, May 6, 2009

Ordina generates revenue of EUR 151 million in Q1 2009

  • Revenue for the first quarter of 2009 at EUR 151 million (Q1 2008: EUR 158 million)
  • Recurring EBITDA margin for first quarter of 2009 at about 8%
  • Cost-saving programme of EUR 15 million in 2009 on track
  • Sale of BPO activities completed
  • Strict working capital management bearing fruit in first quarter

In anticipation of its Annual General Meeting of Shareholders (AGM), which is scheduled for today, Ordina N.V. now publishes an update of its performance for the first quarter of 2009.

Ordina generated EUR 151 million in revenue for the first quarter of 2009, down from EUR 158 million for the same period in 2008 (revenue in 2008 and 2009 is excluding Ordina BPO and Technical Automation activities, sold in 2008). Despite the extremely turbulent economic conditions and thanks to the company's strong position in the Public market, Ordina managed to limit the drop in revenue to about 4% compared to the first quarter of 2008. The decline in revenue can be mainly attributed to pressure on productivity. Revenue from the Finance market has dropped slightly in the first quarter, with revenue from the Industry market showing a considerable decline.

Demand for large, multi-year Application Outsourcing projects has been satisfactory in the first quarter. Ordina is in a good position to win such projects, which has resulted in the announced multi-year contract with the Erasmus Medical Centre, among other projects. The market for professional services is faced with a decline in demand and pressure on fees.

The recurring EBITDA margin was approximately 8% in the first quarter of 2009. Thanks to strict cost management, Ordina managed to contain pressure on the EBITDA margin so that it dropped only a few percentage points compared with the first quarter of 2008. Recurring EBITDA margin refers to the trading operating margin on continuing operations. It does not include non-recurring expense items and the operating margin on the sale of the BPO activities.

Ordina announced in December 2008 that it would implement a cost-saving programme, the aim being to cut costs by EUR 15 million in 2009. The effect of this programme will be EUR 25 million in 2010. One of the main aspects of the programme is the reorganisation that was announced in December 2008 as well, which was set to result in a reduction of 300 employment positions over the course of 2009. As most of this reorganisation was completed in the first quarter, the programme is progressing according to schedule.

On 27 February 2009, Ordina announced that all shares in the capital of Ordina BPO B.V. had been sold to Centric. The shares were transferred to Centric on 17 April 2009, after the Dutch Competition Authority (NMa) had approved the transaction. The transfer of the shares completed the sale of the BPO activities. Ordina is now free to fully focus on the future of its profitable Consulting, ICT and Application Outsourcing activities. The non-recurring operating loss posted by Ordina BPO for the first quarter of 2009 that was not charged against the results of 2008, but will be recognised in Ordina's result of 2009, amounted to approximately EUR 2 million. This is in keeping with the forecast issued in March 2009.

By focusing very strictly on managing working capital, Ordina seeks to control the common seasonal pattern in working capital where possible, which helps to stay within the bandwidths of the covenants that have been agreed with financiers. Ordina was rather successful in doing so in the first quarter. The focus in the coming period will continue to be on generating as much cash as possible.

The market is still very difficult to predict as a result of the ongoing volatility in the economy. Realistically, we can expect Ordina's revenue and margin for the second quarter of the year to fall short of the figures for the first quarter due to a decrease in demand from the financial sector, increasing pressure on fees and slightly fewer workdays.