Prodware

An EBITDA in Line With Expectations, Net 2021 Result Impacted by Exceptional Items - Seite 2

Current Operating Income remained strong at €14.4 million, with a limited decrease of 6.0%.

As announced at the time of the publication of the Annual Revenue report in February and in line with what was indicated as of June 30, 2021, Prodware has decided to factor in the sharp decline in the sales of On-Premise solutions that have been largely replaced by SaaS-based solutions meeting the needs of a number of strategic customers.

The annual impairment tests conducted on the value of the On-Premise assets showed a difference between the residual value on the asset side of the balance sheet and the present value of the future cash flows that Prodware can realistically expect from these assets. As a result, the Group has decided to recognize an exceptional impairment charge for the full year of 2021 of approximately €65 million. So, the Operating Profit will show a loss of €50.7 million at the end of December 2021 compared to €15.6 million in profit at the end of December 2020.

The Net Financial Result amounts to -€11.4 million in 2021, down by €5.0 million compared to 2020 due to an increase in the cost of financial debt and fees related to the setup of a long-term unitranche facility to support its growth. The non-recurring portion of this increase amounts to €3.6 million.

After recording an income tax expense of €6.5 million (including €5.6 million of exceptional deferred taxes which have been adjusted according to the impairment calculations on the value of the assets), the Group's share of net income amounted to a loss of €68.5 million in 2021, compared to a profit of €7.6 million for the previous year.

Restated for all the exceptional items of the year (provisions related to impairment tests for €64.6 million, non-recurring net financial expenses of €3.6 million and deferred taxes of €5.6 million), Prodware's net income (group share) amounts to a normative profit of €5.4 million.

A strong balance sheet

As of December 31, 2021, Prodware's equity amounts to €83.3 million.

In order to finance its growth and business expansion strategy with as much flexibility as possible, the Group has secured a €140 million 7-year unitranche facility, benefitting therefore from an extended maturity range with no need for an amortization schedule for the next few years.

Net debt amounts to 120.8 M€.

This amount includes the IFRS lease liability which amounts to €110.5M€ excluding IFRS 16.

Outlook

In 2022, Prodware will continue to develop its Consulting, Software Development, Integration and Managed Services activities supporting the digital transformation journey of companies. As mentioned, the group will accelerate the initiatives undertaken to continue developing growth in revenue of SaaS sales and very high added-value services, particularly in Consulting and Managed Services. We are therefore paying very close attention to recurring and profitable revenues.