DGAP-News: High-margin platform business makes Netfonds grow at double-digit rate in first quarter

High-margin platform business makes Netfonds grow at double-digit rate in first quarter

- Net consolidated sales increase significantly by 14.3 percent to EUR 5.6 million

- EBITDA again positive at EUR 0.4 million despite persistently high investments

- Assets Under Administration grow by 11.9 percent to EUR 13.2 billion

- Large volume projects in the field of occupational long-term care insurance supporting growth in the insurance sector

Hamburg, 18 June 2019 - Netfonds AG (ISIN: DE000A1MME74), a leading platform for administration, consulting, transaction processing and regulation for the financial industry, has started the new year dynamically in the light of continued growth of its high-margin Technology & Regulatory business. Based on the key performance figures released in the first quarter, the growth of the digital platform finfire once again made a significant contribution to growth.

While gross consolidated sales of EUR 24.4 million were 4.1 percent up on the previous year (Q1 2018: EUR 23.4 million), net consolidated sales increased by 14.3 percent to 5.6 in the same period EUR million (Q1 2018: EUR 4.9 million). The gross margin, ie the net consolidated sales in relation to gross consolidated sales, thus increased significantly and, at 23.0 percent, was above the target of 20 percent. Earnings before interest, taxes, depreciation and amortization (EBITDA) remained stable at the previous year's level at EUR 0.4 million (Q1 2018: EUR 0.4 million), despite continued high investments in the finfire digital platform.

"Our platform business continued to grow in the first quarter of 2019, gaining momentum quarter by quarter. In particular, the strong development of assets under management against the general capital market trend underlines that we are currently doing a lot of things right, "says Karsten Dümmler, CEO of Netfonds AG. "The increasing momentum and the multitude of inquiries we have received regarding finfire already give a very promising outlook for our full-year development."

The key performance figures for the first quarter were as follows:

As in the previous quarters, the high-margin Regulatory and Technology business units made a major contribution to growth, which from 2019 onwards are combined into one business unit. Sales increased by 20.4 percent to EUR 6.5 million (Q1 2018: EUR 5.4 million), driven by rising demand for the digital platform finfire. The Marketing & Products division also developed very positively, with sales of EUR 1.0 million up 25.0 percent on the previous year (Q1 2018: EUR 0.8 million). Above all, rising income from the sale of real estate portfolios via the platform led to the significant increase in revenue. Wholesale sales, on the other hand, fell slightly to EUR 16.9 million (Q1 2018: EUR 17.2 million) as a result of the strained capital market environment.

Gross consolidated sales by segment developed as follows in the first quarter:

Additional dynamics were provided by large volume projects in the field of long-term care insurance. As part of a consultancy and technology partnership for Henkel Germany's new occupational long-term care insurance in cooperation with the Industriegewerkschaft Bergbau, Chemie, Energie (IG BCE) and DFV Deutsche Familienversicherung, the Netfonds Group now has more than 4,500 customer-related and technological advice on finfire settled. "We are already in an advanced stage of negotiations with regard to further such projects and are confident that we will be able to announce further deals in 2019," explains Board Member Karsten Dümmler. "We therefore continue to feel very comfortable with our sales and earnings targets communicated for the year as a whole."

For the current financial year 2019, the Management Board expects organic growth of around 12 to 18 percent and thus gross consolidated sales of between EUR 105 and 110 million. Net sales are expected to range between EUR 23.0 million and EUR 24.5 million. For EBITDA, the Management Board expects a target value of between EUR 1.8 and 2.3 million. With the full roll out of the finfire platform later this year, Netfonds is expanding its business model to include Software as a Service for banks, insurance and financial distributors. In addition, Netfonds sees opportunities in the market to continue to grow inorganically through the acquisition of companies or parts of companies.

The Annual General Meeting of Netfonds AG will take place on 14 August 2019 in Hamburg. The Executive Board and Supervisory Board propose a dividend per share of EUR 0.15 per share. Further information on the Netfonds Group and its affiliated subsidiaries can be found at www.netfonds.de.

Contact
Ingo Middelmenne
Head of Investor Relations
Netfonds AG
Heidenkampsweg 73
20097 Hamburg
Mobile: +49 - 174 - 90 911 90
Phone: +49 - 40 - 822 267 355
Email: imiddelmenne@netfonds.de

About the Netfonds Group

The Netfonds Group is a leading platform for administration, consulting, transaction processing and regulation for the German financial industry. Under the finfire brand, the company provides its customers with a web-based technology platform that enables financial industry users to fully, safely, and above all fully comply with the relevant MiFID II requirements in financial market transactions. The offer is tailor-made for a wide variety of day-to-day business requirements, from fund management companies, asset managers, financial advisors to specialist banks and insurance companies. Customers of Netfonds thus benefit from the most modern software solution on the market, which simplifies the consultation process, makes it secure and enables target group-specific product marketing. With a total of 187 employees (as at 31.12.2018), the company generated net consolidated sales of EUR 20.2 million in 2018 for gross consolidated sales of EUR 93.6 million. The share of Netfonds AG is listed in the m: access of the Munich Stock Exchange and can be traded via XETRA.