Press release: Full Year Results 2016 ICT GROUP NV

ICT REPORTS REVENUE INCREASE OF 25%, WITH A 44% HIGHER EBITDA

Accelerated execution of strategy drives strong results

Highlights FY 2016

  • Revenue up 25% to € 89.7 million, 8% organic growth
  • EBITDA increased 44% to € 10.3 million, organically EBITDA was up 5%
  • The recent acquisitions contributed considerably to the growth in revenue and results
  • The net result came in at € 5.0 million, a 41% increase compared to 2015
  • Proposed dividend of € 0.33 per share for the year 2016

Highlights Q4 2016

  • Revenue up 32% to € 26.6 million, EBITDA increased 74% to € 4.0 million
  • Organically revenue and EBITDA growth was in line with the full year growth; consolidation of Nozhup and BMA significantly contributed to the group’s Q4 results

Outlook

  • ICT expects a further growth in revenue and EBITDA for 2017 compared to 2016

Key figures

Jos Blejie, CEO of ICT Group N.V.: “2016 has been a good year in which we have made many steps in the execution of our strategy. We continued with a clear focus on what we try to accomplish every day; making the world a bit smarter with our technologies and skills. We further shaped the company into an even more customer centric organisation, which translated into healthy organic growth of 8%. With the acquisitions of the past year, we have further strengthened our position in our three main themes; Smarter Industries, Smarter Cities and Smarter Health. In 2016 we continued to challenge innovation and entrepreneurship. With success. A range of new business development initiatives were originated. We will continue to invest substantially in new technologies and the development of new solutions. We defined our strategy in 2015, delivered on an accelerated execution in 2016, and are excited to continue our successful strategy and further build on our strong foundation in 2017.”

Strategy update

Progress in 2016
In 2016, ICT made significant further progress in the execution of its strategic road map. The company completed the transition to a more customer centric business unit structure. ICT combined its strong organic development with growth through acquisitions. In the beginning of 2016 ICT completed the purchase of 51% of the shares of BMA, a leading Dutch Healthcare software company active in the domain of obstetrics. This transaction further enhanced ICT’s position in the field of Smarter Health.

At the end of the first half year of 2016, ICT acquired the water related activities of Dynniq and in September ICT acquired Nozhup, active in industrial process automation in industry and public infrastructure. With these acquisitions, ICT is well on track to deliver on its ambition to become one of the largest Industrial Technology players in the Netherlands, serving the global themes Smarter Industries and Smarter Cities.

The Polish operations had not reached the necessary scale to continue to make the operation viable. Therefore the ICT Poland operations were closed with effect from 31 May 2016. ICT’s focus on a single nearshoring entity supported the considerable growth of Strypes Bulgaria.

Initiatives to spark entrepreneurship in the organization have led to multiple initiatives originated at all levels and business units in the organization. A number of these have the potential to grow to viable business propositions, such as ICT Mobile, which bundles the latest mobile technologies in the Mobile Enterprise App Platform. ICT’s focus on new business development is also reflected by the commitment to invest 1.5% of revenue in R&D. The investments, geared towards all kind of new technologies in new product market combinations, are vital to the company’s future success.

The change of the statutory name from ICT Automatisering N.V. to ICT Group N.V., was adopted by the AGM in May 2016. The new name better reflects the clear focus and the international character of the company.

Focus in 2017
ICT aims to obtain a leading position in each of the three defined themes. To support the transition from a leading software integrator to a total technology and service provider, ICT furthermore strives to increase its higher value added revenue from projects as well as from services and licences. Moreover, ICT has the ambition to serve its international customers, also outside the Netherlands. An ambition that will gradually be pursued in its growth strategy.

Nozhup will be fully, legally and operationally, integrated within the ICT Netherlands organisation. The integration is expected to be completed by the end of 2017. Raster and BMA will continue to operate under their own label, like Improve, of course in close collaboration with the group. Integration of processes and uniform systems will stimulate this collaboration and will increase efficiency. In terms of Research & Development and technology, ICT continues its path towards the next professionalization level, focused on digital transformation.

Furthermore ICT is and will continue to invest in ‘Wellbeing at work’. This includes intellectually challenging assignments, better work places and the simplification of administrative tasks. As the battle for talent continues, attracting and retaining our people remains one of our key priorities.

Notes to the results

Revenue
In 2016, ICT Group’s revenue came in at € 89.7 million, 25% higher than the € 71.8 million reported in 2015. Organically, revenue increased by 8% and 17% of growth was driven by the recent acquisitions Raster, BMA and Nozhup. Organic growth was driven by the increase in the number of FTEs, higher average rates and improvements in a number of markets in which ICT is active.

