Key highlights
Revenue, Underlying Adjusted EBITDA and EPS at the top end of management expectations, driven by:
o Strong performance by the SUSE Product Portfolio where revenues grew by 14.1% on a pro-forma CCY basis (and by 17.8% excluding the impact of the deferred revenue haircut), offset by anticipated reductions in the Micro Focus Portfolio
o Integration benefits resulting in a $42.0m decrease in Adjusted Operating Costs ($34.8m excluding the impact of capitalized R&D)
o Introduction of quarterly rather than annual sales targets is leading to reduced second half weighting of revenues, especially in Host Connectivity
Full year revenue guidance maintained at minus 2% to minus 4% pro-forma CCY
On a CCY basis:
o Total revenues of $604.5m (2014: CCY $192.5m), an increase of 214.0%
o Adjusted EBITDA of $270.6m (2014: CCY $95.1m), an increase of 184.5%
o Underlying Adjusted EBITDA increased by 190.2% to $263.8m (2014: CCY $90.9m), at a margin of 43.6%
On a pro-forma CCY basis to provide a better comparison of performance
o Total revenues of $604.5m (2014: pro-forma CCY $616.6m), a reduction of 2.0%, at the top of management's guidance range of minus 2% to minus 4%, with growth in SUSE subscription and licence revenues largely offsetting declines in maintenance and consultancy revenues
o Adjusted EBITDA of $270.6m (2014: pro-forma CCY $242.6m), an increase of 11.5%
o Underlying Adjusted EBITDA of $263.8m (2014: pro-forma CCY $235.3m), an increase of 12.1%
Growth in Adjusted diluted earnings per share of 25.6% to 74.01 cents (2014: 58.92 cents)***
Strong cash generation in the period
o Cash generated from operations was $162.1m (2014: $68.4m) representing 62.4% (2014: 88.4%) of Adjusted EBITDA less exceptional costs. The decline in the ratio is mainly related to negative working capital impacts of the change in period end for TAG, change in approach to multi-year maintenance deals and cash payments related to FY15 provisions
o Net debt at 31 October 2015 increased to $1,454.3m (30 April 2015: $1,403.5m). Significant items increasing net debt included payment of final dividend of $70.0m, cash restructuring costs of $25.1m, the acquisition of Authasas for $10.0m and seasonal movement in deferred revenues impacting working capital together with the move away from multi-year maintenance contracts
o Net debt to pro-forma Facility EBITDA for 12 month period to 31 October 2015 is a multiple of 2.62 times; medium-term target remains 2.5 times
Proposed interim dividend increased by 10.0% to 16.94 cents per share (2014: 15.40 cents per share)
