Press release 1st half year results FY2015 - TIE KINETIX: solid growth in SaaS revenue
Press release interim consolidated financial statements TIE KINETIX N.V. Financial information in this interim report is unaudited.
May 20 - 2015 -
Breukelen, the Netherlands,
First half year results (period Oct, 1, 2014 – March 31, 2015).
Launch of Google GSA sales in the Netherlands and UK
Growth of Demand Generation sales in US and Europe
SaaS and hosting revenues grow 34,5% to € 4.485k (H1 2014: € 3.334k)
Implementation of SaaS contracts erodes chargeable consultancy
Total revenue (excl. EU projects) increase by 6,8% to € 9.495k (H1 2014: € 8.888k)
EBITDA, excl. EU projects and one-time costs amounts to € 540k (H1 2014: € 1.103k)
EBITDA impacted by EU projects (- €187k) and one-time costs (€ 1.893k)
Net profit, excl. EU projects and one-time costs amounts to € 28k (H1 2014: € 731k)
Three year contract value (excl. EU projects) increases with 8,3% to € 31.848k (H1 2014: € 29.402k)
TIE Kinetix, the leading provider of cloud-managed Integration, Analytics, Demand Generation and E-Commerce services today released interim results for the first half year of its fiscal 2015, covering the period October 1, 2014 – March 31, 2015. In the first half year of 2014 the German company Tomorrow Focus Technologies GmbH (“TFT”, hereinafter called ‘TIE Kinetix Germany’) was acquired on December 2nd, 2013. The results for the first half year of 2014 include the results of TIE Kinetix Germany as from that date, consolidated for only four months in the first half year of 2014. Acquisition costs amounted to € 345k and have been reported under one-time expense in the first half year 2014 Profit & Loss statement.
EU subsidies repayment
In the first half year of 2015, the full scope of the repayment of EU subsidies became clear. TIE Kinetix hired an interim subsidy specialist to fully recalculate all current and past EU projects and turned to Deloitte to assure that the recalculations were in line with the audit findings and EU regulations. Management has spent a considerable effort in investigating possibilities to mitigate damages, communicate with EU officials and their auditors to try and find an amicable resolution or payment plan. The EU officials have responded negatively to all TIE Kinetix’ requests for resolution and even our request for phased payments was rejected. As a consequence, TIE Kinetix has to repay EU subsidies currently calculated at approximately € 1.085.383, for which amount a provision has been created in the first half year of 2015. Furthermore, TIE Kinetix has incurred support costs consisting of subsidy specialist costs and legal fees, in total amounting to € 62.286. This amount is of an extra-ordinary nature and reflected in the first half year profit and loss account under one-time expenses. In order to completely mitigate any effect of repayments of subsidies on the company’s operations, TIE Kinetix obtained a shareholder guarantee for damages up to an amount of € 2 million. On March 31st a first draw-down of € 700.000 under this guarantee was done. All draw-downs under this guarantee will be reflected under the company’s equity.
Jan Sundelin (CEO) said: “In the first half year management has spent considerable efforts resolving matters of the past. We were happy to finally close the Samar case. The EU subsidy repayments are a heavy burden for a company with the size of TIE Kinetix. As much as we are disappointed with the position the European Commission is taking with regards to finding a resolution, we are very grateful for the shareholder-guarantor that enables TIE Kinetix to close this matter without spillover effect to its operations. With regards to our operational performance we see a continued growth in SaaS revenue in line with our projections. However, we do recognize that our billable consultancy has suffered from the focus on SaaS performance. We are taking measures to avoid similar erosion of consultancy hours in the second half year. We are content with the roll out of Google Analytics to the Netherlands and the UK, under TIE Kinetix Germany management, in line with our plans. Our integration business continues to deliver healthy margins, and we are developing new tools and processes to bring newly signed up customers quicker into operation. This will allow a more aggressive go to market strategy. Our E-commerce business grew with a number of new T-mobile projects. Our second largest customer KPN has indicated to consolidate certain of its brands, as a result of which our future revenue with these brands will be uncertain. Although we are happy with the performance in the first half year, we will exploit new commercial opportunities for our platform. Our Demand Generation business is developing in the right direction, and TIE Kinetix seems to have a pole position in this budding market. But the size of the market and speed of development continues to be below our expectation.”
(For the full version of the press release, please download from the link below.)
Submitted by Investor Relations on Wed, 05/20/2015