Revenue at ICT Netherlands increased 13% to € 69.0 million in 2016, from € 61.0 million in the previous year. This includes four months of revenue from Nozhup, as this activity was consolidated in ICT Netherlands from September onwards. Organically, ICT Netherlands recorded 7% higher revenues. Nozhup is meeting expectations and is making a clear contribution to ICT Netherlands’ profitability. In 2016, ICT Netherlands managed to realise 2% higher average rates. Productivity levels and licences and materials sales were more or less unchanged compared to the previous year.

The conditions on the Dutch industrial market were favourable last year, which was reflected in the solid performance of the ICT business units active in this market. The public infrastructure sector saw a lot of activity in 2016 and ICT was able to benefit from this and record strong results. ICT realised healthy growth in the Healthcare segment and sees plenty of opportunities for continued growth in this market. With the recent acquisition of BMA, ICT has clearly strengthened its position in this market.

Strypes Bulgaria (“ICT Nearshoring”) saw its revenues increase 33% to € 7.6 million in 2016, from € 5.7 million in 2015. Strypes has more than doubled its employee numbers since ICT acquired the company in early 2015, and has broadened its customer base by gaining a number of new clients. To be able to manage this increase in size and to ensure continued and sustainable strong growth, in 2016 Strypes invested in the professionalization of the organization, including quality controls. These investments, which will continue in 2017, are already paying off, as Strypes was able to increase its profitability substantially in the second half of the year compared to the first half. This resulted in an EBITDA increase of 5% to € 1.7 million for the full year 2016.

The segment ‘Other’ recorded revenues of € 14.3 million in 2016 (2015: € 6.2 million).
Raster is delivering on target, despite the continuing difficult market conditions in the oil & gas industry in 2016. Their niche position, high quality standards and direct client relationships make them resilient in these challenging market circumstances.
Improve performed well, in line with last year. In 2015, Improve achieved a substantial improvement in performance and the company was able to maintain its results at this level in 2016.
After a challenging first half of the year, in which BMA performed below expectations as a result of postponed projects, the second half of 2016 saw a recovery in results. The Dutch market is a declining market, as the number of hospitals is declining due to a number of mergers. However, BMA developed a new generation of software to facilitate international expansion, as this new generation software is easier to connect to different protocols in different countries. BMA is in a strong position for this international expansion.
ICT Poland was closed down in the first half of 2016. On balance, the five months of revenue from ICT Poland was offset by the costs of closing down the operation.

Costs/ personnel expenses
In 2016, personnel costs increased by 20% to € 52.0 million (2015: € 43.5 million), as a result of the marked increase in the number of employees and a modest increase in salaries. Other operating expenses increased by 14%, mainly as a result of the recent acquisitions. In 2016, ICT invested in office accommodation, marketing & sales and its financial reporting & human resources processes, with investment levels similar to those in 2015. The HR investments focused primarily on improving the HR processes at the companies ICT has acquired over the past two years. In addition, ICT invested more heavily in recruitment last year. The costs related to strategic initiatives and the realisation of acquisitions and partnerships amounted to € 0.5 million (2015: € 0.6 million).

EBITDA
EBITDA for the full year 2016 increased by 44% to € 10.3 million, compared to € 7.1 million in 2015. Organically, EBITDA was up 5%, with ICT Netherlands and Strypes Bulgaria both recording higher EBITDA compared to 2015. The overall EBITDA margin increased to 11.5% in 2016 from 9.9% in 2015.

Amortisation and depreciation
ICT has attributed a value to, and is amortising a number of intangible assets, including order backlog, software and customer relations of its recent acquisitions. Amortisation amounted to € 2.3 million in 2016, comprising € 0.7 million related to Strypes Bulgaria, € 0.6 million to Raster and € 0.6 million to BMA. For Nozhup, the annual amortisation will be € 0.4 million. Depreciation amounted to € 0.6 million in 2016 (2015: € 0.5 million).

Operating profit amounted to € 7.4 million in 2016 (2015: € 5.3 million). The operating margin was 8.2%, compared to 7.4% in 2015.

The results from joint ventures and associates
InTraffic was more or less in line with last year and contributed € 0.2 million to the results.

LogicNets performance improved significantly in 2016, as revenues from the platform doubled and the losses were halved in 2016 compared to 2015. Last year, we saw the completion of the development of the platform into a standardised solution, which has improved the marketability of the software platform. LogicNets won a number of reputable new customers. Despite the improvements on all key parameters, LogicNets is still lagging its original ambitious plans. ICT therefore decided to take an impairment on its stake in LogicNets in the fourth quarter of 2016. The downward valuation of LogicNets, including our share in the loss, amounted € 0.6 million. The book value of LogicNets per year-end 2016 amounted to € 0.5 million.

In 2016, ICT issued loans to start-up company CIS Solutions, a selling agency (for LogicNets and Internet of things solutions) in Germany. As the company is not yet profitable, the loans have been devalued by € 0.4 million in accordance with IFRS requirements. The book value of the loans was € 0.2 million as per year end 2016.

