Results first half-year 2014
Exact sharpens strategic focus
- Divestment of Longview and Lohn enhances focus on core businesses
- JobBOSS, Macola and Max to support Exact Online in US market
- Decision on use of proceeds of divestitures with FY 2014 results
- Adjusted for divested businesses full year EBITDA guidance at € 41 to € 44 million
- Exact evaluates announced expressions of preliminary interest for possible public offer
- Total revenues (including Longview and Lohn), up 3.0% to € 54.7 million in Q2; on an operational basis up 5.2%
- Total revenues H1 up 1.5% to € 106.9 million, up 3.5% on operational basis
- EBITDA up 5.6% to € 11.0 million in Q2; EBITDA H1 down 6.7% to € 21.8 million
- Higher operating expenses reflect the build-up of the cloud organization and product development during 2013
- Net income H1 down 10.6% to € 13.7 million
- Interim dividend amounts to € 0.60 per share consistent with 100% pay-out policy
Cloud Solutions: strong growth
- Cloud Solutions revenues up 47.0% to € 7.3 million in Q2 driven by strong performance in Benelux
- Annualized recurring revenues up 43.9% to € 29.2 million at the end of Q2
- 164,470 paying companies at June 30, up 10,281 in Q2; prior quarters adjusted
- International rollout in UK and Germany on track, US remains challenging
Business Solutions: enduring headwind
- Business Solutions revenues down 3.7% to € 27.4 million in Q2; on an operational basis down 3.0%
- License revenues down 7.9% to € 4.3 million in Q2; on an operational basis down 7.1%
- Subscription-based revenue amounted to € 0.2 million in Q2
- Attrition in Business Solutions amounted to 8.1% in H1; increase compared to last year reflects a base change; value contract cancelations shows favorable decline of 1.7% to € 3.2 million in H1
Specialized Solutions: solid improvements
- Specialized Solutions revenues up 1.5% to € 20.1 million in Q2; on an operational basis up 6.5%
- Longview divested for $31.8 million in cash; net book gain of € 0.4 million in Q2
- Agreement to divest Lohn for € 16.3 million in cash; estimated net book gain of € 14.7 million in Q3
Erik van der Meijden, CEO:
The software industry is changing at an ever-accelerating pace. With the divestiture of Longview and Lohn we are keeping up our high pace of executing our strategy and demonstrate our commitment to core activities. We will decide on the use of the cash proceeds of these divestitures with our full year results. As mentioned earlier, we have been approached by parties who have shown an indicative interest in our organization. It is too early to give any update on these approaches and possible outcome. Whatever the outcome of these discussions, we are confident about the merit of our strategy and the value it brings to our key stakeholders being our shareholders, our customers and our employees.
I am pleased with the performance of the business in the first six months of the year. The enduring strong growth of Cloud Solutions continues to be a key driver of revenue growth for Exact. Our basis in the Netherlands and Belgium is strong and offers further growth prospects. Overall, the international rollout of Exact Online is progressing well. We gain invaluable experience in each of these markets and adapt our tactics to achieve success in every new market. We are on track in the UK and see positive response from the accountancy channel. HW Fisher, one of the leading accountancy firms in the UK, entered into a partnership with Exact to offer its SME customers cloud based integrated accounting and industry solutions. In the US we decided to lever the market presence of our existing business units. We believe that particularly JobBOSS is well positioned to help Exact Online gain commercial traction. In Germany we are making steady progress and see opportunities to develop our business with some large accountancy partners.
Business Solutions license revenues continued to encounter headwinds in the second quarter this year. We did win some of the sizeable contracts which had been postponed in the first quarter. This was however not enough to offset the decline in the second quarter. Business Solution made further progress with its strategy to develop mobile functionality. In May, we launched four mobile apps related to CRM, HR self-services, expenses and a field service app.
Macola, Max and JobBOSS are showing good progress.
Accounting for discontinued operations
The key financials below include the revenues and OPEX for Longview and Lohn. In the interim financial report the financial results for Longview and Lohn are presented as discontinued operations in a single line item net of tax for an amount of minus € 8 thousand in H1 this year. Net Income line in the Key Financials equals Net Income in The Statement of Comprehensive Income in the Interim Financial Report.
Volledig persbericht: 140801_Exact H1 2014.pdf