Aug 20, 2015

USU Software AG reports sales and earnings growth for Q2 2015 and first half of 2015

Management Board raises lower level of guidance and adjusts planning range

  • Organic sales increase of 11% in second quarter of 2015
  • International business accounts for 36% of total sales in Q2 2015
  • License income up 48% compared to Q2 2014
  • Product business grows by 15% in Q2 2015 – service business remains modest
  • EBIT in quarter under review up 49% year on year – adjusted EBIT rises by 20%
  • Figures for first half of 2015 fully on track – positive forecast for subsequent quarters
  • Management Board raises lower level of guidance and adjusts planning range

Möglingen, August 20, 2015 – USU Software AG (ISIN DE000A0BVU28) generated an 11% increase in consolidated sales according to IFRS to EUR 15.9 million in the second quarter of 2015 (Q2 2014: EUR 14.3 million). This increase was chiefly due to the strong international business, which contributed sales of EUR 5.7 million (Q2 2014: EUR 4.0 million) to consolidated sales in the quarter under review and accordingly posted an above-average rise of 42% year on year. The share of sales generated outside Germany in relation to the USU Group’s total sales thus amounted to 36% in Q2 2015 (Q2 2014: 28%).

USU benefited particularly from a significant expansion of software license business. In the quarter under review, license income rose by 48% year on year to EUR 3.3 million (Q2 2014: EUR 2.3 million). At the same time, the USU Group also increased its maintenance business, which comprises income from software maintenance agreements and sales from software-as-a-service (SaaS) projects, by 28% to EUR 4.2 million (Q2 2014: EUR 3.3 million). Only consulting business was lower than in the previous year, falling by 4% to EUR 8.1 million (Q2 2014: EUR 8.4 million). This was attributable in particular to the decline in sales with freelance staff in USU’s service segment. The “Service Business” segment was accordingly down 6% year on year in the second quarter of 2015 with segment sales of EUR 3.1 million (Q2 2014: EUR 3.3 million). By contrast, the “Product Business” segment continued the positive trend from the previous quarters and expanded its segment revenue organically by 15% to EUR 12.7 million (Q2 2014: EUR 11.0 million).

The USU Group’s cost base rose by 9% year on year to EUR 14.0 million in Q2 2015 (Q2 2014: EUR 12.9 million). As a result of the higher increase in sales, USU significantly improved its profits. The USU Group’s EBITDA thus climbed by 32% year on year to EUR 2.3 million (Q2 2014: EUR 1.7 million). Earnings before interest and taxes (EBIT) improved from EUR 1.2 million in the second quarter of 2014 to EUR 1.7 million in the second quarter of 2015, corresponding to a rise of 49%. USU increased its consolidated net profit according to IFRS by 39% year on year to EUR 1.4 million in the quarter under review (Q2 2014: EUR 1.0 million), resulting in earnings per share of EUR 0.14 (Q2 2014: EUR 0.10).

EBIT after adjustment for the extraordinary effects of acquisitions (“adjusted EBIT”) totaled EUR 1.8 million in the second quarter of 2015 (Q2 2014: EUR 1.5 million), equivalent to growth of 20% as against Q2 2014. USU increased its adjusted consolidated earnings by 9% from EUR 1.4 million in Q2 2014 to EUR 1.5 million in the quarter under review. Adjusted earnings per share therefore improved to EUR 0.14 (Q2 2014: EUR 0.13).

In the first half of the year, USU increased its consolidated sales by 8% year on year to EUR 29.9 million (Q1-Q2 2014: EUR 27.6 million), particularly as a result of the continuing international expansion. The USU Group’s international sales rose by 46% year on year to EUR 4.2 million in the first half of the year (Q1-Q2 2014: EUR 2.8 million). The main growth driver in the period under review was high-margin software license business, which increased by 27% year on year to EUR 5.5 million (Q1-Q2 2014: EUR 4.1 million). Maintenance business including SaaS revenues contributed EUR 7.7 million (Q1-Q2 2014: EUR 6.4 million) to consolidated sales, corresponding to a year-on-year increase of 20%. Consulting business was on a par with the previous year’s level at EUR 16.6 million in the first half of 2015 (Q1-Q2 2014: EUR 16.6 million). Other income, chiefly consisting of merchandise sales of third-party hardware and software, came to a total of EUR 0.4 million (Q1-Q2 2014: EUR 0.5 million).

