EQS-News: DATAGROUP Presents Very Good Preliminary Results for 2022/2023: Guidance for Revenues and Earnings fully met, EBITDA Forecast Exceeded

• Revenues at the upper end of the guidance
• EBIT grows disproportionately to EUR 45.3m, EBIT margin improves to 9.1 %
• Strong demand for CORBOX services
• Solid balance sheet ratios provide scope for additional growth, further acquisitions planned in the current fiscal year
• Investments in and expansion of AI, cyber security and cloud to drive growth

Pliezhausen, 21 November 2023. DATAGROUP SE (WKN A0JC8S) today publishes preliminary results for FY 2022/2023. Revenues came in at EUR 497.8m, which is at the upper end of the guidance of EUR 485–500m and is slightly below the prior year (PY EUR 501.4m). Gross profit was up 3.5 % to EUR 341.2m (PY EUR 329.8m), which clearly shows that the focus on profitable sales in the CORBOX core business pays off.

Operating earnings before taxes, interest, depreciation and amortization (EBITDA) were up 4.9 % in FY 2022/2023 to EUR 80.2m (PY EUR 76.5m) and exceeded the guidance of EUR 76–80m. Earnings before interest and taxes (EBIT) have grown disproportionately on the back of efficiency measures and a focus on profitable contracts. Despite investments of c. EUR 1m in artificial intelligence in Q4 2022/2023, recognized in the income statement, EBIT came in at EUR 45.3m, which is 9.3 % above the prior-year figure (PY EUR 41.5m, guidance EUR 45–48m). At 9.1 %, the EBIT margin is +0.8pp above the prior-year level (PY 8.3 %) and thus exceeds the midterm goal of 9 %. Net income amounts to EUR 28.3m after EUR 22.0m in the prior-year period. Earnings per share of EUR 3.39 are well above the prior-year figure of EUR 2.64.

“Although the macroeconomic situation remains challenging because of the sharp rise in energy prices and high inflation, DATAGROUP has again delivered good business results”, says Andreas Baresel, CEO of DATAGROUP SE. “The strength of our business model and the sustainability of the CORBOX SaaP approach, which ensure a reliable and stable long-term development thanks to recurring revenues and good margins, makes itself felt in uncertain times in particular. The attractiveness of our standardized service portfolio is high, as we continue to develop it further in relation to new technologies while we always remain close to the requirements of our customers.”

Revenue development burdened by special effects

The revenue development was mainly affected by three special effects: Firstly, the Covid-19-related exceptional boom, which had driven revenues in the prior year, slowed down earlier than expected. The vaccination centers, for instance, had closed earlier than anticipated at the beginning of the fiscal year which also meant a premature end to the related IT services provided by DATAGROUP. Furthermore, existing contracts from earlier acquisitions, which were operated outside the CORBOX core business at a lower profitability, were reduced prematurely. Lastly, a change of the accounting treatment concerning the license business resulted in a reduction of revenues pursuant to IFRS 15 (principal agent). On a full-year basis, these aspects led to negative sales effects totaling c. EUR 40m, which have almost been fully compensated for by growth in the CORBOX core business and the business with solutions, but in total still led to a slight decline in revenues. That said, DATAGROUP’s high growth is demonstrated by the compensation.

CORBOX core business with stable growth

Business of DATAGROUP’s fully integrated entities remains encouragingly stable. Demand for CORBOX IT Services continued to grow in comparison to FY 2021/2022, and demand for consulting services, e.g. in the SAP environment, has developed positively. The proportion of services in revenue has increased yet again to 81.4 % compared to the prior year (PY 80.9 %). 20 new CORBOX contracts were signed in the past fiscal year, 2 contracts were expanded by upselling, and 33 existing DATAGROUP customers have either extended or renewed their contracts. In the past fiscal year, the respective service portfolio of DATAGROUP has convinced NBank and Stadtwerke Neuss, amongst others, but existing customers such as CURRENTA have also significantly expanded their CORBOX services with new service agreements.

Company acquisitions in the past fiscal year

Acquired in April 2023, systemzwo GmbH in Ulm – an IT service provider with a SME customer portfolio, which has significantly expanded the footprint of DATAGROUP in the Ulm region – has also contributed to the development of revenue. Furthermore, DATAGROUP has laid the foundation for its AI strategy by acquiring own IP rights as well as a corresponding team of specialists in July 2023. DATAGROUP plans to acquire additional companies and to continue its inorganic growth strategy in the new FY 2023/2024 as well.

