- Revenue up 5.7% to EUR 95,630 thousand
- Above-average growth in software license business and SaaS revenue
- Consolidated net income increases fivefold year-on-year to EUR 5,273 thousand
- Adjusted EBIT up 50.9% to EUR 6,226 thousand
- Dividend proposal of EUR 0.40 per share
- Group liquidity high at EUR 10,413 thousand
- Net cash from operating activities increases to EUR 9,518 thousand
- High equity ratio of 57.6% underlines extremely solid financing
- Planning anticipates further growth and improved earnings with positive adjusted EBIT even if the current situation deteriorates due to Covid-19
In fiscal 2019, USU Software AG (ISIN DE000A0BVU28) and its subsidiaries (hereinafter referred to as “USU” or the “USU Group”) increased their consolidated revenue by 5.7% year-on-year to EUR 95,630 thousand (2018: EUR 90,487 thousand). In addition to increased domestic business, USU benefited in particular from the further growth in international business, which rose strongly by 9.1% to EUR 26,462 thousand (2018: EUR 24,245 thousand). As a result of the increase in revenue generated outside Germany, the share of consolidated revenue accounted for by international business also rose slightly to 27.7% in 2019 (2018: 26.8%).
In particular, the main driver of this revenue growth was software license business thanks to contracts for projects postponed from the previous year to fiscal 2019 and additional customer orders in Germany and abroad. USU thus increased its income from software licenses by 12.8% as against the previous year to EUR 15,005 thousand in fiscal 2019 (2018: EUR 13,300 thousand). At the same time, maintenance and SaaS business increased to EUR 28,739 thousand (2018: EUR 25,967 thousand) on the back of strong SaaS business. This represents an increase of 10.7% compared with the previous year. By contrast, consulting business was down 1.0% year-on-year at EUR 49,905 thousand in the year under review (2018: EUR 50,420 thousand) owing to slightly weaker service business.
As a result of the growth in high-margin software license and SaaS business, the USU Group's profitability increased significantly in fiscal 2019 compared with the previous year. USU’s EBITDA rose by 80.2% as against the previous year to EUR 9,920 thousand (2018: EUR 5,506 thousand). EUR 2,360 thousand of this increase is due to amortization from the initial recognition of leases and rental agreements in accordance with the new IFRS 16. In addition to this amortization, there was also amortization of intangible assets of EUR 1,525 thousand (2018: EUR 1,643 thousand), depreciation of property, plant and equipment of EUR 1,190 thousand (2018: EUR 1,156 thousand) and goodwill impairment of EUR 791 thousand (2018: EUR 0 thousand). The latter resulted from the impairment test of the French subsidiary USU SAS, whose business performance fell short of expectations in the year under review. Adjusted for total depreciation, amortization and impairment of EUR 5,866 thousand (2018: EUR 2,799 thousand), USU generated EBIT of EUR 4,054 thousand in fiscal 2019 (2018: EUR 2,707 thousand). This represents an increase in operating earnings of 49.8% as against the previous year.
Net finance costs amounted to EUR -4 thousand in fiscal 2019 (2018: EUR 104 thousand). In addition, USU generated tax income in the year under review. Income taxes thus amounted to EUR 1,223 thousand (2018: EUR -1,850 thousand). The tax income largely resulted from the capitalization of deferred taxes on tax loss carryforwards in connection with the company’s profit transfer agreement with its subsidiary USU GmbH, which was resolved at the Annual General Meeting on July 2, 2019.
Overall, consolidated net profit increased fivefold compared with the previous year to EUR 5,273 thousand in 2019 (2018: EUR 961 thousand), translating to earnings per share of EUR 0.50 (2018: EUR 0.09). EBIT adjusted for extraordinary effects relating to acquisitions increased by 50.9% year-on-year to EUR 6,226 thousand in fiscal 2019 as a result of the growth in high-margin software business (2018: EUR 4,125 thousand). At the same time, USU’s consolidated net profit almost quadrupled year-on-year to EUR 7,349 thousand (2018: EUR 1,923 thousand). Accordingly, USU’s adjusted earnings per share improved to EUR 0.70 (2018: EUR 0.18).
As a standalone company, USU Software AG reported net profit in accordance with the German Commercial Code (HGB) of EUR 6,066 thousand in fiscal 2019 (2018: EUR 4,318 thousand). This corresponds to a 40.5% increase in profit as against the previous year. In accordance with the company’s communicated dividend policy, whereby the dividend should never be less than in the previous year and should amount to roughly half the profit generated, the Management Board and the Supervisory Board of USU Software AG are proposing a dividend distribution equal to the previous year’s level of EUR 0.40 per share for fiscal 2019 (2018: EUR 0.40).
The USU Group had cash funds (not including securities) of EUR 10,413 thousand as of December 31, 2019 (2018: EUR 9,450 thousand). This corresponds to a year-on-year increase of EUR 963 thousand or 10.2%, essentially stemming from the operating cash flow from the profit generated by USU in the year under review. Accordingly, USU’s cash flow from operating activities climbed significantly from EUR 1,996 thousand in 2018 to EUR 9,518 thousand now.
The equity of the USU Group increased from EUR 59,665 thousand as of December 31, 2018, to EUR 60,198 thousand as of December 31, 2019, as a result of the increase in profit. With total assets of EUR 104,460 thousand (December 31, 2018: EUR 95,144 thousand), the equity ratio was 57.6% as of the reporting date in 2019 (December 31, 2018: 62.7%). This means that the USU Group still has extensive free liquidity and retains its extremely solid financial position with no liabilities to banks.
The Management Board expects a further significant expansion in consolidated revenue and consolidated earnings in the current year before taking into account the potential impact of the Covid-19 crisis. Accordingly, the Management Board is forecasting an increase in consolidated revenue to between EUR 102 million and EUR 105 million in 2020, accompanied by a rise in adjusted EBIT to between EUR 7.5 million and EUR 10 million. The Management Board is also confirming the USU Group’s medium-term planning, which includes average organic revenue growth of 10% in the next few years and an increase in the operating margin on adjusted EBIT to 13%-15% by 2024.
These forecasts do not include any consequences of the global Covid-19 crisis, as the scenarios and their impact on license and consulting revenues are unclear. However, the Management Board anticipates positive adjusted EBIT in fiscal 2020 even in the event of a significant deterioration in the current situation.