Interim / Quarterly Report • Aug 1, 2023
Interim / Quarterly Report
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PRESS RELEASE
| Ordina delivers solid performance in first half of 2023 | 3 |
|---|---|
| H1 2023 highlights | 3 |
| Q2 2023 highlights | 3 |
| Key figures | 3 |
| Jo Maes, Ordina CEO, on the results | 3 |
| Group performance | 4 |
| Revenue | 4 |
| Employees and productivity | 4 |
| EBITDA | 5 |
| Performance per region | 5 |
| Net profit | 6 |
| Net cash and cash flow | 7 |
| Risk management | 8 |
| Management Board statement | 9 |
| Additional information | 10 |
| Consolidated balance sheet | 13 |
|---|---|
| Consolidated statement of profit or loss | 14 |
| Consolidated statement of comprehensive income | 15 |
| Consolidated statement of changes in equity | 16 |
| Consolidated statement of cash flows | 17 |
| Notes to the consolidated interim financial statements | 18 |
Ordina is the digital business partner that harnesses technology and market know-how to give its clients an edge. We do this by using smart solutions to connect technology, business challenges and people. We help our clients to accelerate, to develop smart applications, to launch new digital services and ensure that people embrace those services. Ordina was founded in 1973. Its shares are listed on Euronext Amsterdam and are included in the Smallcap Index (AScX). In 2022, Ordina recorded revenue of EUR 429 million. You will find more information at www.ordina.com
This document contains forward-looking statements regarding the financial performance of Ordina N.V. and outlines certain plans, targets and ambitions based on current insights. Such forecasts are obviously not without risk and entail a certain degree of uncertainty, since there are no guarantees regarding future circumstances. There are multiple factors that could potentially result in the actual results and outcomes differing from those outlined in this document. Such factors include: general economic trends, the pace of globalization of the markets for solutions, IT and consulting, increased performance commitments, scarcity on the labor market, and future acquisitions and disposals.
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
6 September , 2023 Extraordinary General Meeting 2 November, 2023 Q3 Trading Update
Nieuwegein, 1 August 2023 – Ordina N.V. (Ordina), the digital business partner that harnesses technology and market know-how to give its clients an edge, today presents its results for first half of 2023 and the key results for the second quarter of 2023.
| Change | ||||||
|---|---|---|---|---|---|---|
| Change | Q2 2023 | |||||
| H1 2023 vs. | vs. | |||||
| (in thousands of euro, unless stated otherwise) |
H1 2023 | H1 2022 | H1 2022 | Q2 2023 | Q2 2022 | Q2 2022 |
| Revenue | 229,396 | 216,038 | +6.2% | 111,998 | 105,292 | +6.4% |
| Working days (NL/Belux) | 126/125 | 125/124 | +1/+1 | 61/61 | 61/61 | -/- |
| Normalized for working days | +5.4% | - | ||||
| Normalized EBITDA | 29,044 | 28,187 | +857 | 12,877 | 10,920 | +1,957 |
| Normalized EBITDA | ||||||
| margin | 12,7% | 13.0% | -0.3% points | 11,5% | 10,4% | +1.1% points |
| EBITDA | 25,759 | 28,187 | -2,428 | 12,170 | 10,920 | +1,250 |
| EBITDA margin | 11,2% | 13.0% | -1.8% points | 10,9% | 10,4% | +0.5% points |
| Net profit | 12,180 | 13,983 | -1,803 | 5,550 | 4,653 | +897 |
| Net debt /cash position | -4,039 | 25,954 | -29,993 | |||
| Free cash flow | -2,565 | 10,154 | -12,719 |
"Ordina achieved solid growth and results in the first half of the year, despite challenging conditions driven by high inflation and a tight labor market. This performance demonstrates the flexibility and resilience of our organization, as well as the effectiveness of our strategy. Our digital solutions are an effective response to the continued high demand in our key markets, with particularly strong revenue growth in the public sector with our high performance teams.
1 Normalized EBITDA is EBITDA Normalized for M&A costs, primarily the costs related to the offer for all Ordina ordinary shares
We continue to strengthen our role as a digital business partner with specific solutions for the sectors in which we want to continue to grow. We continue to invest heavily in our employees' knowledge and the application of that knowledge in relevant use cases, such as in artificial intelligence (AI). For instance, we provided the expertise in AI and machine learning for the archiving of 6.5 million objects for meemoo, the Flemish Institute of Archives.
Recently, we made an important step in the process of joining forces with Sopra Steria. Sopra Steria made the official offer for Ordina's shares. We expect the transaction to be completed in the second half of this year."
Revenue increased by 6.2% to EUR 229.4 million in the first half (H1 2022: EUR 216.0 million). Business proposition revenue continued to increase, to 49% of total revenue in H1 2023 from 46% in H1 2022.
| Change | Change Q2 | |||||
|---|---|---|---|---|---|---|
| H1 2023 vs. | 2023 vs. | |||||
| (in thousands of euro) | H1 2023 | H1 2022 | H1 2022 | Q2 2023 | Q2 2022 | Q2 2022 |
| Public sector | 105,085 | 89,327 | +17.6% | 52,671 | 43,941 | +19.9% |
| Financial services | 59,158 | 56,956 | +3.9% | 28,036 | 27,744 | +1.1% |
| Industry | 65,153 | 69,755 | -6.6% | 31,290 | 33,607 | -6.9% |
| Total | 229,396 | 216,038 | +6.2% | 111,998 | 105,292 | +6.4% |
Based on our strategic objective to evolve from a valuable IT service provider to a digital business partner for our clients, our focus is on our top 70 clients. We therefore achieved the highest growth (+17.6%) in our largest market, the 'Public Sector', in the first six months of 2023. Demand for our business propositions and high performance teams (HPTs) remained high and our growth came primarily from our high performance teams (HPT), business platforms & cloud and data-driven propositions.
Financial services also recorded solid growth (+3.9%) in H1 2023, with the Financial Economic Crime market theme a key growth factor. In the past six months, we recorded particularly strong growth in the business platforms & cloud, data-driven and HPT digital themes.
In our 'Industry' market, revenue declined by 6.6% compared with H1 2022. This was partly driven by the shift in revenue due to our focus on our top 70 clients, which are mainly in the other two markets. Nevertheless, we see good growth opportunities in the Industry market with solutions such as supply chain optimization, field service planner and cybersecurity & maturity.
| Year-end 2022 | Net change | End-Q1 2023 | Net change | End-H1 2023 | |
|---|---|---|---|---|---|
| Direct FTEs | 2,532 | -22 | 2,510 | -70 | 2,440 |
| Indirect FTEs | 273 | -7 | 266 | - | 266 |
| Total | 2,805 | -29 | 2,776 | -70 | 2,706 |
In the first half of the year, the number of direct employees fell by 92 FTEs. The tight labor market makes it a challenge to continue to attract and retain good people. In the first half of 2023, Ordina focused on continuing to improve our operational excellence following the creation of new leadership roles and the hiring of business consultants in 2022, to further shape our strategy.
