Q3 2019 results impacted by weak market developments

Key developments:

Q3 2019

  • Revenue grew 13% to € 35.9 million (Q3 2018: € 31.8 million), organic revenue growth came in at 2%
  • EBITDA (Pre-IFRS 16) was down to € 2.0 million (Q3 2018: € 3.1 million), mainly impacted by weak market conditions in the industry

9M 2019

  • Revenue rose 25% to € 115.7 million (9M 2018: € 92.7 million), organic revenue growth of 7%.
  • Underlying EBITDA (Pre-IFRS 16) amounted € 9.0 million (9M 2018: € 8.9 million)
  • EBITDA (Pre-IFRS 16) amounted € 8.4 million (9M 2018: € 8.1 million)


  • FY 2019 EBITDA (Pre-IFRS 16) forecast at between € 10 and € 12 million

Key figures

Jos Blejie, CEO of ICT Group N.V.: “After a strong first half of 2019, the third quarter was disappointing for ICT Group. In our business the third quarter is traditionally a quarter with uncertainties due to the summer breaks. Although we anticipated the high organic growth levels to level off in the second half of the year, we did not foresee the rate of deterioration in market conditions. Clients terminated a number of projects unexpectedly, impacting productivity in the third quarter. At the same time, we see increased momentum for our Software as a Service offerings, and we continue to invest in these innovative solutions. These upfront outlays do however impact the short term profitability. We expect the situation of the third quarter to stabilize in the fourth quarter. We have taken the necessary measures and have trust in the recovery of our margins. The anticipated lower productivity in the traditionally strong fourth quarter will however impact EBITDA in the fourth quarter. We therefore expect EBITDA for the full year 2019 to come in at between €10 to €12 million.”

Financial developments

In the third quarter of 2019 revenue increased by 13% to € 35.9 million from € 31.8 million in the same period last year, fully driven by the acquisitions of Additude and BNV in Q1 2019. Organically, revenue growth was limited to 2% in the third quarter, mainly due to the market developments. For the first nine months of the year revenue amounted to € 115.7 million (9M 2018: € 92.7 million). All segments showed growth over the 9 months period compared to last year. Organically, revenue rose 7% year-to-date.

EBITDA decreased to € 2.0 million in the third quarter of 2019 compared to 3.1 million in the same period in 2018. A decline in productivity was the main reason for this decrease.

In the first nine months of 2019 EBITDA was slightly higher in absolute terms compared to last year. The EBITDA margin came in at 7.3% year-to-date (9M 2018: 8.8%). The costs related to strategic initiatives and the realisation of acquisitions and partnerships in 9M 2019 were higher at € 0.6 million (9M 2018: € 0.1 million). In 2018, following the acquisition of InTraffic, one-off costs of € 0.8 million were incurred as contract termination fees.

In the Netherlands performance of the segment Engineering R&D was affected by the termination of a number of projects. The Infra & Mobility segment experienced lower productivity in the Energy activities and results were also impacted by the upfront outlays in Mobility as a Service. The Swedish activities (Additude) reported lower than anticipated results due to low productivity. In Bulgaria, the nearshoring entity Strypes realised healthy growth in both revenue and EBITDA, mainly driven by ongoing demand for nearshoring services.


ICT remains fully focused on profitable growth and will continue to execute its buy-and-build strategy; combining healthy organic growth with selective acquisition opportunities. Given the developments this third quarter, the main focus on the short term will be on improving productivity. We have taken necessary measures and we are confident that our margins will recover. For the long term, ICT is fully committed to deliver on its objective of increasing annual revenue to between € 200 and € 230 million by 2022, with a targeted EBITDA margin between 10 and 12%.

We expect stabilisation of the productivity levels though at a lower level than traditionally in fourth quarters. As a result we anticipate a lower EBITDA in the second half of the year compared to the first half. For the full year 2019 this is expected to result in an EBITDA between € 10 and 12 million.

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