Release no. 11/2019
Columbus had a good start to the year
In the first quarter of 2019 Columbus delivers a revenue growth of 3% (adjusted for last year’s divestiture of the SAP ERP business the growth is 7%) and an increase in net result before tax of 11%. The growth is primarily driven by sale of Columbus Care services and growth in the services business. Columbus maintains guidance for the year.
In accordance with the regulations for listed companies’ submission of interim statements, Columbus A/S hereby submits the interim management statement for the period 01.01.2019-31.03.2019 (3 months).
Organic growth of 7%
Revenue in Q1 2019 amounted to DKK 482m (2018: DKK 469m), corresponding to an increase of 3% compared to the same period last year. Isolated for the SAP ERP Business and Columbus Latvia divested in 2018 (constituting DKK 19.8m), Columbus delivered an organic growth of 7.2%.
The revenue growth is mainly driven by increased sale of Columbus Care services, a general growth in the services business and increased sales of external software.
EBITDA increased from DKK 50.6m to DKK 60.5m, a growth of 19%.
EBITDA is impacted by a decline in EBITDA in the US Business of DKK 5.8m and continued integration cost of iStone of DKK 2m.
Q1 is in general characterized by increased investments in building new offerings (9 Doors to Digital Leadership®), digitalization, marketing and continued integration of iStone.
The result before tax increased by 11% to DKK 35.7m.
Currency rate effect
Revenue and EBITDA were not significantly impacted by currency fluctuations. However, the USD has increased compared to 2018 and SEK has declined. The net effect of the changes in these two currencies are immaterial.
Progress in the services business
In Q1, the service revenue increased by 3%. Organically (without SAP) the increase in service revenue is 8.5%. The increase in the service revenue was primarily driven by increased sale of Columbus Care services and a general progress in the services business where especially the business areas M3 and Commerce showed strong progress.
Chargeable hours constitute 56% in the first quarter of 2019 (2018: 57%). The small decline is primarily caused by lower efficiency in Russia, UK and US.
Recovery of Columbus US
The US business entered 2019 with a challenging outlook in continuation of a difficult 2018. Columbus expects a continued decline in revenue and EBITDA during the first half of 2019 with a slow turn around in second half of 2019. We believe we have the right team in the US with many highly skilled individuals. However, as the turnaround has not materialized as expected, we are in the process of hiring a new local General Manager.
Progress in new business areas
In 2018, Columbus launched the framework of 9 Doors to Digital Leadership® which is our comprehensive services and solutions
catalogue. In Q1, the sale of the new business areas within Analytics & Business Insight, Customer Experience and Application Management (Columbus Care) delivered significant growth.
Progress in the sale of Columbus Cloud
The sale of Columbus Cloud has come off to a good start with a total revenue growth of 46%. Columbus Cloud revenue now constitutes a larger part of Columbus Software sales than licenses sales, which
has been expected due to the cloud conversion. Overall, Columbus Software declined by 16% due to the accelerated cloud conversion and an extraordinary strong sale in 2018.
Columbus Care and cloud drive growth in recurring revenue
In Q1 2019 recurring revenue increased by 9% and constituted 22% of the total revenue. The progress is driven by a considerable increase in sale of Columbus Care of 14% as well as an increase in total cloud revenue of 54%.
Expectations to 2019
IFRS 16 “Leasing” is expected to have
a total impact on EBITDA 2019 of DKK 36m. This will impact the expected EBITDA margin by 1.7 percentage points. Profit before taxes will be slightly negatively
impacted by DKK -0.2m.
Columbus maintains the announced expectations to 2019:
- Revenue in the level of DKK 2bn
- EBITDA in the level of DKK 240m
- Columbus Software revenue in the level of DKK 110m
- 10% dividend on nominal share capital
Latest developments
No events or transactions with a material effect on the company’s financial position have occurred since the balance sheet date.
