USU continues growth and resolves share buyback program

• Sales growth of 14.9% in Q2 2022
• EBITDA rises 9.4% in Q2/2022
• Half-year figures confirm successful business performance
• Liquidity climbs 19.6% year-on-year
• New record for orders on hand
• Management Board reiterates sales and earnings planning
• Public share buyback to begin in early September 2022

Thanks to a large number of new and follow-up orders, USU Software AG and its subsidiaries (referred to as the USU Group or USU) achieved robust growth once again in the reporting quarter. Despite the negative economic and political conditions around the world, consolidated sales (IFRS) rose by 14.9% to EUR 30.7 million (Q2/2021: EUR 26.7 million). USU mainly benefited from its strong domestic business, which expanded by 17.7% to EUR 23.6 million (Q2/2021: EUR 20.0 million). International revenue also increased again for the first time since the decline due to COVID, by 6.3% to EUR 7.2 million (Q2/2021: EUR 6.7 million).

Broken down by sales type, SaaS sales experienced strong year-on-year growth of 26.6% to EUR 3.4 million (Q2/2021: EUR 2.7 million). Maintenance revenue likewise rose by 8.3% to EUR 6.2 million in the second quarter of 2022 (Q2/2021: EUR 5.7 million), while recurring revenue was up by 14.1% at EUR 9.6 million (Q2/2021: EUR 8.4 million). At the same time, USU significantly increased its license revenue by 22.9% to EUR 3.2 million thanks to multiple on-premise orders (Q2/2021: EUR 2.6 million). Moreover, consulting business expanded by 12.2% as against the previous year to EUR 17.3 million (Q2/2021: EUR 15.4 million). Other income amounted to EUR 0.6 million in total (Q2/2021: EUR 0.3 million).

Consolidated expenses rose at a slower rate year-on-year, by 13% to EUR 28.2 million (Q2/2021: EUR 24.9 million). USU therefore increased its earnings as against the previous year. The USU Group’s EBITDA improved by 9.4% to EUR 3.8 million in the second quarter of 2022 (Q2/2021: EUR 3.5 million). Adjusting for depreciation and amortization of EUR 1.2 million (Q2/2021: EUR 1.2 million), EBIT was up by 15.0% at EUR 2.6 million (Q2/2021: EUR 2.3 million).

Net financial income amounted to EUR 0.1 million in the reporting quarter (Q2/2021: EUR -0.1 million). As a result of the rise in profits, income taxes increased from EUR 0.4 million in the second quarter of 2021 to EUR 0.8 million in the reporting quarter due to negative effects from deferred taxes. In total, consolidated net profit climbed by 6.9% year-on-year to EUR 1.9 million (Q2/2021: EUR 1.8 million).  With an average of 10,523,770 shares outstanding, this translates to earnings per share of EUR 0.18 (Q2/2021: EUR 0.17).

In the first six months, the USU Group’s consolidated sales expanded by 11.8% year-on-year to EUR 60.3 million (Q1-Q2/2021: EUR 53.9 million). SaaS sales grew significantly by 30.5% year-on-year to EUR 6.7 million (Q1-Q2/2021: EUR 5.1 million). With the number of license agreements on the rise, maintenance sales rose by 6.2% to EUR 12.2 million (Q1-Q2/2021: EUR 11.5 million). Accordingly, recurring revenue rose by 13.7% year-on-year to EUR 18.9 million in the first half of the year (Q1-Q2/2021: EUR 16.6 million). Recurring revenue now accounts for 31.3% of total sales (Q1-Q2/2021: 30.8%). License revenue from on-premise orders climbed by 21.3% to EUR 5.8 million (Q1-Q2/2021: EUR 4.8 million), while consulting revenue was up by 8.9% year-on-year at EUR 34.8 million (Q1-Q2/2021: EUR 32.0 million). Other income amounted to EUR 0.8 million in total (Q1-Q2/2021: EUR 0.5 million).

The USU Group’s operating cost base grew by 10.6% year-on-year to EUR 55.6 million in the first six months of 2022 (Q1-Q2/2021: EUR 50.3 million). In particular, this reflects the higher costs resulting from the increased use of in-house consultants, freelancers and partners in connection with business growth.

The company’s EBITDA expanded by 9.1% to EUR 7.3 million (Q1-Q2/2021: EUR 6.7 million), while EBIT climbed by 14.3% to EUR 4.9 million (Q1-Q2/2021: EUR 4.3 million). Net financial income amounted to EUR 0.1 million in the first six months of 2022 (Q1-Q2/2021: EUR 0.04 million). Owing to negative effects from deferred taxes, income taxes increased from EUR 0.6 million in the first half of 2021 to EUR 1.5 million in Q1-Q2/2022. As a result, USU’s consolidated earnings effectively declined by 6.9% year-on-year to EUR 3.5 million in the first half of 2022 (Q1-Q2/2021: EUR 3.8 million). With an average of 10,523,770 shares outstanding, this translates to earnings per share of EUR 0.34 (Q1-Q2/2021: EUR 0.36).

With an equity ratio of 55.7% (December 31, 2021: 55.5%), an increase in Group liquidity of 19.6% to EUR 26.3 million (June 30, 2021: EUR 22.0 million) and no liabilities to banks, the USU Group’s financial situation is still extremely sound and secure.

“Our consistently good financial resources, combined with our sustainable business model and operational growth, are providing us with the opportunity to buy back our shares. In line with our shareholders’ interests, we can use these for acquisitions or retire them. There is also the option of using them for an employee participation program. To achieve the highest possible acceptance level, we have chosen the maximum offer price of EUR 18.75. This is equivalent to a premium of around 10% based on the arithmetic average of the price of the company’s shares in the closing auction in Xetra trading on the Frankfurt stock exchange over the last ten trading days before the publication of this decision to make a public tender offer.,” explained Bernhard Oberschmidt, CEO of USU Software AG. “Even after the share buyback, we will continue our shareholder-friendly dividend policy thanks to the positive business outlook and the associated cash generation,” added Management Board member Dr. Benjamin Strehl.

USU has resolved a public share buyback offer for up to 523,770 of its shares (around 5% of the share capital). The offer period is due to begin on September 7, 2022 at 00:00 a.m. and end at midnight/12:00 p.m. (CET) on October 5, 2022. Details can be found in the ad hoc disclosure published by the company today.

Following the positive start to fiscal 2022 and given the record level of orders on hand (EUR 78.3 million; June 30, 2021: EUR 66.2 million), the Management Board is confirming its forecast for 2022 as a whole of sales growth to between EUR 120 and EUR 125 million with recurring revenue accounting for 45% of new product business, allowing EBITDA to rise to between EUR 14.5 and EUR 16.0 million. This will be driven in particular by the strong growth in high-margin SaaS business. The Management Board also anticipates positive effects and a further increase in efficiency in connection with the implementation of the “One USU” strategy. Moreover, the Management Board is confirming the current medium-term planning, which includes average organic sales growth of 10% over the next few years and, in view of the continued growth in SaaS business, an increase in the EBITDA margin to between 16% and 18% by 2024.