Interim Management Statement for Q1 2014

Columbus continues growth in earnings with a 69% growth in EBITDA* and maintains expectations for the year

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| Source: Columbus A/S
multilang-release

                                    

Release no. 13/2014
 

In accordance with the regulations for listed companies’ submission of interim statements, Columbus A/S hereby submits the interim management statement for the period 01.01.2014-31.03.2014 (3 months).

 

Revenues in Q1 amounted to DKK 207.5m (2013: DKK 203.3), corresponding to an increase of 2%. Adjusted for foreign currency translation revenues increased by 6%.  EBITDA1 amounted to DKK 12.8m (2013: DKK 7.6m), corresponding to an increase of 69%.

 

Growth in all industry solutions

Columbus continues the focus on sale of industry solutions. Revenues from Columbus’ key industries increased to 75% of total revenues. There was a solid increase in sale of all three industry solutions. Industry focus strengthens Columbus’ ability to deliver more value to customers, strengthens our competitive advantage and contributes to improved earnings from sale of own software and in our consultancy business.

 

Development in revenues

Revenues from consultancy increased by 11%, which is mainly caused by an increase in invoiceable work from 55% to 58%. Revenues from external software licenses have declined by 33%. The main reason for this is that our main supplier, Microsoft, is changing their sales model. The most significant change in the sales model is that Columbus is not responsible for invoicing and does not carry the debtor risk. Instead Columbus receives a sales commission. Moreover, the sales commission is earned over three years instead of one. This development is expected. Columbus considers this development a possibility to increase the sale of consultancy services and own software, as the total initial investment in business systems for customers becomes smaller.

 

DKK ´000 Q1 2014 Q1 2013 2013
       
Columbus Software licenses 3,708 3,707 31,052
Columbus Software subscriptions 6,805 5,402 29,102
External software licenses 12,491 18,700 88,270
External software subscriptions 22,521 29,234 140,258
Consultancy 157,295 140,938 567,614
Other 4,645 5,335 23,509
Net revenues 207,465 203,316 879,805
       
EBITDA before share-based compensation 12,825 7,580 72,084
Share-based compensation -644 -168 -1,960
EBITDA 12,181 7,412 70,124

 

 

Columbus Software increased by 15% YTD

In total, revenues from Columbus Software licenses and subscriptions increased by DKK 1.4m in Q1, corresponding to an increase of 15% compared to the same period last year. The increase mainly relates to Columbus subscriptions, which is recurring revenue.

 

 

Invoiceable work increased from 55% to 58%

The sale of consultancy services increased by 11% in Q1. At the same time the productivity in the consultancy business increased, and consequently invoiceable hours increased from 55% to 58%. The development is satisfactory and is the primary reason for the considerable increase in EBITDA.

 

Continued optimization in the Columbus Global Delivery Center

The optimization of Columbus’ Global Delivery Center in India continues. In Q1 the Global Delivery Center has delivered 1,344 days of customer support and implementations, corresponding to an increase of  39% compared to Q1 2013.


 

Acquisition of consultancy

At the end of January Columbus acquired the consultancy Omnica, a leading retail and e-commerce company based in the UK. The acquisition is a strategic move in line with Columbus’ ambition to further strengthen its global position as an innovative consultancy to the retail industry.

 

Since Omnica was founded in 2007, the company has consistently increased its market share within e-commerce and multichannel retail business and showed a continuous growth in revenues and profit. 

 

The integrationen of Omnica into the existing UK subsidiary is progressing according to the plan.

 

Expectations to revenues and EBITDA are being maintained

The announced expectations to 2014 are being maintained, and thus Columbus expects revenues in the level of DKK 900m and an EBITDA* in the level of DKK 80m.

 

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                                CEO

Columbus A/S              Columbus A/S

 

For further information, please contact:

CEO Thomas Honoré, T: +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

 

    Group  
DKK ´000 Q1 2014 Q1 2013 2013
       
Net revenues 207,465 203,316 879,805
External project costs -41,000 -47,152 -216,278
Gross earnings 166,465 156,164 663,527
       
Staff expenses before share-based compensation -124,754 -118,947 -476,207
Other external costs -28,884 -29,884 -116,145
Other operating income 0 248 914
Other operating costs -2 -1 -5
EBITDA before share-based payment 12,825 7,580 72,084
       
Share-based compensation -644 -168 -1,960
EBITDA 12,181 7,412 70,124
       
Depreciation -5,744 -6,396 -25,352
Earnings before write down of goodwill (EBITA) 6,437 1,016 44,772
       
