2014 Full year results. INVESTOR CALL 26 March 2014

Transcription

1 2014 Full year results INVESTOR CALL 26 March 2014

2 AGENDA DISCLAIMER 2014 FOURTH QUARTER 2014 FULL YEAR CAPITAL STRUCTURE OUTLOOK APPENDIX 2

3 DISCLAIMER Any information in this presentation that is not a historical fact is a forward-looking statement. Such statements may include opinions and expectations regarding TMF Group Holding B.V. ( the Company ) and its future business, Management s confidence and strategies as well as details of Management s expectations of global economic and regulatory trends. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's and/or its Management control that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. While the Company believes that its assumptions concerning future events are reasonable, there are inherent difficulties in predicting certain important factors that could impact the future performance or results of the Company s business. Accordingly, such statements should not be regarded as representations as to whether such anticipated events will occur nor that expected objectives will be achieved. The Company expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise. In this presentation, the Company makes references to EBITDA and EBITDA margin, neither of which is defined under International Financial Reporting Standards, as issued by the International Accounting Standards Board and as adopted by the European Union ( IFRS ). The items excluded from EBITDA and EBITDA margin are significant in assessing the Company s operating results and liquidity. EBITDA and EBITDA margin have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, analysis of the Company s results as reported under IFRS. Other companies in the Company s industry and in other industries may calculate EBITDA and EBITDA margin differently from the way that the Company does, limiting their usefulness as comparative measures. 3

4 2014 FULL YEAR GROUP PERFORMANCE Highlights: Revenue growth in Q and FY14: - as reported: 17.5% and 11.2% respectively - on a like-for-like basis*: 10.1% and 8.7% respectively Disposal of the Fund Services business to management Ongoing M&A activity - Integration KCS - on track - Acquisition of GMG Trust integration in progress - Acquisition of PwC Outsourcing in Brazil - closed post period-end - Acquisition of Axiss International in Cayman subject to regulatory approval - Pipeline of opportunities continues to build in line with defined criteria Expansion of activities in Russia, Greece and Africa now covering Ethiopia, Tanzania, Nigeria and Ghana * On a constant currency basis, excluding impact of acquisitions and disposals 4

5 Q GROUP PERFORMANCE Financial performance vs. Q m Q Q Change % Revenue % EBITDA % EBITDA margin 30.9% 32.0% 1.1 pps Cash Flow from operations % Consolidated interest expense - Bank / Bond - Shareholder* - FX (income) / loss * Not cash paying (0.1) 30.4% 30.0% 16.0% Key points Growth in Corporate Services and Structured Finance Services of 18.6% and 17.8% respectively Positive contribution to revenue and EBITDA from acquisitions EBITDA increased mainly in APAC and EMEA as benefit delivered from investment in sales capability Increase in cash flow due to a higher EBITDA and a positive FX effect on working capital Increase in the interest expense due to the additional funding raised in July 2014 and the compounding impact of shareholders' loan interest 5

6 Q GROUP PERFORMANCE Operational metrics vs. Q Selected KPIs Q Q Change No. of employees* 5,243 4, Key points Increase in number of employees primarily due to acquisitions Annualised Revenue per employee ( 000) Annualised Staff costs per employee ( 000) % % Set-up of business activities in Qatar, Tanzania, Ghana, Ethiopia and Nigeria No. of offices** No. of jurisdictions** * Average number over the period (FTE) ** Excludes the acquired KCS offices as these are in process of merging with the TMF Group offices Annualised staff costs positively impacted by the pension adjustment in Q4 6

7 Q GROUP PERFORMANCE Revenue by Geography m Revenue by Geography (% in total revenue) Revenue by Service Line m Change % 71.9% 7.1% 100% 12.4% 18.7% 100% 18.2% 17.0% Change % 4.1% 17.8% % 33.2% 34.5% % % 34.4% 28.8% Q Q Q Q Q Q Other APAC Americas EMEA Benelux Other APAC Americas EMEA Benelux Private Clients Structured Finance Services Corporate Services 7

