News

, May 15, 2013

Ordina N.V. first quarter results - Solid results in disappointing market conditions

Key developments

  • Recurring EBITDA dropped by EUR 1.5 million to EUR 2.5 million (Q1 2012: EUR 4.0 million). Largely due to the fact that there were two fewer working days (approximately EUR 1.7 million);
  • Recurring EBITDA margin 2.6% (Q1 2012: 3.9%);
  • Revenue down 9% to EUR 93.9 million (Q1 2012: EUR 103.3 million). Adjusted for the effect of the fewer working days and the loss of the offshore component of the Rabobank contract, revenue fell by 2.1%;
  • Net debt / EBITDA ratio at 1.3, well within the agreed covenants (≤ 2.0);
  • Modest growth in earning capacity: 2,968 FTEs at end Q1 2013 (end of Q4 2012: 2,920);
  • Various new clients in the healthcare sector, including CAK and the Centrum Indicatiestelling Zorg. Contract for management and development made-to-measure applications ProRail and successful delivery of Haaglanden Region alarm centre.

Stépan Breedveld, CEO Ordina about the results

 “The market recovery we noted in the fourth quarter of 2012 did not continue in the first quarter of 2013. Despite these conditions, we have made progress with our management agenda. For instance, our focus on the healthcare sector has resulted in strong growth in this market. We obtained new contracts from various healthcare organisations such as CAK and Centrum Indicatiestelling Zorg. In Belgium and Luxembourg we are now seeing the first results of the improvement program we launched in the second half of 2012.”

Outlook 2013

The economic outlook in the Benelux region remains uncertain. This makes it difficult to predict revenue development and thus profit and we will therefore refrain from giving a forecast for the upcoming period.

Results

The tables below take into account the effect of the number of working days and the impact of the offshore component of the Rabobank contract that was renewed in December 2012. The first quarter of 2013 has two less working days at 63 (Q1 2012: 65). This has an impact of around EUR 1.7 million on revenue and EBITDA.

Revenue per market (rounded in EUR million)

  Q1 2012  Q1 2012 adjusted*  Q1 2013  Difference 
Public sector / Healthcare  41.0  40.3  40.7  0.7 % 
Financial services  33.5  27.5  25.6  -6.9 % 
Industry  28.8  28.3  27.6  -2.5 % 
Total   103.3 96.1  93.9  -2.1 % 

*Adjusted for the effect of fewer working days and the absence of the offshore component of the Rabobank contract.

Revenue from the public sector and healthcare market was up 0.7% compared with Q1 2012, largely due to higher revenue in the healthcare market. Thanks to our focus on the industry market the drop in revenue levelled off in the period under review. Revenue in the industry market fell 2.5% in the first quarter compared with the same period of last year (Q4 2012: 5.9%). The decline in the financial services market eased to 6.9% in Q1 2013 compared to the same quarter of 2012 (Q4 2012: 8.3%).

Revenue per division (rounded in EUR million)

Q1 2012  Q1 2012 adjusted* Q1 2013 Difference 
Professional Services & Projects** 71.6 64.8 63.9 -1.4 %
Business Solutions** 8.2 8.0 6.5 -18.8 %
Consulting 9.2 9.0 8.1 -9.2 %
Belgium/Luxembourg 18.7 18.5 18.5 -
Intra-company services** -4.3 -4.2 -3.1 -26.2%
Totaal 103.3 96.1 93.9 -2.1%

*Adjusted for the effect of fewer working days and the absence of the offshore component of the Rabobank contract.
**Q1 2012 figures for Professional Services & Projects, Business Solutions and intra-company services have been adjusted for activities which have been transferred to Business Solutions from Professional Services & Projects.

At the end of 2012, Rabobank renewed its contract with Ordina for the design, development and testing of applications. Under the new agreement, Rabobank will itself take charge of contacts with the offshore partner. The related revenue came in at around EUR 5.5 million in the first quarter of 2012. This impacted the results of the Professional Services & Projects division. The drop in revenue at Business Solutions was due to the termination of less profitable activities. The decline in revenue at the Consulting division was primarily due to the low demand for consultancy services in the public sector. In the second half of 2012, we started an improvement program in Belgium/Luxembourg. This program is on schedule and resulted in a stabilisation of revenue in the first quarter of 2013.   

Innovation

The programme for proposition development based on a number of innovation themes is progressing on schedule One example is our development of Secure Mobile Data, a patented solution for mobile data at the cutting edge of the themes Mobile and Security. This solution offers users the opportunity to view data on their mobile phones, desktop computer or tablet without having to have this data physically downloaded to the hardware. The solution offers companies the opportunity to handle confidential data in a responsible manner.

For the Big Data theme, we created a testing ground to allow clients to get acquainted with the various analytical options of Big Data. This gives clients the opportunity to gain experience with so-called Big Analytics tools.  

Staff

At the end of the first quarter of 2013, Ordina had 2,968 employees, an increase by 48 FTEs compared with year-end 2012. The total number of FTEs dropped by 12 in comparison to the end of the first quarter of 2012.

Financial position

The net debt position at the end of the first quarter of 2013 was EUR 20.1 million, compared with EUR 23.0 million a year earlier. There was an increase of EUR 10.3 million compared with EUR 9.8 million at the end of the fourth quarter of 2012, in line with normal seasonal patterns. The net debt/EBITDA ratio stood at 1.3 (covenant ≤ 2.0), and the Interest Coverage Ratio was 14.3 (covenant  ≥ 5.0). The ratios are therefore well within the agreed bank covenants. 

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