M+M Q1 on target, too

Mensch und Maschine Software (M+M) announced Q1 results today that show that its diversification strategy is working: building up a VAR channel and focusing on the “value add” component is paying off. First quarter revenue was up 14% to €59 million, as all parts of the business performed well. M+M Software, the company’s proprietary software business saw revenue increase 13% to €6.81 million; the VAR business reported revenue of nearly €18 million, up 30% and the distribution business saw revenue increase almost 8% to €35 million. This split is slightly higher in distribution that was the case for 2010 overall, but is likely due to the seasonality in M+M’s proprietary business — weighted towards Q4. CEO Adi Drotleff said in a prepared statement (my translation), “These results makes us optimistic that the target ranges for fiscal year 2011 should be achievable.” The company reaffirmed its prior forecast for 2011, a path that would see it return to a pre-crisis levels. M+M targets topline growth of 10% to 15% per year, or €220 million in 2011 and €250 million in 2012, with the high margins in Software and VAR segments enabling disproportionate earnings growth.