IBS Group Reports Operating Results for Q4 and Fiscal Year of 2011

News provided by

IBS Group Holding Limited

05 Jun, 2012, 11:29 GMT

RAMSEY, The Isle of Man, June 5, 2012 /PRNewswire/ --

Please refer to relevant legal information at the end of the document

IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading IT services provider in Central and Eastern Europe, has announced its preliminary unaudited operating results for the fourth quarter (1 January - 31 March 2012) and the full year (1 April 2011 - 31 March 2012) of Fiscal Year (FY2011).

Highlights

  • Full year FY2011 consolidated revenues rose by 24% y-o-y to US$816.1mn. Revenues were driven up by the fast growth in both of our business segments - IT Services and Software Development.
  • IT Services segment's full year FY2011 revenues increased by 22% y-o-y to US$476.5mn on the back of continuing expansion in the Russian IT market.
  • Software Development segment revenues were up 37% y-o-y in FY2011, totaling US$271.1mn as we saw healthy demand for our services driven predominantly by existing clients.
  • We witnessed the most rapid progress in our operations in Europe, where our FY2011 revenues swelled by 44% y-o-y. In Russia we observed revenues growth of 20%, in line with the increase of revenues in the IT segment for FY2011.
  • The total Group headcount reached 8,225 when we added 870 employees on a net basis in FY2011.
  • The Group gradually followed its risk averse policy of debt reduction, as we end FY2011 with a total debt of US$44.5mn, down US$13.7mn y-o-y, and net debt of US$24.2mn, down another US$7.5mn y-o-y.

Consolidated Revenues *

                                                 Change               Change
                                            Q4
    US$, mn                     Q4 FY2011 FY2010 y-o-y  FY2011 FY2010 y-o-y
 
    Consolidated revenues          183.0   152.3   20%   816.1  656.0   24%
    IT Services                     92.2    82.6   12%   476.5  389.8   22%
    Software Development            72.6    53.5   36%   271.1  198.4   37%
    Corporate, other and
    eliminations                    18.2    16.2   12%    68.5   67.8    1%

* Based on preliminary unaudited management accounts; Corporate, other and eliminations field now includes results previously reported under the Online Software Delivery segment

  • Consolidated revenues for the full year of FY2011 were up 24% y-o-y to US$816.1mn as the Group continued to capitalize on the surging demand in both of its segments. In the fourth quarter of FY2011, consolidated revenues increased by 20% y-o-y to US$183.0mn.
  • The IT Services segment revenues for the full year of FY2011 were up 22% y-o-y and reached US$476.5mn. Increasing revenues in the segment are attributable to the growth of our business across diversified sectors of the domestic economy. The segment revenues demonstrated a 12% y-o-y revenue growth in the fourth quarter of FY2011.
  • The Software Development segment revenues for the full year of FY2011 surged by 37% y-o-y to US$271.1mn. The growth stemmed from the expansion of our current clients in financial services, automotive & transport, travel & aviation and telecoms industries, as well as business with prospective clients in technology and financial services verticals. The segment's revenues were up 36% y-o-y in the fourth quarter of FY2011.

Consolidated Revenues by Geography *

                                                                  Change
                                            Share          Share    in
                                             of             of    absolute
                                            total          total  result,
    US$, mn                         FY2011 revenue FY2010 revenue  y-o-y
 
    Revenues generated in Russia    556.1    68%   461.5    70%     20%
    Revenues generated in Europe    187.9    23%   130.7    20%     44%
    Revenues generated in North
    America                          72.1     9%    63.8    10%     13%

* Based on preliminary unaudited management accounts; customer geography is determined by billing location

  • Revenues from Russian operations reached US$556.1mn in FY2011, a rise of 20% y-o-y. The Group further expanded its footprint on the Russian IT market against a backdrop of healthy demand for the infrastructure solutions and business applications systems provided by our IT Services segment.
  • Revenues from European operations reached US$187.9mn in FY2011, an increase of 44% y-o-y. Success here can be ascribed to the further generation of business in Western Europe through our Software Development segment over the year.
  • Revenues from North American operations reached US$72.1mn, up 13% y-o-y. The growth in the region was generated via our Software Development segment.

Group Headcount *

    Number of                                 Change                 Change
    employees         31.03.2012 31.12.2011    q-o-q    31.03.2011    y-o-y
    Group headcount     8,225      8 334        -1%       7 355        12%
    IT Services         2,948      3 121        -6%       3 074        -4%
    Software
    Development         5,277      5 213         1%       4 281        23%

* IT segment includes personnel of Corporate segment

As of 31 March 2012, the headcount of IBS Group totaled 8,225 employees, a 12% increase y-o-y. During the last quarter of FY2011 personnel fell by 1%. The decrease in the number of employees was due to organizational restructuring in the IT Services segment to streamline effectiveness of business, combined with a seasonal hiring slowdown in the Software Development segment. The latter is already picking up in the first months of FY2012 to the levels seen through FY2011.

Debt Position *

                                                                      Change
    US$, mn            31.03.2012 31.12.2011 Change q-o-q 31.03.2011   y-o-y
    Total debt            44.5       55.8       -11.3        58.2     -13.7
    Short-term debt       18.2       28.2       -10.0        23.1      -4.9
    Long-term debt        26.3       27.6        -1.3        35.1      -8.8
    Cash and cash
    equivalents           20.3       39.2       -18.9        26.5      -6.2
    Net debt              24.2       16.6         7.6        31.7      -7.5

* Based on preliminary unaudited management accounts

The company continued to deleverage its balance sheet over the course of the last year. At the end of FY2011 the company decreased its total debt by US$13.7mn bringing it to US$44.5mn, and slightly cut cash position by US$6.2mn vs. 31 March 2011. As a result, net debt position was down by US$7.5mn and amounted to US$24.2mn. In Q4 FY11, the total debt position decreased by US$11.3mn q-o-q due to the scheduled repayment of debt. The group remains well-positioned to further decrease its net debt position by the end of calendar 2012 year.

Comment from President    

Anatoly Karachinsky, President of IBS Group, said: "In our view, IBS Group's performance remained strong throughout 2011, with a healthy increase of EBITDA margin from 7.2% in FY2010 to high single digits, and both of the Group's business segments growing confidently. Capitalizing on its vibrant technological growth over the year, the Group broadened the range of innovative products and solutions available. Successful large projects in some of the Group's core activities for a variety of domestic industries underpinned the strong growth in the IT Services segment. In the Software Development segment, revenues rose 37% y-o-y, boosted by the expanded business with existing clients in financial services, automotive, aviation and telecommunications sectors in Europe and the US. We note, that in the first months of 2012 both segments of the Group continue to grow, albeit at slightly lower rates than those experienced throughout the previous year."

About IBS Group

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, IT outsourcing, business and IT consulting, 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 8,000 people worldwide.

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).

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.

The Company undertakes no obligation to review, update, amend or revise any of its forward-looking statements, whether as a result of new information, future events or developments or otherwise, or to reflect actual results, changes in assumptions or changes in factors affecting these statements. There may be additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. All subsequent written and oral forward-looking statements attributable to the Company, and those acting on its behalf, are expressly qualified in their entirety by the foregoing.

For more information about IBS Group please visit http://www.ibsgr.com