ICT convenes Annual General Meeting

AGM only electronically accessible for shareholders

ICT Group N.V. (“ICT”) today published the convocation and related documents for its Annual General Meeting of Shareholders (AGM) that will be held on Wednesday 24 June 2020.

In response to the global COVID-19 pandemic, ICT is doing everything possible to keep its shareholders, employees and other stakeholders safe. This includes avoiding unnecessary travel and large gatherings. The Supervisory Board has therefore decided, following the Temporary Act COVID-19 Justice and Safety (the “Emergency-Act”), that the AGM will only be electronically accessible for shareholders via a live video-webcast. Shareholders can vote through an electronic proxy and have the opportunity to submit questions to ICT prior to the AGM at ava2020@ict.eu.

On the Company’s website you will find further information with regard to registration and instructions about how to submit votes or questions prior to the AGM. In addition all documents, including the agenda, an explanation of the agenda items as well as the accompanying documents and the 2019 Annual Report are available on the website.

We will continue to closely monitor the situation in relation to COVID-19 measures and will inform shareholders through the Company’s website if any changes regarding the AGM occur.

Revenue growth of 6%; COVID-19 impact limited in Q1

Highlights Q1 2020

  • Revenue in Q1 2020 up 6% to € 41.6 million (Q1 2019: € 39.4 million), organically flat
  • EBITDA decreased 7% to € 4.5 million (Q1 2019: € 4.8 million) due to lower productivity levels
  • COVID-19 impact was limited in Q1, effects will be more significant as of April.
    Due to the uncertainty of the extent and duration of the crisis, the full year impact cannot be estimated yet
  • Multiple precautionary measures taken to cut costs and to preserve cash
  • Decision not to distribute 2019 dividend

Key figures

(in € millions) Q1 2020 Q1 2019 Δ
Revenue 41.6 39.4 6%
EBITDA 4.5 4.8 -7%

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Jos Blejie, CEO of ICT Group N.V.:
“After a weak fourth quarter last year we saw productivity levels slowly but steadily improving over the first quarter of 2020, on balance resulting in organic revenue coming in at the same level as the first quarter last year. Obviously, COVID-19 is having an unprecedented impact on economic activities since mid-February, also in some of the markets ICT is operating in. The impact on the performance of ICT was still rather limited in the first quarter of 2020. Around 95% of our activities for our clients can be done remotely.

Nevertheless we anticipate that the impact will deepen the longer the lockdown measures continue. Although our order portfolio is currently well filled and we benefit from being well-diversified in both activities and exposure to various sectors, we notice a slowdown in order intake. Therefore we expect that it will become more challenging to sustain performance levels at the level of the first quarter. Particularly secondment services will be affected. Our projects in R&D Engineering and vital infrastructures are less sensitive to a sudden economic downturn, but might follow suit if the economic uncertainty persists.

We remain confident that we are well positioned to benefit when economic activity rebounds. Our measures are geared at increasing our business agility, whilst working to retain our professional workforce. This will allow us to weather the current crisis, and remain well positioned to benefit quickly when business activities return to normal levels.”

Financial developments

In the first quarter of 2020 revenue increased by 6% to € 41.6 million from € 39.4 million in the same period last year. This increase is attributable to the acquisitions of Additude (consolidated as of February 2019), BNV Mobility (consolidated as of April 2019) and Proficium (consolidated as of November 2019). Organically, revenue was at the same level as Q1 last year.

EBITDA decreased 7% to € 4.5 million in the first quarter of 2020 compared to € 4.8 million in the same period in 2019. This decrease is fully attributable to the lower productivity levels that, despite an improving trend throughout the quarter, are still lower for the full quarter compared with the same period last year.

The EBITDA margin came in at 10.9% (Q1 2019: 12.3%).

At ICT Netherlands the productivity levels, although improving, were lower than the strong performance in this segment in Q1 last year. The impact from COVID-19 was especially noticeable in the sectors Machines & Systems and Logistics & Transport. In the public domain of Infra & Mobility performance is stable. The productivity in the healthcare activities has slightly improved.

The nearshoring activities in Bulgaria performed well with increased revenues. The productivity levels of the Swedish activities are still lower than anticipated, although representing an improvement compared to the fourth quarter 2019.

In the segment ‘Other’, Improve has been impacted by the COVID-19 outbreak as the market for trainings has stalled. OrangeNXT performed in line with expectations, despite the difficulty to gain new sales orders in the current environment.

COVID-19 measures

ICT anticipates that the impact from COVID-19 will deepen the longer the lockdown measures persist. Therefore ICT is taking necessary measures to cut and control costs, and remaining focused on cash management. ICT has proactively reached out to its financing banks to discuss extension of its loans and to postpone redemption schedules. ICT will also consider opting for the various governmental business support measures as and when necessary.

In view of the necessary prudence, ICT has decided to withdraw its intended 2019 dividend proposal and to propose to the AGM to retain all earnings.

ICT offers support for the obstetric care of pregnant women with a medical risk. ICT Healthcare has decided to make its product Sense4Baby, a portable and wireless system for pregnancy monitoring at home, available free of charge during the Corona crisis.

Outlook

Given the uncertainty about the length and depth of the virus outbreak and its impact on the global economy, we refrain from giving an outlook for 2020. We continue to believe in the ongoing digital transformation in all the markets we operate in. We remain fully committed to deliver on our mid-term objective of increasing annual revenue to between € 200 and € 230 million, with a targeted EBITDA margin between 13% and 15%. However, the timelines for achieving these objectives could be impacted by the current crisis.

ICT Group publishes annual report 2019

ICT Group N.V. has today published its annual report 2019 on its website (www.ict.eu/annualreport).

The Annual General Meeting of Shareholders will take place on 13 May 2020, 10:30 CET at Novotel Rotterdam, K.P. van der Mandelelaan 150, Rotterdam. The convocation for the AGM, including the agenda, the accompanying explanatory notes and other information, will be published on the company website no later than 31 March 2020.

Press release: FULL YEAR RESULTS 2019 ICT GROUP

Revenue increase of 20%; EBITDA margin impacted by lower productivity in the second half

Highlights FY 2019

  • Full year revenue came in at € 155.5 million, up 20%; organic growth was 3%
  • Pre-IFRS 16 EBITDA came in lower at € 11.7 million (FY 2018: € 13.5 million), as a result of lower productivity levels in the second half of the year. EBITDA amounted to € 16.5 million including IFRS 16 effects
  • Pre-IFRS EBITDA margin came in at 7.5% (FY 2018: 10.4%)
  • Net profit amounted to € 2.7 million (FY 2018: € 9.5 million) also due to € 3.5 million lower accounting gains
  • Acquisition of Additude marks international expansion into Sweden

Highlights Q4 2019

  • Revenue in Q4 came in at € 39.7 million (Q4 2018: € 37.2 million); organic revenue was down 6%
  • Pre-IFRS EBITDA came in at € 3.3 million in Q4 2019 (Q4 2018: € 5.4 million)
  • Proposition in Smarter Cities strengthened by acquisition of Proficium 

Jos Blejie, CEO of ICT Group N.V.:

“2019 got off to a good start with strong revenue growth, both organically, particularly in the high-tech and automotive industries, and as a result of acquisitions. During the summer we were confronted with the abrupt termination of several projects, causing a considerable decrease in productivity. We have taken immediate measures and increased focus and efforts of the team. At the same time we have been confronted with a more prudent buying behaviour in the industry in the latter part of 2019. In comparison with the excellent last quarter of 2018 these effects caused an organic decline in the fourth quarter of 2019.

