November 7, 2018 at 9:15 AM CET

Interim Management Statement Q3 YTD 2018

Release no. 20/2018

Columbus delivers 52% growth in revenue
In the first three quarters of 2018 Columbus delivers revenue growth of 52% and increases EBITDA* by 22%. The growth in revenue is primarily driven by the iStone and HiGH Software acquisitions and increase in sale of Columbus Software.

In accordance with the regulations for listed companies’ submission of interim statements, Columbus A/S hereby submits the interim management statement for the period 01.01.2018-30.09.2018 (9 months).

Growth driven by acquisitions

Revenue in Q3 YTD 2018 amounted to DKK 1,382m (2017: DKK 907m), corresponding to an increase of 52% compared to the same period last year.

The revenue growth is primarily driven by the acquisitions of iStone and HiGH Software. The integration of the two companies is progressing as planned.

The sale of Columbus Software contributes with a growth of 34% compared to last year. The growth is deriving from both Columbus’ existing portfolio as well as the acquired HiGH Software.

Columbus Cloud grew by 129% to DKK 10m in the first three quarters of the year. The growth is driven both by organic growth and by acquisitions.

External software licenses declined by 25%, which is due to the fact that a number of large customers buy licenses directly from the vendor where Columbus receives an agent fee. The decline is also affected by the decline in external software sales in Columbus US as previously announced.

External cloud increased by 171% due to the increasing conversion to cloud-based solutions.

Service revenue increased by 72% which is driven by the acquisitions of iStone and HiGH Software. Columbus Care continued the growth and increased sales by 49%.

EBITDA* amounted to DKK 119m (2017: DKK 97m), corresponding to an increase of 22% compared to the same period last year.

The increase in EBITDA* is driven by the previously mentioned acquisitions, cost adjustments in the US business and the increase in sale of Columbus Software.

EBITDA* is impacted by accelerated integration cost in iStone in the third quarter, which has resulted in higher cost than first anticipated, due to a faster integration of the organization than initially planned. In Q3 YTD the integration cost amounts to DKK 14m.

The result before tax increased by 8% to DKK 66m. 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 remaining 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 -20.1m and EBITDA* by DKK -1.7m. The decline in GBP and RUB rates has less effect on the results. In total, the declining currency rates affect the revenue by DKK -28.5m and EBITDA* by DKK -2.5m.

Progress in the services business

In Q3 YTD, the service revenue increased by 72%, from DKK 619m to DKK 1,063m, and chargeable hours increased from 52% to 54% compared to the same period last year.

The increase in the service revenue is primarily driven by the iStone acquisition as services constitute the largest part of iStone’s revenue.

Progress in the sale of Columbus Software

The sale of Columbus Software increased by 34%. The sale of software subscriptions increased by 20% as a consequence of a satisfactory renewal rate and a positive effect of the cloud conversion. The sale of licenses increased by 37% due to increasing demand.

The sale of own cloud software products showed good progress increasing from DKK 4.4m to DKK 10m, a very satisfactory progress.

Columbus Care and cloud drive growth in recurring revenue

In Q3 YTD 2018 recurring revenue increased by 26% and constituted 22.5% of the total revenue. The progress is driven by a considerable increase in sale of Columbus Care which grew by 49%, an increase in Columbus Cloud growing by 129% as well as external cloud growing by 171%,

Columbus US improving

Columbus’ US business unit is performing according to plan with an adjusted cost level. Overall revenue is behind last year, however, EBITDA increased from DKK 6.6m to DKK 16.9m in the first three quarters in 2018.

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.

“The first 9 months of 2018 has been an extraordinary period for Columbus. With the acquisition of iStone, we have moved into a new league in the Nordic market and have extended our offering portfolio with market leading solutions like Commerce and M3. In addition, we are growing our Columbus Software and Columbus Care businesses which are our main market differentiators and key elements in creating close customer engagements”, says CEO and President in Columbus, Thomas Honoré.

DKK ´000YTD 2018YTD 20172017
Columbus Software licenses24,61017,92526,673
Columbus Software subscriptions43,93136,50950,258
Columbus Cloud10,0254,3866,248
External software licenses52,44969,59994,629
External software subscriptions148,560138,597190,119
External cloud16,9246,2519,215
Services1,063,261619,388822,551
Other22,07414,08619,069
Total net revenue1,381,834906,7411,218,762
    
EBITDA before share-based payment119,01997,346148,510
Share-based payment-7,392-1,737-2,302
EBITDA111,62795,609146,208

* EBITDA before share-based payment

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

 



Columbus2020

Columbus’ Columbus2020 strategy – towards growth

Based on Columbus’ strengthened position, as a result of successful execution of the Columbus15 strategy, the company launched a growth strategy in March. The strategy is named Columbus2020 and consists of four interconnected strategic elements.

