Nets A/S: Financial results for Q2 2017
(Thomson Reuters ONE) -
Company announcement
No. 24/2017
Financial results for Q2 2017
Highlights for Q2 2017
* Solid organic growth in net revenue of 5%, driven by strong growth in both
Merchant Services and Corporate Services with organic growth of 10% and 3%,
respectively. Organic growth in Financial & Network Services was 2%
negatively impacted by high implementation revenues in Q2 last year. Organic
revenue growth in H1 2017 was 6%
* Transaction volumes showed strong growth across all business segments,
particularly within issuer processing and e-bill payment solutions
* EBITDA b.s.i. was up 6.8% compared to Q2 2016, equivalent to a margin
expansion of 100 basis points to 36.0%. For H1 2017, EBITDA b.s.i. margin
was 34.5%, an improvement of 110 basis points compared to the same period
last year
* Adjusted net profit amounted to DKK 389 million, equivalent to an increase
of 84.4% compared to Q2 2016. In H1 2017, adjusted net profit was DKK 742
million, compared to DKK 362 million in H1 last year
* Capital expenditure ratio was 10.7% in Q2 2017 and 9.3% in H1 2017
* Operating free cash flow was DKK 371 million down by 11% compared to Q2
2016 due to higher investments as expected. Operating free cash flow in H1
2017 was DKK 621 million, up 16% compared to last year
* Cash conversion of 73% down by 200 basis points compared to Q2 2016 due to
higher investments
* The capital structure was unchanged from Q1 2017 with a net interest-bearing
debt / EBITDA b.s.i. of 3.1x at the end of Q2 2017, including the effect of
the acquisition of OP's Merchant acquiring business and share-buyback
programme
* Guidance for 2017 is reiterated for all parameters except special items
which is changed from DKK 150 million to approx. DKK 200 million. The
increase primarily relates to the evaluation of options in connection with
the interest in buying Nets and higher cost related to the transformation of
technology. Special items, with exception of approx. DKK 30 million related
to the IPO, are still expected to be finalised by the end of 2017
Bo Nilsson, CEO of Nets, said,
"I am pleased to report a solid organic growth in Q2 of 5% driven by strong
growth in transactions and volumes across all business segments. The growth was
as expected lower than previous quarters due to the high implementation revenues
in Financial & Network Services last year. I am furthermore pleased that our
transformation of Nets continues to deliver solid margin expansion"
Financial performance
Q2 Q2 Change H1 H1 Change FY
DKKm 2017 2016 2017 2016 2016
Revenue, net 1,919 1,844 4.1% 3,816 3,587 6.4% 7,385
EBITDA before special items 690 646 6.8% 1,316 1,197 9.9% 2,619
Special items (40) (105) (61.9%) (124) (245) (49.4%) (606)
Adjusted EBIT 594 542 9.6% 1,134 1,002 13.2% 2,203
Net profit 333 163 104.3% 535 23 2,226.1% (584)
Adjusted net profit 389 211 84.4% 742 362 105.0% 997
------------------------------------------------------------------------- ------
Organic growth 5% 7% 6% 6% 7%
EBITDA before special items
margin 36.0% 35.0% +1.0 pp 34.5% 33.4% +1.1 pp 35.5%
EBITDA margin 33.9% 29.3% +4.6 pp 31.2% 26.5% +4.7 pp 27.3%
Capital expenditure/revenue 10.7 % 8.7 % +2.0 pp 9.3 % 8.2 % +1.1 pp 9.0 %
Net interest-bearing debt /
LTM EBITDA bsi 3.1x 3.2x
--------------------------------------------------------------------------------
Outlook
-------------------------------------------------------------------------------
Targets Guidance 9 May 2017 Guidance 17 August 2017
FY 2017 FY 2017
-------------------------------------------------------------------------------
Organic revenue growth 5-6% 5-6%
-------------------------------------------------------------------------------
EBITDA b.s.i. margin At or above 36.5% At or above 36.5%
-------------------------------------------------------------------------------
Special items (including DKK 150 million, which of DKK 200 million, which of
IPO-related retention approx. DKK 30 million is approx. DKK 30 million is
expenses) IPO-related IPO-related
-------------------------------------------------------------------------------
Capital expenditure Around 8% Around 8%
incurred
(% of net revenue)
-------------------------------------------------------------------------------
Net interest-bearing debt Around 2.5x, including Around 2.5x, including
