ICT Group N.V. (ICT) has signed an agreement as Gold Cloud Partner with Microsoft for an extension of the current Azure Cloud Contract. In addition, ICT has proceeded to purchase Microsoft Surface Devices.
Jos Blejie, CEO ICT Group: “As Technology Solutions Provider, we utilize innovative architectures and services. A partner eco-system is linked with the solutions we have to offer. I am delighted that Microsoft and ICT have renewed and extended their relationship once again.”
Leading smart charging company for electric mobility secures EUR 11 million funding to accelerate international expansion
Sustainable energy company Eneco Group and independent investment fund SET Ventures have both acquired a minority stake in Amsterdam-based GreenFlux Assets BV (“GreenFlux”), as part of a total Series B round of EUR 11M. Existing shareholders BOM Brabant Ventures and ICT Group NV also participated in the round. The investment in a leading enabler of electric driving and smart charging supports Eneco Group’s and SET Ventures’ ambitions to accelerate the energy transition by means of technology.
ICT Group N.V. (ICT) announces that the Annual General Meeting of Shareholders (AGM), which was held today, adopted all proposed resolutions. This included the appointment of Mrs. Gina van der Werf as member of the Supervisory Board of ICT Group. Mr. Jan Sinoo, who was not available for re-appointment, retired as member of the Supervisory Board as per the end of the AGM. After the AGM, the Supervisory Board re-appointed Mr. Jos Blejie and Mr. Jan Willem Wienbelt as member and CEO, respectively CFO of the Executive Board for a period of four years.
In line with the proposal, the AGM approved a dividend of € 0.35 per share for the 2017 financial year. The dividend will be payable, in cash or in shares, on 30 May 2018. ICT will determine the dividend payment in shares one day after the end of the optional period on the basis of the average price of ICT shares during the last five trading days of the optional period, which shall end on 28 May 2018. The ex-dividend date is 11 May 2018.
Revenue in Q1 up 12% to € 28.7 million (Q1 2017: € 25.6 million)
Organic revenue increase of 6%
EBITDA amounted to € 6.5 million, including a one-off accounting gain of
approx. € 3.5 million
Underlying EBITDA increased to € 3.0 million (Q1 2017: € 2.8 million).
Acquisition of NedMobiel and remaining 50% stake in InTraffic completed
(in € millions)
* including a one-off gain of approx. € 3.5 million. This one-off accounting gain is the result of the acquisition of the remaining 50% stake in InTraffic.
Jos Blejie, CEO of ICT Group N.V.:“In the first quarter of 2018 results were in line with expectations, with a good performance of ICT Netherlands. One of the highlights of the first quarter was acquiring full ownership of InTraffic. As wholly owned subsidiary, InTraffic substantially strengthens our position in Smarter Cities from Q2 onwards. We will continue to focus on the further execution of our strategy, aimed at organic growth combined with add-on acquisitions. Considering the performance in this first quarter and the continued positive market trends, we reiterate that we expect a further growth in both revenue and EBITDA for the full year 2018 compared to 2017.”
Revenue increased to € 28.7 million in the first quarter of 2018, compared to € 25.6 million in the first quarter of 2017. Organically, excluding High Tech Solutions (acquired in June 2017) and NedMobiel, revenue grew 6%. InTraffic is consolidated as of 1 April 2018. In the first quarter, InTraffic is still reported as a joint venture.
ICT Netherlands performed well, showing good productivity levels, except for the Healthcare unit, for which a large project ended in 2017. The results of Strypes Bulgaria are somewhat behind compared to last year due to slightly lower productivity in combination with ongoing outlays in quality improvement. In the segment ‘Other’, Raster is experiencing a lack of larger new projects, which is reflected in its results. We anticipate that the challenging Oil & Gas market circumstances will continue in the next two quarters.
EBITDA, excluding the one-off accounting gain, increased to € 3.0 million in the first quarter, compared to € 2.8 million in the same period of 2017.
