DGAP-News: Asknet Reverses Four Years of Business Decline and Reports 30% Topline Growth Under New Ownership and Management

Asknet Reverses Four Years of Business Decline and Reports 30% Topline Growth Under New Ownership and Management

• Sales revenues up by 30 percent to 85.84 million euros
• Gross profit rises by 13 percent to 9.65 million euros
• First year of growth since 2014 driven by profound changes at asknet AG following acquisition of majority ownership by The Native SA in November 2017
• EBITDA of -0.26 million euros (previous year: 0.99 million euros), largely driven by increase in sales and marketing expenses and one-off restructuring / reorganization costs
• Earnings before taxes (EBT) of -1.87 million euros (previous year: 0.58 million euros) largely explained by special impairment of asknet R&D and technology assets triggered by migration to Nexway technology platform
• Outlook on 2019: Substantial increase in sales revenues and gross profits both through organic expansion and consolidation of Nexway Group as of February 1, 2019; positive earnings on an adjusted EBT basis

Karlsruhe, 17 May 2019 - asknet AG, a Germany-listed company that is majority owned by the Swiss-listed international technology and media group The Native SA (www.thenative.ch), reports strong growth in financial year 2018 making it the first growth year for asknet AG since 2014, thanks to the new ownership, recapitalization and leadership provided by The Native following acquisition of majority interest in asknet AG in November 2017.

Sales revenues grew by a strong 30 percent to 85.84 million euros in the reporting period (previous year: 66.16 million euros). Based on a strong second half of 2018, gross profit, the key performance indicator for the asknet Group's business, rose by 13 percent to 9.65 million euros. This was partly achieved through a new growth plan announced in September 2018, associated with additional investments and recruitments in the areas of sales and marketing. The gross profit margin, based on sales revenues, fell from 12.9 percent to 11.2 percent and is in line with the general industry trend.

In the eCommerce Solutions Business Unit, the successful ramp-up of new shops led to a 29 percent increase in revenues, totaling 66.58 million euros (previous year: 49.25 million euros). Gross profit in this business unit also increased significantly by 26 percent to 7.04 million euros. The slightly under-proportional increase is in particular due to the larger number of small and medium-sized customers, which results in a weaker margin on the one hand, but a broader and more stable customer spectrum on the other.

In the Academics Business Unit, asknet also recorded a strong increase in sales revenues, up to 14 percent from 16.91 million euros to 19.26 million euros. Despite the strong revenue growth, in particular as a result of the sales partnerships, gross profit fell by 12 percent to 2.58 million euros. This decline is mainly due to lower margins in the distribution of software from major vendors.

Group earnings in the financial year 2018 were dominated by the new growth plan and the acquisition of Nexway Group. In the course of advancing the integration of Nexway Group, asknet had decided in March 2019 to carry out special depreciations on internally developed software (pre-Nexway acquisition) already for the 2018 financial year. This non-cash effective adjustment follows the strategic decision to primarily utilize Nexway's e-commerce platform technology. By using one platform and gradually integrating special features of the asknet platform into the superior Nexway technology, costs can be reduced and scalability as well as utilization increased to become a leading global Commerce-as-a-Service and merchant services provider. On an operational level, asknet Group clearly exceeded projections according to the September 2018 growth plan with an EBITDA of -0.26 million euros. Including the above-described non-cash-effective special depreciations in the amount of 1.6 million euros, EBIT amounted in the asknet Group to -1.86 million euros (previous year: 0.59 million euros), earnings before taxes (EBT) to -1.87 million euros (previous year: 0.58 million euros) and the consolidated result to -1.83 million euros (previous year: 67 thousand euros).

"After a fundamental transformation over the past years and declining revenues and gross profits, 2018 marked a year of strong organic top-line growth for us. This new growth is a strong foundation for successfully shaping one of the biggest milestones in the history of asknet AG, the acquisition of the Nexway Group. Overall, the integration of Nexway creates a new group with leading technology, high visibility in international markets, strong solutions, and long-standing lighthouse customers in key global markets," commented Aston Fallen, CEO of asknet AG.

For the full year 2019, the Executive Board of asknet AG projects a substantial increase in sales revenues and gross profits and asknet Group will roughly double the size of its business volume. As the shift to lower-margin businesses will continue, the gross margin on sales revenues will fall slightly. On the earnings side, it is planned to significantly reduce the loss and to generate positive earnings on an adjusted EBT basis (before extraordinary and restructuring costs pertinent to streamlining an expanded asknet AG organization).

As the integration of the Nexway Group led to delays in the preparation of the 2018 Annual Report, the Annual General Meeting is now expected to take place at the end of June. Furthermore, Osman Khan, Chairman of the Board of The Native SA, was replaced on the asknet Supervisory Board by Victor Iezuitov, CFO of The Native SA, who was elected chairman of asknet AG with effect from 17 April 2019.

The full Annual Report for 2018 is available on the company's website at www.asknet.com.
 

Press Contact
Florian Kirchmann
Phone: +49 221 9140-97 0
Email: investorrelations@asknet.com