Jena, 15 March 2017 – Intershop Communications AG (ISIN: DE000A0EPUH1), a leading independent provider of innovative solutions for omni-channel commerce, generated revenues of EUR 34.2 million in the financial year 2016. Revenues were thus down by 20% on the previous year’s EUR 42.7 million. On the one hand, the decline was due to fewer product orders received by the company. On the other hand, the strategic reorientation and the resulting change in the customer structure led to a decline in service revenues. Earnings before interest and taxes (EBIT) as well as extraordinary expenses for the restructuring amounted to EUR -1.4 million, compared to EUR 0.2 million in the previous year. The extraordinary expenses of EUR 1.0 million are related to the “Lighthouse 2020” strategy program initiated in October 2016.
Product revenues decreased by 21% to EUR 13.7 million in the financial year 2016. The related licensing revenues dropped by 39% to EUR 5.7 million, but improved notably in the fourth quarter compared to the previous quarters. Maintenance revenues remained almost unchanged from the previous year at EUR 8.0 million. Service revenues declined by 19% to EUR 20.5 million in the reporting period. They include full-service revenues of EUR 4.6 million, which were down by 23% on the previous year. Accounting for 60% of total revenues, the services segment remained Intershop’s dominating business segment (previous year 59%). According to the plans of “Lighthouse 2020”, this relation will further shift in favour of product revenues going forward.
The Intershop Group’s gross margin was up by one percentage point on the previous year to 46% in 2016, whereas the gross result moved in sync with revenues and dropped significantly to EUR 15.7 million. Operating expenses declined by 4% to EUR 18.1 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) came in at EUR 1.1 million, while EBIT stood at EUR -1.4 million, both before extraordinary expenses. Adjusted for one-time restructuring expenses, EBITDA and EBIT amounted to EUR 0.1 million and EUR -2.4 million, respectively. The Group’s result (including extraordinary expenses) declined to EUR -3.0 million, compared to a balanced result in the previous year. Earnings per share amounted to EUR -0.09 (previous year: EUR 0.00).
Total assets of the Intershop Group were down by 18% on year-end 2015 to EUR 27.1 million. The decline is mainly attributable to the reduction in debt capital resulting from loan repayments as well as to the negative result for the year. On the assets side, cash and cash equivalents were down by EUR 4.3 million to EUR 10.9 million, due, among other things, to the above-mentioned loan repayments totalling EUR 2.2 million. At EUR -0.9 million, cash flow from operations remained negative in the past fiscal year. The equity ratio increased from 58% to 59% on December 31, 2016 due to the disproportionate decline of debt capital. As of the balance sheet date, Intershop employed 355 people worldwide.
Says Dr. Jochen Wiechen, CEO of Intershop Communications AG: “We are convinced that the decision to focus on the wholesale segment as well as on cloud solutions, which was taken in the context of ‘Lighthouse 2020’, will be key to new growth. In the previous years, we already successively expanded our platform functionalities to the B2B sector. Our cloud offerings are also meeting with growing acceptance, and the partnership with Microsoft allows us to clearly extend our reach. After a disappointing financial year 2016, we are therefore cautiously optimistic about 2017 and project moderate revenue growth as well as a balanced operating result.”
The full Annual Report is available on Intershop’s website at http://www.intershop.com/investors-financial-reports.
Intershop Communications AG (founded in Germany 1992; Prime Standard: ISH2) is the leading independent provider of omni-channel commerce solutions. Intershop offers high-performance packaged software for internet sales, complemented by all necessary services. Intershop also acts as a business process outsourcing provider, covering all aspects of online retailing up to fulfillment. Around the globe more than 300 enterprise customers, including HP, BMW, Würth, and Deutsche Telekom run Intershop solutions. Intershop is headquartered in Jena, Germany, and has offices in the United States, Europe, Australia, and China. More information about Intershop can be found online at www.intershop.com.
This news release contains forward-looking statements regarding future events or the future financial and operational performance of Intershop. Actual events or performance may differ materially from those contained or implied in such forward-looking statements. Risks and uncertainties that could lead to such difference could include, among other things: Intershop's limited operating history, the unpredictability of future revenues and expenses and potential fluctuations in revenues and operating results, significant dependence on large single customer deals, consumer trends, the level of competition, seasonality, risks related to electronic security, possible governmental regulation, and general economic conditions.