PARIS, April 28, 2011 /PRNewswire/ --Hubwoo (Euronext: HBW.NX), a leading global provider of Cloud Procurement solutions powered by SAP® software, today announced financial information for Q1 2011, in accordance with the "European Transparency Obligations Directive" financial disclosure requirements.
Greg Mark, Hubwoo CEO commented: "We are pleased with the level of sales activity and market momentum we are seeing early in 2011. Although our growth, Q1 2010 over Q1 2011, is modest, it is based on a significant repricing of the European legacy customer base. We therefore look forward to the future with longer term contracts based on our current market pricings. This clean slate, along with the strong growth potential from our new SAP and Crossgate sales channels for Hubwoo's Business Network, will allow for more significant growth in the future."
in EUR million
% Q1 Change 2011 / 2010
(Q1 2011 Figures Unaudited)
(*) SaaS is a model of delivering technology where a software solution is hosted ,on-demand, as a service for its customers. Clients do not buy the technology but rather pay a subscription fee to use it.
Q1 2011 revenues showed marginal improvement compared to Q1 2010 (+5%), with the services component up 23%, reflecting improved market conditions for both new customer implementations as well as for incremental services to existing customers.
The marginal increase in overall revenue is primarily due to the impact of our SaaS backlog. Hubwoo started 2011 with a SaaS backlog equivalent to the SaaS backlog at the start of 2010. This is largely due to renewing large legacy contracts down at current market pricing levels. The legacy contracts were from companies that were both shareholders and customers in Hubwoo's past acquisitions. These renegotiations to market levels have been occurring for several years, and are now nearly complete as of the end of 2010.
Several large new customers have signed multi-module contracts with Hubwoo this past quarter, contributing to a solid level of first year SaaS order intake. The impact of these bookings are not reflected in Q1 revenues but, given Hubwoo's subscription model, are expected to provide recurring revenue over multiple years.
Sales activity on services was successful in both the Americas and Europe – due to large services engagements on sourcing, procurement, and supplier enablement projects.
2. General description of the financial situation
Unaudited Q1 estimates on EBITDA confirm again a positive figure and the trend of a solid and scalable cost base on which Hubwoo can build for future growth.
3. Major Q1 2011 events
New Buyer Contracts
Significant new contracts during the quarter included Barclays, Lloyds, Nationwide, Rolls Royce, Shell, Tuv Sud, and United Utilities.
Crossgate and SAP Network Alliance
During the quarter, Hubwoo and Crossgate formalized a global alliance agreement. Under the terms of the alliance agreement, Hubwoo and Crossgate have combined their B2B networks so that enterprises can gain access to hundreds of thousands of active trading partners globally through a single connection. The joint network is certified as a Solution Extension for SAP AG, which means it will be a significant new sales channel for Hubwoo as the network can now be sold by SAP AG's global salesforce.
The Business Network Growth
Supplier community volumes surpassed 200,000 active suppliers at the end of Q1, including the addition of the Crossgate supplier community. Critical mass in suppliers increases business value for buyer customers, as well as provides a longer term basis for incremental network revenue streams.
Update to Board of Directors
Edwin B. Lange has been appointed as a member of the Board of Directors. Lange is currently President and CEO of Equus Advisors LLC, an innovative software and services consulting firm that assists in the acquisition of new customers. Prior to founding Equus in 2010, Lange was a member of SAP's executive management team, most recently as global Chief Customer Office and Executive Vice President, reporting to the current co-CEO of SAP AG, Bill McDermott. In his sixteen years at SAP, Lange held a number of leadership positions with the company including Executive Vice President of Global Alliance Accounts responsible for SAP's strategic global customer segment in the US and Canada. Prior positions with the company included Executive Vice President of Sales and Marketing for the US, Senior Vice President and General Manager for the North American Manufacturing Sector, Senior Vice President for Global Supply Chain Management, Senior Vice President and General Manager for North American Discrete Manufacturing business unit, and Vice President of the US- Midwest Region. Prior to joining SAP, Lange was with Andersen Consulting (now Accenture). Lange currently serves as the Non-Executive Chairman for SmartOps, Inc., an inventory optimization solutions company and is on the Board of Directors for Vendavo, Inc., a pricing management solutions company. Lange is a former Board Member of the National Association of Manufacturers, America's oldest and largest industrial trade association.
"I'm pleased to be joining the Board of Directors of Hubwoo," Mr. Lange stated. "Hubwoo's Cloud Procurement solution coupled with its strong partnership with SAP offers tremendous value for customers. I am looking forward to working with the Hubwoo team in growing our market share in this dynamic market segment."
Banques Populaires Participantions has resigned its seat on the Hubwoo Executive Board.
On 16 February, 2011 Hubwoo launched a capital increase with maintained preferential rights of subscription for its shareholders. Ten (10) new shares were offered for each fifty one (51) existing shares at a unit price of EUR 0.25. The subscription process for the capital increase took place between the 16th of February and the 2nd of March 2011 and resulted in a total demand of around EUR 7.2M which corresponds to a subscription rate of 169%. This over subscription allowed the operation to be extended to EUR 4.25M. This additional capital will allow Hubwoo to execute on its growth plans by accelerating investments in The Business Network, furthering financial rationalization of the cost base, and investing in sales development with specific attention on the European market and new markets in Latin America.
Hubwoo the world's leading provider of on-demand procurement solutions for the SAP community. The Company manages a Business Network with over 200,000 active suppliers and over 150 major international corporations as buyer customers of which 50+ are in the Global 1000. Significant customers include Honeywell, Shell, Evonik, EDF, Nokia, Monsanto, Michelin, Henkel, Statoil, The Hershey Company, CONSOL Energy, EcoPetrol, Carl Zeiss, Burton's Foods, and The Dow Chemical Company. The Company has international offices in Europe, Americas and Asia and is a strategic partner of SAP and IBM.
Listed in Compartment C on the Euronext Paris Eurolist.