KPS exceeds revenue forecast for 2021/2022 and is optimistic about the new financial year 2022/2023

KPS AG (WKN: A1A6V4 / ISIN: DE000A1A6V48), Europe's leading management consultancy for digital transformation and process optimisation in retail, publishes the results for the 2021/2022 financial year.

Recovery of demand for ERP transformation projects on the German market and robust demand in foreign markets

In the financial year 2021/2022, KPS generated revenues of 179.5 million euros (previous year: 158.0 million euros) thus growing by 13.6%. KPS recorded robust growth in its domestic and foreign markets. In Germany, KPS saw a clear recovery in demand for ERP transformation projects. Domestic revenues rose accordingly by 10.9% to 74.9 million euros. In its foreign markets, demand for ERP and e-commerce projects remained high. For example, revenues in Switzerland increased by 44.2% to 19.6 million euros and in Great Britain by 18.8% to 22.9 million euros.

KPS significantly expands its team of consultants

To reduce the comparatively high use of external service providers in the future and to further strengthen its own expertise, KPS has invested in its workforce in the financial year 2021/2022. The total number of employees increased by 12.1% from 647 at 30.09.2021 to 725 at 30.09.2022. By strengthening its consulting expertise and creating additional capacity for future growth, KPS expects to be able to gradually improve profitability since the proportion of service providers and freelancers can be successively reduced.

EBITDA at the level of the previous year - profit after tax rises by 9.5%

At 21.7 million euros, EBITDA was at the same level as in the previous year. The EBITDA development was effected by several factors. The strong increase in project volume led to the increased use of service providers and freelancers. In addition, the project mix changed compared to the previous year, as numerous projects were in an early phase in which the profitability tends to be lower than in mature projects. Furthermore, EBITDA was effected by the number of new hires. Consultants usually need nine to twelve months of training before they can achieve the same efficiency as the existing and trained team of consultants. Moreover, the general cost increases in the area of personnel had a negative impact on the development of earnings.

EBIT increased by 6.7% to 14.3 million euros. Earnings after taxes rose by 9.5% to 9.6 million euros.

Proposal of a dividend of 19 Euro Cents

At the Annual General Meeting on 10 May 2023, the Supervisory Board and the Executive Board will propose a dividend of 0.19 euros per share. The dividend proposal corresponds to the dividend distributed for the 2020/21 financial year and takes into account the net profit generated as well as uncertainties arising from the war in Ukraine and the associated increased economic risks.

Despite rising uncertainties due to the war in Ukraine, KPS is confident about the financial year 2022/2023

The Russian war of aggression against Ukraine had only marginal effects on the course of business in the past reporting period 2021/2022. KPS does not have any client relationships in Russia and Ukraine. In addition, KPS had no nearshore locations or service providers in these countries.

The war has increased uncertainties, clouded the economic outlook, and led to high general price increases. The core business of KPS consists of the implementation of transformation and e-commerce projects for companies. With a share of around 70% in terms of group revenues, retail is the most important sector for the KPS Group. Declining consumption and persistently high inflation rates could therefore lead to a reluctance to award projects.

Overall, KPS is confident about the future outlook. On the one hand, the need for companies to further digitalise their systems and processes remains high. On the other hand, KPS AG sees itself well positioned with its project pipeline as well as its project and country mix to be able to continue its growth course.

Based on the data situation and the information available in January 2023, the Executive Board forecasts that it will be able to increase revenue in the 2022/2023 financial year by a mid-single-digit percentage compared to the previous year 2021/2022. In addition, the Executive Board expects to be able to increase EBITDA in the high single-digit to low double-digit percentage range.

The detailed annual report 2021/2022 is now available for download here.

26 January 2023

KPS AG

The Executive Board

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KPS exceeds revenue forecast for 2021/2022