Intertrust N.V. reports Q4 and Full Year 2016 unaudited results
(Thomson Reuters ONE) -
Amsterdam - February 10, 2017 - Intertrust N.V. ("Intertrust" or "the Company")
[ticker symbol INTER], the leading global provider of high-value trust, fund and
corporate services, today announces fourth quarter and full year 2016 results.
Intertrust financial and operating performance for Q4 and Full Year 2016
* Q4 revenue of ?120.7 million increased by 31.9% year-on-year and underlying*
Intertrust revenue for Q4 increased by 4.0% year-on-year.
* Luxembourg Q4 revenue was up sharply reflecting clearance of the Q3 backlog
by new billable employees.
* In Cayman the outflow of entities over Q4 slowed and loss of revenue to
competitors decelerated versus Q3.
* EBITA was ?40.2 million in Q4 and EBITA margin including costs related to
the acquisition of Elian was 33.3%. Adjusted EBITA margin for the quarter
contracted by 153bps to 39.9% reflecting the consolidation of Elian while
underlying* EBITA margin was unchanged at 41.5%.
* Adjusted FY 2016 EPS was ?1.27 (including Elian full year contribution,
adjusted net income per share of ?1.44). The integration of Elian continues
to be on track for completion in 2018.
* The final dividend will be ?0.25 and will be paid on June 12, 2017, subject
to shareholder approval, resulting in a total FY 2016 dividend of ?0.49.
Intertrust Group Q4 2016 figures
As reported Adjusted
Notes Q4 16 Q4 15 % Change Q4 16 Q4 15 % Change
---------------------- ---------------------
Revenue (?m) (1) 120.7 91.6 31.9% 120.7 91.5 32.0%
EBITA (?m) (2) 40.2 38.0 5.8% 48.1 37.9 27.1%
EBITA Margin 33.3% 41.5% -819bps 39.9% 41.4% -153bps
Net Income (?m) (3) 15.9 n/a 35.5 n/a
Earnings per share (?) (4) 0.17 n/a 0.39 n/a
Cash from operating
activities (?m) 51.6 37.7 36.9%
David de Buck, Chief Executive Officer of Intertrust, commented:
"I am pleased with our solid performance over Q4 and the progress we have made
on the integration of Elian. Our efforts to improve the Luxembourg operations
have been successful. In Cayman, we see an improvement versus Q3 and outflow of
entities reduced in Q4 as well as during the start of 2017. On the basis of a
full year of Elian, our adjusted net income per share in FY 2016 would have been
?1.44. Our growth in 2016 was largely driven by clients' needs for more added-
value services per entity. Geopolitical uncertainty such as Brexit caused a
slowdown in Foreign Direct Investment and M&A activity which impacted the rate
of creation of new entities. For 2017, we expect to achieve underlying revenue
growth of 4-5% and maintain our adjusted EBITA margin (39.9% for FY 2016). We
welcome Maarten de Vries as our new CFO. Going forward, IT, Operations and
Finance will report to Maarten."
Intertrust Group FY 2016 figures
As reported Adjusted
Notes FY 16 FY 15 % Change FY 16 FY 15 % Change
---------------------- ---------------------
Revenue (?m) (1) 385.8 344.6 11.9% 385.8 344.9 11.9%
EBITA (?m) (2) 135.9 137.4 -1.1% 153.8 140.4 9.5%
EBITA Margin 35.2% 39.9% -464bps 39.9% 40.7% -85bps
Net Income (?m) (3) 52.0 2.6 113.2 101.4
Earnings per share (?) (4) 0.58 0.12 1.27 1.19 6.9%
Cash from operating
activities (?m) 152.4 127.5 19.5%
Intertrust (standalone)
Intertrust standalone presented for historical comparison purposes
Q4 Q4 % % Change FY FY % % Change % Change
2016 2015 Change (Constant 2016 2015 Change (Constant (Underlying*)
Currency) Currency)
------------------------------ -------------------------------------------
Adjusted
Revenue
(?m) 93.9 91.5 2.6% 4.0% 357.3 344.9 3.6% 4.8% 3.0%
Adjusted
EBITA (?m) 39.0 37.9 2.9% 4.0% 144.0 140.4 2.6% 3.6% 2.6%
Adjusted
EBITA
margin 41.5% 41.4% 12bps 0bps 40.3% 40.7% -40bps -48bps -16bps
FTEs 1,753 1,714 2.3%
Number of
entities
(000's) 37.9 40.1 -5.4%
ARPE 9.4 8.6 9.5% 10.7% 8.9%
Adj.
Revenue/FTE 203.8 201.2 1.3% 2.4%
Adj.
