Growth slows in 2011: market heading for “important reshuffle”
WeDo Technologies has warned that strong pricing competition from its competitors in the revenue and business assurance software space is likely to drive consolidation in the sector through 2012.
Despite turnover dropping slightly from 2010 the company reported that it had produced “record results” for the financial year 2011, winning six telecom accounts in Central Africa, the Middle East, Asia Pacific, the USA and Eastern Europe (Vodafone Czech Republic).
EBITDA grew 4.3% to €5.6 million in 2011, a slowdown from 20% EBITDA growth in 2010. Total revenues dropped slightly to €46.2 million from €46.8 million in 2010. International revenues (ie business outside WeDo’s home market of Portugal) increased 5.4% and now form over two thirds of the company’s total turnover. The company said it had an order backlog of €33 million.
A WeDo statement said it had achieved its small EBITDA gain and slight revenue decrease against a tough backdrop, with the macro-economic situation impacting the European market especially, and “very aggressive” price competition in the market.
CFO Fernando Videira said that the competitive situation would drive continued consolidation in the sector. “The market endured very aggressive competition based on pricing which is likely to drive an important reshuffle in 2012, impacting some of the key players in the industry,” he commented. Just last week NEC-NetCracker bought the BSS assets of Convergys for $449 million, including its revenue assurance assets.
Nevertheless, WeDo’s results statement said that as over 50% of the addressable telecoms market is still reliant on home-built legacy revenue and business assurance solutions, there are ongoing opportunities for sales of its COTS software.
Recent announcements from WeDo include the 2011 launch of its BASE revenue assurance tool, the RAID Mobile Dashboard for iPhone, and the acquisition of Portuguese software company specialising in the mediation and complex events processing areas. The company also announced its first patent in the revenue assurance and fraud management space in February 2012.
“WeDo Technologies continued to deliver positive, 12 per cent EBITDA levels in 2011, and has an order backlog above €33 million. This was only possible due to very tight management and control across the different areas of the company, combined with a very strong focus among the sales and marketing teams on obtaining win-win projects with our customers and prospects”, commented Videira. “In addition, the company’s growing profitability and the support of its sole shareholder leaves WeDo Technologies and its customers in a positive and sustainable position that will enable continued innovation and value production without disruption. The company believes this combination of strengths has become one of its greatest differentiators in the market.”