/ EBITDA b.s.i. effect of share buyback effect of share buyback
of approx. DKK 150 of approx. DKK 150
million to cover long- million to cover long-
term incentive programme term incentive programme
and including acquisition and including acquisition
of OP's merchant of OP's merchant
acquiring business acquiring business
-------------------------------------------------------------------------------
Additional information
Conference call
In connection with the publication of the results for Q2 2017, Nets will host a
conference call on Thursday, 17 August 2017, from 10:00 to 11:00 am CET. The
conference call can be followed live via the company's website,
https://investor.nets.eu
Dial-in details for investors and analysts:
Participants, DK: +45 32 71 16 60
Participants, UK: +44(0)20 3427 1919
Participants, US: +1 646 254 3362
Confirmation code: 8978598
For further information, please contact:
For media enquiries:
Karsten Anker Petersen, Head of Communications, at +45 29 48 78 83 or
kapet(at)nets.eu
For investor and analyst enquiries:
Lars Oestmoe, Head of M&A and IR, at +47 91 34 71 77 or lostm(at)nets.eu
Financial calendar
* 9 November 2017: Interim Report for Q3 2017
Forward-looking statements
This report contains forward-looking statements, including, but not limited to,
the statements and expectations contained in the outlook section. Forward-
looking statements are statements (other than statements of historical fact)
relating to future events and Nets' anticipated or planned financial and
operational performance. The words 'may', 'will', 'will continue', 'should',
'expect', 'foresee', 'anticipate', 'believe', 'estimate', 'plan', 'predict',
'intend' or variations of these words, including negatives thereof, as well as
other statements regarding matters that are not historical fact or regarding
future events or prospects, constitute forward-looking statements. Nets has
based these forward-looking statements on its current views with respect to
future events and financial performance. These views involve a number of risks
and uncertainties, which could cause actual results to differ materially from
those predicted in the forward-looking statements and from the past performance
of Nets. Although Nets believes that the estimates and projections reflected in
the forward-looking statements are reasonable, they may prove materially
incorrect, and actual results may materially differ, e.g. as the result of risks
related to the industry in general or to Nets in particular, including those
described in Nets Annual Report 2016.
Factors that may affect future results include, but are not limited to, global
and economic conditions, including currency exchange rate and interest rate
fluctuations, delay or failure of projects related to research and/or
development, unexpected contract breaches or terminations, unplanned loss of
patents, government-mandated or market-driven price decreases for Nets'
products, introduction of competing products, reliance on information
technology, Nets' ability to successfully market current and new products,
exposure to product liability, litigation and investigations, regulatory
developments, actual or perceived failure to adhere to ethical marketing
practices, unexpected growth in costs and expenses, failure to recruit and
retain the right employees, and failure to maintain a culture of compliance.
As a result, forward-looking statements should not be relied on as a prediction
for actual results. Nets undertakes no obligation to update or revise any
forward-looking statements, neither because of new information, nor because of
future events or otherwise, except to the extent required by law.
Information on Nets
Nets is a leading provider of digital payment services and related technology
solutions across the Nordic region. Nets sits at the centre of the digital
payments ecosystem and operates a deeply entrenched network, which connects
merchants, corporate customers, financial institutions and consumers enabling
them to make and receive payments as well as, increasingly, utilise value-added
services to help them improve their respective activities.
Nets Q2 Company Announcement_FINAL:
http://hugin.info/173023/R/2127716/812555.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: Nets A/S via GlobeNewswire
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