Nagarro SE

Earnings Release • Aug 13, 2021

News Details

Corporate | 13 August 2021 11:21

Nagarro SE posts 21.1% YoY revenue growth in Q2, 24.7% in constant currency

DGAP-News: Nagarro SE / Key word(s): Half Year Results/Half Year Report

13.08.2021 / 11:21

The issuer is solely responsible for the content of this announcement.

August 13, 2021 – Nagarro, a global leader in digital engineering and technology solutions, today stated its unaudited financial numbers for Q2 2021 (April 1, 2021 – June 30, 2021) and released its half-yearly report. Demand continued to be strong for Nagarro’s services, while supply was significantly constrained by hiring challenges and Covid-19 disruptions. Revenue grew to €127.3 million in Q2 2021, up 21.1% YoY from €105.1 million in Q2 2020, and up 10.0% QoQ from € 115.7 million in Q1 2021. Constant currency YoY revenue growth for Q2 2021 was 24.7%. Gross profit increased to €38.0 million in Q2 2021 from €36.0 million in Q2 2020. Gross margin dropped to 29.9% in Q2 2021 from 34.2% in Q2 2020. Adjusted EBITDA decreased by 9.8% YoY to €19.0 million (14.9% of revenue) in Q2 2021, from €21.0 million (20.0% of revenue) in Q2 2020. It should be noted here that Q2 2020 results had included the effect of temporary salary cuts in response to the pandemic.

EBITDA dropped by 26.9% YoY to €15.4 million, from €21.0 million in Q2 2020. The main EBITDA adjustments were on account of stock option expense of €2.9 million and expenses of €1.8 million related to the rollover of non-controlling interest. EBIT decreased by 38.9% YoY to €9.6 million, from €15.7 million in Q2 2020. Net profit decreased by 38.2% YoY to €5.6 million against €9.1 million in Q2 2020. The cash balance decreased by €5.8 million from December 31, 2020 to €101.9 million.

H1 results

Nagarro also released its very first half-year report. Revenue grew to €243.0 million in H1 2021 (January 01, 2021 – June 30, 2021), up 12.5 % YoY from €216.0 million in H1 2020. Constant currency revenue growth for H1 2021 was 16.3%. Gross profit increased to €72.1 million in H1 2021 from €70.9 million in H1 2020. Gross margin dropped to 29.7% in H1 2021 from 32.8% in H1 2020. Adjusted EBITDA grew 5.1 % YoY to €37.5 million (15.4% of revenue) in H1 2021, up from €35.7 million (16.5% of revenue) in H1 2020. EBITDA dropped by 8.4 % YoY to €32.7 million, down from €35.7 million in H1 2020. EBIT decreased by 14.3 % YoY to €21.4 million, from €24.9 million in H1 2020. Net profit decreased by 12.1 % YoY to €13.3 million against €15.1 million in H1 2020.

“Nagarro’s revenue growth continued, despite an overheated job market and the afflictions of the second wave of Covid-19 in India”, said Manas Fuloria, co-founder. “We again added over 1000 professionals in this quarter, including fresh graduates, net of attrition. The company retains its revenue and Adjusted EBITDA guidance for 2021. However, we are reducing our gross margin guidance from 32% to 29% because of unprecedented wage inflation, while the effect of our remedial steps will lag the increase in wages. We have other operational levers to still feel comfortable about our Adjusted EBITDA guidance for 2021.”

The company will offer an earnings call (analyst meeting) on August 13 at 2 pm Central European Summer Time, 8 am in New York City and 8 pm in Singapore. The telephone dial-in numbers for audio and the URL for the online presentation can be found below and here .

Key figures – Quarterly

		Q2 2021		Q2 2020				Q1 2021
		kEUR		kEUR		Change in percent		kEUR		Change in percent
Revenue		127,322		105,131		21.1%		115,724		10.0%
Cost of revenues		89,328		69,198		29.1%		81,715		9.3%
Gross profit		38,038		35,977		5.7%		34,054		11.7%
Adjusted EBITDA		18,960		21,014		-9.8%		18,559		2.2%
Revenue by country
Germany		30,754		27,106		13.5%		30,554		0.7%
US		45,413		37,936		19.7%		39,271		15.6%
Revenue by industry
Automotive, Manufacturing and Industrial		21,123		14,144		49.3%		18,860		12.0%
Energy, Utilities and Building Automation		10,875		8,407		29.4%		9,412		15.6%
Financial Services and Insurance		14,687		14,067		4.4%		13,055		12.5%
Horizontal Tech		12,020		9,332		28.8%		11,965		0.5%
Life Sciences and Healthcare		9,149		8,057		13.5%		8,866		3.2%
Management Consulting and Business Information		7,889		7,874		0.2%		7,904		-0.2%
Public, Non-profit and Education		11,107		8,558		29.8%		9,323		19.1%
Retail and CPG		17,715		12,262		44.5%		16,067		10.3%
Telecom, Media and Entertainment		9,483		10,123		-6.3%		9,113		4.1%
Travel and Logistics		13,273		12,306		7.9%		11,161		18.9%