8 2014 FULL YEAR GROUP PERFORMANCE Financial performance vs m Change % Revenue % EBITDA % EBITDA margin 27.9% 28.3% 0.4pps Cash Flow from operations % Consolidated interest expense - Bank / Bond - Shareholder* - FX (income) / loss (0.6) 10.0% 3.6% 10.1% Key points Growth in Corporate Services and Structured Finance Services of 12.8% and 6.4% respectively Positive impact on revenue and EBITDA due to acquisitions EBITDA increased in EMEA, and APAC regions Increase in cash flow due to improved collection of receivables Increase in the interest expense due to the additional funding raised in July 2014 and the compounding impact of shareholders' loan interest * Not cash paying 8

9 2014 FULL YEAR GROUP PERFORMANCE Operational metrics vs Selected KPIs Change No. of employees* 4,763 4, Annualised Revenue per employee ( 000) Annualised Staff costs per employee ( 000) % No. of offices** Key points New offices opened in Qatar (Q1 2014), Greece, and Russia (Q4 2014) and closed offices in Americas Set-up of business activities in Qatar, Tanzania, Ghana, Ethiopia and Nigeria No. of jurisdictions** * Average number over the period (FTE) ** Excludes the acquired KCS offices as these are in process of merging with the TMF Group offices 9

10 2014 FULL YEAR GROUP PERFORMANCE Revenue by Geography m Revenue by Service Line m Change % Change % % 2.1% % 6.4% % % % FY 2013 FY 2014 Other APAC Americas FY 2013 FY 2014 Private Clients Structured Finance Services Corporate Services EMEA Benelux 10

11 COUNTRY GROWTH PROFILE VS Growth at constant foreign exchange rates Revenue growth (%) Revenue growth ( m) 2014 vs < 0% countries 0 5% countries 5 10% countries 10 20% countries >20% countries * Excludes KCS and GMG Trust acquisitions 11

12 2014 FULL YEAR CORPORATE COST INVESTMENT Corporate costs by function m Key points 4.3 (1.4) Increase in corporate costs following continued investments in building the sales capability and support functions Increase in IT efforts on roll out of capital projects 42.9 FY 2013 Sales IT Marketing Support functions FY

13 2014 FULL YEAR EBITDA MARGIN EBITDA margin (%) Key points 0.6% 0.7% (0.0)% (0.1)% 0.2% Margin impacted by the movement in weighting by region and regional margin movement year-on-year 28.3% FY 2013 Benelux EMEA APAC Americas (1.8)% 27.9% Other Corporate FY 2014 costs Increase in corporate costs due to investment in sales capability, regional management structure and central costs of acquired businesses 13

14 DISCONTINUED OPERATIONS FUNDS BUSINESS Evolution of Revenue ( m) Funds market changed significantly in recent years 3 largest clients lost as outgrew Fund Services offering % Strong pipeline of new opportunities, but insufficient to fill the gap in the short term Funds Services is a standalone offering within the group limited cross selling FY12 FY13 FY14 Revenue Reached agreement to sell majority stake to management Residual 10% of the shareholding will be retained by TMF Group Treated as discontinued operations in 2014 and prior years restated 14

15 DISCONTINUED OPERATIONS RESTATEMENT OF ACCOUNTS Reported Revenue and EBITDA m FY 2012 FY 2013 FY 2014 Revenue EBITDA EBITDA margin 27.4% 27.4% 26.6% Restated Revenue and EBITDA m FY 2012 FY 2013 FY 2014 Revenue EBITDA EBITDA margin 27.3% 28.3% 27.9% 15

16 PwC OUTSOURCING ( APRIORI ) ACQUISITION Overview of the business Revenue growth ( m) Established in 2000, provides a full set of outsourced corporate services including finance and accounting, human resources, tax and compliance % Ranked as one of the leaders in the Brazilian back-office outsourcing industry Employs over 500 people, working from three locations - Sao Paulo, Rio de Janeiro and Ribeirao Preto FY10 FY11 FY12 FY13 FY14 Breakdown by business line 13.0% 36.0% 18.0% Acquisition will strengthen and consolidate TMF Group s existing platform in Brazil, whilst also benefitting from the addition of Apriori s specialist technology 33.0% Financial and Accounting Solutions (FAS) Human Resources Outsourcing (HRO) Tax Compliance Outsourcing (TCO) Business Technology Outsourcing (BTO) 16

