ICT Group N.V.: Verdere toename van de omzet en hogere winst over het derde kwartaal

Voornaamste ontwikkelingen: Derde kwartaal 2016

  • Omzet in derde kwartaal gestegen met 23% naar € 21,0 miljoen (derde kwartaal 2015: € 17,1 miljoen), autonome omzetstijging 5%.
  • Een EBITDA van € 2,1 miljoen in derde kwartaal (derde kwartaal 2015: € 1,7 miljoen).
  • Overname van Nozhup afgerond op 6 september 2016.

Resultaten 2016 tot dusver

  • In de eerste negen maanden van 2016 is de omzet gestegen met 22% naar € 63,1 miljoen (YTD 2015: € 51,7 miljoen), autonome omzetstijging 7%.
  • De EBITDA bedroeg over de eerste negen maanden € 6,3 miljoen (YTD 2015 € 4,8 miljoen), een stijging van 30%.
  • ICT bevestigt een verwachte verbetering van de EBITDA van 25%-35% voor het gehele jaar 2016 ten opzichte van 2015.

Kerncijfers

(in miljoenen €) Q3 2016 Q3 2015 YTD 2016 YTD 2015
Omzet 21,0 17,1 23% 63,1 51,7 22%
EBITDA 2,1 1,7 27% 6,3 4,8 30%

Jos Bleije, CEO van ICT Group N.V.: “De positieve trend van de eerste helft van 2016 heeft zich in het derde kwartaal voortgezet. We zien een sterk gestegen omzet, zowel door autonome groei als door onze succesvolle overnamestrategie, waarbij alle dochterondernemingen hebben bijgedragen aan de groei. Onze meest recente overname, Nozhup, versterkt onze positie in de markt van industriële automatisering en is vanaf 1 september verwerkt in onze cijfers. Onze winstgevendheid toont een continue verbetering. Daarnaast hebben we gedurende de afgelopen maanden een aantal belangrijke opdrachten binnengehaald. Op basis van deze ontwikkelingen bevestigen we onze verwachting van een verbetering van onze EBITDA van tussen de 25 en 35% over het gehele jaar 2016.” Financiële ontwikkelingen De omzet over het derde kwartaal van 2016 is gestegen naar € 21,0 miljoen in vergelijking met € 17,1 miljoen in het derde kwartaal van 2015. Tijdens het derde kwartaal, dat doorgaans lagere resultaten toont ten gevolge van de vakantieperiode, bedroeg de autonome groei van de omzet 5%. Alle dochterondernemingen van ICT hebben bijgedragen aan deze groei. De omzet over de eerste negen maanden van 2016 bedroeg € 63,1 miljoen in vergelijking met € 51,7 miljoen over dezelfde periode vorig jaar; de stijging wordt ondersteund door een autonome groei van 7%. Binnen ICT Nederland was de productiviteit tijdens het derde kwartaal vergelijkbaar met die van hetzelfde kwartaal vorig jaar. ICT verhoogde echter de gemiddelde tarieven en realiseerde hogere resultaten van zijn projecten, met als gevolg een hogere omzet. De omzet van Strypes Bulgaria steeg in vergelijking met het derde kwartaal van vorig jaar. Ook de andere recente overnames presteerden goed, in lijn met de verwachting. De cijfers omvatten tevens voor de eerste keer de resultaten van één maand van Nozhup. De EBITDA bedroeg € 2,1 miljoen over het derde kwartaal, vergeleken met € 1,7 miljoen over dezelfde periode van 2015. Tijdens de eerste negen maanden van 2016 steeg de EBITDA tot € 6,3 miljoen (€ 4,8 miljoen over de eerste negen maanden van 2015). Zowel de recente overnames, de toename van het personeel, de licht gestegen gemiddelde tarieven, als de goede projectresultaten hebben bijgedragen aan deze verbetering. Tegelijkertijd zijn de dubbele groeicijfers in Bulgarije ondersteund door verdere investeringen in kwaliteitscontrole en professionalisering van de organisatie. Overname van Nozhup Op 6 september 2016 heeft ICT de overname van 100% van de aandelen van Nozhup afgerond. Met deze overname verkrijgt ICT een belangrijk aandeel in de markt van industriële automatisering. De overname betekent bovendien een aanzienlijke verbreding van het klantenbestand van ICT, evenals het scala aan activiteiten in deze markt. De overname is gerealiseerd door een combinatie van contante betaling en aandelen in ICT. Het aandelenkapitaal is per 9 september 2016 verwaterd met 443.058 aandelen. Over een heel jaar genomen zal de overname zorgen voor een substantiële winst per aandeel. Uitbreiding van kredietfaciliteiten Vooruitlopend op de overname van Nozhup heeft ICT de kredietfaciliteit voor overnames bij de Rabobank in juli 2016 verhoogd van € 6 miljoen naar € 11 miljoen. Daarnaast heeft ICT zijn kredietfaciliteiten voor werkkapitaal uitgebreid van € 6 miljoen naar € 10 miljoen. De voorwaarden van de faciliteiten zijn niet gewijzigd. Vooruitzichten ICT blijft streven naar autonome groei in combinatie met groei door overnames en blijft daarbij nadruk leggen op het optimaal benutten van de recente overnames. In het licht van de reeds gerealiseerde strategische vooruitgang en zijn overnames bevestigt ICT zijn verwachting voor het gehele jaar 2016 van een verbeterde EBITDA van tussen de 25% en 35% in vergelijking met het gehele jaar 2015.