Key figures – Half yearl y

		H1 2021		H1 2020
		kEUR		kEUR		Change in percent
Revenue		243,046		216,039		12.5%
Cost of revenues		171,043		145,196		17.8%
Gross profit		72,092		70,932		1.6%
Adjusted EBITDA		37,519		35,692		5.1%
Revenue by country
Germany		61,309		58,356		5.1%
US		84,684		75,075		12.8%
Revenue by industry
Automotive, Manufacturing and Industrial		39,983		29,535		35.4%
Energy, Utilities and Building Automation		20,287		18,590		9.1%
Financial Services and Insurance		27,742		26,764		3.7%
Horizontal Tech		23,985		18,423		30.2%
Life Sciences and Healthcare		18,015		16,322		10.4%
Management Consulting and Business Information		15,792		15,864		-0.5%
Public, Non-profit and Education		20,429		17,897		14.2%
Retail and CPG		33,782		25,202		34.0%
Telecom, Media and Entertainment		18,596		21,101		-11.9%
Travel and Logistics		24,435		26,341		-7.2%

		H1 2021		H1 2020
		Percent		Percent
Revenue concentration (by customer)
Top 5		13.9%		13.9%
Top 6-10		10.8%		10.4%
Outside of Top 10		75.3%		75.6%

Segment information

		H1 2021		H1 2020
		kEUR		kEUR		Change in percent
Central Europe
Revenue		84,822		80,633		5.2%
Cost of revenues		59,882		55,781		7.4%
Gross profit		24,939		24,852		0.4%
North America
Revenue		84,698		75,276		12.5%
Cost of revenues		59,691		49,167		21.4%
Gross profit		25,007		26,108		-4.2%
Rest of Europe
Revenue		37,001		32,487		13.9%
Cost of revenues		26,775		22,518		18.9%
Gross profit		10,315		10,057		2.6%
Rest of World
Revenue		36,525		27,644		32.1%
Cost of revenues		24,694		17,730		39.3%
Gross profit		11,831		9,914		19.3%

Gross profit, gross margin and Adjusted EBITDA are neither required by, nor presented in accordance with, IFRS. Non-IFRS measures should not be considered in isolation or as a substitute for results under IFRS.

Gross profit is calculated on the basis of total performance which is sum of revenue and own work capitalized.

Rounding differences may arise when individual amounts or percentages are added together.

Earnings call (analyst meeting) information

The earnings call will involve a telephone dial-in for audio plus an online presentation.

Dial-in numbers:

+43 1 3865461 Austria local

+358 9 42720657 Finland local

+33 4 82 98 62 47 France local

+49 69 247471834 Germany local (English)

+91 11 7127 9191 India local

+39 02 6006 3140 Italy local

+47 815 03 466 Norway local

+48 12 200 52 45 Poland local

+34 912 66 19 31 Spain local

+46 40 688 75 30 Sweden local

+44 20 3872 0880 United Kingdom local

+1 516-269-8980 United States local

Online presentation login:

https://webcast.meetyoo.de/index.html?e=W0ggs1O1p826

About Nagarro

Nagarro, a global digital engineering leader, helps clients become innovative, digital-first companies and thus, win in their markets. The company is distinguished by its entrepreneurial, agile, and global character, its CARING mindset, and its approach of “Thinking Breakthroughs”. Nagarro employs over 10,000 people in 26 countries. For more information, visit www.nagarro.com .

FRA: NA9 (SDAX, ISIN DE000A3H2200, WKN A3H220)

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13.08.2021 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.

The issuer is solely responsible for the content of this announcement.

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Language:	English
Company:	Nagarro SE
	Einsteinstraße 172
	81677 München
	Germany
Phone:	089 9984210
Internet:	www.nagarro.com
ISIN:	DE000A3H2200
WKN:	A3H220
Listed:	Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange
EQS News ID:	1226379

End of News	DGAP News Service