Write down of goodwill 0 0 0
Operating profit (EBIT) 6,437 1,016 44,772
       
Results in associated companies 0 461 -4,109
Financial income 722 69 190
Financial expense -337 -795 -4,123
Pre-tax earnings, continuing operations 6,822 751 36,730

 


 

Balance sheet

 

  Group balance sheet
DKK ´000 Q1 2014 Q1 2013 2013
       
ASSETS      
       
Goodwill 183,821 172,177 167,705
Other intangible assets 3,023 2,796 1,446
Development projects finalized 39,236 45,041 43,288
Development projects in progress 8,387 4,964 3,593
Intangible assets 234,467 224,978 216,032
       
Leasehold improvement 188 858 781
Plant and operating equipment 8,951 9,856 8,873
Tangible assets 9,139 10,714 9,654
       
Deferred tax assets 19,429 21,062 19,418
       
Total long-term assets 263,035 256,754 245,104
       
Inventories 219 303 40
       
Trade receivables 136,231 133,089 138,929
Contract work in progress 10,766 32,981 9,471
Corporation tax 40 1,160 40
Other receivables 4,624 11,867 5,232
Prepayments 13,598 14,776 9,478
Receivables 165,259 193,873 163,150
       
Cash 60,168 36,162 75,410
       
Total short-term assets 225,646 230,338 238,600
       
TOTAL ASSETS 488,681 487,092 483,704

 

 

Balance sheet

 

  Group balance sheet
DKK ´000 Q1 2014 Q1 2013 2013
       
LIABILITIES      
       
Share capital 132,793 132,174 132,793
Reserves on foreign currency translation -10,018 -6,191 -10,680
Retained profit 150,485  147,397  144,940
Proposed dividends 13,279  13,279
Group shareholders equity 286,539 273,380 280,332
Minority interests 4,278  8,006  3,646
Equity 290,817 281,386 283,978
       
Deferred tax 330 91 74
Provisions 6,461 507 121
Debt to credit institutions 5 21 6
Other debt 1,270 1,270 1,270
Long-term debt 8,066 1,889 1,471
       
Credit institutions 6,340 15,721 2,385
Client prepayments 22,393 18,924 14,946
Trade accounts payable 28,064 41,374 52,694
Corporation tax 4,855 5,638 5,235
Other debt 106,644 106,648 103,704
Accruals 21,502 15,512 19,291
Short-term debt 189,798 203,817 198,255
       
Total debt 197,864 205,706 199,726
       
TOTAL LIABILITIES 488,681 487,092 483,704

 


 

 

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 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 and implementation of standard business systems. Western Europe
Eastern Europe
North America
             
Information about the Group’s segment is stated below.
             
             
    Consultancy    
             
DKK ´000 ISV Western Europe Eastern Europe North America Parent company/
Eliminations
Total
             
Q1 2014            
             
Columbus Software licenses 2,759 969 529 466 -1,015 3,708
Columbus Software subscriptions 5,975 1,662 210 829 -1,871 6,805
External software licenses 0 7,110 2,548 3,023 -190 12,491
External software subscriptions 115 9,316 4,312 8,777 1 22,521
Consultancy 3,010 108,801 25,995 25,699 -6,210 157,295
Other 157 3,104 484 839 61 4,645
Net revenues 12,016 130,962 34,078 39,633 -9,224 207,465
             
Gross earnings 10,823 102,719 26,679 27,579 -1,335 166,465
EBITDA 4,084 12,943 1,991 1,137 -7,974 12,181
             
    Konsulentforretning    
             
DKK ´000 ISV Western Europe Eastern Europe North America Parent company/
Eliminations
Total
             
Q1 2013            
             
Columbus Software licenses 2,277 988 936 356 -850 3,707
Columbus Software subscriptions 4,686 1,003 216 734 -1,237 5,402
External software licenses 19 4,397 10,312 3,972 0 18,700
External software subscriptions 299 12,928 7,485 8,522 0 29,234
Consultancy 3,365 88,081 22,945 31,970 -5,423 140,938
Other 148 2,991 795 1,250 151 5,335
Net revenues 10,794 110,388 42,689 46,804 -7,359 203,316
             
Gross earnings 9,965 85,522 27,002 34,197 -522 156,164
EBITDA 3,626 5,158 2,695 5,090 -9,157 7,412

 

 

 

 

* EBITDA before share-based compensation