ORDINA N.V. INTERIM REPORT

Transcription

1 ORDINA N.V. INTERIM REPORT

2 CONTENTS About Ordina 3 Statement from the Management Board 4 Key figures Ordina N.V. 5 Highlights H Highlights Q Stépan Breedveld, Ordina CEO, on the results 6 Cost-saving Programme 7 Developments Q Developments H Market developments 9 Innovation 10 Employees 10 Investigations and integrity programme 10 Financial developments 11 Risk Management 13 Outlook 13 Additional information 14 Interim accounts Consolidated balance sheet Ordina N.V. 16 Consolidated statement of income Ordina N.V. 17 Consolidated statement of comprehensive income 18 Consolidated statement of movements in shareholders equity 19 Consolidated statement of cash flows Ordina N.V. 20 Notes to the consolidated interim financial statements 21 ORDINA N.V. INTERIM REPORT

3 ABOUT ORDINA Ordina is the largest independent IT services provider in de Benelux, with more than 2,900 employees. We devise, build and manage IT applications in the public sector, financial services, industry and the healthcare sector. Our goal is IT that truly helps people. IT that matters and that has been developed without wasting any resources. We do this by working with our clients in partnerships for sustainable innovation. Ordina was founded in The company s shares have been listed on NYSE Euronext Amsterdam since 1987 and are included in the Smallcap Index (AScX). In 2014, Ordina recorded turnover of EUR 367 million. You will find addition information on our corporate website: ORDINA N.V. INTERIM REPORT

4 STATEMENT FROM THE MANAGEMENT BOARD This document comprises the 2015 interim report and the consolidated interim financial statements of Ordina N.V. This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. This interim report does not contain all the information required for financial statements. It should therefore be read in conjunction with the consolidated financial statements for the full year These interim financial statements are unaudited. The Management Board hereby declares, in accordance with Section 5:25d (2) (c) of the Dutch Financial Supervision Act that, to the best of their knowledge: the interim financial statements give a true and fair view of the assets and liabilities, and the financial position as at 30 June 2015, and the results for the first six months of 2015 of Ordina N.V. and its consolidated companies; and that the Interim Report of the Management Board incorporated in this interim report for 2015 gives a true and fair view of the information required under Sections 5:25d(8) and, insofar as applicable, (9) of the Dutch Financial Supervision Act, subject to the disclaimer regarding forward looking statements included at the bottom of page 14. Nieuwegein, 19 August 2015 S. Breedveld, CEO M.J. Poots-Bijl, CFO ORDINA N.V. INTERIM REPORT

5 KEY FIGURES ORDINA N.V. (in thousands of euros, unless indicated otherwise) H H Change H on H Revenue the Netherlands 136, , % Revenue Belgium / Luxembourg 36,663 35, % Total Revenue 172, , % Recurring EBITDA Division Technology & Competences 333 5, % Recurring EBITDA Margin Division Technology & Competences 0.4% 6.1% Recurring EBITDA Division Business Consulting & Solutions % Recurring EBITDA Margin Division Business Consulting & Solutions -2.4% -1.4% Recurring EBITDA Division Application Management % Recurring EBITDA Margin Division Application Management 2.2% 3.3% Recurring EBITDA Division Belgium / Luxembourg 3,029 2, % Recurring EBITDA Margin Division Belgium / Luxembourg 8.3% 6.0% Recurring EBITDA 3,339 8, % Recurring EBITDA Margin 1.9% 4.5% Redundancy costs 2,930 4, % Costs internal investigation 1,394 0 Net profit -3, Shareholders equity¹ 141, ,491 Capital asset ratio Intangible fixed assets¹ 133, , % Tangible fixed assets 6,753 7, % Total assets 246, , % Days Sales Outstanding (DSO) Days Payables Outstanding (DPO) Total net debt at year-end 6,057 8, % Total net debt to adjusted EBITDA Average number of direct staff (FTE) 2,552 2, % Average number of indirect staff (FTE) % Number of staff at end of reporting period (FTE) 2,917 2, % Number of shares outstanding at end of reporting period (in thousands) 92,959 92, % Per-share information (based on average number of issued shares) in euros Shareholders equity Cash generated from operating activities Earnings Earnings - diluted ORDINA N.V. INTERIM REPORT

6 Turnover decline public sector puts pressure on results; cost-saving programme delivers more than expected Nieuwegein, 20 August 2015 HIGHLIGHTS H Recurring EBITDA falls to EUR 3.3 million (H1 2014: EUR 8.3 million); Recurring EBITDA margin drops to 1.9% (H1 2014: 4.5%); Turnover declines 6.8% to EUR million (H1 2014: EUR 185.2); Turnover the Netherlands down by 9.1%, largely within the public sector Turnover Belgium/Luxembourg up by 3.2% Net result falls to loss of EUR 3.9 million (H1 2014: profit of EUR 0.1 million); Cost-saving programme raised from EUR 6.0 million to around EUR 8.0 million per annum Employee engagement stable at 6.5 (2014: 6.4). HIGHLIGHTS Q Recurring EBITDA falls to negative EUR 0.8 million (Q2 2014: EUR 3.6 million); Recurring EBITDA margin drops to minus 1.0% (Q2 2014: 3.9%); Effect of two fewer working days around EUR 1.6 million Turnover declines 8.2% to EUR 84.2 million (Q2 2014: EUR 91.7 million); Company successfully completes re-financing; Net debt position improves to EUR 6.1 million (end-q2 2014: EUR 8.0 million). STÉPAN BREEDVELD, ORDINA CEO, ON THE RESULTS The decline in turnover was considerable and put pressure on the results, in particular in the Public sector and industry segments in the Netherlands. In Belgium/Luxembourg, Ordina delivered a good performance, both in terms of growth in turnover and profitability. The media reports and discussions regarding public sector IT projects led to a slowdown in decision-making related to IT investments in the Netherlands. The public sector s goal is to make processes and services more efficient and intensify communications with private citizens. Digitisation plays a key role in this. We therefore expect demand in the public sector to increase again in the future. A number of energy and telecom clients in the Industry segment are cutting costs, which is having an impact on the hiring of IT staff. Growth among logistics clients in this segment was not enough to fully compensate for this decline. The previously announced cost-saving programme aimed at bolstering Ordina s results has been adjusted to around EUR 8.0 million per annum. We are taking measures to reduce both direct and indirect costs and to improve processes. The IT market is caught in the tail-end of the crisis and is showing no signs of a broad recovery in the Netherlands. Due to the constantly changing market conditions, we are making accelerated adjustments to our range of competencies, in order to maintain our focus and enable us to respond effectively to client demands. In the coming period, we will adapt our strategy where necessary and identify new growth opportunities. We will also continue to invest in our innovation programme, (re-)training and our Young Professionals programme. ORDINA N.V. INTERIM REPORT

