Results from Globo (LON:GBO) revealed not only a strong 2013, but that performance momentum has continued into 2014.
Sarah Lowther spoke to Globo’s chief executive, Costis Papadimitrakopoulos, about the results and what has been behind the growth story at the mobile business software specialist.
Sarah: Costis, 2013 was the second year of positive free cash flow for Globo. So, what has changed over the last two years, and does this represent a turning point in the evolution of your company?
Costis: Yes. I think that 2013 has been an excellent year in all different aspects. We had an excellent financial performance, positive free cash flow and a resulting robust balance sheet.
We made an important acquisition in the US. We developed new products. We actually achieved significant partnerships. At the same time, we grew our revenues by 55% to 71.5 million. More significantly, the revenue from GO!Enterprise Mobility Solution has grown almost by 150% to 30 million, and at the same time, our CitronGO! And GO!Social revenue has maintained its growth pace of 20% to reach 34.8 million.
Sarah: You have got a strong balance sheet and a history of making selective acquisitions. Now, when buying a company, what is more significant for you? Is it the technology or the customer base that you are acquiring?
Costis: I think that it is a combination of three main items. First of all, it is people, because all technology companies are related to their employees and to their intellectual property of them. So, as long as the company has great people, it obviously becomes a significant target for us.
Now, the two other elements which come into place are technologies and customers. In the case of Notify, the combination of all three came together. So, we acquired a company that already had a very robust technology for mobile device management, which is now part of GO!Enterprise Solution. We acquired clientele, revenues and profits.
Last, but not least, we now have expanded our US presence by an additional 56 employees, which were a team before, so they were working. It is very important that they were a team, and now they are global. Obviously, since then, we have been investing heavily in expanding this team to become one of the biggest operation centres of Globo globally.
Sarah: These sorts of growth numbers, in terms of earnings, clients, expansion, are sure to make people sit up and take notice, so what are Globo’s competitive advantages, in your view?
Costis: Globo has many different competitive advantages. First of all … from a purely financial perspective, it has a very strong business based on fundamentals, and obviously being a listed company, carries obligations and regulation that we need to comply with. I think that this has matured us enough to be able to manage growth and to look for further growth more aggressively.
Most of our competitors, they are private, VC [venture capital] funded firms. They are still on a start-up situation despite their big valuations. I think that they need to walk those extra miles to get to our level of corporate governance and understanding of being a mature company.
Secondly, having been a company of 17 years old, since the inception, we have carried and accumulated IPR [intellectual property rights] through different investments, and this gives us a significant economy of scale and understanding of evolution in markets.
Since 1997, when I founded the company, there have been many technological cycles which the company has actually addressed, and has actually taken advantage of. Obviously, these add significantly to our execution, understanding and performance.
Third, is the fact that Globo now has a very, very big and significant product line. Our CitronGO! Business, which has been started since 2010, is still performing and is generating cash. So, we obviously diversified in emerging markets. It is a promised land for all the Western European countries, and we are already there.
At the other end, GO!Enterprise, which is our flagship product nowadays, is addressing two significant areas. The first one is the Enterprise Mobility Management space, which is actually controlling the security and enablement of mobile workers, which is very important.
At the other end, it has the mobile application development platform, which is truly unique in the sense that it can help organisations develop applications for all different devices, in one place, so saves a significant amount of time and investment.
So, the combination of all these, in addition to a growing market, in enterprise, mobility and Smartphone area, is actually what Globo is about. I think that the prospects are very, very positive.