November 16th, 2016 - Breukelen, the Netherlands
Trading Update Q4 and full year financial statements
Financial information in this press release is unaudited
TIE Kinetix Closes Profitable 2016
Fiscal year 2016 (period Oct. 1, 2015 – Sept. 30, 2016).
- Total revenue amounts to € 20.250k (2015: € 22.263k)
- SaaS and hosting revenue amounts to € 9.818k (2015: € 9.180k)
- EBITDA amounts to € 2.065k (2015: € -134k)
- EBIT amounts to € 786k (2015: € -1.390k)
- SaaS Order intake at 50,2% of total order intake (2015: 44,1%)
- Full year 2016 EBITDA of € 2.065k or 10.2% (2015: € -134k)
Highlights full year 2016
EU Projects and Total Performance FY2016
In 2016, the company was able to replace lost SaaS revenue from KPN Hi/Telfort with new customer implementations, growing overall SaaS revenue with 7%. Consultancy revenue and Other Income came in below 2015 levels, caused by is 1) loss of KPN revenue due to the discontinuation of the Hi/Telfort labels, and 2) a further reduction of EU projects and 3) the expiration of Tomorrow Focus AG revenue guarantees/contractual fees to TIE Kinetix GmbH. These revenue reductions have been anticipated with cost reductions taken in prior periods. The EU team has been downsized and refocused towards developing FLOW. The Ecommerce delivery team was downsized to only provision T-Mobile. Furthermore, operating costs have been reduced due to a shift in product development towards FLOW as planned. As a result, anticipating lower sales, operating expenses in 2016 came in below 2015 levels and EBITDA performance developed according to plan. In 2017, the planned transition towards a homogeneous FLOW based product suite will continue. At this stage, it cannot be excluded that the build-up of FLOW revenue is insufficient to replace the discontinuation of non-core products. This may set limitations to top line growth in FY 2017.
After the introduction of FLOW (April 2016), significant marketing investments were made to bring the product to our US and European markets. All our sales staff, delivery teams and partners have been trained in product functionality. Since the introduction, email campaigns with 10.000’s emails per month have been launched in all our markets, generating 1.000’s of prospects and 100’s of leads. Our prospects and customers are receiving FLOW positively and in a relatively short period after the introduction TIE Kinetix was able to close FLOW deals with customers Drabbe, Unify, Nuance, Xerox, Dell, Svedex and Michelin (France). The Q4 revenue impact of FLOW was limited since most of these deals came in late Q4.
TIE closed the fourth quarter, with revenue amounting to € 4.935k, and EBITDA of € 718k (14,5%). The company reports full year revenue of € 20.250k (2015: € 22.263k) with an EBITDA of € 2.065k (2015: € -134k). Growth is reported in Integration (+14%), revenue of the business lines A&O and Demand Generation consolidated (with -3% and -4% respectively) and the business line E-Commerce business declined with 37%. The following highlights the developments in our four business lines throughout our financial year 2016 (Oct. 1, 2015 – Sept. 30, 2016):
- Business Integration: we have been able to build on our strong position in our vertical markets such as food retail, publishing, do-it-yourself, telecommunications and automotive in the US and the Netherlands with Order Intake increasing 10% from €6.2 million (2015) to € 6,8 million (2016). In fiscal year 2016, our Business Integration revenue grew with 14% from € 9.804k (2015) to € 11.157k (2016).
- Analytics: the build out of our A&O business has suffered from Google’s decision not to deliver the Google Search Appliance product in the license model to new customers anymore, anticipating the introduction of their SaaS delivery model. As a consequence, the revenue of this business line consolidated around € 3.2 million and the Order Intake declined from €3.3 million (2015) to € 2 million (2016).
- Demand Generation: revenue of our Demand Generation Solution grew 32% from € 1.678k (2015) to € 2.229k (2016). We also report our German hosting customers under Demand Generation. This part reported a decline in revenue with 26% from € 2.888k (2015) to € 2.145k (2016) due to price erosion and fierce competition in the hosting market. A further decline of this revenue may be expected in FY 2017.
- E-commerce: our E-commerce proposition delivers webshop solutions with full back office integrations. Historically, our customers are large telecommunications companies such as KPN and T-Mobile for whom we provision complete webshop functionality. In 2016, the termination of the KPN contract, following a consolidation of its customer labels, is reflected in lower revenue. The contract with T-Mobile expires mid FY 2017 and is currently subject to renewal review. In 2016, T-Mobile is our largest customer. In 2016, the E-commerce revenue declined with 37% from € 3.217k (2015) to € 2.041k (2016).
Jan Sundelin (CEO) said:“2016 is an important year in the existence of the company. This was the first year in which we were able to fully combine our highly rated back-end integration expertise with front end channel management functionality. The result was the mid-year introduction of FLOW: “the world’s First Self Service Partner Automation Platform”, a truly novel solution bringing together all our product functionality in one self-service platform. We intend to continue our investments in further development, marketing and sales of FLOW in the coming years. 2016 was also the year in which the company has further homogenized its product suite. Our overall Q4 revenue came in below Q4 last year, as we strive to discontinue certain non-strategic activities, such as EU projects and other bespoke type of business, and replace that with our core FLOW solutions. This conversion process of our business will take at least another year. At the same time, our quarter on quarter increasing bottom line profitability confirms to us that we are on the right track”.
(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
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 25 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 has offices in the United States, the Netherlands, France, Germany, United Kingdom and Australia.
Submitted by Investor Relations on Wed, 11/16/2016