SOURCE: UNIT4 Business Software

UNIT4 Business Software

August 22, 2013 13:42 ET

UNIT4 Announces Significant Increase in Revenues From Cloud and SaaS for H1 2013

SaaS and Subscriptions Revenues Exceed License Sales for the First Time

SLIEDRECHT, THE NETHERLANDS--(Marketwired - Aug 22, 2013) - UNIT4, the global leader in software that supports business change, today released interim results for 2013. The company saw a strong increase in demand for its cloud-based solutions with growth of more than 40% in SaaS and subscriptions revenues, and a particularly strong performance by FinancialForce.com.

In response to the strong upward trend of SaaS and subscriptions licensing, UNIT4 is focusing heavily on further enhancement and sales of its cloud solutions. This resulted in a decline of 10% in traditional license (product) revenues but significant growth in SaaS and subscriptions revenues, which are up 43.2% to $43.4 million (EUR 32.5 million) in H1 2013 (H1 2012: $30.3 million (EUR 22.7 million)). The annual run rate of SaaS and subscriptions grew from $62.4 million (EUR 46.8 million) in June 2012 to $89.7 million (EUR 67.2 million) in June 2013, an increase of $27.2 million (EUR 20.4 million) or 43.5%.

First Half Year Results

  • Total revenue increased by 4.1% to $321.4 million (EUR 240.3 million) (H1 2012: $308.7 million (EUR 230.8 million))
  • Cloud and SaaS / subscriptions revenues grew 43.2% from $30.3 million (EUR 22.7 million) to $43.4 million (EUR 32.5 million)
  • Cloud applications specialist FinancialForce.com grew strongly with the monthly revenue run rate up by 80% (compared with June 2012)
  • EBITDA rose by almost 9.7% to $54.1 million (EUR 40.6 million) (H1 2012: $49.3 million (EUR 37.0 million))
  • Excluding FinancialForce.com, EBITDA increased 13.2% to $61.7 million (EUR 46.3 million) (H1 2012: $54.5 million (EUR 40.9 million))
  • Net profit before goodwill increased 21.6% to EUR 18.6 million (H1 2012: $20.4 million (EUR 15.3 million))

Despite a decline in product (traditional license) revenue, contract revenue (maintenance) increased by 2.1% to $130.1 million (EUR 97.5 million). Total recurring revenue (Contracts, SaaS and subscriptions) was significant at $173.4 million (EUR 130.0 million), representing 54% of total revenues (H1 2012: 51%).

"It is very positive that SaaS and subscriptions revenue in the first half year has exceeded license revenue, even without our being able to recognize SaaS revenue from the large government deals in the UK yet," said Edwin van Leeuwen, CFO, UNIT4. "This change of focus towards cloud solutions makes the profitability of UNIT4 more predictable and less dependent on fluctuations in license sales. Our EBITDA has increased by 10%, even with lower traditional license sales, driven by the substantial growth in cloud-based solutions."

Business Highlights

During H1 a number of significant announcements were made, including in June the appointment of José Duarte as co-CEO, former Global President Services and Corporate Officer for software company SAP A.G. The Group's current CEO Chris Ouwinga announced that he would step down on January 1, 2014 as CEO to become Chairman. 

Commenting on the H1 results, José Duarte said: "The accelerating growth of SaaS and subscription-based revenues along with a healthy improvement in margin shows clearly that UNIT4 is successfully meeting the rapidly changing demands of the market worldwide. I'm delighted that my early observations -- that UNIT4 is extremely well positioned to exploit the growing demand for cloud solutions -- are being confirmed. Our depth of experience in delivering cloud-based solutions that help customers thrive in rapidly changing market conditions is being recognized by customers and the wider industry. I'm delighted that we are in such a strong position."

"We have seen a very positive development in the first half of the year," said Chris Ouwinga. "Our products are being recognized as having unique qualities and we have been able to make further inroads into very important markets. We are excellently positioned to gain further market share in Europe and beyond. With José coming on board we are also strengthening our management team to support further growth and I am convinced UNIT4 has a bright future."