EBITA/FTE 82.2 81.9 0.3% 1.2%
*Underlying: Intertrust standalone (excl. Elian) at constant currency and, for
FY, incl. Jan-Jun 2015 CorpNordic figures
* * See definitions
* ARPE, Adj. Revenue/FTE and Adj. EBITA/FTE in all tables shown in ? thousands
* Standalone 2016: Intertrust excl. Elian. Standalone 2015: includes Jul-Dec
2015 CorpNordic figures
Notes to Adjusted figures:
(1) Adjusted Revenue is Revenue adjusted for one-off revenue in 2015 which
consisted mainly of revenues related to the release of one-off provision(s).
(2) Adjusted EBITA is defined as EBITA before specific items and before one-
off revenue / expenses. Specific items of income or expense are income and
expense items that, based on their significance in size or nature, should be
separately presented to provide further understanding on financial performance.
Specific items include (i) transaction and monitoring costs of ?5.3 million in
2015 and ?4.2 million in 2016; (ii) integration costs of ?3.1 million in 2015
and ?8.5 million in 2016; (iii) income / (expenses) related to disposal of
assets of ?3.7 million in 2015 and (?0.5 million) in 2016 (iv) share-based
payment upon IPO and integration of ?4.4 million in 2015 and ?4.5 in 2016.
Specific items are not of an operational nature and do not represent core
operating results. One-off revenue consists mainly of revenues related to the
release of one-off provision. The one-off expenses are related to redundancies,
legal costs and settlement fees.
(3) Adjusted net income is defined as Adjusted EBITA less net interest costs
and less tax costs
(4) Adjusted earnings per share is defined as Adjusted net income divided by
the average number of shares outstanding at December 31, 2016. Average for Q4:
91,995,836. Average for FY2016: 88,942,943
Highlights Q4 2016
* Q4 revenue of ?120.7 million grew by 31.9% on a year-on-year basis including
Elian's contribution. Underlying revenue grew by 4.0% driven primarily by an
increase in clients' needs for more added-value services per entity.
* Luxembourg Q4 revenue was up sharply, 17.7% higher year-on-year as
sufficient billable employees were in place to absorb market growth and
address the Q3 backlog.
* Cayman Islands standalone revenue declined 10.2% in Q4 year-on-year while
net entity outflow during Q4 was 207 compared to 1,891 over the first nine
months of 2016 and compared to 1,413 net outflow in Q4 2015.
* Elian contributed ?26.9 million in revenue and ?9.2 million in Adjusted
EBITA over Q4, slightly behind initial management estimates. Performance of
Elian's capital markets business was strong, with Jersey operations
experiencing some weakness related to Brexit. Elian continued its track
record of high single digit constant currency revenue growth on an annual
basis.
* The integration of Elian continued in Q4 and is on track for completion in
2018, with expected run-rate synergies of £10.4 million to be achieved by
year-end 2018.
* Standalone adjusted EBITA margins were maintained at 41.5%. Including
Elian's lower margin profile and on an adjusted basis, group margins
decreased by 153bps to 39.9%.
* Net debt decreased to ?758.5 million at end Q4 (from ?771.1 million at end
Q3). The net debt leverage ratio decreased from 3.79x (end Q3) to 3.72x (end
Q4). An interim dividend amounting ?22.1 million was paid out in November
2016.
Highlights FY 2016
* In FY 2016, revenue grew 11.9% to ?385.8 million. Underlying revenue grew by
3.0%, with growth in Luxembourg and the Netherlands of 7.4% and 4.3%
respectively, while Cayman's revenue decline of 10.6% on a constant currency
basis had a significant impact.
* EBITA for the year was ?135.9 million (35.2% margin). EBITA margin of 35.2%
included ?17.9 million in one-off costs mainly related to the Elian
acquisition. Underlying EBITA margin was down slightly by 16bps to 40.3%
year-on-year due to the decrease in Cayman margin which could not be fully
compensated by the increase in Luxembourg margin.
* The number of entities worldwide on a standalone basis decreased by 5.4%
during the year of which the majority due to end-of-life with the remainder
being due to portfolio optimisation, loss to competition, compliance
reasons, bad debtors and insourcing. Underlying ARPE showed growth of 8.9%.
This was driven by both a decrease in entities as a result of loss of low-
ARPE entities to competitors and end-of-life and an increase in added-value
services stemming from increased regulatory complexity and substance
requirements.
* The Elian acquisition and our strategic focus on investing in people enabled
us to increase the number of full-time equivalent employees (FTEs) at year-
end to 2,359. Average revenue per FTE increased by 1.3% on a standalone
basis. At year-end 2016 we had 75.4% billable employees.
