Release no. 15/2017
In accordance with the regulations for listed companies’ submission of interim statements, Columbus A/S hereby submits the interim management statement for the period 01.01.2017-31.03.2017 (3 months).
| Release no. 15, 2017 – Interim Management Statement for Q1 2017 April 25th, 2017 |
Growth driven by the services business
Revenue in Q1 2017 amounted to DKK 310m (2016: DKK 275m), corresponding to an increase of 13% compared to the same period last year. EBITDA* amounted to DKK 29m (2016: DKK 26m), corresponding to an increase of 14%.
The revenue growth was primarily driven by a solid growth in revenue in the services business of 18%.
The increase in EBITDA was also driven by an increase in earnings in the services business of 33%.
Financial value drivers (KPI’s)
In connection with the Columbus2020 strategy, the Group has determined three value drivers, which reflect the strategic direction. The value drivers measure the development in relation to significant success criteria for future growth and value creation.
- Improve profitability in the services business
- Scaling of own software sales
- Growth in recurring revenue
Below, the development in these three financial value drivers are reviewed.
Growth and increased earnings in the services business
In Q1 2017 the revenue in the services business increased by 18% to DKK 225m (2016: DKK 192m). The increase primarily came from an increase in realized hourly rates and the effect from acquisitions made in 2016 and 2017.
In Q1 2017 the service EBITDA increased from DKK 20m to DKK 26m, an increase of 33%. The increase primarily came from the higher realized hourly rates and acquisitions. Furhermore, a major parameter for the improvement in the Service EBITDA was increased utilization of Columbus’ Global Delivery Center in India.
Chargeable hours declined from 58% to 55% in the first quarter of the year, affected by a decrease in chargeable hours in the US SMB business, as well as by a normalization of the chargeable hours in England and Russia.
Columbus Software sales increased by 5% I n Q1 2017 the sale of Columbus Software increased by 5%. As a consequence of the cloud conversion license sales decreased by 20%. However, the cloud revenue increased to DKK 664,000.
The revenue from subscriptions increased by 17% due to a satisfactory renewal rate of previous year’s sale of licenses. The sale of Columbus Software developed according to plan.
Growth in recurring revenue
The recurring revenue consists of Columbus Software subscriptions, third party software subscriptions, cloud revenue, hosting revenue and ColumbusCare contracts.
Recurring revenue increased by 17%.
The sale of ColumbusCare contracts increased significantly by 62%, which is a satisfactory development.
Recurring revenue constituted 24.4% of total revenue (2016: 23.6%). The development is according to plan.
Acquisitions in 2017 In January 2017 Columbus acquired the US IT services company, Tridea Partners, which holds a leading positon within ERP and CRM in the growing food and beverage industry in the US.
Columbus maintains expectations to 2017
Columbus maintains the announced expectations to revenue, EBITDA1, Service EBITDA and dividend in 2017:
- Revenue in the level of DKK 1.35bn.
- EBITDA* in the level of DKK 150m.
- Service EBITDA of DKK 80m.
- 10% dividend on nominal share capital
Latest developmentsNo events or transactions with a material effect on the company’s financial position have occurred since the balance sheet date.
*EBITDA before share-based payment
| DKK ´000 | Q1 2017 | Q1 2016 | 2016 |
| Columbus licenses | 6,387 | 7,973 | 44,187 |
| Columbus subscriptions | 12,859 | 10,417 | 46,876 |
| External licenses | 16,967 | 18,210 | 86,495 |
| External subscriptions | 42,995 | 42,108 | 195,164 |
| Services | 225,089 | 191,557 | 796,401 |
| Other | 5,755 | 5,066 | 23,584 |
| Total net revenue | 310,053 | 275,331 | 1,192,707 |
| EBITDA before share-based payment | 29,454 | 25,908 | 144,070 |
| Share-based payment | -597 | -546 | -5,524 |
| EBITDA | 28,857 | 25,362 | 138,546 |
| Ib Kunøe Chairman Columbus A/S | Thomas Honoré CEO & President Columbus A/S |
| For further information, please contact: CEO & President, Thomas Honoré .: +45 70 20 50 00 | |
| Translation: In the event of any inconsistency between this document and the Danish language version, the Danish language version shall be the governing version. |
| Income statement |
| DKK ´000 | Q1 2017 | Q1 2016 | 2016 |
| Net revenue | 310,053 | 275,331 | 1,192,707 |
| External project costs | -60,371 | -52,677 | -264,601 |