Country Highlights

The UK operation achieved some extremely high profile wins in the public sector. The largest was the signing of a Framework agreement with arvato UK & Ireland. arvato was selected to operate ISSC1, the first of two Independent Shared Service Centers (SSCs) to be established under Central Government's Next Generation Shared Services (NGSS) Strategic Plan (2012). ISSC1 is based on the Department for Transport's (DFT) SSC in Swansea. The Agresso Central Government Enterprise Resource Planning (ERP) Platform will replace the center's existing SAP system, as part of a phased migration process, to underpin the services offered by arvato. Another major UK deal saw the UNIT4 Agresso Local Government ERP Platform procured by BT Global Services to support the London Tri-borough shared services project for 15,000 users across Finance and Human Resources (HR), replacing systems from Oracle and JD Edwards.

The Benelux performed well reporting 5% growth and large deals ( > $1 million) with Aegon, Infinitas Learning, Algemene Handelsmaatschappij Bomij, and Stichting zorggroep Cicero. In Scandinavia UNIT4 signed a 10-year SaaS-deal with Sweden's second largest city, Gothenburg, and a five-year contract with property management chain HSB Common IT. Norway signed a four-year SaaS shared services deal with a group of 13 smaller municipalities and won a significant deal at Gard Group, a shipping insurance corporation. The cloud-based e-invoicing portal 'Sendregning', which allows SMEs to electronically invoice organizations they work for, reached a record level with almost 10,700 customers invoiced in June. A significant and highly prestigious contract was won in Denmark with a global company, to replace its corporate finance system. UNIT4 also started up activities in Finland and achieved its first sales there.

UNIT4 was awarded a European CSR (corporate social responsibility) award for its work with Blindeforbundet, the Norwegian Association for the Blind and Partially Sighted (NABP) to make its UNIT4 Agresso ERP software accessible to blind and partially sighted people. In partnership with the NABP, UNIT4 has enhanced Agresso to support plug-ins that convert text and numbers to braille or to speech. This work benefits blind or partially sighted users around the world, helping them have greater access to the workplace.

In North America the newly combined Agresso and Coda-focused operations performed well in their first six months. The first combined user conference was sold out and the new, larger organization is gaining momentum in the marketplace. Success continued in the NGO/Not for Profit sector and there is a renewed focus on Higher Education as part of the new global initiative.

FinancialForce.com

FinancialForce.com continues its rapid growth and reported record first half results for 2013. With a strong sales pipeline and increasingly larger deal sizes, the company saw the monthly revenue run rate in June 2013 up more than 80% compared to June 2012. The annualized revenue run rate (including services) was over $21.5 million by the end of June 2013 (H1 2012: $12.0 million).

To both fuel and support its growth, FinancialForce.com's global headcount has grown by over 66% year-on-year from 125 employees at the end of H1 2012 to more than 208 at the end of H1 2013. To accommodate the rapidly growing workforce, FinancialForce.com has significantly expanded office space in its San Francisco (United States) headquarters and Harrogate (United Kingdom) offices.

For the full H1 2013 financial statement, please click here.

About UNIT4

UNIT4 is a global cloud-focused business software company aimed at helping dynamic public sector and commercial services organizations to embrace change simply, quickly and cost effectively. The Group incorporates a number of the world's leading change embracing software brands including Agresso, our flagship ERP suite for mid-sized and large services intensive organizations; Coda, our best-of-class financial management software; and FinancialForce.com, the cloud applications company formed with investment from salesforce.com.

With operations in 26 countries worldwide, revenue of EUR 469.8 million was realized in 2012. UNIT4 is headquartered in Sliedrecht, the Netherlands and has over 4,000 employees. It is listed on Euronext Amsterdam by NYSE Euronext and is included in the Amsterdam Midcap Index (AMX). For more information on UNIT4 or any of its operating companies, please visit the website at http://www.unit4.com, follow us on Twitter @UNIT4_Group or visit our Facebook page.

Conversion: 1 EUR = USD $1.337

Contact Information

  • Media Contact
    Emma Keates
    Group PR Manager, UNIT4
    +44 (0)1423 537977
    Email Contact