* Cash from operating activities was ?152.4 million. The cash conversion
ratio, excluding strategic capital expenditures, was 94.5%.
* Net Income was ?52.0 million or ?113.2 million on an adjusted basis. The
main adjustments were Elian-transaction related costs (total ?17.9 million),
depreciation and amortisation (?33.8 million), and forex (?9.6 million).
* Earnings per share were ?0.58 based on the average number of shares
outstanding over the year (88,942,943).
Market trends 2016
Management estimates that the market continued to grow in line with 2015 rates,
with increasing ARPE being the primary component driving growth. This growth in
ARPE is the result of an increase in regulation and more complexity, leading to
more reporting requirements for clients. Management believes that entity
creation may have been negatively impacted by global political uncertainty which
contributed to a decrease in deal-making worldwide.
Demand by regulators for transparency increased following the Panama Papers,
contributing to pressure on smaller Trust and Corporate Services providers in
some jurisdictions.
Guidance
The guidance below pertains to 2017. Management will update the medium term
guidance at our first Capital Markets Day on September 21, 2017.
* Underlying revenue growth for 2017 is expected to be between 4-5%.
* Underlying EBITA margins in 2017 are expected to expand slightly due to
synergies and continued operating leverage, which will compensate for the
margin pressure inherent to Elian's lower margin profile. This will result
in expected adjusted EBITA margin being roughly stable versus 2016 (39.9%).
* Dividend policy over 2017 continues to be 40-50% of adjusted net income.
* Previous guidance on synergies (£10.4 million by end CY 2018E, of which 75%
by end CY 2017E), capex (2-2.5% of revenue), effective tax rate (circa
16%), and cash conversion (in line with historical rates) remain unchanged.
Performance in key jurisdictions
The figures in this press release are shown in a manner consistent with
Intertrust's historical reporting for comparability. Due to integration of
Elian, as of Q1 2017 Intertrust will no longer break out Elian results but will
use the following segmentation: the Netherlands, Luxembourg, Jersey, Cayman
Islands, and Rest of World (ROW) whereby Guernsey will become a part of ROW.
The Netherlands (Intertrust standalone)
Q4 2016 Q4 2015 % Change FY 2016 FY 2015 % Change
-------------------------- -------------------------
Adjusted Revenue (?m) 28.8 28.6 0.8% 116.9 112.1 4.3%
Adjusted EBITA (?m) 18.1 17.7 2.4% 74.8 71.8 4.2%
Adjusted EBITA margin 62.8% 61.8% 104bps 64.0% 64.1% -8bps
FTEs 438 414 5.8%
Number of entities
(000's) 4.2 4.5 -6.5%
ARPE 27.9 25.0 11.5%
Adj. Revenue/FTE 267.1 270.9 -1.4%
Adj. EBITA/FTE 170.9 173.6 -1.5%
In the Netherlands, we maintained our position as market leader. Based on the
number of incorporations of Dutch entities by trust and corporate services
providers, we estimate an increase in our market share. Increasingly strict
regulation by the Dutch Central Bank has contributed to a decrease in the number
of service providers in the Netherlands, a trend which is expected to continue.
In the Netherlands, we achieved year-on-year Adjusted Revenue growth of 0.8% in
Q4 and 4.3% for the year driven by solid growth in corporate services, despite a
slowdown from specialised services due to timing. A write-down of Work-in-
Progress (WIP) of ?1.2 million in Q4 has impacted the growth rate of the
Netherlands. Inflow of entities in 2016 was in line with expectations and
similar to 2015, largely driven by new entities from existing clients as well as
inflow from US clients. Outflow was largely driven by end-of-life and
administrative clean-up but also impacted by insourcing. ARPE grew by 11.5% in
FY 2016 to ?27.9 k driven by transaction monitoring services, substance-related
services as well as a mix effect.
The Netherlands Adjusted EBITA margin expanded by 104bps to 62.8% in Q4 year-on-
year and was flat over the full year (-8bps) at 64.0%.
Luxembourg (Intertrust standalone)
Q4 2016 Q4 2015 % Change FY 2016 FY 2015 % Change
-------------------------- -------------------------
Adjusted Revenue (?m) 23.5 19.9 17.7% 80.9 75.3 7.4%
Adjusted EBITA (?m) 13.7 10.2 35.1% 43.2 37.8 14.4%
Adjusted EBITA margin 58.4% 50.9% 752bps 53.4% 50.1% 323bps
FTEs 388 383 1.4%
Number of entities
(000's) 2.7 2.6 3.7%
ARPE 30.3 29.3 3.6%
Adj. Revenue/FTE 208.6 196.9 5.9%
Adj. EBITA/FTE 111.3 98.7 12.8%
In Luxembourg, we maintained our position as number two in the market overall,
but were number one in terms of new incorporations. In Luxembourg, we achieved
Adjusted revenue growth of 17.7% in Q4 year-on-year and 7.4% in 2016, driven
mostly by a higher billing ratio and more available hours due to the successful
on-boarding of new billable employees.
