MuM kicked things off with a report of solid revenue growth in Q2, with total revenue up 8% to €49 million. For the first six months of 2011, revenue was up 11% to €108 million while operating income was €1.2 million, up from a loss of €0.2 million a year ago. CEO Adi Drotleff said that “business development during the first six months was very satisfactory and fully within the estimated range in both sales and operating profit."
As a quick refresher, MuM has been transitioning its business to favor value-added sales (rather than pure distribution) because these sales typically have higher margins and establish stronger relationships with customers. To accomplish this, MuM has been acquiring European VARs to broaden its network and areas of expertise. The company reports that it now has 40 locations in Germany, Austria and Switzerland and that it “now has nearly full area coverage” with its VAR business, in addition to its distribution and software sales in 16 European countries and software sales-only offices in Japan, APAC and USA.
The VAR business reported revenue of €15.8 million for Q2 leading to a six month total of €33.4 million, an increase of 23%. MuM reports that its VAR segment has been profitable for the last three quarters and that its 2.9% operating margin is at the upper end of the 2% to 3% target the company had set for 2011.
The company’s software business had an “extraordinary second quarter”, with revenue of €7.6 million leading to H1 revenue of €14.4 million, up 18% from last year. The company said in its half-year report that “the strategy of past years to invest strongly in development (R&D expenses were increased 16% per annum from €3.06 million in 2009 to €4.10 million in 2011) slightly begins to pay back.” That’s a 34% increase in R&D over 2 years. MuM currently invests at a rate of about 13% of (software) revenue, a proportion that is comparable to most PLM companies and higher than some.
The distribution business saw a 4% sales increase in H1 2011, with Q2 revenue of €25.7 million — down sharply down from Q1’s €34.7 million. However, MuM reports that the business continues to perform at an “orderly” margin comparable to previous periods.
In all, things appear to be going to plan. MuM continues on its acquisition strategy and reaffirmed its earlier guidance, writing in the half-year report that it expects sales of approximately €220 million, an increase of 12% to 13%.
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