asknet Solutions AG publishes results for the first half of 2021 and continues implementation of Three-Pillar StrategySeptember 30, 2021
- Gross profit, the key performance indicator for the asknet business, remains on prior-year level at EUR 4.0 million
- EBIT at EUR -1.6 million (H1 2020: EUR 0.1 million)
- Improved business performance expected in the second half of 2021, based on a successful start of several new client projects
- Management proposes capital increase at the Extraordinary General Meeting (EGM) on October 15, 2021
September 30, 2021, Karlsruhe (Germany) – asknet Solutions AG, a leading procurement, e-commerce and EdTech specialist, announces its financial results for the first six months of 2021. In the reporting period, asknet Solutions AG generated gross profit at the level of the prior-year period in the amount of EUR 4.0 million. This was achieved despite a 9.9% drop in revenues to EUR 35.7 million. The gross profit margin climbed from 10.2% in the first six months of 2020 to 11.3% in the reporting period.
In the eCommerce Solutions business unit (eCS), a strong performance by top clients compensated for the still perceptible effects of restructuring of the customer base. Total revenues stood at the prior-year level of EUR 25.8 million. Gross profit slightly decreased by 1.3% to EUR 2.5 million. In the Academics business unit, revenues amounted to EUR 9.9 million compared to EUR 13.8 million in the first six months of 2020. The decrease was mainly the result of a major tender loss as well as the postponement of high-revenue projects to the second half of 2021. Thanks to the expansion of the IBM partnership and increasing license sales, gross profit rose by 3.8% to EUR 1.6 million.
Furthermore, in the past months, the company has taken significant steps to implement its Three-Pillar Strategy, presented at the Annual General Meeting on July 5, 2021, aimed at bringing the company to profitability and sustainable, steady growth by 2023. This includes the migration of its customer stores and portals to Amazon Web Services (AWS), that was started in the reporting period and is currently well underway, increasing the company’s competitiveness through providing higher scalability and extended cloud functionalities. To further boost the repositioning of the eCommerce Solutions business unit, Aston Fallen and Thomas Garrahan, long-time asknet partners with outstanding eCommerce market expertise and a deep understanding of the needs of the company, will be appointed as Managing Directors of eCS in October 2021. Reflecting the new approach and business culture in this business unit, a new eCS website was launched this week. In the Academic Business Unit, the company is driving expansion in the Swiss education market with the launch of a new project with an academic client from Switzerland, which involves the distribution of software licenses from a major publisher. Regarding the New Pipeline strategy, asknet advanced its activities in the education market, tightening the partnership with Blackboard in the reporting period.
Looking at the company’s earnings, the first half of the year was characterized by higher extraordinary costs than originally expected. Other operating expenses increased by 7.5% to EUR 3.6 million due to legal costs in relation to legacy issues as well as the restructuring and investment costs of strategic initiatives within the framework of the company's Three-Pillar Strategy. EBITDA stood at EUR -1.3 million in comparison to EUR 0.3 million in the first half of 2020. The EBIT amounted to EUR -1.6 million compared to EUR 0.1 million in the prior-year period. Net loss was at EUR -1.7 million (H1 2020: EUR -0.8 million).
As of June 30, 2021, the company's balance sheet total stood at EUR 19.4 million compared to EUR 31.8 million as of December 31, 2020. The main reason for the decrease was the reduction in liabilities. Due to the net loss in the period, a deficit not covered by equity in the amount of EUR 0.9 million occurred, compared to EUR 0.7 million total equity at the end of 2020.
To finance the on-going operational enhancements as well as the implementation of the Three-Pillar Strategy, including upcoming strategic investments, asknet Solutions AG intends to carry out a capital increase issuing up to 1,961,295 new shares, each with a pro rata amount of the share capital of EUR 1.00 and with a share price set at EUR 3.50. As a result of the issuance, the company would receive proceeds of approximately EUR 7 million. The execution of the capital increase is subject to the approval of shareholders at the upcoming EGM on October 15, 2021.
Christian Herkel, CEO of asknet Solutions AG: “We have taken significant steps in the reporting period to advance our plans related to the Three-Pillar Strategy. However, to be able to fully succeed in its implementation, cash flow-generating investments are necessary in both business units. The approval of the renewed capital requirement is an important decision to make for our shareholders, one which would allow us to implement our strategy on a sound financial basis and to create profitable growth in the medium-term. This is why we see it as absolutely necessary to undertake a capital increase at this stage.”
Based on the successful start of several new client projects, the company expects the business situation to improve in the second half of the year 2021. Nevertheless, this upward trend will not fully compensate for the negative half-year result. For the full financial year 2021, the management thus expects declining sales revenue and gross profit, leading to earnings before interest and taxes (EBIT) around prior-year level.
The half-year report 2021 of asknet Solutions AG is available on the company website: https://asknet-solutions.com/investors/financial-reports.html
About asknet Solutions AG
asknet Solutions AG is a renowned procurement, e-commerce and EdTech specialist headquartered in Karlsruhe, Germany. The company offers software procurement and distribution for European universities and is the undisputed market leader in Germany (Academics business unit). The asknet portfolio includes a wide range of high-quality software applications for the academic sector, ranging from IBM SPSS to Adobe Creative Cloud. By continuously expanding its portfolio beyond software procurement through partnerships with leading software manufacturers such as Blackboard and Dell, asknet aims to become the leading IT service provider in the European education market. The company also develops and manages online stores for digital and physical products worldwide (eCommerce Solutions business unit). Leading global publishers such as Cyberlink and Steinberg rely on asknet's e-commerce expertise to distribute their products in more than 190 countries. asknet Solutions AG is listed on the Frankfurt Stock Exchange (Ticker: ASKN; ISIN: DE000A2E3707).