The year was also marked by significant strategic steps in terms of growing our international footprint, increasing our successful nearshoring activities and strengthening our position in Infra & Mobility. We are on track to achieve the desired revenue split between secondment, projects and proprietary IP, thus creating a more robust business model. In 2019 we have put more focus in our investment initiatives, with a specific aim at Mobility as a Service and the OrangeNXT solutions. To further drive our international reach we will expand OrangeNXT and Additude to other countries and anticipate building more of our solutions in our nearshoring facilities in Bulgaria. Therefore we are confident that we are able to deliver on our mid-term objectives by 2022.”

Strategy update

In 2019 ICT refined its proposition by further focussing on areas where the company can truly make a difference for its customers. ICT excels in technological solutions in Engineering R&D and Industrial Automation, sustainable mobility, infrastructure and healthcare. ICT’s Software as a Service solutions (OrangeNXT) are also offered across these markets, as are its nearshoring offerings.

International expansion

The acquisition of Additude in Sweden early 2019 was an important step in the international expansion of the company. In line with its strategic direction, ICT expects Additude to become the platform for the Northern European market, offering high-profile industrial technology consulting services.

Accelerating nearshoring

To further enlarge its nearshoring position in Bulgaria, ICT acquired two start-up companies in 2019, Kodar and Up2. Kodar closely collaborates with the University of Plovdiv, which increases ICT’s access to technical talents in the second largest city of Bulgaria. With Up2 ICT gains access to talents in the world of app development. At the end of 2019 the Group employs over 250 professionals in Bulgaria, representing a growth of 26% compared to 2018.

 Mobility as a Service

In the year under review ICT took important steps towards strengthening its offering in the field of MaaS. With the acquisition of BNV Mobility, one of the leading smart mobility services firms in the Netherlands, in Q2 2019, ICT significantly increased its position in the mobility market. To enable more efficient and decisive operations, BNV’s activities were fully integrated into InTraffic. The MaaS platform (TURNN) was further developed and commercialized. At the end of 2019 TURNN was involved in several pilots in Groningen, Drenthe, Limburg and the Eindhoven area. 

Strong growth in software solutions

ICT’s offering of proprietary software solutions showed very strong growth in the past year. OrangeNXT welcomed HelloFresh, an innovative player in the meal-kit market, as a large new customer of the MobileNXT SaaS platform. The platform enables HelloFresh to manage its expanding supply chains efficiently and reduce costs while optimising the consumer experience.

Focus in 2020

In 2020 ICT aims to further strengthen its position both in the industries it services and in the geographies in which the company operates. ICT aims to expand its international operations. The company will also continue to fuel the growth of own IP solutions, such as OrangeNXT. At the same time business processes will be further optimised throughout the whole Group by implementing one way of working. Reducing complexity within the organisation through further integration and centralisation will increase effectiveness and efficiency.

Notes to the results

In the financial analysis below focus is put on the pre-IFRS 16 results because it facilitates a fair comparison.

Performance ICT Group

In 2019 ICT Group’s revenue came in at € 155.5 million, an increase of 20%, organically revenue increased 3%. Revenue growth was mostly attributable to the acquisitions of InTraffic (acquired and consolidated in April 2018), Additude (acquired in January 2019 and consolidated as of February 2019), BNV Mobility (acquired in March 2019 and consolidated as of April 2019) and Proficium (acquired in and consolidated as of November 2019). After a strong first half, organic revenue growth was significantly impacted by the sudden termination of a number of projects in the second half by certain large clients.

Revenue added value increased 13% compared to 2018, reflecting an increase of projects and related equipment as well as an increase in use of freelance professionals.

The personnel costs increased 22% to € 93.6 million (post-IFRS 16: € 91.5 million) compared to € 76.7 million in 2018, mainly a combination of the increase in FTEs and higher wages.

Other operating expenses decreased slightly from € 24.0 million in 2018 to € 23.6 million in 2019 (post-IFRS 16: € 20.9 million), as a result of cost efficiency measures. In 2018 other operating costs included one-off contract termination fees of € 0.8 million, following the acquisition of InTraffic. The costs related to strategic initiatives and the realisation of acquisitions and partnerships increased significantly in 2019 to € 0.7 million, compared to € 0.3 million in 2018.

EBITDA came in at € 11.7 million (post-IFRS 16: € 16.5 million), 13% down compared to € 13.5 million in 2018. The EBITDA margin decreased to 7.5% (2018: 10.4%). This was due to the lower productivity that impacted both the secondment business and projects in the second half of the year.

IFRS 16

IFRS 16 ‘Leases’ is effective as of 1 January 2019. Under this new IFRS standard an asset, defined as the right to use the leased item, and a financial liability, representing the present value of future lease payments to be made, are recognised. Consequently, IFRS 16 leads to a shift from operating lease costs to depreciation and amortisation and financial expenses. In 2019 IFRS 16 had an effect of € 4.8 million on EBITDA and an equal and opposite impact on depreciation and amortisation.

Performance per segment

Change in segmentation

In line with the new reporting structure, as of 1 January 2019 ICT changed its reporting segments. The activities in the Netherlands are segmented along the end-markets: Engineering R&D, Industrial Automation (including Raster IA), Infra & Mobility (including InTraffic, BNV, and NedMobiel) and Healthcare Technology Solutions (including BMA). In addition, Bulgaria and Sweden are separate segments. The segment Other includes Improve, OrangeNXT, ICT Belgium, CIS Solutions, ICT Motar and Group holding costs.

Engineering R&D

In this segment, ICT is active in the R&D of the industrial sectors Automotive, High Tech and Machine Building.
In the first half of the year this segment benefited from the high demand in the Automotive industry which translated into a strong performance. In the second half market developments across the spectrum of industries ICT serves weakened. The abrupt termination of a number of projects significantly impacted profitability of this segment during the second half of the year.

Industrial Automation

In the Industrial Automation segment, Logistics & Transport, Industry and Outsourced services are the main business units for ICT. In the first half ICT divested Raster Products. Raster Industrial Automation remains part of the ICT Group.
Port Logistics showed good growth in revenue and profitability, all other units showed a stable performance.

