DATAGROUP proposing higher dividend after record earnings in FY 2015/2016

Strong growth in revenue of 11%, EBITDA up 25% Dividend to rise from 25 to 30 cents DATAGROUP again at the top in customer satisfaction Management expects strong increase in revenue and operating EBITDA

Pliezhausen, January 25, 2017. DATAGROUP SE (WKN A0JC8S) today publishes audited figures for the fiscal year from October 1, 2015 to September 30, 2016. Revenue and EBITDA reached new all-time-highs at the upper end of the guidance. Based on the outstanding business development, the dividend is to rise from 25 to 30 cents per share. Management expects revenue of over EUR 200m and EBITDA of more than EUR 20m.

Revenue grew strongly by 11% to EUR 174.9m in FY 2015/2016 (previous year EUR 157.6m). At the same time, DATAGROUP achieved a record result. Earnings before taxes, interest, depreciation and amortisation (EBITDA) rose clearly disproportionately by 25% to EUR 19.1m (Vj. 15,3 Mio. Euro). The EBITDA margin stood at 10.9% (previous year 9.7%) and climbed to double-digits for the first time. DATAGROUP thus reached the upper end of the guidance respectively (revenue EUR 167-175m, EBITDA EUR 15.5-20m) and again proved its ability to deliver on its forecasts. Earnings before interest and taxes (EBIT) jumped 32% to EUR 12.7m (previous year EUR 9.6m). The EBIT margin improved to 7.2% (previous year 6.1%).

“We are extremely satisfied with the past fiscal year”, commented DATAGROUP CEO Max H.-H. Schaber. “We have grown very strongly, particularly in the high-margin core business with recurring Cloud services, where we increased revenue by one third to EUR 76m. With the help of the 306 SAP and application specialists we took over from Hewlett-Packard Enterprise in September we will further expand this strategically important business as well as our profitability. The combination of organic and inorganic growth has proved to be successful. In line with the company’s growing scale, acquisitions abroad may also become interesting for us.”

In addition to strongly improved operating earnings, the negative purchase price of the deal with Hewlett-Packard Enterprise (HPE) has also contributed to the record result. Conversely, earnings were impacted by one-time special effects: extraordinary tax and interest expenses as a result of a tax audit, costs for the conversion to a European Company as well as acquisition-related restructuring costs at DATAGROUP Vega. In spite of these extraordinary expenses, net profit grew strongly to EUR 5.7m (previous year EUR 4.9m, +16%), which corresponds to earnings per share of 75 cents (previous year 65 cents). Without the negative one-time effects, earnings per share would have amounted to 99 cents.

The strong operating cash flow of EUR 9.5m (previous year EUR 9.4m) was a main contributor to the reduction in net debt from EUR 28.2m to EUR 24.7m in the course of the year. A newly issued promissory note loan of EUR 30m and the takeover of pension obligations in the amount of some EUR 30m as part of the HPE transaction have significantly increased the balance sheet to EUR 159.7m (previous year EUR 103.3m). Possible disadvantages from the high pension obligations which may result from changes in the interest rate are largely covered by an agreement with HPE.

In view of the very good annual result, management board and supervisory board propose to raise the dividend from 25 to 30 cents per share. The Annual General Meeting is scheduled to take place on March 22, 2017 at the company headquarters in Pliezhausen.

Strong growth expected for new fiscal year

The management was very pleased with the start to the new fiscal year. Since October 2016, DATAGROUP has acquired 5 new major customers for its full-outsourcing offer CORBOX. Accordingly, the IT service provider is well on track to reach the 20 new customers targeted for FY 2016/2017.

High customer satisfaction is an important key to success. DATAGROUP ranked second among the 22 leading medium-sized and international outsourcing service providers in Germany in the recently published 2016 IT oursourcing study by Whitelane Research and sourcing advisor Navisco. DATAGROUP thus has improved its position one notch again compared to the previous year.

“We are very proud of this excellent result”, commented DATAGROUP COO Dirk Peters. “Alongside the high service quality, the proximity to our customers and contact at eye-level are central sales arguments. This study again proves that our consistent strive for highest customer satisfaction is recognised and appreciated by the customers. This is the best basis to convince new customers of our performance and tie in existing customers.”

As a result of the good business development and the successful integration of the employees taken over from HPE, the management anticipates strong growth in revenue and operating earnings in the current FY 2016/2017. Revenue is expected to grow to over EUR 200m and EBITDA to over EUR 20m. The Consolidated Financial Statements for FY 2015/2016 are available at www.datagroup.de.

Invitation to the Balance Sheet Conference Call

The management board of DATAGROUP SE invites all interested investors, analysts, and journalists to participate in a conference call explaining figures and outlook. It is scheduled to take place on Monday, January 30, at 10:30 am CET (dial-in number: +49 30-232 531 469). A replay will be available right after the conference call on our website www.datagroup.de.

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