7 COST-SAVING PROGRAMME In late June, Ordina announced a cost-saving programme aimed at achieving structural cost savings of some EUR 6.0 million per year. This programme is on track and has been adjusted to around EUR 8.0 million per annum. These measures are necessary to bolster the results of our Dutch operations. Ordina is taking measures to reduce both direct and indirect costs and to improve processes. One of those measures is our plan to terminate the Change & Learning unit in the Business Consulting & Solutions division, due to a structural decline in demand for this type of IT service in the public sector. We regret that this decision will affect a number of employees. We are currently in consultations with the Works Council. Turnover Q DEVELOPMENTS Q In the second quarter of 2015, turnover fell by 8.2% to EUR 84.2 million (Q2 2014: EUR 91.7 million). The number of workable days in the Netherlands amounted to 60 (Q2 2014: 62). The number of workable days in Belgium/Luxembourg was the same as last year (61). The impact of one less working day on turnover is around EUR 0.8 million. Adjusted for the working days effect and the downsizing of Ordina Consulting Public (OCP, impact EUR 0.3 million) from May 2014, turnover came in 6.3% lower. Turnover was higher in Belgium/Luxemburg. Omzetverdeling per divisie (in thousands of euros) Q Q Change Q on Q2 2014¹ Technology & Competences 38,092 45, % Business Consulting & Solutions 13,544 14, % Application Management 14,664 14, % Belgium/Luxembourg 17,879 17, % TOTAL 84,179 91, % 1 Q figures have been adjusted to the current organisational structure for comparison purposes. Recurring EBITDA Q Recurring EBITDA fell by EUR 4.4 million to a negative EUR 0.8 million in the second quarter (Q2 2014: EUR 3.6 million), after correction for redundancy payments (EUR 1.6 million) and external costs related to the internal investigation (EUR 0.3 million). This drop was largely due to lower turnover. The recurring EBITDA margin dipped to minus 1.0% (Q2 2014: 3.9%). Turnover H DEVELOPMENTS H Turnover fell by 6.8% to EUR million in the first half (H1 2014: EUR million). The number of workable days in the Netherlands amounted to 123 (2014: 125). The number of workable days in Belgium/Luxembourg was the same as the previous year (124). Adjusted for the working days effect and the downsizing of OCP (EUR 1.3 million) from May 2014, turnover was down 5.3%. ORDINA N.V. INTERIM REPORT

8 Revenue per division (in thousands of euros) H H Change H on H1 2014¹ Technology & Competences 79,416 92, % Business Consulting & Solutions 27,570 28, % Application Management 29,021 28, % Belgium/Luxembourg 36,663 35, % TOTAL 172, , % 1 H figures have been adjusted to the current organisational structure for comparison purposes. Overview workable days NL B NL B 1st quarter 2 nd quarter 3 rd quarter 4 th quarter TOTAL Recurring EBITDA H Recurring EBITDA fell to EUR 3.3 million in the first half (H1 2014: EUR 8.3 million), after adjustment for redundancy payments (EUR 2.9 million) and external costs related to the internal investigation (EUR 1.4 million). The recurring EBITDA margin was down by 1.9% (H1 2014: 4.5%). Recurring EBITDA per division (in thousands of euros) H H Technology & Competences % 5, % Business Consulting & Solutions % % Application Management % % Belgium/Luxembourg 3, % 2, % TOTAL 3, % 8, % 1 H figures have been adjusted to the current organisational structure for comparison purposes. Technology & Competencies The Technology & Competencies division designs and builds applications for our clients. The division does this in a number contract forms, via secondment and projects, both for package solutions and tailor-made solutions. In H1 2015, turnover came in 14.2% lower at EUR 79.4 million (H1 2014: EUR 92.6 million). This decline was due to a smaller number of major projects for public sector clients and to lower demand for IT staff at a number of clients in the energy and telecom sectors. The drop in turnover had a major impact on the recurring EBITDA margin, which fell to 0.4% (H1 2014: 6.1%). Business Consulting & Solutions The Business Consulting & Solutions division advises clients on how they can improve their processes and IT systems. This division combines business know-how with technical expertise to devise sustainable solutions in the field of business intelligence, (digital) client interaction, chain integration and security. This division saw turnover decline by 3.7% to EUR 27.6 million (H1 2014: EUR 28.6 million). This drop was due to the downsizing of OCP (turnover impact EUR 1.3 million). The recurring EBITDA margin fell to minus 2.4% (H1 2014: minus 1.4%). This dip in margin was largely due to lower turnover. ORDINA N.V. INTERIM REPORT

