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

NS selecteert ICT Group voor Manufacturing Execution System bij NedTrain

ICT Group is door NS geselecteerd voor de levering van een Manufacturing Execution System (MES) bij NedTrain in Haarlem. NedTrain, onderdeel van NS, verzorgt de revisie en onderhoud van treinstellen op de locatie in Haarlem. NedTrain moderniseert het wielstellenproces door de bouw van een nieuwe duurzame productiehal, een nieuwe productielijn, een nieuw productiemachinepark en toepassing van een IT-systeem (MES) voor real-time productiebesturing van alle machines en transportsystemen. Om te voldoen aan steeds strengere wetgeving op het gebied van spoorveiligheid worden alle gegevens uit het revisieproces in MES opgeslagen en beheerd. ICT Group ontwikkelt het MES op basis van de AspenTech AspenOne software. De geleverde oplossing bestaat uit hardware en software en een applicatie op mobiele barcodescanners voor het bedienend productiepersoneel. Een meerjarig onderhoudscontract maakt deel uit van de opdracht. De invoering van MES bij NedTrain moet leiden tot een efficient ‘lean’ productieproces (Manufacturing Excellence) en een verhoging van de kwaliteit. Het is de bedoeling dat deze nieuwe productiefaciliteit medio 2017 klaar is. De totale revisiecapaciteit van de nieuwe hal komt straks neer op 3.000 wielstellen per jaar. Na vakkundige revisie kunnen de wielen weer zo’n 1,2 miljoen kilometer mee.

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.

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

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.

Announcement of home member state

Article 5:25a(2) of the Dutch Financial Supervision Act obliges all listed companies to publicly announce which country is their “home member state” for purposes of regulation of their disclosure obligations under the EU Transparency Directive. In fulfilment with this obligation ICT Automatisering N.V. hereby announces that its home member state is The Netherlands.

Press Release: ICT strengthens position in healthcare market

ICT signs letter of intent to acquire the leading software company BMA, specialised in obstetrics solutions

ICT Automatisering N.V. (ICT) announces that today it has signed a letter of intent to acquire the shares of BMA (Bureau Medische Automatisering), a leading Dutch Healthcare software company based in Houten. ICT plans to acquire 51% of the shares as per January 2016. The remaining 49% will be acquired after a period of three years. The purchase consideration comprises a cash payment and an amount paid in ICT shares. The intended acquisition of BMA marks another step in the growth strategy of ICT, as it enables ICT to further expand its position in the healthcare market.

BMA develops software products that are designed for electronic record-keeping and fetal monitoring, focusing on the optimisation of the working and decision-making processes at the maternity ward. Their own software called Mosos – the integral solution for Obstetrics – is developed by BMA in close cooperation with gynaecologists, midwives, universities and government agencies. BMA distinguishes itself by offering all necessary software modules in order to produce paperless synoptic reporting. Next to selling and implementing its software products, BMA is also an exclusive distributor of specific obstetrical hardware products. With some 40 highly skilled professionals, BMA is market leader in the Benelux with a market penetration of approximately 80%. Next to the Benelux market the company is active in the UK, France and Switzerland. In the past years, BMA realised consistent profitable revenues of more than EUR 5 million per annum.

Jos Blejie, CEO of ICT: Diagnostic software and tools are getting increasingly important in the Healthcare sector. This acquisition further enhances our position in the field of ‘Smart Health’. Moreover it fully fits ICT’s strategic objective to become a total solutions provider. BMA is a clear market leader in the field of Obstetrics and enriches the total Health portfolio of ICT.

Oscar Appeldoorn and Alex Holsbergen, Managing Directors of BMA: “Joining ICT, as a leading software integrator, is a next step in realizing our growth strategy. In combination with ICT we expect to accelerate in product development and further internationalization. Staying shareholders in BMA the coming three years, and at the same time becoming a shareholder in ICT underlines the trust we have in a long term relationship with ICT.”

BMA will remain an independent business unit residing in its current location and operating under its own label within the ICT Group.

