SNP | Corporate News

SNP AG Publishes Business Results for the First Quarter of 2017 - Strong Growth Continues - Investments in Markets and the Future

- Group revenue rise to EUR 21.6 million in the first three months (+16.8% compared to the previous year)

- Strategic investments in growth and one-time costs influence the quarterly result

- Adjusted EBITDA margin: approximately +4%; unadjusted: -8.4%

- Adjusted EBIT margin: approximately +1%; unadjusted: -11.1%

- Revenue and earnings forecast for fiscal year 2017 affirmed

- Equity ratio: 41.6% (as of 12/31/2016: 54.9%)

- Cash holdings: EUR 53.9 million (as of 12/31/2016: EUR 31.9 million)

Heidelberg, April 28, 2017 - After a renewed high-growth fiscal year in 2016, SNP AG remains on track for growth and is starting fiscal year 2017 with revenue growth. In the first three months of the current fiscal year, SNP was able to increase revenue by 16.8% to EUR 21.6 million (previous year: EUR 18.5 million).

In the first quarter, SNP invested in measures to further develop the Group structure, in part as a result of the extensive acquisitions in recent months. At the same time, SNP established another training academy in Germany so that it can educate and further train urgently needed specialists itself. In the USA and other regions, SNP expanded its presence, thereby setting the stage for further growth there.

As a result, the performance of operating earnings in the first three months was driven primarily by extraordinary one-time expenses as well as investments in growth in the low-single-digit million euro range. Adjusted for these one-time expenses and exchange rate effects, the EBITDA margin of the corporate group came to around +4% in the traditionally weak first quarter, and the EBIT margin to around +1%.

Unadjusted, the SNP Group is recording negative earnings before interest, taxes, depreciation and amortization (EBITDA) of EUR -1.8 million in the first three months of the fiscal year (previous year: EUR 1.9 million); operating earnings (EBIT) amounted to EUR -2.4 million in the same period (previous year: EUR 1.6 million). These figures coincide with an EBITDA margin of -8.4% (previous year: 10.5%) and an EBIT margin of -11.1% (previous year: 8.8%).

"SNP is still on a growth path. It is our goal to secure and further expand sustainable growth. We are therefore stepping up our investment in technology, artificial intelligence and inorganic growth in order to accelerate our internationalization strategy. In the first quarter of 2017, we also made structural decisions, such as preparing to convert to an SE (European Company) and merging the German and U.S. companies. These measures will have a positive impact already in the short term, just like the previous successful projects to further expand profitable growth. We continue to maintain and now confirm our revenue and earnings forecast for the entire 2017 fiscal year," said Dr. Andreas Schneider-Neureither, CEO of SNP AG.

Key figures for the first quarter in detail:

After the conclusion of the first three months of the current fiscal year, SNP Group generated revenue growth of 16.8% to EUR 21.6 million (previous year: EUR 18.5 million). On the segment side, the Professional Services division, which primarily includes consulting services, contributed EUR 19.1 million (previous year: EUR 15.5 million) to revenue in the first three months of the current fiscal year. This amounts to an increase of 22.9% from the previous year's period. Adjusted for acquisitions, organic revenue growth was EUR 2.0 million. This corresponds to growth of approximately 13% from the previous year's quarter.

A decisive growth driver for the positive revenue development was the core Transformations business area with strong growth momentum in the USA. The Transformations USA subdivision contributed EUR 4.6 million (previous year: EUR 1.7 million) to total revenue in the first three months of the fiscal year. This is primarily attributable to a good order situation and the completion of a major contract in the U.S. chemical industry. In the other corporate segments, including SNP Applications and SNP Business Landscape Management, revenue growth of EUR 0.8 million was realized.

From the beginning of the fourth quarter of 2016, SNP has focused on securing sustainable growth. The measures for the strategic development of the corporate Group led to an increase in extraordinary expenses in the first quarter. Further details can be found in the Q1 quarterly report at https://www.snp-ag.com/investor-relations/financial-publications/financial-reports/2017/.

Compared to December 31, 2016, total assets increased by EUR 22.7 million to EUR 111.3 million, primarily as a result of additional borrowing. The equity ratio subsequently decreased from 54.9% to 41.6% Cash and cash equivalents rose to EUR 53.9 million as of March 31, 2017.

The order backlog as of March 31, 2017 was EUR 40.8 million; from the comparable previous year's figure of EUR 28.7 million, this corresponds to an increase of approximately 42%. The order entry as of March 31, 2017, totaled EUR 24.4 million, approximately 7% below the comparable amount in the previous year of EUR 26.2 million. The slight decline in incoming orders is due to the fact that incoming orders that were planned for the first quarter of 2017 had already been generated in the fourth quarter of 2016 and are now being offset by the high order backlog.

Forecast

Notwithstanding the extraordinary one-time expenses and investments in growth, the overall operating growth development of the SNP Group remains stable. For this reason, and because of the continually very high order backlog, the Executive Board is maintaining its revenue and earnings forecast for the entire 2017 fiscal year that was published in the 2016 Annual Report.

As in previous years, it is assumed that in the current fiscal year revenue will not be evenly distributed over the quarters and that the second half of the year should be much stronger. Based on organic growth of up to 20%, the Executive Board expects Group revenue of between EUR 96 million and EUR 100 million in the 2017 fiscal year.

The Executive Board is pursuing the principle goal of consistent revenue growth for the SNP Group, in strict accordance with a structural increase in profitability. Furthermore, the Executive Board also aims to further improve market penetration via additional acquisitions and to tap into new sales markets. Independent from the required organic and inorganic growth investments, the profitability of the SNP Group is subject to an enormous range of fluctuation: with organic revenue growth of 10% to 15%, the Executive Board predicts an EBIT margin of between 9% and 11% for the 2017 fiscal year and forecasts profitability of between 7% and 12% for higher overall growth (organic and inorganic).

About SNP

SNP enables companies to successfully navigate the rapidly changing digital environment and seize their opportunities on the market with a highly flexible IT infrastructure. The solutions and software from SNP provide support for M&A projects and carve-outs, allow for the integration of previously divergent IT landscapes and promote expansion into new markets outside of the domestic space. With SNP Transformation Backbone^(R), the company offers the world's first standardized software for automatically assessing and implementing changes to IT systems. This provides customers with clear qualitative advantages while notably reducing the time and expense involved in transformation projects.

SNP AG employs over 700 people across Europe, South Africa, Asia and the United States. Headquartered in Heidelberg, the company generated revenue of approximately EUR 81 million in 2016. Its customers include globally operating corporations in the industrial, financial and service sectors. SNP AG was founded in 1994 and has been publicly traded since 2000. As of August 2014, the company is listed on the Prime Standard segment of the Frankfurt Stock Exchange (ISIN DE0007203705).

Further information is available at www.snp-ag.com

Investor Relations Contact:

Marcel Wiskow
Tel.: +49 6221 6425-637
Fax: +49 6221 6425-470
Email: investor.relations@snp-ag.com
http://www.snp-ag.com/de/Investor-Relations/