USU Software AG announces figures for third quarter and first nine months of 2019

• Revenue growth of 5.9% in Q3 2019
• License revenue climbs by 44%
• Adjusted EBIT rises by more than 40%
• Revenue for first nine months increases by 6.9%
• Adjusted nine-month EBIT up 58.4%
• Risk factors weigh on Q4 2019
• Revenue and earnings planning revised

USU Software AG (ISIN DE000A0BVU28) and its subsidiaries (hereinafter also referred to as the “USU Group” or “USU”) significantly improved their profitability (IFRS) as against the previous year in the third quarter of 2019. The Group increased its EBITDA by 65.6% from EUR 1,922 thousand in the third quarter of 2018 to EUR 3,183 thousand in Q3 2019. At the same time, EBIT improved by 51.4% to EUR 1,849 thousand (Q3 2018: EUR 1,221 thousand). Consolidated net profit rose by 149.5% from EUR 946 thousand in the same quarter of the previous year to EUR 2,360 thousand in the quarter under review. This includes tax income of EUR 455 thousand (Q3 2018: EUR -289 thousand). Accordingly, earnings per share amounted to EUR 0.22 (Q3 2018: EUR 0.09). USU’s EBIT adjusted for the extraordinary effects of acquisitions (adjusted EBIT) improved by 40.1% to EUR 2,194 thousand in the third quarter of 2019 (Q3 2018: EUR 1,566 thousand).

The main growth driver was license revenue, which rose significantly by 43.9% year-on-year to EUR 4,126 thousand in the third quarter of 2019 (Q3 2018: EUR 2,868 thousand). Overall, consolidated revenue improved by 5.9% on the strong prior-year quarter to EUR 23,836 thousand (Q3 2018: EUR 22,504 thousand).

Over the first nine months, USU generated revenue of EUR 68,713 thousand (Q1-Q3 2018: EUR 64,278 thousand). This represents an increase of 6.9% as against the previous year. USU also benefited from the continuing growth in international business, which rose by 7.3% to EUR 19,134 thousand in the first nine months (Q1-Q3 2018: EUR 17,833 thousand). Accordingly, the share of consolidated revenue accounted for by international business rose slightly to 27.8% in the first nine months of 2019 (Q1-Q3 2018: 27.7%). Thanks to successful contract negotiations, USU increased its income from software licenses by 32.3% as against the previous year to EUR 10,361 thousand in the first nine months of the current fiscal year (Q1-Q3 2018: EUR 7,829 thousand).

USU’s EBITDA therefore also rose by 95.4% as against the previous year to EUR 5,603 thousand (Q1-Q3 2018: EUR 2,868 thousand). However, EUR 1,696 thousand of this figure relates to the recognition of leases and rental agreements in accordance with the new IFRS 16. Adjusted for depreciation and amortization of EUR 3,755 thousand (Q1-Q3 2018: EUR 2,119 thousand), USU generated EBIT of EUR 1,848 thousand in the same period (Q1-Q3 2018: EUR 749 thousand). This represents an increase in operating earnings of 147.1% as against the previous year. Adjusted EBIT increased by 58.4% year-on-year to EUR 2,884 thousand as a result of the growth in high-margin software business (Q1-Q3 2018: EUR 1,821 thousand).

The Management Board is forecasting that various risk factors will influence business performance in the final quarter of the year. For instance, several potential major customers in Germany and abroad are expected to choose a software-as-a-service (SaaS) contract instead of a software license agreement. The originally planned software license revenue will therefore not be generated directly, and will instead be distributed over the term of the SaaS contract.

In addition, there are the restrained development of the French market and capacity gaps in the service segment. Therefore, the Management Board has adjusted the guidance for consolidated revenues for the full year 2019 to EUR 93 – 95 million (2018: EUR 90.5 million) and the guidance for adjusted EBIT to EUR 5 – 8 million (2018: EUR 4.1 million). All in all, USU will therefore continue to significantly increase consolidated sales and consolidated earnings in the current year compared to the previous year.

The USU Group’s medium-term planning has also been revised. The Management Board is now assuming average organic revenue growth of 10%. As a result of ongoing growth in SaaS business, the operating margin on adjusted EBIT is set to increase to 13-15% in the next 4 years.

The full nine-month report for 2019 is available for download on USU Software AG’s website. The Management Board of the company will present further details of business performance at the analyst and investor conference, “German Equity Forum 2019” at 2:30 p.m. on November 26, 2019 at the Sheraton Frankfurt Airport Hotel and Conference Center (Hugo-Eckener-Ring 15, 60594 Frankfurt/Main), Paris room.