Intershop continues to grow its cloud business in 2022

• Cloud revenues climb 28% to EUR 14.2 million; incoming cloud orders improve by 42% to EUR 25.9 million; net new ARR up by 14% to EUR 3.2 million
• Total revenues grow by 2% to EUR 36.8 million
• Earnings before interest and taxes (EBIT) at EUR -2.9 million, primarily due to lower revenues and margins in services segment

Jena, 15 February 2023 – Intershop Communications AG (ISIN: DE000A254211), a global provider of B2B commerce solutions for the upper mid-market in the manufacturing and wholesale sectors, generated total consolidated revenues of EUR 36.8 million in the financial year 2022 (previous year: EUR 36.0 million). Earnings before interest and taxes (EBIT) stood at EUR -2.9 million (2021: EUR 1.3 million). The strategically important cloud business showed a particularly positive trend and exceeded management’s expectations, while declining revenues and lower margins in the services segment temporarily weighed on the bottom line.

Intershop continued to accelerate its growth to expand the cloud business in the reporting period. Realized cloud revenues rose by 28% to EUR 14.2 million in the past financial year (2021: EUR 11.1 million). Incoming cloud orders picked up by 42% to EUR 25.9 million, while net new ARR increased by 14% to EUR 3.2 million. Annual recurring revenues (ARR) were up by 27% to EUR 15.4 million as of 31 December 2022 (31 December 2021: EUR 12.2 million). Intershop benefited in particular from the ongoing trends towards digitalization and cloud transformation, which remain high up on the agenda of companies in the B2B sector, even in a volatile macroeconomic environment.

In the context of the concentration on the cloud business, license and maintenance revenues declined slightly from EUR 9.8 million in the prior year period to EUR 9.5 million in the financial year 2022, as had been expected. Service revenues dropped by 13% to EUR 13.1 million (2021: EUR 15.1 million). Some service projects turned out to be more complex in the course of the financial year 2022 than originally calculated and therefore required more time and resources. The decline in service revenues in the year as a whole was also attributable to a high order intake outside the DACH region, due to which the strategically intended expansion of the partner business in these regions led to a noticeably shift in service revenues in favor of Intershop’s certified partners. Intershop’s management expects service revenues to pick up again in the course of 2023.

The operating result declined to EUR -2.9 million (2021: EUR 1.3 million). Besides lower revenues and margins in the services segment, the operating result was also impacted by write-downs on receivables from customers whose business was affected by the consequences of the war in Ukraine. The EBIT margin fell to -8% (2021: 4%). Earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at EUR 0.4 million (2021: EUR 4.4 million). Earnings after taxes amounted to EUR -3.6 million (2021: EUR 0.8 million).

Gross profit on revenues declined by 10% to EUR 15.7 million in the financial year 2022 (2021: EUR 17.4 million). At 43%, the gross margin was thus 5 percentage points lower than the previous year’s 48%. Total operating expenses increased by 15% to EUR 18.6 million (2021: EUR 16.1 million). This was primarily due to higher personnel expenses resulting from new hires and pay rises, acquisition-related one-time expenses in the context of the acquisition of Sparque B.V., Netherlands, and write-downs on receivables. Research and development expenses picked up by 21% to EUR 6.9 million. At EUR 8.1 million, marketing and selling expenses were up by 6% on the previous year. General administrative expenses stayed at the prior year level of EUR 3.3 million.

Total assets of the Intershop Group amounted to EUR 41.3 million as of 31 December 2022, 4% up on the end of 2021. The increase is mainly attributable to the acquisition of Sparque B.V. and the resulting acquisition of right-of-use assets. As total assets picked up and equity simultaneously decreased, the equity ratio declined from 44% at the end of 2021 to 34% on 31 December 2022. Cash and cash equivalents stood at EUR 10.5 million at the balance sheet date (31 December 2022: EUR 12.2 million). Cash flow from operations amounted to EUR 1.2 million in the reporting period, compared to EUR 4.6 million in the previous year. As of 31 December 2022, Intershop employed a total of 297 people worldwide.

Markus Klahn, CEO of Intershop Communications AG: “In a tight macroeconomic environment, we have every reason to be more than satisfied with the continued increase in all key cloud figures. With the acquisition of Sparque B.V., we have also added the strategically important component of artificial intelligence to our platform. As a result, we see ourselves well positioned for the ongoing digitalization. We have thoroughly analyzed the reasons why the past financial year fell short of our expectations and already initiated important steps in the services segment. These are expected to successively show positive effects in the course of 2023.”

On balance, Intershop expects both incoming cloud orders and net new ARR to increase by more than 10% in FY 2023. Moreover, Intershop projects an increase of over 10% in revenues and a balanced operating result (EBIT).

The full consolidated financial statements will be published in mid-March 2023. All financials in this press release are provisional, pending completion of the statutory audit.

Financial tables 2022