Adjusted EBITA in Luxembourg grew 35.1% year-on-year in Q4 and 14.4% year-on-
year for FY 2016, relating to margin increases of 752bps year-on-year in Q4 and
323bps year-on-year in FY 2016. These margin improvements resulted from a 7.4%
increase in FY 2016 Adjusted revenue, staff expenses remaining flat due to
stable year-on-year FTE numbers as well as strong cost control measures.
The number of client entities grew 3.7% year-on-year in 2016, with particularly
strong inflows of new entities from existing Intertrust clients.
Cayman Islands (Intertrust standalone)
Q4 Q4 % % Change FY FY % % Change
2016 2015 Change (Constant 2016 2015 Change (Constant
Currency) Currency)
--------------------------------- ------------------------------
Adjusted
Revenue
(?m) 14.8 16.2 -9.1% -10.2% 52.7 58.8 -10.4% -10.6%
Adjusted
EBITA
(?m) 8.9 10.1 -11.6% -12.7% 30.5 35.2 -13.3% -13.5%
Adjusted
EBITA
margin 60.3% 62.0% -174bps -174bps 58.0% 59.9% -195bps -195bps
FTEs 125.7 139.5 -9.9%
Number of
entities
(000's) 15.5 17.6 -11.9%
ARPE 3.4 3.3 1.7% 1.5%
Adj.
Revenue/FTE 419.0 421.5 -0.6% -0.8%
Adj.
EBITA/FTE 243.0 252.7 -3.8% -4.1%
Although we saw increased competition in the Cayman Islands, we maintained our
number two position and saw a settling of the landscape in the second half of
the year. In the Cayman Islands, on a constant currency basis, Adjusted revenue
declined 10.2% in Q4 year-on-year and 10.6% for FY 2016 year-on-year, driven by
the decline of registered office entities (largely as a result of the re-entry
of a competitor) but also impacted by the sale of our representative banking
activities at the end of 2015.
At constant currency, Adjusted EBITA declined 12.7% year-on-year in Q4 and
13.5% year-on-year for FY 2016, resulting in margin decline to 60.3% for the
quarter.
Cayman standalone net entity outflow during Q4 was limited to 207 versus total
net outflow over the first nine months of 1,891 and 1,413 net outflow in Q4
2015. Developments in Q4 and the beginning of 2017 show continued improvement in
Intertrust Cayman's market position.
Elian
Q4 2016 FY 2016
----------- ----------
Adjusted Revenue (?m) 26.9 28.5
Adjusted EBITA (?m) 9.2 9.7
Adjusted EBITA margin 34.1% 34.1%
FTEs 606
Number of entities (000's) 14.0
Intertrust completed the acquisition of Elian in September 2016 in order to
bolster its capabilities in capital markets and funds services. As a result of
the acquisition, Intertrust became a leading service provider in Jersey, and
added scale in key locations such as Ireland, the United Kingdom, and Cayman
Islands. The Elian integration is progressing well. Elian was rebranded to
Intertrust in December 2016 and as of January 2017 all office moves have been
completed.
Since the September 23, 2016 closing of the transaction, Elian contributed
revenue of ?28.5 million and Adjusted EBITA of ?9.7 million. Based on management
estimates, Elian FY 2016 revenue was £92.2 million and EBITA was £30.4 million.
Elian performance was slightly below management's initial estimates, with
specifically Jersey impacted by a slowdown of business as a result of the
uncertainty surrounding Brexit. The capital markets business showed good growth
overall, specifically in the UK. Overall, management estimates that Elian showed
high single digit revenue growth for the FY 2016.
Rest of the World (ROW)
* Guernsey (Intertrust standalone)
Q4 Q4 % % Change FY FY % % Change
2016 2015 Change (Constant 2016 2015 Change (Constant
Currency) Currency)
--------------------------------- -----------------------------
Adjusted
Revenue (?m) 6.7 6.7 -0.3% 20.2% 27.7 27.9 -0.9% 11.9%
Adjusted
EBITA (?m) 2.4 2.8 -14.5% 3.6% 10.6 10.1 4.4% 17.9%
Adjusted
EBITA margin 36.1% 42.1% -600bps -600bps 38.2% 36.2% 192bps 192bps
FTEs 123 122 0.8%
Number of
entities
(000's) 2.4 3.3 -26.6%
ARPE 11.3 8.4 35.1% 52.6%
Adj.