 

ICT Group (ICT Automatisering N.V.) is an independent provider of industrial automation services. Our specific industry knowledge of various markets, enables us to realize innovative solutions. Over 700 passionate technical specialists are working for the ICT Group. The following subsidiaries are member of the ICT Group: ICT Netherlands (ICT Automatisering Nederland B.V.), Strypes Bulgaria (ICT Nearshoring B.V.), Raster, Improve Quality Services and InTraffic (50%).

www.ict.eu

www.bma-mosos.com

Press Release: Q3 Results 2015

Q3 2015: revenue growth and improvement of profitability 

Key developments:

  • Revenue in Q3 up 20% at € 17.1 million (Q3 2014: € 14.2 million), organic revenue growth 9%.
  • EBITDA from continuing operations in Q3 came in at € 1.7 million (Q3 2014: € 0.7 million).
  • Acquisition of Raster completed on 16 September 2015.
  • ICT raises its expectation of an improvement in EBITDA to a range of 40%-50% for the full year 2015 compared to 2014.

Key figures (*) tabel (*) In conformity with IFRS 5, ICT Germany classifies as “Discontinued operations” following the decision to divest the operations and is presented as a separate line item in the income statement, being the total loss post tax of the German operations for the period as ‘result from discontinued operations’ Financial developments Revenue in the third quarter of 2015 increased to € 17.1 million compared to € 14.2 million in the third quarter of 2014. Excluding Strypes Bulgaria, revenue grew 9 % (organic growth). All ICT subsidiaries contributed to revenue growth. During the third quarter, ICT Netherlands partly recovered from the slowdown in demand and postponements of projects in the industrial automation markets in the first half of 2015. ICT Netherlands managed to improve productivity rates of employees as a result of more demand of customers. Revenue over the first nine months of the year amounted to € 51.7 million compared to € 46.6 million over the first nine months of 2014. Organically revenue grew 2.2%. Intensive collaboration between ICT Netherlands and Strypes Bulgaria resulted in additional growth in Bulgaria. EBITDA from continuing operations came in at € 1.7 million in the third quarter, compared with € 0.7 million in the same period of 2014, all subsidiaries contributed to this improvement. In the first nine months of 2015 EBITDA improved to € 4.8 million (first nine months 2014: € 3.1 million). The acquisition of Strypes positively impacted the EBITDA margin. Improve Quality Services and ICT Poland also contributed to this improvement. The improvement was partly off-set by lower than expected results in the Netherlands due to postponement of projects in the first half of 2015. The operating result from continuing ordinary operations in the first nine months of 2015 amounted to € 3.5 million (first nine months 2014: € 2.9 million). The acquisition of Strypes Bulgaria was completed on January 6th 2015. In compliance with IFRS 3 order backlog and customer relations have been valued as a result of a Preliminary Purchase Price Allocation. As a result the total amortization for the first nine months of 2015 amounts to € 1.0 million. Depreciation amounts to € 0.3 million for the first nine months of 2015. Acquisition of Raster ICT has completed the purchase of 100% of the shares of Raster as of the 16 September. The acquisition of Raster will substantially enrich ICT’s Industrial Automation activities and will further improve ICT’s position as a total solutions provider and open up new markets and customers. The acquisition will have a direct positive impact on ICT’s earnings as of the closing date. Raster figures are included in the group’s results as from the 16 September. Renewed and extended credit facility To create room for the execution of ICT’s buy and build strategy, ICT renewed and extended its credit facilities in the third quarter of 2015. The renewed facility consist of three credit facilities. The first facility of € 1.5 million, is advised and is used for providing guarantees and securities. The second credit facility amounts to € 6 million, is committed and can be used for working capital financing. The third credit facility also amounts to € 6 million and can be used for financing of acquisitions. From the acquisition facility € 3 million has been used for the acquisition of Raster in the third quarter of 2015. Outlook ICT continues to execute its strategy offering innovative and effective product/market solutions, enriched with state-of-the-art technology, combining autonomous growth with growth through acquisitions. Based on the performance year to date September 2015 and barring unforeseen circumstances, ICT raises its full year 2015 expectation of an improvement in EBITDA (operating profit before depreciation and amortization from continuing operations) between 40%-50% compared to 2014.