Published by Gbaf News
Posted on November 8, 2014
The GFT Group continued to build on its positive first half-year results, with strong growth in revenue and earnings in the third quarter. IT consulting and service activities for the finance sector were driven in particular by increased banking regulations and the digitisation of business processes.
In the first nine months of 2014, the GFT Group recorded revenue growth of 38 percent to EUR 255.20 million (prev. year: EUR 185.44 million). This dynamic revenue trend resulted from strong organic growth in the GFT division, as well as from the acquisition in mid-2013 of Sempla (now GFT Italia) and of Rule Financial in mid-2014, which was included in the consolidated income statement for the first time in the third quarter of 2014. The GFT Group generated significant revenue growth of 87 percent to EUR 78.88 million in the UK (prev. year: EUR 42.27 million) and the USA, where revenue more than doubled to EUR 16.81 million (prev. year: EUR 7.14 million). Earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 84 percent to EUR 24.06 million in the first nine months (prev. year: EUR 13.05 million). Pre-tax earnings (EBT) also improved strongly by 71 percent to EUR 19.19 million (prev. year: EUR 11.21 million). With earnings after tax (EAT) of EUR 13.85 million (prev. year: EUR 8.38 million), earnings per share rose to EUR 0.53 (prev. year: EUR 0.32).
Dedicated to delivering IT services for the finance sector, the GFT division raised revenue by 62 percent to EUR 191.45 million in the first nine months (prev. year: EUR 117.82 million). Adjusted for the revenue contributed by GFT Italia of EUR 33.42 million (prev. year: EUR 10.20 million) and by Rule Financial of EUR 18.75 million (both integrated into this division), GFT posted organic growth of 29 percent. The key growth drivers were increasing regulatory compliance requirements – especially in the investment banking sector. The GFT division’s share of consolidated revenue rose to 75 percent (prev. year: 64 percent). In the first nine months of 2014, the pre-tax earnings contribution (EBT) of the GFT segment improved by 54 percent to EUR 19.48 million (prev. year: EUR 12.62 million), corresponding to an operating margin of 10.2 percent (prev. year: 10.7 percent).
With its services for the staffing of technology projects, the emagine division achieved revenue of EUR 63.74 million in the first nine months – 6 percent down on the same period last year (EUR 67.61 million). The division’s share of total Group revenue fell to 25 percent (prev. year: 36 percent). Despite lower revenues, pre-tax earnings (EBT) of this division more than doubled to EUR 1.17 million (prev. year: EUR 0.48 million). The operating margin rose to 1.8 percent (prev. year: 0.7 percent).
“Growing compliance regulations and changes in the banking sector’s necessary digitisation strategies are continuing to drive our IT consulting and services business,” says Ulrich Dietz, CEO of GFT Technologies AG. “Our two company acquisitions have greatly strengthened the Group’s international presence and portfolio of services in this field. The integration of the recently acquired Rule Financial is making encouraging progress and strengthening our consulting expertise for investment banks – a sector particularly affected by new regulations. We have therefore upgraded our targets for 2014.”
The recent selective acquisitions and strong organic growth have significantly strengthened the GFT division and broadened its portfolio. The GFT Group intends to maintain this growth strategy – especially for the GFT division. Against this backdrop, the strategic options for the emagine division are currently being evaluated. The GFT Group has therefore commissioned an investment bank to identify potential investors.
Headcount grows to over 3,100
As of 30 September 2014, the GFT Group had 3,101 full-time employees – representing growth of 53 percent or 1,072 persons compared to the prior-year figure (2,029). The increase was due to the acquisition of Rule Financial as well as to numerous hirings at nearshore development centres in Spain (up by 283 to 1,291 employees) and Brazil (up by 88 to 252 employees) due to high capacity utilisation. There was also strong growth in headcount in the UK (up 186 to 231) and the USA (up 50 to 76) due in part to the Rule Financial acquisition.
Full-year guidance for 2014 upgraded
Due to further dynamic growth during the course of the third quarter and the expected carry-over of this growth in the fourth quarter in virtually all GFT markets and customer groups, the GFT Group made the following ad-hoc disclosure on 29 October 2014: The GFT Group has upgraded its annual EBITDA forecast from EUR 29.50 million to EUR 32.00 million (increase of EUR 2.50 million) and its annual EBT forecast from EUR 23.00 million to EUR 26.00 million (increase of EUR 3.00 million). The company has also upgraded its revenue forecast for the 2014 financial year to EUR 360.00 million (previously: EUR 352.00 million).
Detailed financial figures are available in the Investor Relations section of the GFT website at http://www.gft.com/ir.
Key figures (deviations possible due to rounding differences)
| IFRS figures in EUR million | 01.01.-30.09.2014 | 01.01.-30.09.2013 |
| Revenue | 255.20 | 185.44 |
| EBITDA | 24.06 | 13.05 |
| EBIT | 19.74 | 11.27 |
| Earnings before taxes (EBT) | 19.19 | 11.21 |
| Net income for the period | 13.85 | 8.38 |
| Earnings/share acc. to IAS 33 in EUR | 0.53 | 0.32 |
| Equity ratio | 33 percent (30.09.2014) | 42 percent (31.12.2013) |
| Employees (full-time) as of 30 Sept | 3,101 | 2,029 |
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