Palgrave Macmillan New Professional Business Catalogue January-June 2014
IFS | Interim Report January–June 2014 · 2014-10-24 · INTERIM REPORT JANUARY –JUNE 2014 ....
Transcript of IFS | Interim Report January–June 2014 · 2014-10-24 · INTERIM REPORT JANUARY –JUNE 2014 ....
www.IFSWORLD.com
INTERIM REPORT Q2 2014
© 2014 IFS
Alastair Sorbie, CEO and Paul Smith, CFO
JULY 17, 2014
FINANCIAL AND OPERATIONAL HIGHLIGHTS
© 2014 IFS
CONTINUED GROWTH FROM A WORKING STRATEGY
INTERIM REPORT JANUARY–JUNE 2014
APRIL–JUNE 2014 (SECOND QUARTER)
License revenue amounted to SKr 134 million (Q2 '13: SKr 128 million), an increase of 5 percent currency adjusted.
Maintenance revenue was SKr 256 million (Q2 '13: SKr 226 million), an improvement of 11 percent currency adjusted.
Consulting revenue amounted to SKr 354 million (Q2 '13: SKr 329 million), an increase of 6 percent currency adjusted.
Net revenue was SKr 745 million (Q2 '13: SKr 686 million), an improvement of 7 percent currency adjusted.
EBIT amounted to SKr 70 million (Q2 '13: SKr 66 million).
Cash flow after investments was SKr 30 million (Q2 '13: SKr 9 million).
Earnings per share after full dilution was SKr 1.91 (Q2 '13: SKr 1.71).
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FINANCIAL AND OPERATIONAL HIGHLIGHTS
© 2014 IFS
CONTINUED GROWTH FROM A WORKING STRATEGY
INTERIM REPORT JANUARY–JUNE 2014
JANUARY–JUNE 2014 (SIX MONTHS)
License revenue amounted to SKr 241 million (YTD '13: SKr 214 million), an increase of 13 percent currency adjusted.
Maintenance revenue was SKr 505 million (YTD '13: SKr 447 million), an improvement of 12 percent currency adjusted.
Consulting revenue amounted to SKr 689 million (YTD '13: SKr 633 million), an increase of 9 percent currency adjusted.
Net revenue was SKr 1,439 million (YTD '13: SKr 1,299 million), an improvement of 10 percent currency adjusted.
EBIT amounted to SKr 95 million (YTD '13: SKr -25 million).
Cash flow after investments was SKr 163 million (YTD '13: SKr 86 million).
Earnings per share after full dilution was SKr 2.50 (YTD '13: SKr -1.23).
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PRODUCT GROWTH
© 2014 IFS
THE INTELLIGENT ALTERNATIVE CHOICE
INTERIM REPORT JANUARY–JUNE 2014
LICENSE SALES—STRONG GROWTH Winning highly-competitive sales to new customers in our target sectors. Existing customers expanding their global use of IFS Applications. Increases interest in IFS and helps expand partner ecosystem.
MAINTENANCE REVENUE Good customer retention, scalable, and improving margins. Product revenue (R12) is now 54 percent of total revenue mix. Over the longer term, product revenue is expected to grow at least at twice the rate of consulting.
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PRODUCT REVENUE
Maintenance Licenses
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Q3 Q1'10
Q3 Q1'11
Q3 Q1'12
Q3 Q1'13
Q3 Q1'14
MAINTENANCE MARGIN (R12)
CONSULTING REVENUE
© 2014 IFS
AN EVOLVING BUSINESS
INTERIM REPORT JANUARY–JUNE 2014
CONSULTING REVENUE AND MARGIN
Consulting not expected to grow at the same rate as product revenue due to:
reduced effort required to implement IFS Applications and
changing mix of skills and increased involvement of partners.
Increased level of variable cost from the use of external partners.
PARTNER PROGRAM—INCREASING MOMENTUM
Greater global reach—able to serve larger customers.
Greater ability to manage peaks in demand.
Shift towards an increased use of partners is progressing but will need further work before it will perform to our expectations.
Additional partners added recently (e.g. Capgemini, Deloitte Consulting).
Strong license sales has the strategic benefit of increasing interest in IFS.
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FINANCIAL OVERVIEW
© 2014 IFS
INTERIM REPORT JANUARY–JUNE 2014
A GROWING BUSINESS
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20%
34%
46%
REVENUE MIX R12
License Maintenance Consulting
margin
91%
margin
75%
margin
19%
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LICENSES
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MAINTENANCE
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CONSULTING
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EBIT
-50
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CASH FLOW AFTER INVESTMENTS
MARKET AND PRODUCT UPDATE
© 2014 IFS
2ND QUARTER
INTERIM REPORT JANUARY–JUNE 2014
IFS SIGNS PARTNERSHIP AGREEMENT WITH CAPGEMINI IN SPAIN IFS has signed an agreement with Capgemini Spain, making the consulting, technology, and outsourcing firm its partner for the sale and implementation of IFS Applications in Spain. Through the agreement, IFS acquires greater commercial reach and additional implementation resources that will allow the company to meet the demanding schedule of expected growth.
MARKET OUTLOOK The gradual improvement of the buying environment seen over the last couple of years is expected to continue, with growth coming from the replacement of legacy core ERP platforms as well as continued appetite for cloud-based extensions. This leads industry analyst firms such as Gartner to anticipate the ERP market to grow in 2014 in the region of 6 to 7 percent.
