INTERIM REPORT ORDINA N.V

Transcription

1 INTERIM REPORT ORDINA N.V

2 CONTENTS About Ordina 3 Statement from the Management Board 4 Key figures 5 Highlights first half Stépan Breedveld, Ordina CEO, on the results 6 Outlook 6 Market developments 7 Developments per division 8 Financial developments 10 Composition Supervisory Board 11 Appointment Jolanda Poots-Bijl as Ordina CFO 11 Risk management 11 Additional information 12 Interim financial statements Consolidated balance sheet Ordina N.V. 14 Consolidated profit and loss account Ordina N.V. 15 Consolidated statement of comprehensive income 16 Consolidated statement of changes in equity 17 Consolidated cash flow statement Ordina N.V. 18 Notes to the consolidated interim financial statements 19 INTERIM REPORT ORDINA N.V

3 ABOUT ORDINA THE DESIGNERS, DEVELOPERS AND MAINTAINERS OF A BETTER DIGITAL WORLD Ordina is the largest independent services provider in the field of consulting, solutions and IT in the Benelux. We focus on the financial services sector, public sector, healthcare sector and a number of specific segments in the industry sector As the designers, developers and maintainers of a better digital world, we have more than 2,900 employees who use their knowhow and expertise on a daily basis to future-proof, rejuvenate and improve corporate processes and IT. Our strength lies in the fact that we can implement strategy and policies on the basis of real knowledge of our clients business, local laws and regulations, language and culture, and translate this from business into IT. We do that by innovating sustainably together. We focus on seven innovative themes to support the transformations our clients are going through: Big Data, Cloud Computing, Mobile, Social Media, Security, Smart Sourcing and Unified Communications & Collaboration and IT Talent Management. Ordina s head offices are in Nieuwegein. Ordina also has several regional offices in the Netherlands, Belgium and Luxembourg. The company was founded in Its shares have been listed on the NYSE Euronext Amsterdam stock exchange since 1987 and are included in the Small Cap Index (AScX). Ordina booked revenues of more than EUR 400 million in INTERIM REPORT ORDINA N.V

4 MANAGEMENT BOARD STATEMENT This document comprises the 2013 interim report and the consolidated interim financial statements of Ordina N.V. This interim report has been prepared in accordance with IAS 34, Interim Financial Reporting. As this interim report does not contain all the information required to be included in annual financial statements, it should be read in conjunction with the consolidated annual financial statements for the year These interim financial statements are unaudited. The Management Board hereby declares, in accordance with Section 5:25d (2) (c) of the Dutch Financial Supervision Act that, to the best of their knowledge: the interim financial statements give a true and fair view of the assets and liabilities, and the financial position as at 30 June 2013, and the results for the first six months of 2013 of Ordina N.V. and its consolidated entities; and that the Interim Report of the Management Board gives a true and fair view of the information required under Sections 5:25d(8) and, insofar as applicable, (9) of the Dutch Financial Supervision Act, subject to the disclaimer with respect to forward looking statements at the bottom of page 12. Nieuwegein, 27 August 2013 Ir. drs. S. Breedveld, CEO Drs. M.J. Poots-Bijl RC, CFO INTERIM REPORT ORDINA N.V

5 KEY FIGURES ORDINA N.V. (in thousands of euros, unless indicated otherwise) H H Change H on H Revenue the Netherlands (net) 149, ,519 Revenue Belgium / Luxembourg (net) 35,623 36,347 Total Revenue 185, , % Recurring EBITDA Division PSP 1,984 6, % Recurring EBITDA Division PSP (as a % of revenue) 1.6% 4.5% Recurring EBITDA Division Business Solutions % Recurring EBITDA Division Business Solutions (as a % of revenue) 3.0% 0.2% Recurring EBITDA Division Consulting % Recurring EBITDA Division Consulting (as a % of revenue) 1.2% 1.2% Recurring EBITDA Division Belgium / Luxembourg 1, % Recurring EBITDA Division Belgium / Luxembourg (as a % of revenue) 2.9% 2.7% Recurring EBITDA total 3,613 7, % Recurring EBITDA total (as a % of revenue) 2.0% 3.7% Net profit -2,368-1, % Shareholders equity 204, ,953 Capital asset ratio Intangible fixed assets 191, , % Tangible fixed assets 9,917 10, % Total assets 317, , % Days Sales Outstanding (DSO) Total net debt at year-end 18,719 20,373 Total net debt to adjusted EBITDA Average number of staff (FTEs) 2,966 2, % Number of staff at end of reporting period (FTEs) 2,987 2, % Number of shares outstanding at end of reporting period (in thousands) 92,178 91, % Per-share information (based on average number of issued shares) in euros Shareholders equity Cash generated from operating activities Earnings Earnings - diluted INTERIM REPORT ORDINA N.V