9 Application Management Belgium/ Luxembourg Turnover Q The Application Management division provides the management, maintenance and renewal of applications on the basis of long-term contracts. This division s turnover rose by 1.9% to EUR 29.0 million (H1 2014: EUR 28.5 million). In 2015, this division extended a number of existing contracts and closed management contracts with several new clients. The higher turnover did not lead to improved margins, as a large part of the rise was related to cooperation with partners. The recurring EBITDA margin dipped to 2.2% (H1 2014: 3.3%). The capacity utilisation rate could be improved further, and Ordina is therefore taking measures to reduce overcapacity and to close new management contracts. The Belgium/Luxembourg division delivers IT services and designs, builds and manages applications in Belgium and Luxembourg. In addition, this division devises solutions aimed at specific sectors and business issues. The division s turnover rose by 3.2% to EUR 36.7 million in the first half of 2015 (H1 2014: EUR 35.5 million). The recurring EBITDA margin rose to 8.3% (H1 2014: 6.0%). The margin improvement was driven by turnover growth across the board, strong performances in Luxembourg and strong growth in innovative application management. MARKET DEVELOPMENTS In the second quarter of 2015, turnover fell by 8.2% to EUR 84.2 million (Q2 2014: EUR 91.7 million). Revenue per market segment (in thousands of euros) Q Q Change Q on Q Public 29,664 35, % Financial services 25,333 25, % Industry 23,471 25, % Healthcare 5,712 5, % TOTAL 84,180 91, % 1 Q figures have been adjusted for comparison purposes in connection with the reclassification of a number of clients. Turnover H Turnover fell by 6.8% to EUR million in the first half of 2015 (H1 2014: EUR million). Revenue per market segment (in thousands of euros) H H Change H on H Public 61,317 70, % Financial services 51,789 51, % Industry 48,514 51, % Healthcare 11,050 11, % TOTAL 172, , % 1 H figures have been adjusted for comparison purposes in connection with the reclassification of a number of clients. Public sector Turnover in the public sector market segment fell by 13.5% to EUR 61.3 million in the first half of 2015 (H1 2014: EUR 70.9 million). This decline was largely due to the drop in the number of projects. In addition to this, the downsizing of OCP from May 2014 also had a negative impact of EUR 1.3 million. In the longer term, IT will be one of the driving forces in the reduction of costs and the continued improvement of public sector ORDINA N.V. INTERIM REPORT

10 services. Financial services Industry Healthcare Turnover in the Financial services market segment came in 0.1% higher at EUR 51.8 million (H1 2014: EUR 51.7 million). This rise was largely driven by the stable performance of Ordina s sourcing contracts. On top of this, there are new opportunities in the pension market. In 2014, we closed an agreement with Axyware, under which we will implement the AxyLife product at our clients. AxyLife is a system for the intelligent administration of pensions and life insurance policies. We have in the meantime closed contracts with a growing number of pension funds and insurance firms. Turnover in the Industry market segment fell by 5.9% to EUR 48.5 million (H1 2014: EUR 51.6 million). This decline was largely due to falling demand for IT staff at a number of specific clients in the Dutch telecom and energy sectors. Growth among logistics clients in this segment was not enough to fully compensate for this decline. Turnover in the Healthcare market segment rose by 0.2% to EUR 11.1 million (H1 2014: EUR 11.0 million). This rise was driven by a number of clients in the pharmaceutical industry. In addition to this, we once again saw a number of new healthcare institutions sign up for Quli, an e-health platform for the healthcare sector. Ordina supports Quli with know-how and expertise and also provides the management of the platform. INNOVATION Ordina s innovation programme involves working with clients and partners to develop innovative applications. The use of smart phones and tablets is changing the face of client behaviour in the financial sector. Financial institutions are being forced to respond ever more quickly to opportunities related to mobile banking and are constantly searching for new business models. On this front, Ordina is active with its Bouw van de nieuwe bank (building the new bank) initiative, which is looking at how new technologies will help create the bank of the future. Ordina has defined a number of growth diamonds, or areas in which the company can team up with clients to experiment with smart applications that add value to their business. This includes using smart technologies to develop applied solutions using the likes of wearables, virtual reality, robotica and augmented reality. Ordina is also exploring and deepening relationships with universities, start-ups and expertise centres to facilitate cocreation. EMPLOYEES In the first half of 2015, the number of direct employees increased by three FTEs. The average number of employees remained virtually unchanged at 2,552 FTEs (H1 2014: 2,553 FTEs). The number of indirect employees rose by seven FTEs, as the company filled existing vacancies. The average number of indirect employees rose to 341 FTEs (H1 2014: 337 FTEs). At end- H1 2015, Ordina employed a total of 2,917 FTEs (end-h1 2014: 2,907 FTEs). In 2015, we have seen a slight increase in our employee engagement score, which rose to 6.5 from the 6.4 recorded in Our ambition is to achieve a score of at least 7.0. All our divisions have launched initiatives to improve this score further. Attrition employees FTE half year 2015 In Out FTE year-end 2014 Direct FTE 2, ,565 Indirect FTE TOTAL 2, ,907 INVESTIGATIONS AND INTEGRITY PROGRAMME As stated in the press release and in the Shareholders Circular published on 27 January 2015, Ordina has conducted a wide-ranging internal investigation into possible irregularities in public sector tender procedures and contracts. We published the main findings of this investigation on 27 January The Shareholders Circular noted that we were still following up on a number of items. We have since followed up on these items. We uncovered a case dating from 2011 in which there had been contacts with several employees of a principal during a tender process, in which information seems to have been exchanged. The Management Board is of the ORDINA N.V. INTERIM REPORT

