ICT Group N.V.: Q3 results show continued trend in revenue growth and improvement of profitability

Key developments: Q3 2016

  • Revenue in Q3 up 23% at € 21.0 million (Q3 2015: € 17.1 million), organic revenue growth 5%.
  • EBITDA in Q3 amounted to € 2.1 million (Q3 2015: € 1.7 million).
  • Acquisition of Nozhup completed on 6 September 2016.

Year to date 2016

  • In the first nine months of 2016 revenue was up 22% at € 63.1 million (YTD 2015: € 51.7 million), organic revenue growth 7%.
  • EBITDA in the first nine months amounted to € 6.3 million (YTD 2015: € 4.8 million), an increase of 30%.
  • ICT confirms its expectation of an improvement in EBITDA between 25%-35% for the full year 2016 compared to 2015.

 Key figures

(in € millions) Q3 2016 Q3 2015 Δ YTD 2016 YTD 2015 Δ
Revenue 21.0 17.1 23 % 63.1 51.7 22 %
EBITDA 2.1 1.7 27 % 6.3 4.8 30 %

Jos Blejie, CEO of ICT Group N.V.: “The positive trend of the first half of 2016 continued in the third quarter. Our revenue development is strong, both organically and through our successful acquisition strategy, with all subsidiaries contributing to the growth. Our latest acquisition, Nozhup, strengthens our position in Industrial Automation and is consolidated from 1 September onwards. Our profitability continues to improve. Furthermore, we have won a number of important contracts in the past months. Based on these developments we confirm our expectation of an improvement in EBITDA between 25 and 35% for the full year 2016.” Financial developments Revenue in the third quarter of 2016 increased to € 21.0 million compared to € 17.1 million in the third quarter of 2015. Revenue grew 5% organically in the, due to the holiday season traditionally weaker third quarter. All ICT subsidiaries contributed to this growth. Revenue over the first nine months of the year amounted to € 63.1 million compared to € 51.7 million last year, supported by an organic growth of 7%. Within ICT Netherlands, productivity levels in the third quarter have been comparable to the same quarter last year, but ICT increased average rates and achieved better project results, which led to an increase in revenue. Revenue of Strypes Bulgaria increased compared to Q3 last year. Also the other recent acquisitions performed well, in line with expectations. Nozhup was included in the results for the first time, for one month. EBITDA amounted to € 2.1 million in the third quarter, compared to € 1.7 million in the same period of 2015. In the first nine months of 2016 EBITDA improved to € 6.3 million (first nine months 2015: € 4.8 million). The recent acquisitions, increased number of staff, slightly higher average rates and good project results, all contributed to this improvement. At the same time the double digit growth in Bulgaria was supported by the continued investments in the quality controls and professionalization of the organisation. Acquisition of Nozhup ICT has completed the purchase of 100% of the shares of Nozhup as of 6 September 2016. With this acquisition ICT gains significant scale in the industrial automation market. At the same time, it considerably widens ICT’s customer base and scope of activities in this market. The purchase consideration comprised a cash payment and an amount in ICT shares. The share capital was diluted with 443,058 shares as from 9 September 2016. On a full year basis, the acquisition will substantially enhance the earnings per share. Extended credit facility In anticipation of the acquisition of Nozhup, ICT has extended its acquisition credit facility with Rabobank in July 2016 from € 6 million to € 11 million. Additionally, ICT has increased its working capital credit facility from € 6 million to € 10 million. The conditions of the facilities remained unchanged. Outlook ICT continues to aim for organic growth in combination with growth through acquisitions. ICT will focus on further leveraging its recent acquisitions. Given the strategic progress made and its acquisitions, ICT confirms its expectation for the full year 2016 of an improvement in EBITDA between 25%-35% compared to the full year 2015.

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