DGAP-News: adesso boosts sales by 33 % and EBITDA by 61 % in 2016 and achieves new highs / Increase of 20 % in dividends proposed / The company will continue to pursue its growth strategy in 2017

adesso boosts sales by 33 % and EBITDA by 61 % in 2016 and achieves new highs / Increase of 20 % in dividends proposed / The company will continue to pursue its growth strategy in 2017

After a successful fourth quarter, 2016 was the most successful financial year in adesso AG's 20-year history. In 2016, its initiatives for expansion resulted in sales growth of 33 %, to EUR 260.4 million, a 61 % increase in its operating result (EBITDA), to EUR 23.1 million, and earnings per share of EUR 2.14, up from EUR 0.82 in the previous year. The Executive Board and Supervisory Board will propose a further 20 % increase in dividends, to EUR 0.36 per share, to the Annual General Meeting. The company will continue to pursue its ambitious growth strategy in 2017 and expects EBITDA to increase to between EUR 23.0 million and EUR 27.0 million.

adesso's successful strategy - organising its high level of software expertise by industry to offer customers maximum efficiency and added value through the deployment of IT consultancy services and in-house products - again led to high organic growth of 19 % in 2016. Together with acquisitions, that resulted in sales growth of 33 %, to EUR 260.4 million. At the end of the year the company had 2,174 employees (+28 %).

adesso achieved particularly strong growth in Germany. Sales increased in all of its core sectors. Sales from the in|sure product family for insurance companies increased, both in terms of licenses and implementation and maintenance. In the scope of the group-wide modernisation of its existing systems, Generali, Germany's second largest primary insurer, decided to deploy in|sure components in its life insurance business - a further important milestone for adesso in this segment. The licence sales from that contract contributed to a strong fourth quarter, with sales revenue of EUR 72.0 million and EBITDA of EUR 6.5 million.

Capacity utilisation was above the long term average, particularly in Germany and Switzerland. The many new employees were successfully integrated into new and ongoing projects. As in the previous year, fixed-price customer projects were executed profitably. Licence revenue increased further in 2016. Those developments contributed to a 61 % increase in the operating result (EBITDA), to EUR 23.1 million, and an EBITDA margin of 8.9 %, up from 7.3 % in the previous year. Without the acquisitions made in 2016, EBITDA would have grown by 39 %.

All financial targets for 2016 were met, along with guidance, which was increased in the course of the year.

The 30 % increase in depreciation and amortisation was disproportionately low compared to EBITDA. Income from investment activities increased slightly, and almost offset higher financing costs, which resulted from financial liabilities relating to acquisitions. The utilisation of tax loss carry-forwards had a positive effect on the tax result, leading to an arithmetical tax rate of 24 %, down from 44 % in the previous year. The increase in adesso AG's shareholdings in two group companies to 100 % respectively resulted in decreased minority interests. Those developments led to a 161 % increase in earnings per share, to EUR 2.14.

As at the reporting date, liquid assets amounted to EUR 43.1 million (previous year: EUR 28.2 million). That includes EUR 12.7 million from the successful capital increase in December 2016. Those funds will be used for further investment. Despite repayments of financial liabilities of EUR 5.2 million, net liquidity decreased from EUR 6.4 million in the previous year to EUR -4.2 million, primarily due to new loans of EUR 24.0 million for acquisitions. Equity increased by EUR 17.3 million to EUR 59.7 million as a result of the capital increase and high consolidated earnings.

The takeover of the high-margin IT consultancy UnitCon GmbH in February 2017 represented an investment in customer engagement & commerce and utilised some of the funds from the capital increase. UnitCon complements adesso's portfolio with expertise in the areas of SAP customer engagement, business analytics and HANA.

adesso expects sales revenue to increase further in 2017, to between EUR 270 million and EUR 300 million. The market environment, the continuation of important customer relationships and incoming orders are seen as positive. The company has recently opened, or will soon open, a number of new locations in Aachen, Basel, Essen, Hanover and Nuremberg, in order to address new customer groups and to further increase the proportion of project activities carried out close to the customer. It expects operating earnings (EBITDA) of between EUR 23.0 million and EUR 27.0 million. According to adesso's strategy, successful implementation of its plans will lead to a further increase in dividends in financial year 2017.

The annual report and multi-period key performance figures in table-form will be available at www.adesso-group.de in the Investor Relations section.

adesso Group
With over 2,100 employees and annual sales of EUR 260.4 million in 2016, adesso Group is one of the largest German IT service providers and has outstanding opportunities for growth. At its own locations in Germany, Austria, Switzerland, Turkey, USA and the UK as well as at numerous customer sites, adesso offers consulting and software development services for optimising core business processes. adesso also offers ready-to-use software products for standard applications. The development of an own, industry-specific product-portfolio opens up additional growth and earnings opportunities and is another key element of the adesso strategy. 2016, adesso was awarded as the best employer in the german IT-sector.


Contact:
Martin Möllmann
Manager Investor Relations
Tel.: +49 231 7000-7000
E-Mail: [email protected]