The total result from joint ventures and associates amounted to a loss of € 0.8 million (2015: € 0.3 million loss).

Interest expenses increased to € 0.5 million in 2016, from € 0.3 million in 2015, as a result of increased financing for the recent acquisitions, as well as the accrued interest on the deferred acquisition consideration for the remaining 49% of BMA. In July 2016, ICT extended its acquisition credit facility with Rabobank to € 11 million from € 6 million. Additionally, ICT increased its working capital credit facility to € 10 million from € 6 million. The conditions of the facilities remained unchanged.

Taxes
In 2016, corporate income taxes related to the continuing business activities amounted to € 1.7 million, compared with € 1.1 million in 2015. ICT finalised the liquidation of ICT Germany in 2016. In 2014, ICT recognised a deferred tax liability related to the liquidation of ICT Germany. Given that the German activities were officially liquidated in Q4 2016, and the liability no longer exists, this liability has now been released. As a result, taxes from discontinued operations for 2016 amounted to a credit of € 0.8 million.

Net profit for the full year 2016 amounted to € 5.0 million, compared with € 3.6 million in 2015, an increase of 41%. This translates into earnings per share of € 0.56 for 2016 (2015: € 0.41). The number of outstanding ordinary shares had increased to 9,288,309 at year-end 2016 (31 December 2015: 8,747,544) due to shares issued as purchase consideration on acquisitions in 2016.

Cash flow movement

The group cash (and cash equivalents) position amounted to € 5.6 million at year-end 2016, compared to € 6.7 million at year-end 2015. The cash flow from operating activities amounted to € 5.1 million positive in 2016 (2015: € 6.1 million positive). The higher cash income from operating activities was more than offset by the higher income tax paid. Cash flow from investment activities amounted to € 8.4 million negative, compared to € 11.8 million negative cash flow in 2015. The largest impact on the cash flow from investment activities in 2016 came from the net investments less cash acquired related to the acquisition of BMA and Nozhup (€ 6.3 million) and investments in office accommodation (€ 1.1 million).
Cash flow from financing activities amounted to € 2.2 million positive (2015: € 1.0 million positive), as a result of the net effect of dividend paid (€ 2.3 million), the payment of the earn-out obligation related to the acquisition of Strypes Bulgaria (€ 1.6 million) and the use of acquisition financing (€ 6.2 million cash inflow) related to the acquisition of BMA and Nozhup.
The net cash flow amounted to € 1.1 million negative (2015: € 4.7 million negative).

Balance sheet structure

As a result of the net effect of the payment of dividend of € 2.3 million, the issuance of € 5.4 million in new shares related to the acquisition of BMA and Nozhup, and net profit of € 5.0 million, shareholders’ equity increased to € 43.7 million in 2016 (2015: € 35.5 million). The balance sheet total has increased to € 79.2 million at year-end 2016, from € 58.2 million at year-end 2015, as a result of the acquisitions made last year. Solvency (shareholders’ equity/total assets) stood at 55% at year-end 2016, compared with 61% at year-end 2015, which represents a very sound financial basis.

Personnel

The total number of employees stood at 919 FTE’s at year-end 2016, an increase of 20%. This increase was due to both acquisitions and increased recruitment efforts.

Dividend proposal

ICT proposes a dividend of € 0.33 per share for the 2016 financial year (2015: € 0.24). The dividend payment is subject to the approval of the Annual General Meeting of Shareholders (AGM) to be held on 10 May 2017. 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 2016 of € 7.7 million. The proposed dividend represents of € 0.33 per share represents a pay-out ratio of 40% of the adjusted net profit. ICT will offer 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 29 May 2017. The dividend will be payable, in cash or in shares, on 7 June 2017.

Outlook

In 2017, ICT will continue to focus on the further leveraging of the strategic platform it has successfully built over the past years, aimed at organic growth combined with acquisitions. The goal of the acquisition strategy is to achieve strong positions in each of ICT’s three main themes. Overall, the markets in which ICT is active are developing positively from a demand perspective, although some markets do remain challenging. ICT expects its capital expenditures and research & development expenditures for 2017 to grow in line with the increased scale of the company. The tight labour market remains a potential bottleneck, and attracting and retaining the right people continues to be one of our key priorities.

Based on the above, ICT expects further growth in revenue and EBITDA in 2017 compared to 2016.

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.

2016 financial information
The 2016 financial information included in the Extracts from Consolidated Financial Statements attached to this press release is derived from the Annual Report 2016, 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 10 May 2017. In accordance with section 393, title 9, book 2 of the Netherlands Civil Code, Deloitte Accountants B.V. has issued an unqualified auditor’s opinion on the Annual Report.

