IBS Group Reports Operating Results for the Quarter and Full Year Ended March 31, 2014
RAMSEY, Isle of Man, June 3, 2014 /PRNewswire/ --
Please refer to the relevant legal information at the end of this document
IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading software developer and IT services provider in Central and Eastern Europe, today announced its preliminary unaudited operating results for the fourth quarter and full year ending March 31, 2014 (4Q and FYE March 31, 2014).
FYE March 31, 2014 highlights
- Consolidated revenues for the FYE March 31, 2014 amounted to US$903.6 mn, an increase of 3.8% y-o-y.
- IT Services segment revenues for the FYE March 31, 2014 amounted to US$429.8 mn, a decline of 11.2% y-o-y; revenues expressed in RUB terms came to 14,289 mn, a decrease of 5.1%.
- Software Development segment revenues for the FYE March 31, 2014 were US$398.3 mn, an increase of 26.6% y-o-y.
- Revenues from Russian operations amounted to US$521.2 mn in the FYE March 31, 2014. Our revenues from North America came to $192.1 mn, while European operations added another US$190.3 mn.
- Our headcount reached 10,085 employees, an increase of 17.3% y-o-y.
- The net cash position stands at US$26.1 mn, an increase of US$67.2 mn y-o-y.
Consolidated revenues by segment [*]
4Q FYE
4Q FYE March FYE FYE
March 31, 31, Change March March Change
31, 31,
US$ mn 2014 2013 y-o-y 2014 2013 y-o-y
Consolidated revenues 236.7 198.4 19.3% 903.6 870.3 3.8%
IT Services segment 110.6 93.4 18.4% 429.8 483.8 -11.2%
IT Services segment, RUB 3 14 15
mn 3 903.0 086.0 26.5% 289.0 060.0 -5.1%
Software Development
segment 106.3 85.9 23.7% 398.3 314.6 26.6%
Corporate, other and
eliminations 19.7 19.1 3.4% 75.6 71.9 5.1%
* Source: management accounts
Consolidated revenues for the FYE March 31, 2014 amounted to US$903.6 mn, an increase of 3.8% y-o-y, with yet another year of positive revenue dynamics attributable to the Group mostly driven by revenue growth in Software Development segment. Consolidated revenues for the fourth quarter of FYE March 31, 2014 amounted to US$236.7 mn, up by 19.3% y-o-y.
IT Services segment revenues for the FYE March 31, 2014 amounted to US$429.8 mn, a decline of 11.2% y-o-y; revenues expressed in RUB terms totalled 14,289 mn, a decrease of 5.1% y-o-y. The segment's revenues for the fourth quarter amounted to US$110.6 mn, an increase of 18.4% y-o-y in US$ terms and 26.5% in RUB terms respectively. RUB depreciation against USD in 4Q FYE 2014 vs. a year ago significantly affected results of the segment in the quarter as well as full year results. Moreover, a significant increase of revenues in the segment in the fourth quarter is explained by low base effect of the previous year.
Software Development segment revenues for the FYE March 31, 2014 came to US$398.3 mn, an increase of 26.6% y-o-y. The segment's revenues for the fourth quarter amounted to US$106.3 mn, an increase of 23.7% y-o-y.
Consolidated revenues by geography *
FYE Share FYE Share
of of Change
March 31, total March 31, total
US$ mn 2014 revenue 2013 revenue y-o-y
Revenues generated in
Russia 521.2 57.6% 579.0 66.5% -10.0%
Revenues generated in
Europe 190.3 21.1% 149.7 17.2% 27.1%
Revenues generated in
North America 192.1 21.3% 141.6 16.3% 35.6%
* Source: management accounts; customer geography determined by the location of clients' key decision makers
Revenues from Russian operations amounted to US$521.2 mn in the FYE March 31, 2014, a decline of 10.0% y-o-y, affected by declining revenue of IT Services segment and lower proportion of Software Development segment revenues derived in Russia. Revenues generated in Europe amounted to US$190.3 mn, an increase of 27.1% y-o-y, and now account for 21.1% of the Group revenues. Revenues generated in North America increased to US$192.1 mn, up 35.6% y-o-y, and now account for 21.3% of the Group revenues. Our revenues in both geographies increased substantially due to the growth of revenues in Software Development segment and now account for more than 20% each, as measured of proportion of the Group consolidated revenues.
