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23.07.2020 | Press Release

Half-Year Financial Report 2020

Frankfurt/Main 23 July 2020. In the first half of the 2020 fiscal year the Amadeus FiRe Group generated consolidated sales of EUR 137.4 million. The main reason for the 23.9 percent increase in revenue was the acquisition of Comcave Holding GmbH on 19 December 2019. Services contributing to revenue growth as follows:

Change in percent
Temporary Staffing - 4.5%
Permanent Placement - 12.1%
Interim-/Project Management + 52.9%
Training & Education – total segment + 254.1%
Training & Education – existing business excl. Comcave - 16.9%

All business services initially made a good start to the new fiscal year. Starting in March the Coronavirus crisis had a significant impact on operations. Against the background of the massive collapse in demand in all services at the beginning of the Corona crisis, the development of revenues and earnings in the second quarter was maintained at a satisfactory level. In the opinion of the Management Board, the expectation of a very weak second quarter were – at least partially – averted.

The number of billable days in the reporting period was one day more than in the prior-year period. This had a positive impact of EUR 0.5 million on revenue, gross profit and earnings before taxes. Later in the year, this will be reinforced by two extra billable days in the fourth quarter.

In the Personnel Services segment, the Group made partial use of short-time working, a state-subsidised crisis tool, for a large part of the sales organisation from April 14th, 2020 onwards due to the sharp deterioration in the business environment. As a result of a slight improvement in the demand situation over the course of the quarter, working hours were increased again significantly from July 1st, 2020, but the short-time working measure has not yet been completely cancelled.

The number of temporary staffing assignments, which was still higher than in the previous year until mid-March, has since been falling continuously. COVID-19 caused order terms to be shortened and orders to be cancelled and the lack of demand meant that new companies could not be found for all temporary staff to work in. Since April 1st, Amadeus FiRe has been using short-time working for temporary employees who are not on customer assignment. However, in the course of the second quarter the situation increasingly stabilized. At the beginning of the second quarter in April, shortly after the outbreak of the pandemic, the number of current temporary employment contracts had already fallen to around 15 percent below the previous year’s level, after the transition from June to July, the number of current temporary employment contracts was a good 25 percent below the previous year.

The Permanent Placement service was also affected by the immediate and abrupt slump in demand in March. Business volume contracted due to the decline in new enquiries and additional difficulties in arranging the interviews necessary to make a decision as a result of the lockdown. In the second quarter, however, the decline of around 22 percent was less than expected against the background of the Corona crisis.

Despite more difficult business conditions and a slow-down in momentum in the second quarter, the Interim & Project Management service boosted revenue considerably in the first half of 2020. The positive effect of measures implemented in previous years, which stepped up regional focus, created this encouraging business performance in the first half of the year.

The Training segment also had to respond to the effects of the Corona crisis in March.

Most of the training offered by the companies of Steuer-Fachschule Dr. Endriss takes place in presence lessons. This aspect of educational operations had to be temporarily shut down entirely from the beginning of the COVID-19 crisis in mid-March until restrictions began to be lifted in mid-May. Digital alternatives were quickly found for many products during this period, but in particular short seminar events were cancelled without substitution.

The companies of Comcave Holding GmbH, acquired at the end of 2019, were able to increase their revenue slightly in the first half of 2020. Comcave College is particularly active in the field of state-subsidised training for unemployed persons. By specializing in tele-learning, i.e. live teaching led by lectures, Comcave was able to enable 100 percent of its customers to participate in training from home as soon as the crisis broke out, so that there was no interruption to business operations.

The worsening situation on the labour market with unemployment and short-time work represents an improvement in the demand situation for Comcave Holding GmbH’s business model, in which the people affected by the crisis can take the opportunity offered by Comcave for subsidised training.

In the short term, however, COVID-19 also had a negative impact on Comcave’s business, with demand for training products generally coming to a complete standstill for several weeks. This was aggravated by the fact that those interested in subsidised training found it more difficult to access responsible employment agency. This was due to a particularly high workload in light of rising unemployment, the need to administer short-time working applications and the temporary closure of agencies due to the pandemic. This ultimately affected the number of subsidised training vouchers that could be issued, which in turn reduced the number of new bookings since mid-March. This acute demand and processing situation has already significantly stabilised and should return entirely to normal again in the next few months.

The Amadeus FiRe Group’s gross profit climbed by 26.2% to EUR 65.3 million in the first six months of 2020. Adjusted for Comcave, gross profit decreased by 6.9%. The gross profit margin improved by 0.9 percentage points to 47.5%

Selling and administrative expenses increased by 54.3% to EUR 52.9 million. Adjusted for Comcave, the increase amounted to EUR 0.9 million or 2.6 percent organically. Non-recurring expenses in connection with the Comcave transaction of EUR 0.7 million are included in the first half year. Additional expenses in connection with a structural improvement of IT infrastructure and applications have an effect of EUR 0.8 million. Despite the successful expansion phase with a corresponding increase in the number of employees last year and into the beginning of the current year, overall staff costs for sales and administrative personnel in the period under review were reduced year on year under short-time working measures.

EBITA fell by 29.3% to EUR 12.4 million. Most of this can be attributed to the amortisation of intangible assets from purchase price allocation in the amount of EUR 5.0 million. Adjusted for this amortisation, comparable EBITA-pre was EUR 17.4 million, 1.1% lower than in the previous year. The adjusted EBITA-pre margin deteriorated by 3.2 percentage points to 12.7% in the reporting period.

Financial expenses rose from EUR 0.1 million to EUR 1.8 million due to the acquisition of Comcave Holding GmbH and the associated bridge financing.

Net profit for the period after tax amounted to EUR 7.1 million in the first half of 2020, 41.0% lower than in the previous year. Earnings per share, based on the net profit for the period attributable to the ordinary shareholders of the parent company, declined by 90 cents to EUR 1.33.

Overall, the Management Board still does not expect the Amadeus FiRe Group to be able to return entirely to pre-crisis levels during the second half of 2020. However, indicators such as the ifo employment barometer show slight signs of recovery in May and June. The Amadeus FiRe Group should be able to benefit from general signs of recovery and an improving demand situation on the German market.

Following a second quarter that was satisfactory under the given circumstances and assuming that the market situation continues to stabilise steadily, the Management Board believes that the Amadeus FiRe Group is well equipped to further strengthen its own market position in the second half of the year and to achieve solid positive results in both business segments.

The economic slowdown caused by COVID-19 is creating a high level of uncertainty among German companies and to dynamic and non-transparent change effects. Given future development of the Coronavirus pandemic and the resulting economic repercussions, the financial impact on the 2020 fiscal year as a whole cannot be quantified. At this time the Management Board is therefore not issuing a more specific forecast for 2020.

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Jan-Wessling_Investor-Relations_440x247_neu

Jan Hendrik Wessling

Investor Relations

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