Annexes: Extracts from Consolidated Financial Statements 2016
– Consolidated statement of total 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 2016

Smart Energy project ”EnergieKoplopers” wins two prestigious awards

Dutch market model for smart energy wins two awards at the 8th European Smart Energy Awards

London, 3 February 2017 – At the award ceremony of the European Smart Energy Awards in London, USEF Foundation and smart energy pilot ‘EnergieKoplopers’ have received the Energy Market Innovation of the Year Award and the Smart Energy Roll Out Innovation Award.USEF Foundation was founded by ABB, Alliander, DNV GL, Essent, IBM, Stedin and ICT Group

The Smart Energy Awards are part of the Smart Energy UK & Europe Summit in London. They are voted on by 15 judges from utilities and consumer bodies and aim to recognise excellence, innovation and creativity in the Smart Energy Industry throughout Europe and acknowledge those who are playing a defining role in moving the industry forwards.

USEF, the Universal Smart Energy Framework, describes a market model for flexible energy use (‘flexibility’). We are using more and more electricity and with the increase of sustainable energy sources like solar and wind energy, demand and supply of electricity are less predictable. By being flexible about when we use, store or supply energy, consumers can improve their energy efficiency and alleviate grid stress. USEF delivers a market structure for flexibility that fits on top of most energy markets and defines the roles and guidelines required to benefit all players in the electricity chain, from consumer to grid operator.

The EnergieKoplopers project in Heerhugowaard tested a USEF flexibility market for the first time. To this end, smart appliances were installed at 203 households, which enabled flexible electricity consumption. The smart appliances were automatically controlled by a smart IT system. The project has shown that the USEF flexibility market works: the system helps resolve the future problems in the energy system, and value is created for all parties that play a role in a USEF flexibility market.

USEF and Energiekoplopers received the awards for their innovative strength in the design and implementation of a flexibility market model that supports a unified sustainable market. At the 2016 Smart Energy Awards the USEF Foundation was also awarded with a Smart Energy Award shortly after first releasing their framework to the market. They were then recognized with the Smart Grid Network & Communications Award 2016.

About USEF
The Universal Smart Energy Framework (USEF) provides the international common standard for a unified smart energy market, connecting projects and technologies at the lowest cost. With a value-to-all approach, USEF enables the commoditisation and trading of flexible energy use. The framework defines the market structure, stakeholder roles, how they interact and how they benefit by doing so.
USEF Foundation was founded by seven key players active across the smart energy chain (ABB, Alliander, DNV GL, Essent, IBM, ICT Group and Stedin) in order to accelerate the transition to a commercially viable smart energy system. USEF partners work together to effectively address the challenges of one integrated system which benefits new and traditional energy companies as well as consumers. The outcomes of their work is freely downloadable for all. www.usef.energy
About EnergieKoplopers
This demonstration project with 200 households is an initiative of Alliander, Essent, ICT Group, NRG031 and the Municipality of Heerhugowaard. provide insight into how more flexible strategies can help to grow sustainable energy and keep the electricity grid reliable at the lowest possible costs, while also indicating the potential savings for households. The flexible energy system is set up according to the principles of the Universal Smart Energy Framework (USEF). The project has been subsidised with a grant from the government’s Innovation Programme Intelligent Networks (IPIN). For a video animation of the results, view the video or download the end report at https://www.usef.energy/news-events/publications/

More information
Emilie van Rappard
E: contact@usef.energy
T: +31 6 45752819

NS (Dutch Railways) selects ICT Group for Manufacturing Execution System at NedTrain

NS (Dutch Railways) recently selected ICT Group to deliver a Manufacturing Execution System (MES) at NedTrain in Haarlem. NedTrain, a subsidiary of NS, overhauls and maintains train bodies at its Refurbishment & Overhaul workshop in Haarlem.

NedTrain is modernizing the process of overhauling wheelsets by building a new and sustainable production workshop, a new production line, a new production machine park, and by applying an IT system (MES) for real-time production control of all machines and transport systems. All data from the overhaul process is stored and managed in MES in order to comply with the increasingly stringent legislation with regard to rail safety.
ICT Group is developing the MES using the AspenTech AspenOne software. The solution will consist of hardware and software, as well as an application that will run on mobile barcode scanners and that will be used by the production staff. A service contract for the duration of several years is part of the project.

The introduction of MES at NedTrain must result in an efficient, ‘lean’ production process (Manufacturing Excellence), as well as quality improvements. The new production facility is scheduled for completion in the middle of 2017. The new workshop will have an annual overhaul capacity of 3,000 wheelsets. Following professional overhaul, the wheels will have a new lifespan of approx. 1.2 million kilometers.

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

Key developments:

Q3 2016

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

Year to date 2016

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

 Key figures

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

Jos Blejie, CEO of ICT Group N.V.: “The positive trend of the first half of 2016 continued in the third quarter. Our revenue development is strong, both organically and through our successful acquisition strategy, with all subsidiaries contributing to the growth. Our latest acquisition, Nozhup, strengthens our position in Industrial Automation and is consolidated from 1 September onwards. Our profitability continues to improve. Furthermore, we have won a number of important contracts in the past months. Based on these developments we confirm our expectation of an improvement in EBITDA between 25 and 35% for the full year 2016.”

