Hubwoo announces 2014 Annual Results

PARIS, March 30, 2015 /PRNewswire/ -- Hubwoo (Euronext: HBW.NX), a leading provider of comprehensive spend management and business process collaboration solutions, today announced financial information for 2014, in accordance with the "European Transparency Obligations Directive" financial disclosure requirements.

Greg Mark, Hubwoo Chairman & CEO commented: "We announced previously that net new sales would be the primary focus of 2014 and we are pleased that our order book was more than double that of the previous year. This will help reduce the rate of revenue decline as we shift away from go-to-market strategies of the past. Additionally, our scalable cost structure and strict financial controls has once again allowed us to report double digit EBITDA(*) results as a percentage of Revenues. Sales of third party products, however, are taking much longer to materialize than we expected and this has negatively affected our annual impairment test. As a result, the Board has approved a one-time, non-cash, impairment of goodwill, along with accelerated depreciation of all SAP software related capitalised assets, in order to continue the fiscally conservative nature in which the company, and its balance sheet, are managed."

1.    2014 Key Results:

The Hubwoo Board of Directors approved the 2014 accounts on March 23, 2015, which will be formally certified by the Auditors in April.   

Revenues

Over the year, revenue declined by 11% compared to 2013. As previously indicated, the improved level of orders in 2014 has allowed a significant increase in Revenue in the fourth quarter (+9%) in comparison to Q3 2014.

Goodwill impairment

The company performed its annual test of goodwill which resulted in an impairment of EUR M 15, bringing this value down to EUR M 32.5 as of 31rst of December 2014. This impairment is explained by a combination of the following considerations:

• The perspective of extending the transition of the company, which started in 2012, from an economic model and go to market strategy largely based on hosted, third party SAP application software, to one more focussed on its own Intellectual Property.
• Delays in attaining market traction with new commercial and technological partnerships, established in place in 2013 and 2014, in the third party applications world, in order to support growth in the context of the transition mentioned above.

Furthermore, after a careful evaluation of the company's balance sheet, and in line with the considerations mentioned above, an exceptional depreciation of capitalised developments was passed related to legacy technologies (- EUR M 0.3).

Both effects above are non-cash and in no way affect the liquidity and solvability of the Company or its operations.  

Profitability

The Company recorded an EBITDA of EUR 3.6M, 13% as a percent of Revenue, which confirms the flexibility and scalability of its operating model. The Company continued strict financial controls over its cost structure throughout the year 2014. This has allowed the Company to maintain a double digit level of gross margin in the face of declining top line revenue.

Due to the impairment of goodwill and exceptional depreciation, the Net Income is negative by EUR M 15.8.

Cashflow

In 2014, the company's operating cash-flow was EUR M 3.1, taking into account tight control over its working capital. Capital investment remained strong, at EUR M 1.9, and focused on the Company's strategic solution suite, The Business Network by Hubwoo. The 2014 year-end cash position was EUR M 6, EUR M 0.3 below that reported at the end of 2013.

2.    2014 major events:

In 2014 Hubwoo was listed in the top 150 of the World's 500 Largest Cloud Applications Vendors. "I would like to commend Hubwoo for becoming part of Cloud Top 500 in our annual Apps Run The Cloud Survey. Leveraging the ubiquity of the Cloud, Hubwoo has made great strides in broadening the appeal of SRM applications and reshaping the overall market," said Albert Pang, president of Apps Run The World. Read the full release here.

In 2014 Hubwoo was also ranked number 37 on the French Syntec Top 250 list of top software developers and was listed on SpendMatters' 50/50 list as a "Provider to Know". Read the article here.

About Hubwoo (www.hubwoo.com)

Hubwoo connects companies by providing comprehensive spend management and collaborative business process automation solutions for both goods and services, in the cloud, through The Business Network.

Our solutions integrate with any ERP or procurement system, providing our customers with an easy to use solution which drives adoption, compliance and savings.

Significant customers include BASF, Eni, Shell, Evonik, Microsoft, Nationwide, Henkel, CONSOL Energy, Suramericana, ING and Cemex.  Hubwoo's global partnerships include GEP, SAP, IBM, and TrustWeaver.

Hubwoo has major operations in Paris, Houston, Chicago, Bonn, London, Manila, and Leuven.  Hubwoo is listed in Compartment C on the Euronext Paris Eurolist.

ISIN: FR0004052561, Euronext: HBW, Reuters: HBWO.PA, Bloomberg: HBW:FP

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