6 HIGHLIGHTS FIRST HALF 2013 Ordina bolsters its position in the healthcare and industrial markets and launches cost-saving programme to respond to decreasing revenues. Recurring EBITDA down at EUR 3.6 million (H1 2012: EUR 7.6 million) due to persistent challenging market conditions and two fewer working days (EUR 1.7 million); Recurring EBITDA margin was 2.0% (H1 2012: 3.7%); Revenue was down 8.4% at EUR million (H1 2012: EUR million). Corrected for the effect of the two fewer working days and the loss of the offshore component in the Rabobank contract, revenue was down 2.3%; o Revenue in healthcare market up 39.6% at EUR 6.3 million (H1 2012: 4.6 million); o Downward trend in industry market bottomed out. Revenue rises in Q2 to EUR 28.4 million (Q2 2012: EUR 27.6 million); Net result came in at EUR -2.4 million, (H1 2012: EUR 1.7 million); Cost-savings programme launched to structurally decrease annual costs by some EUR 8 million by 1 January 2014; Net debt position improved to EUR 18.7 million (H1 2012: EUR 20.4 million), net debt / adjusted EBITDA ratio stood at 1.4 (H1 2012: 1.3). Covenant has been relaxed; Employee engagement continued to rise, to 6.7, from 6.2; Various new contracts, including Wigo4it, the Dutch tax office (Belastingdienst), the Martini Hospital, the Healthcare Insurance Board (College van Zorgverzekeraars) and Telenet (Belgium). STÉPAN BREEDVELD, ORDINA CEO, ON THE RESULTS In the first half of the year, we saw revenue and result decline in line with the shrinking market. We responded quickly with a substantial cost-savings programme of around EUR 8 million annually. Our focus on returns means all divisions made a positive contribution to the result. We are also making progress in terms of our management agenda. Revenue in healthcare is showing clear growth, partly on the back of our innovative solution Quli and our dedicated ERP solution for hospitals. Our revenue in the industry market has also shown growth since the second quarter. Our decision to boost our sales efforts in this market is now paying off. We are very proud of the improvement in employee engagement. The increase over the past two years has been spectacular. We believe in the direction we have chosen: Innovating sustainably together. Having skilled and engaged employees is one of the key conditions for creating true added value. OUTLOOK The economic outlook in the Benelux region remains uncertain. This makes it difficult to predict revenue developments and consequently profit. We will therefore refrain from giving an outlook for the upcoming period. INTERIM REPORT ORDINA N.V

7 Results H MARKET DEVELOPMENTS Ordina achieved revenue of EUR million in the first half of 2013 (H1 2012: EUR million). The drop was largely due to the loss of the offshore component of the Rabobank contract, which was renewed in December 2012 (EUR 10.9 million) and the effect of fewer working days in the first half of 2013 compared to 2012 (EUR 1.7 million). Public Revenue in the public sector market dropped by 3.5% to EUR 72.8 million (H1 2012: EUR 75.5 million). Major budget cuts have been announced in the public sector market and IT projects are being postponed. There is a long run-up time for new projects. At the same time, many public sector organisations see IT as an enabler for realising cost-savings and increasing the quality of their services. The sector is also seeing an increasing number of tenders based on Best Value Procurement, where the client opts for a solution on the basis of best price-quality ratio. One example of this is the contract we won this year from the Dutch tax office (Belastingdienst) for the digitisation of the M-form. Financial services Industry Healthcare The financial services market continues to focus on cost-saving measures. At the same time, financial services providers are faced with changing legislation and regulations they must comply with. This has led to growing demand in areas such as risk management, security, regulations and process optimisation. These contracts are increasingly carried out by collaborating teams of consultants and IT specialists who join forces to adapt both the processes and the related IT systems. Ordina is in an excellent position to respond to this changing demand. Revenue in the first half came in at EUR 49.9 million, down 6.3% from EUR 53.3 million in the first half of We also won a number of notable contacts in the financial services sector in the first half of the year. For instance, as part the Ordina Top Talent programme we launched an initiative at a Dutch bank to team up with the bank to recruit and train young IT employees in IT fields currently in demand due to scarcity. And at another bank, we acted as an independent local party to provide a key supporting role in a major outsourcing project. Our management agenda includes a renewed focus on a number of specific market segments in the industry sector. To this end, in 2012 we launched regional sales offices in the Netherlands. Ordina has strengthened its position in this market. After a number of quarters of shrinking results, we recorded a 2.9% rise in revenue to EUR 28.4 million in the industry sector in the second quarter, from EUR 27.6 million in the year-earlier period. This growth was realised in the Netherlands. Thanks to this, revenue in the first half of 2013 remained stable at EUR 55.9 million (H1 2012: EUR 56.0 million). In the industry market, we are also seeing a growing demand for combined consulting and IT teams, in addition to the traditionally strong demand for secondment. One innovative development in this market is our food solution, a pre-configured ERP package for the food industry, which allows companies to reduce implementation time and keep costs low. The Dutch healthcare sector is increasingly confronted with new legislation and regulations, budget cuts, changing dynamics between market parties and decentralisation. The government is also looking to increase transparency, which increases the sector s administrative burden. Ordina helps both through consultancy services and via innovation, one excellent example of which is our development of Quli. Quli is an application that helps patients to organise their medication, for instance, but also facilitates contacts with fellow patients, non-professional carers and medical specialists, helping them to remain self-sufficient and improving their quality of life. Ordina cooperates with a number of partners on the Quli application. Another prime example is the delivery of an ERP software package for the Martini Hospital (in Groningen), with the package preconfigured like our food solution for the industry sector. We also won a contract from health insurance body CVZ for the development and maintenance of tailored applications and IT consultancy. Revenue in the healthcare market was 36.9% higher at EUR 6.3 million (H1 2012: EUR 4.6 million). INTERIM REPORT ORDINA N.V

