DATAGROUP : with strong growth in Q3

Pliezhausen, August 22, 2016. DATAGROUP AG (WKN A0JC8S) has accelerated its pace of growth in Q3 of FY 2015/2016 while significantly boosting operating earnings. Revenues, EBITDA and EBIT grew at double-digit rates yoy. In view of the very good performance and the successful takeover of employees and services from Hewlett Packard Enterprise, the management confirms its guidance and targets new records for the fiscal year as a whole.

In Q3 2015/2016 (01.04.2016-30.06.2016), DATAGROUP boosted its revenues at a clear double-digit rate to EUR 44.0m (previous year EUR 36.1m, +22%). The core business with high-margin IT services grew strongly by 15% to EUR 33.0m (previous year EUR 28.9m). In connection with long-term IT outsourcing contracts, the IT service provider has secured lucrative major orders in the trade with hard- and software, increasing trading revenues by 51% to EUR 10.9m (previous year EUR 7.2m).

DATAGROUP's earnings before interest, taxes, depreciation and amortisation (EBITDA) also grew at a double-digit rate. EBITDA was up 13% to EUR 3.5m (previous year EUR 3.1m), as were earnings before interest and taxes (EBIT), which rose to EUR 1.9m (previous year EUR 1.7m, +13%).

DATAGROUP once again accelerated growth with the strong third quarter. Overall, revenues were boosted to EUR 126.7m in the first nine months of the fiscal year (01.10.2015-30.06.2016), which is a strong increase of 11% or EUR 12.1m yoy (previous year EUR 114.6m). However, as a result of high one-time income in the previous year, which will not materialise in this form this year, as well as acquisition-related one-time expenses, earnings remained below the previous year's level. EBITDA came to EUR 9.5m (previous year EUR 10.4m, -8%), corresponding to an EBITDA margin of 7.5% (previous year 9.1%).

'DATAGROUP has seen an excellent operating performance in the fiscal year, particularly in the core business with long-term service contracts and high-quality IT services', comments DATAGROUP COO Dirk Peters. 'Thanks to the modular character of our full-service offer CORBOX, we can optimally adjust our offer to our customers' IT requirements, namely across all industries. Since April, we have among others signed multi-year outsourcing contracts with an internationally active construction and real-estate company from Southern Germany, a major state authority and a car manufacturer. And our sales pipeline is very well filled.'

Earnings after taxes are burdened by one-time extraordinary tax expenses and related interest expenses in the total amount of some EUR 1.2m. This is attributable to the expected result of an audit, according to which a profit-and-loss transfer agreement between companies of the DATAGROUP group, which was cancelled in 2012, is to be classified as non-tax deductible with retroactive effect. The management of DATAGROUP AG considers this assessment to be incorrect and announced they would appeal against the expected tax assessments. Third quarter results after taxes fell to TEUR -502 (previous year TEUR 776) due to the extraordinary tax and interest expenses. This corresponds to earnings per share (EPS) of -7 cents (previous year 10 cents). After the first nine months of the fiscal year, EPS now amounts to 11 cents (previous year 43 cents).

'The fourth quarter of the fiscal year traditionally is very strong for DATAGROUP, so we will be able to clearly step up a gear in terms of earnings until the end of the fiscal year', says DATAGROUP CEO Max H.-H. Schaber. 'Additionally, the successful takeover of employees from Hewlett Packard Enterprise and the start of service production for HPE's existing customers on September 1 will further improve our earnings and bring about new record earnings in FY 2015/2016.'

Based on the strong operating performance and the successful takeover of employees and services from Hewlett Packard Enterprise the management confirms the guidance for the fiscal year 2015/2016, expecting revenues of EUR 167-175m, an EBITDA of EUR 15.5-20m and an EPS of 66-100 cent per share. A complete overview of the quarterly figures is available on the company's website www.datagroup.de in the Investor Relations section.