DATAGROUP Presents Strong Quarter Results with Significant Improvement of all Key Figures

Pliezhausen, August 24, 2021. DATAGROUP has again improved the performance in the third quarter. Revenue was up 26.6% to EUR 119.3m. Total revenue reached EUR 330.8m in the nine-month period, corresponding to an increase of 25.2% yoy. EBITDA was up disproportionately from EUR 1.9m in Q3 2019/2020 to EUR 16.7m (+787.1 %) with Q3 2019/2020 being adversely affected by special effects. This corresponds to an increase of EUR 25.5m to EUR 47.0m (+84.1%). The other earnings figures have also soared significantly. The equity ratio has improved despite an acquisition-related increase in the balance sheet total. The proportion of service revenue remains on a very high level.

Revenue Development

Q3 revenue has again grown significantly by 26.6 % to EUR 119.3m (PY: EUR 94.2m). When compared to the nine-month figures of FY 2019/2020 (01.10.2019 – 30.06.2020), DATAGROUP recorded revenue growth of 25.2 % from EUR 264.2m to EUR 330.8m in the current fiscal year. This increase was mainly driven by the first-time consolidations of URANO Informationssysteme GmbH (“URANO”) and dna Gesellschaft für IT Services GmbH (“dna”), which were consolidated on May 1, 2021. Since the start of the fiscal year, DATAGROUP has achieved organic growth of 9.6 %, which was mainly driven by the thriving business of the fully integrated DATAGROUP entities. Organic growth was also supported by new business, which is in full production mode by now. Further, additional business was generated by upselling into a couple of customer situations. The proportion of service revenue remains on a very high level of 82.7 %.

“The current business figures underline that our strategy of generating recurring revenue with standardized services from our CORBOX portfolio pays off as a reliable source of income. The sustainable profitability of our existing customers with long-term service contracts is proof of the sustainability of the CORBOX-Service-as-a-Product approach”, comments Max H.-H. Schaber, CEO of DATAGROUP. “We assume that we will continue to benefit from the digitization trend, which has intensified significantly since the beginning of the coronavirus pandemic”, adds Andreas Baresel, Chief Production Officer.

Earnings Development

Operating earnings before taxes, interest, depreciation and amortization (EBITDA) have surged from EUR 1.9m in Q3 2019/2020 to EUR 16.7m in Q3 2020/2021 (+787.1 %) and from EUR 25.5m to EUR 47.0m (+84.1 %) in the corresponding nine-month period. Earnings before interest and taxes (EBIT) was boosted from EUR -6.0m to EUR 7.8m. EBIT in the nine-month period improved by 495.0 % to EUR 21.6m (PY EUR 3.6m). Earnings per share (EPS) stand at EUR 0.63 versus EUR -0.83 in the previous year or EUR 1.93 after nine months of the fiscal year versus EUR 0.24 in the prior-year period.

The EBITDA margin in Q3 2020/2021 is 14.0 % versus 2.0 % in the prior-year period and 14.2 % after nine months of the fiscal year versus 9.7 % in the prior-year period. It should be noted that the prior-year earnings figures, especially in the third quarter, had been heavily burdened by delayed start-ups in the banking sector as well as the coronavirus pandemic.To this end, provisions had been set up on June 30, 2020, in the total amount of EUR 12.0m which were offset by other operating income due to a negative difference from the purchase price allocation (badwill) of some EUR 10m from the acquisition of Portavis. Importantly, no provisions were released in Q3, so that the presented Q3 result can be considered fully operational. “After the losses in earnings in the last year in connection with the start-ups of new customers at DATAGROUP Financial IT Services, we deliver a strong margin again which underlines the company’s sustainable earnings power. I am very confident that we will exceed the full-year revenue of EUR 440m which we had guided for as well as the expected EBITDA of EUR 61m”, CEO Max H.-H. Schaber comments the earnings development.

Balance Sheet Development

The acquisitions of URANO and dna have increased the balance sheet total from EUR 386.1m on June 30, 2020 to EUR 431.8m on the current reporting date. Still, the equity ratio has improved slightly from 18.3 % to 19.8 %. Despite investments to the tune of EUR 35m in the context of the two company transactions above, financial resources stood at EUR 50.0m on June 30, 2021 versus EUR 66.10m on June 30, 2020.

URANO Informationssysteme GmbH and dna Gesellschaft für IT Services GmbH have been included in the consolidated financial statements for the first time as per May 1, 2021. The purchase price allocations drawn up for this purpose have not been conclusively processed and reviewed yet and should be considered provisional. The acquired assets and liabilities were subject to a preliminary assessment.

Cashflow

The development of the operating cash flows (OPEX) was particularly satisfying. They were up 199.0 % from EUR 13.6m to EUR 40.7m, primarily driven by the substantial increase of the operating income. CAPEX was significantly reduced: Investments in property, plant and equipment and intangible assets amounted to EUR 5.6m in the first nine months of FY 2020/2021 after EUR 14.9m in the comparable period a year before, but we expect to see a catch-up effect in Q4.

Further Acquisitions Round Off the Portfolio

URANO and dna, the new companies consolidated as of May 1, 2021, round off the nationwide footprint and our service portfolio. The integration of the companies is well underway, and we expect them to make significant contributions in sales and earnings both in the further course of this year but also in the next fiscal years.

Analyst Meeting

Chief Executive Officer Max H.-H. Schaber will explain the figures of the first three quarters in an online conference today at 10.00 am CET. All interested investors, analysts, and journalists are cordially invited to participate.

You can register for the event under the following link: https://attendee.gotowebinar.com/register/434819881200663821