Ctac records higher revenue, EBITDA and net result in third quarter

‘s-Hertogenbosch (the Netherlands), 29 October 2020 – Business & Cloud Integrator Ctac N.V. (Ctac) (Euronext Amsterdam: CTAC) today publishes its trading update for the third quarter of 2020.

Key figures

(x € million) unless stated otherwise	2020 through Q3	2019 through Q3	Delta	2020 Q3	2019 Q3	Delta

Revenue	63,4	61,1	+3,6%	21,0	19,8	+6,1%
EBITDA	6,1	5,6	+8,9%	2,6	2,3	+13,0%
EBIT	2,3	1,5	+53,3%	1,3	1,1	+18,2%
Net result	1,5	0,9	+66,7%	0,9	0,8	+12,5%

Highlights third quarter 2020

Revenue 6.1% higher at € 21.0 million
EBITDA 13% higher at € 2.6 million
EBIT 18% higher at € 1.3 million
Net result 12.5% higher at € 0.9 million

Highlights first nine months of 2020

Revenue up 3.6% at € 63.4 million
Increased demand for XV licences
Stable revenue Cloud Services
Consulting revenue increases by 7.8% including a rise of EUR 3.7 million (13.2%) as a result of the Purple Square acquisition.
The autonomous decrease in revenue of these activities is due to the lower average number of employees within Consulting in 2020 (191) compared to 2019 (205) and is therefore not related to Covid-19. This decline has now come to a standstill.
Profitability up (largely as a result of increased XV sales)

Outlook 2020

Covid-19 pandemic results in continuing caution among clients and pressure on growth
Barring additional government measures as a result of Covid-19 and other unforeseen circumstances, we expect revenue and EBITDA for the full year 2020 to be higher than in 2019.

“Despite the continuing impact of the pandemic on our society, we have been able to report improved results in the third quarter compared with 2019. We are not dissatisfied with Ctac’s development in 2020 to date, and we will continue to implement operational improvements and the review of our product portfolio. We expect to complete this review in Q4.

Expectations for our own IP products remain positive and we will continue to intensify our commercial efforts to stimulate further growth. The arrival of the new sales director for Ctac the Netherlands will contribute to this.

In the past months, we have invested considerable energy in the search for talent resulting in 10 new colleagues as of 1 October. Ctac has defined a growth strategy in which staff retention and our attractiveness to new talent are critical to the realisation of our ambitions. Approximately 35% of the new hires originate from the personal networks of our employees. These referral programmes are proving successful. To strengthen our appeal, Ctac has updated its employer brand which is being implemented in October 2020. This will boost Ctac’s relevance on the labour market in the coming period.”

Henny Hilgerdenaar, CEO

Our performance in the third quarter showed an upward trend. Revenue was higher, primarily as a result of the acquisition of Purple Square and higher demand for XV licences. The increase in EBITDA in the third quarter demonstrates the positive impact of our cost control programme.

After a challenging second quarter, we saw a slight recovery in the third quarter as a result of increased consumer confidence. This translated into growth in licences & projects in the Retail domain and our XV Retail activities. We recently also received an order from Galeria Inno, which is currently digitising its entire IT landscape under the leadership of Ctac. This means we can now count Inno as one of the clients that is using our omni-channel platform, including a loyalty programme.

In the real estate sector, we currently see limited willingness to invest when it comes to complete re-platforming. Business is ongoing with existing clients and in the remaining months of 2020 we will have a go-live for a client we have adopted into our Fit4 platform.

During the first months of the Covid-19 outbreak, Belgium felt the impact more than the Netherlands, where we are now seeing a resumption of revenue growth. Despite the relatively strong impact of the outbreak, we expect Belgium to be able to achieve a break-even result in 2020. In France, we have reached agreement on the completion of a project that ended in December 2016. This does not involve any additional costs.

Pieter-Paul Saasen, CFO van Ctac

Result third quarter 2020

The net result for the third quarter of 2020 came in at € 0.9 million (third quarter 2019: € 0.8 million).

Shareholders’ equity increased to € 20.9 million at end-September 2020 (31 December 2019: € 19.4 million). The increase in the balance sheet total as a result of the Purple Square acquisition and the increase in capitalised rights of use under IFRS 16 in particular resulted in a decline in our solvency rate (shareholders’ equity/balance sheet total) to 36.0% at end-September 2020 (31 December 2019: 42.9%). Working capital (current assets minus current liabilities) increased by € 1.9 million. Ctac will recognise the purchase price allocation for Purple Square in its Q4 figures.

Cash flow
We recorded a positive cash flow of € 5.5 million in the first nine months of 2020, partly as a result of deferred payments. Active working capital management is also having an impact. We expect positive net cash flow for the full year 2020 and we do not expect to have any deferred payments outstanding at year-end 2020.