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Columbus — Interim / Quarterly Report 2016
Apr 28, 2016
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Download source fileRelease no. 13/2016
Columbus delivered a good start to the year with 15% revenue growth
In accordance with the regulations for listed companies’ submission of interim
statements, Columbus A/S hereby submits the interim management statement for
the period 01.01.2016-31.03.2016 (3 months).
Strong growth driven by the services business
Revenue in Q1 2016 amounted to DKK 275m (2015: DKK 240m), corresponding to an
increase of 15% compared to the same period last year. EBITDA* amounted to DKK
26m (2015: DKK 14m), corresponding to an increase of 85%.
The revenue growth is primarily affected by acquisitions made in 2015 and 2016.
Besides, we see a solid growth in the services business, mainly in Columbus’ US
business.
The increase in EBITDA is partly driven by the effect of acquisitions, and
partly by a significant growth in the profitability in the services business.
The improvement of the profitability is partly driven by considerable cost
reductions in Norway and partly by a significant improvement in chargeable
hours in both Norway and the US.
The development in Norway and the US is in line with expectations and is a
result of the recovery plans initiated by the Group in 2015.
Financial value drivers (KPI’s)
In connection with Columbus’ new five-year strategy, the Group has determined
three value drivers, which reflect the new strategic direction. The value
drivers measure the development in relation to significant success criteria for
future growth and value creation.
Value drivers:
- Improve profitability in the services business
Columbus’ services business is the largest revenue contributor in the Group.
Columbus aims to deliver higher productivity and quality in the services
business to optimize delivery, minimize risk and control cost. The value driver
”Service EBITDA” reflects the achievement of this target.
In Q1 2016 the service EBITDA increased from DKK 4.6m to DKK 17.0m,
corresponding to an increase of DKK 12.4m. The main reason for this improvement
is an increase in chargeable hours from 56% to 60%. The increase primarily
comes from the US and Norway, and from the 2015 acquisitions and the
acquisition of Systemhosting on 1 February 2016.
- Scaling of own software sales
Columbus Software generates high earnings while creating high value for
customers. We aim to grow our software sales within Columbus Software licenses,
subscriptions and cloud solutions.
In Q1 2016 the sale of Columbus Software increased by 7%. The revenue from
Columbus Software subscriptions increased by 15%. Considering the strong sale
of Columbus Software in Q1 2015, the development is satisfactory and in line
with expectations.
- Growth in recurring revenue
Columbus expects to grow the recurring revenue as this creates more stability
in the business. The recurring and predictable revenue consists of Columbus
Software subscriptions, third party software subscriptions, cloud revenue and
ColumbusCare contracts.
These revenue categories support a positive development in the customer
relations, where Columbus becomes the strategic business partner.
Recurring revenue increased by 18%, primarily affected by acquisitions. The
proportion of the total revenue is 23% and is at the same level as in Q1 2015.
The development is in line with expectations.
DKK ´000 Q1 2016 Q1 2015 2015
Columbus licenses 7,973 8,138 52,251
Columbus subscriptions 10,417 9,061 44,530
External licenses 18,210 14,910 107,525
External subscriptions 42,108 36,224 184,524
Consultancy 191,557 166,745 715,545
Other 5,065 4,774 19,068
Total net revenue 275,331 239,852 1,123,443
EBITDA before share-based payment 25,908 14,000 105,225
Share-based payment -546 -315 -1,362
EBITDA 25,362 13,685 103,863
Columbus maintains expectations to 2016
Columbus maintains the announced expectations to 2016 and thus expects revenues
in the level of DKK 1.2bn and EBITDA* in the level of DKK 120m.
Latest developments
No events or transactions with a material effect on the company’s financial
position have occurred since the balance sheet date.
Ib Kunøe Thomas Honoré
Chairman of the Board CEO & President
Columbus A/S 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.
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 their ERP-investments and satisfaction from the
is to take care of our by leading them in the customer meet Columbus
customers for life. digital transformation of for the first time to
Columbus aims to be their business delivering unique
widely recognized as a This means that Columbus solutions, high quality
strategic business will intensify the focus services and
partner that enhances our on creating a unique streamlined project
customer’s success by customer experience and delivery and support
improving the value increase customer 24/7.
realization of
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Digital Leadership – Accelerate business innovation
Columbus hel our customers methodologies and business business in order to
in the digital processes that optimizes succeed in the digital
transformation of their and improves the economy. Columbus will
business. With Digital implementation of develop solutions and
Leadership Columbus has ERP-solutions. Secondly, services within cloud,
two focus areas. Firstly, Columbus will establish a mobile, social,
Columbus will continue to leadership position analytics and Internet
strengthen our leadership within Digital of Things that help
position within ERP by Transformation. Many companies take
investing in new companies are about to or advantage of the
companies, applications, in the process of digital opportunities.
transforming their
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Process Excellence – Quality in everything we do
In Columbus, we constantly quality to our customers. over sales and design of
strive to optimize and Our goal is to create the the business solution
streamline our business best customer experience to the implementation
operations in order to in the industry. The process and lifetime
achieve strong sales focal point is quality in support. This means an
excellence and deliver everything we do – from intense focus on
projects, services and the initial contact with optimizing and
support of high customers, streamlining our
processes globally.