”Columbus started the year according to plan with progress in our business overall. We delivered an improvement in organic growth and satisfactory progress in a range of our strategic business areas such as Columbus Care and Analytics & Business Insight and Customer Experience”, says CEO and President in Columbus, Thomas Honoré.
| DKK ´000 | Q1 2019 | Q1 2018* | 2018* |
| Columbus Software licenses | 3,649 | 6,959 | 29,373 |
| Columbus Software subscriptions | 14,775 | 16,907 | 57,949 |
| Columbus Cloud | 4,009 | 2,752 | 15,547 |
| External software licenses | 17,020 | 17,774 | 74,029 |
| External software subscriptions | 45,861 | 43,401 | 206,658 |
| External cloud | 7,102 | 4,485 | 24,095 |
| Services | 379,729 | 369,601 | 1,432,109 |
| Other | 10,328 | 7,510 | 35,492 |
| Total net revenue | 482,473 | 469,389 | 1,875,252 |
| EBITDA before share-based payment | 61,467 | 51,453 | 181,183 |
| Share-based payment | -998 | -837 | -9,774 |
| EBITDA | 60,469 | 50,616 | 171,409 |
| 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 | |
Income statement
| DKK ´000 | Q1 2019 | Q1 2018* | 2018* |
| Net revenue | 482,473 | 469,389 | 1,875,252 |
| External project costs | -95,827 | -91,720 | -391,276 |
| Gross profit | 386,646 | 377,669 | 1,483,976 |
| Staff expenses and remuneration | -283,935 | -274,718 | -1,091,192 |
| Other external costs | -41,739 | -52,718 | -220,048 |
| Other operating income | 497 | 1,220 | 8,472 |
| Other operating costs | -2 | 0 | -25 |
| EBITDA before share-based payment | 61,467 | 51,453 | 181,183 |
| Share-based payment | -998 | -837 | -9,774 |
| EBITDA | 60,469 | 50,616 | 171,409 |
| Depreciation, amortization and impairment | -22,092 | -28,295 | -63,893 |
| Operating profit (EBIT) | 38,377 | 22,321 | 107,516 |
| Financial income | 760 | 9,925 | 13,663 |
| Financial expense | -3,411 | -118 | -5,738 |
| Profit before tax | 35,726 | 32,128 | 115,441 |
Depreciation, amortization and impairment contains depreciations of right-of-use assets in the amount of DKK 9.3m.
| Balance sheet |
| DKK ´000 | Q1 2019 | Q1 2018* | 2018* |
| ASSETS | |||
| Goodwill | 935,109 | 909,223 | 933,872 |
| Customer base | 60,871 | 72,398 | 64,350 |
| Other intangible assets | 6,289 | 1,127 | 6,661 |
| Development projects finalized | 71,985 | 64,004 | 67,480 |
| Development projects in progress | 9,767 | 6,884 | 11,723 |
| Property, plant and equipment | 23,811 | 25,257 | 24,190 |
| Right-of-use assets | 101,052 | 0 | 0 |
| Investments in subsidiaries | 0 | 296 | 0 |
| Deferred tax assets | 22,031 | 22,549 | 24,389 |
| Other receivables | 7,493 | 6,474 | 8,289 |
| Total non-current assets | 1,238,407 | 1,108,212 | 1,140,954 |
| Inventories | 66 | 0 | 5 |
| Trade receivables | 334,499 | 276,579 | 316,111 |
| Contract assets | 38,879 | 13,985 | 25,317 |
| Corporate tax receivables | 7,659 | 3,659 | 1,278 |
| Deferred tax assets | 7,595 | 3,533 | 4,521 |
| Other receivables | 19,640 | 9,836 | 11,327 |
| Prepayments | 23,836 | 27,762 | 25,136 |
| Receivables | 432,108 | 335,354 | 383,690 |
| Cash | 114,085 | 92,000 | 108,909 |
| Total current assets | 546,258 | 427,354 | 492,604 |
| TOTAL ASSETS | 1,784,665 | 1,535,566 | 1,633,558 |
