Q4 & FY 2016 Results. February 10, 2017

Transcription

1 Q4 & FY 2016 Results February 10, 2017

2 Agenda David de Buck (CEO): Introduction to Maarten de Vries, CFO Highlights Q4, Elian Update Maarten de Vries (CFO): Basis of Reporting and Segmentation Financial update, focus on jurisdictions Guidance Q&A 2 2

3 Introduction Maarten Jan de Vries Background > Personal information: - Name: Maarten Jan de Vries - Date of birth: 17 January Nationality: Dutch > Education: Vrije University of Amsterdam: Post-Graduate Education for Controllership University of Groningen: Masters Degree, Faculty for Business Economics Corporate experience > /2016 TNT Express - Hoofddorp, the Netherlands - CFO and Executive Board Member > TP Vision (TPV Technology) - Amsterdam, the Netherlands. Listed in Hong Kong - CEO, Television Joint Venture between TPV and Phillips. Revenue (2014): EUR 2.6 billion > Royal Philips Electronics - Amsterdam, the Netherlands - Member Group Management Committee (including Chief Supply Officer and Chief Information Officer) and other Finance roles including divisional CFO - Of which 10 years based in Taiwan/Asia 3

4 ( m) Highlights Q Underlying 2 Intertrust revenue for Q4 increased by 4.0% yoy Luxembourg Q4 revenue was up sharply reflecting clearance of the Q3 backlog by new employees Cayman outflow of entities over Q4 slowed, loss of revenue decelerated versus Q3 Adjusted EBITA margin reflects consolidation of Elian while underlying 2 EBITA margin unchanged in CC 1 Revenue and Adjusted EBITA Intertrust Group +36.8% 41.4% 39.9% % Margin % Adjusted FY 2016 EPS of 1.27 (incl. full year Elian contribution, adjusted net income per share of 1.44) 3 Q Q Q Q Revenue Adj. EBITA Notes 1. CC refers to constant currency 2. Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 3. Based on management estimates 4 4

5 ( m) Elian update Revenue and Adjusted EBITA Elian Now leading service provider in Jersey, added scale in Ireland, UK and Cayman Since Sept 23, 2016 revenue contribution of 28.5 million and Adjusted EBITA of 9.7 million Integration on track: Target Operating Model, Leadership, Office moves, SFM (Spain) remaining JV stake acquired Feb 2017 Management estimates Elian FY 2016 revenue of 92.2 million and EBITA of 30.4 million slightly below initial estimates Strong growth for Capital Markets business but Jersey impacted by Brexit uncertainty Management estimates Elian revenue grew at high single digit rates for the FY 2016 Margin % 34.1% FY 2016 FY 2016 Revenue Adj. EBITA Q FY 2016 Adjusted revenue ( m) Adjusted EBITA margin 34.1% 34.1% Number of entities 14,031 FTE

6 Basis of reporting and segmentation Q4 and FY 2016 Group figures include Elian as of September 23, 2016 Additionally, Q4 & FY 2016 Intertrust is reported standalone (excluding Elian). Guernsey will be shown separately for the last time in this reporting period Underlying: Intertrust standalone (excluding Elian) at constant currency and, for full year, including Jan-Jun 2015 CorpNordic figures As of Q1 2017, Intertrust Group will use the following segmentation: The Netherlands Luxembourg Jersey Cayman Islands Rest of World (ROW) Guernsey will become part of ROW and will not be broken out 6 6

7 Financial Highlights Q As reported Adjusted ( m) Q Q % change Q Q % change Revenue % % EBITA % % EBITA Margin (%) 33.3% 41.5% -819bps 39.9% 41.4% -153 bps Net Income 15.9 n/a 35.5 n/a Earnings per share n/a 0.39 n/a Cash from operating activities % Q4 revenue of million grew 31.9% yoy including Elian. Underlying 3 revenue grew 4.0% driven by added-value services Luxembourg Q4 revenue increased as sufficient employees were in place to absorb market growth and address Q3 backlog Cayman standalone revenue declined 10.2% in Q4 yoy but entity outflow slowed during Q4 and continued to show improvement in the beginning of 2017 Elian contributed 26.9 million in revenue and 9.2 million in adjusted EBITA over Q4 Standalone adjusted EBITA margins were stable while Group adjusted EBITA decreased, reflecting Elian's lower margin profile An interim dividend of 22.1 million was paid out in November 2016 Notes 1. Q includes Elian 2. Average number of shares for Q4: 91,995, Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 7 7

