- Consolidated revenue up 42 per cent to EUR 271.48 million in the first nine months
- Earnings (EBITDA) improved by 38 per cent to EUR 31.30 million
- Full-year guidance for revenue and earnings upgraded
In the third quarter of 2015, the GFT Group continued its dynamic development of the first half-year, achieving strong growth in revenue and earnings over the first nine months of 2015. The main driver of growth was strong demand for IT solutions to implement regulatory compliance programmes in the finance sector. The trend towards the further digitisation of business processes, especially among retail banks, also helped boost growth. Due to the positive development of the operating business, full-year guidance for revenue was increased from EUR 362 million to EUR 368 million, with EBITDA and EBT increasing by EUR 1 million each to EUR 44 million and EUR 31 million, respectively.
Organic revenue growth of 22 per cent
Compared to the same period last year, consolidated revenue rose by 42 per cent to EUR 271.48 million in the first nine months of 2015 (prev. year: EUR 191.47 million). This positive revenue trend resulted from the strong organic growth of the company’s IT solutions for the financial sector, as well as from the acquisition of the UK-based company Rule Financial Ltd. (Rule) in June 2014 and the Spanish company Adesis Netlife S.L. (Adesis) in July 2015. Adjusted for revenue contributed by the former Rule companies of EUR 58.79 million (prev. year: EUR 18.75 million) and by Adesis of EUR 2.81 million (prev. year: EUR 0.00 million), the GFT Group achieved organic growth of 22 per cent. In the UK (the GFT Group’s largest sales market), revenue rose by 74 per cent to EUR 121.43 million (prev. year: EUR 69.83 million). Bolstered by the Rule acquisition, the GFT Group also posted strong revenue growth of 64 per cent to EUR 27.53 million in the USA (prev. year: EUR 16.81 million). Revenue generated from clients in Spain rose by 46 per cent to EUR 32.01 million (prev. year: EUR 21.99 million), aided by the country’s continued economic recovery and a revitalised banking sector, which is one of Europe’s most advanced in terms of digitisation.
Due to the positive revenue trend and a high capacity utilisation rate of 89 per cent (prev. year: 89 per cent) of staff engaged on client projects, earnings before interest, taxes, depreciation and amortisation (EBITDA) improved by 38 per cent to EUR 31.30 million in the first nine months of 2015 (prev. year: EUR 22.68 million). Pre-tax earnings (EBT) rose by 26 per cent year-on-year to EUR 22.75 million (prev. year: EUR 18.01 million).
Sale of shares in emagine closed on 30 September
As previously announced on 27 July 2015, GFT has sold all companies belonging to the emagine division in Germany, France and the UK. The transaction was closed on 30 September 2015. In accordance with IFRS regulations (IFRS 5), the revenue and earnings generated by emagine in the first nine months of 2015 are no longer disclosed in the GFT Group’s key financial figures. The prior-year figures were adjusted accordingly in line with IFRS 5.
Focus on GFT division
With the discontinuation of the emagine division, the GFT Group is now focusing on its high-growth GFT division. As the revenue generated by emagine in the first nine months of 2015 and the corresponding prior-year period are no longer included in consolidated revenue (in line with IFRS 5), revenue of the GFT division was virtually identical with that of the GFT Group as a whole. Pre-tax earnings (EBT) of the GFT division rose by 25 per cent to EUR 24.30 million in the first nine months of 2015 (prev. year: EUR 19.48 million). At 8.9 per cent, the operating margin was slightly down on the previous year (10.2 per cent), due primarily to purchase price allocation (PPA) effects from the acquisition of Rule and Adesis.
“Adapting IT systems to growing compliance requirements will continue to be a major challenge for all financial institutions. In addition, retail banks need to digitise their business processes even more and make them more customer-centric if they are to fight off the challenge from innovative niche competitors from the fintech sector. We see great potential in this future market and aim to build on our position as the leading provider of digital financial solutions,” says Ulrich Dietz, CEO of GFT Technologies SE.
Full-year guidance upgraded
As a result of the positive business trend in the third quarter of 2015, full-year guidance has once again been upgraded. From the current perspective, GFT Group forecasts the following for the financial year 2015: consolidated revenue for the full year 2015 is expected to reach EUR 368 million (previously EUR 362 million). The guidance for EBITDA and EBT has been raised by EUR 1 million each to EUR 44 million and EUR 31 million, respectively. The productive utilisation rate of the GFT division is expected to remain at its high prior-year rate (89 per cent) in 2015.
Headcount grows to nearly 3,900
As of 30 September 2015, the GFT Group had 3,897 full-time employees – representing growth of 30 per cent year-on-year (30 September 2014: 3,000). These figures do not include employees of emagine. The increase in headcount results from the acquisition of Adesis with 200 employees in Spain and 77 in Mexico, as well as from the hiring of numerous new staff – above all at the company’s development centres in Spain, Brazil, Poland and Costa Rica.
Additional key data
As of 30 September 2015, cash, cash equivalents and securities amounted to EUR 56.96 million and were thus EUR 18.71 million above the year-end figure for 2014 (31 December 2014: EUR 38.25 million). Equity as of 30 September 2015 amounted to EUR 113.61 million and was thus EUR 13.20 million up on year-end 2014 (31 December 2014: EUR 100.41 million). Total assets rose by EUR 33.48 million to EUR 335.13 million as of 30 September 2015 (31 December 2014: EUR 301.65 million). As a result of the increased balance sheet total and change in equity as of 30 September 2015, the equity ratio rose by one percentage point to 34 per cent (31 December 2014: 33 per cent).
Key figures (unaudited) in accordance with IFRS
Deviations possible due to rounding differences
In EUR million
Earnings before taxes (EBT)
Net income for the period
Employees (full-time) as of 30 September