Solid balance sheet structure with scope for further growth

The balance sheet total dropped to EUR 465.3m as per 30 September 2023 after EUR 483.6m in the previous year. The equity ratio improved significantly yet again in comparison to the prior year from 26.4 % to 31.7 %. Net debt was EUR 112.6m after EUR 109.3m on the balance sheet date of the previous year. Liabilities to banks amounted to EUR 99.7m (PY: EUR 78.2m). Cash and cash equivalents stood at EUR 21.9m in comparison to EUR 47.0m on the balance sheet date of the previous year. The decline is attributable to an active cash management, which is also reflected in a financial result that has improved to EUR -4.1m (PY EUR -4.7m) despite a rise in interest rates.

“Financing of the DATAGROUP Group is guaranteed in the long term and also provides sufficient scope for further acquisitions”, says Oliver Thome, CFO of DATAGROUP SE. “The current 2019 promissory note loans with a volume of EUR 69m and maturities of five and seven years will still provide us with attractive interest rates until March 2024 and March 2026. Additionally, we have taken up new promissory note loans of EUR 30m at the beginning of March 2023. Combined with additional working capital lines of EUR 40m, DATAGROUP has financial resources amounting to EUR 70m at its disposal which we are planning to use for further growth and acquisitions.”

For the fiscal year ended 30 September 2023 the management intends to propose to the Annual General Meeting a dividend which is in line with the historic dividend policy with a payout ratio of some 40 % of the net profit. The Annual General Meeting for FY 2022/2023 is scheduled for 14 March 2024.

Investments in future capacity for growth: AI, cyber security and cloud

DATAGROUP continues to significantly expand its own expertise and capacities in AI, cyber security and cloud to maintain future capacity for growth and secure competitive advantages. Artificial intelligence will play an ever greater role in IT service production amongst others, since its use makes many processes more efficient and can reduce the employees’ workload by taking over routine work. This is also important in light of the skills shortage. Since the number of cyber-attacks against companies has strongly increased around the globe, the topic of IT security is gaining in importance. DATAGROUP uses new technologies to continue to develop the CORBOX Security Services so as to minimize the risk of successful cyber-attacks for its customers.

DATAGROUP’s CORBOX cloud is a strongly growing, independent “German” cloud platform which guarantees data sovereignty for its customers and ensures compliance with all data protection obligations. As an enterprise cloud, it is focused on running corporate applications with the highest requirements to availability and stability. To further strengthen the cloud portfolio in Germany, STACKIT and DATAGROUP have formed a long-term partnership on 1 October 2023. This allows to combine CORBOX services with STACKIT’s data-sovereign cloud services so customer can take full advantage of both cloud environments.

The individual topics are important drivers of innovation in themselves, but are also strategically linked: Sovereign cloud infrastructures and proprietary AI technologies running in this cloud environment ensure data sovereignty of the associated IT services. Excellent security services can benefit from AI technologies but can also ensure security for these services and the cloud alike.

“We are continuing to focus on the future topics of AI, cyber security and cloud since they will enable us to continue to grow”, explains Andreas Baresel. “In the fourth quarter, we have invested a total of EUR 2.5m into AI technologies – EUR 1m of which were recognized in the income statement – and still have achieved the envisaged EBIT goal. This is good news for our customers as well: By applying the new technologies in our IT services their automation will be taken to a new level.”

CEO Andreas Baresel and CFO Oliver Thome will explain the preliminary results of the fiscal year 2022/2023 in an online conference on 21 November 2023 at 10.00 am CET. All interested investors, analysts, and journalists are cordially invited. You can register for the conference call under the following link: https://register.gotowebinar.com/register/2003033542985717848

Financial Calendar

21.11.2023  Publication of preliminary full-year results for 2022/2023

27.-28.11.2023  German Equity Forum

04.12.2023  Berenberg European Conference

12.12.2023  Zurich Investor Day

11.-12.01.24 27th ODDO BHF Forum, Lyon

18.01.2024 Publication of the audited annual figures for FY 22/23

07.-08.02.24 Hamburger Investorentage (HIT)

14.03.24 Ordentliche Hauptversammlung

About DATAGROUP

DATAGROUP is one of the leading German IT service providers. Some 3,500 employees at locations across Germany design, implement, and operate IT infrastructures and business applications. With its CORBOX product, DATAGROUP is a full-service provider, supporting global IT workplaces for medium and large enterprises as well as public authorities. The company is growing organically and through acquisitions. The acquisition strategy is particularly noted for its optimal integration of new companies. DATAGROUP is actively participating in the IT service market’s consolidation process with its “buy and turn around” and its “buy and build” strategy.

Contact

DATAGROUP SE
Anke Banaschewski
Investor Relations
anke.banaschewski@datagroup.de