Service business

Improved service business and high margin in trading business boost EBITDA margin

DGAP-News: CANCOM SE / Key word(s): Figures over 9 months
11.11.2021 / 08:04
The issuer is solely responsible for the content of this announcement.

Group revenue in the third quarter of 2021 up 5.6% year-on-year to 302.6 million euros.
– Third quarter EBITDA increased by 30.4% year-on-year to EUR 32.3 million. EBITDA margin therefore at 10.7%.
– Annual recurring revenue (ARR) as of September 30 was up 23.6% year-over-year.
– Annual forecasts for 2021 already raised on October 27, 2021.

Munich, Germany, November 11, 2021 – In the third quarter of 2021, the CANCOM Group achieved an EBITDA margin of 10.7%. This extraordinarily high level of profitability was achieved mainly thanks to an increase in turnover and margin in the services activities, as well as a very good margin in the sale of hardware and software. Overall, CANCOM Group’s third-quarter 2021 revenue increased 5.6% year-on-year to €302.7 million (prior year: €286.6 million). Organically, ie without the influence of the acquired companies, the growth rate was 3.0%. EBITDA amounted to EUR 32.3 million in the third quarter, an increase of 30.4% year-on-year (previous year: EUR 24.8 million). The EBIT amounted to 20.7 million euros in the same period and was therefore 44.6% higher than the previous year (previous year: 14.3 million euros).

“Given the market environment with falling GDP forecasts and the well-known bottlenecks for material supply, it is once again clear that the megatrend towards digitization is unbroken and that a portfolio of state-of-the-art IT services is the key to our success.In addition, the availability of various hardware products was significantly limited, which on the one hand resulted in an extremely high backlog which has yet to be On the other hand, we were in a very good negotiating position regarding the pricing of existing products during the quarter just ended,” said Rudolf Hotter, CEO of CANCOM SE.

At the end of the third quarter, the results of the CANCOM group for the period from January 1 to September 30, 2021 are as follows: Group revenues amounted to €947.9 million, an increase of 12.9% year-on-year (previous year: 839.3 million euros). The organic share of this growth was 10.9%. The group’s EBITDA amounted to 84.6 million euros, up 39.7% compared to the previous year (previous year: 60.5 million euros). The EBITDA margin was thus 8.9% (previous year: 7.2%). Group EBIT for the nine-month period increased by 71.1% to EUR 52.1 million (previous year: EUR 30.5 million).

Cloud and IT solutions show exceptionally high profitability

In the cloud solutions segment, in which CANCOM maps managed services activity and associated recurring revenue, Q3 2021 resulted in a 4.2% increase in segment revenue to €63.0 million (year previous: 60.4 million euros). The segment’s EBITDA increased by 18.7% to EUR 20.1 million in the same period (previous year: EUR 16.9 million). The segment’s EBITDA margin was 31.9% (28.0% the previous year). Annual recurring revenue (ARR), which also comes entirely from the Cloud Solutions segment, amounted to €170.4 million as of September 30, 2021, up 23.6% year-on-year. other (September 30, 2020: €137.9 million).
As a result, the Cloud Solutions segment recorded revenue growth of 3.8% for the nine-month period, resulting in revenue of EUR 176.9 million (prior year: EUR 170.4 million) , an EBITDA growth of 20.3% to 55.4 million euros (previous year: 46.0 million euros), and therefore an EBITDA margin of 31.3%.

The Group’s IT Solutions segment, which is characterized by IT project activity, recorded segment revenue growth of 6.0% to €239.7 million in the third quarter of 2021 (previous year: €226.1 million). At 16.1 million euros, the segment’s EBITDA increased by 36.8% compared to the previous year (previous year: 11.8 million euros). The segment’s EBITDA margin thus amounted to 6.7% (previous year: 5.2%).
In the nine-month period, revenues for the IT Solutions segment amounted to €770.8 million, 15.2% higher than the prior year (prior year: €668.9 million ). The segment’s EBITDA increased by 35.7% to EUR 41.8 million (prior year: EUR 30.8 million) and the EBITDA margin was 5.4% (previous year: 4.6 %).

Net income for the period and cash impacted by the effects of the sale of CANCOM LTD
CANCOM Group net profit for the period from 1 January to 30 September 2021 amounted to €260.9 million, mainly reflecting the strong profit from the sale of commercial activities in the United Kingdom and Ireland (year previous: 41.5 million euros).

Cash and cash equivalents amounted to €582.5 million as of September 30, 2021, also largely due to the sale of CANCOM LTD (December 31, 2020: €338.4 million).

2021 annual forecasts raised

Based on the preliminary results for the first nine months of the 2021 financial year, the CANCOM SE Management Board had already announced on October 27, 2021 that it was raising its guidance for the full year 2021. The Management Board now anticipates a very strong growth in Group Revenue, Group Gross Margin and Group EBITDA in fiscal year 2021 (previously: significant growth in each case). The Group’s EBITA forecast, which already forecast very significant growth, remained unchanged.

For the Group’s IT Solutions segment, the Management Board now anticipates very significant growth in revenue and EBITDA (previously: significant growth in each case).

For the Group’s Cloud Solutions segment, the Management Board has left unchanged its forecasts for very significant growth in revenue, EBITDA and annual recurring revenue for the 2021 financial year.

The CANCOM Group’s full interim statement as of September 30, 2021 will be published at 10:00 a.m. (CET) on the website in the Investors section.

As a digital transformation partner, CANCOM supports businesses into the digital future. We help our clients reduce their IT complexity and increase their business success through the use of advanced technology. In order to holistically map the IT needs of businesses, organizations and the public sector, CANCOM offers bespoke IT from A to Z from a single source.

The IT solutions offered by the CANCOM Group include consulting, implementation, services and operation of IT systems. Clients benefit from our extensive expertise and a holistic, innovative portfolio that covers enterprise IT needs necessary for successful digital transformation. As a hybrid IT integrator and service provider, we offer a range of services and solutions including enterprise solutions and managed services such as cloud computing, analytics, enterprise mobility, IT security , hosting and offers as a service.

The CANCOM Group’s workforce of approximately 4,000 employees and an efficient partner network guarantee market presence and proximity to customers in countries such as Germany, Austria, Switzerland, Belgium and the United States. The CANCOM group is led by Rudolf Hotter (CEO), Thomas Stark (CFO) and Rüdiger Rath (COO). The company is headquartered in Munich. CANCOM generated annual revenues of approximately €1.3 billion in 2020 and the group’s parent company, CANCOM SE, is listed on the Frankfurt Stock Exchange in MDAX and TecDAX (ISIN DE0005419105).

Sebastien Bucher
Investor Relations Manager

Telephone: +49 89 54054 5193

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11.11.2021 Broadcast of a Corporate News, transmitted by the DGAP – a service of EQS Group AG.
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