DGAP-News: PSI Software AG

Thanks to the Energy Transition and Shift in Transport Policy, PSI Group Continues to Increase Sales and Profits after Nine Months
- New orders increase by 10 % to 147 million euros
- EBIT increased by 18 % to 8.2 million euros
- Accelerated growth in energy and industry segments

Berlin - PSI Group increased new orders by 10 % to 147 million euros in the first nine months of the year (30 Sept. 2016: 134 million euros), the order backlog on 30 Sept. 2017 was, with 141 million euros, 7 % above the figure for the previous year (30 Sept. 2016: 132 million euros). The group sales increased as a result of growth in the industry and energy business by 4 % to 133.1 million euros (30 Sept. 2017: 127.9 million euros). The EBIT increased by 18 % to 8.2 million euros (30 Sept. 2016: 6.9 million euros), the group net result improved by 17 % to 4.6 million euros (30 Sept. 2016: 3.9 million euros).

Energy Management (energy networks, energy trading) achieved 5 % higher sales of 50.8 million euros (30 Sept. 2016: 48.3 million euros) in the first nine months, despite it being a regulatory "shadow year". The EBIT for the segment improved by 21 % to 4.2 million euros compared to the same period in the previous year (30 Sept. 2016: 3.5 million euros). Market leadership in the field of sector coupling (connection of electricity transition with the beginning of the transportation shift/electro-mobility and heat transition) has continued with another major contract. The multi-tenancy capability, proven in a major project, has resulted in new business potential for major network operators that are now able to offer smaller network operators "grid management as a service". Network operators are also joining together in cooperatives on the basis of this new technology. The Electrical Grid business has also won additional important contracts for upgrading and expansion and arranged a partnership in the North American market where the first two projects have already been implemented. The Gas and Oil business won an important new European customer in the field of gas transportation, the Energy Trading business improved both sales and results in the third quarter. In eight publically supported research projects, an algorithm has been developed to the point of being marketable. The algorithm aids in securing the dynamic stability of Germany's grids with the continued exit from nuclear power and fossil fuel power plants.

Sales in Production Management (raw materials, industry, logistics) increased by 7 % to 67.2 million euros (30 Sept. 2016: 63.0 million euros) during the first nine months. The EBIT was increased by 6 % to 5.5 million euros (30 Sept. 2016: 5.2 million euros). The business continued to profit from the very strong growth in the Internet order logistics, the establishment of additional electric-vehicle production plants and the end of the investment backlog in the steel industry. As expected, the Metals business obtained major contracts from regular Chinese customers in the third quarter. With the successful migration of all products in the business to the new group java interface, PSI has been demonstrating increasing successes in sales, whereby the individual software products are ever more often being integrated into cross-corporate process chains. This also applies for the transportation and warehousing software on the java group platform for which one of Germany's largest logistics companies has decided and begun a series of major projects with an initial order.

In Infrastructure Management (transportation and safety) sales decreased by 9 % to 15.0 million euros (30 Sept. 2016: 16.5 million euros), the EBIT improved to -0.5 million euros (30 Sept. 2016: -0.9 million euros). The EBIT for the business was encumbered by almost one million euros in the third quarter by an out-of-court settlement in the framework of the collection of key payments from major market entry projects. The costs of the closure of the Chennai site in connection with capacity adjustments of the substation production impacted negatively on the earnings for the quarter. By contrast, the training of information scientists at the Malaysia site moved ahead well with the completion of two smart city projects and a number of IEC 61850 substation SCADA projects. The two-shifts-per-day development and testing procedure established on the basis of the group technology platform is now being extended to other tasks. Now that solar energy is becoming increasingly marketable, additional countries offer opportunities for PSI. More and more countries are extensively expanding solar energy, primarily for economic reasons and less so for reasons of climate protection.

The number of employees in the Group on 30 Sept. 2017 increased to 1,650 (30 Sept. 2016: 1,632). As in the first six months, the growth initiative in Europe contrasted with the capacity adjustments in Southeast Asia's hardware business. The cash flow from operations was marked primarily by changes in the working capital and decreased to 0.6 million euros (30 Sept. 2016: 4.2 million euros). With 39.8 million euros, liquidity was still 11 % above the level of the previous year (30 Sept. 2016: 35.9 million euros), despite the higher dividend payment.

Technologically, the group technology platform will be expanded in the next two quarters to support progressive web applications that allow for continued functionality with the aid of Angular 4, even when mobile connections are weak or even interrupted. A first major industrial customer in Mexico has already been successfully equipped. This technology is not only advantageous for mobile applications, but also within the company as a so-called thin-client web technology. This makes it possible to significantly reduce the IT department's maintenance costs for service to working places, thanks to private clouds. PSI realized this using the WORA principle (write once, run anywhere) so that the unique PSI Click Design user interface design can be used for web applications. In the fourth quarter, PSI will set up the hosting of an initial software-as-a-service for one of the first major high-availability cloud customers.

In general, the growing demand has continued in all the businesses. In the energy business, the decentralised generation of energy and electro-mobility have increased the need for more flexibility and intelligent, decentralised control of the distribution grids. In addition, the major German utilities, following company splits and restructurings, are beginning to focus on new, digital business models and areas of growth.

Despite the encumbrances from the reduction of market risks in Asia, the management continues to be optimistic that the EBIT target corridor of 12 to 15 million euros will be met in the middle or above. After major investments in technology, great attention is now being paid on driving growth. Should the new German government accelerate the shift in transport policy and the exit from coal, the strain on the electricity girds will continue to increase, which improves the long-term business prospects for PSI.

On the basis of its own software products, PSI AG develops and integrates complete solutions for energy management (gas, oil, electricity, heat, energy trading), production management (mining, metals, automotive, mechanical engineering, logistics) and infrastructure management for transport and safety. PSI was founded in 1969 and employs 1,650 persons worldwide. www.psi.de

Contact:

PSI AG
Karsten Pierschke
Head of Investor Relations and
Corporate Communication
Dircksenstraße 42-44
10178 Berlin
Germany

Phone +49 30 2801-2727
Fax +49 30 2801-1000
Email: KPierschke@psi.de