DGAP-News: Intershop continues cloud transformation in Q3 2018

- Effects of 'cloud first' strategy become visible: incoming orders for cloud solutions climb 53% to EUR 3.2 million
- Cloud revenues up 16% to EUR 3.9 million
- Total revenues of EUR 23.9 million (previous year: EUR 26.4 million) due to lower licensing revenues resulting from cloud transformation
- Ranked as world's best B2B commerce solution by Forrester
- Continuous strengthening of Microsoft partnership results in measurable success

Jena, October 30, 2018 - Intershop Communications AG (ISIN: DE000A0EPUH1), a leading independent provider of innovative solutions for omni-channel commerce, continued its 'cloud first' strategy with clear focus in the first nine months of 2018. Incoming orders for cloud solutions in the first nine months, which will lead to recurring revenues in the coming quarters, climbed to EUR 3.2 million (previous year: EUR 2.1 million). Intershop's consolidated revenues for the nine-month period totaled EUR 23.9 million (previous year: EUR 26.4 million). The Software and Cloud segment accounted for approx. EUR 11.8 million of total revenues (-11%), while the Service segment accounted for approx. EUR 12.1 million (-8%). The fact that software and cloud revenues were below the prior year level is primarily attributable to lower licensing revenues (decrease of EUR 2.0 million), whereas cloud revenues increased by 16% to EUR 3.9 million.

"From a strategic point of view, the 2018 figures are not yet very meaningful," says Dr. Jochen Wiechen, CEO of Intershop Communications AG. "But the market trends clearly support our 'cloud first' strategy. Studies show that more than two thirds of all companies in Germany alone use cloud services. Over half of all small and medium-sized businesses use the Azure Cloud of our partner Microsoft or consider using it. In September, we have further intensified our partnership with Microsoft, which will further increase the visibility of our solution. Our approach has only recently been confirmed by the renowned analysts from Forrester Research, who have ranked our commerce solution as the leading global B2B platform in their latest study."

Against the background of the transformation process, figures for the first nine months and the full year 2018 will still be influenced by negative effects on the bottom line. These are in line with the company's projections and are mainly attributable to shifts in revenues, with the strategic transformation to the cloud business resulting in lower licensing revenues. The gross margin stood at 41% at the nine-month stage (previous year: 49%). Earnings before interest and taxes (EBIT) for the first nine months amounted to EUR -3.7 million (previous year: EUR 0.2 million). Operating expenses increased by a moderate 6% to EUR 13.4 million. Selling and marketing expenses rose by approx. 17% to EUR 7.2 million as a result of the cloud-related initiatives, whereas R&D expenses declined by a good 9% to EUR 3.5 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) stood at EUR -2.1 million (previous year: EUR 2.1 million), while the result for the period after taxes amounted to EUR -3.9 million (previous year: kEUR -16). Intershop has confirmed its forecast of slightly lower revenues than in the previous year as well as negative earnings before interest and taxes (EBIT) in the low single-digit euro million range.

"The fiscal year 2018 is a year of transformation, which will see us gradually build up our customer portfolio and a sustainable pipeline in the Cloud segment," says Markus Klahn, COO and Board member in charge of Sales and Marketing. "As our visibility in the market increases, this process will accelerate and the revenue base will be increased by the recurring cloud revenues as of 2019. It remains our medium-term target to generate revenues of EUR 50 million and an EBIT margin of 5% in 2020."

As of September 30, 2018, Intershop had a solid asset base. Cash and cash equivalents amounted to approx. EUR 9.7 million, up 8% on year-end 2017. Operating cash flow before taxes stood at EUR -1.9 million at the nine-month stage (previous year: EUR 1.8 million). At 63%, the equity ratio was 2 percentage points higher than at the end of 2017.

The interim report on the first nine months is available for download at https://www.intershop.com/financial-reports.

Contact:
Investor Relations
Heide Rausch
T: +49-3641-50-1000
F: +49-3641-50-1309
ir@intershop.com