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September 15, 2020
CREALOGIX 2019/2020 Annual Results
CREALOGIX 2019/2020 Annual Results

CREALOGIX reports higher organic growth with increased sales, improved operational performance and strong free cash flow for the financial year 2019/2020. Recurring share of total revenues up to 44%, confirming strategic direction. One-off costs of CHF 7 million impact on net result.

Financial year highlights 2019/2020

The Group increased the overall net sales by 1.7% to CHF 103.7 million (3.9% increase in local currencies). Despite COVID-19, net sales were 13.2% higher in the second half of the year, compared to the first six months of the fiscal year. SaaS and Hosting revenues increased by 15%. The conversion from a one-time to a recurring revenue model temporarily reduced net sales and EBITDA by CHF 6.9 million for this reporting year.

The Group reports an operational result (adjusted EBITDA) of CHF 2.4 million, excluding one-off costs for reorganisation measures. This is an increase of CHF 0.5 million compared to 2018/2019.

The one-off costs as part of the reorganisation of CHF 7.0 million reduced the EBITDA to CHF -4.6 million. These one-time costs will be used to accelerate the transformation, especially the streamlining of the product portfolio. The Group reports an adjusted net loss of CHF -5.4 million, which includes a goodwill amortisation of CHF 4.9 million. The adjusted earnings per share improved to CHF -0.15 (2018/2019: CHF -0.94). The cash position increased to CHF 36.0 million (2018/2019: CHF 12.8 million) with adjusted free cash flow in 2019/2020 of CHF 7.9 million (2018/2019: CHF -2.5 million). This is an increase of CHF 10.4 million year-over-year.

CREALOGIX has now accelerated the transformation and benefits from continued market demand for digital banking solutions. We are executing our strategy to become the leading SaaS provider for digital banking solutions, supported by the following priorities:

  1. Targeting leading financial institutions with an accelerated global go-to-market approach. The sales and marketing force are segment and sales region oriented and have been doubled within six months. Additionally, we are expanding partnerships with global re-sellers and software implementation partners such as IBM.
  2. Consolidating our broad product offering and shifting our focus to key strategic platform products, which are partner enabled and SaaS ready. In addition, we are bundling our development capacities and increasing our research & development budgets to reinforce innovation.
  3. Converting previous one-time sales to recurring revenues. Based on the current progress (increase to a total 44% recurring revenues in 2019/2020) we have set a medium term goal of an overall 60% recurring revenue share.

Oliver Weber, Chief Executive Officer at CREALOGIX, says:

„CREALOGIX is growing while we transform our business towards becoming the leading SaaS provider for digital banking platforms. Recent client wins such as Germany’s Förderbanken (development banks) are underlining our strategy. We have shifted gears and will begin to further cash in on the positive effects of the transformation."

Outlook

By accelerating our transformation towards a leading SaaS provider within digital banking, we are securing our position as fintech partner for banks on their digital journey. While our sales force strengthens across the globe, we will be able to better understand our clients’ need, grasp new market possibilities and enter valuable international partnerships. While the full effect of the COVID-19 pandemic is difficult to predict, we are seeing clear signs of increased appetite to further digitize processes and improve existing online customer journeys. Our business model with a focused product platform, an improved scalability of our offering and a sustainable SaaS revenue model will help us achieve positive results and double-digit profitability on EBITDA level in the medium term. Projecting to next year’s annual results, we expect positive results with our EBITDA margin that go beyond the adjusted EBITDA of 2019/2020.

The Board of Directors has decided not to propose dividends from capital reserves to the shareholders at the Annual General Meeting.

The full annual report for 2019/2020 is available for download