Keyware Technologies : Improved profitability triggered by growing authorisation revenues also confirmed in the third quarter

Published on Keyware Technologies (http://www.keyware.com)

November 2016

REGULATED INFORMATION

PRESS RELEASE

10 November 2016 ? 20:00 CET

Brussels, Belgium ? 10 November 2016 ? Today, Keyware (EURONEXT Brussels: KEYW) is announcing the financial results for the third quarter of 2016, which was closed on 30 September 2016.

The key figures for the first 3 quarters of 2016 can be summarized as follows:

the Group has generated revenues of kEUR 13,239, compared to kEUR 12,513 over the same period last year, which represents an increase in revenues of kEUR 726 or 5.8%; revenues in the first nine months of 2016 are comprised of respectively kEUR 7,626 relating to terminal revenues (compared to kEUR 8,649 as of 30 September 2015) and kEUR 5,613 relating to authorization revenues (compared to kEUR 3,864 as of 30 September 2015). Hence, the increase in revenues mainly lies in the authorization segment;

with respect to the terminal activity, it should be emphasized that in the comparative 9 month period in 2015 the GlobalPay asset deal was included. This explains why revenues from this segment over the first nine months of 2016 are about kEUR 1,023 (or 11.8%) lower. The terminal activity accounts for 57.6% of revenues compared to 69.1% over the first 9 months of 2015;

with respect to the authorization activity, a significant increase of kEUR 1,749 or 45.3% is recorded, as a result of both higher commissions as an increase in the number of contracts generating authorization revenues. Likewise, this segment already accounts for 42,3% of revenues compared to 30.9% in the same period of 2015;

the operating cash flow (EBITDA) in the first nine months amounts to kEUR 3,671 compared to kEUR 3,455 in the first nine months of 2015, which is an improvement of kEUR 216 or 6.3%;

pre-tax profit amounts to kEUR 3,200, compared to kEUR 2,983 for the first nine months of 2015, which is an improvement of kEUR 217 or 7.27%, fully attributable to better financial results as the operating result is in line;

net profit amounts to kEUR 2,397 compared to kEUR 3,617 for the first nine months of 2015, a decrease of kEUR 1,220 or 33.7%. This difference is due to the fact that the comparative period of 2015 includes a deferred tax income of kEUR 636 whereas deferred tax charges of kEUR 751 have been recorded in 2016;

net cash flow amounts to kEUR 3,624 compared to kEUR 4,723 for the same period in 2015. The decrease is accounted for by the difference in deferred taxes (see above)

net equity amounts to kEUR 25,623 and represents 73.2% of the liabilities;

financial debts were initially reduced by kEUR 589 to kEUR 3,600 over the first 6 months of 2016 compared to 31 December 2015. In the third quarter a loan has been granted for the acquisition of 40% shares in Magellan, as a result of which financial debts record an increase to kEUR 6,572;

trade and other debts record a decrease by kEUR 833 compared to 31 December 2015 and amount to kEUR 1,741 compared to kEUR 2,574

during the third quarter of 2016, the Group has generated revenues of kEUR 3,988

compared to kEUR 3,621 over the same period in 2015, amounting to a revenue increase of kEUR 367 or 10.1% compared to the same quarter of 2015;

revenues in the third quarter of 2016 are comprised of respectively kEUR 2,170 in revenues with regard to terminals (compared to kEUR 2,584 as of 30 September 2015) and kEUR 1,818 in revenues with regard to authorizations (compared to kEUR 1,037 as of 30 September 2015). Hence, the increase in the authorization segment was able to offset lower revenues from the terminals segment;

with respect to the terminal segment it should be repeated that the comparative period in 2015 included a higher number of newly signed contracts. This accounts for the decrease in revenues during the third quarter of 2016 being kEUR 414 (or 16.0%) lower; on the other hand, a significant increase of kEUR 781, or 75.3%, is recorded in the authorization segment, as a result of better commissions and a higher number of contracts generating authorization revenues. During the third quarter of 2015 the brokering contract was in its start up phase;

operating cash flow (EBITDA) in the third quarter amounts to kEUR 931 compared to kEUR 1,230 in the third quarter of 2015, which is a decrease of kEUR 299 or 24.3%; pre-tax profit amounts to kEUR 897, compared to kEUR 1,041 for the third quarter of 2015, which is a decrease of kEUR 144 or 16.1% during the third quarter of 2016. The better financial result (up by kEUR 93) was not sufficient to offset the lower operating result (kEUR 237 lower);

net profit amounts kEUR 532, compared to a net profit of kEUR 1,253 for the third quarter of 2015, which represents a decrease of kEUR 721 or 57.5% compared to the third quarter of 2015. In addition to the previous explanation regarding the operating profit (kEUR 237 lower) the remainder is due to the fact that the third quarter of 2015 recorded deferred tax revenues of kEUR 212 compared to deferred tax charges of kEUR 313 in the third quarter of 2016;

net cash flow amounts to kEUR 840, compared to kEUR 1,621 for the third quarter of 2015. The decrease is explained by the difference in deferred taxes