REVENUE +18.8%; EBITDA +15.4%; EBIT +15.1%; EBT +18.6%. EBITDA MARGIN AT 12.3%. REVENUE AND EARNINGS TARGETS EXCEEDED.

(ALL FIGURES PRIOR TO APPLICATION OF IFRS 15 AND 16)

Pliezhausen, November 25, 2019. DATAGROUP SE (WKN A0JC8S) today publishes preliminary unaudited figures for FY 2018/2019. The IT service provider has clearly exceeded its guidance and thanks to its continued growth underlines its aspirations to take a leading position in the German market. In addition to a strong organic business performance (revenue + 4.9%), the positive M&A activities significantly contributed to growth.

In FY 2018/2019 (01.10.2018 – 30.09.2019) revenue was up 18.8% to EUR 323.3m (previous year EUR 272.1m). Operating earnings before taxes, interest, depreciation and amortization (EBITDA) climbed by 15.4% to EUR 39.8m (PY EUR 34.5m), the EBITDA margin came in at 12.3% (PY 12.6 %). The slight decline of the EBITDA margin is due to the sales-related connection of transition expenses and hardware deliveries. Without these effects, the operating EBITDA margin would have been ~13%. Earnings before interest and taxes (EBIT) increased by +15.1% to EUR 23.5m (PY EUR 20.4m). The EBIT margin was 7.3% (PY 7.5%). EBT improved by 18.6 % to EUR 21.9m (PY EUR 18.5m). Earnings per share (EPS) increased by 13.5% to EUR 1.76 (PY 1.55).

DATAGROUP again clearly exceeds its goals with these results. Management recently had guided for revenue in excess of EUR 300m and EBITDA of EUR 38.5m.
 
On the bottom line, the first-time adoption of IFRS 15 and 16 leads to postponements in revenue and EBITDA(1) for the period under review – these effects are shown in the table in the attached PDF version.

With the start of FY 2019/2020, DATAGROUP will base its financial reporting exclusively on post-IFRS 15/16 standard, since comparable year-on-year figures will be available on a quarterly basis from that date onwards.

Numerous large-scale orders provide for secure revenue in the long term

“A particularly pleasing level of incoming orders, the successful integration of the companies acquired in the previous years and the continuation of our acquisition strategy were the ingredients for a very good business performance in the year just closed”, said CEO Max H.-H. Schaber. “Having won renowned customers from the financial community, from industry as well as from the services, media and public sectors underlines DATAGROUP’s position as an IT service provider for customers with challenging SME structures.” The new customers include Bankhaus Lampe, Munich Trade Fair and the joint organization of Germany’s regional broadcasters (ARD) among others. The Group has again significantly expanded its customer base with its CORBOX core product, the modular range of services for smooth IT operations. Furthermore, the package of services has been significantly expanded by upselling among 16 existing customers.

Extended service portfolio due to two acquisitions

DATAGROUP has again actively grown in terms of inorganic growth as well: With effect of April 1, 2019, the company has acquired 100 % of the shares in UBL Informationssysteme GmbH (UBL), which is headquartered in Neu-Isenburg near Frankfurt/Main. In 2018, UBL generated annual revenue of over EUR 20m and a double-digit EBITDA margin with over 70 employees.

The multi-cloud and managed service provider develops and operates IT infrastructures and platforms for larger Mittelstand companies. With its focus on providing customized services from architecture to concept of operations in the cloud and its specialization in IBM infrastructures UBL is a perfect addition to DATAGROUP’s range of services. UBL’s competence in container technology increases the range of DATAGROUP’s central supply units in Cloud Solutions and thus creates a new knowledge center.

