Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SNP Schneider-Neureither & Partner SE reported strong revenue growth, increasing from EUR 48.5 million to EUR 62 million, with a notable 64% increase in software revenue compared to Q2 2023.
- The company successfully resolved a legal dispute with the community of heirs, receiving over 99% shareholder approval for the agreement.
- The partner business accounted for 54% of total order entry in H1, demonstrating strong strategic growth and collaboration with major IT players.
- SNP raised its revenue guidance to a range of EUR 225 million to EUR 240 million and increased its EBIT forecast to between EUR 16 million and EUR 20 million.
- The company achieved a significant improvement in EBIT, with a EUR 9 million increase and a threefold improvement in EBIT margin compared to H1 2023.
Negative Points
- Despite strong topline growth, the updated guidance implies a lower H2 growth rate of around 8% and an EBIT margin of roughly 5%, which may be seen as conservative.
- Personnel costs increased due to higher headcount and salary adjustments, impacting overall expenses.
- The company experienced increased travel and marketing expenses, partly due to efforts to expand into new markets like Brazil, Nordics, and the Middle East.
- Payments from lease liabilities increased significantly, influenced by the acquisition of the Trigon Group.
- The operating cash flow in Q2 was negative, primarily due to bonus and variable payments for the successful year 2023, reducing the strong Q1 cash flow.
Q & A Highlights
Q: Could you quantify the impact of large program licenses in Q2? Are these the two megadeals mentioned in the presentation?
A: Yes, we have two megadeals in Q2 totaling EUR 17 million, with one deal having a high software share of 65%. These are specific licenses related to transformation programs, not all-you-can-eat licenses. - Jens Amail, CEO
Q: The updated guidance implies H2 growth of around 8% at an EBIT margin of roughly 5%, which seems low given recent trends. Could you explain your thinking?
A: We increased the midpoint of our revenue by around 6% and the EBIT by 11%. This reflects our current outlook. - Jens Amail, CEO
Q: How important are the largest partners in your partner business? Are there a few very large partners carrying the business?
A: Approximately 50% of the business is done by our top 5 system integration partners. - Jens Amail, CEO
Q: There was an increase in payments from lease liabilities. Could you explain why and where you see that for the full year?
A: This impact comes from our acquisition of Trigon, affecting the purchase price allocation slightly. It's not a significant change, and we might see a slight increase in EBITDA differences due to this acquisition. - Andreas Roderer, CFO
Q: Can you provide more details on the strong topline growth, especially in software?
A: The software segment increased well above average by 31%, driven by strategic growth markets and strong partner business performance. - Jens Amail, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
