- Revenue growth of 3 percent in core business
- Consolidated revenue falls to EUR 230.69 million due to withdrawal from Third Party Management activities
- Pre-tax earnings (EBT) up 10 percent to EUR 12.11 million
GFT Technologies AG (GFT) today announced its preliminary and unaudited financial figures for the financial year 2012. At EUR 230.69 million, consolidated revenue was down 15 percent on the previous year (EUR 272.38 million). The planned reduction of lower-margin Third Party Management business amounts to around EUR 50 million. Adjusted for this discontinued revenue contribution, core business grew year on year by 3 percent. Consolidated pre-tax earnings climbed 10 percent to EUR 12.11 million (prev. year: EUR 11.05 million).
“The GFT Group performed well in a challenging economic environment,” states GFT’s CEO Ulrich Dietz. “We sharpened our profile and extended our leading position in the finance sector as a strategic partner for innovative IT solutions. With the realignment of our Resourcing division under the emagine brand, we are helping growth sectors staff their technology projects with highly skilled specialists. We will steadily continue the solid growth of our core business by delivering innovations and top quality to support our clients’ business,” adds Ulrich Dietz.
Revenue: solid growth in core business
As part of its realignment, the two business divisions of the GFT Group were renamed as GFT Solutions (formerly Services) and emagine (formerly Resourcing).
As an IT solutions provider for the finance sector, the GFT Solutions division achieved revenue growth of 5 percent to EUR 121.05 million in 2012 (prev. year: EUR 115.50 million). This growth rate is well above the global growth of the IT Services market, which Gartner’s market specialists put at 2.8 percent in 2012. There was a positive impact on revenue in this division from the rising demand for corporate and investment banking solutions in the USA. The division’s contribution to consolidated revenue rose to 52 percent (prev. year: 42 percent).
In the emagine division, revenue was down 30 percent year on year to EUR 109.54 million (prev. year: EUR 156.38 million). This decline resulted from the planned reduction in lower-margin Third Party Management activities of around EUR 50 million to EUR 18.57 million (prev. year: EUR 68.38 million). The staffing of technology projects with highly skilled IT specialists and engineers generated revenue of EUR 90.97 million for emagine, corresponding to year-on-year growth of 3 percent (prev. year: EUR 88.00 million). All in all, this division’s share of consolidated revenue fell to 47 percent (prev. year: 58 percent).
The withdrawal from Third Party Management business in connection with modest capital spending in the banking sector led to a decline in consolidated revenue in Germany of 39 percent. Business was also down in Switzerland by 11 percent, compared to the previous year. The GFT Group’s strongest revenue growth was reported in the USA, with an increase of 38 percent. In addition to considerable organic growth, this figure also includes the positive effects of an acquisition made in 2011 which added consulting expertise for the investment banking sector. Driven by demand for IT and engineering specialists, business in France also grew by an encouraging 20 percent. There was stable revenue growth in the UK (up 3 percent) and Spain (up 1 percent).
EBT: growth in consolidated earnings of 10 percent
In 2012, the GFT Group achieved earnings before taxes of EUR 12.11 million, corresponding to year-on-year growth of 10 percent (EUR 11.05 million). These earnings include income of EUR 2.38 million from the adjustment of the purchase price for the Service division of G2 Systems LLC, USA, acquired in 2011, as well as expenditure of EUR 1.35 million for the innovation initiative CODE_n. The GFT Solutions division increased its contribution to earnings to EUR 12.86 million (prev. year: EUR 9.01 million). In the emagine division, segment earnings fell to EUR 2.32 million (prev. year: EUR 3.49 million), partly due to the discontinuation of its Third Party Management business.
The GFT Solutions division increased its contribution to earnings to EUR 12.86 million (prev. year: EUR 9.01 million). In the emagine division, segment earnings fell to EUR 2.32 million (prev. year: EUR 3.49 million), partly due to the discontinuation of its Third Party Management business. The result from eliminations amounted to EUR -3.07 million (prev. year: EUR -1.45 million).
In its financial year 2013, GFT expects further growth in the GFT Solutions division. “With our innovative solutions for Mobile Applications and Big Data Analytics, we are targeting the current growth fields of our finance sector clients. We also see rising demand for solutions to meet the growing compliance requirements in this field,” says Ulrich Dietz.
In the course of its realignment, the emagine division expects to have almost completed its withdrawal from German Third Party Management activities in 2013. GFT anticipates further strong progress in its consultancy business for the staffing of technology projects. As Ulrich Dietz explains: “We expect companies in the growth sectors we are targeting to have growing demand for IT and engineering experts who are highly specialized and willing to contribute their expertise in challenging projects.” The GFT Group will announce its guidance for the current financial year 2013 on publication of its final results on 28 March 2013.
In line with its stable dividend policy, the Executive Board will recommend that the Supervisory Board proposes a dividend of EUR 0.15 once again for the financial year 2012 at the Annual General Meeting. This would correspond to a total dividend payout of EUR 3.95 million.
Additional key data
In the fourth quarter of 2012, GFT posted revenue of EUR 56.08 million (prev. year: EUR 64.51 million) and earnings of EUR 4.31 million (prev. year: EUR 2.00 million).
As of 31 December 2012, the GFT Group employed 1,386 people – an increase of 49 employees compared to the previous year (31 December 2011: 1,337). In Germany, headcount totalled 273 as of the balance sheet date – 16 fewer employees than one year before.
On 31 December 2012, the GFT Group had cash and cash equivalents of EUR 40.42 million (previous year: EUR 39.68 million). Net income amounted to EUR 8.34 million and was thus slightly up on the previous year (EUR 8.29 million). Basic earnings per share for the period under review amounted to EUR 0.32 (prev. year: EUR 0.31).
Detailed financial figures are available in the Investor Relations section of the GFT website.
Key figures (unaudited)
IFRS figures in EUR million
Earnings before taxes (EBT)
Earnings per share acc. to IAS 33 in EUR
Equity ratio in percent
Employees, absolute figure at year-end
* Deviations possible due to rounding differences