The average number of direct employees increased by 44 FTEs to 2,466 FTEs in the first half of the year, compared with last year (H1 2022: 2,422). Due to the continued strong demand for our IT services and the current tight labor market, we also used more external professionals so we could continue to serve our clients successfully.
The average number of indirect employees stood at 264 FTEs in H1 2023, which was 14 FTEs lower than in H1 2022.
Productivity stood at 71.5% in H1 2023 (H1 2022: 73.1%). The lower productivity was due to the initiatives we launched in 2022 in line with the execution of our strategy. However, this had a negative impact on productivity for the first six months of 2023. Our focus in the first half of the year has been on continuing to improve our operational excellence.
Normalized EBITDA rose by EUR 0.8 million to EUR 29.0 million in the first half (H1 2022: EUR 28.2 million). The normalized EBITDA margin declined by 0.3 percentage points to 12.7%. Our result improved due to the growth in the average number of direct employees, the increasing deployment of our professionals in teams, assignments based on our business propositions and improved pricing. The normalized EBITDA margin declined slightly due to margin pressure, primarily as a result of lower productivity.
Normalized EBITDA increased by EUR 2.0 million to EUR 12.9 million in the second quarter (Q2 2022: EUR 10.9 million). This increase was driven by the above-mentioned effects.
Revenue per region
| Change H1 2023 vs. |
Change Q2 2023 vs. |
|||||
|---|---|---|---|---|---|---|
| (in thousands of euro) | H1 2023 | H1 2022 | H1 2022 | Q2 2023 | Q2 2022 | Q2 2022 |
| The Netherlands | 148,560 | 140,823 | +5.5% | 72,845 | 68,854 | +5.8% |
| Belgium/Luxembourg | 80,836 | 75,215 | +7.5% | 39,153 | 36,438 | +7.5% |
| Total | 229,396 | 216,038 | +6.2% | 111,998 | 105,292 | +6.4% |
In the Netherlands, revenue rose by 5.5% to EUR 148.6 million in the first half (H1 2022: EUR 140.8 million). This growth was driven by an increase in the number of direct employees, higher pricing and increasing business proposition revenue, in line with our strategy. We recorded a sharp increase in revenue from high performance teams and business platforms & cloud. We also achieved an increase in the revenue from external hires to meet the high demand from our clients for digital solutions.
In Belgium/Luxembourg, revenue increased by 7.5% to EUR 80.8 million in the first half (H1 2022: EUR 75.2 million), driven by growth in the number of direct employees and higher revenue, in particular from the data-driven and
digital acceleration business propositions. Revenue from external hires also increased, due to growing demand in the public domain.
| (in thousands of euro and percentage) |
H1 2023 | H1 2022 | Change | |||
|---|---|---|---|---|---|---|
| The Netherlands | 15,695 | 10.6% | 13,754 | 9.8% | +1,941 | +0.8% points |
| Belgium/Luxembourg | 13,349 | 16.5% | 14,433 | 19.2% | -1,084 | -2.7% points |
| Total | 29,044 | 12.7% | 28,187 | 13.0% | +857 | -0.3% points |
In the Netherlands, normalized EBITDA increased to EUR 15.7 million (H1 2022: EUR 13.8 million). The normalized EBITDA margin increased to 10.6%. The operating result improved due to the growth in the number of direct employees, more revenue from our teams and business propositions and a positive change in rates.
In Belgium/Luxembourg, EBITDA declined by EUR 1.1 million to EUR 13.3 million (H1 2022: EUR 14.4 million). The EBITDA margin fell to the still high 16.5%. The growth of the organization and the high indexation in early 2023 led to higher costs, which Ordina was unable fully offset by charging higher rates to clients.
| (in thousands of euro) | H1 2023 | H1 2022 |
|---|---|---|
| Normalized EBITDA | 29,044 | 28,187 |
| One-off expenses, related to M&A | -3,285 | - |
| EBITDA | 25,759 | 28,187 |
| Depreciation & amortization | -7,895 | -7,716 |
| Operating result (EBIT) | 17,864 | 20,471 |
| Financing expenses / result associates | -481 | -774 |
| Result before taxes | 17,383 | 19,697 |
| Taxes | -5,203 | -5,714 |
| Net profit | 12,180 | 13,983 |
Net profit declined by EUR 1.8 million to EUR 12.2 million in the first half (H1 2022: EUR 14.0 million), in line with the decline in operating profit, which is not normalized for the one-off M&A expenses, which were mainly the expenses related to the offer for all Ordina ordinary shares. Earnings per share came in at EUR 0.14 in H1 2023 (H1 2022: EUR 0.15).
| (rounded off to millions of euro) | |
|---|---|
| Year-end 2022 | 37.2 |
| Net profit | 12.2 |
| Depreciation | 7.9 |
| Working capital, provisions and other changes | -17.5 |
| Interest & taxes | 1.8 |
| Net investments | -1.9 |
| Dividend and capital pay-outs | -35.6 |
| Other cash flows from financing activities | -8.1 |
| End-H1 2023 | -4.0 |
The net debt position stood at EUR 4.0 million at the end of H1 2023, representing a decline of EUR 41.2 million compared with the net cash position of EUR 37.2 million at year-end 2022. EUR 35.6 million of this decline was due to the pay-out to shareholders in H1 2023.
Free cash flow declined to a negative EUR 2.6 million in the first half of the year (H1 2022: EUR 10.2 million). This decline was due to a combination of factors, including a lower net profit for H1 2023 compared with H1 2022 and an increase in working capital. The increase in working capital was due, among other things, to higher revenue in the first half of 2023 compared with the first half of 2022, advance payments for various investments, including a new SAAS ERP application, and an early payment term of social security contributions in Belgium.
Ordina's capital and liquidity positions remain strong and provide a good starting position for the future.
In the 2022 Annual Report (page 46 onwards), Ordina described the main objectives and procedures of its risk management and control systems and the key risks and mitigating measures.
Ordina has assessed the risks identified and determined that the main risks identified remain applicable in the second half of 2023. The most significant influences in the first half of 2023 are listed below.
The main risks are:
You will find more details in Ordina's 2022 annual report at www.ordina.com.
We continue to monitor identified risks on an ongoing basis. Nevertheless, new or previously unidentified risks may arise that are not currently known and that could potentially have a material impact on our operations, objectives and results. We will continuously monitor known risks and any new risks and take control measures and mitigating actions where necessary.
