, May 14, 2014

Ordina N.V. results for first quarter 2014

Ordina improves profit on stable turnover


  • Recurring EBITDA rises to EUR 4.8 million (Q1 2013: EUR 2.5 million);
  • Recurring EBITDA margin higher at 5.1% (Q1 2013: 2.6%);
  • Turnover stable at EUR 93.6 million (Q1 2013: EUR 93.9 million);
  • Net debt falls to EUR 12.4 million (Q1 2013: EUR 20.1 million), net debt / adjusted EBITDA ratio comes in at 0.74 (maximum leverage ratio: ≤ 1.75);
  • Ordina ‘Top Employer ICT’ for second successive year.

Stépan Breedveld, CEO Ordina, on the Q1 results
“We improved our profit substantially on stable turnover. The recurring EBITDA rose to EUR 4.8 million in the first quarter, compared with EUR 2.5 million in the same period last year. This improvement was mainly driven by the cost-saving programme we completed last year. Turnover remained stable thanks to higher turnover in the financial services sector, healthcare and industry, which offset the lower turnover in the public sector.

Ordina is bursting with energy. The implementation of our new mission ‘Partnerships in Sustainable Innovation’ is in full swing. At a number of clients we have already kicked off highly focused innovation programmes that will result in new IT applications. For instance, the Google Glass Contest that we recently organised resulted in an innovative idea for the healthcare sector. Using an app designed for Google Glass, healthcare providers will soon be able to consult patient data and scan in the medicines administered for administrative processing. This is a perfect example of IT really working for people.

We also took a step towards achieving our ambition of being one of the best employers in the IT sector. For the second year in a row we were awarded the title ‘Top Employer ICT’.”

We decline to give a forecast for the coming period.


¹ Q1 2013 figures have been adjusted for comparison purposes on the basis of the new division of the market segments.

Turnover was down in the public sector segment, in line with the previous quarters. This decline was offset by
higher turnover in the other market segments.

¹ Q1 2013 figures have been adjusted for comparison purposes on the basis of the new organisational structure.

The turnover shown in the tables pertains to external turnover. External turnover is generated directly at our clients and excludes the internal services delivered between the divisions. For instance, the Technology & Competences division delivers large numbers of staff to the Sourcing and Management divisions. Any growth in external turnover at Sourcing and/or Application Management may therefore be (partly) at the cost of the external turnover at Technology & Competences and/or Business Consulting & Solutions. The external turnover therefore is a good representation of the performance of our various business models at clients.

Technology & Competences
The Technology & Competences division designs and builds applications for our clients in the form of secondment and project contracts, for both out-of-the-box and client-specific solutions. The division saw turnover drop 10.8% to EUR 28.7 million in the first quarter (Q1 2013: EUR 32.2 million). This decline was largely due to the increase in internal deliveries to the Sourcing and Business Consulting & Solutions divisions, but also to a reduction in the number of large-scale projects within the public sector market segment.

Business Consulting & Solutions
The Business Consulting & Solutions division advises clients on how they can improve their processes and IT. The division combines business know-how with technical expertise to create sustainable solutions in the fields of business intelligence, (digital) customer interaction, capital accumulation and mortgages. The division saw turnover decline by 17.0% to EUR 11.2 million in the first quarter (Q1 2013: EUR 13.5 million), largely due to a decline in demand for consulting services in the public sector and to the phasing out of less profitable activities.

Application Management
The Application Management division is responsible for the management, maintenance and upgrading of applications and platforms at our clients through long-term contracts. The division’s turnover fell by 7.0% to EUR 12.8 million (Q1 2013: EUR 13.8 million). The drop in turnover was due to the completion of a number of large (end of life) management contracts and was not entirely offset for by new turnover.

The Sourcing division helps large clients as a strategic partner by together improving the added value of the external ICT-staff. Our client-specific improvement programs with respect to productivity improvement, talent development, knowledge sharing and innovation, are an integrated part of this approach. Turnover at the Sourcing division increased by 42.0% to EUR 22.9 million (Q1 2013: EUR 16.1 million). Ordina’s focus on long-term contracts led to an increase in turnover at almost all clients in the Sourcing portfolio.

Belgium / Luxembourg
The Belgium / Luxembourg division saw turnover decline by 2.3% to EUR 18.0 million (Q1 2013: EUR 18.4 million). The decline in turnover was due to lower turnover generated by external employees. However, this was partly offset by the higher turnover from internal staff.

Last year, we organised the Ordina Innovation Challenge in the context of our new mission ‘Partnerships in Sustainable Innovation’. Together with the start-ups that emerged as winners in this challenge, we are now developing games for children with behavioural problems and medical apps.

We are also working very closely with clients on innovation via our rejuvenated Connect Cafés. These are sessions in which we and our clients together investigate how ICT can contribute to solutions for specific business issues. We held such Connect Café sessions with three of our clients in the first quarter, and we are now working on the implementation of the ideas that were developed at the sessions.

At the end of Q1 2014, the number of employees stood at 2,879 FTEs. The influx amounted to 47 FTEs while 86 FTEs left the company. Ordina saw an overall decline of 39 FTEs compared to the end of Q4 2013 (end Q4 2013: 2,918 FTEs). The decline in indirect FTEs is the result of the cost reduction programme that we completed in 2013.

Net debt stood at EUR 12.4 million at the end of Q1 2014, a decline from the same period of last year (Q1 2013: EUR 20.1 million). When compared to the end of 2013, net debt increased by EUR 10.2 million as a result of normal seasonal patterns (Q4 2013: EUR 2.2 million). The ratio of net debt / adjusted EBITDA stood at 0.74 (maximum leverage ratio: ≤1.75) and the Interest Cover Ratio came in at 12.4 (minimum interest cover ratio: ≥ 5.0). The ratios are therefore well within the limits agreed in the bank covenants.