Group’s strength confirmed: high growth,
increased profitability and strengthened operating cash flow
generation
- Annual revenue of €409 million, up 56%, including 20%
organic growth1
- EBITDA2 of €17 million (+9%)
- Fourfold increase in operating cash flow to €29
million
- Available cash up 10% to €83 million after investment of €33
million
The consolidated financial statements were
approved by the Board of Directors on September 30, 2020.
The consolidated financial statements have been
audited and the audit report is being prepared.
Regulatory News:
Claranova (Paris:CLA) closes another year of high growth,
increasing its profitability in an unprecedented context.
The Group clears the €400 million revenue bar (€409 million),
progressing 56%, of which organic growth of 20%. Claranova’s
three-year average annual growth rate is 46% and the Group has
enjoyed as of June 30, 2020, 14 consecutive quarters of growth3.
This strong growth was achieved while preserving operating
profitability in a complex economic environment: EBITDA, the
main operating performance indicator, is €17 million (+9%). The
Group chose not to include the reduction in employee costs financed
by the US government under the Paycheck Protection Program (PPP),
pending final clarification by the US authorities of the conditions
governing the definitive vesting of this assistance to two of our
subsidiaries. The inclusion of these reductions would have
increased the Group’s operating profitability by nearly US$5
million, producing an EBITDA of €22 million.
Cash flow generation was significantly strengthened, with
operating cash flow increased fourfold from €7 million to €29
million.
This fiscal year confirms the improvement in Claranova’s
financial profile, reporting Net income of €1 million. On
this basis and after investment of €33 million during the fiscal
year, available cash stood at €83 million at the end of June
2020.
Change in the Group’s main operating performance indicators:
In € million
2019-2020
2018-2019
Var.
Revenue
409
262
56%
EBITDA
17
16
9%
EBITDA as a % of Revenue
4.3%
6.1%
-184 bp
Recurring Operating Income
13
14
- 7%
Net income/(loss)
1
(41)
Cash flow from operations
29
7
308%
Closing cash position
83
75
10%
PlanetArt: move toward personalized e-commerce
PlanetArt reports annual revenue of €314 million, up 78% (29% at
constant scope). This growth was driven by continued geographic
roll-out in Europe, the ramp-up of new mobile offerings (FreePrints
Photo Tiles and FreePrints Cards) and a surge in the use of its
apps during lockdown. The Personal Creations assets purchased in
August 2019 generated revenue of €88 million.
The strong revenue growth was accompanied by a 30% increase in
EBITDA to €14 million, translating into a ratio of EBITDA over
sales of 4.5% as compared to 6.2% last year. The performance of
historical activities supported PlanetArt’s profitability during
the period. This positive effect was nonetheless offset by the
integration of Personal Creations which did not contribute to
PlanetArt’s overall profitability in this first year. The operating
profitability of personalized e-commerce activities was also
impacted by the ongoing aggressive marketing investment
strategy.
With the integration of Personal Creations in August 2019,
completed in September 2020 by the acquisition of CafePress,
another leader in the US personalized products market, PlanetArt
increased its critical size, expanded its product range, and
extended its geographic presence, while accessing a unique platform
bringing together hundreds of thousands of designers. Numerous
synergies have been identified between PlanetArt’s historical
businesses and these new activities, at product, customer, regional
and technological levels. The US launch in July 2020 of FreePrints
Gifts, a new mobile app in the FreePrints family dedicated to the
personalized gifts segment, is a first step.
These acquisitions enable PlanetArt to enter the “personalized”
e-commerce space. As e-commerce becomes predominant, “personalized”
e-commerce allows companies to address growing consumer demand for
distinctive products by offering the ability to transform everyday
consumer goods into unique objects. In a world where production
capacities are increasingly sophisticated and able to produce
easily and at low cost personalized objects in small batches and
with short cycle s, the Group believes that personalized e-commerce
will soon win market share from “standard” e-commerce.
Change in PlanetArt’s main operating performance indicators in
2019-2020:
In € million
2019-2020
2018-2019
Var.