Headcount *
March 31, March 31, Change December Change
Number of employees 2014 2013 y-o-y 31, 2013 q-o-q
Group headcount 10 085 8 597 17.3% 9 890 2.0%
IT Services segment 2 226 2 397 -7.1% 2 242 -0.7%
Software Development
segment 7 519 5 846 28.6% 7 273 3.4%
Corporate and other 340 354 -4.0% 375 -9.3%
* Source: management accounts
Our headcount increased to 10,085 employees, up by 17.3% y-o-y. In the IT Services segment, the number of employees declined to 2,226 IT professionals, as we reduced our headcount by 171 IT professional. Over the course of the year we adjusted the size of our domestic business to the demand for our services, undertaking a number of restructuring measures. In the Software Development segment, the number of employees amounted to 7,519, as we added 1,673 IT professionals on the net basis over the year.
Debt *
Change Change
March 31, March 31, December 31,
US$ mn 2014 2013 y-o-y 2013 q-o-q
Total debt 69.3 56.3 13.0 57.8 11.5
Current debt 67.2 35.6 31.6 56.0 11.2
Non-current debt 2.1 20.7 -18.6 1.8 0.3
Net debt / (- Net
cash) -26.1 41.4 -67.2 -46.6 20.4
* Source: management accounts
Our total debt amounted to US$69.3 mn as of March 31, 2014, up US$13.0 mn y-o-y and US$11.5 mn q-o-q. The net cash position stands at US$26.1 mn, an increase of US$67.2 mn y-o-y and decrease of US$20.4 mn q-o-q. Our quarterly increase in net debt is attributable to the growth of the seasonal working capital requirements in the IT Services segment. On June 2, 2014 we fully repaid debt to EBRD with total settlement amounted to US$26.4mn.
Anatoly Karachinsky, President of IBS Group, commented:
"We have noticed a significant transformation of the demand for corporate solutions on the Russian IT market which is driven by emerging of new technological philosophy of the IT-support by corporations. The changes are influenced by implementation of such technologies as Cloud solutions, mobile devices, and big data. Moreover, dynamics of the domestic IT market is very much linked to the complex situation in the Russian economy. These factors forced us to begin a deep reorganization of our IT Services segment aiming at cost cutting and efficiency gains. We anticipate that this reorganization will take from 12 to 24 months to complete.
Our Software Development segment further broaden its ties with the global customers adding a number of high potential accounts to its portfolio over the course of the year. Our strategy of geographical, industrial and client diversification coupled with investments in proprietary solutions proved to be successful as segment demonstrated another year of solid growth."
About IBS Group Holding Limited
IBS Group is a leading software development and IT services provider in Central and 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 and IT services outsourcing, IT infrastructure and business applications implementation. IBS Group has business operations in Russia, Ukraine, Romania, Poland, Germany, Switzerland, the UK, the USA, Vietnam and Singapore. IBS Group employs more than 10,000 people worldwide. In the year ended March 31, 2013, the Group reported US GAAP consolidated revenues of US$870.3 mn. IBS Group's Global Depositary Receipts are listed on the Regulated Market (General Standard) at the Frankfurt Stock Exchange (Bloomberg: IBSG:GR; Reuters: IBSGq.F)
Disclaimer
The information contained in this release is not for publication, distribution or release, directly or indirectly, in the United States of America (including its territories and possessions, any states of the United States and the District of Columbia) or any other jurisdiction where such distribution is unlawful. Such release does not constitute an offer for the sale of securities in the United States of America, Canada, Australia, Japan or in any other jurisdiction in which an offer is subject to legal restrictions.
The information communicated in this document contains certain statements that are or may be projections or forward looking. These statements typically contain the words "anticipate", "believe", "intend", "estimate", "expect", "plan", "project" and words of similar meaning. By their nature, forward-looking statements are not statements of historical fact and reflect the current assessments, views, assumptions and beliefs made by the Company's management according to the information available at the time made about future events, operating performance, financial condition, business strategy, the Company's plans and objectives for future operations and the industry in which the Company operates. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors, any of which can lead to the actual results of operations, profitability, performance, profits or achievements of the Company to be materially different from the results of operations, profitability, performance, profits or achievements of the Company expressed or implied by these forward-looking statements. Factors that could cause the actual results to differ materially from those contained in projections or forward-looking statements of the Company may include, among others, general economic and competitive environment conditions in the markets in which the Company operates as well as many other risks affecting the Company and its operations. In view of these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements.
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For more information about IBS Group please visit http://www.ibsgr.com or contact
Investor Relations:
Andrei Novikov
IR Director
tel: +7(495)967-8000 (ext.4095)
[email protected]
SOURCE IBS Group Holding Ltd
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