Prodware: First Half 2016 Results

Regulatory News:

Prodware (Paris:ALPRO):

* on a comparable basis, the change is -5. 3%

5.3% decline in business on a comparable basis

In the first half of 2016, Prodware generated €84.5m in revenue compared with €91.1m in the first half of 2015. On a comparable basis, revenue fell 5.3%.

This change is directly related to the shift in sales towards SaaS (subscription) mode, which generates a smaller amount of revenue but provides recurring revenue over 3 to 5 years.

In addition, the Group suffered from a difficult environment (strikes and floods) in France, its primary area of business, which weighed on its business volume.

SaaS (subscription) sales accelerated their growth by 31% to €9.1m (11.7% of revenue, +3.4 points), pushing the recurring share of revenue up 12,7% to €29.4m, or 34,8% of overall sales.

Direct sales of Edition totalled €29.1m (34.4% of revenue) compared with €31.5m in the first half of 2015 (34.5%).

In a particularly unfavourable environment in France, the French-speaking region saw an 8.7% decline in its sales to €46.8m versus €51.1m.

International sales represented 47.4% of consolidated revenue compared with 50.2% in the first half of 2015. Spain and Israel continued their momentum, while Benelux and Germany saw an acceleration in their SaaS sales. Revenue in Great Britain faced a high basis of comparison following the sale of a business (Waste management) at the beginning of the year.

EBITDA margin maintained

Efforts to invest in developing the Group’s offering (SaaS, consulting, digital, CRM, etc.) as well as the business shortfall in France impacted the Group’s profitability over the first half.

Thanks to good management of personnel expenses, the EBITDA margin increased by 0.1 points to 20.2%, reaching €17.1m.

Given the increase in investments that accompanied the change in the Group’s offering, amortization and depreciation charges rose significantly by €1,9m. They had an impact on current operating income, which totalled €7.4m compared with €10.4m in the first half of 2015. The current operating income rate was 8.7% of revenue, down 2,7 points from 30 June 2015.

Thanks to the sharp reduction in expenses from the consolidation of European subsidiaries, operating income decreased only slightly to €7.3m versus €7.7m in the first half of 2015.

The establishment of a €79m Euro PP loan in January 2016 to finance the change in the Group’s offering and refinance its MLT debt generated a €0.9m increase in financial expenses over the first half.

After taking into account a financial loss of €2.5m, the Group’s share of net income totalled €4.2m.

Solid balance sheet

At 30 June 2016, Prodware’s balance sheet showed €114.1m in equity, up 3.0% from the end of 2015.

Following the establishment of the €79m Euro PP loan, the group’s net debt ratio remained under control at 46.9% versus 42.2% at 31 December 2015.

Short-term Outlook

Prodware continued the shift in its offering towards digital and the market’s most profitable segments, started in the last six months.

The order book remains good in the second half of the financial year, in a volatile global economic environment.

Next publication: 3^rd quarter 2016 revenue: Thuesday, 15 November 2016 after trading

About Prodware

Founded in 1989, Prodware (www.prodware.fr) is an international group specializing in publishing/integration and hosting management solutions for businesses.

Prodware is Microsoft’s premier partner in the EMEA region and has nearly 1,250 employees supporting 20,000 customers in 14 countries.

Armed with a powerful R&D structure, unique expertise in industrializing best practices and top-notch strategic alliances, the group aims to deploy its Prodware Adjust solution worldwide.

Prodware is a corporate citizen and supports its customers in their sustainable development approach with its range of GreenITude services (www.greenitude.fr). Prodware is one of the top companies in the Gaia Index.

Prodware is a company eligible for FCPI (innovation funds), SRI funds and SME PEA (equity savings plan) and is part of the EnterNext PEA-PME 150 index.

ALTERNEXT

ISIN FR0010313486 - ALPRO - FTSE 972 IT services

Prodware is FCPI eligible - A responsible company, Prodware is a member of the Global Compact.

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