11 opinion that there was some question of inappropriate behaviour on the part of a limited number of people. There are no internal investigations running at this point in time. We will evaluate each and every indication of possible irregularities and launch investigations into same and take measures should this prove necessary. As noted in the Shareholder Circular and the annual report for the 2014 financial year, a number of external (exploratory) investigations by authorities and regulatory bodies are still pending. Ordina is obviously lending its full cooperation to these investigations. In the period under review, Ordina has also taken additional steps to intensify the current policy and internal procedures related to integrity and control. For instance, we have tightened up various internal codes of conduct, organised specific training sessions and Dilemmas & Issues meetings and where necessary we are adjusting our work processes by making compliance an integral part of these processes. However, Ordina s efforts on the integrity and compliance front are not a one-off exercise. Our aim is to keep the subject of compliance top of mind and to develop it further. The launch of new initiatives, such as the introduction of a digital registration system for reports, are all part of this effort, and this will continue in 2016 as an integral part of our business operations. Turnover development FINANCIAL DEVELOPMENTS Turnover fell by 6.8% to EUR million in the first half of 2015 (H1 2014: EUR million). The number of working days amounted to 123 (H1 2014: 125). Recurring EBITDA Recurring EBITDA came in at EUR 3.3 million in the first half (H1 2014: EUR 8.3 million). Including redundancy payments (EUR 2.9 million) and the external costs related to the internal investigation (EUR 1.4 million), EBITDA came in at minus EUR 1.0 million (H1 2014: EUR 4.3 million). From recurring EBITDA to net profit H H (in thousands of euros) Recurring EBITDA 3,339 8,330 Redundancy costs 2,930 4,035 External costs internal investigation 1,394 - EBITDA ,295 Depreciation & amortisation 2,718 2,673 EBIT -3,703 1,622 Finance costs - net Earnings before taxes -4,010 1,039 Taxes Net profit -3, Redundancy costs Redundancy costs amounted to EUR 2.9 million in the first half of 2015 (H1 2014: EUR 4.0 million). Acquisitions and disposals In the first half of 2015, Ordina made no acquisitions or disposals. Depreciation Net profit & EPS Total depreciations amounted to EUR 2.7 million (H1 2014: EUR 2.7 million). The net result came in at a loss of EUR 3.9 million (H1 2014: profit of EUR 0.1 million). The net earnings per share (EPS) amounted to a loss per share of EUR 0.04 (H1 2014: nil). Productivity/ availability Productivity stood at an average of 67.0% in the first half of Availability came in at average of 12.4% in the first half of the year. ORDINA N.V. INTERIM REPORT

12 Net debt and cash flow At end-q2 2015, net debt stood at EUR 6.1 million (end-h1 2014: EUR 8.0 million). This improvement was the balance of a number of positive and negative one-off items that partly cancelled each other out. For instance, one major client paid early, but we were also hit by an invoicing backlog due to the implementation of the new ERP system. We will catch up on this backlog completely in the months ahead. Compared with year-end 2014, net debt had risen by EUR 15.7 million at the end of the first half (year-end 2014: positive cash position of EUR 9.6 million). This increase is higher than the usual seasonal pattern due in part to the negative result and the above-mentioned items. The main changes in net debt in the first half off 2015 are as follows: (rounded up, in EUR millions) Year-end Net result 3.9 Depreciation -2.7 Working capital & provisions & other 10.8 Interest & tax 1.0 Net investments 2.8 End-H The investments include approximately EUR 1.6 million invested in the implementation of a new ERP system at Ordina the Netherlands. Net debt as a ratio of adjusted EBITDA, as formulated in the financing agreement, stood at 0.6 as per 30 June 2015, and was therefore well within the maximum of 2.50 agreed with Ordina s banks. The Interest Cover Ratio stood at 5.8 on 30 June This was therefore above the minimum of 5.0 agreed with the banks. Refinancing In May, Ordina agreed a new financing facility of EUR 30 million with more favourable conditions. The margin was lowered to 1.00% and the covenant related to the net debt as a ratio of adjusted EBITDA was increased to 2.50 from The financing has a term of five (5) years, with an initial term of three (3) years and an option for two extensions of one (1) year each. An overview of the ratios compared with the covenants agreed with the banks: Maximum Leverage Ratio Norm Actual Ratio up to last two periods before end of agreement ¹ 2,5 0,6 Ratio during last two perdios of agreement ¹ 2,0 Minimum Interest Cover Ratio Norm Actual Ratio 5,0 5,8 1 The financing facility has a term of five years, with an initial term of three years and an option for two extensions of one year each. ORDINA N.V. INTERIM REPORT