Infra & Mobility

In the public domain ICT focuses on services around capital assets in the area of Water, Energy, Road and Rail infrastructure as well as Mobility. InTraffic improved its margin to the average ICT Group level.
The Infra & Mobility segment experienced lower productivity in the Energy and Water & Infrastructure activities and results were also impacted by the upfront outlays in Mobility as a Service.

Healthcare Technology

To strengthen the efficiency of the total Healthcare offering, the integration of the different activities into one ICT Healthcare, which started in the first half of the year, is now completed. Although the part of the healthcare market ICT serves stagnated, sales of foetal heart monitors increased, which resulted in an improved performance compared to last year. This performance was offset by a weak performance of the other secondment activities in the Healthcare entity. 

Bulgaria

In Bulgaria, the nearshoring activities realised healthy growth in both revenue and EBITDA, mainly driven by ongoing demand for nearshoring services. The economies of scale are translating in better margins. The investments in the past period are bearing fruit and the nearshoring activities are performing within the desired margin bandwidth again.

Sweden

With the acquisition of Additude in January this year, ICT expanded to Sweden. The integration into the ICT Group is complete and cross selling opportunities are being exploited. Given the business model of Additude, with a large pool of freelancers, it operates below the average ICT margin.
Productivity in the second half was lower than anticipated, which impacted the margins.

In the segment ‘Other’, Improve showed a slightly lower performance. OrangeNXT doubled its revenue in 2019, driven by product development and new customers. Despite this successful year of operations, OrangeNXT posted start-up losses as expected. Holding costs increased as a result of higher M&A costs.

Other financial information

ICT has attributed a value to and is amortising several intangible assets, including order backlog, software and customer relations of its acquisitions. Total amortisation for 2019 (pre-IFRS) amounted to € 5.4 million (2018: € 3.8 million). Depreciation (pre-IFRS) for 2019 amounted to € 1.4 million (2018: € 1.2 million).

The result from associates came in at a loss of € 0.9 million (2018: € 0.4 million loss). The loss is mainly attributable to GreenFlux which, as anticipated, is still loss-making and also reflects ICT’s share of an impairment by GreenFlux on its assets.

Financing expenses came in at € 1.1 million in 2019, an increase compared to € 0.9 million in 2018, due to increased financing.

Taxes in 2019 amounted to € 1.0 million compared with € 2.1 million in 2018.

Net profit in 2019 included a one-off accounting gain of € 0.7 million, as a result of the revaluation of ICT Group’s stake in GreenFlux following the second round of investment by other shareholders. Net profit in 2018 included one-off accounting gains of € 4.1 million in total, of which € 3.5 million was related to the revaluation of the 50% stake in InTraffic already held by ICT and € 0.6 million to the revaluation of ICT Group’s stake in GreenFlux (first round of investment by other shareholders).

Reported net profit for 2019 came in at € 2.7 million (2018: € 9.5 million). This represents earnings per share of € 0.27 (2018: € 0.99). As a result of stock dividend the number of outstanding ordinary shares increased to 9,565,010 at 31 December 2019 (31 December 2018: 9,463,878).

Cash flow developments

In 2019 the net operational cash flow amounted to € 14.4 million (2018: € 11.1 million). The increase is the net effect of increased tax payments, IFRS 16 effects and positive results of disciplined working capital management.

In 2019 the cash outflow on investment activities amounted to € 17.6 million, compared with € 10.2 million in 2018. The main elements of this outflow were the purchase price cash considerations for the acquisitions of Additude, BNV, the payment of the earn-out for the remainder of BMA and Proficium and investments in product development and housing facilities. Cash inflow concerned the sale of Raster Products.

The cash inflow from financing activities amounted to € 2.8 million (2018: cash outflow € 0.9 million). The main elements are the net effect of dividend paid (€ 2.3 million cash outflow) and the increased acquisition financing and the lease liabilities (following IFRS 16).

The net cash position at 31 December 2019 was € 5.8 million (31 December 2018: € 6.2 million). The net cash outflow amounted to € 0.4 million in 2019 (2018: € 0.1 million).

Balance sheet structure

Shareholders’ equity increased to € 54.5 million at the end of 2019 from € 54.2 at the end of 2018, mainly following the net effect of the dividend payment of € 2.3 million and net profit of € 2.7 million. The balance sheet total increased to € 124.4 million at year-end 2019 from € 95.6 million at year-end 2018 as a result of the acquisitions of Additude, BNV and Proficium. In addition the implementation of IFRS 16 lease accounting caused a balance sheet increase of € 13.1 million (lease assets as well as liabilities). The solvency ratio (shareholders’ equity/total assets) stood at 44% at year-end 2019, although lower compared with 57% at year-end 2018, it reflects ICT’s sound financial basis.

Personnel

At 31 December 2019 ICT Group employed 1,413 FTEs (1,468 employees), 15% higher than the 1,227 FTEs (1,274 employees) at year-end 2018. The recent acquisitions and ongoing recruitment efforts contributed to this increase.

Dividend

ICT proposes a dividend of € 0.30 per share for the 2019 financial year (2018: € 0.38). The proposed dividend is subject to the approval of the Annual General Meeting of Shareholders (AGM) to be held on 13 May 2020. For the calculation of the proposed dividend, the net profit realised is adjusted for the accounting gains recognised in 2019 as well as non-cash amortisation amounts. This results in an adjusted net profit for the full year 2019 of € 7.2 million. The proposed dividend of € 0.30 per share represents a pay-out ratio of 40% of adjusted net profit, which is in line with ICT’s dividend policy. ICT offers the option of distribution of the dividend in cash or in shares.

ICT will calculate the dividend payment in shares one day after the end of the optional period on the basis of the weighted average price of ICT shares during the last five trading days of the optional period, which shall end on 2 June 2020. The dividend in cash or in shares will be payable on 4 June 2020.

Outlook

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.

We foresee demand in the markets we serve in the first half of 2020 to be in line with the second half of 2019. The global economic circumstances are anticipated to remain uncertain in 2020 and therefore we refrain from giving an outlook for 2020. Despite these uncertainties we do see ongoing demand for digital transformation projects. We remain fully committed to deliver on our mid-term objective of increasing annual revenue to between € 200 and € 230 million by 2022, with a targeted EBITDA margin between 13% and 15% (including IFRS 16 effects).

Click here to download the Annex of the Annual Results of 2019.