Following the proposed acquisition of Ordina by Sopra Steria announced on 21 March 2023, Sopra Steria made a public offer on 19 July 2023. The offer remains open until 26 September 2023. This public offer was approved by the Financial Markets Authority (AFM) on 17 July 2023. It is also supported by Ordina's two largest shareholders and by each of the members of Ordina's Supervisory Board and Management Board. Ordina's two largest shareholders, representing approximately 26% of Ordina's share capital, have agreed to tender their shares in response to the offer.
This document comprises Ordina N.V.'s 2023 interim report and the condensed consolidated interim financial statements. This interim report has been prepared in accordance with IAS 34, 'Interim Financial Reporting'. This interim report does not contain all the information required for full-year financial statements. It should therefore be read in conjunction with the consolidated financial statements for the full year 2022. These interim financial statements have not been audited.
The Management Board hereby declares, in accordance with Section 5:25d (2) (c) of the Dutch Financial Supervision Act, that to the best of their knowledge:
Nieuwegein, 31 July, 2023 J. Maes, CEO J. van Donk-van Wijnen, CFO
| 2023 | 2022 | |||
|---|---|---|---|---|
| NL | B | NL | B | |
| Q1 | 65 | 64 | 64 | 63 |
| Q2 | 61 | 61 | 61 | 61 |
| Q3 | 65 | 63 | 66 | 64 |
| Q4 | 63 | 62 | 64 | 62 |
| Total | 254 | 250 | 255 | 250 |
Ordina will present its interim results during a conference call at 10:30 hrs CET on 1 August, 2023. Please contact Investor Relations for dail-in details.
Key definitions of the terms used in this press release.
Normalized EBITDA: Normalized EBITDA is EBITDA normalized for M&A costs, including the costs related to the offer for all Ordina ordinary shares.
Business proposition revenue: Revenue from contracts in line with Ordina's business proposition strategy. Please see the list of definitions in Ordina's 2022 annual report for a more detailed definition.
Direct FTE: an employee for whom we can charge clients billable hours and who does not have a full-time staff or management role.
EBITDA: earnings before interest, taxes, depreciation and amortization.
Free cash flow (FCF): the FCF is the sum of the net cash flow from operational business activities and investment activities, adjusted for cash flows related to acquisitions and divestments of group companies and associates and any dividends received from associates. Lease payments are also deducted from the FCF.
Productivity: % of the workable hours that a (direct) employee is deployed on a billable basis.
For additional information on this press release:
ANNEKE HOIJTINK, INVESTOR RELATIONS M [email protected] T +31 (0)6 15396873
JOYCE VAN DONK - VAN WIJNEN, CFO M [email protected] T +31 (0)30 663 7111
JO MAES, CEO M [email protected] T +31 (0)30 663 7111
| (In euro thousands) | Notes | 30 June 2023 | 31 Dec 2022 | 30 June 2022 |
|---|---|---|---|---|
| Assets | ||||
| Intangible assets | 9 | 130,662 | 130,916 | 131,720 |
| Right-of-use assets | 10 | 30,086 | 29,318 | 30,987 |
| Property, plant and equipment | 11 | 7,819 | 8,137 | 7,792 |
| Investments in associated companies | 319 | 319 | 326 | |
| Deferred income tax assets | 5,443 | 6,004 | 6,771 | |
| Total non-current assets | 174,329 | 174,694 | 177,596 | |
| Trade receivables | 12 | 51,601 | 47,693 | 44,380 |
| Unbilled receivables | 12 | 19,714 | 17,776 | 19,167 |
| Contract assets | 12 | 15,033 | 9,786 | 11,954 |
| Other current assets | 12 | 7,873 | 4,768 | 4,768 |
| Cash and cash equivalents | 13 | 6,463 | 37,205 | 25,954 |
| Total current assets | 100,684 | 117,228 | 106,223 | |
| Total assets | 275,013 | 291,922 | 283,819 | |
| Equity and liabilities | ||||
| Issued capital | 9,002 | 9,002 | 9,326 | |
| Share premium reserve | 124,433 | 124,433 | 136,219 | |
| Retained earnings | 996 | 14,203 | 5,560 | |
| Net profit for the period | 12,180 | 23,895 | 13,983 | |
| Total equity | 14 | 146,611 | 171,533 | 165,088 |
| Employee related provisions | 571 | 555 | 927 | |
| Lease liabilities | 10 | 19,941 | 19,520 | 21,467 |
| Other provisions | 15 | - | - | 1,585 |
| Deferred income tax liabilities | 424 | 458 | 491 | |
| Total non-current liabilities | 20,936 | 20,533 | 24,470 | |
| Borrowings | 13 | 10,502 | - | - |
| Lease liabilities | 10 | 11,133 | 10,777 | 10,671 |
| Other provisions | 15 | 1,344 | 1,424 | 2,378 |
| Trade payables | 16 | 19,098 | 17,191 | 17,342 |
| Contract liabilities | 16 | 6,515 | 6,871 | 5,044 |
| Other current liabilities | 16 | 55,688 | 61,636 | 57,086 |
| Current income tax payable | 3,186 | 1,957 | 1,740 | |
| Total current liabilities | 107,466 | 99,856 | 94,261 | |
| Total liabilities | 128,402 | 120,389 | 118,731 | |
| Total equity and liabilities | 275,013 | 291,922 | 283,819 |
| (In euro thousands) | Notes | H1 2023 | FY 2022 | H1 2022 |
|---|---|---|---|---|
| Revenue from contracts with customers | 7 | 229,396 | 429,416 | 216,038 |
| Operating expenses | ||||
| Cost of hardware, software and other direct costs | -2,539 | -5,433 | -2,672 | |
| Subcontracted work | -60,090 | -113,069 | -54,515 | |
| Personnel expenses | -129,808 | -247,118 | -122,641 | |
| Amortisation intangible assets | 9 | -500 | -1,692 | -957 |
| Depreciation right-of-use assets | 10 | -5,991 | -10,972 | -5,625 |
| Depreciation property, plant and equipment | 11 | -1,404 | -2,369 | -1,134 |
| Other operating expenses | -11,200 | -13,407 | -8,023 | |
| Total operating expenses | -211,532 | -394,060 | -195,567 | |
| Operating profit | 17,864 | 35,356 | 20,471 | |
| Finance income | 17 | - | - | - |
| Finance costs | 17 | -481 | -1,357 | -774 |
| Share of profit of associated companies | - | -7 | - | |
| Profit before income tax | 17,383 | 33,992 | 19,697 | |
| Income tax expense | 18 | -5,203 | -10,097 | -5,714 |
| Net profit for the reporting period | 12,180 | 23,895 | 13,983 | |
| Net profit is attributable to: | ||||
| Shareholders of the company | 12,180 | 23,895 | 13,983 | |
| Net profit for the reporting period | 12,180 | 23,895 | 13,983 | |
| (in euros) | ||||
