Earnings Release • May 2, 2017
Earnings Release
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Nieuwegein, 2 May 2017
"The results of the first quarter mark a modest start to the year. The revenue growth in Belgium and Luxembourg could only partly offset this decline. In the Netherlands, we continue to face a shortage of the employees we need to meet the growing demand. We have therefore made our top priorities for 2017 the recruitment and retention of professionals.
To support our recruitment efforts, we are continuing our recruitment marketing campaign 'Do you look beyond the code?'. We expect it to be some time before we can return the number of employees to the desired level in the current highly competitive market.
The increase in revenue in the public sector was driven by Belgium/Luxembourg. In addition, we also saw a levelling off of the decline in the public sector in the Netherlands, as we are increasingly capitalising on the IT outsourcing framework contracts we acquired in 2016. The shortage of employees is particularly severe in the financial services sector, where revenue showed a strong decline. The growth in the industry sector was driven by our strong position among existing clients in the logistics sector and our large clients in Belgium/Luxembourg. We recorded a modest increase in revenue in the healthcare sector.
In recent years, we have successfully made our innovations relevant to the business. We have used this to define Ordina-wide propositions that meet market demand. We will continue to accelerate and upscale the marketing of these propositions in the coming period."
Revenue in the first quarter declined by 1.8% to EUR 88.2 million (Q1 2016: EUR 89.9 million). EBITDA fell to EUR 4.3 million (Q1 2016: EUR 4.6 million). Redundancy costs came in at EUR 0.9 million in the first quarter (Q1 2016: EUR 1.9 million). The number of workable days in Q1 was 65 in the Netherlands and 64 in Belgium/Luxembourg (Q1 2016: Netherlands and Belgium/Luxembourg 63). The impact of the additional workable days was EUR 2.3 million in revenue and EUR 1.7 million in EBITDA.
| Q1 2016 | Q1 2017 | ∆ % | |
|---|---|---|---|
| (in thousands of euros) | |||
| Public sector | 30,494 | 31,125 | 2.1% |
| Financial Services | 27,928 | 24,041 | -13.9% |
| Industry | 25,359 | 26,888 | 6.0% |
| Healthcare | 6,070 | 6,156 | 1.4% |
| Total | 89,851 | 88,210 | -1.8% |
Revenue in the public sector increased by 2.1% to EUR 31.1 million (Q1 2016: EUR 30.5 million). This increase was driven by Belgium/Luxembourg. The decline in the Netherlands levelled off, largely on the back of the framework contracts Ordina won in 2016. Revenue in the financial services sector fell by 13.9% to EUR 24.0 million (Q1 2016: EUR 27.9 million). This decline was largely due to high staff turnover in the Netherlands. Revenue in the industry sector was up 6.0% at EUR 26.9 million (Q1 2016: EUR 25.4 million). This was driven by revenue growth at existing clients in both the Netherlands and Belgium/Luxembourg. Revenue in the healthcare sector increased by 1.4% to EUR 6.2 million (Q1 2016: EUR 6.1 million). After strong growth in 2016, revenue from pharmaceutical clients remained stable in the first quarter of 2017.
| Q1 2016¹ | Q1 2017 | ∆ % | |
|---|---|---|---|
| (in thousands of euros) | |||
| Netherlands | 68,139 | 64,697 | -5.1% |
| Delivery | 63,080 | 59,604 | -5.5% |
| Innovation cluster | 5,059 | 5,093 | 0.7% |
| Belgium/Luxembourg | 21,712 | 23,513 | 8.3% |
| Total | 89,851 | 88,210 | -1.8% |
¹ 2016 figures have been adjusted for comparison purposes, on the basis of the new organisational structure.
| 2017 | 2016 | |||
|---|---|---|---|---|
| NL | B | NL | B | |
| Total workable days | ||||
| Q1 | 65 | 64 | 63 | 63 |
| Q2 | 61 | 61 | 62 | 62 |
| Q3 | 65 | 63 | 66 | 64 |
| Q4 | 63 | 62 | 64 | 62 |
| Total | 254 | 250 | 255 | 251 |
In Belgium/Luxembourg, revenue came in 8.3% higher at EUR 23.5 million (Q1 2016: EUR 21.7 million), partly on the back of the growth in the number of employees we realised in 2016. Belgium/ Luxembourg
At end-Q1 2017, the total number of employees stood at 2,644 FTEs (Q1 2016: 2,801 FTEs). The total influx of employees in the first quarter was 144 FTEs and the outflow was 189 FTEs. On balance, this was a decline of 45 FTEs compared to Q4 2016 (2,689 FTEs).
| Movements in the number of employees | |
|---|---|
| Q4 2016 | Influx | Outflow | Q1 2017 | |
|---|---|---|---|---|
| Direct FTEs | 2,382 | 121 | 174 | 2,329 |
| Indirect FTEs | 307 | 23 | 15 | 315 |
| Total | 2,689 | 144 | 189 | 2,644 |
Net debt stood at EUR 2.5 million at end-Q1 2017, down EUR 8.4 million compared to Q1 2016 (EUR 10.9 million). This was primarily due to working capital management and the net profit recorded in 2016.
The net debt/'adjusted' EBITDA ratio stood at 0.1 (maximum leverage ratio: ≤2.50) and the Interest Cover Ratio stood at 59.7 (minimum interest cover ratio: ≥ 5.0). This puts the ratios within the bandwidth agreed in the bank covenants.
The financing facility agreed in May 2015 has a term of five years, with an initial term of three years and an option to extend this twice by one year. In April 2017, Ordina and its banks agreed the second one-year extension to 2020 at unchanged terms.
# # #
Ordina is the largest independent IT services provider in de Benelux, with around 2,700 employees. We devise, build and manage IT applications in the public sector, financial services sector, in industry and in the healthcare sector. Our goal is IT that truly helps people. IT that matters and that has been developed without wasting resources. We do this by working with our clients in partnerships for sustainable innovation.
Ordina was founded in 1973. The company's shares have been listed on NYSE Euronext Amsterdam since 1987 and are included in the Small Cap Index (AScX). In 2016, Ordina recorded revenues of EUR 344 million. You will find additional information on our corporate website: www.ordina.com.
For more information about this press release, please contact: Joyce van Wijnen, Investor Relations Mail: [email protected] Telephone: +31 (0)30 663 7468
Jeroen Hellenberg, Communications Mail: [email protected] Telephone: +31 (0)30 663 8557
Annemieke den Otter, CFO Mail: [email protected] Telephone: +31 (0)30 663 7002
Jo Maes, CEO Mail: [email protected] Telephone: +31 (0)30 663 7111
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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