8 Financial Highlights FY 2016 As reported Adjusted ( m) FY FY 2015 % change FY FY 2015 % change Revenue % % EBITA % % EBITA Margin (%) 35.2% 39.9% -464bps 39.9% 40.7% -85 bps Net Income Earnings per share % Cash from operating activities % FY 2016 revenue grew 11.9% to million. Underlying 3 group revenue grew by 3.0%, in Luxembourg (7.4%) and Netherlands (4.3%), but impacted by Cayman (-10.6% CC) EBITA for the year was lower due to inclusion of 17.9 million in one-off costs related to Elian acquisition No. of entities worldwide (standalone) decreased by 5.4% in Underlying ARPE grew 8.9% due to mix and higher addedvalue services FTEs increased to 2,359 (including Elian). 75.4% billable FTEs at year-end 2016 Cash from operating activities was million Net Income was 52.0 million or million on an adjusted basis (see slide 23 for adjustments) Notes 1. FY 2016 includes Elian as of September 23, Average number of shares for FY 2016: 88,942, Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 8 8

9 Revenue bridge FY 2015 to FY 2016 Underlying 1 FY 16 yoy % growth +4.3% +7.4% -10.6% +11.9% +3.9% +3.0% +11.9% Q4 16 yoy % growth +0.8% +17.7% -10.2% +20.2% +0.9% +4.0% +31.9% Intertrust 2015 SA Netherlands Luxembourg Cayman Guernsey RoW Intertrust 2016 SA Elian Intertrust 2016 Adjusted Reported 1. +x.x% Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures +xx.x% = reported 9

10 Adjusted EBITA bridge FY 2015 to FY 2016 Underlying 1 FY 16 margin % 64.0% 53.4% 58.0% 38.2% 32.0% 40.3% 34.1% 39.9% Q4 16 margin % 62.8% 58.4% 60.3% 36.1% 29.9% 41.5% 34.1% 39.9% Intertrust 2015 SA Netherlands Luxembourg Cayman Guernsey RoW HQ & IT costs Intertrust 2016 SA Elian Intertrust x.x% Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures +xx.x% = adjusted 10

11 Intertrust standalone Entities & ARPE development Entities (000) ARPE 1 ( k) Total growth % 37.9 Total growth 9.5% Underlying growth 2 8.9% FY 2015 FY 2016 FY 2015 FY ,907 entities at year end 2016 Net outflow of 2,158 (-5.4%) entities over the last twelve months Main reasons for outflows were end-of-life, portfolio optimisation and loss to competition Majority of inflow from existing clients Notes 1. Average revenue per entity ("ARPE") 2. Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 11 11

12 Cash development Cash Conversion Ratio & Cash from operating activities ( m) Capex ( m) 1 Cash from operating activities ( m) 2 Cash conversion ratio % 91.4% 97.0% 94.5% Maintenance Capex ( m) Strategic Capex ( m) Cash from operating activities was million FY 2016 cash conversion ratio, excluding strategic capital expenditures, remains strong at 94.5% Total capital expenditure for FY 2016 was 11.3 million Increase in maintenance capex in Q versus Q was driven by additional IT infrastructure projects 1. Cash from operating activities as reported 2. Cash conversion ratio = Adjusted EBITDA minus maintenance CAPEX, taken as a percentage of Adjusted EBITDA 12 12