| Earnings per share - basic | 19 | 0.14 | 0.26 | 0.15 |
Earnings per share - diluted 19 0.13 0.26 0.15
| (In euro thousands) | Notes | H1 2023 | FY 2022 | H1 2022 |
|---|---|---|---|---|
| Net profit for the reporting period | 12,180 | 23,895 | 13,983 | |
| Items not te be reclassified to profit or loss in subsequent periods | ||||
| Actuarial gains and losses on defined benefit plans | - | 335 | - | |
| Tax related to actuarial gains and losses on defined benefit plans | - | -85 | - | |
| Other comprehensive income, net of tax | - | 250 | - | |
| Total comprehensive income for the reporting period | 12,180 | 24,145 | 13,983 | |
| Total comprehensive income is attributable to: | ||||
| Shareholders of the company | 12,180 | 24,145 | 13,983 | |
| Total comprehensive income for the reporting period | 12,180 | 24,145 | 13,983 |
| (In euro thousands) | Notes | Issued capital |
Share premium reserve |
Retained earnings |
Net profit for the reporting period |
Total |
|---|---|---|---|---|---|---|
| Balance at 1 January 2022 | 9,326 | 136,219 | 8,805 | 24,598 | 178,948 | |
| Changes in H1 2022 | ||||||
| Net profit for the reporting period | - | - | - | 13,983 | 13,983 | |
| Other comprehensive income: | ||||||
| Actuarial gains and losses - net of tax | - | - | - | - | - | |
| Total comprehensive income for the reporting period | - | - | - | 13,983 | 13,983 | |
| Transactions with owners: | ||||||
| Appropriation of profit previous year | - | - | 24,598 | -24,598 | - | |
| Dividend distribution | 14 | - | - | -14,734 | - | -14,734 |
| Treasury shares purchased related to the share buy-back program | 14 | - | - | -10,701 | - | -10,701 |
| Shares purchased in relation to the share-based payments settlement | 14 | - | - | -2,802 | - | -2,802 |
| Share-based payments - personnel expenses | 20 | - | - | 394 | - | 394 |
| Total transactions with owners | - | - | -3,245 | -24,598 | -27,843 | |
| Balance at 30 June 2022 | 9,326 | 136,219 | 5,560 | 13,983 | 165,088 | |
| Changes in H2 2022 | ||||||
| Net profit for the reporting period | - | - | - | 9,912 | 9,912 | |
| Other comprehensive income: | ||||||
| Actuarial gains and losses - net of tax | - | - | 250 | - | 250 | |
| Total comprehensive income for the reporting period | - | - | 250 | 9,912 | 10,162 | |
| Transactions with owners: | ||||||
| Treasury shares purchased related to the share buy-back program | 14 | -324 | -11,786 | 7,811 | - | -4,299 |
| Share-based payments - personnel expenses | 20 | - | - | 582 | - | 582 |
| Total transactions with owners | -324 | -11,786 | 8,393 | - | -3,717 | |
| Balance at 31 December 2022 | 9,002 | 124,433 | 14,203 | 23,895 | 171,533 | |
| Changes in H1 2023 | ||||||
| Net profit for the reporting period | - | - | - | 12,180 | 12,180 | |
| Other comprehensive income: | ||||||
| Actuarial gains and losses - net of tax | - | - | - | - | - | |
| Total comprehensive income for the reporting period | - | - | - | 12,180 | 12,180 | |
| Transactions with owners: | ||||||
| Appropriation of profit previous year | - | - | 23,895 | -23,895 | - | |
| Dividend distribution | 14 | - | - | -35,556 | - | -35,556 |
| Shares purchased in relation to the share-based payments settlement | 14 | - | - | -2,103 | - | -2,103 |
| Share based payments - personnel expenses | 20 | - | - | 557 | - | 557 |
| Total transactions with owners | - | - | -13,207 | -23,895 | -37,102 | |
| Balance at 30 June 2023 | 9,002 | 124,433 | 996 | 12,180 | 146,611 |
| (In euro thousands) | Notes | H1 2023 | H1 2022 |
|---|---|---|---|
| Operating activities | |||
| Net profit for the reporting period | 12,180 | 13,983 | |
| Adjustments for | |||
| Finance costs -net | 481 | 774 | |
| Income tax expense | 18 | 5,203 | 5,714 |
| Amortisation intangible assets | 9 | 500 | 957 |
| Depreciation right-of-use assets | 10 | 5,991 | 5,625 |
| Depreciation property, plant and equipment | 11 | 1,404 | 1,134 |
| Movements in provisions | -64 | -56 | |
| Share-based payments | 20 | 557 | 394 |
| Working capital changes | |||
| Movements in receivables | -14,671 | -11,767 | |
| Movements in current liabilities | -3,347 | 6,334 | |
| Cash generated from operations | 8,234 | 23,092 | |
| Interest paid | -460 | -597 | |
| Income tax paid | 8 | -3,446 | -3,557 |
| Net cash flow from operating activities | 4,328 | 18,938 | |
| Investing activities | |||
| Acquisition of a subsidiary, net of cash acquired | -1,020 | - | |
| Purchase of intangible assets | 9 | -246 | - |
| Purchase of property, plant and equipment | 11 | -684 | -2,415 |
| Proceeds from sale of property, plant and equipment | 11 | 19 | 13 |
| Net cash flows used in investing activities | -1,931 | -2,402 | |
| Financing activities | |||
| Lease payments | 10 | -5,982 | -6,382 |
| Shares purchased related to the share-based settlement | 14 | -2,103 | -2,802 |
| Dividends paid to shareholders | 14 | -35,556 | -14,734 |
| Treasury shares purchased related to the share buy-back program | 14 | - | -10,263 |
| Net cash flows used in financing activities | -43,641 | -34,181 | |
| Net movement in cash and cash equivalents | -41,244 | -17,645 | |
| Net movement in cash and cash equivalents | -41,244 | -17,645 | |
| Cash and cash equivalents at beginning of the reporting period | 37,205 | 43,599 | |
| Cash and cash equivalents at the end of the reporting period | -4,039 | 25,954 |
Ordina N.V. has its registered office in Nieuwegein, the Netherlands. These condensed consolidated interim financial statements for the six months ended 30 June 2023 comprise the financial information of Ordina N.V. and all its group companies (jointly referred to as Ordina).
Ordina is the digital business partner that harnesses technology and market know-how to give its customers an edge. We do this by using smart solutions to connect technology, business challenges and people. We help our customers to accelerate, to develop smart applications, to launch new digital services and ensure that people embrace those services.
Ordina was founded in 1973. Its shares have been listed on the Euronext Amsterdam stock exchange since 1987 and are included in the Small Cap Index (AScX).