13 RISK MANAGEMENT In the 2014 annual report (page 62 and onwards), Ordina describes the most important objectives and procedures of its risk management and control systems and the main risks and mitigating measures taken. Ordina has evaluated the identified risks and determined that the main risks identified remain the same in the second half of The main risks are: Declining demand across all markets due to a long-term downturn. This affects both short-term hiring and the postponement of larger IT programmes. The uncertainty due to the financial and economic situation in Europe, but also the media reports and discussions related to public sector IT projects, have led to delays in the decision-making related to IT investments in the Netherlands and a shift in the demand for IT services. The current uncertainty on the market has led to a (temporary) dip in the demand for IT services. For the long term, there is a risk that secondment (the deployment of professionals) will come under sustained pressure (both in terms of demand and rates), with a shift to outsourcing and freelance IT specialists. The risk profile of result commitments is increasing. Clients are demanding clear result commitments with which Ordina has to comply. As a result of this, the profit or loss from contacts could have a material impact on Ordina s performance. Market conditions may necessitate revaluation of the goodwill of acquisitions. Ordina saw the results development at the Dutch activities in the first half of 2015 as reason to conduct an interim impairment test. This test did not result in any impairments. In the current digital age, data security is vital. Confidential information can fall in to the hands of the wrong people through cyber-crime or the failure of IT systems. The current economic conditions increase the risk that partners are unable to meet their obligations (on time). This could have a negative impact on the value of receivables. Ordina has tax loss carry-forwards. In connection with these tax loss carry-forwards, Ordina has recognised a deferred tax asset in its balance sheet. If in the future the potential to claim tax losses proves insufficient, there is a risk that a portion of the deferred tax asset will have to be amortised. Ordina will in the second half of the year asses the possibility of tax loss renewal. Organisations are increasingly dependent on IT systems in their business operations. There is a risk that the failure of systems will affect business operations. In June of this year, a number of our clients experienced problems due to a temporary disruption in our data centre in Groningen. We are currently assessing the financial impact of this incident, which so far seems fairly limited. For more details on this subject, we refer to Ordina s 2014 annual report on our corporate website: We continuously monitor the risks we have identified. Nevertheless, it is possible that new or previously unidentified risks emerge that are not yet known and that could potentially have a material impact on our business operations, targets and results. We will continuously monitor any known and new risks and take control measures and initiate mitigating actions whenever this is deemed necessary. OUTLOOK We decline to give a outlook for the coming period. ORDINA N.V. INTERIM REPORT

14 ADDITIONAL INFORMATION For more information on this press release: Annemieke den Otter, Investor Relations Mail: Telephone: +31 (0) Jeroen Hellenberg, Communications Mail: Telephone: +31 (0) Jolanda Poots-Bijl, CFO Mail: Telephone: +31 (0) Stépan Breedveld, CEO Mail: Telephone: +31 (0) Financial calendar 3 November 2015 Trading update Q November 2015 Shareholder day February 2016 Publication annual results April 2016 Trading update Q April 2016 General Meeting of Shareholders 18 August 2016 Interim results November 2016 Trading update Q Media call and analyst presentation 09:00 hers CET Media call Ordina will explain its results on Thursday, 20 August 2015, at 09:00 hrs CET during a media call (call number ). 10:30 hrs CET Analyst presentation Ordina will present its results on Thursday, 20 August at 10:30 hrs CET at an analyst meeting at the Wyndham Apollo Hotel in Amsterdam. You can follow this presentation via a webcast. You can follow the webcast via the link you will find on our corporate website: The presentation will be available on our website following the webcast. This document contains forward looking statements regarding the financial performance of Ordina N.V. and outlines certain plans, targets and ambitions based on current insights. Such forecasts are obviously not without risk and entail a certain degree of uncertainty since there are no guarantees regarding future circumstances. There are multiple factors that could potentially result in the actual results and outcomes differing from those outlined in this document. Such factors include: general economic trends, the pace of globalisation of the markets for solutions, IT and consulting, increased performance commitments, scarcity on the labour market, and future acquisitions and disposals. ORDINA N.V. INTERIM REPORT

15 UNAUDITED ORDINA N.V. INTERIM REPORT

16 CONSOLIDATED BALANCE SHEET ORDINA N.V. (in thousands of euros) 30 June Dec June 2014 Assets Intangible fixed assets 133, , ,589 Tangible fixed assets 6,753 7,102 7,871 Investments in associates Deferred income tax assets 18,318 16,939 17,669 Total fixed assets 159, , ,619 Transition costs 1,481 1,792 2,130 Trade and other debtors 78,063 68,250 80,528 Cash & cash equivalents 7,943 9,597 5,494 Assets held for sale Total current assets 87,487 79,639 88,241 Total assets 246, , ,860 Equity and liabilities Issued capital 9,296 9,272 9,272 Share premium reserve 135, , ,657 Retained earnings -10-1,296-1,584 Profit for the reporting period -3,880 1, Shareholders equity 141, , ,491 Long-term borrowings / Term Loan Long-term borrowings / Other Employee related provisions 4,508 4,423 3,936 Other provisions 5,219 5,568 5,693 Non-current liabilities 9,727 9,991 9,629 Borrowings 14,000-13,526 Other provisions 4,240 4,356 5,587 Trade and other payables 74,742 75,981 72,335 Current tax payable 2,929 2,649 1,106 Liabilities held for sale Total current liabilities 95,911 82,986 92,740 Total liabilities 105,638 92, ,369 Total equity and liabilities 246, , ,860 UNAUDITED ORDINA N.V. INTERIM REPORT

17 CONSOLIDATED PROFIT AND LOSS ACCOUNT ORDINA N.V. (in thousands of euros) H H FY 2014 Revenue (net) 172, , ,918 Cost of hardware and software 4,998 4,390 9,614 Work contracted out (hired staff) 37,838 43,607 85,374 Personnel expenses 120, , ,909 Amortisation 1, ,879 Depreciation 1,509 1,686 3,236 Other operating expenses 9,875 7,234 17,251 Total operating expenses 176, , ,263 Operating profit (EBIT) -3,703 1,622 4,655 Finance costs - net ,147 Share of profit of associates - - (8.0) Profit before income tax -4,010 1,039 3,500 Income tax ,488 Net profit -3, ,012 Net profit is attributable to: Shareholders of the company -3, ,012 Non-controlling interests Net profit -3, ,012 (in euros, unless indicated otherwise) Earnings per share - basic Earnings per share - diluted Number of shares outstanding at end of reporting period 92,958,672 92,715,304 92,715,304 UNAUDITED ORDINA N.V. INTERIM REPORT