13 Focus on the Netherlands * Adjusted revenue ( m) Adjusted EBITA ( m) Total growth 0.8% 4.3% % 4.2% Remain market leader, increased market share Q4 Adjusted revenue reflecting 1.2 million WIP write-down FY 2016 driven by solid growth in corporate services, specialised services continues to be impacted by timing issues Entities inflow in line with expectations and similar to 2015, driven by new entities from existing clients as well as inflow from US clients. Net outflow of 290 entities largely driven by end-of-life and administrative clean-up of 170 entities ARPE growth driven by transaction monitoring services, substance-related services as well as mix effect * Standalone Adjusted revenue ( m) Adjusted EBITA margin 61.8% 62.8% 64.1% 64.0% Number of entities 4,482 4,192 ARPE ( k) FTE Adj. revenue/fte ( k)

14 Focus on Luxembourg * Adjusted revenue ( m) Adjusted EBITA ( m) Total growth 17.7% 7.4% 35.1% 14.4% Adjusted Revenue growth driven by higher billing ratio, more available hours from new billable employees Number one in new incorporations and gaining market share, maintained number two position overall Margin improvements resulted from increase in Adjusted Revenue, staff expenses flat due to stable year-on-year FTE numbers as well as strong cost control versus Q Client entities grew year-on-year, strong inflows from existing clients Adjusted revenue ( m) Adjusted EBITA margin 50.9% 58.4% 50.1% 53.4% Number of entities 2,573 2,669 ARPE ( k) FTE Adj. revenue/fte ( k) * Standalone 14

15 Focus on Cayman * Adjusted revenue ( m) Adjusted EBITA ( m) Total growth -9.1% -10.4% -11.6% -13.3% Growth at constant currency -10.2% -10.6% -12.7% -13.5% Maintained number two position, landscape settling CC Adjusted Revenue declined driven by the decline of registered office entities and sale of banking activities at end of 2015 CC Adjusted EBITA declined Cayman standalone net entity outflow during Q4 was 207, versus 1,891 for first 9 months 2016 and 1,413 in Q Q4 and beginning of 2017 continued improvement in Intertrust Cayman s market position Adjusted revenue ( m) Adjusted EBITA margin 62.0% 60.3% 59.9% 58.0% Number of entities 17,571 15,473 ARPE ( k) FTE Adj. revenue/fte ( k) * Standalone 15

16 Focus on Guernsey * Adjusted revenue ( m) Adjusted EBITA ( m) Total growth -0.3% -0.9% -14.5% 4.4% Growth at constant currency 20.2% 11.9% 3.6% % Now market leader, gaining market share CC Adjusted Q4 Revenue grew driven by significantly higher ARPE and an increase in regulatory and compliance services CC Adjusted EBITA margin for FY 2016 increased driven by increased revenue, decreased in Q4 yoy as Q benefitted from a release of provisions FY 2016 net outflow of 885 client entities due to end-of-life, proactive management of portfolio to focus on higher value services Better portfolio mix, more complex clients and increased regulatory requirements led to higher ARPE. Adjusted revenue ( m) Adjusted EBITA margin 42.1% 36.1% 36.2% 38.2% Number of entities 3,324 2,439 ARPE ( k) FTE Adj. revenue/fte ( k) * Standalone 16

17 Focus on ROW * Adjusted revenue ( m) Total growth 0.8 % 11.8% Adjusted EBITA ( m) -5.1% 15.3% Underlying growth 0.9% 3.9% -4.9% % Q4 Revenue up slightly, underlying* FY revenue up 3.9% - double digit growth in Spain, Ireland & UK, and Singapore. Revenue growth and Adjusted EBITA margins impacted in Q4 by a one-off write-down of 1.3 million in Switzerland Underlying* EBITA increased 9.5% Number of entities increased by 8.4% driven by inflow of lower revenue generating entities. Higher value entities were stable. CC ARPE decreased due to inflow of low-arpe entities in Delaware Adjusted revenue ( m) Adjusted EBITA margin 31.7% 29.9% 31.1% 32.0% Number of entities 12,115 13,134 ARPE ( k) FTE Adj. revenue/fte ( k) * Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 17