Revenue/FTE 225.0 228.8 -1.7% 11.0%
Adj.
EBITA/FTE 85.9 82.9 3.5% 12.9%
Intertrust Guernsey continued to gain market share and is now market leader.
In Guernsey during Q4, on a constant currency basis, Adjusted revenue grew
20.2% year-on-year, driven mainly by an increase in regulatory and compliance
services.
On a constant currency basis, Adjusted EBITA margin for FY 2016 increased by
192bps driven mainly by increased revenue, however decreased by 600bps in Q4
year-on-year as Q4 2015 benefitted from a release of provisions.
In FY 2016 there was a net outflow of 885 client entities, due to a combination
of end of life, and proactive management of our client portfolio in line with
our objective of focussing on the provision of added-value services to complex
client structures.
* Rest of World (excl. Guernsey) (Intertrust standalone)
Q4 Q4 % % Change FY FY % % Change % Change
2016 2015 Change (Constant 2016 2015 Change (Constant (Underlying*)
Currency) Currency)
------------------------------- --------------------------------------------
Adjusted
Revenue
(?m) 20.1 20.0 0.8% 0.9% 79.1 70.8 11.8% 12.7% 3.9%
Adjusted
EBITA (?m) 6.0 6.3 -4.9% -4.9% 25.3 22.0 15.4% 16.2% 9.5%
Adjusted
EBITA
margin 29.9% 31.7% -185bps -182bps 32.0% 31.1% 99bps 96bps 163bps
FTEs 541 522 3.5%
Number of
entities
(000's) 13.1 12.1 8.4%
ARPE 6.0 5.8 3.2% 4.0%
Adj.
Revenue/FTE 146.4 135.2 8.2% 9.1%
Adj.
EBITA/FTE 46.9 42.1 11.5% 12.2%
*Underlying: Intertrust standalone (excl. Elian) at constant currency and, for
FY, incl. Jan-Jun 2015 CorpNordic figures
Q4 revenue increased by 0.8% year-on-year and 0.9% at constant currency. Double
digit growth was reported by Spain, Ireland, UK, and Singapore. The revenue
growth and Adjusted EBITA margins of ROW were impacted in Q4 by a one-off write-
down of ?1.3 million in Switzerland.
FY revenue increased by 11.8% year-on-year and underlying revenue of ROW
increased by 3.9%. FY Adjusted EBITA increased by 15.3% year-on-year and
underlying EBITA growth was 9.5%.
The number of entities increased by 8.4% in 2016, driven mainly by the inflow of
lower revenue generating entities in Delaware. The number of higher value
entities remained stable. As a consequence, ARPE increased only 4.0% year-on-
year at constant currency.
Group HQ and IT (Intertrust standalone)
Q4 2016 Q4 2015 % Change FY 2016 FY 2015 % Change
-------------------------- -------------------------
Group HQ and IT costs -10.2 -9.2 10.7% -40.4 -36.5 10.6%
Group HQ and IT costs in Q4 & FY increased by ?1 million and ?3.9 million year-
on-year respectively. The increase is largely driven by IT and mainly comes from
outsourcing cost, IT staff expenses in order to support the business and higher
software amortisation costs due to capitalisation of software investments.
Clients (Intertrust standalone)
Management estimates that revenue per service segment at year end 2016 comprised
circa 48% corporate services, 23% funds services, 12% capital markets services
and 16% private client services. 41% of our FY 2016 revenue came from North
American clients, 39% from European clients, 10% from Asian clients, 3% from
South American clients, and 8% from clients in Rest of World. Client
concentration remains unchanged with no single client accounting for more than
1% of Intertrust's total revenue over FY 2016.
