H1 2021 results ICT Group

Highlights H1 2021

• Revenue was up 10% at € 89.7 million, organic revenue growth of 3%
• EBITDA increased 19% to € 10.6 million; EBITDA margin improved to 11.9% (H1 2020: 10.9%)
• Net profit came in at € 9.6 million (H1 2020: € 2.1 million). The increase is due to positive results and a one-off profit on the sale of minority stake in GreenFlux
• Three acquisitions were completed in the first half: Yellowstar; Profit and Strypes Nederland and Portugal

Recommended all-cash public offer

• On 26 July 2021 the Consortium led by NPM declared the offer unconditional
• Upon settlement, 30 July 2021, the changes to the composition of the Supervisory Board of ICT Group, as approved by the EGM on 9 July 2021, became effective.
• In total, including the shares tendered during the post-acceptance period, the Consortium holds 98.3% of the share capital of ICT Group
• The last day of trading of the ICT Group shares will be on 3 September 2021

Key figures

Jos Blejie, CEO of ICT Group N.V.:
We saw the key trends continuing in the 1st half of 2021, with our nearshoring and project activities sustaining their strong performance. These developments led to an increase in revenue and EBITDA in the first half of 2021, compared to the same period in 2020 when the Covid-19 impact started to kick in, in particular in Q2 2020. Inflow of new recruits increased as mobility on the labour market picked up quite well after the Covid-19 constraints. Simultaneously, however, we saw an increase in outflow holding back our organic growth.

Now the offer on all ICT Group shares has been declared unconditional, ICT is about to conclude an important era as listed company. We would like to thank our shareholders for their support during this period in which ICT evolved into a European industrial technology solutions provider.”

Notes to the results

Performance ICT Group
In the first half of 2021 ICT Group’s revenue came in at € 89.7 million, a 10% increase compared to € 81.4 million reported in H1 2020. Organically, excluding acquisitions and divestments, revenue increased by 3%.

Personnel costs increased to € 54.6 million (H1 2020: € 49.1 million), in line with the increase in FTE’s and salary increases.

Other operating expenses increased from € 9.6 million in H1 2020 to € 11.6 million in the first half of 2021, due to continued cost containment discipline offset by higher costs related to strategic initiatives.

For the first six months of 2021 EBITDA came in at € 10.6 million, an increase of 19% compared to € 8.9 million in the comparable period in 2020. The EBITDA margin increased to 11.9% (H1 2020: 10.9%).

Performance per segment

Engineering R&D  
In this segment, ICT is active in the R&D of the industrial sectors Automotive, High Tech and Machine Building. Engineering R&D is showing a positive performance across all activities. Last year the second quarter was impacted by COVID-19, this half year there hardly was any impact.  

Industrial Automation  
In this segment Logistics, Industry and Outsourced services are the key markets for ICT. Most activities in this segment showed a favourable performance, in line with expectations. Demand from customers in the industrial sector decreased, which resulted in a decrease in revenue. Overall the productivity levels increased compared to the same period last year.  

Infra & Mobility  
In the public domain ICT focuses on services around capital assets in the area of Water, Energy, Road and Rail infrastructure as well as Mobility. The activities in the public transport segment are still experiencing an impact of COVID-19, resulting in a less positive performance compared to the  comparable period last year. 

Bulgaria 
ICT’s nearshoring entity Strypes continued the positive trend of the 2020 and continued to benefit from the increasing demand for nearshoring activities. After expanding to Plovdiv end of 2019, Strypes now also has a presence in Burgas, one of Bulgaria’s university cities. The customer base further diversified in the past six months. 

Sweden 
Additude showed a solid increase in productivity levels. Although the hiring activities are resulting in a good inflow of people, the outflow remains high due to the tight labour market. Therefore Additude still  has a higher than usual number of temporary staff which impacts the margins. 

Indusoft 
As per 1 January 2021, ICT has bundled its offerings of proprietary industry specific software solutions in one cluster. Indusoft includes OrangeNXT, MOTAR, TURNN, Yellowstar and the Healthcare activities. TURNN, ICT’s Mobility as a Service activities, felt the impact of COVID-19 on the public transport sector. At OrangeNXT productivity levels are still at lower levels, MOTAR is performing according to plan. Yellowstar, acquired beginning of 2021, is contributing well, in line with expectations.  

Other 
Improve still experienced the impact of the lockdown measures on the training market. Additude Netherlands and Esprit are performing in line with expectations. 

Other financial information 

ICT has attributed a value to and is amortising several intangible assets, including order backlog, software and customer relations of its acquisitions. Amortisation in the first half of 2021 amounted to  € 3.9 million (H1 2020: € 2.6 million). Depreciation for the first half of 2021 amounted to € 3.9 million  (H1 2020: € 3.5 million).  

The result from associates amounted to a loss of € 0.3 million (H1 2020: profit of € 0.4 million). Financing expenses came in at € 0.7 million in the first six months of 2021 (H1 2020: € 0.6 million).  Taxes in the first half of 2021 amounted to € 0.5 million, at the same level as the first half of 2020.  

The net profit for the first six months of 2021 included a one-off gain of € 8.2 million following the sale of the minority stake ICT held in GreenFlux in June this year. Including this one-off gain, the net profit  for H1 2021 came in at € 9.6 million, compared to € 2.1 million in the first half of 2020. The earnings per share came in at € 0.98 (H1 2020: € 0.20). The number of outstanding ordinary shares were stable  compared to year-end 2020 and amounted to 9,697,106.  

Cash flow movement  

In the first half of the year, net operational cash flow decreased to € 4.7 million positive (H1 2020: € 6.8  million positive). The net cash position increased and amounted to € 15.6 million positive per 30 June  2021 (31 December 2020: € 13.1 million positive).  

Balance sheet  

At the end of the first half of 2021, shareholders’ equity stood at € 65.4 million (31 December 2020:  € 59.7 million). The balance sheet total increased from € 131.0 million at year-end 2020 to € 155.1  million at 30 June 2021. Solvency (shareholders’ equity/total assets) decreased to 42% at the end of  June 2021 (46% at year-end 2020), reflecting a sound financial basis. 

Acquisitions 

The acquisition of 100% of the shares of Yellowstar Solutions Holding B.V was completed on 4  January 2021. On 1 April 2021, ICT closed the acquisition of Profit Consulting Eindhoven B.V. and  Profit Consulting Apeldoorn B.V. as well as the acquisition of Strypes Nederland B.V. The latter  includes a subsidiary in Portugal, Strypes Technical Software Unipessoal LDA Portugal, which  provides ICT with a new nearshoring location.  

Changes in composition Supervisory Board 

Effective as of settlement of the offer, which occurred on 30 July 2021, Bart Coopmans, Martijn Koster and Jan-Jaap Bongers joined the Supervisory Board as members of ICT Group designated by the Consortium. Theo van der Raadt and Koen Beeckmans (recommended by the Works Council)  continue as Chairman and member of the Supervisory Board, respectively, and they, as independent members of the Supervisory Board, will especially monitor compliance with the Non-Financial Covenants.