17 CAPITAL STRUCTURE Capitalization m Dec 2014 Dec 2013 Change % Cash and cash equivalents * % Secured Notes % Senior Notes % Other loans % Key points The floating senior secured loan notes and the fixed rate senior notes were tapped for EUR 45m and EUR 20m respectively in July Total External Debt % Gross leverage 5.81x 5.98x 0.16x Total External Net Debt** % Net Leverage 5.01x 5.12x 0.11x Pro-forma Net leverage*** 4.81x 5.12x 0.31x * Cash includes the cash in Fund Services ** Net Debt excludes capitalized finance costs, long-term supply arrangements, advance client payments, deferred consideration and Subordinated Shareholder Funding *** Includes pro-forma EBITDA of acquired businesses 17

18 OUTLOOK Our priorities continue to be: To continue to scale our business and build on our current geographic footprint and service offerings To continue to identify acquisition opportunities that will complement our existing delivery capabilities To drive productivity levels across our business operations To reduce net leverage in the absence of significant acquisitions 18

19 INVESTOR RELATIONS Provisional Financial Calendar Q results: Wednesday, 13 May 2015 Q results: Thursday, 27 August 2015 Q results: Thursday, 26 November 2015 Contacts Gordon Stuart, CFO Powerscourt Justin Griffiths 19

20 APPENDIX 20

21 APPENDIX 2014 Full year Group performance at constant currency Revenue by Geography m Change % 41.0% 12.4% Revenue by Service Line m Change % -0.3% 10.6% % % % FY 2013 FY 2014 Other APAC Americas FY 2013 FY 2014 Private Clients Structured Finance Services Corporate Services EMEA Benelux 21

22 APPENDIX Performance on a like-for-like basis* m Q Q Change % FY 2014 FY 2013 Change % Revenue % % EBITDA % % EBITDA margin 31.7% 32.5% 0.8 pps 30.2% 28.6% 1.6 pps Due to TMF Group s broad geographical footprint, TMF Group is exposed to fluctuation of currencies other than Euro In constant currency TMF Group recorded a higher revenue and EBITDA growth in FY14 vs. FY13 The excluded acquisitions are KCS in APAC, Accepta in Norway, Tass Axia in Indonesia, GMG Trust in South Africa and the disposal of the paralegal business in Brazil * On a constant currency basis, excluding acquisitions and disposals 22

23 APPENDIX Consolidated Balance Sheet EURm December December Variance Assets Non-current assets % - Trade receivables % Other receivables % Other current assets 7 10 (28.8%) Clients' funds held under trust % Cash and cash equivalents* % Assets held for sale 38 - Current assets % TOTAL ASSETS 1,373 1, % Share capital and premium % Other reserves 27 (3) (1000.0%) Retained earnings (441) (378) 16.7% Non-controlling interest 4 (2) (300.0%) Total equity (230) (203) 13.3% Liabilities Loans and borrowings 1, % Deferred tax liabilities % Other long term liabilities % Other liabilities % Total liabilities 1,603 1, % EURm December December Variance Other liabilities Trade and other payables % Provisions % Current tax liabilities (14.3%) Clients' funds ledger balances % Total short term liabilities % TOTAL EQUITY AND LIABILITIES 1,373 1, % * Under the new cash pool agreement, TMF Group is not able to offset the bank overdrafts against the cash at bank 23

24 DISCONTINUED OPERATIONS RESTATEMENT OF ACCOUNTS Restatement of assets and liabilities EURm December Restatement Restated Variance Assets Non-current assets 815 (21) 794 (2.6%) Trade receivables 111 (4) 107 (3.6%) Other receivables 32 (2) 30 (4.8%) Other current assets 8 (1) 7 (12.5%) Clients' funds held under trust % Cash and cash equivalents* 336 (10) 326 (3.0%) Assets held for sale Current assets % TOTAL ASSETS 1,373-1, % Total equity (226) (226) 0.0% Liabilities Loans and borrowings* 1,343-1, % Deferred tax liabilities % Other long term liabilities % Other liabilities 208 (4) 204 (1.8%) Liabilities held for sale Total liabilities 1,603-1, % TOTAL EQUITY AND LIABILITIES 1,377-1, % * Under the new cash pool agreement, TMF Group is not able to offset the bank overdrafts against the cash at bank 24