Press release: Half Year Results 2019 ICT Group

FIRST HALF YEAR 2019: Strong revenue and EBITDA growth

International expansion and strengthened position in Smarter Cities mark important steps in strategic roadmap

Highlights H1 2019

  • Revenue came in at € 79.8 million, an increase of 31%, organic growth was 9%
  • EBITDA increased to € 8.8 million including IFRS 16 effects. Pre-IFRS 16 EBITDA increased 27% to € 6.4 million (H1 2018: € 5.1 million)
  • Underlying net profit amounted to € 1.9 million, up 24% compared to H1 2018
  • Acquisition of Additude marks international expansion into Sweden
  • Mobility as a Service strengthened with acquisition of BNV Mobility
  • Letter of intent signed to acquire Proficium to strengthen position of ICT in Smarter Cities
  • Outlook 2019: ICT expects further growth in revenue and EBITDA in the second half of 2019 compared to the first half of 2019

Key figures*

Jos Blejie, CEO of ICT Group N.V.:
“In the first half of 2019 ICT Group showed strong revenue growth, on the back of both acquisitions and robust organic growth. The latter was in particular driven by the strong demand in the High Tech and Automotive sectors. Moreover, with the international expansion, the growth in our nearshoring capabilities and the strengthening of our market position in Infra & Mobility, we are well underway in delivering on our strategic agenda. Our efforts are clearly valued by our business partners, as demonstrated by various awards we received from a number of our key partners in the past months.”

Strategy update

On 23 January 2019 ICT completed the acquisition of Additude. In line with ICT’s strategic direction to expand business into new geographies, ICT foresees Additude to become the platform for the Northern European market offering high-profile industrial technology consulting services. The integration of Additude is ongoing and on schedule. The first cross selling opportunities are being explored.

On 27 March 2019 ICT completed the purchase of 65% of the shares of BNV Mobility, one of the leading Smart Mobility Services firms in the Netherlands with a software MaaS solution. The remaining 35% shares have been acquired in July 2019. Acquiring BNV is a logical next step for ICT to accelerate its position in the Mobility as a Service (MaaS) market. ICT will continue to invest in the enhancements and expansion of the BNV developed MaaS system.

In June 2019 ICT signed a letter of intent to acquire 100% of the shares of Proficium, a fast growing company delivering consultancy services and secondment in the Public Infrastructure market. With this acquisition ICT will further strengthen its position in engineering and consultancy in Smarter Cities.

Furthermore, as agreed at the time of acquisition, ICT purchased the remaining 49% of the shares in BMA in June 2019. Following the acquisition of BMA as a whole, the various health activities within the ICT group will be integrated into one Healthcare Technology unit by the end of this year.

To further increase its nearshoring position in Bulgaria, ICT recently acquired Kodar, a start-up closely collaborating with the University of Plovdiv, thereby expanding its access to technical talents in the second largest city of Bulgaria.

Personnel

At 30 June 2019, ICT Group employs 1,412 people (1,290 FTEs), around 10% higher than at year-end 2018. The acquisitions and successful recruitment campaigns worldwide have contributed to this growth. This also results in one of every two recruits being non-Dutch, evolving the total personnel profile into a more international mix of around 40% being non-Dutch.

Notes to the results

Performance ICT Group
In the first half of 2019 ICT Group’s revenue came in at € 79.8 million, up 31% compared to € 60.9 million reported in H1 2018. Organically revenue increased by 9%. This was mainly driven by strong demand in the High Tech and Automotive sector. This organic growth partly excludes InTraffic (acquired and consolidated in April 2018), Additude (acquired in January 2019 and consolidated as of February 2019) and BNV Mobility (acquired in March 2019 and consolidated as of April 2019).

Personnel costs increased significantly to € 46.4 million (H1 2018: € 37.4 million), primarily because of the increase in FTE’s and salary increases.

Other operating expenses increased from € 12.1 million in H1 2018 to € 13.0 million in the first half of 2019 (post-IFRS 16: € 10.6 million), mainly because of the recent acquisitions and additional outlays in new business development and recruitment. The costs related to strategic initiatives and the realisation of acquisitions and partnerships in H1 2019 was at a high level amounting to € 0.5 million (H1 2018:
€ 0.1 million). In 2018, following the acquisition of InTraffic, one-off costs of € 0.8 million were incurred as contract termination fees.

For the first six months of 2019 EBITDA increased to € 6.4 million (post-IFRS 16: € 8.8 million), compared to € 5.1 million in the comparable period in 2018. The EBITDA margin decreased to 8.0% (H1 2018: 8.3%).

IFRS 16
IFRS 16 ‘Leases’ is effective as of 1 January 2019. Under this new IFRS standard an asset, which is the right to use the leased item, and a financial liability, being the present value of future lease payments to be made, are recognised. Consequently, IFRS 16 leads to a shift from operating lease costs to depreciation and amortisation and financial expenses. In H1 2019 IFRS 16 had an effect of € 2.4 million on EBITDA and an equal and opposite impact on depreciation and amortisation.

Performance per segment

Change in segmentation
Since 1 January 2019 ICT changed its reporting segments in line with the new reporting structure. The activities in the Netherlands are segmented along the end-markets: Engineering R&D, Industrial Automation (including Raster IA), Infra & Mobility (including InTraffic, BNV, and NedMobiel) and Healthcare Technology Solutions (including BMA). In addition, Bulgaria and Sweden are separate segments. The segment Other includes Improve, OrangeNXT, ICT Belgium, CIS Solutions, ICT Motar and holding costs.

Engineering R&D
In this segment, ICT is active in the R&D of the industrial sectors Automotive, High Tech and Machine Building.
In the first six months this segment benefited from the high demand in the Automotive industry. Despite this strong performance, we anticipate that the high growth levels will start levelling off in the second half of the year.

Industrial Automation
In the segment Industrial Automation Logistics & Transport, Industry and Outsourced services are the key markets for ICT. In the first half ICT divested Raster Products. Raster Industrial Automation remains part of the ICT Group.
The segment showed a strong performance, to which all units contributed. EBITDA increased significantly following improved productivity and project results. Furthermore Raster received the highest partnership award of Schneider Electric and was accepted at the Master Level of the Schneider Electric Alliance Program. Raster is one of only two European preferred partners within this Program.

Infra & Mobility
In the public domain ICT focuses on services around capital assets in the area of Water, Energy, Road and Rail infrastructure as well as Mobility. InTraffic is fully consolidated in this first half year and improved its margin to the ICT Group target level in the course of the first six months of 2019.

Healthcare Technology
Although the addressable healthcare market stagnates, BMA’s performance improved compared to last year, driven by increased sales of foetal heart monitors. The integration of the different activities into one ICT Healthcare entity, aimed at strengthening the total Healthcare offering, started in the first half of the year and should be completed before the end of the year.

Bulgaria
ICT’s nearshoring entity Strypes reported a considerable increase in revenue in the first six months of 2019. EBITDA grew at a somewhat lower pace due to one-off additional investments in sales and marketing and the costs related to the acquisition of Kodar. With the acquisition of Kodar, a start-up collaborating closely with the University of Plovdiv, ICT has expanded to the second largest city of Bulgaria.

Sweden
With the acquisition of Additude in February this year, ICT expanded to Sweden. Additude continued its strong growth, in line with expectations. The tight labour market is impacting the margins as Additude hired a higher number of temporary staff than usual. The integration into the ICT Group is ongoing and on schedule. Cross selling opportunities are being exploited.