ICT has made clear choices in terms of growth. ICT focuses on the themes Smarter Industries, Smarter Cities and Smarter Health. Within these themes ICT delivers the highest added value to its customers. Due to the acquisition of NedMobiel, Smarter Cities realised considerable growth. The declining revenue in Smarter Health is a result of flat revenue development at BMA and lower productivity in the ICT Healthcare unit.
Revenue split per theme (in € millions)
On 21 March 2018 ICT completed the acquisition of the remaining 50% of the shares of InTraffic B.V. from former joint venture partner Movares Group B.V. ICT now holds 100% of the shares of InTraffic. The acquisition resulted in a one-off accounting gain of approximately € 3.5 million, mainly related to the revaluation of the 50% stake in InTraffic already held by ICT. Except for the one-off gain, InTraffic is still reported as a joint venture in the first quarter of 2018. The impact of step up accounting and purchase price allocation will be disclosed upon publication of the 2018 half year results.
In January 2018 ICT completed the purchase of 100% of the shares of NedMobiel B.V., a Dutch expert consultancy company for complex infrastructures. This acquisition supports ICT’s transition from a leading software integrator to a total technology and service provider, by increasing revenue from projects as well as from consulting services.
ICT’s management reiterates the outlook given at the announcement of the annual results in March. ICT will continue to focus on growth, preferably organically as well as through acquisitions. The focus in 2018 is on increasing the company’s size in Smarter Cities and Smarter Health. ICT will continue to be disciplined and cautious in its acquisition strategy.
ICT expects its capital expenditures and research & development expenditures to increase in 2018, in line with the increased scale of the company. With these investments ICT creates the right conditions to take additional steps in our transformation into a total solution provider. The battle for talent continues and attracting and retaining the right people remains to be one of our key priorities.
Based on the above, ICT expects a further growth in revenue and EBITDA in 2018 compared to 2017.
Furthermore, today ICT Group N.V. (ICT) has published the convocation for the Annual General Meeting of Shareholders (AGM), including the agenda and the accompanying explanatory notes, on its website (www.ict.nl)
The Annual General Meeting of Shareholders will take place on 9 May 2018, 10:30 CET at Novotel Rotterdam, K.P. van der Mandelelaan 150, Rotterdam.
ICT Group N.V. (ICT) announces that it has completed the purchase of the remaining 50% of the shares of InTraffic B.V. (InTraffic) from former joint venture partner Movares Group B.V. (Movares). ICT now holds 100% of the shares of InTraffic.
The acquisition of InTraffic enables ICT to further expand its position in the strategic ‘Smarter Cities’ theme. It also supports ICT’s strategic objective to become a leading total solutions provider.
InTraffic, located in Nieuwegein, designs and builds applications for Traffic Management, Infrastructure Monitoring and Travel Information. The company was founded in 2003 as a joint venture between ICT and engineering company Movares. With 150 professionals InTraffic generates annual turnover of approximately € 19 million.
InTraffic will be fully consolidated as from 22 March 2018, while ICT’s former 50% stake used to be reported as result from joint ventures. The purchase consideration for 50% of the shares will be paid in cash. Further financial details will not be disclosed.
Integration of acquisitions and continued investments result in a more powerful organisation
Highlights FY 2017
Revenue up 17% to € 105.0 million, 7% organic growth
EBITDA increased 17% to € 12.0 million
Acquisitions of HTS and NedMobiel further strengthen position in Smarter Industries respectively Smarter Cities
The net result came in at € 5.2 million, compared to € 5.0 million in 2016 that included a one-off gain of € 0.8 million
Proposed dividend of € 0.35 per share for the year 2017
Highlights Q4 2017
Revenue up 7% to € 28.5 million, EBITDA realised at € 4.2 million (Q4 2016: € 4.0 million)
Organically, revenue growth was in line with the full year growth
ICT expects a further growth in revenue and EBITDA for 2018 compared to 2017
Jos Blejie, CEO of ICT Group N.V.:“We successfully took ICT Group to the next level in 2017. Both in terms of scale, as we surpassed the milestones of 1,000 employees and € 100 million in revenue, but even more so in terms of our readiness for the future. By decisively embarking on our strategic road map for growth, we once again delivered on our promises. We recorded sustainable levels of growth, while making the world a little smarter every day. The full integration of Nozhup and HTS resulted in a major step forward in our position in the industry and vital infrastructure sectors. The integration, combined with continued investments in the organisation, led to a more powerful organisation. The rapid pace of technological developments requires a certain critical mass to operate at the forefront of these developments. This is why growth is once again our key objective for 2018. Organic growth remains our main growth driver and we will also continue our buy and build strategy.”