Financial Calendar
+------------------+-----------------------------------------------------------+
|Date |Event |
+------------------+-----------------------------------------------------------+
| |Publication of Annual Report 2016 and audited financial |
|April 3, 2017 |statements |
+------------------+-----------------------------------------------------------+
|May 4, 2017 |Q1 2017 results |
+------------------+-----------------------------------------------------------+
|May 16, 2017 |Intertrust N.V. AGM |
+------------------+-----------------------------------------------------------+
|May 18, 2017 |Intertrust NV share quotation ex-final dividend 2016 |
+------------------+-----------------------------------------------------------+
|May 19, 2017 |Record date final dividend 2016 entitlement |
+------------------+-----------------------------------------------------------+
|June 12, 2017 |Payment date final dividend 2016 |
+------------------+-----------------------------------------------------------+
| |Q2 & Half Year 2017 results & announcement of interim |
|August 24, 2017 |dividend |
+------------------+-----------------------------------------------------------+
|September 21, 2017|Capital Markets Day |
+------------------+-----------------------------------------------------------+
|November 9, 2017 |Q3 2017 results |
+------------------+-----------------------------------------------------------+
Press and analyst calls
Today, Intertrust's CEO David de Buck and CFO Maarten de Vries will hold a:
* Press call at 09:30 am CET
* Analyst / investor call at 1:00 pm CET. A webcast of the call will be
available on the company website. Details can be found at
https://www.intertrustgroup.com/investors.
For further information
Intertrust N.V.
annelouise.metz(at)intertrustgroup.com
Anne Louise Metz Tel: +31 20 577 1157
Director of Investor Relations, Marketing & Communications
About Intertrust
Intertrust is the leading global provider of high-value trust, fund and
corporate services, with more than 2,500 employees located throughout a network
of 41 offices in 30 jurisdictions across Europe, the Americas, Asia and the
Middle-East. The Company delivers high-quality, tailored services to its clients
with a view to building long-term relationships. Intertrust's business services
offering is comprised of corporate services, fund services, capital market
services, and private wealth services. Intertrust has leading market positions
in selected key geographic markets of its industry, including the Netherlands,
Luxembourg, Jersey and the Cayman Islands. Intertrust works with global law
firms and accountancy firms, multi-national corporations, financial
institutions, fund managers, high net worth individuals and family offices.
Comparison of Unaudited Results for the Full Year 2016 and Full Year 2015
The following table and subsequent discussion summarises our financial
performance and certain operating results for Historical FY 2016 and Historical
FY 2015.
Intertrust N.V. - Consolidated Profit/Loss
(in ? millions) FY 2016 FY 2015
--------- --------
Revenue 385.8 344.6
Staff expenses -170.7 -144.9
thereof equity share-based payments upon -4.1 -4.4
IPO
thereof equity share-based payments upon -0.4 0.0
integration
Rental expenses -20.1 -17.2
Other operating expenses -50.5 -41.6
thereof transaction & monitoring costs -4.2 -5.3
thereof integration costs -8.5 -3.1
Other operating income 0.1 3.7
EBITDA 144.6 144.6
Depreciation & amortisation -42.5 -37.3
Profit/(loss) from operating activities 102.1 107.3
Net Finance costs -30.6 -100.7
Profit/(loss) before tax 71.5 6.6
Income tax -19.5 -4.0
Profit/(loss) from continuing operations 52.0 2.6
EBITDA to Adjusted EBITA Analysis
EBITDA 144.6 144.6
Transaction & monitoring costs 4.2 5.3
Integration costs 8.5 3.1
Other operating (income)/expense 0.5 -3.7
Equity share-based payments upon IPO 4.5 4.4
One off revenue 0.0 0.3
One-off expenses 0.3 -6.3
Adjusted EBITDA 162.5 147.6
Depreciation and software amortisation -8.7 -7.2
Adjusted EBITA 153.8 140.4
Revenue
Revenue increased by ?41.2 million or 11.9% year-on-year on a reported basis to
?385.8 million, driven by the acquisition of Elian which contributed 8.3% or
?28.5 million for the full year. Furthermore, Luxembourg, Netherlands and ROW
contributed an increase year-on-year of ?5.6 million, ?4.8 million and ?8.4
million respectively, whereby ROW benefitted from the full year contribution of
CorpNordic, versus 6 months in 2015. Revenue was negatively impacted by the
performance of Cayman (minus ?6.1 million), as a result of the re-entry of a
competitor. Guernsey decreased ?0.2 million year-on-year driven by the weakening
of the GBP.
Staff expenses
Staff expenses increased by ?25.8 million or 17.8% year-on-year to ?170.7
million, driven by a 15% increase of the average amount of full-time equivalent
employees, resulting from the acquisition of Elian and the full year inclusion
of CorpNordic in 2016 versus 6 months in 2015. Furthermore, 2015 staff expenses
also included ?6.7 million of one-off gain due to a reduction in pension
liabilities deriving from the change in our Dutch pension plan from a defined
benefit plan to a defined contribution scheme. Staff expenses comprised ?4.1
million of equity share-based payments upon IPO, presented in Specific items in
Intertrust's adjusted results.
Rental expenses
Rental expenses increased by ?2.9 million or 16.6% year-on-year to ?20.1
million. This can almost fully be attributed to the integration of Elian in
2016 and the full year inclusion of the rental expenses of CorpNordic in 2016.