PlanetArt (excluding Personal
Creations)
227
176
29%
Personal Creations
88
Revenue
314
176
78%
EBITDA4
14
11
30%
EBITDA as a % of Revenue
4.5%
6.2%
-169 bp
Avanquest: a transition year to prepare an upcoming
acceleration in profitable growth
Avanquest reports revenue of €90 million, up 9%5. This increase
reflects the refocus of activities towards proprietary software
sold as subscriptions.
This shift in revenue model to subscription sales has limited
growth6 during this year, but it will strengthen the recurring
nature and future profitability of Avanquest. Within a year, the
percentage of recurring revenue jumped from 35% to 46%.
EBITDA is €7 million, representing an operating margin of 7.9%
compared to 12.4% last year. This decrease reflects again the
refocus of activities towards proprietary software sold as
subscription.
It also reflects the impact of the pandemic on Avanquest’s
non-strategic activities and significant marketing investment to
support the launch of new products that will fuel Avanquest’s
growth in the future: launch of InPixio Studio Photo 10 on March
25, 2020, Adaware Antivirus on August 4, 2020, Soda PDF 12 on
August 5, 2020 and Adaware Protect.
Efforts made during the fiscal year, reflected by growth in
recurring SaaS revenue7, will secure revenue generation in the long
term and boost profitability, as each subscription renewal is
achieved with low additional marketing investment.
Change in Avanquest’s main operating performance indicators in
2019-2020:
In € million
2019-2020
2018-2019
Var.
Revenue
90
83
9%
EBITDA
7
10
- 31%
EBITDA as a % of Revenue
7.9%
12.4%
-450 bp
myDevices: ongoing commercial roll-out and strengthening of
the partnership with Sprint in the United States
myDevices reports revenue of
€5 million, up 51% in the fiscal year. While roll-out slowed in
certain sectors (particularly hospitality and catering) due to the
pandemic, the division nonetheless reported a strong surge in
commercial activity with close to 500 customers and 5,000 sites
equipped.
Alongside revenue growth,
operating losses reported during the year fell 26%. Despite the
uncertainties inherent to the current health situation, the
commercial ramp-up during the period is expected to continue,
enabling the IoT division to progressively improve its
profitability. The merger of our historical partner Sprint, with
the telecommunications operator T-Mobile, boosts our US market
expansion prospects, as T-Mobile sales teams now propose myDevices
IoT solutions to their customers.
While the IoT market is still
emerging, the myDevices platform places Claranova in an excellent
position to seize major developments in this new market.
Change in myDevices’ main operating performance indicators in
2019-2020:
In € million
2019-2020
2018-2019
Var.
Revenue
5
3
51%
EBITDA
(4)
(5)
- 26%
EBITDA as a % of Revenue
(79.1)%
(162.3)%
Strong acceleration in Group operating cash flow, multiplied
by four during the period
Operating cash flows increased fourfold during the year from €7
million to €29 million. This increase reflects strong Group growth
(organic and external), the surge in FreePrints activities during
lockdown and the specific nature of the business model (B2C8
distribution) which naturally operates with negative WCR, including
for the Personal Creations business acquired at the beginning of
the year.
In € million
6/30/2020
6/30/2019
Cash flow from operations
14
15
Change in working capital requirements
23
(4)
Taxes and net interest paid
(7)
(3)
Cash flow from operating
activities
29
7
Cash flow used in investing
activities
(33)
(16)
Cash flow from (used in) financing
activities
12
18
Increase (decrease) in cash
8
9
Strong and healthy financial position: available cash of €83
million, up 10% after €33 million in investment
Claranova closes fiscal year 2019-2020 with cash of €83 million,
up 10% on June 30, 2019. This increase in the Group's cash position
includes investments totaling €33 million during the year, with the
acquisition of Personal Creations for €17 million and settlement of
the remaining €15 million deferred payment for the acquisition of
the Adaware, SodaPDF and Upclick businesses.
In € million
6/30/2020
6/30/2019
Opening cash position
75
66
Effect of exchange rate fluctuations on
cash
(1)
0
Closing cash position
83
75
With available cash of €83 million and financial liabilities
(excluding IFRS 16 impact) of €69 million, Claranova’s financial
structure remains healthy, with net cash of €14 million. With this
level of cash and an improved operating profile, the Group secures
its financing capabilities.