Progress in 2017
In 2017, ICT passed the milestone of 1,000 employees as a result of acquisitions, hires and a modest attrition rate. In an employment market characterised by an ever-growing shortage of IT talents, ICT’s efforts to have an appealing profile as an employer bear fruit as the company scored well in terms of attracting and retaining talented people in 2017.
In 2017, ICT prioritised the integration of the acquisitions made over the previous year, to safeguard a proper basis for the consolidation of future potential, without losing focus on driving organic growth. ICT fully integrated Nozhup, which was acquired in September 2016. With the acquisition of Nozhup, ICT gained significant scale in its activities in the industrial automation market, and also widened its customer base in this market. The integration of Nozhup enabled ICT to move further up in the value chain.
In June 2017, ICT acquired High Tech Solutions B.V., an industrial automation project and services provider, employing 25 highly educated professionals. HTS delivers consultancy services in various markets within the domain of Smarter Industries. In November 2017, ICT signed a letter of intent to acquire 100% of the shares of NedMobiel B.V., a Dutch expert consultancy company for complex infrastructures, such as tunnels, bridges, water locks, motorways and mobility solutions. The fields of expertise of NedMobiel include (tunnel) safety, asset management and project management.
A key strategic theme, interwoven with all other key trends throughout ICT’s activities, is digital transformation. In 2017, ICT has therefore set up a dedicated Digital Transformation Unit, a team that works across all sectors and industries. The combination of profound Digital Transformation expertise and the deep knowledge of those industries provides ICT with a unique proposition.
Focus in 2018
In 2018, ICT will continue to focus on the further execution of this strategy, aimed at organic growth combined with add-on acquisitions.
ICT aims to grow organically by 5% per annum. ICT’s performance in the last four years demonstrates its ability to deliver on this target. As the company has clearly achieved a substantial position in Smarter Industries, fuelled in part by the acquisition of Nozhup, the focus of the acquisition strategy in 2018 will be increasing its size in Smarter Cities and Smarter Health. ICT will continue to be disciplined in its acquisition strategy.
Further expansion of the digital transformation activities will also be a key priority for 2018, aimed at building more innovative solutions in-house. ICT remains focused on creating all the right conditions to take further steps in the transformation into a total solutions provider.
Notes to the results
In 2017, ICT Group’s revenue came in at € 105.0 million, 17% higher than the € 89.7 million reported in 2016. Organically, revenue increased by 7%. Acquisitions accounted for 10% of ICT Group’s revenue growth. Organic growth was driven mainly by the increase in the number of FTEs, higher average rates and improvements in a number of markets. Added value increased by 18% to € 93.4 million in 2017.
Revenue at ICT Netherlands increased by 18% to € 81.3 million in 2017 from € 69.0 million in the previous year. Nozhup, which ICT acquired in September 2016, and fully integrated within ICT Netherlands in the first half of 2017, was the main contributor to this increase. Productivity levels were in line with last year. The average tariff increase was in line with the average salary increase.
Strypes Bulgaria (“ICT Nearshoring”) reported a 27% increase in revenue to € 9.6 million in 2017, from
€ 7.6 million in 2016. This increase was recorded at both existing and new clients.
The segment ‘Other’ recorded revenues of € 16.4 million in 2017 (2016: € 14.3 million). The slow start of Improve was balanced by its recovery in the second half and the good start to the year for Raster was offset by a more moderate second half. In 2017, BMA benefited from the delayed launch of a new generation of foetal heart monitors, which resulted in a substantial increase in revenue.
