NFON AG: Business development in 2020 highlights future potential

  • NFON grows as expected in 2020 despite the difficult economic conditions
  • Recurring revenues increase significantly by 24%
  • At 88%, recurring revenues accounted for a very high share of total revenue
  • Plus 75,000 installed seats (+17% compared to the previous year)
  • Important milestone reached in an installed base of over 500,000 seats
  • EBITDA increase of around EUR 9 million shows high earnings potential
  • Forecast for 2021 foresees continuation of the growth course

Munich, 4 March 2021 – NFON AG (together with its subsidiaries “NFON” or the “Company”), the only pan-European cloud PBX (telephone system from the cloud) provider, continued to grow in financial year 2020 on the basis of its preliminary figures. The Company not only recorded a significant increase in recurring revenues, but also a clearly positive result. The extremely positive development in 2020, an exceptional year marked by Covid-19, impressively underscores that NFON is positioned just right in the European market for business communication with its cloud-based product portfolio.

Based on preliminary figures, NFON 2020 significantly increased its recurring revenues by 23.6% to EUR 59.4 million (2019: EUR 48.1 million). Total revenue increased by 18.4% to EUR 67.6 million (2019: EUR 57.1 million). This further increased the share of recurring revenues in total revenue to 87.8% (2019: 84.1%). The number of extensions (seats) installed at customers’ premises increased by 75,080 to 524,791, an increase of 16.7% compared to the previous year’s reporting date (31 December 2019: 449,711). This development is all the more remarkable as, on the one hand, the general economic uncertainties in 2020 had led to investment restraint among companies. On the other hand, markets such as Spain, France, Italy and the UK, where NFON is seeking to drive sales activities in line with its strategy, suffered greatly from the pandemic-related lockdown measures. Average revenue per user (blended ARPU) increased to EUR 9.77 in the 2020 reporting period (2019: EUR 9.64) and is mainly due to increasing home related work activities and the resulting higher volume of voice minutes. The increased blended ARPU combined with the significantly lower expenses for travel and marketing activities, for example, compared to the previous year, had a clearly positive impact on the development of earnings. Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 2.3 million (2019: EUR -7.0 million). Adjusted EBITDA even improved to EUR 3.5 million (2019: EUR -5.1 million).

“NFON continues to benefit from the increasing digitisation of business communication with Cloudya, its PBX from the cloud. The market for cloud communication is undergoing a structural change. 2020 was a catalyst for this development. Flexible working is seen as the new normal,” explains Dr. Klaus von Rottkay, Chief Executive Officer of NFON AG. “This development is also confirmed by the latest surveys[1]: 75% of employees worldwide concur with this statement. In Germany alone, 54% of companies are planning to introduce remote working on a permanent basis. Accordingly, the importance of flexible, location-independent and effective communication and collaboration within companies and organisations is increasing rapidly.”

The pandemic-related lockdown measures in Europe and the related uncertainty in the second half of 2020 made it difficult to gain new seats – this still applies in the current first quarter of 2021. Nevertheless, the latest growth in seats more than doubled the total number of seats since the beginning of 2018. With more than 500,000 seats, NFON has an excellent basis for future growth. Klaus von Rottkay explains further: “We will invest more again in 2021 and thus set the course for further growth. We are intensifying our sales activities in Europe via our network of more than 2,700 partners and intend to continuously acquire more partners for NFON. At the same time, we plan to significantly ramp up our marketing activities again in order to increase the number of seats in 2021. And, of course, we will continue to drive the further development of our product portfolio.”

For 2021 as a whole, taking into account the lockdown measures that will continue into the second quarter of 2021 and the associated investment restraint on the part of customers as well as the corresponding effects on seat growth in the first half of 2021, the Management Board forecasts a further increase in seats of between 15% and 17%. This equates to an increase of up to 89,000 seats. Given the lower seat growth during the second half of 2020 and the first half of 2021 due to the pandemic, NFON projects a growth rate of between 14% and 16% in terms of recurring revenues for 2021. Recurring revenues are expected to account for more than 85% of total revenue. The possibilities of acquiring attractive companies in the field of cloud telephony are also being considered on an ongoing basis. The forecast does not include any such acquisitions or new shareholdings.

The fully audited report for financial year 2020 will be available for download from the Investor Relations section of the NFON AG website on Thursday, 15 April 2021.

[1] de.statista.com/statistik/daten/studie/1067502/umfrage/umfrage-zur-flexibilitaet-im-arbeitsleben-in-ausgewaehlten-laendern-weltweit/; www.ifo.de/node/56686

Preliminary results for financial year 2020 at a glance:

 EUR million  2020 2019‌Change in %
‌Total revenue 67.6‌57.1‌18.3%
‌Recurring revenues ‌59.4‌48.123.6%
‌Share of recurring revenues in total revenues 87.8%84.1%
‌Non-recurring revenues ‌8.29.1‌-9.6%
‌Share of non-recurring revenues in total revenues ‌12.2%‌15.9%
‌ARPU blended (EUR)1 ‌9.779.64‌1.3%
‌Growth in seats (31 December) ‌524.791‌449.711‌16.7%
‌EBITDA ‌2.3-7.0‌n/a
‌Adjusted EBITDA2  ‌3.5‌-5.1‌n/a

1 Based on the average number of seats per month in each year
2 Adjusted for the retention bonus, stock options, DTS acquisition expenses and one-time effects
* The figures for the financial year are still preliminary figures

Investor Relations Contact

NFON AG
Sabina Prüser
Head of Investor Relations
+49 89 45300 134
sabina.prueser@nfon.com

Media Contact

NFON AG
Thorsten Wehner
Vice President Public Relations
+49 89 45300 121
thorsten.wehner@nfon.com

About NFON AG

Headquartered in Munich, NFON AG is the only pan-European cloud PBX provider – counting more than 40,000 companies across 15 European countries as its customers. With Cloudya, NFON offers an easy-to-use, independent and reliable solution for advanced cloud business communications. Further premium and industry solutions complete the portfolio in the field of cloud communications. With our intuitive communications solutions, we enable European companies to improve their work a little every single day. NFON is the new freedom in business communication. corporate.nfon.com/de/

Disclaimer

This announcement is not an offer of securities for sale in the United States of America. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act. No public offering of securities of the Company is being made in the United States of America and the information contained herein does not constitute an offering of securities for sale in the United States of America, Canada, Australia, Japan or any other jurisdiction in which such offering would be unlawful. This announcement is not for release, publication or distribution directly or indirectly in or into the United States of America, Australia, Canada, Japan or any other jurisdiction in which the distribution or release would be unlawful or to U.S. persons.

"NFON AG Preliminary Results 2020" on 4 March 2021 10am (CET).

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