| Gross profit | 249,682 | 222,654 | 928,106 |
| Staff expenses and remuneration | -178,584 | -160,439 | -631,675 |
| Other external costs | -41,669 | -36,223 | -158,982 |
| Other operating income | 25 | 0 | 6,685 |
| Other operating costs | 0 | -84 | -64 |
| EBITDA before share-based payment | 29,454 | 25,908 | 144,070 |
| Share-based payment | -597 | -546 | -5,524 |
| EBITDA | 28,857 | 25,362 | 138,546 |
| Depreciation | -9,778 | -7,501 | -33,275 |
| Operating profit (EBIT) | 19,079 | 17,861 | 74,843 |
| Financial income | 18 | 90 | 2,674 |
| Financial expense | -2,388 | -1,754 | -642 |
| Profit before tax | 16,709 | 16,197 | 107,303 |
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 2017 | Q1 2016 | 2016 |
| ASSETS | |||
| Goodwill | 464,391 | 339,962 | 415,152 |
| Customer base | 34,370 | 29,977 | 30,562 |
| License rights | 19 | 0 | 17 |
| Development projects finalized | 64,541 | 55,781 | 59,354 |
| Development projects in progress | 5,310 | 5,319 | 8,491 |
| Property, plant and equipment | 15,975 | 16,293 | 17,142 |
| Deferred tax assets | 21,086 | 18,581 | 17,053 |
| Total non-current assets | 605,692 | 465,913 | 547,771 |
| Inventories | 688 | 1,228 | 205 |
| Trade receivables | 136,582 | 119,950 | 151,475 |
| Contract work in progress | 13,815 | 17,858 | 8,994 |
| Corporate tax receivables | 6,429 | 346 | 11,531 |
| Deferred tax assets | 3,400 | 7,500 | 7,500 |
| Other receivables | 7,107 | 10,368 | 8,155 |
| Prepayments | 13,711 | 10,622 | 7,206 |
| Receivables | 181,044 | 166,644 | 194,861 |
| Cash | 64,918 | 52,333 | 94,669 |
| Total current assets | 246,650 | 220,205 | 289,735 |
| TOTAL ASSETS | 852,342 | 686,118 | 837,506 |
| Balance sheet |
| DKK ´000 | Q1 2017 | Q1 2016 | 2016 |
| EQUITY AND LIABILITIES | |||
| Share capital | 149,832 | 142,123 | 145,247 |
| Reserves on foreign currency translation | -7,163 | -16,302 | -6,475 |
| Retained profit | 360,454 | 270,400 | 331,041 |
| Group shareholders’ equity | 503,123 | 396,221 | 469,813 |
| Minority interests | 2,653 | 2,791 | 1,774 |
| Equity | 505,776 | 399,012 | 471,587 |
| Deferred tax | 10,619 | 6,436 | 10,614 |
| Provisions | 18,008 | 13,049 | 11,532 |
| Non-current liabilities | 28,627 | 19,485 | 22,146 |
| Debt to credit institutions | 20,607 | 1,302 | 29,091 |
| Client prepayments | 27,885 | 30,077 | 33,645 |
| Trade payables | 48,033 | 43,080 | 66,211 |
| Corporate tax payables | 19,209 | 9,528 | 24,177 |
| Other liabilities | 157,118 | 151,660 | 157,228 |
| Accruals | 45,087 | 31,974 | 33,421 |
| Current liabilities | 317,939 | 267,621 | 343,773 |
| Total liabilities | 346,566 | 287,106 | 365,919 |
| TOTAL EQUITY AND LIABILITIES | 852,342 | 686,118 | 837,506 |
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 areas | Description | Geographical segment | ||||
| ISV (Independent Software Vendor) | Development and sale of industry-specific software within Columbus' three focus industries: Retail, food and manufacturing | No specific area | ||||
| Consultancy | Sale, implementation and service of standard business systems. | Western Europe Eastern Europe North America | ||||
| Information about the Group’s segments is stated below. | ||||||
| Consultancy | ||||||
| DKK ´000 | ISV | Western Europe | Eastern Europe | North America | HQ, GDC and Eliminations | Total |
| Q1 2017 | ||||||
| Columbus Software licenses | 5,523 | 2,777 | 721 | 159 | -2,793 | 6,387 |
| Columbus Software subscriptions | 10,020 | 4,151 | 449 | 1,257 | -3,018 | 12,859 |
| External licenses | 0 | 5,031 | 3,523 | 8,481 | -68 | 16,967 |
| External subscriptions | 0 | 12,414 | 5,138 | 25,450 | -7 | 42,995 |
| Services | 4,177 | 119,095 | 25,662 | 79,530 | -3,375 | 225,089 |
| Other | 283 | 2,645 | 423 | 2,688 | -284 | 5,755 |
| Total net revenue | 20,003 | 146,113 | 35,916 | 117,565 | -9,545 | 310,053 |
| Gross profit | 16,949 | 114,996 | 28,095 | 82,783 | 6,859 | 249,682 |
| EBITDA | 9,679 | 18,055 | 4,279 | 3,941 | -7,097 | 28,857 |
| Consultancy | ||||||
| DKK ´000 | ISV | Western Europe | Eastern Europe | North America | HQ, GDC and Eliminations | Total |
| Q1 2016 | ||||||
| Columbus Software licenses | 6,678 | 2,157 | 378 | 417 | -1,657 | 7,973 |
| Columbus Software subscriptions | 9,107 | 2,758 | 321 | 1,078 | -2,847 | 10,417 |
| External licenses | 0 | 5,140 | 2,119 | 10,964 | -13 | 18,210 |
| External subscriptions | 0 | 15,104 | 4,807 | 22,284 | -87 | 42,108 |
| Services | 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 |
| Gross profit | 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 |
