IBS Group Reports its Operating Results for the Third Quarter and Nine Months of Fiscal Year 2011
RAMSEY, Isle of Man, February 28, 2012 /PRNewswire/ --
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IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading IT services provider in Eastern Europe, announces its preliminary unaudited operating results for the third quarter (1 October - 31 December 2011) and nine months (1 April - 31 December 2011) of financial year 2011.
- Consolidated revenues for the third quarter of fiscal year (FY) 2011 increased by 26.3% year-over-year (y-o-y) to US$277.3 million. For the nine months of the FY2011, consolidated revenues increased by 25.7% y-o-y to US$633.5 million.
- Revenues in the IT Services segment grew 30.8% y-o-y for the third quarter of FY2011 to US$187.1 million. For the nine months of the FY2011, the segment's revenues reached US$384.6 million, an increase of 25.2% y-o-y.
- Revenues in the Software Development segment grew 27.1% y-o-y for the third quarter of FY2011, to US$71.2 million. For the nine months of FY2011, the segment's revenues increased by 37.9% y-o-y to US$198.5 million.
- For the nine months of FY2011, the share of revenues generated in Europe and North America rose by 33.2% y-o-y to US$189.3 million and reached 29.9% of the consolidated total revenues.
- As of the end of the third quarter of FY2011, net debt amounted to US$16.6 million, a material decrease of US$16.7 million y-o-y that took place against the backdrop of 25.7% consolidated revenues growth over the same period.
- The Group's headcount continued to grow and reached 8,334 employees as of the end of the third quarter of FY2011.
- Guidance for consolidated revenues for FY2011 (ending 31 March 2012) is reiterated at US$835 million - US$850 million.
Consolidated Revenues, Net of Intercompany Sales*
3Q 3Q 9M 9M US$ million FY2011 FY2010 Change FY2011 FY2010 Change Consolidated revenues 277.3 219.5 26.3% 633.5 503.8 25.7% IT Services segment 187.1 143.1 30.8% 384.6 307.2 25.2% Software Development segment 71.2 56.0 27.1% 198.5 143.9 37.9% Corporate, other and eliminations 19.0 20.4 -6.9% 50.4 52.7 -4.4%
* Based on the preliminary unaudited management accounts; Corporate, other and eliminations line now includes results that were previously reported under the Online Software Delivery segment
- For the third quarter of FY2011, consolidated revenues increased by 26.3% y-o-y to US$277.3 million, driven by strong growth in both the Software Development segment and the IT Services segment.Consolidated revenues for the nine months of FY2011 increased 25.7% y-o-y to US$633.5 million.
- The IT Services segment (IBS IT Services) demonstrated a 30.8% y-o-y revenue growth in the third quarter of FY2011, driven by continued growth in demand for IT services in Russia as well as continued efforts to expand market share in strategic business lines. The segment's revenues for the nine months of FY2011 increased by 25.2% y-o-y.
- The Software Development segment (Luxoft) demonstrated a 27.1% y-o-y revenue growth in the third quarter of FY2011, which was driven by both existing and new customers. The segment'srevenues for the nine months of FY2011 increased by 37.9% y-o-y.
Consolidated Revenues by Geographies*
Change in Share Share absolute of of result , 9M total 9M total US$ million FY2011 revenue FY2010 revenue y-o-y Revenues generated in Russia and the CIS 444.2 70.1% 361.7 71.8% 22.8% Revenues generated in Europe 135.1 21.3% 94.6 18.8% 42.8% Revenues generated in North America 54.2 8.6% 47.5 9.4% 14.1%
* Based on the preliminary unaudited management accounts; customer geography is determined based on billing location
- During the nine months of FY2011 IBS Group's share of international revenues amounted to 29.9% of consolidated total, up from 28.2% in the nine months of FY2010. This was a result of continued diversification of the Group's business and strong growth in the Software Development segment, which is primarily focused on international customer base.
- The share of revenues generated in Europe increased to 21.3% of consolidated total in the nine months of FY2011 compared to 18.8% in the nine months of FY2010. This reflected, among other factors, a successful expansion strategy focused on Western European accounts over the past year. Revenues from Europe reached US$135.1 million in the nine months of FY2011, an increase of 42.8% y-o-y.
- The share of revenues generated in North America reached 8.6% of consolidated total in the nine months of FY2011, down from 9.4% in the nine months of FY2010. In absolute terms, however, the North American revenues increased by 14.1% y-o-y to US$54.2 million in the nine months of FY2011 from US$47.5 million in the nine months of FY2010.