The segment ‘Other’ includes a number of small entities as well as the holding costs of the group. Improve performed in line with last year and was listed in the top 3 of best IT trainers in the Netherlands, published by Enigma Research. OrangeNXT, ICT’s Software as a Service engine, showed strong revenue growth over last year, driven by ICT’s proprietary products developed over the last few years. Furthermore, OrangeNXT was awarded Country Partner of the year 2019 by Microsoft Netherlands.

Other financial information

ICT has attributed a value to and is amortising several intangible assets, including order backlog, software and customer relations of its acquisitions. The amortisation for Additude in the first half of 2019 amounted to € 0.5 million. Total amortisation in the first half of 2019 (pre-IFRS) amounted to € 2.6 million (H1 2018: € 1.8 million). Depreciation (pre-IFRS) for the first half of 2019 amounted to € 0.7 million (H1 2018: € 0.5 million).

The result from associates amounted to a loss of € 0.3 million (H1 2018: € 0.2 million loss), mainly attributable to GreenFlux which is, as expected, still loss-making.

Financing expenses came in at € 0.5 million in the first six months of 2019, similar to the comparable period in 2018.

Taxes in the first half of 2019 amounted to € 0.5 million compared with € 0.7 million in the first half of 2018.

In the net profit for H1 2019 a one-off accounting gain of € 0.7 million was included as a result of the revaluation of ICT Group’s stake in GreenFlux following the second round of investment by other shareholders. The net profit in H1 2018 included one-off accounting gains of € 4.1 million in total, of which € 3.5 million was related to the revaluation of the 50% stake in InTraffic already held by ICT and € 0.6 million to the revaluation of ICT Group’s stake in GreenFlux.

Reported net profit for the first six months of 2019 came in at € 2.5 million (H1 2018: € 5.7 million). This translates into earnings per share of € 0.27 (H1 2018: € 0.59). The number of outstanding ordinary shares increased during the first half year 2019 to 9,565,010 (31 December 2018: 9,463,878) due to stock dividend. Excluding the one-off accounting gains as explained above the underlying net profit came in at € 1.9 million in H1 2019 compared to € 1.5 million in H1 2018, an increase of 24%.

Cash flow movement

In the first half of the year, net operational cash flow amounted to € 3.8 million positive (H1 2018: € 3.7 million positive).
The net cash position per 30 June 2019 was € 1.6 million positive (31 December 2018: € 6.2 million positive). This decrease was the balanced effect of the purchase price paid for acquisitions, new financing arranged for acquisitions, the repayments of existing acquisition financing, the payment of dividend, investments in product development and normal working capital patterns.

Balance sheet structure

At the end of the first half of 2019, shareholders’ equity stood at € 53.3 million (31 December 2018: € 53.3 million). The balance sheet total increased from € 95.6 million at year-end 2018 to € 126.8 million at 30 June 2019. The main impact were the acquisitions of Additude and BNV. In addition the implementation of IFRS 16 lease accounting caused a balance sheet increase of € 12.9 million (lease assets as well as obligations). Solvency (shareholders’ equity/total assets) stood at 43% at the end of June 2019 (57% at year-end 2018), still reflecting a sound financial basis.

Outlook

ICT is fully focused on profitable growth and will continue to execute its buy-and-build strategy; combining healthy organic growth with selective acquisition opportunities. The employment market for IT talents remains very challenging. Attracting and retaining the right people is a top priority.
ICT is fully committed and confident in its ability to deliver on its long-term objective of increasing annual revenue to between € 200 and € 230 million by 2022, with a targeted EBITDA margin between 10 and 12%.

Barring unforeseen circumstances, ICT expects further growth in revenue and EBITDA in the second half of 2019 compared to the first half of 2019.

Click here to download the Annex: Condensed consolidated interim financial statements 30 June 2019

Divestment Raster Products B.V.

HMS Industrial Networks AB, a wholly owned subsidiary of HMS Networks AB, located in Halmstad, Sweden, has today acquired all shares in Raster Products B.V. from Raster Beheer B.V., an ICT Group company. For several years Raster Products has been HMS’ primary distributor of Ewon products in the Netherlands. Raster Industrial Automation remains a subsidiary of ICT Group.

You can find the press release of HMS Networks here.

Q1 2019: revenue growth of 37%, organic growth 9%

Key developments:

  • Revenue in Q1 2019 up 37% to € 39.4 million (Q1 2018: € 28.7 million)
  • Organic revenue growth of 9%
  • Reported EBITDA Q1 2019 amounted to € 4.8 million (post-IFRS 16).
  • Underlying EBITDA increased 20% to € 3.6 million (Q1 2018: € 3.1 million)
  • Acquisition of Additude completed; international expansion through acquisition in Sweden
  • Acquisition of BNV Mobility completed; strengthens position in Mobility as a Service market
  • ICT reiterates its outlook of further revenue and EBITDA growth for 2019 compared to 2018

Key figures

Jos Blejie, CEO of ICT Group N.V.: “I am pleased with how we started 2019, posting a strong revenue and EBITDA growth, to which our acquisitions, InTraffic and most recent Addittude, greatly contributed. But also organically we showed a solid performance. We benefited from strong demand in the High Tech and Automotive sector but there are indications that this will level off in the course of the year.”

Financial developments

Revenue increased to € 39.4 million in the first quarter of 2019, compared to € 28.7 million in the first quarter of 2018. Organically, excluding InTraffic (acquired in April 2018) and Additude (acquired in January 2019, consolidated as of February 2019), revenue was up 9%. Organic growth was positively impacted by strong demand in the High Tech and Automotive sector. This is expected to level off in the course of the year.

ICT Netherlands continued its solid performance, with good productivity levels. Strypes Bulgaria and InTraffic both showed improved results over last year. In the segment Other Raster was more or less in line with last year and Improve showed increased results.

Underlying EBITDA, pre-IFRS 16 and excluding the one-off accounting gain increased to € 3.6 million, compared to € 3.0 million in the same period in 2018. Acquisition costs increased from € 0.1 million in the first quarter of 2018 to € 0.5 million in the first quarter of 2019. The underlying EBITDA margin came in at 9.1%. Excluding acquisition costs the margin came in at 10.4%, in line with the first quarter of 2018 (10.3%).

IFRS 16

IFRS 16 ‘Leases’ is effective as of 1 January 2019. Under this new IFRS standard an asset, which is the right to use the leased item, and a financial liability, being the present value of future lease payments to be made, are recognised. Additionally, IFRS 16 leads to a shift from operating lease costs to depreciation and amortisation and financial expenses. In Q1 2019 IFRS 16 had a positive impact on EBITDA of € 1.2 million.

Strategic Themes

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.
Smarter Cities showed considerable growth, mainly driven by the acquisition of the remaining 50% stake in InTraffic. In Smarter Industries both the acquisition of Additude (contributing for two months) as well as strong demand in the Automotive sector contributed to the significant growth. The revenue decline in Smarter Health results from flat revenue development at BMA and lower rates in the ICT Healthcare unit.