Financial developments
Revenue in the third quarter of 2016 increased to € 21.0 million compared to € 17.1 million in the third quarter of 2015. Revenue grew 5% organically in the, due to the holiday season traditionally weaker third quarter. All ICT subsidiaries contributed to this growth. Revenue over the first nine months of the year amounted to € 63.1 million compared to € 51.7 million last year, supported by an organic growth of 7%.

Within ICT Netherlands, productivity levels in the third quarter have been comparable to the same quarter last year, but ICT increased average rates and achieved better project results, which led to an increase in revenue. Revenue of Strypes Bulgaria increased compared to Q3 last year. Also the other recent acquisitions performed well, in line with expectations. Nozhup was included in the results for the first time, for one month.

EBITDA amounted to € 2.1 million in the third quarter, compared to € 1.7 million in the same period of 2015. In the first nine months of 2016 EBITDA improved to € 6.3 million (first nine months 2015: € 4.8 million). The recent acquisitions, increased number of staff, slightly higher average rates and good project results, all contributed to this improvement. At the same time the double digit growth in Bulgaria was supported by the continued investments in the quality controls and professionalization of the organisation.

Acquisition of Nozhup
ICT has completed the purchase of 100% of the shares of Nozhup as of 6 September 2016. With this acquisition ICT gains significant scale in the industrial automation market. At the same time, it considerably widens ICT’s customer base and scope of activities in this market. The purchase consideration comprised a cash payment and an amount in ICT shares. The share capital was diluted with 443,058 shares as from 9 September 2016. On a full year basis, the acquisition will substantially enhance the earnings per share.

Extended credit facility
In anticipation of the acquisition of Nozhup, ICT has extended its acquisition credit facility with Rabobank in July 2016 from € 6 million to € 11 million. Additionally, ICT has increased its working capital credit facility from € 6 million to € 10 million. The conditions of the facilities remained unchanged.

Outlook
ICT continues to aim for organic growth in combination with growth through acquisitions. ICT will focus on further leveraging its recent acquisitions. Given the strategic progress made and its acquisitions, ICT confirms its expectation for the full year 2016 of an improvement in EBITDA between 25%-35% compared to the full year 2015.

GreenFlux Smart Charging Controller wins sMove360° Award at eCarTec in Munich

On Tuesday 18 October the winners of the 2016 sMove360° Award were announced at the international eCarTec expo in Munich. In the category ‘ICT Infrastructure & Security’ the first prize was awarded to Dutch charge point operator and service provider GreenFlux. Their Smart Charging Controller can transform every charge station for electric vehicles into an intelligently connected device. ICT Group has a minority interest in Greenflux.

GreenFlux developed their Smart Charging Controller to offer charge point manufacturers and operators worldwide a scalable and future-proof working solution. The controller is designed to support smart charging of electric vehicles. Smart Charging distributes the total available power over charging stations in a smart way. This means electric vehicles can charge at a higher speed and ‘capacity overload’ with full occupancy is prevented. This results in a safe solution and no extra installation fees or electricity charges based on a higher peak use.

GreenFlux is a pioneer in Smart Charging and has extensive experience in this field in several European countries such as the Netherlands and the UK. The solutions GreenFlux offers are based on extensive experience and pilots with Dutch grid operators and companies. They address current issues for organisations that want to offer EV charging as a service. The need for smart charging will only grow, both nationally and internationally, when the demand of energy on the network will increase because of market growth of electric vehicles. GreenFlux’ controller is ready for that and moreover transforms unconnected charge stations for electric vehicles into smart stations, offering the charge point operators more services for their customers like remote services and billing services.

The GreenFlux Smart Charging Controller is part of GreenFlux’ vision of a sustainable world, powered by the sun. The controller enables a way to charge cars with 100% renewable energy. Making cars charge faster when there is more green energy available.

Jos Blejie, CEO ICT Group: “The Greenflux platform was developed by the ICT Energy unit and we are therefore very proud to congratulate Greenflux with the 2016 sMove360° Award. In 2015 we have transferred the intellectual property of this development to Greenflux and we have at the same time acquired a minority interest in the company. This award shows that we have made the right decision and we will of course continue to support Greenflux as a technology partner”.

For more information www.greenflux.nl

ICT completes acquisition of Nozhup

ICT Group (ICT) announces that today it has completed the purchase of 100% of the shares of Nozhup, a Dutch based industrial automation services provider. The purchase consideration comprised a cash payment and an amount in ICT shares. The share capital will be diluted with 443,058 shares.

