Full Year 2017 and Q4 update

Trading Update Q4 and full year financial statements
Financial information in this press release is unaudited

TIE Kinetix Q4 trading update and full year 2017 performance

Breukelen, the Netherlands, November 15th, 2017

Fiscal year 2017 (period Oct. 1, 2016 – Sept. 30, 2017).

  • Total revenue amounts to € 18.854k                                                                          (2016: € 22.250k)
  • SaaS and hosting revenue amounts to € 9.818k                                                      (2016: € 9.818k)
  • EBITDA amounts to € 1.575k                                                                                       (2016: € 2.066k)
  • EBIT (excl. impairment and one time charges) amounts to € 296k                      (2016: 786k))
  • EBIT (incl. goodwill impairment and one time charges) amounts to € - 2.129k
  • FLOW order Intake € 12.5 mln.                                                                                     (2016: € 9.8 mln)
  • FLOW SaaS Order intake at 55% of total order intake                                              (2016: 45%)
  • Recurring revenue of 72.5%                                                                                          (2016: 67.9%)

Full year 2017 EBITDA of € 1.575k or 8.3% (2016: € 2.066k)

TIE Kinetix (hereinafter “TIE”), the leading provider of cloud-managed Business Integration, E-Commerce, Demand Generation, and Business Analytics services today released the results for the fourth quarter and full fiscal year 2017 (Oct 1, 2016 – Sept 30, 2017) as follows:  

Full year 2017 Business Line performance

Full year 2017 Business Line performance

Full year 2017 Total performance

Full year 2017 Total performance

Q4 2017 Business Line performance

Q4 2017 Business Line performance

Q4 2017 Total performance

Q4 2017 Total performance

In 2017 the company made important steps in implementing the FLOW platform as its core strategic product offering. To TIE Kinetix, the FLOW offering brings new sources of revenues from existing and new accounts by combining connectivity with suppliers and connectivity with sales channel partners on one platform. To our customers this brings the unique possibility of combining supply side information with sales and marketing information enabling users to optimize their supply chain by generating more revenues with lower costs.

Along with the technical transition towards one technology platform, the company further optimized its sales organization and provided internal sales training to all sales staff. All local sales teams were subsequently split into a Customer Success Team – responsible for existing accounts, and a New Business Development team – responsible for developing new accounts.

In addition to existing partner Epicor, new partners (such as Google, Oracle, Exact, Unit4 and Syspro) were contracted to provide scalability and deeper penetration into certain vertical markets. 

In the second half year of FY 2017, the following large new customers decided to implement our FLOW platform: Parker Hannifin, Chanel, city of Amsterdam and city of Rotterdam.

TIE closed the fourth quarter, with revenue amounting to € 4.491k, and EBITDA of € 567k (12,6%). The company reports full year revenue of € 18.854k (2016: € 20.250k) with an EBITDA (excl. one-time expenses) of € 1.714k (2016: € 2.066k).

In 2017, the company decided to discontinue investments in certain businesses, unrelated to FLOW. These are EU projects, the hosting of bespoke portals in Germany and with TMobile. The 2017 revenue of these discontinued businesses was € 3.3 million (2016: € 4.9 million). The company anticipates a further decline of these businesses to around € 1.8 - 2.0 million in FY 2018. This effect limits overall top line growth in FY 2018.

The chart below visualizes the top line revenue effects of the migration towards FLOW;

Revenue effects FLOW migration

In 2017, FLOW revenue (consisting of applications in Integration, Demand Generation and Analytics) amounted to € 16.471k (2016: € 16.456k), included FLOW SaaS revenue of € 7.831k (11,1% increase versus € 7.047 in 2016). Since our FLOW proposition requires less consultancy efforts to onboard customers our consultancy/support revenue declined to € 8.052k (2016: € 8.397k). FLOW is principally run in a SaaS model. Only in incidental cases FLOW modules are sold as a license. Therefore FLOW license revenue declined to €573k (2016: € 898k). The chart below visualizes the top line revenue transition effect of the growing FLOW SaaS revenue and declining FLOW consultancy revenue.

Revenue FLOW

The company has taken measures to reduce costs to counter the expected effect of the lower volumes of consultancy work and the lower amount of portal projects. As a consequence thereof several staff has been re-assigned and/or their contracts have been terminated. At the same time the company is building up sales resources to bring FLOW deeper into the existing markets. For FY 2018 this trend may be expected to continue.

FTE by department TIE Kinetix

During 2017 the Order Intake in FLOW applications from existing and new customers amounted to € 12.5 million (2016: € 9.7 million) an increase of 27.5% compared to FY 2016. Total order intake is split between FLOW and Non FLOW as follows: 

Revenue FLOW ISP

Jan Sundelin (CEO) said:“In 2017, we have also seen our non-FLOW business decline – as foreseen. Especially in the second half of 2017, the company was able to prove the viability of the FLOW strategy. The demand for our FLOW platform, combining highly rated back-end integration expertise with front end channel management functionality, is increasing as evidenced with strong Order Intake. We have signed up many new FLOW customers on our self-service platform. With our extended partner channel and expanded sales teams we will continue our investments in the roll out of FLOW in our markets. We intend to increase our marketing budgets to support these efforts. Higher sales and marketing costs can to some extend be mitigated by lower costs of delivery and implementation. However, in FY 2018 some margin pressure may be expected as a result of our increased marketing and sales efforts. Also the decline of non-FLOW business will continue in FY 2018.”

(For the full version of the press release, please download from the link below.)

For further information, please contact:
TIE Kinetix N.V.
Jan Sundelin CEO or Michiel Wolfswinkel CFO
Phone: +31 (0) 88 3698060
e-mail: Michiel.Wolfswinkel@TIEKinetix.com

About TIE Kinetix
TIE Kinetix transforms the digital supply chain by providing Total Integrated E-commerce solutions. These solutions maximize revenue opportunities by minimizing the energy required to market, sell, deliver and optimize online. Customers and partners of TIE Kinetix constantly benefit from innovative, field tested, state-of-the-art technologies, which are backed by over 30 years of experience and prestigious awards. TIE Kinetix makes technology to perform, such that customers and partners can focus on their core business. 

TIE Kinetix is a public company (Euronext: TIE), and has offices in the United States, the Netherlands, France, Germany, UK, and Australia.

Submitted by Investor Relations on Wed, 11/15/2017

 

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