18 Guidance The guidance below pertains to 2017 Management will update the medium term guidance at our first Capital Markets Day on September 21, 2017 Underlying revenue growth for 2017 is expected to be between 4-5% Underlying EBITA margins in 2017 are expected to expand slightly due to synergies and continued operating leverage, which will compensate for the margin pressure inherent to Elian s lower margin profile. This will result in expected adjusted EBITA margin being roughly stable versus 2016 (39.9%) Dividend policy over 2017 continues to be 40-50% of adjusted net income Previous guidance on synergies ( 10.4 million by end CY 2018E, of which 75% by end CY 2017E), capex (2-2.5% of revenue), effective tax rate (circa 16%), and cash conversion (in line with historical rates) remain unchanged 18

19 Appendix 1 19

20 Key dates for your agendas Date April 3, 2017 May 4, 2017 May 16, 2017 Event Publication of Annual Report 2016 and audited financial statements Q results Intertrust N.V. AGM May 18, 2017 Intertrust NV share quotation ex-final dividend 2016 May 19, 2017 Record date final dividend 2016 entitlement June 12, 2017 Payment date final dividend 2016 August 24, 2017 September 21, 2017 November 9, 2017 Q2 & Half Year 2017 results & announcement of interim dividend Capital Markets Day Q results 20 20

21 Income statement Including Elian acquisition since September 23, 2016 Income statement ( m) FY 2016 FY 2015 Revenue Staff expenses (170.7) (144.9) thereof equity share-based payments upon IPO (4.1) (4.4) thereof equity share-based payments upon Integration (0.4) Rental expenses (20.1) (17.2) Other operating expenses (50.5) (41.6) thereof transaction & monitoring costs (4.2) (5.3) thereof integration costs (8.5) (3.1) Other operating income Earnings before interest, taxes, depreciation and amortisation (EBITDA) Depreciation and amortisation (42.5) (37.3) (Profit/(loss) from operating activities Net finance costs (30.6) (100.7) (Profit/(loss) before income tax Income tax (19.5) (4.0) Profit/(loss) from continuing operations

22 Bridge EBITDA & EBITA -> Adjusted EBITDA & EBITA Adjustments ( m) FY 2016 FY 2015 Earnings before interest, taxes, depreciation and amortisation (EBITDA) Transaction & Monitoring costs Integration costs Other operating (income)/expense 0.5 (3.7) Equity share based payments upon IPO Equity share based payments upon Integration 0.4 One-off revenue 0.3 One-off expenses 0.3 (6.3) Adjusted EBITDA Depreciation and software amortisation (8.7) (7.2) Adjusted EBITA

23 FY 2016 Reported and Adjusted Net Income Including Elian acquisition since September 23, 2016 Reported Net Income ( m) FY 2016 FY 2015 Reported EBITDA Depreciation and software amortization (8.7) (7.2) Amortization of (PPA related) intangibles (33.8) (30.1) Net finance costs (30.6) (100.7) Profit before tax Income tax (19.5) (4.0) Reported Net Income Adjusted Net Income ( m) FY 2016 FY 2015 Adjusted EBITDA Depreciation (8.7) (7.2) Adjustments Excluding specific items (Integration & transaction costs mainly) and equity share based payments upon IPO and upon integration Adjusted EBITA Amortization of (PPA related) intangibles 0 0 Net Interest costs (21.1) (16.7) Adjusted Profit before tax Income tax (19.5) (22.3) Adjusted Net Income Acquisition related amortisation excluded from Adjusted Net Income definition 2016: Net finance Costs excl. Forex gains and losses of 9.6 m; 2015: pro forma post IPO interest cost 2016: Reported Income tax; 2015: 18% pro forma taxes 23 23