8 Revenue per market segment H H H adjusted 1 Change H on H Public 72,849 76,140 75, % Financial services 49,905 64,645 53, % Industry 55,944 56,437 55, % Healthcare 6,307 4,644 4, % TOTAL 185, , , % 1 Corrected for the effect of fewer working days and the loss of the offshore component from the Rabobank contract. Workable days st quarter 2 nd quarter 3 rd quarter 4 th quarter NL B NL B TOTAAL Professional Services and Projects Business Solutions DEVELOPMENTS PER DIVISION The Professional Services and Projects (PSP) division designs, builds and maintains applications for clients. It uses various forms of contracts, from time & material contracts to service level agreements. Revenue at the division dropped by 1.5% to EUR million (H1 2012: EUR million). This revenue figure has been corrected for the lower number of working days and the loss of the offshore component from the Rabobank contract. At the end of 2012, Rabobank renewed the contract with Ordina for the design, construction and testing of applications. As part of the renewed and revised contract, Rabobank will take over coordination of the offshore partner. The revenue from this component was EUR 10.9 million in the first half of Business Solutions combines business know-how with technical expertise to provide solutions in the field of business intelligence, digital customer interaction, rule-based case systems, wealth accumulation and mortgage systems. Revenue fell by 17.8% to EUR 13.0 million (H1 2012: EUR 15.8 million). The drop in revenue was largely due to the downsizing of less profitable activities. Therefore the financial result of Business Solutions increased. Consulting The Consulting division advises clients on improving their processes and IT systems. Revenue at the division dropped by 8.7% to EUR 16.2 million (H1 2012: EUR 17.7 million). This drop in revenue was largely due to the continued decline in demand from the public sector. Belgium / Luxembourg The division Belgium / Luxembourg designs, builds and maintains applications in Belgium and Luxembourg. It is also active in solutions for specific industries. Revenue at the division Belgium / Luxembourg dropped by 1.1% to EUR 35.8 million (H1 2012: EUR 36.2 million). A programme to improve results has resulted in an increase in the financial contribution from this division. There was growth in the financial services and public sector segments, while recovery lagged in the industry market. INTERIM REPORT ORDINA N.V

9 Revenue per division H H H adjusted 1 Change H on H PSP 126, , , % Business Solutions 12,987 15,923 15, % Consulting 16,160 17,840 17, % Belgium/Luxembourg 35,826 36,513 36, % Intercompany services -6,752-9,088-9, % TOTAL 185, , , % 1 Corrected for the effect of fewer working days and the loss of the offshore component from the Rabobank contract. Recurring EBITDA per division H H PSP 1, % 6, % Business Solutions % % Consulting % % Belgium/Luxembourg 1, % % TOTAL 3, % 7, % Long-term contracts The contribution to revenue from long-term contracts dropped to 31% in the first half of 2013 (H1 2012: 35%) in the year-earlier period. Ordina s goal is at least 35% of revenues from long-term contracts to reduce the company s sensitivity to economic fluctuations. The drop in the first half of 2013 was partly due to the loss of the offshore component of the Rabobank contract. Investment in employees In the first half of 2013, the workforce increased by 67 FTEs. This puts the total number of employees at end- June 2013 at 2,987 FTEs, compared with 2,936 at end-june 2012 and 2,920 at year-end The ratio direct/indirect employee improved at end-june to 6.3 (H1 2012: 6.1). Increasing employee engagement is part of our strategic management agenda. As part of this drive, we organised Connect Cafes, meetings at which Ordina employees and clients can discuss innovative ideas to improve our clients businesses. Last year, we won an award for the employer with the greatest increase in employee engagement and this year we have seen another sharp increase in engagement. The score for employee engagement this year stands at 6.7, half a point higher than last year. INTERIM REPORT ORDINA N.V

10 Revenue development FINANCIAL DEVELOPMENTS Total revenue in the first six months of 2013 was EUR 185 million, down 2.3% from the first half of Recurring EBITDA and margin development EBITDA came in at EUR 1.8 million in the first half of 2013 (H1 2012: EUR 4.6 million). This total includes EUR 1.8 million in one-off reorganisation costs in the Netherlands and Belgium. The costs relate to redundancy costs for both direct and indirect employees. Corrected for these one-off costs, recurring EBITDA came in at EUR 3.6 million (H1 2012: EUR 7.6 million). We launched a substantial cost-saving programme in the first half of 2013 aimed at annual cost savings of around EUR 8 million. Recurring EBITDA H H Reported operating profit (EBIT) -2,056-1,207 Amortisation 1,120 2,904 EBITA ,697 Depreciation 2,757 2,866 EBITDA 1,821 4,563 One-off reorganisation costs 1,792 3,000 Recurring EBITDA 3,613 7,563 Acquisitions and divestments There were no acquisitions or divestments in the first half of Amortisation Amortisation in the first half was EUR 1.1 million (H1 2012: EUR 2.9 million). Net result and EPS The net result in H was EUR -2.4 million (H1 2012: EUR -1.7 million). Financing costs came in at EUR 0.7 million in the first half of 2013 (H1 2012: EUR 0.7 million). Net earnings per share (EPS) for the first half of 2013 amounted to EUR (H1 2012: EUR -0.02) due to a drop in results. EPS before amortisation came in at EUR in the first half of 2013 (H1 2012:EUR 0.00). Cash flow and investments At end-june 2013, total net debt stood at EUR 18.7 million (H1 2012: EUR 20.4 million). The main changes to net debt in the first half of 2013 were as follows: Year-end ,756 Cash flow from operations 6,034 Interest paid and taxes on profits 1,040 Net investments and other changes 1,889 At end - H ,719 Days Sales Outstanding (DSO) at end-june 2013 stood at 54 days (H1 2012: 51). The DSO dropped by one day compared with the first quarter of The net debt / adjusted EBITDA ratio as formulated in the financing facilities stood at 1.4 at 30 June 2013 and was therefore well below the maximum of 2.0 agreed with our lenders. The Interest Cover Ratio stood at 11.4 at 30 June This therefore remains above the minimum of 5.0 agreed with the lenders. INTERIM REPORT ORDINA N.V

