IBS Group Reports Operating Results for the Quarter and Nine Months Ended December 31, 2012 PR Newswire RAMSEY, The Isle of Man, March 4, 2013 RAMSEY, The Isle of Man, March 4, 2013 /PRNewswire/ -- Please refer to the relevant legal information at the end of this document IBS Group Holding Limited (IBSG:GR; IBSGq.DE), a leading software developer and IT services provider in Central and Eastern Europe, today announced its preliminary unaudited operating results for the third quarter of the financial year ending March 31, 2013 as well as the nine month period ending December 31, 2012 (3Q and 9M FYE March 31, 2013). 9M FYE March 31, 2013 highlights *Consolidated revenues totaled US$672.0 mn, a 6.1% increase y-o-y, with comparable revenues* growth of 11.6% y-o-y. *Revenues in the IT Services segment came to US$390.5 mn up 1.6% y-o-y. Segment's comparable revenues* growth amounted to 10.6% in US$ terms and 12.8% in Russian Ruble terms. *Revenues in the Software Development segment amounted to US$228.5, up by 15.1% in US$ terms and 19.3% in constant currency terms. *Revenues generated in Europe and North America amounted to US$214.4 mn, and now account for 31.9% of consolidated Group revenues against 29.4% a year ago. *Our headcount reached 8,473, as we added 482 IT professionals. The increase was driven by the expansion of the delivery centers in Software Development segment. *Total debt amounted to US$54.3 mn, a decline of US$1.5 mn y-o-y. Net debt position came to US$12.9 mn, down US$3.7 mn y-o-y. *Consolidated revenues growth guidance for FYE March 31, 2013 is reiterated to be in the range of 9-13% in US$ terms. * Comparable revenues defined as revenues that exclude results of OOO Borlas Group for the FYE March 31, 2012. Consolidated revenues by segment ^[ ^* ^] ^, ^[ ^* ^* ^] 3Q FYE 3Q FYE 9M FYE 9M FYE March March March March 31, 31, Change 31, 31, Change US$ mn 2013 2012 y-o-y 2013 2012 y-o-y Consolidated revenues 294.1 276.6 6.3% 672.0 633.2 6.1% Consolidated revenues (ex-disposals) 294.1 264.7 11.1% 672.0 602.0 11.6% IT Services segment 189.7 187.0 1.4% 390.5 384.3 1.6% IT Services segment, (ex-disposals) 189.7 174.8 8.5% 390.5 353.2 10.6% IT Services segment, RUB mn . (ex-disposals) 5 603 5 490 +2.1% 11 974 10 617 12.8% Software Development segment 83.3 70.7 17.9% 228.5 198.5 15.1% Software Development, constant currency change 18.5% 19.3% Corporate, eliminations, and other 21.1 18.9 11.6% 53.0 50.4 5.2% * Source: management accounts. ** Revenues (ex-disposals) exclude results of OOO Borlas Group for FYE March 31, 2012. Consolidated revenues for the first nine months of FYE March 31, 2013 totaled US$672.0 mn, an increase of 6.1% y-o-y, and consolidated revenues growth ex-disposals of 11.6% y-o-y. Consolidated revenues for the third quarter of FYE March 31, 2013 amounted to US$294.1 mn, an increase of 6.3% y-o-y, and consolidated revenues growth ex-disposals of 11.1% y-o-y. IT Services segment revenues for the first nine months of FYE March 31, 2013 amounted to US$390.5 mn, up 1.6% y-o-y. We adjust segment revenues for the disposal of OOO Borlas Group which added US$31.1 mn of revenues in the nine months of FYE March 31, 2012 (In February 2012 the Group exchanged 100% of OOO Borlas Group shares for 14.09% of shares in IBS IT Services subsidiary, raising effective ownership in the segment to 97.02%). Segment revenues growth ex-disposals amounted to 10.6% in US$ terms and 12.8% in Russian Ruble terms. Infrastructure related projects remained major drivers of our revenues in the reported period. Software Development segment revenues for the nine months of FYE March 31, 2013 were US$228.5 mn, an increase of 15.1% y-o-y. The segment's revenues in constant currency* increased by 19.3% and 18.5% y-o-y, in the nine months and third quarter of FYE March 31, 2013, respectively. Revenue growth in the segment was mainly attributable to new clients and increase in recurring business within Financial Services and Automotive & Transport verticals. * Constant currency revenues are calculated based on a weighted average of actual daily exchange rates for previous periods. Consolidated revenues by geography * 9M FYE Share 9M FYE Share Change March of March of in 31, total 31, total absolute US$ mn 2013 revenue 2012 revenue result Revenues generated in Russia and the CIS 457.6 68.1% 446.8 70.6% 2.4% Revenues generated in Europe 109.5 16.3% 99.6 15.7% 9.9% Revenues generated in North America 104.9 15.6% 