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

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.

Strong first quarter for ICT – Revenue and operating result improved

Key developments:

  • Revenue in Q1 up 23% at € 21.1 million (Q1 2015: € 17.1 million)
  • Organically revenue increased by 10%.
  • EBITDA from continuing operations increased to € 2.2 million (Q1 2015: € 1.4 million).
  • All subsidiaries showed profitable growth, Raster and BMA performed in line with expectations.
  • In March ICT announced the closure of the Polish activities.

Jos Blejie, CEO of ICT Automatisering N.V.: “We have started the year 2016 with confidence. We are pleased with the profitable growth shown at all our subsidiaries. We are committed to further execute the company strategy. In 2016, we will further leverage the acquisition of Raster and BMA. We will continue to implement a customer-centric approach with clear focus on the targeted markets addressing the different themes in each market. We reiterate that we expect this to lead to a further improvement in both revenue and profitability.” Financial developments Revenue in the first quarter of 2016 increased to € 21.1 million compared to € 17.1 million in the first quarter of 2015. Organically, excluding Raster and BMA, revenue grew 10%. All ICT subsidiaries contributed to this increase in revenue. Where in Q1 2015 ICT Netherlands saw a slowdown in demand and postponements of projects in the industrial automation, the improvement seen in the second half of 2015 continued in the first quarter of 2016. Strypes as well as Improve Quality Services performed well and the acquisitions, Raster and BMA showed a favourable development, in line with expectations. EBITDA from continuing operations came in at € 2.2 million in the first quarter, compared with € 1.4 million in the same period of 2015. All subsidiaries contributed to this improvement. Closure of Polish activities On 22 March 2016, ICT announced the closure of its ICT Poland operation with effect from 31 May 2016. Although ICT Poland realised an improvement in the past year, the Polish activities had not reached the necessary scale to continue to make the operation viable. Therefore, in a consolidating market, ICT decided to focus its nearshoring strategy fully on Strypes Bulgaria which has already achieved healthy growth and has the clear potential to continue to expand its customer base. Outlook ICT’s management reiterates the outlook given at the annual results announcement in March. ICT’s primary focus continues to be the execution of its strategy. ICT will further leverage the acquisitions of Strypes, Raster and BMA. ICT continues to aim for organic growth in combination with growth through acquisitions. Given the strategic progress made and its acquisitions, ICT expects a further improvement in revenue and EBITDA in 2016 compared with 2015, despite continued challenging conditions in various geographical markets and industries.