18 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (in thousands of euros) H H FY 2014 Profit -3, ,012 Other comprehensive income, not reclassifiable to profit or loss Actuarial gains and losses on defined benefit plans Tax on items taken directly to or transferred from equity Other comprehensive income (net of tax) Total comprehensive income -3, UNAUDITED ORDINA N.V. INTERIM REPORT

19 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (in thousands of euros) Issued capital Share premium reserve Other reserves Total equity At 1 January , ,060-1, ,663 Changes in H Net profit for the reporting period Other comprehensive income: Actuarial gains and losses Total comprehensive income for the reporting period Transactions with owners: Share issue Share issue at acquisitions Share-based payment Total transactions with owners At 30 June , ,657-1, ,491 Changes in H Net profit for the reporting period Other comprehensive income: Actuarial gains and losses Total comprehensive income for the reporting period Transactions with owners: Share issue Share issue at acquisitions Share-based payment Total transactions with owners At 31 December , , ,645 At 1 January , , ,645 Changes in H Net profit for the reporting period ,880-3,880 Other comprehensive income: Actuarial gains and losses Total comprehensive income for the reporting period ,880-3,880 Transactions with owners: Share issue Share issue at acquisitions Share-based payment Total transactions with owners At 30 June , ,856-3, ,262 UNAUDITED ORDINA N.V. INTERIM REPORT

20 CONSOLIDATED CASH FLOW STATEMENT ORDINA N.V. H H (in thousands of euros) Cash flow from operating activities Net profit for the reporting period -3, Adjustments for: Finance costs - net Income tax expense ,476 Operating profit -3,703 1,622 Adjustments for: Amortisation 1, Depreciation 1,509 1,686 Share-based payments ,215 2,856 Operating profit before changes in working capital and provisions ,478 Movements in transition costs Movements in trade and other receivables -9,813-8,047 Movements in current liabilities -1,536 2,931 Movements in provisions (long-term) ,302-4,943 Cash generated from operations -11, Interest paid Income taxes paid Net cash from operating activities -12,885-1,115 Cash flow from investing activities Acquisitions of group companies Additions to intangible fixed assets -1,609-2,490 Additions to tangible fixed assets -1,160-1,127 Proceeds from sale of tangible assets - 8 Net cash used in investing activities -2,769-4,521 Cash flow from financing activities Issue of shares - - Repayment of borrowings (Term Loan) - -5,000 Drawings of borrowings (Revolver) - - Net cash used in financing activities - -5,000 Net movements in cash and cash equivalents -15,654-10,636 Movements in cash -15,654-10,636 Cash and cash equivalents at beginning of the reporting period 9,597 7,446 Cash and cash equivalents at the end of the reporting period / net -6,057-3,190 UNAUDITED ORDINA N.V. INTERIM REPORT

21 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS General information Ordina N.V. has its registered office in Nieuwegein, the Netherlands. These consolidated interim financial statements for the six months ended 30 June 2015 comprise the financial information of Ordina N.V. and all its subsidiaries ( the group ). Ordina is the largest independent IT services provider in the Benelux. We design, build and manage IT solutions for organisations in the public sector, in the financial services sector, the industrial sector and in the healthcare sector. We aim for IT that truly helps people. IT that matters and that has been developed without wasting any resources. And we do so by working with our clients in partnerships for sustainable innovation. Ordina was founded in Its shares have been listed on the NYSE Euronext Amsterdam stock exchange since 1987 and are included in the Small Cap Index (AScX). Statement of compliance The consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted for use within the European Union. They do not contain all the information that is required for a full set of financial statements, and should therefore be read in conjunction with the Ordina N.V. consolidated financial statements for the full year The 2014 Annual Report (including the consolidated financial statements for the financial year 2014) is available online at: The consolidated interim financial statements were prepared by the Management Board and approved for publication by the Supervisory Board on 19 August The consolidated interim financial statements are unaudited. Ordina s interim financial statements have been drawn up in Dutch and in English, with the Dutch text prevailing. Key standards for financial reporting For an explanation of the accounting policies for the valuation, determination of results and statement of cash flows, we refer you to the consolidated financial statements for The consolidated financial statements for 2014 were drawn up in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union. The accounting standards have been applied consistently for all subsidiaries and across all periods as presented in these consolidated interim results. The same standards have been applied to the interim report, with the exception of the new standards, amendments to standards and interpretations outlined below, which have been included and found relevant for Ordina. The group s reporting currency is the euro. ORDINA N.V. INTERIM REPORT

