CREALOGIX HOLDING AG Media release
Zurich, 18 September 2018
2017/2018 Annual Results
Driver "Open Banking": CREALOGIX reports record sales for the third time in a row
- Sales increased adjusted for currencies by 13.1% per cent to CHF 87.1 million.
- At CHF 7.0 million, profitability (EBITDA) was slightly below previous year's level (CHF 7.3 million). The EBITDA margin reached 8.1%.
- Share of International product revenues increased to 57% (prior year 50%).
- For the 2018/2019 financial year, CREALOGIX expects to exceed the sales threshold of CHF 100 million for the first time.
- The Group confirms its mid-term goals: annual sales growth of over 20% is expected and a profitability (EBITDA) of more than 15% is targeted.
CREALOGIX looks back to a successful financial year 2017/2018. Never before have so many new licenses and projects been concluded. "Our passion is to empower our customers on their journey to a successful digital future. Through an intensive exchange with them, we realise new user-friendly digital solutions for Retail Banking, Corporate Banking and Wealth Management, taking new market requirements into account" says Thomas Avedik, President & Chief Executive Officer of CREALOGIX.
The Group maintained its market leading position in Europe and expanded globally: With the acquisition of the digital banking supplier "Innofis" in January 2018, CREALOGIX establishes itself in Middle East. It enhances its product portfolio and expertise in the field of "Islamic Banking". This also paves the way to new opportunities in the Asian region, e.g. Malaysia. Therefore, and thanks to a new digital banking project for a large Swiss private bank in Singapore, the local organization was strengthened. In addition, in North America a major Canadian bank is now using CREALOGIX solutions to digitize its asset management process.
Strong performance reflected in results
CREALOGIX is profitable, healthy and stable heading into the future. In the financial year 2017/2018, sales increased by 16.4% from CHF 74.9 million to CHF 87.1 million. This corresponds to a growth of 13.1% in local currencies. At 57%, the majority of the revenue was generated internationally (Europe, Asia / Pacific, Middle East). At CHF 7.0 million, profitability (EBITDA) was slightly below previous year's level (CHF 7.3 million). The EBITDA margin reached 8.1%, which was slightly below the previous year's level. This is mainly due to a pleasingly earlier than expected customer switch from a traditional initial license model to the rental model (Software-as-a-Service 'SaaS'). This switch will furthermore increase the future recurring revenues.
Open Banking on the rise
Various international surveys commissioned by CREALOGIX among 3'000 bank customers between the ages of 18 and 45 demonstrate the importance of digital and mobile banking. In Switzerland, 80% of respondents stated that everyday services such as referrals were also or exclusively to be carried out online. The demand for open-banking applications, which allow access to all financial services from different providers via a single app, is also growing. Over 60% of respondents in the UK and more than 65% of Germans surveyed would welcome such an application. Among the Swiss, this figure is more than 40%. "The more informed customers are about the positive effects of open banking, the stronger their demand for corresponding solutions. The open platform strategy with the 'Digital Banking Hub' as centrepiece enables financial services institutions to adding third-party offers to their portfolio, thereby taking a major step closer to customer needs" says Richard Dratva, Chief Strategy Officer of CREALOGIX.
Serving Mobile
Asked about the preferred digital banking method - on desktop or via mobile - in both Switzerland and Germany, the majority prefers to do the services "traditionally" on their desktops. However, a considerable and steadily growing part already prefers mobile banking. As a leading provider in this area (according to IDC MarketScape), CREALOGIX is taking advantage of this preference with its newly developed "Mobile Application Platform". Financial service providers can use it to combine various applications in one secure app. Bank customers access all financial information and services on a single platform and have a seamless banking experience.
Further growth in the future
CREALOGIX strives to maintain its leading position in Digital Banking and therefore continues to heavily invest into its product offerings. At the beginning of July 2018, the acquisition of ELAXY Business Solution & Services in Germany was announced. With this step, the Group is expanding its portfolio and is in the position to offer hosting services for banks.
For the 2018/2019 financial year, CREALOGIX expects to exceed the sales threshold of CHF 100 million for the first time. In addition, despite high investments into the product offering, market expansion and the ongoing shift from the traditional license model to rental (SaaS) models, it expects a margin improvement.
CREALOGIX confirms its mid-term goals: annual sales growth of over 20% is expected. In addition, the share of international product revenues is to be increased to 70%. Furthermore, profitability (EBITDA) of more than 15% is targeted.
The Board of Directors plans to suggest to the Shareholder's Meeting on 29 October 2018 a distribution from premium amounting to CHF 0.25 per share.
The full annual report for 2017/2018 can be downloaded online at crealogix.com/report-en.
*Non-GAAP measure. More information with respect to the use of and differences between the non-GAAP financial measures and the most directly comparable SWISS GAAP FER measures is provided on page 42 of the financial report.
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