11 Ratios in comparison to the covenants agreed with lenders: Actual 30 june 2013 Net debt / adjusted EBITDA Interest Coverage Ratio Covenant In June 2013, Ordina reached agreement with its banks on a change to the existing agreements. Based on this change, the correction to the EBITDA for one-off charges and reorganisation costs is remained. This correction as specified in the financing agreement and the addendum is a maximum of EUR 5.0 million for the full-year 2013 and for the year 2014, while the total correction for the two years combined has been set at a maximum of EUR 8.0 million. In addition, the maximum leverage ratio will be reduced more gradually. Pursuant to the financing agreement and the addendum to the financing facility, the following ratios apply: New Old Leverage ratio Maximum Maximum 1 October June July December January March From 1 April 2014 December 2016 (end-date agreement) COMPOSITION SUPERVISORY BOARD The General Meeting of Shareholders on 15 May 2013 reappointed Mrs. Pamela Boumeester to the Supervisory Board of Ordina N.V. for a period of four years. APPOINTMENT JOLANDA POOTS-BIJL AS CFO ORDINA Ordina N.V. s Supervisory Board appointed Jolanda Poots-Bijl as a member of the Management Board as of 1 April As of 1 June 2013, Mrs Poots-Bijl has also been appointed CFO of Ordina. For the past four years, Jolanda Poots-Bijl has been the CFO at construction company VolkerWessels. She is also a member of the Supervisory Board of Gasunie. RISK MANAGEMENT The 2012 annual report, from page 48 onwards, contains a description of the risk profile of Ordina, as well as the key risks and measures for internal control. The main risks for the upcoming period are: Decline in demand in all markets due to a sustained downturn. This relates to both short-term external hiring, as well as postponement of larger IT programmes. This is partly due to uncertainty caused by the financial and economic situation in Europe, but also because the Dutch government s ambition to create a more efficient and streamlined public sector has not yet resulted in concrete measures in the field of IT. The current uncertain market conditions have resulted in a (temporary) low level of demand for IT services. In the longer term, there is a risk of continued pressure on (demand and rates) secondment (use of professionals), in favour of outsourcing and the use of freelancers. If there is a further deterioration of the market and/or delay in economic recovery, this could potentially lead to an extraordinary impairment of intangible fixed assets. The risk profile of result commitments increases. The customer demands clear result commitments within which Ordina has to operate. As a result, the profit or loss from contracts could have a material impact on Ordina s performance. Our business model of secondment is very sensitive to economic fluctuations. Ordina is aiming for a contribution to revenue from long-term contracts of 35%, to counter the fluctuations that occur as a result of this sensitivity. INTERIM REPORT ORDINA N.V

12 As the IT market in the Benelux matures and the number of outsourcing parties and freelancers increases, there is a risk of structural pressure on rates. Due to the current economic conditions, there is an increased risk of clients being unable to meet their financial commitments (on time). This may in some situations lead to a write-down of receivables. Ordina closed a new financing facility in 2011 and optimised the covenants in the first half of If Ordina s results deteriorate, there is a risk that the company will be unable to meet the covenants agreed with its lenders. For further details, we refer you to Ordina s 2012 annual report at We believe that these risks, in terms of the nature and scale as described above, will also be applicable during the second half of We will monitor any risks identified on an ongoing basis. Nevertheless, in the course of 2013 new risks or previously unidentified risks that we are not yet aware of may occur and may have a material impact on our activities, targets and results. We will closely monitor known risks and any new risks and apply internal controls and take mitigating actions where necessary. ADDITIONAL INFORMATION For more information about this press release Jolanda Poots-Bijl, CFO Mail: jolanda.poots@ordina.nl Telephone: +31 (0) Stépan Breedveld, CEO Mail: stépan.breedveld@ordina.nl Telephone: +31 (0) Financial calendar 7 November 2013 Trading update 13 February 2014 Publication annual results 2013 Presentation analysts and media Ordina will present its results on 27 August at 10:30 CET in a meeting in Amsterdam. You can follow this presentation via a webcast via a link on The presentation will be available on our website after the webcast. This document contains pronouncements forecasting the future financial performance of Ordina N.V. and outlines certain plans, targets and ambitions based on current insights. Obviously, such forecasts are not without risk; they entail a relative degree of uncertainty since no guarantees exist on future circumstances. There are many factors that could potentially affect the actual performance and forecasts, causing them to deviate from the situation described in this document. Such factors include: general economic trends, the pace of globalisation in the solutions, ICT and consulting markets, the growing number of projects with responsibility for deliverables, scarcity on the labour market, and future acquisitions and disposals. In case of any discrepancies the Dutch version prevails INTERIM REPORT ORDINA N.V