86.8 13.7% 20.8% * Source: management accounts, customer geography determined based on the location of clients' key decision maker. Revenues from Russian operations amounted to US$457.6 mn in the first nine months of FYE March 31, 2013, an increase of 2.4% y-o-y. During the same period, revenues generated in Europe amounted to US$109.5 mn, an increase of 9.9% y-o-y, and now account for 16.3% of the Group revenues. Revenues generated in North America increased to US$104.9 mn, up 20.8% y-o-y and now account for 15.6% of the Group revenues. The gradual increase of revenues derived from Europe and US is attributable to the growth in the Software Development segment. Headcount * December December Change September Change Number of employees 31, 2012 31, 2011 y-o-y 30, 2012 q-o-q Group headcount 8 473 7 991 6.0% 8 372 1.2% IT Services segment 2 464 2 466 -0.1% 2 456 0.3% Software Development segment 5 671 5 213 8.8% 5 568 1.8% Corporate and other 338 312 8.3% 348 -2.9% * Source: management accounts. The Group's total headcount amounted to 8,473employees, as we added 482 IT professionals over the last year. In the Software Development segment, the number of employees amounted to 5,671, an increase of 458 IT professionals y-o-y and 103 IT professionals q-o-q, with the majority of employees added in Ukrainian, Romanian and Polish delivery centres over the last year. Debt * December December Change US$ mn 31, 2012 31, 2011 y-o-y September 30, 2012 Change q-o-q Total debt 54.3 55.8 -1.5 67.4 -13.1 Current debt 33.4 33.2 0.2 45.8 -12.4 Non-current debt 20.9 22.6 -1.7 21.5 -0.6 Net debt 12.9 16.6 -3.7 53.7 -40.8 * Source: management accounts. The Group's total debt amounted to US$54.3mn as of December 31, 2012, down US$1.5 mn y-o-y and US$13.1 mn q-o-q. Net debt position was US$ 12.9 mn, a decrease of US$3.7 mn y-o-y and US$40.8 mn q-o-q. Full year revenues outlook Our full year outlook for the Group's consolidated revenues growth remains unchanged: in the range of 9-13% in US$ terms. Anatoly Karachinsky, President of IBS Group commented , "We are, for the most part, satisfied with the Group's performance in the first nine months of the financial year. In the Software Development segment we are seeing a revival of client demand in the financial vertical, something we attribute to the end of turbulence in financial markets. Moreover, we are seeing that high growth rates in this business segment correlate with the growth of the global offshore programming market. The slowing of the Russian IT market growth rate to 3.9%* in US$ terms adversely impacted the IT Services segment, although the segment continued growing faster than the market." * IDC estimates http://www.cnews.ru/top/2013/02/20/idc_u_itrynka_rossii_zafiksirovan_rekordno_nizkiy_rost_519725 About IBS Group Holding Limited IBS Group is a leading software development and IT services provider in Central and Eastern Europe. Through its two principal subsidiaries, Luxoft and IBS IT Services, it offers a wide variety of information technology services, such as software development and IT services outsourcing, IT infrastructure and business applications implementation. IBS Group has business operations in Russia, Ukraine, Romania, Poland, Germany, Switzerland, the UK, the USA, Vietnam and Singapore. IBS Group employs more than 8,300 people worldwide. In the year ended March 31, 2012, the Group reported US GAAP consolidated revenues of US$816.3 million. IBS Group's Global Depositary Receipts are listed on the Regulated Market (General Standard) at the Frankfurt Stock Exchange (Bloomberg: IBSG:GR; Reuters: IBSGq.F) Disclaimer The information contained in this release is not for publication, distribution or release, directly or indirectly, in the United States of America (including its territories and possessions, any states of the United States and the District of Columbia) or any other jurisdiction where such distribution is unlawful. Such release does not constitute an offer for the sale of securities in the United States of America, Canada, Australia, Japan or in any other jurisdiction in which an offer is subject to legal restrictions. The information communicated in this document contains certain statements that are or may be projections or forward looking. 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IBS Group Reports Operating Results for the Quarter and Nine Months Ended December 31, 2012
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