Sidetrade: 2013 Annual results (Success of the Cloud: + 18%) - 2014 Q1 Turnover : + 7%

Success of the Sidetrade Cloud: + 18%
Strong Operating Profit Margin: + 20%
Record Net Result: + € 2M
Proposal to maintain dividend payment: €0.90 per share
2014 Q1 Turnover : + 7%
'Target25' plan, ambitious plan to accelerate through 2014

     *   The consolidated accounts have been subject to audit. The certification report will be issued following completion of the procedures required for the publication of the annual financial report.

At €13.6 million, consolidated turnover for the Sidetrade Group posted growth of 5%. The Group recorded successive quarterly growth increases throughout the year. Following a turning point in the second quarter, Group turnover resumed double-digit growth during the second half.

SUCCESS OF THE SIDETRADE CLOUD: + 18%

In excess of 34 million invoices were loaded into the Sidetrade Cloud over the course of 2013, growth of 13% over the previous year. This record invoice volume equates to a corresponding number of user payment experiences across more than 1.4 million debtor businesses. These business-to-business transactions surpassed the €90 billion.

The Sidetrade Network business posted double-digit growth of 18% over the period at €10.2 million turnover (2012: €8.7 million). The product-mix focus towards Cloud Computing has resulted in strong revenue growth in this area, representing 75% of Group turnover, compared to 67% in 2012.
In contrast, Professional Services (Consulting, Business Process Outsourcing), have been adversely affected due to the exit from Treasury Consulting (2012 revenue: €0.8 million), deemed as non-strategic in the framework of the 'Target25' plan, as well as a difficult environment in the Consulting sector generally. Following a contraction of 34% over the first half of 2013, the decrease in Professional Services revenues was limited to 5% over the second half.

Notable subscription-based customers to go live during the year included Manpower France, Geodis Wilson (Denmark, USA, Indonesia and Mexico) Loxam Spain, Akso Nobel France, Emfi and Layher France. At the same time, commercial inroads achieved by the Sidetrade UK branch enabled successful go-lives for Linde Materials UK, INK (UK and Singapore), Atkins UK and Steria UK.

Recurring revenues in the SaaS business resulting from multi-year contracts ensure excellent visibility of medium term revenues. Accordingly, the SaaS backlog at December 31^st 2013 stood at €18.5 million. These committed unrealised revenues are not included in the group income statement or balance sheet at the close of 2013.
Strong Operating Profit Margin: + 20%

Sidetrade continues to demonstrate the strengths of the SaaS model, where over a certain volume threshold; operating costs remain largely fixed as volume continues to grow. Within the context of the Target 25 investment plan, Operating Profit posted a solid result of € 2.8 million for 2013, compared to € 2.9 million for 2012.

With this Operating Profit, the Sidetrade Group achieved an Operating Profit Margin of 20% for 2013, against 22% for 2012 and 19% in 2011.

Taking into account these factors, Pre-tax Consolidated Income stood at €2.7 million for the 2013 period, compared to €2.8 million for the 2012 period (- 5%).

The 2013 Net Result came in at €2 million for 2012, an increase of 2%. It is worth noting that the 2013 Net Result includes a tax payment of €0.6 million, giving an effective tax rate of 25% compared to 30% for 2012.

As at 31^st December 2013, the Sidetrade Group benefits from a solid net cash position of €8.6 million and continues to operate debt-free, providing substantial financial resources to satisfy development objectives.

PROPOSAL TO MAINTAIN DIVIDEND: €0.90 € PER SHARE

At the Annual General Meeting the Board of Directors proposed the payment of a dividend of €0.90 per share, the same amount as for the previous year.

The dividend yield on Sidetrade shares stands at 2.8% based on the April 29^th 2014 closing price;

2014 1ST QUARTER TURNOVER: + 7%

Following growth in Turnover of 5% during 2013, Sidetrade continued to grow over the first quarter of 2014, with a progression of 7% in Turnover to €3.4 million (2013 Q1: €3.1 million). During this first quarter period, the Sidetrade Network business registered growth of 8% compared to the same period in 2013, partly due to an unfavourable base effect comparison following the acquisition of the Sage FRP Collect business in 2013. The Sidetrade Network business now accounts for 78% of Group Turnover (2013: 75%).

Centred around a diverse portfolio of subscription-based customers, a growing presence in Europe and the very latest technological know-how, Sidetrade enters 2014 in a satisfying position despite a weaker macro-economic back-drop.

TARGET 25, ambitious plan launched in 2013 to accelerate through 2014

The 2013 period saw the launch of Target 25, an ambitious strategic plan to attain 25% growth within a 3 to 5 year horizon. The strategic growth offensive involves significant investments in R&D and Sales to accelerate development in additional international markets.

The wait and see approach taken by business decision makers is symptomatic of the weak growth in software expenditure in France, of less than 1.5% in 2013 (source: « Global Software 100 », AFDEL/PricewaterhouseCoopers, 2013). Looking beyond the current lacklustre market, Sidetrade took the opportunity to bolster the Marketing and Sales teams in France, the UK and Ireland. Sidetrade continues to capitalise on its strengths as the only SaaS pure player in the software market to maintain sustained growth of 13% (source: « Global Software 100 », AFDEL/PricewaterhouseCoopers, 2013). The R&D pipeline is filled with new innovations which will further increase the technological lead.

Management is confident of the Group's ability to post further growth over the current period. Through a sustained investment commitment through 2014, Sidetrade is laying the foundations to further accelerate growth in the coming years.

Olivier Novasque, CEO of Sidetrade Group, explains:

« 2013 marked a step change in our growth strategy with the Target 25 plan. From the second half of the year we initiated significant investments in R&D, Marketing, Sales, both in France and internationally. The opening of our pan-European platform in Ireland at the end of 2013 formed a solid base from which to accelerate our development of key European markets. In terms of innovation, we successfully launched Digital Collection, the first interactive social dunning solution. In the Credit risk space where 2013 witnessed the demise of 60,000 businesses, a record number, the Euler Hermes Intelligence by Sidetrade application made a promising start, giving Finance Departments the automated management of credit insurance policies. Already available on the Apple Store, the Sidetrade Mobile application will be offered to our subscription-based customers in the coming weeks. This App supports the spread of a Cash-culture within a company; it especially targets Sales, road warriors in the customer financial relationship. We have set aggressive targets in terms of value creation for our customers, and are convinced that our strategic decisions will help businesses to accelerate the digitisation of their financial CRM processes. Strengthened by a solid balance sheet and the utility of our innovations, throughout 2014 we will continue to accelerate our commitments in R&D and Sales and Marketing investments. Even if the positive impact of these investments on our business is shifted out in time, we have every confidence in our ability to accelerate our growth in the next three years to make Sidetrade the leading actor in SaaS at the European level. »

Sidetrade is eligible for the Share Saving Scheme for Small & Medium Size Enterprises (see March 27^th 2014 announcement). Therefore, Sidetrade shares can now be included in the relevant (Share Saving Scheme for Small & Medium Size Enterprises) accounts which benefit from the same tax treatment as the Share Saving Plan.