With this acquisition ICT gains significant scale in its activities in the industrial automation market. At the same time it considerably widens ICT’s customer base in this market. Nozhup will immediately contribute to the profitability of ICT. On a full year basis the acquisition will substantially enhance the earnings per share.

Press Release: half year results 2016 ICT Group

STRONG FIRST HALF YEAR RESULTS
On track to become a leading total technology solutions provider

Highlights H1 2016

  • Revenue up 22% to € 42.1 million, 8% organic growth
  • EBITDA increased 32% to € 4.2 million
  • Net profit at € 2.1 million, an increase of 44% (H1 2015: € 1.5 million)
  • Acquisition of BMA in the field of Smarter Health completed
  • Intended acquisition of Nozhup in the field of Smarter Industries as announced on 12 July 2016
  • Barring unforeseen circumstances, ICT expects an improvement in EBITDA between 25%-35% for the full year 2016 compared to 2015.

Key figures

Key figures
(in millions of €) H1 2016 H1 2015 Change
Revenue 42.1 34.6 22%
Revenue Added Value 37.3 31.8 18%
EBITDA 4.2 3.2 32%
Amortisation / depreciation 1.2 1.1 8%
Operating result 3.0 2.1 44%
Net profit 2.1 1.5 44%
(in €)
Earnings per share (*) 0.24 0.17 41%

(*) Based on the average number of outstanding ordinary shares.

Jos Blejie, CEO of ICT Group N.V.: “We are pleased with the developments of this first half year. Both in terms of results as well as in the further roll out of our strategy. We realised strong revenue and EBITDA growth, to which all our key activities contributed. We closed the acquisition of BMA, thereby strengthening our position in Smarter Health. We announced the expansion of our water infrastructure services through the acquisition of the Dynniq activities. And finally, early July, we announced the intended acquisition of Nozhup, with which we will gain significant scale in the Industrial Automation markets. These are all important steps in our road map to becoming a leading total technology solutions provider. In March we decided to close our Polish operations and focus our nearshoring business on Strypes in Bulgaria, which is further professionalising its organisation to enable sustainable growth. We are confident about the second half of the year and therefore expect an improvement in EBITDA between 25-35% for the full year 2016.”

Strategy update
In the first half of 2016 ICT made important steps in the execution of its strategic road map. The success of the earlier strategic choices is reflected in the strong financial results realised in the first half of the year. In 2015 ICT changed its organisational structure from verticals to business units, to spark the entrepreneurial spirit within ICT. This resulted in the first half of 2016 in a profitable autonomous growth of 8%.

In February 2016 ICT completed the purchase of 51% of the shares of BMA (Buro Medische Automatisering), a leading Dutch Healthcare software company active in obstetrics. The remaining 49% will be acquired after a period of three years. This transaction also marks an important step in ICT’s growth strategy and further enhances ICT’s position in the field of Smarter Health.

The acquisition of Raster in September 2015 marked an important step in strengthening ICT’s position in the Oil and Gas market. In June 2016, ICT acquired the water related services activities of Dynniq, which strengthened ICT’s expertise in Smarter Cities. In July 2016, we announced the proposed acquisition of Nozhup, active in process automation in the industry and infrastructure markets. With these acquisitions, ICT is well on track to deliver on its ambition to become one of the largest Industrial Automation players in the Netherlands, addressing the global themes Smarter Industries and Smarter Cities.

Furthermore at the end of March 2016 ICT announced the closure of the ICT Poland operation with effect from 31 May 2016. As the Polish operations had not reached the necessary scale to continue to make the operation viable, ICT decided to focus its nearshoring strategy fully on Strypes Bulgaria.

At the beginning of July 2016 a new legal entity (start-up), ICT Mobile B.V., was incorporated, in which ICT holds 51% of the shares (49% is owned by the two founders). With this new activity ICT is responding to the trend of enterprises embracing mobile processes and adopting a mobile strategy at high speed.

At the AGM held on 11 May 2016 the statutory name change of ICT Automatisering N.V. to ICT Group N.V., was adopted. The new name better reflects the international character of the company and also enables the company to easier add new labels to the group.

Notes to the results
In the first six months of 2016 ICT Group’s revenue came in at € 42.1 million, up 22% compared to € 34.6 million reported in H1 2015. Organically, revenue increased by 8%. This was driven by increased number of staff, slightly higher average rates and good project results, whilst overall productivity was slightly lower.

Revenue at ICT Netherlands increased 7% to € 32.3 million in H1 2016 from € 30.1 million in the same period last year. Productivity levels were more or less at the same levels as last year, but ICT was able to increase the average rate and the company realised good project results. Licences and materials sales were below expectations. Market circumstances in the Industrial Automation market remained challenging. Other markets, including High Tech, Machine & Systems, Automotive, Healthcare and Logistics, showed a positive development. ICT sees ample opportunities in Healthcare that realised good growth percentages.