13 INTERIM REPORT ORDINA N.V

14 CONSOLIDATED BALANCE SHEET ORDINA N.V. 30 June Dec June 2012 Assets Intangible fixed assets 191, , ,793 Tangible fixed assets 9,917 10,640 10,779 Transition costs 2,490 1,277 - Investments in associates Loans Deferred income tax assets 16,970 16,420 17,734 Total fixed assets 220, , ,165 Trade and other debtors 87,179 85,391 88,182 Cash & cash equivalents 9,065 9,528 11,238 Total current assets 96,244 94,919 99,420 Total assets 317, , ,585 Equity and liabilities Issued capital 9,218 9,192 9,192 Share premium reserve 134, , ,692 Retained earnings 63,177 62,913 62,771 Profit for the reporting period -2, ,702 Shareholders equity 204, , ,953 Long-term borrowings / Term Loan 4,418 9,284 14,111 Long-term borrowings / Other 5, Employee related provisions 3,762 3,762 3,764 Defered income tax liabilities Non-current liabilities 13,290 13,377 18,471 Borrowings 18,366 10,000 17,500 Other provisions 1, ,690 Trade and other payables 79,516 85,694 81,269 Current tax payable Total current liabilities 99,005 96, ,161 Total liabilities 112, , ,632 Total equity and liabilities 317, , ,585 Unaudited INTERIM REPORT ORDINA N.V

15 CONSOLIDATED PROFIT AND LOSS ACCOUNT ORDINA N.V. H H FY 2012 Revenue (net) 185, , ,666 Cost of hardware and software 2,124 4,083 6,793 Work contracted out (hired staff) 45,117 57, ,143 Personnel expenses 126, , ,920 Amortisation 2,052 4,003 6,956 Depreciation 1,825 1,767 3,665 Other operating expenses 9,031 8,559 15,177 Total operating expenses 187, , ,654 Operating profit -2,056-1,207 3,012 Finance costs - net ,516 Share of profit of associates Profit before income tax -2,786-1,950 1,576 Income tax ,125 Net profit for the reporting period -2,368-1, Net profit is attributable to: Shareholders of the company -2,368-1, Non-controlling interests Net profit for the reporting period -2,368-1, (in euros, unless indicated otherwise) Earnings per share - basic Earnings per share - diluted Recurring earnings per share Number of shares outstanding 92,177,662 91,924,886 91,924,886 Unaudited INTERIM REPORT ORDINA N.V

16 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME H H FY 2012 Profit for the reporting period -2,368-1, Other comprehensive income, potentially reclassifiable to profit or loss Actuarial gains and losses on defined benefit plans Tax on items taken directly to or transferred from equity Other comprehensive income (net of tax) Total comprehensive income for the reporting period -2,368-1, Unaudited INTERIM REPORT ORDINA N.V

17 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Issued capital Share premium reserve Other reserves Total equity At 1 January , ,619 62, ,655 Changes in H Net profit for the reporting period ,702-1,702 Other comprehensive income: Actuarial gains and losses Total comprehensive income for the reporting period ,702-1,702 Transactions with owners: Share-based payment Total transactions with owners At 30 June , ,692 61, ,953 Changes in H Net profit for the reporting period - - 2,153 2,153 Other comprehensive income: Actuarial gains and losses Total comprehensive income for the reporting period - - 2,013 2,013 Transactions with owners: Share-based payment Total transactions with owners At 31 December , ,692 63, ,248 Changes in H Net profit for the reporting period ,368-2,368 Other comprehensive income: Actuarial gains and losses Total comprehensive income for the reporting period ,368-2,368 Transactions with owners: Share-based payment Total transactions with owners At 30 June , ,874 60, ,901 Unaudited INTERIM REPORT ORDINA N.V

18 CONSOLIDATED CASH FLOW STATEMENT ORDINA N.V. H H Cash flow from operating activities Net profit for the reporting period -2,368-1,702 Adjustments for: Finance costs - net Income tax expense Operating profit -2,056-1,207 Adjustments for: Amortisation 2,052 4,003 Depreciation 1,825 1,767 Depreciation transition costs Share-based payments 21-4,171 5,770 Operating profit before changes in working capital and provisions 2,115 4,563 Movements in trade and other receivables -2,518-8,785 Movements in current liabilities -5,631-1,446 Movements in provisions (long-term) ,149-10,123 Cash generated from operations -6,034-5,560 Interest paid Income taxes paid Net cash from operating activities -7,074-6,838 Cash flow from investing activities Divestments of subsidiaries 1, Additions to intangible fixed assets Additions to tangible fixed assets -1,102-1,158 Investments in transition costs -1,486 - Net cash used in investing activities -1, Cash flow from financing activities Repayment of borrowings (Term Loan) -5,000 - Drawings of borrowings (Revolver) 5,000 - Net cash used in financing activities - - Net movements in cash and cash equivalents -8,829-7,795 Movements in cash -8,829-7,795 Cash and cash equivalents at beginning of the reporting period 9,528 6,533 Cash and cash equivalents at the end of the reporting period / net 699-1,262 Unaudited INTERIM REPORT ORDINA N.V

