DGAP-News: Intershop's business performance in 2018 influenced by transformation into a provider of cloud solutions

- Total revenues of EUR 31.2 million (previous year: EUR 35.8 million)
- Strong growth in cloud revenues, sharp drop in license and service revenues
- Incoming orders for cloud solutions up by 238% to EUR 7.2 million
- EBITDA of EUR -3.7 million (previous year: EUR 2.8 million)
- EBIT of EUR -5.9 million (previous year: EUR 0.4 million)
- Forecast for 2019: double-digit revenue growth (>10%); EBIT still slightly negative

Jena, 20 February 2019 - Intershop Communications AG (ISIN: DE000A0EPUH1), a leading independent provider of innovative solutions for omnichannel commerce, generated revenues of EUR 31.2 million in the fiscal year 2018 (previous year: EUR 35.8 million). Earnings before interest and taxes (EBIT) amounted to EUR -5.9 million (previous year: EUR 0.4 million). The decline in business is mainly due to the company's transformation from a license provider to a provider of cloud-based commerce-as-a-service solutions. This process entails a temporary reduction in revenues and earnings, as it involves a change from immediately received license revenues to monthly recurring cloud revenues. In the medium term, however, recurring cloud revenues will ensure greater consistency in revenues.

Cloud and subscription revenues increased continuously from quarter to quarter in the reporting period by a total of 20% to EUR 5.4 million (previous year: EUR 4.5 million). At the same time, the transformation led to a sharp drop in license revenues of 54% to EUR 2.4 million (previous year: EUR 5.2 million). This contrasted with a high level of incoming orders in the cloud segment. In the final quarter alone, the latter was up by EUR 3.0 million on the third quarter and totaled EUR 4.0 million. For the full year 2018, incoming orders in the cloud segment increased by 238% to EUR 7.2 million (previous year: EUR 2.1 million). Maintenance revenues remained stable at EUR 8.1 million (previous year: EUR 8.0 million). Service revenues fell by 15% to EUR 15.2 million (previous year: EUR 18.0 million).

Dr. Jochen Wiechen, CEO of Intershop Communications AG: "2018 was a year of light and shade and the cloud transformation undoubtedly had a negative impact on our business performance. But the market continued to shift clearly towards cloud solutions in 2018, and our new, highly scalable commerce-as-a-service offering has already met with a very good response. After a year of transformation, we will now fully implement our cloud approach in 2019, increase our cloud customer base significantly and return to growth."

As a consequence of the transformation process, the full year 2018 was also marked by negative earnings effects. The gross margin decreased by 11 percentage points to 38%. The cloud margin climbed from 32% to 37%. Operating expenses increased by 4% to EUR 17.8 million. Marketing and sales expenses rose by 16% to EUR 9.6 million. Research and development expenses declined by 8% to EUR 4.7 million. Administrative expenses dropped by 6% to EUR 3.5 million. Earnings before interest and taxes (EBIT) amounted to EUR -5.9 million (previous year: EUR 0.4 million). Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at EUR -3.7 million (previous year: EUR 2.8 million). The net loss for the period after taxes amounted to EUR -6.7 million (previous year: EUR -0.7 million).

Total assets of the Intershop Group were down by 10% to EUR 22.7 million as of the balance sheet date on 31 December 2018. Cash and cash equivalents dropped to EUR 7.2 million (previous year: EUR 8.9 million). Cash flow from operations stood at EUR -4.1 million, compared to EUR 1.7 million in the previous year. At 60%, the equity ratio remained at a high level as of the balance sheet date. At the end of 2018, Intershop employed a total of 339 people worldwide.

In January 2019, Intershop Communications AG generated gross proceeds of EUR 4.97 million from a successful capital increase. The funds from the capital increase will be used to further accelerate the transformation of the business model and the marketing of the new cloud solution.

Markus Klahn, COO and Board member in charge of Sales and Marketing: "Our key objective is to establish Intershop as the leading provider of a digital B2B commerce platform by 2020. To achieve this objective, we will further strengthen our marketing and sales efforts in the current financial year. We also intend to intensify our lead generation initiatives. In this context, we rely on our own activities and on our strategic partner Microsoft, the world's leading cloud provider. The steady increase in incoming orders for cloud solutions makes us confident that we will successively reverse the trend and grow again in the coming quarters."

The Intershop Management Board expects total consolidated revenues to increase by more than 10% in the financial year 2019. Management also projects still slightly negative EBIT as well as a moderate increase in gross profit and the gross margin.

The full consolidated financial statements will be published in mid-March 2019. All financials in this press release are provisional, pending completion of the statutory audit.

Contact:
Investor Relations
Heide Rausch
T: +49-3641-50-1000
F: +49-3641-50-1309
ir@intershop.de