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- A new era in corporate transformation: Cloud Solutions for the first time main source of earnings, two international acquisitions and special investments of more than four million euros.
- First half of 2018 brings improved growth and increased profitability: Revenue +13.5 percent, EBITDA (adjusted) +25.8 percent, EBITDA margin (adjusted) 8.0 percent.
- Management Board confirms growth targets for 2018.
Munich, Germany, 13 August 2018 - 2018 marks a turning point for the CANCOM Group: For the first time, CANCOM generates more earnings in the Cloud Solutions segment than in the IT Solutions segment and for the first time two international company acquisitions were made in one year. But above all, the IT company is now investing heavily in reinvesting its earnings in the new highly scalable business areas of cloud technologies and its proprietary IT infrastructure management software AHP.
"We are moving CANCOM substantially away from the purely linear growth model of an IT systems house and reseller to the highly scalable business areas of a service and software provider. We are working hard to grow in both group segments. But we are now determinedly and in new magnitudes reinvesting our earnings in structures, personnel and companies that will enable exponentially growing recurring sales in the medium term. For us, these revenues can be found in the software and managed services business," explains Klaus Weinmann, founder and CEO of CANCOM SE.
The recently announced acquisition of the UK IT service provider OCSL underlines the thrust of the CANCOM Group towards the cloud-ready international - and thus primarily English-speaking - IT markets.
First half of 2018: revenues growth accelerated, profitability increased
These investments and acquisitions are made possible by the continued dynamic business development of the CANCOM Group. In the first half of 2018, this led to a 13.5 percent improvement in consolidated revenues to EUR 608.5 million (previous year: EUR 535.9 million). In addition, CANCOM exceeded the growth rate of the previous year (previous year: 8.9 percent) with this growth. The increase in revenues in the first half of 2018 was mainly driven by good customer demand across the entire CANCOM portfolio. Added to this were the positive effects from recently acquired companies as a result of the offensive acquisition strategy of the CANCOM Group.
The CANCOM Group's continued high profitability is reflected in the adjusted key earnings figures for the first half of 2018: EBITDA (adjusted) rose by 25.8 percent against the comparable previous year's figure to EUR 48.7 million (comparable previous year: EUR 38.7 million). This corresponds to an EBITDA margin (adjusted) of 8.0 percent (comparable previous year: 7.3 percent). Since CANCOM applied the accounting rule IFRS 16 for the first time in its half-year financial report and this had an impact on EBITDA, the figures for the previous year - also for the group segments - were also adjusted for the IFRS 16 effect in order to ensure comparability.
At EUR 36.7 million, EBITA (adjusted) was 30.1 percent higher than the comparable figure for the same period last year (previous year: EUR 28.2 million). The application of IFRS 16 had no significant impact here or in any further key figures of the income statement.
EBITDA (adjusted) in particular shows the earnings achieved from operating business, i.e. before deduction of the special investments and incidental costs for company takeovers amounting to around EUR 4.4 million. They thus show the actual earning power of the CANCOM Group and the key figures comparable with those of the previous year. At the same time, only the adjustment allows comparison with the historical peer group, because it compensates for the increasing differences in CANCOM's business model and strategy compared to the currently common peer companies.
"In the IT trade and traditional IT service business, profits must be realized in the shortest possible time, as due to the development towards the rising use of cloud solutions margins tend to be higher today than tomorrow. With our AHP software, financial strength and existing experience in the software and shared managed services business, we have a great opportunity to conquer new markets and business models. To achieve this, we are spending money today in order to turn the current continuous growth into a more exponential growth in the medium term," said Weinmann.
The Cloud Solutions segment contributed 37.6 percent year-on-year revenue growth to EUR 109.7 million in the first half of 2018 (previous year: EUR 79.7 million). Segment EBITDA (adjusted) amounted to EUR 27.3 million, up 49.2 percent against the comparable previous year's figure (comparable previous year: EUR 18.3 million).
In the IT Solutions segment, CANCOM achieved a 9.3 percent increase in revenues to EUR 498.8 million (previous year: EUR 456.2 million). Segment EBITDA (adjusted) rose by 7.2 percent year-on-year to EUR 26.7 million (comparable previous year: EUR 24.9 million).
Forecast for 2018 confirmed
Based on the business development achieved in the first half of the current financial year and assuming the premises set out in the Annual Report 2017, the Management Board confirms the CANCOM Group's growth targets for financial year 2018, which envisage a significant increase in revenues, gross profit, EBITDA, EBITA and EBIT for the Group. For the Cloud Solutions and IT Solutions segments, the targets are also for a significant increase in revenues, gross profit, EBITDA, EBITA and EBIT, with growth rates in the Cloud Solutions segment expected to be above the level of the IT Solutions segment.
As an orientation for the scope of special investments in strategic growth projects, the Management Board states a planned investment volume for the entire 2018 financial year of around EUR 10 million.
The CANCOM Group's complete semi-annual report as of 30 June 2018 is published in the Investors section of its website at www.cancom.de.
As Digital Transformation Partner, CANCOM guides businesses into the digital future. The CANCOM Group's business-oriented IT solution range encompasses consulting, implementation and services. Clients benefit from extensive expertise and an innovative portfolio that covers business IT requirements for a successful digital transformation. IT trends such as cloud computing, analytics, enterprise mobility or security are addressed with smart business solutions and services.
The CANCOM Group operates internationally and has more than 3,000 employees worldwide. Together with a powerful partner network, many geographies enjoy market presence allowing close client proximity including Germany, Austria, Switzerland, Belgium, the United Kingdom and the United States. CANCOM Group is headed by Klaus Weinmann (Founder and CEO), Rudolf Hotter (COO), Thomas Volk (President and General Manager) and Thomas Stark (CFO). The company's headquarter is in Munich, Germany. CANCOM SE is listed on the Frankfurt Stock Exchange in the index TecDAX (ISIN DE0005419105) and the group achieves an annual turnover of more than one billion euros.
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