22 Standards, amendments and interpretations Insofar as applicable, the group has applied all published IFRS standards, amendments and interpretations that came into effect on 1 January These standards and interpretations had no material impact on the group. Any published IFRS standards and interpretations that were not yet applicable for reporting periods that commence on 1 January 2015 have not been applied early. Critical accounting estimates and assumptions The preparation of the consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the calculated income and expenses, as well as the reported contingent assets and liabilities. Actual results may differ from these estimates and assumptions. The assumptions and estimates are based on historical experience and various other factors that can be deemed reasonable under the circumstances. Said assumptions and estimates are continually (re)evaluated. For a list of the most critical assumptions and estimates, we refer you to section 5 of the notes to the consolidated 2014 financial statements, as included in the 2014 annual report. There were no significant changes in said assumptions and estimates in the first half of Financial risk management In its 2014 annual report (page 62 and onwards), Ordina described in detail the critical risks and risk management and control systems. Ordina has evaluated the risks identified and determined that the main risks identified remain applicable in the second half of Segment information Segment information is presented in line with how the management, reporting lines and decision-making is organised within Ordina. Ordina recognises the following segments: Technology & Competencies, Business Consulting & Solutions, Application Management and Belgium / Luxembourg. In 2014, Ordina also recognised the segment Sourcing. Sourcing acts as a strategic partner, working with major clients to jointly improve the added value of hired-in IT staff. Client-specific improvement programmes in the field of productivity improvements, talent development, knowledge sharing and innovation are an inherent part of this approach. From 2015 onwards, Sourcing is no longer reported as a separate segment and is deployed more broadly at the clients of all segments as a specialised delivery model. From 1 January 2015, the turnover and costs of the sourcing model are incorporated in those of the segment divisions delivering sourcing services in the Netherlands. The comparable figures for 2014 have consequently been adjusted. Management information on balance sheet positions and analysis of same is recognised at the aggregated level of Ordina the Netherlands and Ordina Belgium / Luxembourg respectively. Segment information related to balance sheet positions is therefore disclosed at the level of Ordina the Netherlands and Ordina Belgium / Luxembourg. Segment results, assets and liabilities consist of the items that can be directly attributed to the segment in question. ORDINA N.V. INTERIM REPORT

23 H Technology & Competences Business Consulting & Solutions Application Management Belgium / Luxembourg (in thousands of euros, unless indicated otherwise) Total revenue per segment Inter-segment revenue Revenue 79,416 27,570 29,021 36, ,670 Total Recurring EBITDA ,029 3,339 Redundancy costs / costs internal investication -2, ,324 EBITDA -2,591-1, , Amortisation -1,209 Depreciation -1,509 Operating profit (EBIT) -3,703 Finance costs - net -307 Share of profit of associates - Profit before income tax -4,010 Income tax 130 Net profit -3,880 EBITDA margin -3.3% -5.5% 1.1% 7.6% -0.6% Recurring EBITDA margin 0.4% -2.4% 2.2% 8.3% 1.9% H Technology & Competences Business Consulting & Solutions Application Management Belgium / Luxembourg (in thousands of euros, unless indicated otherwise) Total revenue per segment 92,561 28,630 28,489 35, ,220 Inter-segment revenue Revenue 92,561 28,630 28,489 35, ,220 Total Recurring EBITDA 5, ,120 8,330 Redundancy costs / costs internal investication , ,035 EBITDA 5,530-4, ,007 4,295 Amortisation -987 Depreciation -1,686 Operating profit (EBIT) 1,622 Finance costs - net -583 Share of profit of associates - Profit before income tax 1,039 Income tax -893 Net profit 146 EBITDA margin 6.0% -14.2% 2.9% 5.6% 2.3% Recurring EBITDA margin 6.1% -1.4% 3.3% 6.0% 4.5% ORDINA N.V. INTERIM REPORT

24 SEGMENT INFORMATION (CONTINUED) 30 June 2015 the Netherlands Belgium/ Luxembourg (in thousands of euros, unless indicated otherwise) Intangible fixed assets 116,686 17, ,860 Tangible fixed assets 5,600 1,153 6,753 Financial fixed assets 18, ,800 Total assets 205,845 41, ,900 Investments in intangible fixed assets 1,609-1,609 Investments in tangible fixed assets ,160 Amortisation 1, ,209 Depreciation 1, ,509 Number of staff at end of reporting period (FTEs) 2, ,917 Average number of staff (FTEs) 2, ,893 Total 30 June 2014 the Netherlands Belgium/ Luxembourg (in thousands of euros, unless indicated otherwise) Intangible fixed assets 114,388 17, ,589 Tangible fixed assets 6,776 1,095 7,871 Financial fixed assets 17, ,159 Total assets 206,475 39, ,860 Investments in intangible fixed assets 2,490-2,490 Investments in tangible fixed assets ,127 Amortisation Depreciation 1, ,686 Number of staff at end of reporting period (FTEs) 2, ,890 Average number of staff (FTEs) 2, ,882 Total Intangible fixed assets Movements in intangible fixed assets in the first half of 2015 can be specified as follows: (in thousands of euro's) Goodwill Software PPA related Total Carrying amount at year-end ,495 6,251 2, ,460 Investments - 1,609-1,609 Depreciations ,209 Carrying amount at 30 June ,495 7,103 2, ,860 The investments of EUR 1.6 million in software (first half 2014: EUR 2.5 million) are primarily related to a new ERP package at Ordina the Netherlands. The software for this investment was partly produced in-house. The new ERP application was taken into use from 1 January The ERP application will be amortised over a period of seven years. ORDINA N.V. INTERIM REPORT