Strypes Bulgaria (“ICT Nearshoring” or “Strypes”) saw a 26% increase in revenue from € 2.5 million in H1 2015 to € 3.2 million in the first six months of 2016. As Strypes further broadened its client base, it continued to decrease the firm’s dependency on its largest client. In the past six months Strypes invested efforts both on new clients as well as on the internal processes, with the objective to further professionalise the organisation and to ensure that Strypes Bulgaria will be able to continue its strong growth path. Given these outlays we anticipate a temporisation of the results.

Raster contributed revenues of € 2.9 million in the first six months of 2016. Despite the still challenging Oil and Gas market, Raster showed a good performance, in line with expectations.

The segment ‘other’ (Improve, BMA and ICT Poland) recorded revenues of € 4.2 million. The market for training is favourable as is reflected in the revenue recorded by Improve, which slightly improved over last year. BMA performed below expectations as a result of postponement of projects, but expects to improve in the second half of the year and the new product developments are running on schedule. As a result of the closure of the Polish operations as per 31 May 2016, revenue of ICT Poland was slightly down compared to H1 2015.

Personnel costs increased overall to € 24.9 million (H1 2015: € 21.6 million), as a result of both salary increases as well as the increase in number of employees. Other operating expenses also increased, mainly as a result of the most recent acquisitions. The costs related to strategic initiatives and the realisation of acquisitions and partnerships amounted to € 0.3 million (H1 2015: € 0.3 million).

EBITDA for the first six months of 2016 increased by 32% to € 4.2 million, compared to € 3.2 million in the comparable period in 2015. Organically (excluding BMA and Raster) EBITDA was in line with last year. Profitability at ICT Netherlands increased, but this was off-set by the increased investments in Strypes Bulgaria and the costs related to the closure of the Polish operations. The EBITDA margin increased from 9.2% in H1 2015 to 9.9% in H1 2016.

Based on Purchase Price Allocation, ICT has attributed a value to and is amortising a number of intangible assets, including order backlog, software and customer relations of its recent acquisitions. Amortisation amounted to € 0.9 in the first half of 2016, comprising € 0.3 million related to Strypes Bulgaria, € 0.3 million related to Raster and € 0.3 million related to BMA. Depreciation for the first half of 2016 amounted to € 0.2 million (H1 2015: € 0.2 million).

The operating profit amounted to € 3.0 million in H1 2016 (H1 2015: € 2.1 million).

The results from joint venture InTraffic increased compared to last year and contributed € 0.1 million to the results. The result from associates improved to € 0.1 million negative (H1 2015 € 0.2 million negative), mainly due to a better performance of LogicNets Inc.

Taxes in the first half of 2016 amounted to € 0.7 million compared with € 0.4 million in the first half of 2015.

Net profit for the first six months of 2016 amounted to € 2.1 million, compared with € 1.5 million in H1 2015. This translates into earnings per share of € 0.24 for H1 2016. The number of outstanding ordinary shares increased during the first half year 2016 to 8,845,251 (31 December 2015: 8,747,544).

Cash flow movement
As usual for the first half of the year, net operational cash flow amounted to € 0.3 million negative in H1 2016 (H1 2015: € 0.8 million negative). The cash position per 30 June 2016 decreased to € 1.2 million (31 December 2015: € 6.7 million). This was mainly due to investments in housing facilities, the payment of the earn out obligation related to the acquisition of Strypes Bulgaria, the purchase price cash consideration of the acquisition of BMA, and the payment of dividend. The acquisition of BMA was partly financed from the acquisition facility.

Balance sheet structure
In the first half of 2016, shareholders’ equity increased to € 36.3 million (31 December 2015: € 35.5 million) as a result of the net effect of dividend paid of € 2.1 million, issuance of new shares of € 0.8 million, related to the acquisition of BMA and net profit of € 2.1 million. The balance sheet total increased from € 58.2 million at year-end 2015 to € 70.3 million at 30 June 2016, as a result of the acquisitions in the last half year. Solvency (shareholders’ equity/total assets) represents a sound financial basis and stood at 52% at the end of June 2016 (61% at year-end 2015).

Personnel
The total number of employees at 30 June 2016 was around 4% higher than at year-end 2015. This was due to both acquisitions and as well as increased recruitment efforts.

Significant events after the balance sheet date
On 11 July 2016, ICT signed a letter of intent to acquire Nozhup. With this intended acquisition ICT gains significant scale in the industrial automation market. At the same time it considerably widens ICT’s customer base in this market. Nozhup will immediately contribute to the profitability of ICT.

In anticipation of the intended acquisition of Nozhup, ICT has extended its acquisition credit facility with Rabobank in July 2016 from € 6 to € 11 million. Additionally ICT has increased its working capital credit facility from € 6 million to € 10 million. The conditions of the facilities remained unchanged.

