Earnings Release • Apr 23, 2020
Earnings Release
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Nieuwegein, 23 april 2020
"We started the year with strong results in both the Netherlands and Belgium/Luxembourg. We recorded an aboveaverage increase in revenue from teams and business propositions. In the Netherlands, revenue growth was tempered by the reduction of revenue with subcontractors, but the quality of the underlying revenue is increasing, which resulted in a strong return. In Belgium/Luxembourg, growth was once again driven by the higher number of employees and a strong operational performance.
Our cash position continued to improve, providing Ordina with a solid basis, even in the current circumstances. The stability of our company and the care for all our stakeholders are our highest priorities. Due to the extraordinary circumstances and the resultant uncertain outlook, we will be withdrawing our dividend proposal for 2019. At the moment, we are making every possible preparation to respond quickly and effectively to changes and we are introducing measures that take into account the interests of all our stakeholders, including our people, our clients and our shareholders. It will become apparent in the months to come to what extent our clients will continue to invest in IT and digitalisation.
The impact of the coronavirus on a global scale is unprecedented. Many of our clients are active in vital sectors, so the continuity of our services to our clients remains our top priority. Over the past few weeks, we have been able to continue to provide our services almost flawlessly. I am therefore particularly grateful for the commitment of our professionals and the flexibility of our clients under these exceptional circumstances."
In the first quarter of 2020, revenue was up 1.8% at EUR 96.3 million (Q1 2019: EUR 94.6 million). EBITDA (after redundancy costs) came in at EUR 12.1 million (Q1 2019: EUR 8.6 million). Redundancy costs amounted to EUR 0.8 million (Q1 2019: EUR 0.6 million). The EBITDA margin came in at 12.6% in the first quarter (Q1 2019: 9.1%).
The number of working days was 64 in the Netherlands and in Belgium/Luxembourg (Q1 2019: 63). The impact of one working day is around EUR 1.3 million in revenue and around EUR 1.0 million in EBITDA.
(in EUR thousands)
| Q1 2020 | 1 Q1 2019 |
∆ % | |
|---|---|---|---|
| Public sector | 38,863 | 36,449 | 6.6% |
| Financial services | 25,826 | 27,757 | -7.0% |
| Industry | 31,586 | 30,349 | 4.1% |
| Total | 96,275 | 94,555 | 1.8% |
1 The 2019 figures have been adjusted for comparison purposes, due to the reclassification of a number of clients that were previously reported in the healthcare sector.
In the first quarter of 2020, revenue in the public sector increased by 6.6% to EUR 38.9 million (Q1 2019: EUR 36.4 million). Revenue increased in both in the Netherlands and in Belgium/Luxembourg on the back of higher revenue from the business propositions High performance teams and Intelligent data-driven organisations.
Revenue in the financial services sector came in at EUR 25.8 million in the first quarter, a decline of 7.0% compared to last year (Q1 2019: EUR 27.8 million). This decline was primarily due to a continued decline in revenue from subcontractors in the Netherlands. The underlying figures show an increase in revenue from our services based on the business propositions High performance teams and Intelligent data-driven organisations. In Belgium/Luxembourg, we recorded an increase in revenue.
In the industry sector, revenue in the first quarter of 2020 was 4.1% higher at EUR 31.6 million (Q1 2019: EUR 30.3 million). In Belgium/Luxembourg, the higher revenue was largely driven by growth in the pharmaceutical industry on the basis of Cybersecurity & compliance and Business platforms. In the Netherlands, revenue in this sector remained stable compared to 2019.
(in EUR thousands)
| Total | 96,275 | 94,555 | 1.8% |
|---|---|---|---|
| Belgium/Luxembourg | 31,926 | 29,202 | 9.3% |
| The Netherlands | 64,349 | 65,353 | -1.5% |
| Q1 2020 | Q1 2019 | ∆ % |
| 2020 | 2019 | |||
|---|---|---|---|---|
| NL | Belux | NL | Belux | |
| Q1 | 64 | 64 | 63 | 63 |
| Q2 | 60 | 61 | 62 | 61 |
| Q3 | 66 | 64 | 66 | 64 |
| Q4 | 65 | 63 | 64 | 63 |
| Total | 255 | 252 | 255 | 251 |
At the end of the first quarter of 2020, Ordina had 2,639 FTEs (end-Q1 2019: 2,656 FTEs). The number of direct employees increased by 2 FTEs and the number of indirect employees increased by 8 FTEs in the first quarter. Belgium/Luxembourg saw the largest increase in the number of indirect employees, to provide support for the growing organisation.
| Year-end 2019 | Net change | End-Q1 2020 | |
|---|---|---|---|
| Direct FTEs | 2,340 | + 2 | 2,342 |
| Indirect FTEs | 289 | + 8 | 297 |
| Total | 2,629 | + 10 | 2,639 |
The net cash position stood at EUR 23.7 million at end-Q1 2020 (end-Q1 2019: EUR 9.8 million). This increase was largely driven by tight working capital management and the higher result.
The net debt/'adjusted' EBITDA ratio was –0.8 (maximum leverage ratio ≤ 2.50) and the Interest Cover Ratio stood at 302.0 (minimum ICR ≥ 5.0). These ratios are therefore well within the parameters set in the covenants agreed with the banks.
The Annual General Meeting will be held on 30 June at 14:30; location: Ordina head office, Ringwade 1 in Nieuwegein. We will amend the proposal for the appropriation of profit on the agenda and withdraw the proposal to pay out a dividend for 2019. The proposed result appropriation included in Ordina's 2019 annual report is therefore replaced by the new information included in this press release (in which the dividend proposal is withdrawn). In view of the current circumstances, Ordina asks that shareholders vote as much as possible by proxy or voting instructions and that any questions be submitted in advance. Ordina will include more information on this subject in the agenda, also convocation for the meeting, which will be published no later than 19 May on www.ordina.nl/en/investorrelations/general-meeting-of-shareholders/
Ordina is the largest local IT services provider in the Benelux, with around 2,650 employees. We focus on giving our clients a digital edge in the sectors: financial services, industry, the public sector and healthcare. We do this by devising, building and managing technological applications. Ordina helps its clients to stay ahead of the challenges and changes in their business. Ordina was founded in 1973. Ordina's shares have been listed on Euronext Amsterdam since 1987 and are included in the Smallcap Index (AScX). In 2019, Ordina recorded revenues of EUR 372 million. For more information, please go to: www.ordina.nl.
Joyce van Donk-van Wijnen, Investor Relations Mail: [email protected] Telephone: +31 (0)30 663 7000
Eveline Rogier, Corporate Communications & Marketing Mail: [email protected] Telephone: +31 (0)30 663 7000
Annemieke den Otter, CFO Mail: [email protected] Telephone: +31 (0)30 663 7111
Jo Maes, CEO Mail: [email protected] Telephone: +31 (0)30 663 7111
| 30 June 2020 | Annual General Meeting |
|---|---|
| 30 July 2020 | Publication interim results 2020 |
| 29 October 2020 | Trading update Q3 |
| 18 February 2021 | Publication annual results 2020 |
09:00 hours CET – Press conference call Ordina will explain the results at 09:00 hours CET on 23 April 2020 during a press conference call.
Ordina will present its results at 10:00 hours CET on 23 April 2020 during an analyst conference call.
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 globalisation of the markets for solutions, IT and consulting, increased performance commitments, scarcity on the labour market, and future acquisitions and disposals.
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