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Our People – Attract, develop and retain the best people
Columbus’ greatest asset providing challenging exceeding the customers’
is our employees and career opportunities, expectations sets the
therefore it is crucial attractive working direction in everything
that we attract and conditions and we do.
retain the best people in professional and personal This means that Columbus
the industry. We want to growth. Columbus want to always strives to
attract highly skilled create a customer deliver projects on
people by culture, where time, within budget and
at the highest quality.
Income statement
DKK ´000 Q1 2016 Q1 2015 2015
Net revenue 275,331 239,852 1,123,443
External project costs -52,677 -50,684 -274,962
Gross profit 222,654 189,168 848,481
Staff expenses and remuneration -160,439 -143,788 -606,755
Other external costs -36,223 -33,404 -150,013
Other operating income 0 2,082 13,549
Other operating costs -84 -57 -37
EBITDA before share-based payment 25,908 14,000 105,225
Share-based payment -546 -315 -1,362
EBITDA 25,362 13,685 103,863
Depreciation -7,501 -6,000 -29,020
Operating profit (EBIT) 17,861 7,685 74,843
Financial income 90 13,543 9,183
Financial expense -1,754 -75 -626
Pre-tax earnings 16,197 21,153 83,400
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 2016 Q1 2015 2015
ASSETS
Goodwill 339,962 279,145 319,249
Other intangible assets 29,977 20,390 21,604
Development projects finalized 55,781 41,873 56,996
Development projects in progress 5,319 6,620 2,065
Intangible assets 431,039 348,029 399,914
Leasehold improvements 123 135 96
Property, plant and operating equipment 16,170 10,880 12,535
Tangible assets 16,293 11,015 12,631
Deferred tax assets 18,581 12,256 18,951
Total long-term assets 465,913 371,300 431,496
Inventories 1,228 317 1,303
Trade receivables 119,950 155,825 141,710
Contract work in progress 17,858 13,092 11,546
Corporate tax receivables 346 4,475 333
Deferred tax assets 7,500 7,500 7,500
Other receivables 10,368 11,266 12,058
Prepayments 10,622 8,023 9,542
Receivables 166,644 200,180 182,689
Cash 52,333 39,566 82,294
Total short-term assets 220,205 240,063 266,285
TOTAL ASSETS 686,118 611,363 697,781
Balance sheet
DKK ´000 Q1 2016 Q1 2015 2015
EQUITY AND LIABILITIES
Share capital 142,123 137,831 142,123
Reserves on foreign currency translation -16,302 -9,553 -11,006
Retained profit 270,400 220,147 255,062
Group shareholder equity 396,221 348,425 386,179
Minority interests 2,791 4,665 2,573
Equity 399,012 353,090 388,752
Deferred tax 6,436 309 6,454
Provisions 13,049 17,461 13,876
Non-current liabilities 19,485 17,770 20,330
Debt to credit institutions 1,302 858 420
Client prepayments 30,077 28,068 43,374
Trade payables 43,080 47,715 68,270
Corporate tax payables 9,528 5,977 10,601
Other liabilities 151,660 132,017 138,723
Accruals 31,974 25,868 27,311
Current liabilities 267,621 240,503 288,699
Total liabilities 287,106 258,273 309,029
TOTAL EQUITY AND LIABILITIES 686,118 611,363 697,781
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 Description Geographical segment
areas
ISV (Independent Development and sale of No specific area
Software Vendor) industry-specific software
within Columbus' three focus
industries: Retail, food and
manufacturing
Consultancy Sale and implementation of Western Europe
standard business systems. Eastern Europe
North America
Information about the Group’s segment is stated below.
Consultancy
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DKK ´000 ISV Western Easter North HQ, GDC and Total
Europe n America Eliminations
Europe
Q1 2016
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Columbus licenses 6,678 2,157 378 417 -1,657 7,973
Columbus 9,107 2,758 321 1,078 -2,847 10,417
subscriptions
External licenses 0 5,140 2,119 10,964 -13 18,210
External 0 15,104 4,807 22,284 -87 42,108
subscriptions
Consultancy 3,869 109,570 20,998 63,389 -6,269 191,557
Other 196 2,330 409 2,082 49 5,066
Total net revenue 19,850 137,059 29,032 100,214 -10,824 275,331
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Gross earnings 18,976 105,945 23,011 67,480 7,242 222,654
EBITDA 9,696 13,934 2,427 5,278 -5,973 25,362
Consultancy
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DKK ´000 ISV Western Easter North HQ, GDC and Total
Europe n America Eliminations
Europe
Q1 2015
0
Columbus licenses 5,436 4,477 770 743 -3,288 8,138
Columbus 7,725 2,765 383 735 -2,547 9,061
subscriptions
External licenses 0 5,944 1,129 8,282 -445 14,910
External -93 15,343 4,376 16,598 0 36,224
subscriptions
Consultancy 5,107 97,101 23,201 46,080 -4,744 166,745
Other 261 2,199 235 2,038 41 4,774
Total net revenue 18,436 127,829 30,094 74,476 -10,983 239,852
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Gross earnings 15,883 97,780 23,933 48,032 3,540 189,168
EBITDA 9,649 8,309 2,099 969 -7,341 13,685