Globo Announces H1 2015 Trading UpdateJuly 21, 2015
Key highlights include YOY growth in revenue, profit margin and cash
Palo Alto, Calif. – July 21, 2015: Globo plc (LSE-AIM: GBO / OTCQX: GOBPY), the international provider of Enterprise Mobility Management (EMM), mobile solutions and software as a service (SaaS), announces a trading update for the six months ended 30 June 2015.
The Board is pleased to report that Globo has achieved a strong financial performance in the first half of 2015, ahead of market expectations. This performance was underpinned by the continued demand for our enterprise mobility products and services, successful customer and project wins and expansion of our geographic and partner distribution reach.
- H1 Group revenue grew 56% YoY to €72.4 million
- GO!Enterprise revenue grew 126% YoY to €44.9 million (H1 2014: €19.9 million)
- CitronGO! / GO!Social revenue grew 6% YoY to €21.3 million (H1 2014: €20.1 million)
- Telecom & SaaS revenue grew 17% YoY to €5.0 million (H1 2014: €4.3 million)
- The Group continues to build the basis of strong recurring revenue streams:
- Approximately 97% of new GO!Enterprise EMM & MADP licence revenue was for annual renewable licences. The renewal rate of the prior year’s licences was roughly 99%
- 68% of GO!Enterprise MBS project revenue was generated by repeat orders
- H1 Gross profit margin increased to 59.3% (H1 2014: 58.0%) primarily due to the increased proportion of direct sales
- EBITDA grew 55% YoY to €34.2 million (H1 2014: €22.0 million)
- Last twelve months EBITDA was €63.1 million
- Cash generated from operations increased to €21.0 million (H1 2014: € 16.6 million)
- Free Cash Flow1 of €7.2 million (H1 2014: €4.2 million)
- Last twelve months Free Cash Flow1 was €10.3 million
- Net cash position increased to €47.4 million (31 December 2014: €40.4 million)
- Globo secured a major contract with a strategically significant South Asian industrial conglomerate customer in June 2015. The contract win is for numerous mobile application projects. The initial contract value is in excess of US$1million, and the diversified nature of the customer offers additional future opportunities for new projects and licence growth.
- U.S. growth remains on track, with expanded operations and headcount increases in the region. During the period we strengthened our sales and marketing capabilities with the addition of Keith Higgins as our U.S. Chief Marketing Officer and the hiring of numerous sales and marketing professionals. In order to attract additional talent, a software development centre has been established in Pittsburgh, Pennsylvania. The Group has also expanded the capabilities of its Canfield, Ohio development centre.
- Renewal of approximately 50,000 GO!Enterprise EMM licences and an incremental purchase order from a U.S. Fortune 100 company, worth US$1.2 million (€1.0 million).
- Numerous new customers added in Q2 2015, such as eRevmax, CenClear, Northlands Police, Aegean Oil, International Life, Lafarge, UBB Bank, Peoplecert and Watt & Volt. These new customers follow contract wins in Q1 2015 with customers such as the U.S. Army, ING, EMC, INTEL, Musananda (UAE), Vodafone and Coca-Cola.
- Continued awards and recognition from industry observers:
- Highlighted in Ovum’s 2015-16 Decision Matrix for MADP Solutions as a major “Market Challenger” amongst the 12 leading MADP vendors, with the potential to become a Tier-1 player
- Highlighted in Gartner’s 2015 Enterprise Mobility Management Suites Magic Quadrant
- Innovative Application Award in February 2015 for the “EMBRYOGENESIS” app
- Recognition for our TUI app in March by Tourism Awards 2015 in the category ‘Applications for smartphones and tablets’
- Distinction at the Mobile Excellence Awards 2015 in June for the mobile app “be inlife” (International Life)
- Announcement at Mobile World Congress in Barcelona of FIPS 140-2 certified encryption for GO!AppZone. Globo is the only company to offer this level of security for such a development platform.
- Launch in the U.S. of a Fully-Sponsored Level 1 ADR with over-the-counter trading facilities the OTCQX platform, traded under the ticker GOBPY.
Situation in Greece
As previously announced, the Group remains well-prepared, both structurally and operationally, to withstand any impact of the current situation in Greece. The key features are:
- An international operation utilising cloud-based systems linking Globo’s presence in Palo Alto CA, San Francisco CA, Canfield OH, Pittsburgh PA, London, Athens, Bangalore, Limassol, Dubai and Singapore
- Reduced revenue exposure from Greece. Greek revenues in 2015 are estimated at between 6% and 7% of total revenue
- An expected reduction in the Group’s cost base in the eventuality that Greece reverts to a local currency, based on an employment base of 198 personnel in Athens out of a total of 469 Group employees
- Measures in place to safeguard all local systems such as CRM, ERP, mail, and telecommunications, as well as payment of salaries to employees
- Minimal financial exposure, with only approximately €100,000 held in Greek bank accounts to cover running costs in Athens.
Globo Technologies S.A.
The Group received, on schedule, the fifth instalment, of €1.65 million, from the acquiring entity (GMBO Holdings Ltd, previously Zipersi Consulting Ltd). This comprised €1.48 million of principal and €173K in interest due, in respect of the Group’s divestment of 51% of Globo Technologies S.A., the e-business and software service. We expect that outstanding payments, totalling €6.7 million, to be received in three instalments up to the end of 2016, will be collected on time.
Globo CEO Costis Papadimitrakopoulos commented:
“During H1 2015 we have demonstrated our ability to execute and expand our market footprint and continued to receive industry recognition. Our US and international expansion underpins our growth as we are focusing operationally and from a marketing perspective on the most mature economies globally. We expect our successes in H1 2015 to continue through the remainder of the year.”
The Group expects to announce its interim results in September 2015.
1 Free Cash Flow (FCF). Free Cash Flow is calculated by taking the net cash flow from operating and investing activities, adding back the cost of acquisitions.
For further information please contact:
Costis Papadimitrakopoulos, CEO
Dimitris Gryparis, Finance Director
Mike Jeremy, IRO
RBC Capital Markets
(Nominated Adviser & Broker)
Pierre Schreuder or Ema Jakasovic
Simon Bridges or Emma Gabriel
Chris Blundell or Charles Pemberton
Globo (LSE-AIM:GBO, OTCQX: GOBPY) empowers the mobile enterprise by enabling employees to work and collaborate from anywhere, anytime and by extending the enterprise’s engagement with customers and partners. Globo is unique in offering a complete enterprise mobility solution by merging Enterprise Mobility Management (EMM), Mobile Application Development Platform (MADP) and professional services. Globo solutions cover critical areas for a “Mobile First” enterprise, which are data security, app and device management as well as app design and development. The Group operates internationally in USA, Europe, Middle East and South East Asia, and has achieved worldwide recognition from leading analysts firms like Gartner, IDC and OVUM. For more information visit www.globoplc.com