19 NOTES TO THE INTERIM FINANCIAL STATEMENTS General information Ordina N.V. has its registered office in Nieuwegein, the Netherlands. These consolidated interim financial statements for the six months ended 30 June 2013 comprise the financial information of Ordina N.V. and all its subsidiaries. Ordina implements strategy in company processes and IT. We design, build and maintain solutions for a sustainable digital world. We firmly believe that cooperation with our customers, partners and suppliers leads to the best solutions. Ordina operates in the Benelux, via specialised divisions for consulting, solutions and IT. We provide (reproducible) solutions and know-how for the financial services sector, public sector and healthcare markets, as well for a number of specific segments in the industrial market. Ordina was founded in 1973 and its shares are listed on NYSE Euronext Amsterdam, where Ordina is part of the Small Cap index. Statement of compliance The consolidated interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted for use within the European Union. They do not contain all the information that is required for a full set of financial statements, and should therefore be read in conjunction with the Ordina N.V. consolidated financial statements for the full year 2012, which were drawn up in accordance with IFRS. The 2012 Annual Report (including the 2012 consolidated financial statements) is available online at the company s corporate website The consolidated interim financial statements were prepared by the Management Board and approved for publication by the Supervisory Board on 26 August The consolidated interim financial statements are unaudited. Ordina s interim financial statements have been drawn up in Dutch and English, with the Dutch version prevailing. Key principles for financial reporting For a description of the accounting policies for the valuation, determination of results and statement of cash flows, we refer you to the consolidated financial statements for The consolidated financial statements for 2012 were drawn up in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European Union. The accounting principles have been applied consistently for all subsidiaries and across all periods as presented in these consolidated interim results. The same accounting policies have been used in the interim financial statements, with the exception of the new standards, amended standards and interpretations given below, which have been adopted and are deemed relevant to Ordina. Standards, amendments and interpretations With effect from 1 January 2013, a number of standards, amendments and interpretations came into force, such as: IAS 1 Presentation of financial statements. IAS 1 has been amended. The most significant change is that the other components of comprehensive income must now be grouped according to whether or not they are items that will be reclassified to profit or loss. This amendment has been incorporated in the comprehensive statement of income. IAS 19 Employee benefits. Under the new standard, actuarial gains and losses will be recognised immediately in equity through Other Comprehensive Income. Ordina already recognises actuarial gains and losses directly in equity through Other Comprehensive Income so this change will therefore not affect Ordina. Under the new standard, income from fund investments presented in the realised and non-realised results will be determined on the basis of the cash value of the liability for defined benefit pension schemes, rather than the expected return on fund investments. The revised standard was adopted by the European Union in The application of the revised standard is compulsory from 1 January This revised standard has no material impact on Ordina s interim financial statements. IFRS 10 Consolidated financial statements, is based on existing policies under which the principle of control determines whether an entity should be consolidated in the consolidated financial statements of the parent company. This standard includes a supplementary note to help assess whether or not the parent company controls an entity. The application of IFRS 10 has not led to any changes in the number of companies consolidated in Ordina s consolidated financial statements. The application of this revised standard has therefore no material impact on Ordina s consolidated (interim) financial statements. IFRS 12 Disclosure of interests in other entities, comprises a broadening of the disclosure requirements for the financial statements regarding all forms of interests in other entities, including joint arrangements, associates, special entities and other forms of interests not recognised in the balance sheet. The revised standard did not lead to any changes in these interim financial statements. INTERIM REPORT ORDINA N.V

20 IFRS 13 Fair value measurements, aims to improve consistency and reduce complexity by giving an exact definition of the concept fair value and the disclosure requirements across all IFRS standards. The requirements do not constitute a broadening of the method of recognition on the basis of fair value, but provide an explanation of the situations in which this method of recognition is already required or permitted on the basis of existing IFRS standards. The impact of IFRS 13 coming into force is outlined in the section fair value estimations. Critical accounting estimates and assumptions The preparation of the consolidated interim financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, as well as contingent assets and liabilities. Actual results may differ from these estimates and assumptions. The assumptions and estimates are based on historical experience and various other factors that are deemed to be reasonable under the circumstances. Said assumptions and estimates are continually (re)evaluated. For a list of the most critical assumptions and estimates, we refer you to the full year financial statements for There were no significant changes in said assumptions and estimates in the first half of Fair value measurements Due to the fact that IFRS 13 Fair value measurements has come into force, disclosure requirements now apply to interim financial statements. The carrying amount of current assets, payables and other liabilities approximate their fair value due to the short-term nature of these instruments. Trade receivables also approximate their fair value, as any potential impairment has already been taken into account in the form of a provision for bad debts. The long-term loans with a carrying amount of EUR 14.4 million have a fair value of EUR 15.4 million. Impairment test Ordina conducts impairment tests at least once a year on goodwill and other tangible fixed assets. The annual impairment test is carried out in the fourth quarter of each calendar year. In the first six months of the 2013 financial year, Ordina assessed whether there was any indication of a need for impairment of goodwill or other tangible fixed assets. Ordina found no indication that there was any need for an interim impairment test in the first half of Financial risk management In the 2012 annual report, Ordina described in detail the critical objectives and procedures of its risk management and control systems and the critical risks identified that could constitute a threat to the realisation of our goals. Ordina has evaluated the risks identified and determined that the main risks identified remain unchanged for the second half of Ordina has not identified any additional risks or uncertainties. The critical objectives and procedures of the financial risk management systems within Ordina are therefore consistent with the objectives and procedures presented in the consolidated financial statements for the full year Segment Information Segment information is presented in line with the way management, reporting lines and decision-making is organised within Ordina. Ordina recognises the following segments: Professional Services and Projects, Business Solutions, Consulting and Belgium / Luxembourg. The segment Professional Services and Projects, Business Solutions and Consulting together form Ordina the Netherlands. Segment information on balance sheet positions and analysis of same is recognized at the aggregated level of Ordina the Netherlands and Ordina Belgium / Luxembourg respectively. Segment information on balance sheet positions is therefore disclosed at the level of Ordina the Netherlands and Ordina Belgium / Luxembourg. Segment results, assets and liabilities comprise the items that can be directly attributed to the relevant segment. INTERIM REPORT ORDINA N.V

