Press

28.03.2019
CANCOM: Double-digit growth rates and increased profitability 2018, confident outlook for 2019

- Group sales grow by 18.7 percent to EUR 1,378.9 million in fiscal year 2018.

- EBITDA (adjusted) improved by 24.0 percent to EUR 114.8 million, EBITDA margin (adjusted) rises to 8.3 percent.

- Strongly increased Annual Recurring Revenue and significantly increased contribution to earnings from the Cloud Solutions segment show progress in strategic transformation.

- CANCOM is planning significant growth in all key performance indicators and very significant growth in Annual Recurring Revenue.

Munich, Germany, 28 March 2019 - The CANCOM Group closed the 2018 financial year very successfully with an increase in revenue of 18.7 percent to EUR 1,378.9 million (previous year: EUR 1,161.2 million). Not only the two acquisitions in the United Kingdom that CANCOM made in 2018 contributed to this dynamic business development. Organic growth was also very high at 12.1 percent.
The CANCOM Group's EBITDA (adjusted) rose by 24.0 percent to EUR 114.8 million in 2018 (comparable previous year: EUR 92.6 million), so that the EBITDA margin (adjusted) improved to 8.3 percent (comparable previous year: 8.0 percent).

"18.7 percent sales growth is an outstanding figure, of which we achieved 12.1 percent organically. Our growth rate is therefore well above the general market trend and this shows our strong competitive position. The fact that we can further increase operating profitability despite this high growth strengthens our conviction that we are pursuing the right strategy with CANCOM," said Thomas Volk, CEO of CANCOM SE.

The figures for the fourth quarter of 2018 were EUR 415.2 million for Group sales (previous year: EUR 352.3 million) and EUR 36.6 million for EBITDA (adjusted) (comparable previous year: EUR 32.4 million).

Segment results show major progress in transformation
The segment results reflect the major progress made in 2018 in strategically strengthening the Cloud and Managed Services business: On the one hand, CANCOM achieved a higher contribution to earnings in the Cloud Solutions segment than in the IT Solutions segment for the first time in a financial year. On the other hand, Annual Recurring Revenue rose by 41.3 percent year-on-year to EUR 130.1 million (previous year: EUR 92.1 million). The ARR reflects recurring revenues from multi-year managed services contracts and from the AHP Enterprise Cloud software. In particular, the increase in highly profitable recurring revenues, which also make CANCOM less dependent on short-term macroeconomic developments, is the declared goal of the corporate strategy.

Overall, the Cloud Solutions segment contributed to the 2018 annual result with revenue growth of 33.0 percent to EUR 242.5 million (previous year: EUR 182.3 million). EBITDA (adjusted) in the Cloud Solutions segment amounted to EUR 64.1 million, which corresponds to an improvement of 40.6 percent (comparable previous year: EUR 45.6 million). The EBITDA margin (adjusted) was thus 26.4 percent (comparable prior year: 25.0 percent).
The figures for the fourth quarter of 2018 were EUR 67.8 million for segment sales (previous year: EUR 57.5 million) and EUR 20.1 million for EBITDA (adjusted) (comparable previous year: EUR 16.0 million).

The IT Solutions segment achieved an increase in sales of 16.1 percent to 1,136.4 million euros (previous year: 978.8 million euros). At EUR 62.0 million, EBITDA (adjusted) was 10.1 percent up on the previous year (56.3 percent). The EBITDA margin (adjusted) was 5.5 percent (comparable prior year: 5.8 percent).
The figures for the fourth quarter of 2018 were EUR 347.4 million for segment sales (previous year: EUR 294.7 million) and EUR 19.2 million for EBITDA (adjusted) (comparable previous year: EUR 18.5 million).

Sustained improvement in operating cash flow and working capital
The operating cash flow of the CANCOM Group amounted to EUR 81.9 million in fiscal 2018 (previous year: EUR 124.9 million). Just as in the previous year, CANCOM was thus able to achieve the targeted significantly higher level compared to the long-term average. The strength of the business model in generating cash was therefore again also reflected in the high Group liquidity available at the 2018 balance sheet date. It amounted to EUR 135.2 million (previous year: EUR 157.6 million) despite two acquisitions in the United Kingdom.
The sustainability of the optimization of operating working capital that began in 2017 was reflected in the low operating working capital ratio of 2.5 percent achieved in 2018 (previous year: 2.3 percent). It confirms the value from the previous year and shows the clear improvement compared to the years before 2017, when the ratio had been between 6 and 8 percent.

Against the backdrop of the successful business development, the Executive Board and Supervisory Board of CANCOM SE have decided to propose to the General Meeting that a dividend of EUR 0.50 per share be paid for the 2018 financial year. The dividend is thus at the same level as in the previous year before the share split, when EUR 1.00 per share was paid.

Confident outlook for 2019
In view of the positive development in 2018 and the course of the current financial year to date, the Executive Board of CANCOM SE is planning significant growth in revenue, gross profit, EBITDA and EBITA for the CANCOM Group in 2019.
The Group segment IT Solutions is expected to contribute to this with significant growth in segment revenue, segment gross profit, segment EBITDA and segment EBITA.
The Cloud Solutions Group segment is also expected to achieve significant growth in segment revenue, segment gross profit, segment EBITDA and segment EBITA. However, growth rates are expected to exceed those of the IT Solution segment. For the Annual Recurring Revenue, the Executive Board expects a very significant increase compared to December 2018.

The complete Annual Report 2018 of the CANCOM Group is published in the Investors section of the Company's website www.cancom.de

Note: The above EBITDA figures for the previous year ("comparable previous year") have been aligned to the effect of the initial application of IFRS 16 in order to be comparable.

About CANCOM
As a Digital Transformation Partner, CANCOM accompanies companies into the digital future. The CANCOM Group's range of IT solutions includes consulting, implementation, services and the operation of IT systems. Customers benefit from the extensive expertise and an innovative portfolio that covers the IT requirements of companies necessary for a successful digital transformation, for example with business solutions and managed services for IT trends such as cloud computing, analytics, enterprise mobility or IT security.
The worldwide more than 3,400 employees of the internationally active CANCOM Group and an efficient partner network ensure market presence and customer proximity in Germany, Austria, Switzerland, Belgium, Great Britain and the USA. The CANCOM Group is led by Thomas Volk (CEO), Rudolf Hotter (COO) and Thomas Stark (CFO). The company is headquartered in Munich. CANCOM has an annual turnover of over one billion euros and its parent company, CANCOM SE, is listed on the TecDAX and SDAX of the Frankfurt Stock Exchange (ISIN DE0005419105).

Contact:
Sebastian Bucher
Manager Investor Relations

Phone: +49 89 54054 5193
Email: sebastian.bucher@cancom.de

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Contact

Sebastian Bucher
Manager Investor Relations