In € million
June 30, 2020
June 30, 2019
Bank debt
189
3
Bonds
48
48
Other financial liabilities
3
1
Accrued interest
0
0
Total financial liabilities 10
69
52
Available unpledged cash
83
75
Net debt
(14)
(24)
“This new year of profitable growth in an unprecedented context
confirms Claranova’s ability to adapt, develop and be resilient.
Our mobile, software and IoT solutions all progressed during the
year, enabling us to report growth of 56% and exceed the €400
million revenue bar.
While continuing to invest heavily in marketing and R&D and
completing a defining acquisition with the integration of Personal
Creations, we successfully maintained our profitability.
This pandemic has turned our economy upside down and accelerated
the digitalization of how we live, work and consume. In this
changing environment our digital positioning remains a strength.
More than ever, Claranova is well placed to respond to these
structural changes and maintains its objectives of revenue of €700
million and operating profitability in excess of 10%11 by
2023.”
Pierre Cesarini, CEO of the Claranova group
Financial calendar:
November 4, 2020: Publication of 2020-2021 Q1
revenue
About Claranova:
A high-growth technological group, Claranova is an international
player that is positioned in the long term, drawing on resilient
business models for high-growth potential markets. As the leader in
personalized e-commerce (PlanetArt), Claranova also sets itself
apart through its technological expertise in software publishing
(Avanquest) and the Internet of Things (myDevices). These three
business divisions share a common vision: simplify access to new
technologies using solutions combining innovation and ease of use.
Drawing on this vision, for the past five years Claranova has
enjoyed an average annual growth trajectory of more than 30% while
improving its profitability, both through organic and external
growth.
For more information on the Claranova group:
https://www.claranova.com or
https://twitter.com/claranova_group
Disclaimer:
This document contains forward-looking information that may only
be interpreted at the date of its communication and Claranova
refuses any intention or obligation to provide, update or revise
any forward-looking statements, as a result of new information,
future events or other factors.
Appendix
Appendix 1: Consolidated Income Statement
In € million
2019-2020
2018-2019
Net revenue
409.1
262.3
Raw materials and purchases of goods
(126.2)
(71.2)
Other purchases and external expenses
(191.4)
(122.0)
Taxes, duties and similar payments
(0.7)
(0.4)
Employee expenses
(55.0)
(38.8)
Depreciation and provisions (net of
reversals)
(7.2)
(2.0)
Other recurring operating income and
expenses
(15.2)
(13.6)
Recurring Operating Income
13.3
14.3
Other operating income and expenses
(5.6)
(2.9)
Operating income
7.8
11.4
Net financial income (expense)
(4.5)
(49.2)
Tax expense
(2.1)
(3.7)
Net income/(loss)
1.2
(41.4)
Net income, Group share
0.5
(40.8)
Appendix 2: Earnings per share
In €
2019-2020
2018-2019
Number of shares outstanding12 (in
units)
39,200,753
39,200,754
Number of shares outstanding after
potential dilution (in units)
39,905,818
39,905,823
Net income per share
0.03
(1.06)
Adjusted net income per share
0.17
0.21
Net income, Group share, per share
0.01
(1.04)
Adjusted net income, Group share, per
share
0.15
0.23
Net income per share after potential
dilution
0.03
(1.04)
Adjusted net income per share after
potential dilution
0.16
0.21
Net income per share, Group share, after
potential dilution
0.01
(1.02)
Adjusted net income, Group share, per
share after potential dilution
0.15
0.23
Appendix 3: Calculation of EBITDA and Adjusted net
income
EBITDA and Adjusted net income are non-GAAP measures and should
be viewed as additional information. They do not replace Group IFRS
aggregates. Claranova’s Management considers these measures to be
relevant indicators of the Group’s operating and financial
performance. It presents them for information purposes, as they
enable most non-operating and non-recurring items to be excluded
from the measurement of business performance.
