asknet Solutions AG completes restructuring and reports positive operating result in the first half of 2020, significantly strengthening the balance sheet

asknet Solutions AG completes restructuring and reports positive operating result in the first half of 2020, significantly strengthening the balance sheet

• Total assets have increased from EUR 12.9 million on December 31, 2019 to EUR 38.5 million on June 30, 2020
• The business has been scaled down through divestments and returned to profitability with 1H 2020 EBITDA of EUR 0.3 million (1H 2019: EUR -0.9 million) and EBIT at EUR 53 thousand (1H 2019: EUR -1.3 million)
• Full-year guidance: slightly positive earnings before interest and taxes (EBIT)

October 28, 2020, Karlsruhe (Germany) - asknet Solutions AG (Ticker symbol: ASKN, ISIN: DE000A2E3707, WKN: A2E370), a leading procurement, e-commerce and payment specialist with a dominant position in the German-speaking academic market, announces its financial results for the first six months of 2020. In the reporting period, the company was able to complete an extensive restructuring, strengthening the balance sheet and preparing for business expansion through both organic growth and acquisitions.

As a consequence of the wide-ranging internal restructuring, for the first time since 1H 2014, asknet Solutions AG recorded a profitable first half of the year on an operating basis (EBIT). This was driven by outstanding results generated by the Academics business unit with sales revenues up by 30% to EUR 13.8 million and a remarkable gross profit increase of 53% to EUR 1.5 million. Following divestment of Nexway Group AG completed in April and termination of client contracts with certain technical service providers, the eCommerce Solutions business unit experienced a decrease in revenues by 24.5% to 25.8 million and reduction of gross profit by 33.3% to EUR 2.5 million.

In total, sales revenues fell by 12% from EUR 44.8 million to EUR 39.6 million. Gross profit decreased from EUR 4.8 million to EUR 4.0 million. However, key profitability metrics improved significantly: the earnings before depreciation and amortization (EBITDA) went from negative EUR 0.9 million in 1H 2019 to positive EUR 0.3 million in the reporting period, and earnings before interest and taxes (EBIT) changed from EUR 1.3 million loss in 1H 2019 to EUR 53 thousand profit in the first six months of 2020. The company's net loss narrowed from EUR 1.3 million in 1H 2019 to EUR 0.8 million in 1H 2020.

The material improvements of operating business were supported by a series of positive financing and investment decisions. At the beginning of COVID19 pandemic, asknet Solutions shored up its balance sheet by successfully executing a capital increase and issued a short-term bond, which was later converted into a long-term (3 years), EUR 9 million lower-cost bond. In April, the company divested 100% ownership interest in Swiss Nexway Group AG (including a French subsidiary Nexway SAS), recording more than 3x cash-on-cash return on investment within 15 months investment cycle.

These transactions significantly strengthened asknet Solutions AG's balance sheet, securing sufficient resources to back new strategic acquisition and business development initiatives. Total assets increased from EUR 12.9 million on December 31, 2019 to EUR 38.5 million as of June 30, 2020, and cash and cash equivalents were at EUR 5.8 million on June 30, 2020 versus EUR 3.2 million on December 31, 2019.

"The essential adjustment of our strategy with a clear focus on the academic market, combined with a far-reaching restructuring of our internal processes, is already bearing fruit. The strengthened balance sheet and the overall improved financial situation now put us in the position to execute our expansion in the global education markets", commented Christian Herkel, the CEO of asknet Solutions AG: "We will continue to keep the focus on delivering operating profitability in 2021 and to look out for attractively priced acquisitions in the global education and e-commerce space, likely to bring synergies and profitability in the months and years to come."

Given the progress already made in the first half of the year at both operational and strategic levels, the management expects to achieve slightly positive earnings before interest and taxes (EBIT) on a full-year basis.

Simultaneously with the publication of its interim financial report asknet Solutions AG is confirming that it has completed the issuance of the new EUR 9 million 6% 2023 bond (ISIN: DE000A3H2VS8, WKN: A3H2VS) and fully repaid and extinguished the EUR 8 million 10% 2021 bond (ISIN: DE000A2YN140, WKN: A2YN14).

The half year report 2020 of asknet Solutions AG is available on the company website: https://asknet-solutions.com/investors/financial-reports.html.

About asknet Solutions AG
The asknet Solutions AG is a leading procurement, e-commerce and payment specialist. The company offers software procurement and sales services for European academic institutions, students and alumni. The procurement portals offered by asknet are used by more than 80% of German colleges and universities. The headquarter of asknet Solutions AG is Karlsruhe. The company is listed on the Frankfurt Stock Exchange (ISIN: DE000A2E3707).

Contact
Magda Gajny
+49(0)721/96458-6116
investors@asknet.com
https://asknet-solutions.com/