25 Impairment test Ordina carries out impairment tests on goodwill and other fixed assets at least once a year. The annual impairment test is carried out in the fourth quarter of each calendar year. In the first six months of 2015, Ordina assessed where there were any indications of impairments to goodwill or other fixed assets. Ordina saw the development of the results at the Dutch operations in the first half of 2015 as sufficient reason to carry out an interim impairment test. This interim impairment test did not result in impairment for any of the cash flow generating units as per 30 June 2015, although it should be noted that the available goodwill for the cash flow generating unit Business Consulting & Solutions is extremely limited. In addition to the valuation, Ordina also carried out sensitivity analyses, assuming on the one hand a lower EBITDA margin and on the other a lower continuous growth in combination with a higher discount rate. The sensitivity analysis in which the EBITDA margin is reduced by 0.25 %, with the discount rate unchanged, resulted in a potential impairment for the cash-generating unit Business Consulting & Solutions of EUR 1.4 million, respectively EUR 2.3 million. The sensitivity analysis in which, firstly, the discount rate is raised successively by 0.5%, 1.0% and 1.5 %, and secondly the forward growth is reduced from 0.5% to 0% resulted in a potential impairment for the cash-generating unit Business Consulting & Solutions that varied between EUR 0.1 million and EUR 4.0 million. The following is an overview of the goodwill per cash flow generating unit: (in thousands of euro's) 30 June 2015 Technology & Competences 65,432 Business Consulting & Solutions 23,121 Application Management 18,800 Belgium/Luxembourg 17,142 Carrying amount at 30 June ,495 Tangible assets Movements in tangible fixed assets in the first half of 2014 can be specified as follows (in thousands of euro's) Total Carrying amount at year-end ,102 Investments 1,160 Depreciations -1,509 Carrying amount at 30 June ,753 The investments of EUR 1.2 million (first half 2014: EUR 1.1 million) are largely related to replacement investments in computer equipment, as well as equipment related to the ERP application within Ordina the Netherlands. ORDINA N.V. INTERIM REPORT

26 Cash & cash equivalents Cash and cash equivalents as show in the consolidated cash flow statement can be specified as follows: (in thousands of euro's) 30 June June 2014 Cash in hand or with banks 7,943 5,494 Bank overdrafts -14,000-8,684 Balance cash & cash equivalents -6,057-3,190 Outstanding shares Movements in paid-up and called-up share capital can be specified as follows: (in thousands) At 1 January 92,715 92,311 Issue at acquistitions Issue related to share-based payment At 30 June 92,959 92,715 As per 30 June 2015, Ordina has one paid-up priority share and 92,958,667 ordinary shares (year-end 2014: 1 priority share and 92,715,299 ordinary shares). The share issues in the first half of 2015 amounted to 243,368 shares (first half 2014: 404,444 shares) and were entirely related to share-related remunerations in connection with the variable long-term bonus of the members of the Management Board. Bank debts / Financing facility Banks debts can be specified as follows: (in thousands of euro's) 30 June June 2014 Bank loans 14,000 8,684 Short-term repayment obligations for long-term loan - 4,842 Total 14,000 13,526 As per 30 June 2015, Ordina has no long-term bank debts. The long-term loan for an initial EUR 20 million taken out in 2011 was paid back in full at year-end In mid-2014, the repayment commitment for the long-term loan amounted to more than EUR 4.8 million. In May 2015, Ordina agreed a new financing facility of EUR 30.0 million with ABN Amro Bank and ING. This new financing facility is fully committed and is a revolving facility of EUR 20.0 million and a current account credit facility of EUR 10.0 million. The new financing facility replaces the previous facility of EUR 35.0 million extended by ABN Amro Bank, ING and NIBC that was supposed to expire in November The new financing agreement has a maximum term of five years, with an initial term of three years and an option to extend twice by one year. The most important elements regarding covenants included in the financing facility are a maximum leverage ratio (ratio of net debt to adjusted EBITDA) and an Interest Cover Ratio. The leverage ratio has been set at a maximum of 2.5, and 2.0 for the final two quarters of the (possibly extended) term. The Interest Cover Ratio has been set at a minimum of 5.0. The covenants are based on the consolidated (interim) financial statements as drawn up in accordance with IFRS. The adjustment to the ORDINA N.V. INTERIM REPORT

27 EBITDA for one-off expenses and reorganisation costs has been set at a maximum of EUR 5.0 million for the year 2015 and a maximum of EUR 3.0 million for 2016 and subsequent years. The interest on the facility is set on the basis of the prevailing base rate (EURIBOR) plus a surcharge. The base rate depends on the interest period to be determined by Ordina, which can in principle vary from one to six months. The surcharge has been set at a fixed percentage of 1.0%. As per 30 June 2015, the ratio of total net debt / adjusted EBITDA stood at 0.6 (year-end 2014: minus 0.8; mid-2014: 0.4). As per 30 June 2015, the Interest Cover Ratio stood at 5.8 (year-end 2014: 9.2; mid-2014: 12.5). Main terms credit facility new versus old new old Facility (in euro millions) Final repayment date Extention options Margin 30.0 May x 1 year 100bps 35.0 Nov 2016 none bps depending on leverage ratio Adjustment of one off charges and reorganisation costs 2015: EUR 5.0 million and EUR 3.0 milion in subsequent years 2014: EUR 3.0 million; starting 2015: none Leverage Ratio (maximum) 2,5 - and 2.0 in the last 2 quarters years prior to the maturity date 1.5 Interest Cover Ratio (minimal) Earnings per share Earnings per share are calculated by dividing the result after taxes by the average number of outstanding shares. The earnings per share after dilution takes into account the shares that are expected to be issued in connection with the share-related bonuses. The earnings per share are calculated on the basis of the following information: (in thousands of euros, unless indicated otherwise) H H Profit for the period -3, Average number of outstanding shares (in thousands) 92,836 92,604 Impact of potential dilution Conditionally granted shares 990 1,199 Average number of outstanding shares diluted (in thousands) 93,826 93,803 ORDINA N.V. INTERIM REPORT