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 ´000YTD 2018YTD 20172017
    
Net revenue1,381,834906,7411,218,762
External project costs-293,225-193,355-267,455
Gross profit1,088,609713,386951,307
    
Staff expenses and remuneration-813,397-505,577-659,790
Other external costs-160,812-110,494-150,335
Other operating income4,619537,380
Other operating costs0-22-52
EBITDA before share-based payment119,01997,346148,510
    
Share-based payment-7,392-1,737-2,302
EBITDA111,62795,609146,208
    
Depreciation, amortization and impairment-51,717-29,356-39,479
Operating profit (EBIT)59,91066,253106,729
    
Financial income9,10283909
Financial expense-2,786-5,137-6,008
Profit before tax66,22661,199101,630

Financial income and expenses

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

Balance sheet


DKK ´000YTD 2018YTD 20172017
    
ASSETS   
    
Goodwill896,959442,710439,342
Customer base67,40329,42727,674
License rights1,75091,173
Development projects finalized65,74458,51868,934
Development projects in progress10,06813,4955,558
Property, plant and equipment25,14213,69512,645
Deferred tax assets21,34421,78623,786
Other receivables7,0094,3115,162
Total non-current assets1,095,418583,951584,274
    
Inventories716327
    
Trade receivables260,394136,867148,900
Contract work in progress26,7508,7137,577
Corporate tax receivables6,4686,4733,397
Deferred tax assets3,5323,1083,194
Other receivables9,7534,1023,217
Prepayments33,20210,70612,942
Receivables340,099169,969179,227
    
Cash83,08665,19288,235
    
Total current assets423,192235,324267,489
    
TOTAL ASSETS1,518,610819,275851,763


Balance sheet


DKK ´000YTD 2018YTD 20172017
    
EQUITY AND LIABILITIES   
    
Share capital152,234149,832149,832
Reserves on foreign currency translation-45,468-25,346-28,779
Retained profit485,557385,873428,059
Group shareholders' equity592,323510,359549,112
Minority interests3,7433,1343,031
Equity596,066513,493552,143
    
Deferred tax27,12012,69117,808
Provisions225,96811,5796,943
Debt to credit institutions184,6080607
Non-current liabilities437,69624,27025,358
    
Debt to credit institutions6,85718,9788,810
Client prepayments17,76618,48818,149
Trade payables64,38245,05765,956
Corporate tax payables4,36517,3512,266
Other liabilities325,512134,813130,316
Accruals65,96645,82548,765
Current liabilities484,848281,512274,262
    
Total liabilities922,544305,782299,620
    
TOTAL EQUITY AND LIABILITIES1,518,610819,275851,763



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 areasDescription   Geographical segment
ISV (Independent Software Vendor)Development and sale of industry-specific software within Columbus' three focus industries: Retail, food and manufacturingNo specific area
ConsultancySale, implementation and service of standard business systems.Western Europe
Eastern Europe
North America
       
Information about the Group’s segments is stated below.
       
  Consultancy  
DKK ´000ISVWestern
Europe
Eastern
Europe
North
America
HQ, GDC and EliminationsTotal
       
YTD 2018      
       
Columbus Software licenses18,8767,5102,9901,918-6,68424,610
Columbus Software subscriptions39,98611,7641,0723,520-12,41143,931
Columbus Cloud8,8553,30416026-2,32010,025
External software licenses1,81330,5683,90217,344-1,17852,449
External software subscriptions6,40962,16113,17770,410-3,597148,560
External cloud5776,5683179,475-1316,924
Services42,922813,01372,934158,167-23,7751,063,261
Other58317,6351,6313,554-1,32922,074
Total net revenue120,021952,52396,183264,414-51,3071,381,834
       
Gross profit104,923720,97576,505177,0129,1941,088,609
EBITDA47,79972,6687,95716,949-33,746111,627
       
       
  Consultancy  
DKK ´000ISVWestern
Europe
Eastern
Europe
North
America
HQ, GDC and EliminationsTotal
       
YTD 2017      
       
Columbus Software licenses14,3507,5631,8591,416-7,26317,925
Columbus Software subscriptions32,30110,6319514,203-11,57736,509
Columbus Cloud4,0571,28700-9584,386
External software licenses029,15711,59429,008-16069,599
External software subscriptions048,14417,01873,819-384138,597
External cloud02,63603,637-226,251
Services12,735337,57371,298210,416-12,634619,388
Other3526,5671,5146,379-72614,086
Total net revenue63,795443,558104,234328,878-33,724906,741
       
Gross profit54,756334,75678,225224,56221,087713,386
EBITDA30,61263,8388,7786,563-14,18295,609

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

 

 

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