The condensed consolidated interim financial statements for the first six months ended on 30 June 2023 have been prepared in accordance with IAS 34, 'Interim Financial Reporting', as adopted by the European Union. Ordina has prepared the interim financial statements on the basis that it will continue to operate as a going concern. The Management Board believes that there are no material uncertainties that cast significant doubt on this assumption. It is of the opinion that there is a reasonable expectation that Ordina will have sufficient resources to continue its activities as a going concern in the coming period of at least 12 months from the end of the reporting period.
These condensed consolidated interim financial statements do not include all the information that is required for a full set of financial statements and should therefore be read in conjunction with the Ordina N.V. consolidated financial statements for the full year 2022. The 2022 Annual Report (including the consolidated financial statements for the 2022 financial year) is available online at: www.ordina.com .
The condensed consolidated interim financial statements were prepared by the Management Board and approved for publication by the Supervisory Board on 31 July 2023. These condensed consolidated interim financial statements have not been audited.
The condensed consolidated interim financial statements are published in both English and Dutch. The English version is leading.
For an explanation of the accounting policies for the valuation, determination of results and statement of cash flows, reference is made to the consolidated financial statements for the full year 2022. The consolidated financial statements for the full year 2022 were drawn up in accordance with the International Financial Reporting Standards (IFRS), together with the interpretations of same as adopted by the International Accounting Standards Board (IASB), as accepted for use within the European Union, and the legal provisions of Section 9 of Book 2 of the Dutch Civil Code.
The same accounting policies have been applied to the interim report, with the exception of new standards, amendments to standards and interpretations, which have been included and found relevant for Ordina. The accounting policies have been applied consistently by all subsidiaries and across all periods as presented in these condensed consolidated interim financial statements.
The condensed interim financial statements are presented in euro. Amounts are stated in thousands of euros, unless otherwise indicated, as a result of which rounding differences may occur.
Insofar as applicable, Ordina has applied all published IFRS standards, amendments and interpretations that came into effect on 1 January 2023. Ordina has not early adopted any standard, amendment or interpretation that has been published but is not yet effective.
Various amendments and interpretations are required as from 2023, but these have no material impact on Ordina's condensed interim financial statements.
The preparation of the consolidated interim financial statements requires management to make estimates and assumptions that have an impact on the valuation of assets and liabilities, on the determination of results, as well as on the reporting of contingent assets and liabilities. Actual results may differ from these estimates.
The assumptions and estimates are based on historical experience and various other factors that are assumed to be reasonable under the circumstances. Ordina continually evaluates said assumptions and estimates. For a list of the most critical assumptions and estimates, we refer to section 5 of the notes to the consolidated financial statements for 2022 as included in the 2022 annual report, and the section Risk Management in this interim report on page 8.
In its 2022 annual report (page 46 onwards), Ordina describes in detail the identified critical risks and its risk management and control systems. Ordina evaluated the identified risks and determined that the main identified risks will remain applicable in the second half of 2023. We refer tot the section risk management on page 8 of this report.
The table below specifies the revenue from contracts with customers that Ordina recognises.
| H1 2023 | H1 2022 | |||||
|---|---|---|---|---|---|---|
| the Netherlands |
Belgium / Luxembourg |
Total | the Netherlands |
Belgium / Luxembourg |
Total | |
| Type of goods or service | ||||||
| Sale of hardware and software | 95 | 359 | 454 | 84 | 201 | 285 |
| IT services | 148,465 | 80,477 | 228,942 | 140,739 | 75,014 | 215,753 |
| Total revenue from contracts with customers | 148,560 | 80,836 | 229,396 | 140,823 | 75,215 | 216,038 |
| Timing of revenue recognition | ||||||
| Goods transferred at a point in time | 162 | 239 | 401 | 129 | 111 | 240 |
| Services transferred over time | 148,398 | 80,597 | 228,995 | 140,694 | 75,104 | 215,798 |
| Total revenue from contracts with customers | 148,560 | 80,836 | 229,396 | 140,823 | 75,215 | 216,038 |
Revenue per sector can be specified as follows:
| H1 2023 | H1 2022 | |
|---|---|---|
| Revenue by markets | ||
| Public | 105,085 | 89,327 |
| Finance | 59,158 | 56,956 |
| Industry | 65,153 | 69,755 |
| Total revenue from contracts with customers | 229,396 | 216,038 |
Business proposition revenue as a percentage of total revenue amounts to 49% in the first half of the year 2023 (H1 2022: 46%). For a definition of the revenue from business propositions we refer to the definitions on page 10.
Ordina's organization is structured in line with its geographical locations. The reportable segments of Ordina are the Netherlands and Belgium/Luxembourg. The Management Board is the Chief Operating Decision Maker (CODM) and monitors the operating results of the reportable segments. Information is reported on a monthly basis to the Management Board in its capacity as CODM in line with this structure. The Management Board's decision-making is based on the information provided for the reportable segments. Ordina discloses segment information on the basis of how the internal governance, reporting and decision-making is organized within the company.
The Management Board's assessment of the reportable segments from a financial perspective focuses primarily on revenue and EBITDA. Segment information is provided for the segments the Netherlands and Belgium/Luxembourg. Segment results, assets and liabilities are items that are directly or reasonably attributable to a segment. Transfer prices between operating segments are on an arm's length basis in a manner similar to transactions with third parties. Segment capital expenditure is the total amount incurred during the reporting period to acquire assets that are expected to be used for more than one reporting period. Management information related to balance sheet positions and the analysis of same is aggregated at the level of the Netherlands and Belgium/Luxembourg.