Broken down by segment, Product Business contributed EUR 23.3 million (Q1-Q2 2014: EUR 20.8 million) to consolidated sales in the first half of 2015, corresponding to a year-on-year increase of 12%. USU benefited here particularly from the expansion of license and maintenance business. By contrast, consulting sales in the Service Business segment were down 5% year on year at EUR 6.4 million (Q1-Q2 2014: EUR 6.8 million) owing to reduced freelancer business. The share of consolidated sales attributable to the product segment thus increased from 75% in the previous year to currently 78%. 

As a result of the significant expansion of high-margin product business combined with only a moderate rise in costs, the USU Group achieved a considerable improvement in earnings in the first six months of the 2015 fiscal year compared to the first half of 2014. For example, USU increased its EBITDA by 51% year on year to EUR 3.5 million in the first half of the year (Q1-Q2 2014: EUR 2.3 million), while EBIT almost doubled in the same period to EUR 2.5 million (Q1-Q2 2014: EUR 1.2 million). USU improved its consolidated earnings according to IFRS from EUR 1.0 million in the previous year to EUR 2.4 million in the period under review, representing an increase of 148%. Earnings per share in the first half of the year totaled EUR 0.23 (Q1-Q2 2014: EUR 0.09).

The USU Group’s adjusted EBIT climbed by 46% year on year in the first half of 2015 to EUR 2.9 million (Q1-Q2 2014: EUR 2.0 million). At the same time, USU increased its adjusted consolidated earnings by 60% compared to the previous year to EUR 2.8 million (Q1-Q2 2014: EUR 1.7 million). The USU Group’s adjusted earnings per share therefore rose year on year to EUR 0.26 (Q1-Q2 2014: EUR 0.16).

In line with the positive earnings development, USU further increased Group liquidity in the first two quarters of the current fiscal year. Despite the final purchase price payment for the acquisition of B.I.G. Social Media GmbH in the quarter under review and the dividend payment to the shareholders, USU increased its cash and cash equivalents to EUR 19.3 million as of June 30, 2015 (December 31, 2014: EUR 18.9 million). At the same time, the USU Group’s equity declined to EUR 54.8 million (December 31, 2014: EUR 55.6 million) as a result of the dividend distribution, while current and non-current liabilities fell to EUR 28.5 million (December 31, 2014: EUR 29.6 million), partly due to the repayment of the purchase price liabilities for the final acquisition of BIG. With total assets of EUR 83.3 million (December 31, 2014: EUR 85.2 million), the equity ratio rose from 65% as of December 31, 2014 to 66% as of June 30, 2015.

The Management Board expects the growth trend of the past quarters to continue successfully in the second half of 2015. International business in particular is set to increase further. This will be aided by the ongoing penetration of the US market and the expansion of activities in Central Europe. At the same time, business in Germany should also continue to grow. Particularly in the big data areas of license, IT and knowledge management and social business, the Management Board anticipates a significant increase in high-margin product business. The new Group subsidiary SecurIntegration GmbH will also contribute to this starting from the third quarter of 2015.

By contrast, the lower-margin service business, in which USU generates consulting sales from individual projects that are not dependent on specific products, is expected to be slightly lower than in the previous year due to the decline in consulting business with freelancers. Owing to the consistently strong product business, the existing orders on hand of EUR 32.9 million (June 30, 2014: EUR 27.0 million) and the current forecast, the Management Board has slightly raised the lower level of the guidance based on the above assumptions and has adjusted the planning range accordingly. The planning for the USU Group now anticipates a rise in consolidated sales to EUR 65 – 68 million (previously: EUR 64 – 68 million) in the 2015 fiscal year, together with a higher increase in adjusted EBIT to EUR 8.5 – 9.5 million (previously: EUR 8.0 – 9.5 million).

On the basis of this forecast, the Management Board plans to allow the shareholders of USU Software AG to participate in the company's operating success again in 2015, as in the previous years, and thus to continue the shareholder-friendly dividend policy in the interests of sustainable continuity. With international business flourishing, potential on the core German market remaining high and the growth-oriented acquisition policy of the USU Group, the Management Board is also still assuming that its medium-term planning of sales of more than EUR 100 million with an adjusted EBIT margin in excess of 15% will be implemented by 2017.

Back