The transition from Recurring Operating Income to EBITDA is as
follows:
In € million
2019-2020
2018-2019
Recurring Operating Income
13.3
14.3
Impact of IFRS 16 on leases expenses
(3.1)
Share-based payments, including social
security expenses
0.0
(0.3)
Depreciation, amortization and
provisions13
7.2
2.0
EBITDA
17.4
16.0
The transition from Net Income to Adjusted Net income is as
follows:
In € million
2019-2020
2018-2019
Net income (loss)
1.2
(41.4)
Impact of IFRS 16 on Net income
0.4
Share-based payments, including social
security contributions
0.0
(0.3)
Fair value remeasurement of financial
instruments
(0.6)
47.2
Other operating income and expenses
5.6
2.9
Adjusted net income
6.6
8.4
Adjusted net income, Group
share
5.9
9.0
Appendix 4: Simplified Statement of Financial
Position
Claranova’s Statement of Financial Position increased from
€176.1 million to €210.0 million between the end of June 2019 and
the end of June 2020. This rise reflects the Group’s organic growth
and the integration of the personalized gifts business Personal
Creations® acquired on August 2, 2019.
In € million
6/30/2020
6/30/2019
Goodwill
61.7
63.0
Other non-current assets
32.0
12.1
Current assets (excl. cash)
33.5
25.5
Cash and cash equivalents
82.8
75.4
Total assets
210.0
176.1
Equity
62.3
63.6
Financial liabilities
68.9
51.9
Lease liabilities
10.1
Non-current liabilities
3.1
2.8
Current liabilities
65.6
57.8
Total equity and liabilities
210.0
176.1
Appendix 5: Impact of IFRS 16 on leases
On January 13, 2016, the IASB
published IFRS 16 on the recognition of leases, replacing IAS 17.
The Group transitioned to IFRS 16 on July 1, 2019, using the
simplified retrospective method. The impacts on the Income
Statement, the Statement of Financial Position and the Statement of
Cash Flows are presented below. Further information on the impacts
of application of IFRS 16 on the Group financial statements can be
found in Note 21 to the 2019-2020 consolidated financial
statements.
In € million
2019-2020
Cancellation of lease expenses
3.1
Amortization of right-of-use assets
(2.9)
Interest on lease liabilities
(0.6)
Impact on net income
(0.4)
Non-current lease assets
10.1
Impact on total assets
10.1
Non-current lease liabilities
7.2
Current lease liabilities
3.0
Impact on total liabilities
10.1
Impact on closing cash
0.0
1 Organic growth is equal to the increase in revenue at constant
consolidation scope and exchange rates. 2 See Appendix 3 at the end
of the press release for the definition of this operating
performance indicator and a breakdown of the calculation. 3
Compared with the prior year quarter. 4 As Personal Creations
activities purchased in August 2019 are now fully merged with
PlanetArt’s traditional businesses in PlanetArt LLC, the Group
published consolidated PlanetArt EBITDA for 2019-2020. 5 The
percentage revenue growth presented for Avanquest in the press
release of August 2, 2020 was increased from 8% to 9% after
inclusion of a non-material audit adjustment slightly increasing
2019-2020 software business revenue. 6 The unitary price of a
subscription sale being lower than that of software sold under a
perpetual license. 7 Software as a Service. 8 Business-to-Consumer,
a direct commercial relationship between a company and a private
individual. 9 This amount includes the €4.5 million reduction in
employee costs financed by the US government under the Paycheck
Protection Program (PPP), recognized in financial liabilities
pending final clarification by the US authorities of the conditions
governing the definitive vesting of this assistance to two of our
subsidiaries. 10 Excluding lease liabilities resulting from the
adoption of IFRS 16. 11 In terms of EBITDA. 12 The number of
outstanding shares was restated in H1 2018-2019 and H1 2017-2018 to
take into account the one-for-ten reverse share split in H1
2019-2020. 13 In fiscal year 2019-2020, charges to depreciation,
amortization and provisions include an IFRS 16 impact of €2.9
million (see Appendix 5 of this press release and Note 21 to the
2019-2020 consolidated financial statements)).
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