Other operating expenses
Other operating expenses increased by ?8.9 million or 21.4% year-on-year to
?50.5 million. ?4.2 million of the increase is driven by higher Transaction &
monitoring costs and Integration costs as a result of the acquisition of Elian
in 2016 versus the costs in 2015 related to the IPO and the acquisition of
CorpNordic. Furthermore, an increase of ?2.9 million is the result of the
incorporation of Elian and the remainder is mainly caused by an increase in IT
expenses.
Other operating income
Other operating income decreased by ?3.6 million or 97.3% year-on-year to ?0.1
million.
The Operating income reported for Full Year 2015 consisted of indemnities
received from former shareholders in relation to tax settlements of past years,
along with the gain from the sale of the Cayman Bank operations.
EBITDA
As a result of the aforementioned factors, EBITDA remained at the same level as
2015 at ?144.6 million.
Depreciation and Amortisation
Depreciation and Amortisation charges increased by ?5.3 million year-on-year, or
14.1%, to ?42.5 million for FY 2016. The increase is driven by higher
amortisation and depreciation of software due to higher capital expenditure
relating to the implementation of the Business Application Roadmap (BAR) and
other IT projects and higher amortisation of intangibles related to the Elian
acquisition.
Profit/(Loss) from Operating Activities
As a result of the aforementioned factors, the Profit from operating activities
decreased by ?5.2 million year-on-year, or 4.8%, to ?102.1 million for FY 2016.
Net finance costs
The net finance costs decreased by ?70.1 million year-on-year or 69.6%, to ?30.6
million for FY 2016. This decrease is mainly due to the refinancing in October
2015 of the Senior Facilities, the Second Lien Facilities, using a combination
of proceeds from the primary offering, and a drawdown from new facilities and
the restructuring of shareholder loans.
Finance costs in FY 2016 of ?30.6 million include ?21.0 million bank interest
and other related costs and ?9.6 million of foreign exchange losses. Finance
costs in FY 2015 of ?100.7 million included ?47.0 million bank interest, ?7.0
million shareholder loan interest, a ?33.7 million write-off of financing fees
for the pre-IPO debt, ?5.5 million amortisation of financing fees, net foreign
exchange losses of ?1.6 million, as well as expenses relating to the termination
of the pre-IPO debt and other costs of ?5.9 million.
Income tax
Income tax expense increased by ?15.5 million year-on-year to an income tax
charge of ?19.5 million for FY 2016. The increase was primarily the result of
the increase of the profit before income tax by ?64.9 million.
In FY 2016 the income tax rate as a percentage of Profit before taxes was 27.3%
and was impacted by non-tax-deductible interest expenses in the fiscal unity of
Intertrust Luxembourg and non-tax-deductible specific items (transaction costs
related to Elian acquisition and share-based payment expenses).
Profit/(Loss) for FY 2016
As a result of the foregoing factors, the profit for the period increased by
?49.3 million year-on-year to ?52 million for FY 2016 from ?2.6 million for FY
2015.
Balance Sheet
Intertrust N.V.
In ? millions 31.12.2016 31.12.2015
Assets
Property, plant and equipment 20.2 11.3
Intangible assets 1,580.5 1,064.5
Investments in equity-accounted investees 0.7 0.3
Other non current financial assets 3.8 4.1
Deferred tax assets 2.5 7.1
--------------------------
Non-current assets 1,607.7 1,087.2
--------------------------
Trade receivables 99.2 81.0
Other receivables 15.0 16.5
Work in progress 32.0 18.0
Current tax assets 0.9 0.7
Other current financial assets 1.6 1.2
Prepayments 8.2 5.4
Cash and cash equivalents 69.9 80.5
--------------------------
Current assets 226.8 203.2
--------------------------
--------------------------
Total assets 1,834.4 1,290.4
--------------------------
Equity
Share capital 55.2 51.1
Share premium 630.4 513.4
Reserves 42.3 0.1
Retained earnings 29.9 (2.5)
Equity attributable to owners of the Company 757.9 562.2
Non-controlling interests 1.9 0.1
--------------------------
Total equity 759.8 562.3
--------------------------
Liabilities
Loans and borrowings 781.2 523.7
Other non current financial liabilities 1.8 0.0
Employee benefits liabilities 3.1 2.8
Deferred income 8.7 8.3
Provisions 1.1 0.8
Deferred tax liabilities 85.7 72.3
--------------------------
Non-current liabilities 881.5 607.9
--------------------------
Loans and borrowings 18.1 0.1
Trade payables 10.6 6.2
Other payables 67.0 54.9
Deferred income 71.5 46.7
Provisions 2.2 1.0
Current tax liabilities 23.7 11.1
--------------------------
Current liabilities 193.1 120.1
--------------------------
--------------------------
Total liabilities 1,074.6 728.1
--------------------------
--------------------------
Total equity & liabilities 1,834.4 1,290.4
--------------------------
Cash flow statement
In ? millions FY 2016 FY 2015
----------------