| DKK ´000 | Q1 2019 | Q1 2018* | 2018* |
| EQUITY AND LIABILITIES | |||
| Share capital | 155,778 | 149,832 | 152,234 |
| Reserves on foreign currency translation | -26,475 | -54,706 | -44,503 |
| Retained profit | 558,071 | 450,021 | 528,608 |
| Group shareholders' equity | 687,374 | 545,147 | 636,339 |
| Minority interests | 3,281 | 4,151 | 3,381 |
| Equity | 690,655 | 549,298 | 639,720 |
| Deferred tax | 20,040 | 33,346 | 25,016 |
| Other provisions | 14,825 | 0 | 12,015 |
| Contingent consideration | 219,508 | 341,564 | 227,259 |
| Debt to credit institutions | 183,230 | 184,658 | 184,270 |
| Lease liability rigth-of-use assets | 70,602 | 0 | 0 |
| Non-current liabilities | 508,205 | 559,568 | 448,560 |
| Debt to credit institutions | 13,738 | 6,089 | 7,494 |
| Contingent consideration | 87,156 | 0 | 88,561 |
| Contract liabilities | 25,798 | 20,198 | 30,745 |
| Trade payables | 75,312 | 67,017 | 105,585 |
| Corporate tax payables | 5,582 | 1,721 | 4,514 |
| Other Payables | 263,276 | 268,056 | 235,173 |
| Accruals | 79,327 | 63,619 | 73,206 |
| Lease liability rigth-of-use assets | 35,616 | 0 | 0 |
| Current liabilities | 585,805 | 426,700 | 545,278 |
| Total liabilities | 1,094,010 | 986,268 | 993,838 |
| TOTAL EQUITY AND LIABILITIES | 1,784,665 | 1,535,566 | 1,633,558 |
* 2018 numbers are not adjusted for IFRS 16 (Leasing) effect.
| 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, 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 2019 | ||||||
| Columbus Software licenses | 2,624 | 1,369 | 128 | 390 | -862 | 3,649 |
| Columbus Software subscriptions | 12,412 | 4,213 | 208 | 1,282 | -3,340 | 14,775 |
| Columbus cloud | 3,102 | 1,787 | 118 | 0 | -998 | 4,009 |
| External licenses | 624 | 10,051 | 2,360 | 4,575 | -590 | 17,020 |
| External subscriptions | 1,963 | 19,968 | 3,515 | 21,705 | -1,290 | 45,861 |
| External cloud | 504 | 2,599 | 199 | 3,800 | 0 | 7,102 |
| Services | 13,221 | 306,024 | 25,506 | 44,531 | -9,553 | 379,729 |
| Other | 236 | 9,282 | 435 | 1,101 | -726 | 10,328 |
| Total net revenue | 34,686 | 355,293 | 32,469 | 77,384 | -17,359 | 482,473 |
| Gross profit | 30,759 | 273,728 | 26,447 | 49,952 | 5,760 | 386,646 |
| EBITDA | 15,506 | 50,845 | 2,589 | 1,202 | -9,673 | 60,469 |
| Consultancy | ||||||
| DKK ´000 | ISV | Western Europe | Eastern Europe | North America | HQ, GDC and Eliminations | Total |
| Q1 2018 | ||||||
| Columbus Software licenses | 5,619 | 2,343 | 281 | 890 | -2,174 | 6,959 |
| Columbus Software subscriptions | 16,241 | 4,323 | 256 | 963 | -4,876 | 16,907 |
| Columbus cloud | 2,318 | 1,180 | 49 | 0 | -795 | 2,752 |
| External licenses | 886 | 10,121 | 1,634 | 5,524 | -391 | 17,774 |
| External subscriptions | 2,276 | 16,377 | 3,299 | 22,349 | -900 | 43,401 |
| External cloud | 105 | 1,653 | 39 | 2,688 | 0 | 4,485 |
| Services | 14,252 | 279,728 | 23,696 | 53,537 | -1,612 | 369,601 |
| Other | 196 | 5,655 | 641 | 1,161 | -143 | 7,510 |
| Total net revenue | 41,893 | 321,380 | 29,895 | 87,112 | -10,891 | 469,389 |
| Gross profit | 34,607 | 247,065 | 24,406 | 58,177 | 13,414 | 377,669 |
| EBITDA | 17,944 | 30,763 | 3,320 | 7,022 | -8,433 | 50,616 |
Attachment