21 SEGMENT INFORMATION H (in thousands of euros, unless indicated otherwise) Division PSP Division Business Solutions Division Consulting Division Belgium / Luxembourg Total revenue per segment 126,783 12,987 16,160 35, ,756 Inter-segment revenue -3,004-1,705-1, ,752 Total revenue (net) 123,779 11,282 14,320 35, ,004 Total Recurring EBITDA 1, ,049 3,613 One-off reorganisation costs ,792 EBITDA 1, ,821 EBITDA - margin 0.9% 2.9% -3.0% 2.2% 1.0% Recurring EBITDA - margin 1.6% 3.0% 1.2% 2.9% 2.0% H (in thousands of euros, unless indicated otherwise) Division PSP Division Business Solutions Division Consulting Division Belgium / Luxembourg Total revenue per segment 140,678 15,923 17,840 36, ,954 Inter-segment revenue -4,060-3,102-1, ,088 Total revenue (net) 136,618 12,821 16,080 36, ,866 Total Recurring EBITDA 6, ,563 One-off reorganisation costs -1, , ,000 EBITDA 5, ,563 EBITDA - margin 3.6% -2.0% -4.6% 1.6% 2.3% Recurring EBITDA - margin 4.5% 0.2% 1.2% 2.7% 3.7% FY 2012 (in thousands of euros, unless indicated otherwise) Division PSP Division Business Solutions Division Consulting Division Belgium / Luxembourg Total revenue per segment 281,006 30,467 34,970 71, ,893 Inter-segment revenue -6,988-6,095-3, ,227 Total revenue (net) 274,018 24,372 31,178 71, ,666 Total Recurring EBITDA 15, ,205 17,621 One-off reorganisation costs -1, , ,988 EBITDA 13, ,633 EBITDA - margin 4.9% -1.2% -1.2% 0.8% 3.4% Recurring EBITDA - margin 5.5% 0.5% 1.9% 1.7% 4.4% INTERIM REPORT ORDINA N.V

22 SEGMENT INFORMATION (CONTINUED) 30 June 2013 the Netherlands Belgium/Luxe mbourg Total (in thousands of euros, unless indicated otherwise) Intangible fixed assets 173,928 17, ,179 Tangible fixed assets 8,604 1,313 9,917 Total assets 277,714 39, ,196 Investments in intangible fixed assets Investments in tangible fixed assets ,102 Investments in transition costs 1,486-1,486 Amortisation 1, ,052 Depreciation 1, ,825 Depreciation transition costs Number of staff at end of reporting period (FTEs) 2, ,987 Average number of staff (FTEs) 2, , June 2012 the Netherlands Belgium/Luxe mbourg Total (in thousands of euros, unless indicated otherwise) Intangible fixed assets 177,021 18, ,793 Tangible fixed assets 9,198 1,581 10,779 Total assets 281,640 42, ,585 Investments in intangible fixed assets Investments in tangible fixed assets 1, ,158 Investments in transition costs Amortisation 2,880 1,123 4,003 Depreciation 1, ,767 Depreciation transition costs Number of staff at end of reporting period (FTEs) 2, ,936 Average number of staff (FTEs) 2, , December 2012 the Netherlands Belgium/Luxe mbourg Total (in thousands of euros, unless indicated otherwise) Intangible fixed assets 175,102 17, ,021 Tangible fixed assets 9,340 1,300 10,640 Total assets 275,725 41, ,986 Investments in intangible fixed assets Investments in tangible fixed assets 2, ,917 Investments in transition costs 1,347-1,347 Amortisation 4,979 1,977 6,956 Depreciation 2, ,665 Depreciation transition costs Number of staff at end of reporting period (FTEs) 2, ,920 Average number of staff (FTEs) 2, ,938 INTERIM REPORT ORDINA N.V