Composition of the Supervisory Board
At the General Meeting of Shareholders held on 11 May 2016, Mr. Luthra was reappointed for a second four-year term as member of the Supervisory Board.

Outlook
ICT continues to aim for organic growth in combination with growth through acquisitions. ICT will focus on further leveraging its recent acquisitions. Given the strategic progress made and its acquisitions, ICT expects for the full year 2016 an improvement in EBITDA between 25%-35% compared to the full year 2015.

Condensed consolidated interim financial statements 30 June 2016

ICT Group’s Limburg Water Level app nominated for Award

Channelweb has announced the nominees of the Channel Awards 2016 in the category ‘Best Channel Project of the Year’. The nominees were chosen by a total of 21 jury members specialized in projects, project management and chain collaboration in projects. The winners will be announced during a spectacular award show on 7 December 2016.

Limburg-based water boards, ICT Group and Smartportal (Limburg Water Level app)
“The Limburg Water Level app has allowed citizens of Limburg to check the actual water levels in their area since February 2016. ICT Group developed the app using Smartportal – a smart, cloud-based solution – in combination with the current IT landscape and standard processes, data and tools. Citizens are informed promptly by e-mail or push message in cases of possible flooding, and social media allow them to track the measures taken by the water boards. Smartportal converges multiple, existing IT solutions of a company into a single, integrated, cloud-based application.” Click here for more information on the app.

We are very proud of this nomination.
You can vote until Sunday 13 November 2016. The winners will be announced during a spectacular award show on 7 December 2016.

ProRail awards maintenance contract for TTI Delft operating system to ICT Group

ICT Group has been awarded the ProRail contract for the daily maintenance of the operating system for the technical tunnel systems (TTI) in the Willem van Oranje rail tunnel in the city of Delft. The system operates and controls the technical tunnel systems (TTI) of the 2.3-kilometer rail tunnel. The Delft tunnel is part of the rail link between Rotterdam and The Hague on one of the busiest rail routes in the Netherlands. The contract has been concluded for a period of three years and includes an extension option until 2025.

The tunnel, which is part of Spoorzone Delft (Railway Zone Delft), consists of an East tube and a West tube, both fitted with 2 separate rail lines. The operating system is the technical heart of the tunnel, from where all the electromechanical systems for safety measures and audio and video communication are operated and controlled.

IMG_3995
In order to meet the high availability requirements, the Siemens operating system is fully implemented in duplicate, so that rail traffic can continue to run even if there is a malfunction. The maintenance activities include configuration management, incident management and preventative and corrective maintenance. The service processes have been configured to fulfill the operating system’s high reliability and availability requirements. The contract will be implemented by the Outsourced Services unit of ICT Group, which specializes in software life-cycle management and Asset Management in addition to the above-mentioned service activities.

Press release: ICT gains significant scale in industrial automation

ICT Group (ICT) announces that today it has signed a letter of intent to acquire 100% of the shares of Nozhup, a Dutch based industrial automation services provider. With the intended acquisition ICT gains significant scale in its activities in the industrial automation market. At the same time it considerably widens ICT’s customer base in this market. Nozhup will immediately contribute to the profitability of ICT. On a full year basis the acquisition will substantially enhance the earnings per share.

Nozhup is a well-respected industrial automation project and services provider, founded in 2003, which employs around 90 highly educated professionals. Nozhup delivers projects, services, project management and consultancy in process control and instrumentation engineering. Furthermore it provides design and implementation of control software and hardware and systems integration of technical installations. The company has a focus on both the industrial markets, mainly in the sectors machinery and chemicals, as well as the infrastructure market. NOZHUP’s diversified customer base is largely complementary to ICT’s customers. Nozhup realizes profitable revenues of around EUR 9.5 million per annum.

ICT has already taken a number of steps to gain scale in the Industrial Automation markets, both organically as through acquisitions. With the intended acquisition of Nozhup, ICT is well on track to deliver on its ambition to become one of the largest Industrial Automation players in the Netherlands addressing the global themes Smart Industries and Smart Cities.

Jos Blejie, CEO of ICT: “This is a very important step in the roll out of our Industrial Automation strategy. Combined we have the scale and strength and above all the skills, to be leading in the Industrial Automation markets. I am convinced of the cultural fit and I am delighted to welcome all Nozhup employees, For the ICT Group this acquisition marks another milestone in our road map to become a leading total technology solutions provider.”

For multiple years Nozhup and ICT already worked together on a regular basis and therefore know each other quite well. The two companies share the same type of culture. The quality of work, education of staff and knowledge of the various sectors is similar. Nozhup will operationally work closely together with ICT’s Industrial Automation business unit. The founders of Nozhup will remain involved as advisors.

The purchase consideration comprises a cash payment and an amount in ICT shares. It is expected that the share capital will be diluted with approximately 450.000 shares (approximately 5% of total shares). The acquisition is expected to close in the third quarter.