Personnel costs increased to € 62.5 million (2016: € 52.0 million), as a result of the marked increase in the number of employees and an increase in salaries. Other operating expenses increased by 11%, as a result of recent acquisitions and higher costs for recruitment, office accommodation and a further professionalization of the organisation. The costs related to strategic initiatives and the realisation of acquisitions and partnerships amounted to € 0.2 million (2016: € 0.5 million).
EBITDA for the full year 2017 increased by 17% to € 12.0 million, compared to € 10.3 million in 2016. The increase was mainly due to the higher EBITDA at ICT Netherlands (up 25% to € 8.3 million in 2017, from € 6.6 million in 2016). This was the result of both the organic growth realised and the full year consolidation of Nozhup, plus the consolidation of HTS from June 2017. Strypes Bulgaria recorded higher EBITDA of € 1.9 million (up 12%). In 2017, ICT continued its investments in the organisational effectiveness of Strypes Bulgaria, to safeguard continued and sustainable strong growth of its nearshoring activities. The segment Other recorded EBITDA of € 1.8 million (2016: € 2.0 million). In 2017, Raster experienced margin pressure as a result of the adverse impact of two projects in the second half of 2017, which resulted in substantially lower results. As a result of a good performance in the second half of the year, BMA recorded substantially better results compared to the previous year.
The overall EBITDA margin declined slightly to 11.4% in 2017 from 11.5% in 2016.
Amortisation and depreciation
ICT has valued and is amortising a number of intangible assets, including order backlog, software and the customer relations of its recent acquisitions. Amortisation in 2017 amounted to € 2.7 million (2016:
€ 2.3 million). Depreciation amounted to € 0.9 million in 2017 (2016: € 0.6 million).
Operating profit increased 14% to € 8.4 million in 2017 (2016: € 7.4 million). The operating margin came in at 8.0%, compared with 8.2% in 2016.
The results from joint ventures and associates
The total result from joint ventures and associates amounted to a loss of € 0.4 million (2016: € 0.8 million loss). InTraffic contributed € 0.1 million to the results (2016: € 0.2 million).
In November 2017, the minority stake (25%) in Strypes Nederland B.V. (held by Strypes Bulgaria) was divested to the existing shareholders. This divestment resulted in a book profit of € 0.2 million.
In 2017, LogicNets’ revenue was stable when compared with the previous year. LogicNets did manage to win new reputable customers but the company is still loss-making. ICT still believes in the strategic importance of the platform, but it will take some time before the company realises substantial growth and moves into profit. ICT therefore decided to fully impair its stake in LogicNets in the fourth quarter of 2017. The downward valuation of LogicNets, including our share in its loss for the year, amounted to € 0.5 million.
Interest expenses came in at the same level as last year at € 0.5 million (2016: € 0.5 million).
In 2017, corporate income taxes related to the continuing business operations amounted to € 1.9 million, compared with € 1.7 million taxes in 2016. In 2017 there have been no one-off tax items, whereas in 2016, following the official liquidation of the German activities, taxes from discontinued operations for 2016 amounted to a one-off tax credit of € 0.8 million.
Net profit for the full year 2017 came in at € 5.2 million, a slight increase compared to last year (€ 5.0 million). Excluding the one-off tax gain of € 0.8 million recorded in 2016, net profit was up by 24%. Earnings per share amounted to € 0.56 in 2017 (2016: € 0.56). The number of outstanding ordinary shares had increased to 9,411,301 at year-end 2017 (31 December 2016: 9,288,309), due to shares issued for stock dividend and the employee share participation plan.
Cash flow movement
The cash flow from operating activities amounted to € 7.9 million positive in 2017 (2016: € 5.1 million positive). This increase was the result of the growth of the company and the fact that there were no cash tax payments in 2017, as a result of the tax benefits related to the liquidation of the German activities in December 2016. Working capital increased in line with the increased activity levels, as well as the increased average scope of projects. ICT maintains disciplined working capital management.
Cash outflow on investment activities amounted to € 2.9 million in 2017, compared with € 8.4 million in 2016. The purchase price cash consideration for the acquisition of HTS (€ 1.2 million) and investments in office accommodation (€ 1.3 million) had the largest impact. The divestment of Strypes Netherlands had a positive impact of € 0.7 million.
