Intershop Communications AG | Press Release |
Intershop publishes preliminary figures for financial year 2014
- Net revenues of EUR 46.2 million down 14% on the previous year
- Gross margin increased; negative earnings trend slowed down in Q4
- Lower revenues and investments result in EBIT of EUR -6.3 million
Jena, 18 February 2015 – Intershop Communications AG (ISIN: DE000A0EPUH1), a leading independent provider of innovative solutions for omni-channel commerce, generated net revenues of EUR 46.2 million in the financial year 2014, down 14% on the previous year. This decline was primarily attributable to lower revenues with some large customers, which could only partially be offset by the comparatively strong new business. The increased focus on product business and the resulting broadening of the customer base showed a positive effect on the new customers acquired in 2014. Intershop won twice as many new customers than in the previous year.
At 6.2 million, licensing revenues were almost unchanged on the previous year (-2%). In spite of the stronger focus on licensing business, the clearly positive trend of the year did not continue in the last quarter. Although Intershop reported licensing revenues of EUR 2.5 million in the fourth quarter, which were the highest quarterly licensing revenues generated in 2014, they remained behind the very strong previous year’s Q4 level. Intershop expects total licensing revenues to increase again in 2015. In the financial year 2014, the Consulting segment again made the biggest revenue contribution. At EUR 23 million (-11%), it accounted for approximately half of the net revenues. Maintenance revenues and other revenues amounted to EUR 7.5 million (-10%) and EUR 6.3 million (-28%), respectively. The online marketing subsidiary SoQuero sold with effect of September 30, 2014 reported revenues of EUR 3.2 million (full year 2013: EUR 4.4 million) for this period of time.
Earnings in the fourth quarter improved significantly compared to previous quarters. In the last three months of the year, the gross margin increased to 44%, while operating expenses declined. Adjusted for one-time expenses due to bad debt, Intershop reported a break-even operating result (EBIT) in the last quarter of 2014. In the full year, the gross margin improved from 35% to 36%. EBIT amounted to EUR ‑6.3 million in the financial year 2014, compared to EUR -3.2 million in the previous year. The net result for the period stood at EUR -6.6 million (previous year: EUR -3.3 million). Earnings per share reached EUR -0.22 (previous year: EUR -0.11).
Ludwig Lutter, Chief Financial Officer of Intershop Communications AG, said: “Strategically, we are on the right track, even though the financials for 2014 are unsatisfactory. The shifting of technology investments of two of our major customers had a significant adverse effect on our revenues, which could not be offset by the large number of new customers won. As a result, we cut our costs in the second half of the year in order to ensure that our cost base will be in line with our revenue level in 2015.”
Intershop’s consolidated balance sheet showed a sound equity ratio of approximately 70% (previous year: 72%). Total assets as of 31 December 2014 declined to EUR 25.3 million (previous year: EUR 33.7 million). Cash & cash equivalents as of the balance sheet date amounted to EUR 6.7 million, down EUR 0.7 million on the previous year. At the end of 2014, Intershop had 415 employees.
In the medium term, the broadening of the customer base will help stabilizing the business given that customers can grow with Intershop’s scalable platform without having to switch to a different technology. Another milestone in 2014 was the major expansion of the partner network with some 30 new cooperation agreements. Moreover, the Intershop 7.5 version further strengthened the technology leadership of Intershop’s solution.
Jochen Moll, Board Spokesman of Intershop Communications AG, said: “At the beginning of this year, our omni-channel commerce solution was assessed by Forrester Research for B2C online trading (end customer business) and achieved an excellent result. This strengthens our product business initiatives for which we will set the financial basis in the current year.”
The full consolidated financial statements will be published in mid-March 2015. All financials in this press release are preliminary figures, pending completion of the statutory audit.
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.