14. November 2019 | Corporate News

CANCOM: Strong profitability improvement raises EBITDA margin (adjusted) to record level of 9.1 percent in third quarter

– In the third quarter of 2019, Group revenue rose to EUR 383.7 million and EBITDA (adjusted) to EUR 34.8 million.

– In the nine-month period, CANCOM thus achieved growth rates of 22.0 percent in revenues and 19.9 percent in EBITDA (adjusted).

Annual Recurring Revenue continues growth trend and reaches EUR 156.6 million.

Munich, Germany, 14 November 2019 – The CANCOM Group today published its results for the first nine months of fiscal 2019 and the third quarter. The results show a continuation of the very good development of the company in the first half of the year. For the nine-month period 2019, CANCOM reported revenue growth of 22.0 percent year-on-year to EUR 1,175.6 million (prior year: EUR 963.7 million). The organic growth included in this figure amounts to 16.3 percent.
EBITDA (adjusted)* improved by 19.9 percent in the first nine months to EUR 93.8 million (prior year: EUR 78.2 million). The EBITDA margin (adjusted) was thus 8.0 percent (prior year: 8.1 percent).

The third quarter contributed the following figures to this high growth momentum: CANCOM Group revenues rose by 8.0 percent year-on-year to EUR 383.7 million (prior year: EUR 355.2 million) and EBITDA (adjusted)* improved by 18.0 percent to EUR 34.8 million (prior year: EUR 29.5 million). The EBITDA margin (adjusted) in the third quarter was thus at the new record level of 9.1 percent for CANCOM.

“After very strong volume growth in the first half of the year, the third quarter also brought a corresponding increase in profitability. This is a quite common effect, for example when lower-margin but high-revenue hardware and software deliveries are first made in IT projects and then more profitable consulting services are invoiced. With this nine-month result, we see ourselves fully on course to achieve our already raised annual forecast,” said Thomas Volk, CEO of CANCOM SE.

Group segments contribute equally to sales and earnings growth
In the Cloud Solutions Group segment, CANCOM generated revenue growth of 22.4 percent to EUR 213.8 million between January and September 2019 (prior year: EUR 174.7 million). EBITDA (adjusted) rose by 27.2 percent to EUR 56.1 million (prior year: EUR 44.1 million). The EBITDA margin (adjusted) was 26.2 percent (prior year: 25.3 percent).

CANCOM also continued its existing growth trend in Annual Recurring Revenue, a key figure in the Cloud Solutions segment and particularly important for corporate strategy. ARR, which reflects recurring revenues from managed services contracts and the AHP Enterprise Cloud, amounted to EUR 156.6 million as of 30 September 2019, 25.3 percent up on the previous year (Sept 2018: EUR 125.0 million). This development was achieved without acquisition support, i.e. completely organically. CANCOM thus increased its ARR by 7.6 percent in the third quarter alone, compared with June 2019 (June 2019: EUR 145.5 million).

“The sustained high growth rate of the ARR shows that our transformation towards recurring revenues continues to make great progress,” said Volk.

In the Group segment IT Solutions, sales rose by 21.9 percent to EUR 961.8 million in the first nine months (prior year: EUR 789.1 million). At EUR 48.3 million, EBITDA (adjusted) was 12.6 percent above the comparable figure (prior year: EUR 42.9 million). The EBITDA margin (adjusted) was 5.0 percent (prior year: 5.4 percent).

The figures for the third quarter of 2019 in the Cloud Solutions segment were: Revenue EUR 76.8 million (prior year: EUR 65.0 million), EBITDA (adjusted) EUR 20.9 million (prior year: EUR 16.8 million) and EBITDA margin (adjusted) 27.2 percent (prior year: 25.8 percent). In the IT Solutions segment the figures amounted to: Revenue EUR 306.9 million (prior year: 290.2 million Euro), EBITDA (adjusted) EUR 17.3 million (prior year: EUR 16.2 million) and EBITDA margin (adjusted) 5.6 percent (prior year: 5.6 percent).

Acquisition of Novosco expands managed services business
After the reporting date of 30 September 2019, CANCOM announced the acquisition of the Novosco Group. The managed services provider from Belfast complements CANCOM’s already extensive range of services and further strengthens its market presence in the United Kingdom. As part of the transaction, CANCOM Group will pay a total of approximately EUR 70 million in cash, in addition to issuing minority interests at subsidiary level to Novosco’s management.

CANCOM Group’s complete interim report has been published in the Investors section of the Company’s website at

*In terms of EBITDA (adjusted), CANCOM Group earnings before interest, taxes, depreciation and amortization for the first nine months of 2019 were adjusted for special investments in the strategic transformation, ancillary acquisition costs, share-based payments and a one-time special gain from the sale of a property totaling EUR 6.6 million (prior year: EUR 7.2 million). In the third quarter of 2019, a total of EUR 1.3 million was adjusted for EBITDA at Group level (prior year: EUR 2.8 million).

As a Digital Transformation Partner, CANCOM accompanies companies into the digital future. CANCOM supports customers in reducing the complexity of their IT and expanding their business success through the use of state-of-the-art technology. In order to map the IT requirements of companies, organizations and the public sector holistically, CANCOM offers tailor-made IT from A to Z from a single source.
CANCOM Group’s range of IT solutions includes consulting, implementation, services and the operation of IT systems. Customers benefit from our extensive expertise as well as our holistic and innovative portfolio, which covers the IT requirements of companies necessary for a successful digital transformation. As a hybrid IT integrator and service provider, the company provides a range of services and solutions that includes business solutions and managed services such as cloud computing, analytics, enterprise mobility, IT security, hosting and as-a-service offerings.
The more than 4,000 employees of the internationally active CANCOM Group worldwide and an 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 EUR 1.4 billion and its parent company CANCOM SE is listed on the MDAX and TecDAX of the Frankfurt Stock Exchange (ISIN DE0005419105).