The segment results can be specified as follows:
| H1 2023 | H1 2022 | |||||
|---|---|---|---|---|---|---|
| the Netherlands |
Belgium / Luxembourg |
Total | the Netherlands |
Belgium / Luxembourg |
Total | |
| Total revenue | 151,616 | 85,685 | 237,301 | 142,880 | 79,710 | 222,590 |
| Inter-segment revenue | -3,056 | -4,849 | -7,905 | -2,057 | -4,495 | -6,552 |
| Revenue from contracts with customers | 148,560 | 80,836 | 229,396 | 140,823 | 75,215 | 216,038 |
| Normalized EBITDA | 15,695 | 13,349 | 29,044 | 13,754 14,433 |
28,187 | |
| One off M&A costs | -3,285 | 0 | -3,285 | 0 | 0 | 0 |
| EBITDA | 12,410 | 13,349 | 25,759 | 13,754 | 14,433 | 28,187 |
| Amortisation intangible assets | -498 | -2 | -500 | -848 | -109 | -957 |
| Depreciation right-of-use assets | -3,618 | -2,373 | -5,991 | -3,601 | -2,024 | -5,625 |
| Depreciation property, plant and equipment | 8,294 | 10,974 | 19,268 | 9,305 | 12,300 | 21,605 |
| Operating profit | 7,340 | 10,524 | 17,864 | 8,485 | 11,986 | 20,471 |
| Finance costs - other | -337 | 268 | -69 | -298 | -31 | -329 |
| Finance costs - lease obligations | -285 | -127 | -412 | -315 | -130 | -445 |
| Profit before tax | 6,718 | 10,665 | 17,383 | 7,872 | 11,825 | 19,697 |
| Income tax expense | -1,924 | -3,279 | -5,203 | -2,150 | -3,564 | -5,714 |
| Net profit | 4,794 | 7,386 | 12,180 | 5,722 | 8,261 | 13,983 |
| EBITDA margin | 10.6% | 16.5% | 12.7% | 9.8% | 19.2% | 13.0% |
The assets and liabilities of the segments can be specified as follows:
| 30 June 2023 | ||||||
|---|---|---|---|---|---|---|
| the Netherlands |
Belgium/ Luxembourg |
Total | Eliminations | Consolidated | ||
| Total assets | 236,761 | 94,799 | 331,560 | -56,547 | 275,013 | |
| Total liabilities | 90,150 | 40,676 | 130,826 | -2,424 | 128,402 | |
| 30 June 2022 | ||||||
| the Netherlands |
Belgium/ Luxembourg |
Total | Eliminations | Consolidated | ||
| Total assets | 256,766 | 99,103 | 355,869 | -72,050 | 283,819 | |
| Total liabilities | 91,678 | 44,405 | 136,083 | -17,352 | 118,731 |
Other segment information can be specified as follows:
| H1 2023 | H1 2022 | |||||
|---|---|---|---|---|---|---|
| the Netherlands |
Belgium/ Luxembourg |
Total | the Netherlands |
Belgium/ Luxembourg |
Total | |
| Carrying amount of intangible assets | 113,520 | 17,142 | 130,662 | 114,466 | 17,254 | 131,720 |
| Carrying amount of right-of-use assets | 21,903 | 8,183 | 30,086 | 23,155 | 7,832 | 30,987 |
| Carrying amount of property, plant and equipment | 5,929 | 1,890 | 7,819 | 5,956 | 1,836 | 7,792 |
| Carrying amount of financial fixed assets | 5,564 | 198 | 5,762 | 6,847 | 250 | 7,097 |
| Purchases of intangible assets | 246 | - | 246 | - | - | - |
| New group companies intangible assets | - | - | - | - | - | - |
| Purchases of right-of-use assets | 4,408 | 2,351 | 6,759 | 2,258 | 1,741 | 3,999 |
| Purchases of property, plant and equipment | 779 | 326 | 1,105 | 1,263 | 618 | 1,881 |
| Amortisation intangible assets | 498 | 2 | 500 | 848 | 109 | 957 |
| Depreciation right-of-use assets | 3,618 | 2,373 | 5,991 | 3,601 | 2,024 | 5,625 |
| Depreciation property, plant and equipment | 954 | 450 | 1,404 | 820 | 314 | 1,134 |
| Income tax recognised in income statement | 1,924 | 3,279 | 5,203 | 2,150 | 3,564 | 5,714 |
| Income tax paid in reporting period | 2,214 | 1,232 | 3,446 | 325 | 3,232 | 3,557 |
| Number of employees at end of reporting period (FTEs) | 1,680 | 1,026 | 2,706 | 1,670 | 1,030 | 2,700 |
| Average number of employees (FTEs) | 1,667 | 1,063 | 2,730 | 1,666 | 1,034 | 2,700 |
Movements in intangible assets can be specified as follows:
| 2023 | 2022 | |
|---|---|---|
| At 1 January | 130,916 | 132,677 |
| Additions | 246 | - |
| Amortisation | -500 | -957 |
| Carrying amount at 30 June | 130,662 | 131,720 |
The intangible assets are related to goodwill for an amount of EUR 128.5 million (as at 30 June 2022: EUR 128.5 million), software for an amount of EUR 0.5 million (as at 30 June 2022: EUR 1.3 million) and intangible assets related to customers for an amount of EUR 1.6 million (as at 30 June 2022: EUR 1.9 million). Investments in intangible assets in the first half of 2023 are mostly related to the development of a new website.
Goodwill is monitored at the level of a group of cash-generating units within Ordina, which groups of cashgenerating units are the same as the segments. Ordina recognizes the segments the Netherlands and Belgium/Luxembourg. Ordina conducts an impairment test on the goodwill at least once a year, on the basis of the relevant (groups of) cash-generating units.
The table below shows goodwill per segment:
| 2023 | 2022 | |
|---|---|---|
| the Netherlands | 111,362 | 111,362 |
| Belgium/Luxembourg | 17,142 | 17,142 |
| Total | 128,504 | 128,504 |
The annual impairment test is conducted in the fourth quarter of each calendar year. In the first six months of 2023, Ordina assessed whether there were any indications of impairment of goodwill or other fixed assets. Ordina has assessed to what extent Ordina is affected, directly or indirectly through its customers, by the consequences of the war in Ukraine. Based on current developments, Ordina does not assess the war in Ukraine and its possible economic impact as a triggering event.
In the first half of 2023, there was no indication of any impairment of goodwill or other fixed assets, and on this basis Ordina did not conduct an interim impairment test.
Lease contracts result in the recognition of right-of-use assets and corresponding lease liabilities. The right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful life of the asset.
Ordina has various lease contracts relating to the lease of property, cars and other equipment. The term of the lease contracts generally varies from three to five years. The lease contract for the office location in Nieuwegein ends on 31 March 2028. The term of contracts related to cars generally varies from 24 to 48 months.
Ordina applies the exemption for lease contracts with a term of less than 12 months upon commencement, as well as the exemption for lease contracts related to underlying assets with a low value.
Changes in right-of-use assets can be specified as follows:
| 2023 | 2022 | |
|---|---|---|
| At 1 January | 29,318 | 32,613 |
| Additions | 5,887 | 3,359 |
| Modifications / renewals | -31 | 85 |
| Remeasurements | 903 | 555 |
| Depreciation | -5,991 | -5,625 |
| Carrying amount at 30 June | 30,086 | 30,987 |
Lease liabilities can be specified as follows:
| 2023 | 2022 | |
|---|---|---|
| At 1 January | 30,297 | 34,521 |
| Additions | 5,887 | 3,359 |
| Modifications / renewals | -31 | 85 |
| Remeasurements | 919 | 547 |
| Interest costs | 412 | 445 |
| Lease payments | -6,410 | -6,819 |
| At 30 June | 31,074 | 32,138 |
| Lease liabilities - non-current | 19,941 | 21,467 |
| Lease liabilities - current | 11,133 | 10,671 |
| At 30 June | 31,074 | 32,138 |
Lease liabilities are primarily related to offices and cars. The lease liabilities related to other equipment pertain to lease contracts for printing equipment and other inventory. During the term of the underlying contacts, the lease liabilities are calculated plus an interest component and less the lease payments already made.