Additude

On 21 January 2019 ICT completed the acquisition of Additude. In line with ICT’s strategic direction to expand business into new geographies, ICT foresees Additude to become the platform for the Northern European market offering high-profile industrial technology consulting services.

BNV Mobility

On 26 March 2019 ICT completed the purchase of 65% of the shares of BNV Mobility, one of the leading Smart Mobility Services firms in the Netherlands. Acquiring the majority of the shares of BNV is a logical next step for ICT to accelerate its position in the Mobility as a Service (MaaS) market. BNV Mobility will be consolidated as from April 2019.

Outlook

ICT’s management reiterates the outlook given at the announcement of the annual results in March.

ICT is fully focused on profitable growth and will continue to execute its buy-and-build strategy; combining healthy organic growth with selective acquisition opportunities. The employment market for IT talents remains very challenging. Attracting and retaining the right people is a top priority.

ICT is fully committed and confident in its ability to deliver on its long-term objective of increasing annual revenue to € 200 to € 230 million by 2022, while maintaining an EBITDA margin between 10 and 12%. For 2019 ICT expects further revenue and EBITDA growth.

ICT Group strengthens position in Mobility as a Service market

Today ICT Group (ICT) announced its intent to acquire 65% of the shares of BNV Mobility (BNV). ICT aims to make BNV’s platform TURNN the Mobility as a Service (MaaS) solution of ICT Group. MaaS is about providing a seamless travelling experience using all mobility means possible based on real-time information. Travelling time, comfort and costs are optimized based on individual needs.

Acquiring the majority of the shares of BNV will be a logical next step for ICT to accelerate its position in the MaaS market. Within the ICT group, InTraffic is the leading company on travel information systems for public transport, NedMobiel has extensive capabilities and experience in comparable mobility projects in the Dutch market and ICT has the platform knowledge. BNV is one of the leading B2G and B2B Smart Mobility Services firms in the Netherlands. As an experienced mobility provider with a unique know how in behavioral changes of commuters, BNV has been recognised by the Dutch government as a MaaS institute. The full breath of capabilities within ICT Group combined with the specific position of BNV will enable ICT to successfully deliver the MaaS service to the Dutch market and at a later stage to other European Countries.

Jos Blejie, CEO ICT Group: “We are impressed by the current TURNN solution technology of BNV. The specific position of BNV in combination with the use of leading-edge technologies and the power of ICT Group in the Dutch market makes a new combination undoubtfully successful.
MaaS is a new market, but we are convinced it will develop to a sizable market, driven by global issues like city density and pollution. MaaS is one of our strategic themes. This step will strengthen our position as frontrunner and create a dominant position from the start.”

Rehu de Bruijn, CEO BNV Mobility: “We are thrilled to become part of this group as it opens up opportunities of growth acceleration on the platform capabilities through ICT Group’s competence centers and resources, for example in artificial intelligence, machine learning and in-depth knowledge of a broad range of mobility operations. At the same time the access to ICT Group’s business and partner network will help boost our sales and marketing efforts and hence significantly grow our customer base.”

ICT’s strategy is to become a successful European technology solution provider offering time hire services, delivering fixed price projects and software as a service to internationally operating companies and governmental institutes. As part of this strategy ICT Group is looking specifically for a MaaS offering in the Netherlands. The other main shareholder in BNV is Egis, a French group with international activities in transport and mobility services. ICT is convinced that this strategic alliance between Egis and ICT Group shall accelerate the strategic (inter)national MaaS ambitions.

Financial details will not be disclosed.

Press release: ICT GROUP 2018 FULL-YEAR RESULTS

ICT GROUP REPORTS SOLID PROFITABLE GROWTH IN 2018

Important acquisitions in Infra & Mobility and launch of OrangeNXT mark important steps in execution of strategic roadmap

Highlights FY 2018

  • Revenue up 24% to € 129.9 million, 6% organic growth
  • Underlying EBITDA rose 19% to € 14.2 million, reflecting an underlying EBITDA margin of 11%
  • Acquisitions of NedMobiel and remaining 50% of InTraffic were completed; significantly strengthening ICT’s strategic position in Infra & Mobility
  • Software as a Service solutions now bundled in OrangeNXT, a strong platform that supports customers in their digital transformation
  • Net profit increased to € 9.4 million, including one-off accounting gains of € 4.1 million
  • Proposed dividend of € 0.38 per share for the year 2018

Highlights Q4 2018

  • Revenue up 30% to € 37.2 million, EBITDA up 28% to € 5.4 million (Q4 2017: € 28.5 million and
    € 4.2 million, respectively)
  • Organic revenue growth of 8%

Outlook

  • ICT expects further growth in revenue and EBITDA in 2019 compared to 2018

Key figures

Jos Blejie, CEO of ICT Group N.V.: “We are pleased with the revenue growth of 24% and the EBITDA margin we reported in 2018. Our results show that we are delivering on our promise of healthy and profitable growth while taking significant steps in the execution of our strategy. We significantly enhanced our position in Smarter Cities with our recent acquisitions and are now even better positioned to support our customers in their digital transformation with the OrangeNXT software solutions that combine our expertise and domain knowledge. In 2018 we celebrated our 40th anniversary. Throughout the years we have come to mean more and more to our customers and have grown into leaders in our core markets. I am proud of our over 1,250 professionals who really make a difference. In January 2019 we acquired Additude, a leading Swedish IT consultancy that is a perfect fit with our international expansion strategy. For 2019 we expect higher revenue and EBITDA.”

Strategy update

Progress in 2018
In 2018 ICT significantly strengthened its position in Smarter Cities with the acquisition of NedMobiel and InTraffic. The purchase of 100% of the shares in NedMobiel, a Dutch consultancy specialised in complex infrastructures, was completed in January 2018. This acquisition increases revenue from both projects and consultancy services, thus enabling ICT to move up the value chain. Moreover, the acquisition of NedMobiel positions ICT well in Mobility as a Service (MaaS), a concept which is expected to be a major game changer in Smarter Cities.

The acquisition of the remaining 50% of InTraffic in March 2018 further enhances ICT’s innovation and product development capabilities in the field of Rail Infrastructure and Mobility. The integration process is focused on increasing efficiency to bring InTraffic’s margins more in line with ICT’s overall margins.

OrangeNXT
In September 2018 ICT acquired the remaining 49% of the shares in ICT Mobile. This acquisition was a jump-start for OrangeNXT, which combines all promising ICT Group software solutions to help its customers reap the full benefits that digital transformation has to offer. OrangeNXT is focused on ready to use software solutions, offered as Software as a Service.

Motar
In 2015 ICT started the development of a new platform, Motar, to anticipate the trend of low coding in industrial environments. Low-code software is being used to speed up design and development processes with minimal hand-crafted code, thus minimising programming errors. In 2017 Motar had its first successes in the automotive industry and based on that ICT decided to adapt Motar to other industries. This led to the launch of the company ICT Motar, embracing the High-tech version of the platform, in the second half of 2018.