Cash flow from financing activities amounted to € 4.3 million negative (2016: € 2.2 million positive), as a result of the net effect of dividend paid (€ 2.1 million), the repayments of existing acquisition financing (€ 2.6 million) and the proceeds from the issuance of shares (€ 0.5 million cash inflow).
The net cash flow amounted to € 0.7 million (2016: € 1.1 million negative).
Balance sheet structure
As a result of the net effect of the payment of a dividend of € 2.1 million, and net profit of € 5.2 million, shareholders’ equity increased to € 47.7 million in 2017 (2016: € 43.7 million). The balance sheet total increased to € 81.6 million at year-end 2017, from € 79.2 million at year-end 2016. Solvency (shareholders’ equity/total assets) stood at 58% at year-end 2017, compared with 55% at year-end 2016, which represents a sound financial basis.
ICT proposes a dividend of € 0.35 per share for the 2017 financial year (2016: € 0.33). The dividend payment is subject to the approval of the Annual General Meeting of Shareholders (AGM) to be held on 9 May 2018. For the calculation of the proposed dividend, the realised net profit is adjusted for the non-cash amortisation amounts and the downward valuation of LogicNets. This results in an adjusted net profit for the full year 2017 of € 8.3 million. The proposed dividend of € 0.35 per share represents a pay-out ratio of 40% of the adjusted net profit. ICT offers an option for payment in cash or in shares.
ICT will determine the dividend payment in shares one day after the end of the optional period on the basis of the average price of ICT shares during the last five trading days of the optional period, which shall end on 28 May 2018. The dividend will be payable, in cash or in shares, on 30 June 2018.
On 24 January 2018, ICT completed the purchase of 100% of the shares of NedMobiel B.V. The purchase price amounts to € 2.3 million in cash and a contingent consideration will be payable based on the EBITDA that NedMobiel will achieve in 2018, capped at € 0.5 million.
On 5 February 2018, ICT Group signed a letter of intent with Movares and InTraffic to acquire the remaining 50% of the shares in InTraffic from joint venture partner Movares. Following the acquisition ICT Group will hold 100% of the shares of InTraffic. Acquiring InTraffic in full will allow ICT to strengthen its position in its strategic theme ‘Smarter Cities’.
InTraffic, located in Nieuwegein, designs and builds applications for Public Transport, Infrastructure Monitoring and Travel Information. The company was founded in 2003 as a joint venture between ICT Group and engineering company Movares. InTraffic generates annual turnover of approximately € 19 million. Closing of the transaction is expected end of March 2018. InTraffic will be fully consolidated as from the closing of the transaction, while currently ICT’s 50% stake is reported as ‘result from joint ventures’. The purchase consideration for 50% of the shares will be paid in cash.
Industry growth will be driven by multiple trends in 2018 and beyond, including the advent of Digital Transformation. ICT sees the continued expansion of its digital transformation activities as a key priority for 2018. ICT will focus increasingly on building innovative solutions in-house. Again in 2018, we will work hard to create all the right conditions to take additional steps in our transformation into a total solutions provider.
In 2018, ICT will continue to focus on the growth of the company, both organically and through acquisitions. As the company has clearly achieved a substantial position in Smarter Industries, the focus of our acquisition strategy in 2018 will be on increasing the company’s size in Smarter Cities and Smarter Health. ICT will continue to be disciplined and cautious in its acquisition strategy.
ICT expects its capital expenditures and research & development expenditures to increase in 2018, in line with the increased scale of the company. The battle for talent will continue and attracting and retaining the right people continues to be one of our key priorities.
Based on the above, ICT expects a further growth in revenue and EBITDA in 2018 compared to 2017.
This press release contains forward-looking statements. Forward-looking statements are always based on assumptions and estimates relating to uncertain events over which ICT Group N.V. has no control. They concern, for example, measures taken by the Dutch and other governments, currency movements, price fluctuations, changes in law and regulations, legal precedents and market developments. ICT Group N.V. would like to stress that the contents of this press release are based on the information that is currently available. The reality can always deviate from expectations for the future. ICT Group N.V. has no obligation to update the statements contained in this document, unless required by law.
