Attractive market potential
An Enterprise Resource Planning (ERP) system is an IT system for managing companies’ business processes. Organisational changes at companies, such as mergers, reorganisations and spin-offs, result in a significant need for ERP transformations. In 2014, the total value of global company mergers alone came to USD 3,000 billion. But only around 1% of transformation expenditure currently goes towards replacing software. The market for software-based ERP transformations therefore offers outstanding growth prospects.
Unique business model
In contrast to the conventional “consultancy approach”, SNP pursues a “software approach”. Using transformation software allows the customer to save time, reduce error rates and increase project security. As the world’s first provider of standard software solutions, SNP has demonstrated its ability to implement transformations in all ERP landscapes in a short space of time in over 4,000 projects worldwide.
Unparalleled customer benefit
In addition to organisational changes, companies also face increasing pressure to change due to technological development – triggered by advancing digitalisation. As the provider of a cross-sector software standard, SNP supports and promotes changes at companies. The key is adaptable IT landscapes – with the aim of standardising heterogeneous and complex IT infrastructures and thereby increasing companies’ capacity to act and their competitiveness. Only if they can handle change as a strength will companies be able to enter a new era.
Strong competitive position
The SNP Group’s core market is the DACH region (Germany, Austria and Switzerland). In addition, the company is active in other foreign markets, as shown by the branches in the USA, South Africa and Spain. It expanded its presence in the Southeast Asian region at the beginning of 2016. The company moved to the British market in the summer of 2016 with a branch in London. Since May 2017, the SNP Group has been focusing on the Central and Eastern European market.
SNP relies on close customer and partner relationships. Its well-known customer lists includes large corporations, global players and medium-sized companies. SNP is also increasingly tapping into the US market, as proven by two significant US contracts – including the largest order in company history. The company also established a partnership with SAP in order to pool expertise in the software-supported transformation environment and improve the technologies together.
Economic success path
In the 2016 fiscal year, SNP AG forged ahead on its path of profitable growth. SNP AG generated Group revenue of € 80.7 million (previous year: € 56.2 million) in the 2016 fiscal year. Despite continuous investments in growth, earnings before interest, taxes, depreciation and amortization (EBITDA) increased in the 2016 fiscal year to € 8.5 million (previous year: € 5.8 million). In the same period, earnings before interest and taxes (EBIT) amounted to € 6.9 million (previous year: € 4.6 million).
Due to the unchanged positive situation for orders and projects, as well as Group revenue of € 81.0 million at the end of the first nine months of the current fiscal year, the Executive Board is increasing the forecast for Group revenue to around € 120 million for the current fiscal year (previous revenue forecast: € 110 million). In addition, the Executive Board is forecasting a generally balanced operating result (EBIT) for the 2017 fiscal year (previous earnings forecast: EBIT margin of 7% to 12% for the 2017 fiscal year). This is due to the earnings performance in the first nine months of the 2017 fiscal year that was heavily impacted by one-time extraordinary expenses and investments in growth, as well as lower than expected revenue from software licensing.
Organic & Inorganic Growth
SNP is implementing its growth strategy through two parallel approaches. In addition to its own organic growth, the company is also pursuing inorganic growth through acquisitions.
With its investment in RSP GmbH at the beginning of 2015, SNP AG expanded its strategy and process-oriented consulting range while simultaneously extending the value chain in the market for corporate transformations.
Acquiring majority interests in Hartung Consult and Astrums Consulting at the beginning of 2016 allowed deeper access to the rapidly growing Asian markets for the SNP Group.
In October 2016, 90% of the shares in Harlex Management, headquartered in London, were acquired. Partnering with the company, which focuses on IT data migration projects, strengthens the SNP Group’s presence in British markets.
In May 2017, the Polish BCC Group was acquired – the largest acquisition in the history of the company to date. BCC is one of the largest SAP partners in Central and Eastern Europe. Due in part to this step toward growth, the SNP Group now has more than 1,000 employees.
The acquisition of the South American ADEPCON Group in July 2017 further boosted internationalization.
Stable dividend policy
In view of the positive performance in the 2016 fiscal year, a dividend of € 0.39 per share was distributed for the 2016 fiscal year (previous year: € 0.34 per share; adjusted for the higher number of shares after the capital increase in 2016: € 0.26). This corresponds to a dividend ratio of 48% (previous year 49%) with regard to the profit share of SNP AG’s shareholders.