• Acquisition and integration of Nexway Group AG and its 100% subsidiary Nexway SAS has created a new powerful company
• Consolidated sales revenues of 86.1 million euros (H1 2018: 41.4 million euros)
• Gross margin at 9.2 million euros, gross profit at 6.1 million euros
• Earnings still negative with -1.5 million euros (EBITDA) due to ongoing integration process
• Earnings improvement in the second half of the year expected

Karlsruhe/Paris, October 31, 2019 – Nexway AG, a leading ecommerce and payment player, has more than doubled its business volume in the first half of 2019. Sales revenues amounted to 86.1 million euros, compared to 41.4 million euros in the first six months of 2018. The increase is largely attributable to the first-time consolidation of Nexway Group AG and its 100% owned French subsidiary Nexway SAS (“Nexway Group”), following the acquisition by Nexway AG (former asknet AG). As the consolidation occurred on January 31, 2019, Nexway Group January 2019 figures are not included.

On a like-for-like comparison with restated pro-forma accounts *, sales revenues decreased in the first six months by 12.9% compared to the same period last year. The decrease was mainly due to the decision of the management to streamline parts of the client portfolio and shifting focus and resources to higher margin long term customers, both existing and new ones

Gross profit (defined as sales minus cost of goods/merchandise sold and cost of services) increased from 4.3 million euros to 6.1 million euros. The gross margin (defined as sales minus cost of goods/merchandise purchased) stood at 9.2 million euros in the reporting period. Before deduction of January 2019 results of Nexway Group, Nexway AG reported in the first six months of 2019 consolidated sales revenues of 95.1 million euros and a gross margin of 9.7 million euros.

As expected, on an EBITDA basis, Nexway AG remained at loss with -1.5 million euros in the first six months 2019. Main factors were several one-time charges for the integration of the Nexway SAS Group as well as restructuring costs. Due to the amortization of the consolidation goodwill, depreciations stood at 3,0 million euros. The net result for the period was -5,1 million euros (H1 2018: -0.5 million euros, Pro-forma: 2.7 million euros). For the second half of 2019, the company expects an improvement of the EBITDA due to economies of scale and cost savings.

The consolidated balance sheet of Nexway AG rose from 11.0 million euros to 46.4 million euros, which is also mainly attributable to the initial consolidation of the Nexway Group. On the assets side, the first-time consolidation of the goodwill of the Nexway Group was a key factor, amounting to 18.1 million euros on the balance sheet date. Internally generated intangible assets from capitalized development costs rose from 1.4 million euros to 7.2 million euros. In total, non-current assets increased from 2.3 million euros to 26.2 million euros as of June 30, 2019. Current assets, in particular for trade receivables and other assets, rose from a total of 4.0 million euros to 15.6 million euros.

Equity fell from 1.3 million euros to -0.8 million euros as a result of the negative consolidated balance sheet result of 5.1 million euros. The increase in liabilities from 7.1 million euros to 45.8 million euros is mainly due to a higher business volume, which is reflected in an increase in trade payables from 5.2 million euros to 34.1 million euros. Loans received from third parties also increased sharply due to the consolidation of an external bond of Nexway SAS in the amount of 7.5 million euros. It is the only significant external debt of Nexway, maturing in 2023 and carrying 6.5% annual interest. The company has the option to request further credit lines in the amount of 4.5 million euros, thus giving access to further liquidity if needed.

During the first half-year 2019, Nexway employed an average number of 181 employees (H1 2018: 87 employees).

Victor Iezuitov, CEO of Nexway AG: “ The merge of Nexway Group AG (and its 100-% subsidiary Nexway SAS) and asknet AG has created a new powerful company in many terms, be it technology, business volume or visibility. In the months after the acquisition we focused on unifying and streamlining the operations of this new group. The overall aim was to realize synergies, harmonize the operations and work on a common global market positioning. Among other initiatives and as a first step towards integration and repositioning, we carried out a rebranding thus bringing the operations of both companies together under one roof. For the second half we expect economies of scales and synergies to start to make a positive impact on profitability.”

Against the background of the expected business development in the last quarter of 2019, Nexway AG lowered its guidance for the full year. Nexway AG continues to expect an improvement of consolidated EBITDA for the second half of 2019. Contrary to previous expectations, however, the improvement will not be sufficient to achieve the slightly positive EBITDA previously forecast on a full-year basis. The company now expects an EBITDA between -2.0 million euros and -2.8 million euros for 2019. Regarding the top line, Nexway AG now expects consolidated sales revenues between 180 and 200 million euros and a gross margin between 14 and 18 million euros, both before deduction of January 2019 figures of Nexway Group AG and its 100-% subsidiary Nexway SAS, given that it had been consolidated as of January 31, 2019. Originally the company had forecast consolidated sales revenues of over 200 million euros and a gross margin of more than 20 million euros (including capitalized development cost and both before deduction of January 2019 figures of Nexway Group AG and its 100-% subsidiary Nexway SAS).

The full financial report for the six months period ending June 30, 2019 is available on the company’s website at www.nexway.com/financial-reports/.

About Nexway
Nexway AG (formerly asknet AG, www.nexway.com) is a leading ecommerce and payment player. Combining technology and managed services, Nexway offers solutions to software, video games, services and retail companies to run and maximize their online sales worldwide. Nexway clients leverage subscription models, local payment methods, fraud prevention, partner & reseller management and customer insights to transform their purchasing experience and grow their business. The company also provides software procurement and distribution services to European academic institutions, students and alumni. The company is based in Karlsruhe and listed on the Frankfurt Stock exchange (Ticker: NWAY, ISIN: DE000A2E3707).

Media Contact
Florian Kirchmann
+49 221 9140-97 0
investors@nexway.com