Strategic update: ‘Develop the future’
At the Capital Markets Day in November 2018 ICT presented its ‘Develop the Future’ strategic update, defining its strategic roadmap and new long term objectives for 2022 as follows:

– to increase the company’s annual revenue to around € 200-230 million in 2022 through organic growth of more than 5% along with acquisitions
– to maintain a profitability margin (EBITDA) of between 10 and 12%

Focus in 2019
Growth will again be the main focus for 2019. Our growth path is defined by our strategic roadmap 2022. The buy-and-build strategy continues to be fully focused on profitable growth, combining healthy organic growth with selective acquisition opportunities.

ICT aims to grow organically in a tight labour market by:
– remaining an employer of choice
– seizing opportunities provided in high growth areas and industries with our Software as a Service solutions bundled in OrangeNXT
– accelerating our nearshoring offerings

At the same time ICT will continue to pursue suitable acquisitions. This includes companies with compelling offerings in the countries in which ICT is already active as well as other geographies, with a focus on Northern Europe. After the balance sheet date ICT announced the acquisition of Additude, a leading Swedish IT consultancy firm. This acquisition is a perfect fit with this international expansion strategy.

Notes to the results

Performance of ICT Group
In 2018 ICT Group revenue rose 24% to € 129.9 million (2017: € 105.0 million). Organic growth, i.e. excluding the contribution of NedMobiel and the nine-month consolidation of InTraffic, in revenue was 6%. Organic growth was driven mainly by the strong performance at ICT Netherlands as a result of the increase in FTEs and higher productivity. Added value increased by 22% to € 114.2 million in 2018 (2017: € 93.4 million).

Market conditions in the industries we serve remained favourable in 2018. The Automotive, High Tech and Machine & Systems markets showed substantial growth, driven by increased customer spending. Public opinion and discussions on sustainability have resulted in lower demand for projects in our Oil & Gas industry unit.

The growth in revenue relating to Smarter Cities was mainly due to the acquisitions of InTraffic and NedMobiel. Smarter Cities also realised solid organic growth in 2018. Spending on public infrastructure remained high in 2018 due to good economic circumstances. Also, government spending on mobility solutions remained high. Our Smarter Cities cluster benefited from these favourable conditions.

The growth in Smarter Health achieved in 2017 could not be sustained. Although the healthcare sector continued to invest in robust, life-prolonging and life-improving IT solutions, ICT saw a decline in revenue due a lower and later availability of the new foetal monitors for sale by BMA and lower productivity in the ICT Healthcare unit.

Personnel costs increased 23% to € 76.7 million (2017: € 62.5 million), in line with the increase in the number of FTEs, both as a result of acquisitions and organic growth in the 2018 financial year.

Other operating expenses increased to € 24.0 million (2017: € 18.9 million), mainly because of the recent acquisitions. The costs relating to strategic initiatives and acquisitions and partnerships amounted to € 0.3 million (2017: € 0.2 million). Furthermore, in connection with the acquisition of InTraffic one-off costs of € 0.8 million were incurred for contract termination fees. Other operating expenses also included non-recurring costs of € 0.4 million relating to the 40th anniversary of the company and start-up costs of € 0.4 million for ICT Belgium BVBA.

Underlying EBITDA came in at € 14.2 million in 2018, an increase of 19% compared to € 12.0 million in 2017. Taking the one-off costs of € 0.8 million relating to the aforementioned contract termination fees at InTraffic into account, EBITDA increased by 12% year-on-year to € 13.5 million.

The underlying EBITDA margin decreased from 11.4% in 2017 to 11.0% in the year under review. This decrease in the underlying EBITDA margin is due to the non-recurring costs related to the 40-year anniversary of the company and start-up costs in ICT Belgium.

Performance per segment

ICT Netherlands showed a strong performance in 2018. Revenue was up 10% to € 89.3 million as a result of more hires and increased productivity, supported by positive market circumstances. Organically, revenue was up approximately 8%. In the year under review EBITDA increased 31% to € 10.8 million. This significant growth in EBITDA compared to 2017 was the result of increased project activity and material sales.

At Strypes Bulgaria (ICT Nearshoring) revenue rose slightly to € 9.9 million in 2018. The ongoing investments in the organisation limited EBITDA in 2018 to € 1.9 million, the same level as in 2017. The increased organisational effectiveness was necessary to safeguard further growth of our nearshoring activities.

InTraffic was consolidated as of 1 April 2018 and contributed € 14.6 million to revenue in the last nine months of 2018. EBITDA came in at € 1.3 million excluding one-off costs of € 0.8 million relating to contract termination fees. Although InTraffic’s margin is currently below the ICT Group target margin range, we are already seeing the first benefits of the steps being taken to increase efficiency at InTraffic. The aim is to bring InTraffic’s margins more in line with ICT’s overall group margins and the full impact of these measures will materialise in the course of 2019.

The ‘Other’ segment posted revenue of € 20.1 million (2017: € 16.4 million). Improve performed in line with last year, with slightly better margins. The performance of Raster stabilised compared to last year. BMA’s performance decreased due to lower hardware (foetal heart monitors) sales and lower software sales in the Netherlands. NedMobiel exceeded expectations in the second half of 2018 and OrangeNXT also performed well with better-than-expected revenue growth. CIS Solutions was consolidated as of the fourth quarter of 2018. CIS is developing as planned.

Other financial information

ICT has attributed a value to, and is amortising, several intangible assets including the order backlog, software and customer relations at its recent acquisitions. Total amortisation in 2018 amounted to
€ 3.8 million (2017: € 2.7 million). Depreciation totalled € 1.2 million in 2018 (2017: € 0.9 million).

Operating profit came in at € 8.6 million in 2018 (2017: € 8.4 million). As a result of the higher amortisation, the operating margin declined to 6.6% from 8.0% in 2017.

The result from joint ventures reflects the contribution of InTraffic for one quarter as InTraffic was still reported as a joint venture in the first quarter of 2018. The result from associates amounted to a loss of € 0.4 million (2017: € 0.4 million loss), mainly attributable to GreenFlux. The result was foreseen in line with Greenflux’ future growth strategy. LogicNets achieved a breakeven result in 2018.

Financing expenses increased to € 0.9 million in 2018 from € 0.5 million in 2017 as a result of increased financing for the recent acquisitions and a loss on the write-off of loans to Valuemaat which filed for bankruptcy in the first half of 2018 (€ 0.2 million). Financing income came in at € 0.3 million and relates mainly to a deferred acquisition consideration adjustment for BMA.

Taxes in 2018 amounted to € 2.1 million compared with € 1.9 million in 2017.