23 Seasonal influences Ordina s revenue and results are subject to a limited level of seasonal influence. These seasonal influences pertain primarily to the lower number of working days in the first half of the year compared with the second half. This means that Ordina s revenue is generally lower in the first half than in the second half. Movements in the working capital are partly influenced by the settlement of liabilities related to, among other things, holiday payments, bonus payments and pension premiums in the first half of the year. Intangible fixed assets Movements in intangible fixed assets in the first half of 2013 can be specified as follows: Goodwill Software PPA related Carrying amount at year-end ,418 3,078 5, ,021 Investments Depreciations ,120-2,052 Carrying amount at 30 june ,418 2,356 4, ,179 Total Tangible assets Movements in tangible fixed assets in the first half of 2013 can be specified as follows: Carrying amount at year-end ,640 Investments 1,102 Depreciations -1,825 Carrying amount at 30 june ,917 Total The investments were largely related to replacement investments for computer equipment. Cash & cash equivalents Movements in cash & cash equivalents as recognised in the consolidated cash flow statement can be specified as follows: 30 June June 2012 Cash in hand or with banks 9,065 11,238 Bank overdrafts (excluding short-term repayment obligations) -8,366-12,500 Balance cash & cash equivalents 699-1,262 Outstanding shares As per 30 June 2013, Ordina has one paid-up priority share and 92,177,662 ordinary shares (year-end 2012: one priority share and 91,924,881 ordinary shares). The share issue in the first half of 2013 involved a total of 252,781 shares and pertains to share-related bonuses in the context of the performance-related long-term bonus plans for the members of the Management Board. Bank debts / Long-term borrowings Movements in the long-term borrowings in the first half of 2013 can be specified as follows: Carrying amount at year-end ,284 Repayments -5,000 Changes due to the effective interest rate method 134 Total 14,418 Presented as short-term liabilities -10,000 Balance at 30 June ,418 Total INTERIM REPORT ORDINA N.V

24 The repayment schedule for the long-term loan for the initial amount of EUR 20 million is as follows: Repayment per 22 June ,000 Repayment per 22 December ,000 Repayment per 22 June ,000 Repayment per 22 December ,000 Total 20,000 In December 2011, Ordina agreed a committed senior financing facility with ING, ABN AMRO Bank and NIBC for a total of EUR 55 million. This committed senior financing facility relates to a long-term loan for an initial amount of EUR 20 million and a revolving credit facility of EUR 35 million with a term of five years. After repayment of EUR 5 million on 22 June 2013, the committed financing facility amounts to EUR 50 million as per 30 June The critical components of the covenants for the financing facility are a maximum leverage ratio of total net debt / adjusted EBITDA and an Interest Cover Ratio. The covenants are based on the consolidated (interim) financial statements as drawn up in accordance with IFRS. In June 2013, Ordina reached agreement with its banks on a change to the existing agreements. Based on this change, the correction to the EBITDA for one-off charges and reorganisation costs is remained. This correction as specified in the financing agreement and the addendum is a maximum of EUR 5.0 million for the full-year 2013 and for the year 2014, while the total correction for the two years combined has been set at a maximum of EUR 8.0 million. In addition, the maximum leverage ratio will be reduced more gradually. Pursuant to the financing agreement and the addendum to the financing facility, the following ratios apply: New Old Leverage ratio Maximum Maximum 1 October June July December Januar March From 1 April 2014 December 2016 (end-date agreement) Interest Cover Ratio Minimum 1 Januar March April June July September October December From 1 Januar 2013 December 2016 (end-date agreement) 5.00 As per 30 June 2013, the ratio total net debt / adjusted EBITDA stood at 1.4 (year-end 2012: 0.6; mid- 2012: 1.3). As per 30 June 2013, the Interest Cover Ratio stood at 11.4 (year-end 2012: 15.6; mid-2012: 5.8). Bank loans Banks loans can be specified as follows: 30 June June 2012 Banks loans 8,366 12,500 Short-term repayment obligations for long-term loan 10,000 5,000 Total 18,366 17,500 Taxes on the results Current tax for the half-year period under review has been calculated by applying the estimated effective annual tax rate to pretax profit. The effective tax rate for the first six months of 2013 was 15.0%, compared with 71.4% for the full-year 2012, and 12.7% for the first half of The discrepancy between the nominal tax rate of 25.0% and the effective tax rate is largely due to the impact of non-deductible amounts and rate differences abroad. Corporate tax receivables stood at EUR 43,000 at end- June 2013, compared with a tax payable amount of EUR 317,000 at year-end INTERIM REPORT ORDINA N.V

25 Deferred taxes are measured at the expected method of settlement or realisation. The deferred tax claim pertains mainly to recognised tax losses, as well as temporary differences in valuation related to tangible fixed assets and pension provisions. Deferred tax liabilities are largely related to temporary differences relating to intangible assets. Approximately EUR 38 million of the recognised tax losses is expected to expire in The remaining losses will expire in the years after Share-based remuneration The long-term component of the performance-related remuneration of the members of the Management Board comprises a payment in Ordina N.V. shares, with a term of three years for each current scheme. This performance-related long-term remuneration is explained in detail in the 2012 annual report. In connection with the performance-related long-term remuneration for the members of the Management Board, Ordina recognised an expense of approximately EUR 21,000 in the personnel expenses for the first half of Related parties The remuneration of the members of the Management Board is determined annually by the Supervisory Board. For an explanation of the remuneration policy pertaining to the members of the Management Board, we refer you to the Report of the Supervisory Board as included in the 2012 annual report. The total remuneration for the Management Board amounted to EUR 522,000 in the first half of 2013, compared with EUR 471,000 in the first half of The total remuneration for the members of the Supervisory Board amounted to EUR 66,000 in the first half of 2013 (H1 2012: EUR 65,000). Off-balance sheet liabilities The nature and scale of off-balance sheet liabilities as per 30 June 2013 are unchanged from those reported in note 32 to the consolidated financial statements for the financial year Post-balance sheet date events After 30 June 2013, there have been no events that might have a material impact on or that might require adjustments to the balance sheet positions as per 30 June 2013, as presented in the interim financial statements. INTERIM REPORT ORDINA N.V