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BUSINESS AND STRATEGY
© 2014 IFS
THE INTELLIGENT ALTERNATIVE CHOICE
INTERIM REPORT JANUARY–JUNE 2014
IFS WILL CONTINUE TO SUCCEED BECAUSE: Implementation time is critical for customers with international operations; IFS’s component architecture and worldwide support can reduce this. IFS targets growing markets that are less exposed to economic fluctuations. Through close cooperation with our customers, IFS can offer differentiating industry solutions; we listen and respond rather than dominate and dictate. IFS’s agile open-technology platform enables customers to benefit from new IT developments rather than causing restrictive customer lock-in.
IFS WILL CONTINUE TO GROW THROUGH: cash-generating organic growth and targeted acquisitions.
2007 2009 2010 2011 2012
LATINIFS
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2013
DEFENCE
CUSTOMER WINS IN 2014
© 2014 IFS
INTERIM REPORT JANUARY–JUNE 2014 10
Aerospace and Defense Construction and Contracting High Tech Oil and Gas Retail
BAE Systems Baltic Yachts
Axis Communications Apply Group
Assist Trend
BAE Systems – Saudi Arabia Eurofeu
Minco Products Archer Management
BYGGmax
Lockheed Martin JSF IHC Merwede Holding
Mitutoyo Odfjell Drilling
D Samson & Sons
Sporveien Oslo K-Híd
Renco Electronics PGS Geophysical
Oriflame Cosmetics
Asset-Intensive Serimax Holdings
Scanfil EMS Songa Offshore
Shanghai Garnor Sealing
Kangra Coal
VWS Westgarth SEAKR Engineering
Teledyne ODI Service Providers
Klondex Mines Energy and Utilities Industrial Manufacturing Thalassa Holdings
Dover Harbour Board
Unimin Corporation BaiYin Power
Aluminum Precision Products Trelleborg Offshore Norway
DSL
Automotive Brookfield Renewable Power
Dipex Process Manufacturing Landmark Information Group
Agility Fuel Systems ENEA Wytwarzanie
Estudio Cerámico Benders Paper Cup Company
Polygon International
CalsonicKansei North America GDF Suez Énergie Services
Hymer-Leichtmetallbau Bronco Wine Company Other
FEV Hafslund
Molins Tobacco Machinery Fundação Butantan
City of Uppsala
The Morgan Motor Company Jiangsu Ligang Power Station
Nova Werke Guangzhou Taiqi Food Co.
Établissements Darty et Fils
Toyota Lanka Liberty Utilities (Canada) Corp.
Promag Jotun
Evry
Toyota Material Handling Europe PGNIG Termika
ROL Nature's Path Foods
General Dynamics Information
Wright Bus
Renova Roxtec International
Omni Industries
SDIC BaiYin Power Co.
Samson Meß- und Regeltechnik Teknos Group
Warsaw Water and Sewerage Co.
Saueressig
Vitacress
Survitec Group
Whitworths
STRONG UNDERLYING BUSINESS
© 2014 IFS
HIGHLY-COMPETITIVE CONTRACTS IN TARGET SECTORS
INTERIM REPORT JANUARY–JUNE 2014
LEADING PAINT MANUFACTURER JOTUN To support its ambitious growth targets and to maximize process efficiency and transparency, Jotun has decided to extend its central IFS ERP solution to include an additional 2,000 users.
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PROMINENT PULP AND PAPER COMPANY A Scandinavian pulp and paper manufacturer has decided to implement IFS Applications 8. The solution will be deployed to support business-critical processes at its HQ and across its production facilities.
FINANCIAL OVERVIEW
© 2014 IFS
INTERIM REPORT JANUARY–JUNE 2014 12
2ND QUARTER JULY–JUNESKr million 2014 2013 2013/14 2012/13
Net revenue 745 686 2,884 2,665of which Licenses 134 128 562 508of which Maintenance and support 256 226 960 891of which Consulting 354 329 1,312 1,246Gross earnings 378 342 1,485 1,329of which Licenses 119 115 512 473of which Maintenance and support 194 160 719 616of which Consulting 66 63 253 228EBIT 70 66 322 134EBIT margin 9% 10% 11% 5%Earnings before tax 64 55 308 120Earnings for the period 48 42 238 84Cash flow after investments 30 9 199 119
CASH FLOW
© 2014 IFS
INTERIM REPORT JANUARY–JUNE 2014 13
GROUP 2ND QUARTER JULY–JUNESKr million X 2014 2013 2013/14 2012/13
Cash flow before change in working capital 107 71 413 355Change in working capital -19 -12 64 -12Cash flow from current operations 88 59 477 343
Cash flow from investments -58 -50 -278 -224Cash flow after investments 30 9 199 119
Cash flow from financing -98 -55 -99 -73Cash flow for the period -68 -46 100 46
Cash and equivalents, beginning of period 431 314 272 234Exchange differences in cash and equivalents 7 4 -2 -8Cash and equivalents, end of the period 370 272 370 272
OUTLOOK
© 2014 IFS
INTERIM REPORT JANUARY–JUNE 2014
FOR 2014, IFS EXPECTS STRONG LICENSE GROWTH AND A SIGNIFICANT IMPROVEMENT IN EBIT.
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THIS DOCUMENT MAY CONTAIN STATEMENTS OF POSSIBLE FUTURE FUNCTIONALITY FOR IFS’S SOFTWARE PRODUCTS AND TECHNOLOGY. SUCH STATEMENTS OF FUTURE FUNCTIONALITY ARE FOR INFORMATION PURPOSES ONLY AND SHOULD NOT BE INTERPRETED AS ANY COMMITMENT OR REPRESENTATION. IFS AND ALL IFS PRODUCT NAMES ARE TRADEMARKS OF IFS. THE
NAMES OF ACTUAL COMPANIES AND PRODUCTS MENTIONED HEREIN MAY BE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.
© 2014 IFS