CREALOGIX Group - FY20 results slightly below forecasts, strong H2

In its preliminary results, CREALOGIX announced a sales increase of 1.7% to CHF103.7m (FY19 CHF101.9m), 3.9% growth in constant currencies. As expected, there was an acceleration of growth in H220, 13.2% higher than H120, but revenues still fell c 1.7% short of our forecasts. Adjusted EBITDA of CHF2.4m was higher than in FY19 (CHF1.86m), although 6.8% off our EBITDA forecast of CHF2.58m. EBITDA excluded one-off provisions of CHF7.0m for streamlining business processes, unifying the product platform and a staff reorganisation, leading to job cuts of around 10% of headcount. After these provisions, the group reported an EBITDA loss of CHF4.6m. These measures are intended to accelerate the group’s transition to becoming a leading SaaS provider of digital banking platforms, with initial benefits from this investment expected to be seen in FY21, and a full year of benefit in FY22. Our forecasts (which exclude these exceptional items) remain unchanged pending the full-year results on 15 September 2020.