Net cash from operating activities 152.4 127.5
Net cash from/(used in) investing activities (182.1) (34.2)
Net cash from/(used in) financing activities 22.5 (51.0)
----------------
Net changes in cash and cash equivalents (7.2) 42.3
----------------
Cash and cash equivalent at the begining of the period 66.5 23.2
----------------
Effect of exchange rate fluctuations on cash held (7.5) 1.0
----------------
Cash attributable to the Company at the end of the period 51.7 66.5
----------------
Cash held on behalf of clients at the end of the period 18.1 14.0
----------------
Cash and cash equivalents at the end of the period 69.9 80.5
----------------
Forward-looking statements and presentation of financial and other information
This press release may contain forward looking statements with respect to
Intertrust's future financial performance and position. Such statements are
based on Intertrust's current expectations, estimates and projections and on
information currently available to it. Intertrust cautions investors that such
statements contain elements of risk and uncertainties that are difficult to
predict and that could cause Intertrust's actual financial performance and
position to differ materially from these statements. Intertrust has no
obligation to update or revise any statements made in this press release, except
as required by law.
This press release includes unaudited financial information and financial
information is presented on adjusted basis before specific items and one-off
revenues/expenses. The financial statements have not yet been issued or
approved. The audited financial statements and annual report will be available
on April 3, 2017.
Definitions
Adjusted EBITDA is defined as EBITDA before specific items and before one-off
revenue / expenses. Specific items of income or expense are income and expense
items that, based on their significance in size or nature, should be separately
presented to provide further understanding about financial performance. Specific
items include (i) transaction and monitoring costs; (ii) integration costs;
(iii) income / expenses related to disposal of assets; and (iv) share-based
payment upon IPO. Specific items are not of an operational nature and do not
represent core operating results. One-off revenue consists mainly of revenue
related to the release of one-off provisions. The one-off expenses are related
to redundancies, legal costs and settlement fees.
Adjusted EBITA is defined as Adjusted EBITDA after depreciation and software
amortisation.
Adjusted EBITA margin is defined as Adjusted EBITA divided by Adjusted revenue,
and is expressed as a percentage.
Adjusted net income is defined as Adjusted EBITA less net interest costs and
less tax costs
Adjusted net income per share is defined as Adjusted net income divided by the
average number of shares outstanding at December 31, 2016.
Average for Q4: 91,995,836 shares. Average for FY2016: 88,942,943 shares.
Adjusted revenue is defined as revenue adjusted for one-off revenue as defined
under Adjusted EBITDA.
Capital expenditure is defined as investments in property, plant, equipment and
software not related to acquisitions.
Cash conversion ratio including strategic capital expenditures is defined as
Adjusted EBITDA less capital expenditure, including strategic capital
expenditures, divided by Adjusted EBITDA and is expressed as a percentage
Cash conversion ratio excluding strategic capital expenditures is defined as
operating free cash flow divided by Adjusted EBITDA and is expressed as a
percentage.
CC is Constant Currency
EBITDA is defined as earnings before interest, taxes, depreciation and
amortisation.
Net debt leverage ratio is defined as Total net debt divided by the adjusted
EBITDA of Intertrust (including Elian Q4 contribution) and the adjusted EBITDA
January-September 2016 proforma contribution of Elian and full year run-rate
synergies of £10.4 million related to the Elian acquisition.
Net interest is defined as Net finance cost excluding Forex gains and losses
Operating free cash flow is defined as Adjusted EBITDA less capital expenditure,
excluding strategic capital expenditures. We define strategic capital
expenditures as capital expenditures relating to the Business Application
Roadmap, or relating to investments in IT infrastructure in connection with the
Business Application Roadmap.
Underlying is Intertrust standalone (excluding Elian) at constant currency and,
for FY, including January-June 2015 CorpNordic figures.
Intertrust NV Press release - FY 2016 Results - vFINAL:
http://hugin.info/171118/R/2077528/781591.pdf
This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Intertrust Group via GlobeNewswire
Unternehmensinformation / Kurzprofil:
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" alt="First Global Announces Non-Brokered Private Placement of UnitsDatum: 10.02.2017 - 07:15 Uhr
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News-ID 523318
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