With effect of August 1, 2019, and thus without any major impact on the revenue development in the year under review, DATAGROUP has acquired assets and companies of IT-Informatik GmbH from insolvency and transformed it into a separate legal entity (DATAGROUP Ulm). The company is specialized in SAP consulting and maintenance, cloud infrastructure and software development, and supplies a broad portfolio of SME customers from various industries. 300 experts for SAP, infrastructure and software development came to DATAGROUP as part of the transaction. “With over 500 SAP experts in total, we are now one of the leading providers in this market of high-quality IT services in Germany”, said COO Dirk Peters. “In view of the upcoming wave of migrations from SAP R3 to S/4HANA we see ourselves well positioned to exploit the good growth prospects in this market segment.”

Structural conditions for future growth in place

DATAGROUP has grown to over 2,500 employees in the year under review and currently supports over 600k global IT workplaces from locations throughout Germany. To adjust the corporate structures to the increased size, DATAGROUP has expanded the management board amongst others. On October 1, 2018, Andreas Baresel took up the newly established position as Chief Production Officer, which involves responsibility and management across locations of the four central service factories at Board level. “We are intensely working on an improvement of our efficiency – we want to become even more productive by further improving our central supply units and by implementing a program to avoid organizational inefficiencies”, explains Andreas Baresel. “To this end, we intend to increasingly use future technologies such as Robotic Process Automation. Our centralized structure provides an optimal basis for a group-wide roll-out of such technologies”, he continued.

Additionally, the Supervisory Board appointed Peter Schneck as a further member of the Management Board of DATAGROUP on October 1, 2019. Mr. Schneck is responsible for mergers & acquisitions, investor relations and legal affairs.

In early April, the company seized the consistently favorable interest level to continue its corporate financing through promissory note loans. By taking up funds of EUR 69m over a term of up to seven years, DATAGROUP ensures there is a high degree of planning certainty and financial stability at favorable conditions. The liquid funds have increased the financial scope for further organic and inorganic growth. The promissory notes were placed with the principal banks, which confirms the great confidence the company enjoys among its long-term business partners. As usual, the loan is to be repaid from the cash flow.

Well equipped for the new fiscal year

The general business climate among IT Mittelstand companies continues to be good. The business situation in the digital industry has remained robust. In September, the Bitkom-ifo-digital index reached 43.9 points, up 3.4 points compared to the previous month. Unlike the overall economy, which is facing the effects of a trade war, impacts due to the forthcoming departure of the UK from the European Union as well as specific developments in a couple of sectors, the ICT industry continues to be at a far higher level. “We have a broad customer portfolio and therefore no sector risk”, said Max H.-H. Schaber. “IT basic operations are largely independent of any economic cycles anyway.” The recent study of market research firm Lünendonk confirms the increasing trend to cloud-based IT applications and a consistently high need for consultation for high-quality IT services by providers with a broad range of services such as DATAGROUP. Thanks to its diverse portfolio of IT services, the company covers strategically important topics such as IT architecture, IT security and S/4HANA. What is more, DATAGROUP combines long-standing expertise in on premise and private & managed cloud with a profound know-how of the public cloud and thus is well equipped to provide customers with hybrid scenarios that are optimally tailored to their needs.

(1)

The first-time adoption of IFRS 15 has an impact on the date as to when the revenue from a project business which has a transition and a subsequent operation phase is recognized. Revenue that was shown in the transition phase before is now deferred and spread evenly across the operating phase. No revenue is shown for large-scale projects which are in the transition phase – such as the NRW.Bank project in particular – even though a considerable amount of services is provided. In a comparison to the IFRS standard applied so far, this leads to a negative special effect in revenue in the amount of EUR 16.5m.

First-time accounting in accordance with IFRS 16 means that lease contracts for buildings and motor vehicle leasing contracts will in future be recognized as finance leases. Rights for the use of the rented buildings and motor vehicles are activated and loan obligations are passed. This leads to a balance sheet extension of EUR 26.9m. On the other hand, rental and motor vehicle leasing expenses are replaced by depreciation on the usage rights and loan interest expenses. This leads to an improvement in EBITDA of EUR 7.2m.

Financial Calendar

About DATAGROUP

DATAGROUP is one of the leading German IT service companies. Over 2,500 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.