Mensch und Maschine Software SE (DE:MUMG) (M+M) has reported strong revenue growth for H118, with both divisions reporting double-digit growth on a year-on-year basis. Group EBITDA margins expanded over the same period, with better profitability for both businesses. Management has maintained its growth and profitability guidance for FY18, underpinned by the strong H118 results.
Strong performance continues into Q2
M+M reported H118 revenue growth of 13% y-o-y, with Q1 growth of 6.8% y-o-y accelerating to 20.3% in Q218. Both divisions contributed to growth, confirming that the VAR business is back on track now that the demand fluctuations related to the switch to subscription licensing for Autodesk (NASDAQ:ADSK) software are substantially over. Both divisions expanded EBITDA margins, resulting in a 1.6pp y-o-y increase in group EBITDA margin to 12.5% in H118. The Software business is now generating EBITDA margins ahead of its 25% target (Q1 29.5%, Q2 27.0%), and the VAR business is making steady progress towards its 10% target (5.9% in H118 vs 4.7% in H117; both Q1 and Q2 margins were higher y-o-y). To make further progress towards this target, we expect the VAR business to focus on increasing the level of value-added services and proprietary software that it can provide to its Autodesk customer base.
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