USU Software AG returns to long-term growth path, increases operating cash flow and forecasts sales growth of around 10% for year as a whole

(PresseBox) ( Möglingen, Germany, )
- Sales growth in Q3 2013 of 15% thanks to strong Product Business
- International sales climb significantly in Q3 2013 after modest first half of year
- Service Business still down on previous year - growth advised for 2014
- Extensive future investments in product innovations and workforce expansion
- High operating cash flow leads to increase in Group liquidity
- Management Board adjusts forecast for 2013 and reiterates medium-term Group planning

USU Software AG (ISIN DE000A0BVU28) today announced its final figures for the third quarter and the first nine months of 2013. According to these figures, USU increased its consolidated sales by 15.3% year-on-year in the period from July to September 2013 to EUR 13,802 thousand (Q3 2012: EUR 11,969 thousand) and has therefore returned to its long-term growth trend. A key factor in the success of the USU Group in the reporting quarter was its international business, which expanded by 81.3% as against the same period of the previous year to EUR 2,203 thousand (Q3 2012: EUR 1,215 thousand). This corresponds to an international share of consolidated sales of 16.0% (Q3 2012: 10.2%).

Product Business, which comprises license, consulting and maintenance income from the sale and implementation of the proprietary software products of the USU Group, grew by a total of 23.8% to EUR 10,376 thousand (Q3 2012: EUR 8,381 thousand). Here, USU benefited from the first sales successes of the newly developed software products that it successfully launched over the course of the current fiscal year. At the same time, USU generated positive sales contributions in Product Business from BIG Social Media GmbH, in which it acquired a majority holding at the start of the year. While Service Business, which is not dependent on specific products and combines individual projects and contract programming for customers, also concluded new projects following the end of several major projects, it did not match the level of the previous year's sales. Accordingly, segment sales for Service Business in Q3 2013 amounted to EUR 3,396 thousand (Q3 2012: EUR 3,579 thousand), 5.1% below the figure for the previous year.

The USU Group's cost base climbed by 21.2% to EUR 12,802 thousand (Q3 2012: EUR 10,560 thousand) as a result of the implementation of its medium-term growth strategy and the associated expansion of the Group's workforce by 25.9% to 447 employees (September 30, 2012: 355) as of the end of the third quarter of 2013, in addition to the more extensive research and development activities entailed by the product campaign.

In terms of earnings, USU once more posted an operating profit in the reporting period, but fell short of the previous year's figure on account of targeted recruitment activities and additional investments in the development of new software products. Taking into account the extraordinary effects due to acquisitions, adjusted EBIT amounted to EUR 1,066 thousand (Q3 2012: EUR 1,584 thousand) and was therefore almost a third below the figure for the previous year. Adjusted consolidated earnings were EUR 782 thousand (Q3 2012: EUR 1,534 thousand), corresponding to adjusted earnings per share of EUR 0.07 (Q3 2012: EUR 0.14). On an unadjusted basis, USU generated EBITDA of EUR 1,182 thousand (Q3 2012: EUR 1,540 thousand) and EBIT of EUR 818 thousand (Q3 2012: EUR 1,107 thousand). While a tax expense of EUR 168 thousand was incurred in the reporting quarter, USU posted tax income of EUR 1,183 thousand in the previous year on account of the profit transfer agreement concluded with the Group's subsidiary Aspera. The USU Group's IFRS consolidated earnings totaled EUR 541 thousand in the third quarter of 2013 (Q3 2012: EUR 2,281 thousand). Earnings per share were therefore EUR 0.05 (Q3 2012: EUR 0.22).