24 FY 2016 proforma (Intertrust + Elian 1 ) Adjusted net income per share In m Intertrust s.a. FY 2016 Elian 2016 Total Adjusted EBITA Interest expenses Adj. Net income before tax Taxation Adjusted net income Number of shares (in million) 92.0 Elian EBITA 30.4 million Proforma Proforma As at end Dec 2016 Adjusted net income per share 1.44 Notes 1. Based on management estimates 24

25 ( m) Intertrust standalone trading update Q Revenue and Adjusted EBITA (Actual growth) Key performance indicators Underlying +4.0% 41.4% 41.5% Margin % Q Q % Revenue Growth (underlying) 1,4 4.0% Revenue Growth (CC) 4.0% Revenue Growth 2 2.6% Adjusted EBITA Growth 4.0% (underlying) 1,4 Adjusted EBITA Growth (CC) 1 4.0% Adjusted EBITA Growth 2 2.9% Q Q Q Q Revenue Adj. EBITA # of entities (k) ARPE ( k) ARPE Growth 8.5% Notes 1. Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 2. CC refers to constant currency ARPE Growth (CC) 1 9.9% FTE 1,714 1,753 Revenue / FTE ( k) EBITA / FTE ( k) Annualised numbers based on quarterly figures (Q4) 4. CorpNordic is included in 2015 figures 25 25

26 ( m) Intertrust standalone trading update FY 2016 Revenue and Adjusted EBITA (Actual growth) Key performance indicators Underlying +3.0% 40.3% 40.7% Margin % FY 2015 FY % in CC +2.6% Revenue Growth (CC & PF) 1,4 3.0% Revenue Growth (CC) 1 4.8% Revenue Growth 2 3.6% Adjusted EBITA Growth (CC & PF) 1,4 2.6% Adjusted EBITA Growth (CC) 1 3.6% Adjusted EBITA Growth 2 2.6% # of entities (k) FY 2015 FY 2016 FY 2015 FY 2016 Revenue Adj. EBITA ARPE ( k) ARPE Growth 9.5% ARPE Growth (CC) % FTE 1,714 1,753 Revenue / FTE ( k) EBITA / FTE ( k) Notes 1. Underlying: Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 2. CC refers to constant currency 3. Annualised numbers based on quarterly figures (Q4) 4. CorpNordic is included in 2015 figures 26 26

27 Intertrust standalone FTEs FTEs Revenue per FTE 1 ( k) Total growth 2.3% Total 1.3% growth Proforma & 0.7% CC growth FY 2015 FY 2016 FY 2015 FY 2016 The Elian acquisition and our strategic focus on investing in people enabled us to increase the number of FTEs at yearend to 1,753 on standalone basis Average revenue per FTE increased by 1.3% on a standalone basis At year-end 2016 we had 75.4% billable FTEs Notes: 1. Annualised numbers based on adjusted revenue before specific items and one-off revenue/expenses 2. Including CorpNordic 27 27

28 Notes & Definitions Intertrust N.V. Q4 and FY 2016 financial figures are shown on a reported and adjusted basis Adjustments in EBITDA and EBITA are disclosed in the appendix of this document Financial figures of the Segmentation are presented on an adjusted basis Reported figures are as disclosed in the statutory annual accounts Adjusted figures represent adjustments because of exceptional occurrences Intertrust standalone ( s.a. ), means Intertrust group before the acquisition of Elian on September 23, 2016 Selected definitions: Adjusted net income per share is defined as Adjusted net income divided by the average number of shares outstanding at December 31, Average for Q4: 91,995,836 shares. Average for FY2016: 88,942,943 shares. Cash conversion ratio including strategic capital expenditures is defined as Adjusted EBITDA less capital expenditure, including strategic capital expenditures, divided by Adjusted EBITDA and is expressed as a percentage Cash conversion ratio excluding strategic capital expenditures is defined as operating free cash flow divided by Adjusted EBITDA and is expressed as a percentage. CC is Constant Currency FTE is Full-time equivalent employee Underlying is Intertrust standalone (excl. Elian) at constant currency and, for FY, incl. Jan-Jun 2015 CorpNordic figures 28 28