IBS Group Reports Operating Results for the Second Quarter and Six Months Ended September 30, 2013
RAMSEY, the Isle of Man, December 2, 2013 /PRNewswire/ --
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 second quarter and six months ended September 30, 2013 (2Q and 1H FYE March 31, 2014).
1H FYE March 31, 2014 highlights
- Consolidated revenues for the first half of FYE March 31, 2014 amounted to US$373.6 mn, a decrease of 1.1% y-o-y.
- Revenues in the IT Services segment came to US$158.9 mn, down 20.9% y-o-y. The segment's revenues in RUB amounted to 5,150 mn, a decline of 19% y-o-y.
- Revenues in the Software Development segment amounted to US$181.4 mn, up 25.0%.
- Group revenues generated in Europe and North America amounted to US$172.4 mn and now account for 46.2% of consolidated revenues against 25.5% a year ago.
- Our headcount reached 9,509, as we added 700 IT professionals on a net basis over the course of the year.
- Total debt amounted to US$80.5 mn, an increase of US$13.1 mn y-o-y. We accumulated a net cash position of US$13.6 mn mostly due to the successful placement of Luxoft shares on NYSE in June 2013.
Consolidated revenues by segment [*]
1H 1H
2Q FYE 2Q FYE FYE FYE
March March March March
31, 31, Change 31, 31, Change
US$ mn 2014 2013 y-o-y 2014 2013 y-o-y
Consolidated revenues 208.0 212.6 -2.2% 373.6 377.8 -1.1%
IT Services segment 92.9 122.3 -24.0% 158.9 200.8 -20.9%
IT Services segment, RUB
mn 3 052 3 877 -21.3% 5 150 6 357 -19.0%
Software Development
segment 97.7 74.1 31.8% 181.4 145.1 25.0%
Corporate, other and
eliminations 17.4 16.2 7.4% 33.3 31.9 4.4%
* Source: management accounts
Consolidated revenues for the first half of FYE March 31, 2014 amounted to US$373.6 mn, a decrease of 1.1% y-o-y, while consolidated revenues for the second quarter of FYE March 31, 2014 amounted to US$208.0 mn, a decline of 2.2% y-o-y, reflecting two opposite trends: one being a fragile IT market environment in Russia and the other - mirroring a stronger demand for IT outsourcing services globally.
IT Services segment revenues for the first half of FYE March 31, 2014 amounted to US$158.9 mn, a decline of 20.9% y-o-y, revenues expressed in RUB terms totalled 5,150 mn, a decrease of 19.0%. The segment's revenues for the second quarter amounted to US$92.9 mn, a decline of 24% y-o-y in US$ terms and 21.3% in RUB terms respectively.
Software Development segment revenues for the first half of FYE March 31, 2014 were US$181.4 mn, an increase of 25% y-o-y. Segment's revenues for the second quarter amounted to US$97.7 mn, an increase of 31.8% y-o-y.
Consolidated revenues by geography *
Share Share
1H FYE of 1H FYE of Change in
March 31, total March 31, total absolute
US$ mn 2014 revenue 2013 revenue result
Revenues generated in
Russia 201.1 53.8% 240.4 63.7% -16.3%
Revenues generated in
Europe 87.0 23.3% 70.1 18.5% 24.1%
Revenues generated in
North America 85.5 22.9% 67.3 17.8% 26.8%
* Source: management accounts; customer geography determined by the location of clients' key decision makers
Revenues from Russian operations amounted to US$201.1 mn in the first half of FYE March 31, 2014, a decline of 16.3% y-o-y. Revenues generated in Europe amounted to US$87.0 mn, an increase of 24.1% y-o-y, and now account for 23.3% of the Group revenues. Revenues generated in North America increased to US$85.5 mn, up 26.8% y-o-y and now account for 22.9% of the Group revenues. The growth of consolidated revenues outside of Russia is attributed to the Software Development segment.
Headcount *
September September
30, 30, Change Change
June 30,
Number of employees 2013 2012 y-o-y 2013 q-o-q
Group headcount 9,509 8,372 13.6% 8,809 7.9%
IT Services segment 2,336 2,456 -4.9% 2,290 2.0%
Software Development
segment 6,803 5,569 22.2% 6,161 10.4%
Corporate and other 370 347 6.6% 358 3.4%
* Source: management accounts
Our headcount totaled 9,509 employees. In the IT Services segment, the number of employees declined by 4.9% y-o-y to 2,336 IT professionals as a result of business restructuring undertaken throughout the previous financial year. Our headcount in the IT Services segment remained flat q-o-q, stabilizing at current levels. In the Software Development segment, the number of employees amounted to 6,803, an increase of 1,234 IT professionals y-o-y and 642 IT professionals q-o-q.
Debt *
September September Change
US$ mn 30, 2013 30, 2012 y-o-y June 30, 2013 Change q-o-q
Total debt 80.5 67.4 13.1 78.6 1.9
Current debt 58.8 45.8 13.0 56.6 2.2
Non-current debt 21.7 21.6 0.1 22.0 -0.3
Net debt -13.6 53.7 -67.3 56.5 -70.1
* Source: management accounts
Our total debt amounted to US$80.5 mn as of September 30, 2013, up US$13.1 mn y-o-y and US$1.9 mn q-o-q. The net cash position stands at US$13.6 mn, an increase of US$53.7 mn
y-o-y and US$70.1 mn q-o-q. Our transition to net cash position is mostly attributable to the cash proceeds from the Luxoft IPO conducted on NYSE in June 2013.
Outlook
Following weak results in our IT Services segment in the first half of FYE March 31, 2014, we now anticipate that our full year consolidated revenues growth will be in the range of 2-5% as measured in US$ terms.
Anatoly Karachinsky, President of IBS Group, commented:
"Our results in the first half of the year reflect mixed market environment for the Group's primary segments. Our Software Development segment, which reported one of the best second quarters and best half year results in its history, is growing rapidly, capitalizing on the current technological trends and successfully developing a pool of high-potential clients, tapping demand for IT outsourcing in the financial and automotive industry verticals and investing into the existing solutions. Our IT Services segment is facing a tough domestic IT market where corporate clients are scaling back investments, including launch of large-scale IT projects, amid uncertainties prevailing in the economy. This is particularly true for our business applications line, while performance of our infrastructure line is well within our expectations."
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 9,500 people worldwide. In the year ended March 31, 2013, the Group reported US GAAP consolidated revenues of US$870.3 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.F)
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