25 DISCONTINUED OPERATIONS RESTATEMENT OF ACCOUNTS Restatement of the P&L EURm Var. Reported Restatement Restated Var. Reported Restatement Restated Var. Revenue 397 (24) 373 (6.1%) 433 (18) 414 (4.2%) Staff costs (209) 15 (194) (7.0%) (232) 13 (219) (5.5%) Rental and office expenses (48) 4 (44) (8.4%) (50) 3 (47) (5.6%) Professional fees (11) 1 (10) (8.5%) (12) 1 (11) (11.6%) Other operating expenses (20) 1 (19) (5.1%) (23) 1 (21) (6.3%) (288) 21 (267) (7.2%) (317) 19 (299) (5.8%) EBITDA 109 (4) 105 (3.3%) % Acquisition, litigation and restructuring costs (12) 1 (10) (12.2%) (29) 1 (28) (3.4%) Depreciation, amortisation and impairment (31) 1 (30) (4.3%) (23) 5 (18) (21.8%) Operating profit 66 (1) 66 (1.3%) % Net finance costs (93) 2 (91) (2.1%) (102) (0) (103) 0.4% Result before income tax (27) 1 (26) (4.2%) (39) 6 (33) (14.9%) Income tax (5) (1) (6) 18.7% (8) (1) (9) 13.0% Result for the year from continuing operation (32) 0 (31) (0.8%) (47) 5 (43) (10.0%) Result for the year from discontinued operation - (0) (0) 0.0% - (5) (5) 0.0% Result for the year (32) (0) (32) 0.0% (47) (0) (48) 0.6% Non-controlling interest (1) - (1) 0.0% (1) - (1) 0.0% Result attributable to the shareholders (33) (0) (33) 0.0% (48) (0) (48) 0.6% 25

26 APPENDIX Quarterly evolution Revenue and EBITDA* ( m) % % % % % % % % % % % % % % % % Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q y-o-y % Revenue Margin EBITDA Cash Flow from operations ( m) % % % % % % % % Q Q Q Q Q Q Q Q % of EBITDA CF from operations * Quarterly numbers are restated as Funds Services segment is reported as discontinued 26

27 WE HAVE GLOBAL REACH Venezuela Colombia Brazil Ecuador Peru Bolivia Chile Paraguay Argentina Uruguay Mexico Guatemala Honduras El Salvador Nicaragua Costa Rica Panama Dominican Republic Jamaica Canada United States Curacao Aruba Cayman Islands British Virgin Islands Bermuda The Netherlands Belgium Luxembourg United Kingdom Jersey Guernsey Ireland Germany Denmark Sweden Finland Norway France Switzerland Italy Spain Portugal Malta Austria Poland Czech Republic Slovakia Hungary Slovenia Bulgaria Croatia Romania Serbia Ukraine Estonia Latvia Lithuania Russia Kazakhstan Turkey Cyprus Israel United Arab Emirates Qatar Mauritius South Africa China Hong Kong Japan South Korea Philippines Thailand Singapore Vietnam Indonesia Malaysia Taiwan India Australia New Zealand

28 Disclaimer Whilst we have taken reasonable steps to provide accurate and up to date information in this publication, we do not give any warranties or representations, whether express or implied, in this respect. The information is subject to change without notice. The information contained in this publication is subject to changes in (tax) laws in different jurisdictions worldwide. None of the information contained in this publication constitutes an offer or solicitation for business, a recommendation with respect to our services, a recommendation to engage in any transaction or legal, tax, financial, investment or accounting advice. No action should be taken on the basis of this information without first seeking independent professional advice. We shall not be liable for any loss or damage whatsoever arising as a result of your use of or reliance on the information contained herein. This is a publication of TMF Group Holding B.V., P.O. Box 23393, 1100 DW Amsterdam Zuidoost, the Netherlands (contact@tmf-group.com). TMF Group Holding B.V. is part of TMF Group, consisting of a number of companies worldwide. A full list of the names, addresses and details of the regulatory status of the companies are available on our website: TMF Group Holding B.V.