IBS GROUP HOLDING LTD 
By IBS Group reports operating results for the quarter and full year ended March 31, 2014
Ramsey, the Isle of Man, 3 June 2014 - 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 fourth quarter and full year ending March 31, 2014 (4Q and FYE March 31, 2014).
FYE March 31, 2014 highlights
· C onsolidated revenues for the FYE March 31, 2014 amounted to US$903.6 mn, an increase of 3.8% y-o-y.
· IT Services segment revenues for the FYE March 31, 2014 amounted to US$429.8 mn, a decline of 11.2% y-o-y; revenues expressed in RUB terms came to 14,289 mn, a decrease of 5.1%.
· Software Development segment revenues for the FYE March 31, 2014 were US$398.3 mn, an increase of 26.6% y-o-y.
· Revenues from Russian operations amounted to US$521.2 mn in the FYE March 31, 2014 . Our revenues from North America came to $192.1 mn, while European operations added another US$190.3 mn.
· Our headcount reached 10,085 employees, an increase of 17.3% y-o-y.
· The net cash position stands at US$26.1 mn, an increase of US$67.2 mn y-o-y.
Consolidated revenues by segment *
US$ mn | 4 Q FYE March 31, 2014 | 4 Q FYE March 31, 2013 | Change y - o - y | FYE March 31, 2014 | FYE March 31, 2013 | Change y - o - y | |
Consolidated revenues | 236.7 | 198.4 | 19.3% | 903.6 | 870.3 | 3.8% | |
IT Services segment | 110.6 | 93.4 | 18.4% | 429.8 | 483.8 | -11.2% | |
IT Services segment, RUB mn | 3 903.0 | 3 086 .0 | 26 . 5 % | 14 289 .0 | 1 5 060 .0 | - 5 . 1 % | |
Software Development segment | 106.3 | 85.9 | 23.7% | 398.3 | 314.6 | 26.6% | |
Corporate, other and eliminations | 19.7 | 19.1 | 3.4% | 75.6 | 71.9 | 5.1% |
* Source: management accounts
C onsolidated revenues for the FYE March 31, 2014 amounted to US$903.6 mn, an increase of 3.8% y-o-y, with yet another year of positive revenue dynamics attributable to the Group mostly driven by revenue growth in Software Development segment. Consolidated revenues for the fourth quarter of FYE March 31, 2014 amounted to US$236.7 mn, up by 19.3% y-o-y.
IT Services segment revenues for the FYE March 31, 2014 amounted to US$429.8 mn, a decline of 11.2% y-o-y; revenues expressed in RUB terms totalled 14,289 mn, a decrease of 5.1 % y-o-y. The segment's revenues for the fourth quarter amounted to US$110.6 mn, an increase of 18.4% y-o-y in US$ terms and 26.5% in RUB terms respectively. RUB depreciation against USD in 4Q FYE 2014 vs. a year ago significantly affected results of the segment in the quarter as well as full year results. Moreover, a significant increase of revenues in the segment in the fourth quarter is explained by low base effect of the previous year.
Software Development segment revenues for the FYE March 31, 2014 came to US$398.3 mn, an increase of 26.6% y-o-y. The segment's revenues for the fourth quarter amounted to US$106.3 mn, an increase of 23.7% y-o-y.
Consolidated revenues by geography *
US$ mn | FYE March 31, 2014 | Share of total revenue | FYE March 31, 2013 | Share of total revenue | Change y-o-y |
Revenues generated in Russia | 5 2 1.2 | 5 7 . 6 % | 579. 0 | 66.5% | - 10 . 0 % |
Revenues generated in Europe | 1 90 . 3 | 2 1 . 1 % | 1 49 . 7 | 17. 2 % | 2 7 . 1 % |
Revenues generated in North America | 1 92 . 1 | 2 1. 3 % | 14 1 . 6 | 16. 3 % | 35 . 6 % |
* Source: management accounts; customer geography determined by the location of clients ' key decision makers
Revenues from Russian operations amounted to US$521.2 mn in the FYE March 31, 2014 , a decline of 10.0% y-o-y, affected by declining revenue of IT Services segment and lower proportion of Software Development segment revenues derived in Russia. Revenues generated in Europe amounted to US$190.3 mn, an increase of 27.1% y-o-y , and now account for 21.1% of the Group revenues. Revenues generated in North America increased to US$192.1 mn, up 35.6% y-o-y, and now account for 21.3% of the Group revenues. Our revenues in both geographies increased substantially due to the growth of revenues in Software Development segment and now account for more than 20% each, as measured of proportion of the Group consolidated revenues.
Headcount *
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* Source: management accounts
Our headcount increased to 10,085 employees, up by 17.3% y-o-y. In the IT Services segment, the number of employees declined to 2,226 IT professionals, as we reduced our headcount by 171 IT professional. Over the course of the year we adjusted the size of our domestic business to the demand for our services, undertaking a number of restructuring measures. In the Software Development segment , the number of employees amounted to 7,519 , as we added 1,673 IT professionals on the net basis over the year.
Debt *
US$ mn | March 3 1 , 201 4 | March 3 1 , 201 3 | Change y-o-y | December 3 1 , 2013 | Change q-o-q | ||
Total debt | 69. 3 | 56. 3 | 1 3 . 0 | 57.8 | 11. 5 | ||
Current debt | 67.2 | 35. 6 | 31. 6 | 56.0 | 11.2 | ||
Non-current debt | 2 . 1 | 20.7 | -18. 6 | 1.8 | 0. 3 | ||
Net debt / (- Net cash) | - 26.1 | 41.4 | - 67 . 2 | -46.6 | 20 .4 | ||
* Source: management accounts
Our total debt amounted to US$69.3 mn as of March 31, 2014, up US$13.0 mn y-o-y and US$11.5 mn q-o-q. The net cash position stands at US$26.1 mn, an increase of US$67.2 mn y-o-y and decrease of US$20.4 mn q-o-q. Our quarterly increase in net debt is attributable to the growth of the seasonal working capital requirements in the IT Services segment. On June 2, 2014 we fully repaid debt to EBRD with total settlement amounted to US$26.4mn.
Anatoly Karachinsky , President of IBS Group, commented :
"We have noticed a significant transformation of the demand for corporate solutions on the Russian IT market which is driven by emerging of new technological philosophy of the IT-support by corporations. The changes are influenced by implementation of such technologies as Cloud solutions, mobile devices, and big data. Moreover, dynamics of the domestic IT market is very much linked to the complex situation in the Russian economy. These factors forced us to begin a deep reorganization of our IT Services segment aiming at cost cutting and efficiency gains. We anticipate that this reorganization will take from 12 to 24 months to complete.
Our Software Development segment further broaden its ties with the global customers adding a number of high potential accounts to its portfolio over the course of the year. Our strategy of geographical, industrial and client diversification coupled with investments in proprietary solutions proved to be successful as segment demonstrated another year of solid growth."
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 10,000 people worldwide. In the year ended March 31, 2013, the Group reported US GAAP consolidated revenues of US$870.3 mn. 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)
For more information about IBS Group please visit www.ibsgr.com or contact
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