In 2018 ICT Group recognised € 4.1 million in accounting gains. As a result of the acquisition of the remaining 50% in InTraffic, ICT recognised a one-off accounting gain of € 3.5 million related to the revaluation of the 50% stake in InTraffic already held by ICT. Following the investment by new shareholders in GreenFlux, ICT’s stake was diluted from 24.49% to 19.57%. As a result of the revaluation of its stake, ICT realised a one-off accounting gain of € 0.6 million.

Net profit increased to € 9.4 million in 2018 compared with € 5.2 million in 2017. This translates into earnings per share of € 0.99 (2017: € 0.56). The number of outstanding ordinary shares increased during the year under review to 9,463,878 (31 December 2017: 9,411,301) due to the 2017 stock dividend.

Cash flow movement
In 2018 the net operational cash flow amounted to € 11.1 million (2017: € 7.9 million). This positive development is in line with the results growth in 2018 and a result of disciplined working capital management.

In 2018 the cash outflow on investment activities amounted to € 10.2 million, compared with € 2.9 million in 2017. The main elements of this outflow were the purchase price cash consideration for the acquisitions of NedMobiel and 50% of InTraffic (€ 7.8 million) and investments in product development and housing facilities.

The cash outflow from financing activities amounted to € 0.9 million (2017: € 4.3 million). The main elements are the net effect of dividend paid (€ 2.4 million cash outflow) and the balance of new financing arranged for acquisitions and the repayments of existing acquisition financing (€ 1.7 million cash inflow).

The net cash position at 31 December 2018 was € 6.2 million (31 December 2017: € 6.3 million). The net cash outflow amounted to € 0.1 million (2017: € 0.7 million inflow).

Balance sheet structure
Mainly as a result of the net effect of the dividend payment of € 2.4 million and net profit (€ 9.4 million), shareholders’ equity increased to € 54.2 million in 2018 (2017: € 47.7 million). The balance sheet total increased to € 95.6 million at year-end 2018 from € 81.6 million at year-end 2017 as a result of the acquisitions of InTraffic and NedMobiel. The solvency ratio (shareholders’ equity/total assets) stood at 57% at year-end 2018, compared with 58% at year-end 2017, reflecting ICT’s sound financial basis.

Personnel
At 31 December 2018 ICT Group had 1,227 FTEs (1,274 employees), 24% higher than the 990 FTEs (1,032 employees) at year-end 2017. The acquisitions of InTraffic and NedMobiel and ongoing recruitment efforts contributed to this increase.

Dividend proposal
ICT proposes a dividend of € 0.38 per share for the 2018 financial year (2017: € 0.35). The proposed dividend is subject to the approval of the Annual General Meeting of Shareholders (AGM) to be held on 15 May 2019. For the calculation of the proposed dividend, the net profit realised is adjusted for the accounting gains recognised in 2018 as well as non-cash amortisation amounts. This results in an adjusted net profit for the full year 2018 of € 9.1 million. The proposed dividend of € 0.38 per share represents a pay-out ratio of 40% of adjusted net profit. ICT offers the option of distribution of the dividend in cash or in shares.

ICT will calculate 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 3 June 2019. The dividend in cash or in shares will be payable on 5 June 2019.

Events after balance sheet date
In January 2019 ICT acquired full ownership of Additude AB, one of southern Sweden’s leading IT consultancy firms. With over 160 employees, Additude realises an annual turnover of around € 16 million. The company provides software and engineering consultancy services supporting customers in their innovation processes, product development and growth strategy. Additude primarily operates in the IT and engineering markets and serves many of Sweden’s largest and technology-intensive companies. This acquisition is a perfect fit with ICT’s international expansion strategy, in which the northern European countries are defined as an important spearhead.

In January 2019 ICT prolonged and extended its financing arrangements. To fund the company’s growth ambitions, the acquisition facility was extended from € 11 to € 25 million at better terms. The working capital arrangement increased from € 10 to € 12.5 million to cover for the larger size of the company. The covenant requirements related to Senior Net Debt to EBITDA ratio increased from 2.0 to 2.5. The other covenants did not change.

Outlook
Growth will again be the main focus in 2019, as defined in the company’s strategic roadmap 2022. ICT is fully focused on profitable growth and will continue to execute its buy-and-build strategy; combining healthy organic growth with selective acquisition opportunities.

The employment market for IT talents remains very challenging. Attracting and retaining the right people is a top priority.

ICT expects its capital expenditure and research & development expenses to increase in 2019, in line with the increased scale of the company.

ICT is fully committed and confident in its ability to deliver on its long-term objective of increasing annual revenue to € 200 to € 230 million by 2022, while maintaining an EBITDA margin between 10 and 12%. For 2019 ICT expects further revenue and EBITDA growth.

Cautionary statement
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.

2018 financial information
The 2018 financial information included in the Extracts from Consolidated Financial Statements attached to this press release is derived from the Annual Report 2018, 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 15 May 2019. 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 2018
– Consolidated statement of comprehensive income
– Consolidated balance sheet
– Consolidated statement of changes in equity
– Consolidated statement of cash flows
– Other financial information
– Segment information

Click here to download the Annex of the Annual Results of 2018.

Wouter van de Bunt nominated for appointment to the Supervisory Board

ICT Group N.V. (ICT) today announces the nomination of Mr. Wouter van de Bunt for appointment as member of the Supervisory Board of ICT Group. His nomination made by the Supervisory Board will be on the agenda of the Annual General Meeting of Shareholders of ICT Group on 15 May 2019. At that same meeting the re-appointment of Theo van der Raadt, chairman of the Supervisory Board, will also be on the agenda. This nomination will be for a two year period, in line with the corporate governance code. Mr. Fritz Fröschl, whose second term ends on 15 May 2019, will not be available for re-election.

Wouter van de Bunt (57) was partner at KPMG where he has held several roles in the past 20 years, the latest being Global Head of Mergers & Acquisitions. His focus was on M&A within the national and global Technology, Media and Telecom sector. Prior to KPMG he worked for a number of years at private equity firms and he started his career as an auditor at Ernst & Young.

Theo van der Raadt, chairman of the Supervisory Board of ICT Group: “It is with pleasure that we nominate Wouter van de Bunt for appointment to the Supervisory Board. His extensive experience in the IT sector will be valuable for ICT Group and complement our board. At the same time, I would like to thank Fritz Fröschl for his valuable contribution to the development of the company in the past eight years.”

Wouter van de Bunt will be nominated for appointment for a period of four years until the AGM in 2023. In addition, there will be a proposal to re-appoint Theo van der Raadt, whose second term ends on 15 May 2019, for a two-year period, until the AGM in 2021. This is to ensure sufficient continuity in the Supervisory Board. Both nominations will be made under the condition that the general meeting does not make use of its right of recommendation. After the (re-)appointments, ICT Group’s Supervisory Board will, effective 15 May 2019, consist of the following members: Theo van der Raadt (Chairman), Deepak Luthra, Gina van der Werf and Wouter van de Bunt. Mr. van de Bunt will become member of the Audit Committee.