14. August 2019 | Corporate News

CANCOM: CANCOM raises forecast following outstandingly positive business development in the second quarter

– Half-year report 2019 confirms already published strong preliminary figures for the second quarter and first half of 2019.

– First-half sales growth of 30.1 percent and an increase in EBITDA (adjusted) of 21.4 percent compared with the previous year’s figures.

– Annual Recurring Revenue continues to show a high growth rate with an increase of around 38 percent compared to the previous year.

Executive Board raises outlook and now expects very significant growth of all forecast figures for fiscal year 2019.

Munich, Germany, 14 August 2019 – The CANCOM Group’s 2019 half-year report published today confirmed the previously published outstandingly positive preliminary figures for the reporting period and the second quarter. In the first half of 2019, CANCOM increased consolidated revenue by 30.1 percent to EUR 791.8 million (prior year: EUR 608.5 million). The organic growth rate was 21.9 percent.
In the same period, CANCOM improved EBITDA (adjusted)* by 21.4 percent to EUR 59.1 million (prior year: EUR 48.7 million), with organic earnings growth of 12.6 percent. The EBITDA margin (adjusted) amounted to 7.4 percent in the reporting period (prior year: 8.0 percent).

In the extraordinarily successful second quarter of 2019, CANCOM recorded revenue growth of 40.3 percent to EUR 421.8 million (prior year: EUR 300.6 million) with an organic growth rate of 31.6 percent. EBITDA (adjusted)* rose by 23.7 percent to EUR 31.3 million (prior year: EUR 25.3 million) with an organic growth rate of 12.6 percent.

“In the second quarter in particular, we benefited from our customers’ extremely high IT investments. We are currently seeing significant growth in the healthcare sector and the public sector. However, we also see a continuing need to invest in IT in all other sectors as a result of digitization. We have therefore raised our forecast for the CANCOM Group’s annual results on the basis of the reported business development,” said Thomas Volk, CEO of CANCOM SE.

Business development extremely dynamic in both segments and in ARR
In the first half of 2019, the Group segment Cloud Solutions contributed to the outstandingly positive business development with revenue growth of 24.8 percent to EUR 136.9 million (prior year: EUR 109.7 million). At the same time, CANCOM was able to further increase its already high profitability in this segment. EBITDA (adjusted) amounted to EUR 35.4 million, an improvement of 29.7 percent compared with the prior year (prior year: EUR 27.3 million). The EBITDA margin (adjusted) in the first half of the year was 25.9 percent (prior year: 24.9 percent).
In the second quarter of 2019, CANCOM recorded revenue growth of 22.2 percent to EUR 70.0 million in the Cloud Solutions segment (prior year: EUR 57.3 million). EBITDA (adjusted) rose by 27.5 percent to EUR 18.1 million (prior year: EUR 14.2 million).

The Annual Recurring Revenue (ARR), which is shown entirely in the Cloud Solutions segment, maintained the high growth rates of the previous quarters. With an increase of around 38 percent, it stood at around EUR 146 million at June 2019 (June 2018: EUR 106 million). At CANCOM, the ARR reflects recurring revenues from managed services contracts and business with CANCOM’s proprietary AHP Enterprise Cloud software.

In the first half of the year, the Group segment IT Solutions recorded enormously high sales growth of 31.3 percent and contributed EUR 654.9 million to the CANCOM Group’s extraordinarily good half-year result (prior year: EUR 498.8 million). EBITDA (adjusted) amounted to EUR 31.0 million and was thus 16.1 percent above the comparable figure (prior year: EUR 26.7 million). The EBITDA margin (adjusted) for the first half of the year was 4.7 percent (prior year: 5.4 percent).
In the second quarter of 2019, CANCOM recorded a 44.6 percent increase in revenue to EUR 351.9 million in the IT Solutions segment (prior year: EUR 243.3 million). EBITDA (adjusted) grew by 25.0 percent to EUR 17.0 million (prior year: EUR 13.6 million).

Forecast for 2019 raised
On the basis of the business development in the first half of 2019 and the current framework conditions for the IT industry, the Executive Board of CANCOM SE has raised the annual forecast published for the first time in the 2019 Annual Report.
The Management Board now expects a very significant increase in Group sales for the 2019 financial year (previously: “significant increase”). Group gross profit, Group EBITDA and Group EBITA are now also expected to increase very significantly compared to the previous year (previously: “significant increase”).

For the Group segment IT Solutions, the Executive Board now expects a very significant increase in revenue, gross profit as well as EBITDA and EBITA (previously: “significant increase”).

For the Cloud Solutions group segment, the Executive Board now also expects a very significant increase in revenue, gross profit, EBITDA and EBITA (previously: “significant increase”), whereby this increase is still expected to be above the level of the increase in the IT Solutions segment.

In addition, a very significant increase in Annual Recurring Revenue (ARR) compared to December 2018 is still expected.

The complete half-year financial report of the CANCOM Group is published on the website in the Investors section.

*To calculate the financial indicator EBITDA (adjusted), CANCOM Group’s earnings before interest, taxes, depreciation and amortization for the first half of 2019 were adjusted for special investments in strategic transformation, incidental acquisition costs and share-based payments totaling EUR 5.4 million (prior year: EUR 4.4 million). A total of EUR 2.8 million in EBITDA was adjusted for the second quarter of 2019 (prior year: EUR 3.2 million).

As a Digital Transformation Partner, CANCOM accompanies organizations into the digital future. CANCOM helps customers to simplify complex enterprise IT and increase their business success through the implementation of modern technology. In order to comprehensively meet the IT needs of companies, organizations, and the public sector, CANCOM delivers tailor-made IT end to end from a single source.
The CANCOM Group’s range of IT solutions includes consulting, implementation, services, and the management of IT systems. Customers benefit from the extensive expertise as well as a holistic and innovative portfolio that covers the IT requirements that are necessary for a successful digital transformation. As a hybrid IT integrator and service provider, the Company provides an integrated range of services and solutions including business solutions and managed services, such as cloud computing, analytics, enterprise mobility, IT security, hosting, and as-a-service offerings.

With more than 3,500 employees worldwide, the internationally active CANCOM Group and its efficient partner network ensure market presence and customer proximity in Germany, Austria, Switzerland, Belgium, Great Britain, and the USA. The CANCOM Group is led by Thomas Volk (CEO), Rudolf Hotter (COO), and Thomas Stark (CFO). The company is headquartered in Munich. CANCOM has an annual turnover of around 1.4 billion euros and its parent company, CANCOM SE, is listed on the TecDAX and SDAX of the Frankfurt Stock Exchange (ISIN DE0005419105).