USU's consolidated sales climbed by 4.1% in the first nine months to EUR 38,446 thousand (Q1-Q3 2012: EUR 36,925 thousand). License business rose by 8.0% to currently EUR 5,601 thousand thanks to rising income from the sale of its proprietary software products (Q1-Q3 2012: EUR 5,187 thousand). As part of the expansion of the customer-related installation base, Group-wide maintenance sales climbed by 6.1% in the first nine months of 2013 to EUR 9,188 thousand (Q1-Q3 2012: EUR 8,661 thousand). Consulting sales for products and services increased by 3.7% to EUR 22,365 thousand (Q1-Q3 2012: EUR 21,567 thousand), which is exclusively due to Product Business. This segment's sales climbed by 13.2% in the first nine months of 2013 to EUR 28,461 thousand (Q1-Q3 2012: EUR 25,147 thousand). By contrast, consulting sales by the Service Business segment were down on the previous year by 15.6% on account of the weaker first half of 2013 and totaled EUR 9,921 thousand (Q1-Q3 2012: EUR 11,754 thousand). The Management Board is anticipating sustainable growth in this area again from 2014.

As a result of the USU Group's focus on growth to implement its medium-term strategy and the associated investment in increasing headcount and expanding the product portfolio, adjusted EBIT amounted to EUR 1,305 thousand after the first nine months of the current fiscal year (Q1-Q3 2012: EUR 4,462 thousand), EUR 3,157 thousand lower than the figure for the previous year. This was largely due to the weaker development in Service Business, selective investment in product innovations, the significant expansion of the global workforce and the later than anticipated recognition of sales from the CA partnership.

While USU increased its operating earnings as against the previous quarters in Q3 2013, this did not offset the extraordinary expenses of the first half of the year. Adjusted consolidated earnings were EUR 740 thousand (Q1-Q3 2012: EUR 3,420 thousand), corresponding to adjusted earnings per share of EUR 0.07 (Q1-Q3 2012: EUR 0.32). On an unadjusted basis, EBITDA was EUR 1,583 thousand (Q1-Q3 2012: EUR 2,667 thousand). EBIT totaled EUR 501 thousand (Q1-Q3 2012: EUR 1,377 thousand). In the first nine months of 2013, tax expenses amounted to EUR 322 thousand, while in the previous year - as a result of the recognition of deferred tax assets under the profit transfer agreement between USU Software AG and Aspera GmbH - USU had generated cumulative tax income of EUR 261 thousand. The IFRS consolidated earnings of the USU Group totaled EUR -29 thousand in the period under review (Q1-Q3 2012: EUR 1,490 thousand), corresponding to break-even earnings per share (Q1-Q3 2012: EUR 0.14).

Regardless of the dip in growth, USU posted a significantly improved cash flow from operating activities of EUR 10,603 thousand in the reporting period (Q1-Q3 2012: EUR 1,697 thousand) and increased Group liquidity to EUR 15,123 thousand as of September 30, 2013 (Q1-Q3 2012: EUR 9,118 thousand).

At the same time there was positive development in the order backlog, which rose by 6.1% year-on-year to EUR 23,620 thousand as of September 30, 2013 (September 30, 2012: EUR 22,253 thousand) and is a positive indicator for the quarters to come.

As the extraordinary expenses of the first half of the year had largely not been offset by the end of the third quarter, the Management Board adjusted its guidance for the year as a whole when it published the provisional Q3 figures, in spite of the significant business growth forecast for the final quarter of 2013. Owing to the declines in Service Business recorded in the reporting year, the sales forecast was reduced from previously EUR 58 million to now at least EUR 56 million (2012: EUR 51.2 million), which still corresponds to sales growth of around 10% year-on-year. At the same time, adjusted EBIT is expected to amount to more than EUR 5 million (2012: EUR 7.1 million), lower than both the originally planned figure of EUR 8 million and the previous year's level on account of the extraordinary issues referred to above. Nonetheless, the additional investments will lead to a significant growth surge in 2014 and a sustainably positive business performance, with the result that the Management Board is reiterating its medium-term planning of consolidated sales of more than EUR 100 million by 2017 combined with a higher operating earnings margin. 

The complete nine-month report for 2013 is available for download on the USU Software AG website at Further information will be presented by the Management Board of the company today at the analyst and investor conference "German Equity Forum 2013" at 2:15 p.m. at the Congress Center Messe Frankfurt, Zurich Room (Ludwig-Erhard-Anlage 1, 60327 Frankfurt/Main).
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