In this press release, where information has been presented in thousands or millions of units, amounts may have been rounded. Accordingly, totals of columns or rows of numbers in tables or charts may not be equal to the apparent sum of the individual items. Actual numbers may differ from those contained herein due to such rounding.
2017 financial information
The 2017 financial information included in the Extracts from Consolidated Financial Statements attached to this press release is derived from the Annual Report 2017, that has been authorized for issue. The Annual Report has not yet been published by law and still has to be adopted by the Annual General Meeting on 09 May 2018. In accordance with section 393, title 9, book 2 of the Netherlands Civil Code, PricewaterhouseCoopers Accountants N.V. has issued an unqualified auditor’s opinion on the Annual Report.
Annexes: Extracts from Consolidated Financial Statements 2017
– Consolidated statement of comprehensive income
– Consolidated balance sheet
– Consolidated statement of changes in equity
– Consolidated statement of cash flows
– Other financial information
– Segment information
ICT Group (ICT) and IoT.nxt announce their partnership for Internet of Things (IoT)
ICT and IoT.nxt entered into a partnership to comply with the increasing demand for IoT (Internet of Things) applications and further digitization across many different industry verticals, IoTnxt’s technology agnostic platform offers horizontal integration of ‘islands’ of digitization with an unprecedented ROI. By leveraging all existing devices and infrastructure into one single platform, visibility and new insights are provided that will open doors for new business models and (strategic) services.
The IoT.nxt hardware and software solutions in combination with ICT’s domain expertise in different industry verticals as well as the expert knowledge of Cloud, Machine Learning, BI and IoT, enables ICT to completely shape the digital transformation journey of their customers.
Frank Snijders, Business Development Executive at ICT Group “This partnership will offer Business grade IoT solutions for our customers’ Digital Transformation journey’. For many years several sectors have been struggling with unstructured and disparate data coming from many types of assets. With this partnership, our customers can now be supported through one interconnected, interoperable ecosystem, transforming data into actionable information and business ROI.” View testimonial video Frank Snijders.
Joe Bester, Marketing Director of IoT.nxt states: “The company has engaged with different companies since the opening of its office in The Hague in September last year, seeking appropriate partners to introduce its IoT solutions and drive its expansion in Europe. The ICT Group is an ideal partner as they are leaders in their field of expertise and by partnering with them we can drive business value for any company in any industry. Digital transformation is now a business imperative and our companies will jointly assist businesses to embark on and fast-track that process. We believe our innovation, especially around interoperability and edge intelligence will enhance their offering and deliver fast results for customers.”
IoT.nxt focuses on delivering innovative software and hardware solutions for the Internet of Things (IoT). IoT.nxt has developed an open platform framework that is used for rapid software development, integration and deployment in the Internet of Things realm.This world leading framework that makes the efficiencies, cost savings and increased revenue from IoT a reality for businesses. The major strength of the IoT.nxt framework is that the solution is technology agnostic, which overcomes the challenge of connecting any and all devices or systems. This enables you to deploy best of breed technologies (hardware/sensors/subsystems) but at the same time also achieve interoperability and interconnectivity between all the currently deployed systems and devices from the edge to the cloud. The IoT.nxt platform allows rapid deployment and businesses to action an Internet of Things strategy with little or no disruption to your current operations
On February 23, 2018, Dutch water authorities Drents Overijsselse Delta and Vechtstromen entered into a framework agreement with ICT Group.
ICT Group will provide the authorities with all software-related services required for process automation for the next four to eight years. ICT Group was awarded this contract thanks to its extensive knowledge of and experience with the water authorities and the requested systems (Alliance partner to Schneider and certified for Mitsubishi), as well as its expertise in information security.
The work involved in process automation is becoming increasingly complex due to the use of modern technologies and the complicated purification technologies required for the treatment of wastewater in order to comply with the stringent effluent quality standards. Joining forces and applying a common standard will promote knowledge-sharing within the water authorities, rather than each authority having to solve each problem individually. Implementation of proven standards across the water authorities will also contribute to quality improvement.
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