Lease payments related to the repayment component are included in the cash flows from financing activities. Lease payments related to the interest component are included in cash flows from operational activities.
The changes in property, plant and equipment can be specified as follows:
| Depreciation Carrying amount at 30 June |
7,819 | 7,792 |
|---|---|---|
| -1,423 | -1,147 | |
| Additions | 1,105 | 1,881 |
| At 1 January | 8,137 | 7,058 |
| 2023 | 2022 |
Investments made in the first half of 2023 totalled EUR 1.1 million (first half 2022: EUR 1.9 million). The investments are related to computer equipment for EUR 0.9 million (H1 2022: EUR 0.7 million) and to inventory for EUR 0.2 million (H1 2022: EUR 0.8 million). The investments in the first half 2022 were related for EUR 0.4 million to the purchase of the Ordina Forest in Pelt, Belgium.
Trade receivables and other current assets can be specified as follows:
| 2023 | 2022 | |
|---|---|---|
| Trade receivables - net | 51,601 | 44,380 |
| Unbilled receivables | 19,714 | 19,167 |
| Contract assets | 15,033 | 11,954 |
| Pension contributions - prepayments | 220 | - |
| Other receivables | 163 | 994 |
| Prepayments and accrued income | 7,490 | 3,774 |
| At 30 June | 94,221 | 80,269 |
As at 30 June 2023, Ordina recognizes a provision of around EUR 0.5 million for expected credit losses on trade receivables, unbilled receivables and contract assets (at 30 June 2022: EUR 0.8 million). The other classes within trade receivables and other current assets do not contain any impaired assets.
Prepayments and accrued income include, among other things, prepaid expenses. Prepayments and accrued income at 30 June 2023 also include an amount of EUR 3.1 million related to the design and implementation of a new SAAS ERP application that is taken into use on 1 July 2023. Prepayments and accrued income have a maturity of less than twelve months, except for the amount of EUR 2.5 million at 30 June 2023 regarding prepayments related to the SAAS ERP application.
At 30 June 2023 the net cash position stands at EUR 4.0 million negative (at end-June 2022: EUR 26.0 million). At 30 June 2023 an amount of EUR 0.7 million (end-June 2022: EUR 2.3 million) is held in a blocked account, the ability to spend is limited to tax obligations.
As per 30 June 2023, Ordina has drawn an amount of EUR 10.5 million under the financing facility (as per 30 June 2022: nil).
In July 2019 Ordina extended its existing financing facility agreed with ABN Amro and ING. This financing facility is for an amount of EUR 30 million and is a fully committed current account credit facility. This financing facility has a maximum term of five years, with an initial term of three years and an option to extend this twice by one year. In 2021, Ordina and its banks agreed a second extension as a result of which the agreement now ends in July 2024.
The most important elements of the covenants related to this financing facility comprise a maximum leverage ratio (calculated on the basis of total net debt/adjusted EBITDA) and an Interest Cover Ratio (calculated on the basis of the (adjusted) EBITDA/total interest ratio as defined in the financing agreement). The leverage ratio has been set at a maximum of 2.5. The Interest Cover Ratio has been set at a minimum of 5.0. The covenants are based on the consolidated financial statements drawn up in accordance with IFRS. The net debt is the total of short term and long-term borrowings and current account debt, less the available cash and cash equivalents. The adjusted EBITDA is determined on the basis of the EBITDA recognized in the statement of profit and loss, corrected for the impact of IFRS 16 Leases and the EBITDA of acquisitions in so far as these are not consolidated. The adjusted EBITDA used to determine the leverage ratio is subject to a correction for one-off costs and restructuring costs set at a maximum of 1% of revenue and with a maximum of EUR 4.0 million.
The financing agreement also stipulates that the total EBITDA of the companies that have agreed joint and several liability for the purposes of the financing agreement should account for a minimum of 80% of the consolidated EBITDA as laid down in the credit agreement (the Guarantor Cover Ratio) and that a minimum of EUR 30 million of the trade receivables are pledged as security for the lender (the Security Cover).
The interest rate on the financing facility is calculated on the basis of the one-month EURIBOR rate plus a fixed margin of 0.7%.
The table below shows the applicable covenants and the extent to which these have been realized at the end of June 2023:
| Realization End-June 2023 |
Finance | |
|---|---|---|
| Leverage ratio | 0.1 | agreement <=2,5 |
| Interest Cover Ratio | 353.1 | >=5,0 |
| Guarantor Cover Ratio | 94% | >=80% |
| Security Cover (in euro millions) | 66.7 | >=30,0 |
Equity amounts to EUR 146.6 million as per 30 June 2023 (as per 30 June 2022: EUR 165.1 million). For a detailed overview of the movements in equity reference is made to the consolidated statement of changes in equity on page 16.
The total authorized capital amounts to EUR 20 million at 30 June 2023 and consists of 199,999,995 shares with a par value of EUR 0.10 per share, plus one priority share with a par value of EUR 0.50. At 30 June 2023, one priority share and 90.015.795 ordinary shares were issued and fully paid (year-end 2022: one priority share and 90.015.795 ordinary shares). No new shares were issued in the first half of 2023 (first half 2022: nil).
For the settlement of the variable long-term bonuses for the period 2020-2022, which took place in the first half of 2023, Ordina acquired and then immediately paid out a total of 210,812 treasury shares. These shares were purchased at an average share price of EUR 5.97 per share. In addition, due to the net settlement in 2023 of the long-term bonuses, Ordina has paid an amount of EUR 0.8 million for payroll tax on behalf of the employees. The total amount paid in the first half of 2023 to settle the obligation related to the variable long-term bonuses for the period 2020-2022 amounts to EUR 2.1 million (H1 2022: EUR 2.8 million regarding the variable long-term bonuses for the period 2019-2021).
At end-June 2023 Ordina N.V. holds no treasury shares. (end-June 2022: 2,332,369 shares which were repurchased in line with the share buy-back program executed in 2022).
The General Meeting of 6 April 2023 approved the payment of a dividend of 26.5 eurocent per share in cash to be charged to the 2022 net profit. In addition, an additional distribution of 13.0 eurocent per share in cash was approved. The total distribution to shareholders was 39.5 eurocent per share in cash. The total distribution amounts to EUR 35.6 million.
In a joint press release on 21 March 2023 Sopra Steria SA and Ordina N.V. published a conditional agreement on a recommended all-cash public offer for all shares in Ordina N.V.. On 17 July 2023 Sopra Steria SA published the offer memorandum regarding the public offer. Sopra Steria and Ordina expect the offer will be closed in the second half of 2023. Information on the public offer is available at www.ordina.com/investors and www.shareholdersofferordina.com.