- The share of revenues generated in Russia and the CIS reached 70.1% of consolidated total in the nine months of FY2011 compared to 71.8% in the nine months of FY2010. Revenues from Russia and the CIS reached US$444.2 million in the nine months of FY2011, an increase of 22.8% y-o-y.
3Q FY2011 3Q FY2010 Change 2Q FY2011 Change Number of employees (31/12/2011) (31/12/2010) y-o-y (30/9/2011) q-o-q Group headcount 8,334 7,272 14.6% 8,062 3.4%
* Based on the preliminary unaudited management accounts
As of 31 December 2011, the headcount of IBS Group reached 8,334 employees, a 14.6% increase y-o-y. During the third quarter of FY2011, IBS Group had a net personnel increase of 272 employees, a 3.4% gain compared to its headcount at the end of the second quarter ofFY2011. The headcount growth was primarily due to active hiring at the Software Development segment across its regional development centres in Eastern Europe.
End of 3Q Change End of 2Q Change End of 3Q FY2010 from FY2011 from FY2011 previous previous US$ million 31.12.2011 31.12.2010 year 30.09.2011 quarter Total debt, including 55.8 69.4 -13.6 71.7 -15.9 Short-term debt 27.5 31.3 -3.8 42.0 -14.5 Long-term debt, including 28.3 38.1 -9.8 29.7 -1.4 Current portion of long-term debt 5.7 11.2 -5.5 6.0 -0.3 Non-current portion of long-term debt 22.6 26.9 -4.3 23.7 -1.1 Cash and cash equivalents 39.2 36.1 3.1 18.7 20.5 Net debt 16.6 33.3 -16.7 53.0 -36.4
* Based on the preliminary unaudited management accounts
IBS Group continues to adhere to its conservative financial policy, which has brought about a significant reduction in net debt in FY2011. As of the end of the third quarter of FY2011, total debt stood at US$55.8 million, a decrease of US$13.6 million or 19.6% y-o-y. As of the end of the third quarter of FY2011, the net debt amounted to US$16.6 million, a material decrease of US$16.7 million y-o-y that took place against the backdrop of 25.7% consolidated revenues growth over the same period. Compared to the end of the second quarter of FY2011, the net debt declined a significant $36.4 million or 68.7%, as seasonally strong cash flows of the third financial quarter were used to materially strengthen the balance sheet.
Based on current market trends and conditions, IBS Group reiterates its guidance for consolidated revenues for the FY2011 (ending 31 March 2012) at US$835 million - US$850 million, compared to US$656 million for FY2010. This forecast is subject to certain risks and the stated revenue goal assumes continued and growing demand for software and applications development outsourcing services, a continued recovery of the Russian IT services market, generally sound economic environment and stable financial conditions.
Comment from President
Anatoly Karachinsky, President of IBS Group said, "We are very pleased with the performance of both our business segments for the third quarter of fiscal year 2011. Our Software Development business continued to grow rapidly, driven by expansion of existing client relationships and new business wins. In particular, we achieved strong progress for our clients in automotive, finance and telecommunications industries. At the same time our IT Services segment demonstrated very strong growth that reflected our successful efforts to expand our market share in strategic lines of business, such as industrial and financial sectors, as well as the on-going expansion of the domestic IT services market. Notably, the IT Services segment achieved substantial revenue growth while keeping its headcount largely unchanged, thus reflecting increased productivity and utilisation levels. Finally, we significantly improved our financial position, reducing net debt to just $16.6 million and increasing our cash position to $39.2 million as of the end of 2011. Continued growth in demand for sophisticated IT services in Russia and globally, as well as our strong financial position, make us reasonably optimistic about IBS Group's business outlook for 2012."
About IBS Group
IBS Group is a leading software development and IT services provider in Eastern Europe. Through its two principal subsidiaries, Luxoft and IBS IT Services, it offers a wide variety of information technology services, such as software development, IT outsourcing, business and IT consulting, business applications implementation. IBS Group is headquartered in Russia and has business operations in Russia, Ukraine, Romania, Poland, Germany, Switzerland,
the UK, the USA, Canada, Vietnam and Singapore. IBS Group employs more than 8,000 people worldwide. -In financial year 2010, IBS Group reported US GAAP revenues of US$656 million.
IBS Group's Global Depositary Receipts are listed on the Regulated Market (General Standard) at the Frankfurt Stock Exchange (Bloomberg: IBSG:GR; Reuters: IBSGq.DE). -IBS Group is majority owned by management, with portfolio investors holding 37% of the Group's share capital.
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