

In Q1, the service revenue increased by 3%. Organically (without SAP) the increase in service revenue is 8.5%. The increase in the service revenue was primarily driven by increased sale of Columbus Care services and a general progress in the services business where especially the business areas M3 and Commerce showed strong progress.

Chargeable hours constitute 56% in the first quarter of 2019 (2018: 57%). The small decline is primarily caused by lower efficiency in Russia, UK and US. 

Recovery of Columbus US

The US business entered 2019 with a challenging outlook in continuation of a difficult 2018. Columbus expects a continued decline in revenue and EBITDA during the first half of 2019 with a slow turn around in second half of 2019. We believe we have the right team in the US with many highly skilled individuals. However, as the turnaround has not materialized as expected, we are in the process of hiring a new local General Manager.

Progress in new business areas

In 2018, Columbus launched the framework of 9 Doors to Digital Leadership® which is our comprehensive services and solutions
catalogue. In Q1, the sale of the new business areas within Analytics & Business Insight, Customer Experience and Application Management (Columbus Care) delivered significant growth.

Progress in the sale of Columbus Cloud

The sale of Columbus Cloud has come off to a good start with a total revenue growth of 46%.  Columbus Cloud revenue now constitutes a larger part of Columbus Software sales than licenses sales, which

has been expected due to the cloud conversion. Overall, Columbus Software declined by 16% due to the accelerated cloud conversion and an extraordinary strong sale in 2018.

 

Columbus Care and cloud drive growth in recurring revenue

In Q1 2019 recurring revenue increased by 9% and constituted 22% of the total revenue. The progress is driven by a considerable increase in sale of Columbus Care of 14% as well as an increase in total cloud revenue of 54%.

Expectations to 2019

IFRS 16 “Leasing” is expected to have
a total impact on EBITDA 2019 of DKK 36m. This will impact the expected EBITDA margin by 1.7 percentage points. Profit before taxes will be slightly negatively
impacted by DKK -0.2m.

Columbus maintains the announced expectations to 2019:

  • Revenue in the level of DKK 2bn
  • EBITDA in the level of DKK 240m
  • Columbus Software revenue in the level of DKK 110m
  • 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 according to plan with progress in our business overall. We delivered an improvement in organic growth and satisfactory progress in a range of our strategic business areas such as Columbus Care and Analytics & Business Insight and Customer Experience”, says CEO and President in Columbus, Thomas Honoré.

DKK ´000 Q1 2019 Q1 2018* 2018*
Columbus Software licenses 3,649 6,959 29,373
Columbus Software subscriptions 14,775 16,907 57,949
Columbus Cloud 4,009 2,752 15,547
External software licenses 17,020 17,774 74,029
External software subscriptions 45,861 43,401 206,658
External cloud 7,102 4,485 24,095
Services 379,729 369,601 1,432,109
Other 10,328 7,510 35,492
Total net revenue 482,473 469,389 1,875,252
       
EBITDA before share-based payment 61,467 51,453 181,183
Share-based payment -998 -837 -9,774
EBITDA 60,469 50,616 171,409

 

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









 

Income statement

DKK ´000 Q1 2019 Q1 2018* 2018*
       
Net revenue 482,473 469,389 1,875,252
External project costs -95,827 -91,720 -391,276
Gross profit 386,646 377,669 1,483,976
       
Staff expenses and remuneration -283,935 -274,718 -1,091,192
Other external costs -41,739 -52,718 -220,048
Other operating income 497 1,220 8,472
Other operating costs -2 0 -25
EBITDA before share-based payment 61,467 51,453 181,183
       
Share-based payment -998 -837 -9,774
EBITDA 60,469 50,616 171,409
       
Depreciation, amortization and impairment -22,092 -28,295 -63,893
Operating profit (EBIT) 38,377 22,321 107,516
Financial income 760 9,925 13,663
Financial expense -3,411 -118 -5,738
Profit before tax 35,726 32,128 115,441

Depreciation, amortization and impairment contains depreciations of right-of-use assets in the amount of DKK 9.3m.

Balance sheet

 

DKK ´000 Q1 2019 Q1 2018* 2018*
       
ASSETS      
       
Goodwill 935,109 909,223 933,872
Customer base 60,871 72,398 64,350
Other intangible assets 6,289 1,127 6,661
Development projects finalized 71,985 64,004 67,480
Development projects in progress 9,767 6,884 11,723
Property, plant and equipment 23,811 25,257 24,190
Right-of-use assets 101,052 0 0
Investments in subsidiaries 0 296 0
Deferred tax assets 22,031 22,549 24,389
Other receivables 7,493 6,474 8,289
Total non-current assets 1,238,407 1,108,212 1,140,954
       
Inventories 66 0 5
       
Trade receivables 334,499 276,579 316,111
Contract assets 38,879 13,985 25,317
Corporate tax receivables 7,659 3,659 1,278
Deferred tax assets 7,595 3,533 4,521
Other receivables 19,640 9,836 11,327
Prepayments 23,836 27,762 25,136
Receivables 432,108 335,354 383,690
       
Cash 114,085 92,000 108,909
       
Total current assets 546,258 427,354 492,604
       
TOTAL ASSETS 1,784,665 1,535,566 1,633,558

 

DKK ´000 Q1 2019 Q1 2018* 2018*
       
EQUITY AND LIABILITIES      
       
Share capital 155,778 149,832 152,234
Reserves on foreign currency translation -26,475 -54,706 -44,503
Retained profit 558,071 450,021 528,608
Group shareholders' equity 687,374 545,147 636,339
Minority interests 3,281 4,151 3,381
Equity 690,655 549,298 639,720
       
Deferred tax 20,040 33,346 25,016
Other provisions 14,825 0 12,015
Contingent consideration 219,508 341,564 227,259
Debt to credit institutions 183,230 184,658 184,270
Lease liability rigth-of-use assets 70,602 0 0
Non-current liabilities 508,205 559,568 448,560
       
Debt to credit institutions 13,738 6,089 7,494
Contingent consideration 87,156 0 88,561
Contract liabilities 25,798 20,198 30,745
Trade payables 75,312 67,017 105,585
Corporate tax payables 5,582 1,721 4,514
Other Payables 263,276 268,056 235,173
Accruals 79,327 63,619 73,206
Lease liability rigth-of-use assets 35,616 0 0
Current liabilities 585,805 426,700 545,278
       
Total liabilities 1,094,010 986,268 993,838
       
TOTAL EQUITY AND LIABILITIES 1,784,665 1,535,566 1,633,558

* 2018 numbers are not adjusted for IFRS 16 (Leasing) effect.

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 2019            
             
Columbus Software licenses 2,624 1,369 128 390 -862 3,649
Columbus Software subscriptions 12,412 4,213 208 1,282 -3,340 14,775
Columbus cloud 3,102 1,787 118 0 -998 4,009
External licenses 624 10,051 2,360 4,575 -590 17,020
External subscriptions 1,963 19,968 3,515 21,705 -1,290 45,861
External cloud 504 2,599 199 3,800 0 7,102
Services 13,221 306,024 25,506 44,531 -9,553 379,729
Other 236 9,282 435 1,101 -726 10,328
Total net revenue 34,686 355,293 32,469 77,384 -17,359 482,473
             
Gross profit 30,759 273,728 26,447 49,952 5,760 386,646
EBITDA 15,506 50,845 2,589 1,202 -9,673 60,469
             
             
    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

 

 

 

Attachment

Shareholder Portal

As a shareholder you can access a wide range of investor information via the shareholder portal. View your shareholdings, request admission card for the Annual General Meeting, etc.

Link to shareholder portal


henrick_image

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