The other provisions amount to EUR 1.3 million at end-June 2023 (end-June 2022: EUR 4.0 million) and pertain to onerous contracts. The provisions at end-June 2022 are related to onerous contracts for EUR 1.4 million and to earn-out obligations for EUR 2.6 million. At end-June 2023 the other provisions have a term of less than one year.
The provision for onerous contracts pertains to the estimated outstanding activities with respect to onerous
contracts. The project provisions also include a provision related to a past dispute with one of our suppliers. This supplier initiated legal proceedings and the court issued a ruling in the case in the first half of 2021. An appeal has been lodged against this ruling. The outcome of this appeal is uncertain. On the basis of the status at end-June 2023, Ordina has estimated the potential settlement of the dispute. The actual outcome may differ from the estimate used as a basis for the recognition of the provision. The formal process is expected to resume in the second half of 2023.
The provision for earn-out obligations of EUR 2.6 million at end-June 2022 relates to the deferred purchase price regarding IFS Probity B.V. Due to payments in the second half of 2022 and the first half of 2023 this obligation is fully settled.
Trade payables and other current liabilities can be specified as follows:
| 2023 | 2022 | |
|---|---|---|
| Trade payables | 19,098 | 17,342 |
| Contract liabilities | 6,515 | 5,044 |
| Taxes and social security | 19,916 | 21,290 |
| Pension contributions | 0 | 19 |
| Accruals and other current liabilities | 35,772 | 35,777 |
| At 30 June | 81,301 | 79,472 |
Finance income and expenses can be specified as follows:
| H1 2023 | H1 2022 | |
|---|---|---|
| Finance income | - | - |
| Finance costs | -481 | -774 |
| Total | -481 | -774 |
Finance expenses can be specified as follows:
| H1 2023 | H1 2022 | |
|---|---|---|
| Interest costs finance agreement | -3 | -63 |
| Other finance costs | -66 | -266 |
| Finance costs - other | -69 | -329 |
| Finance costs - lease liabilities | -412 | -445 |
| Total finance costs | -481 | -774 |
The interest expenses on the financing facility are among other related to negative interest on current account positions held with banking institutions. The other financial expenses relate mostly to commitment fees. In the other financial expenses in the first half of 2022 are also included interest expenses for the settlement of earn-out obligations.
The interest expenses for lease liabilities are related to the interest component of lease contracts recognized under the application of IFRS 16 Leases (see note 10).
Income taxes for the half-year period under review have been calculated on the basis of the estimated effective annual tax rate applied to pre-tax profit. The corporate income tax in the first six months can be specified as follows:
| H1 2023 | H1 2022 | |
|---|---|---|
| Current income tax for the year | -4,675 | -3,955 |
| Deferred income tax for the year | -528 | -1,759 |
| Total | -5,203 | -5,714 |
The effective tax rate for the first six months of 2023 was 29.9% (29.7% for the full-year 2022 and 29.0% for the first half of 2022). The discrepancy between the nominal tax rate in the Netherlands of 25.8% and the effective tax rate is largely due to the size and composition of the taxable amounts across the various countries, in combination with the impact of non-deductible amounts. The effective tax rate for the first half of 2023 is in line with the effective tax rate for the year 2022.
Deferred taxes are measured on the basis of the expected manner of settlement or realisation. The deferred tax assets relate to temporary value differences related to intangible and tangible assets, pension and other provisions. The deferred tax liabilities relate to the temporary differences in the measurement of intangible assets related to customers upon the acquisition of an associated company.
Basic earnings per share are calculated by dividing the net profit by the average number of outstanding shares. The diluted earnings per share are calculated by dividing the net profit by the average number of outstanding shares during the period under review, including all shares granted conditionally in connection with the share-based bonuses.
The calculation of the earnings per share can be explained as follows:
| H1 2023 | H1 2022 | ||
|---|---|---|---|
| Net profit for the period | 12,180 | 13,983 | |
| Average number of outstanding shares (in thousands) | 90,016 | 93,256 | |
| Earnings per share- basic (in euros) | 0.14 | 0.15 | |
| Adjustment for share-based payment obligations | 838 | 995 | |
| Average number of outstanding shares diluted (in thousands) | 90,854 | 94,251 | |
| Earnings per share - diluted (in euros) | 0.13 | 0.15 |
For the members of the Management Board and members of the senior management, Ordina has a variable longterm bonus scheme that involves payments in shares. This variable long-term bonus is explained in detail in the 2022 annual report. In the context of this scheme, as per 30 June 2023, the company has conditionally awarded Ordina N.V. shares to the members of the Management Board (a total of approximately 0.3 million shares) and to the members of the senior management (a total of approximately 0.5 million shares).
In connection with the variable long-term bonus schemes of the members of the Management Board and members of the senior management, Ordina recognizes an expense of around EUR 0.6 million under personnel costs in the first half of 2023 (first half 2022: around EUR 0.4 million). Around EUR 0.2 million of this expense was related to the members of the Management Board (first half 2022: around EUR 0.2 million) and around EUR 0.4 million was related to the members of the senior management (first half 2022: around EUR 0.2 million).
The remuneration of the members of the Management Board is determined annually by the Supervisory Board. For an explanation of the remuneration policy pertaining to the members of the Management Board, we refer to the Report of the Supervisory Board as included in the 2022 annual report. The total remuneration for the Management Board amounts to EUR 835,000 in the first half of 2023 (first half 2022: EUR 756,000).
The total remuneration for the members of the Supervisory Board amounts to EUR 125,000 in the first half of 2023 (first half of 2022: EUR 125,000).
Ordina's revenue and profit are subject to a limited degree of seasonal influences. The seasonal influences pertain primarily to the lower number of working days in the first half of the year when compared with the second half of the year. This means that Ordina's revenues are generally higher in the second half than in the first half of the year. The movements in working capital are partly influenced by the settlement of liabilities related to items such as holiday pay, bonus payments and dividend payments in the first half of the year.
The nature and scope of off-balance sheet liabilities as per 30 June 2023 do not differ materially from those reported in note 29 of the consolidated financial statements for the 2022 financial year.
On the basis of IFRS 13 'Fair value measurement', the interim financial statements are supposed to include disclosures on how fair value is measured. The carrying amount of the cash and cash equivalents, payables and other debts are close to their fair value due to the short-term nature of these instruments. Trade receivables are also close to their fair value, as any potential downward valuation has already been taken into account via a provision for doubtful debts.
On 21 July 2023 Ordina sold its interest in Quli B.V. (equity interest at end-June 2023: 25%). The sale proceeds amount to approximately EUR 0.2 million and are in line with the balance sheet valuation (at end-June 2023: approximately EUR 0.2 million). The sale therefore has no significant impact on Ordina's results.
There have been no other events since 30 June 2023 that might have a material impact on or that might require adjustments to these condensed interim financial statements.
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