SL Bidco B.V. Interim financial report for the period 1 January 30 June Table of contents

Transcription

1 SL Bidco B.V. Interim financial report for the period 1 January 30 June 2018 Table of contents 1. Consolidated profit and loss account 2. Consolidated balance sheet 3. Consolidated condensed cash flow statement 4. Notes to the consolidated interim financial report 5. Management comments on results All information is unaudited. Amounts are presented in thousands of euro unless stated otherwise. SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 1

2 1. Consolidated profit and loss account Notes Period ended 30 June Revenue... 4b Cost of sales of goods and providing services... 4c (87 906) (90 461) Gross profit Selling expenses... (13 228) (11 405) General administrative expenses... 4d (25 904) (27 026) Other income Operating result... (8 768) (14 884) Finance income Finance costs... (10 133) (5 989) Finance cost - net... (10 111) (5 972) Result before income tax and share in result of associated companies... (18 879) (20 856) Income tax... (421) 535 Share in result of associated companies... (36) Result after income taxes... (19 336) (20 321) Attributable to: Owners... (19 329) (20 333) Non-controlling interests... (7) 12 SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 2

3 2. Consolidated balance sheet After appropriation of result Notes Period ended 30/06/ /12/2017 ASSETS Non-current assets Intangible assets Property, plant and equipment Financial fixed assets Current assets Inventories Derivative Financial instruments Trade and other receivables Cash TOTAL ASSETS EQUITY AND LIABILITIES Capital and reserves attributable to shareholders of the Parent Share capital Share premium Other reserves... (91 545) (71 988) Legal reserves... (4 447) Non-controlling interest TOTAL GROUP EQUITY Provisions Long term loans... 4e Current liabilities Trade and other payables Current tax liabilities Short term loans Derivative financial instruments Deferred revenue... 4f TOTAL LIABILITIES TOTAL GROUP EQUITY AND LIABILITIES SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 3

4 3. Consolidated condensed cash flow statement Period ended 30 June According to the indirect method Operating result including depreciation and amortization charge (8 768) (14 884) Adjustments for depreciation and amortization Operating Result Changes in operating assets and liabilities... (1 561) (2 565) Cash generated from business activities Income tax paid/received (469) Net cash generated from operating activities Cash flows from investing activities Payment for acquisition of subsidiary, net of cash acquired... (21 310) Payment for intangible assets other than goodwill, customer relations and tradenames... (434) (1 465) Purchase of property, plant & equipment, net of proceeds from disposals (325) (712) Net cash (used in) investing activities... (759) (23 487) Cash flows generated from financing activities... (10 564) Net increase in cash and cash equivalents... (3 251) (8 708) Cash and cash equivalents at beginning of period Effect of foreign exchange rate changes on cash and cash equivalents (271) (80) Cash and cash equivalents at end of period SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 4

5 4. Notes to the consolidated interim financial statements a. Basis of preparation of the Interim Financial report as per 30 June 2018 The basis of preparation of the Interim financial report including the significant accounting policies, the accounting framework and the principles of valuation of assets and liabilities is the same as the basis of preparation of the Report on the annual accounts of SL Bidco B.V. for the period 1 January 2017 until 31 December b. Revenue segment reporting Revenue is allocated based on the country in which the customer is located. There are no inter-segment revenues. Period ended 30 June Belgium The Netherlands Sweden United Kingdom Germany Denmark Others The revenue comprises the following categories: Period ended 30 June Products Maintenance and Managed Security Services (MSS) Consultancy services Other revenue Total revenue SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 5

6 c. Cost of sales of goods and providing services Cost of sales of goods and providing services includes an amount of (2017: 7 595) amortization and depreciation charges. d. General administrative expenses General administrative expenses include an amount of (2017: ) amortization and depreciation charges and (2017: 2 082) of non-recurring expenses. e. Long term loans Long term loans include an amount of shareholder loans of (2017: ). f. Deferred revenue Non-current portion of deferred revenue amounts to (2017: ) SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 6

7 5. Management comments on results Financial Results In the first half year of 2018, the company grew its revenues with compared to first half year of 2017 which equals an organic growth rate of 3,8% (including the negative effect of denominating SEK and GBP Revenues in EUR over H compared to H1 2017). Revenues are composed of product sales for , maintenance support services and managed security services for , professional consulting services for and other revenues for Maintenance and managed security services revenue and professional consulting services show the most significant organic growth of 7,9% and 12,7% respectively. Cost of sales of goods and providing services amounts to , including amortization of intangible assets. Excluding amortization, cost of sales of goods and providing services amounts to It includes the cost of the products sold by SecureLink, as well as the directly attributable payroll cost (both in-house and procured) for providing the maintenance support, consulting and managed security services. For H1 2018, the Company reported a negative result after income taxes of , mainly as a result of the amortization of intangible assets and the finance cost related to the refinancing transaction which took place in Q The company measures its financial performance for management purposes on EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization). The GAAP applied for management reporting purposes is the statutory local GAAP of all SecureLink entities, applicable at the moment of acquisition by SecureLink, consistently applied in the period of ownership. This preserves the comparability of pro forma financial information over historic and current periods. SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 7

8 The below table presents the breakdown of differences between NL GAAP operational result and EBITDA used by management to measure the company s financial performance over historic and current periods: EBITDA Reconciliation NL GAAP vs Management Reporting H H Change EUR '000 EUR '000 % Operating result (8 768) (14 884) Add back amortizations customer contracts and tradenames (NL GAAP included in COGS) Add back other amortizations and depreciations (NL GAAP included in SG&A) NL GAAP operating result including non-recurring items % Non-recurring (Exceptional) expenses Recurring NL GAAP operating result % Add back differences NL GAAP / Historic GAAP (373) (655) Historic GAAP EBITDA (Management reporting EBITDA) % EBITDA Reconciliation NL GAAP vs Management Reporting H FY 2017 Change EUR '000 EUR '000 % Historic GAAP EBITDA (Management Reporting EBITDA) Add back Historic GAAP EBITDA (Management Reporting EBITDA) H (8 158) Add Historic GAAP EBITDA (Management Reporting EBITDA) H Historic GAAP LTM EBITDA % Add future cost saving synergies Historic GAAP LTM EBITDA including cost saving synergies % The integration of acquired companies throughout 2017 obviously created scaling opportunities. By the end of Q3 2017, the Group Leadership Team identified a synergy plan leading to annual cost savings in the range of The plan was executed throughout Q At period end H1 2018, the expected amount of the cost savings plan still to be realized in 2018 amounts to (year end 2017: 2 000). The cost saving synergies identified in 2017 have already partly materialized in the actual H EBITDA. Solvency, Cash Flow and Liquidity SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 8

9 On June 30, 2018, the company s solvency ratio (shareholder equity / balance sheet total) is 28,2% (2017: 34,1%), and the current ratio (current assets incl. cash & bank / current liabilities) is 90,9% (2017: 78,9%). In this calculation, the Shareholders Loans are considered as equity and the calculation of the current ratio excludes the non-current portion of deferred revenue. The refinancing operation has resulted in the repayment of almost all short-term loans received from credit facilities and has increased the liquidity and financial flexibility of the company. For H1 2018, the Company reported a net loss, mainly as a result of the amortization of intangible assets and the finance cost related to the refinancing transaction which took place in Q As these are non-cash items, the net cash flow from operating activities is positive as can be derived from the cash flow statement. The operating result for H adjusted for depreciation and amortization equals compared to for H1 2017, an increase of or 34,7% significantly outperforming revenue growth primarily resulting from cost saving synergies. Solid cash conversion resulted in of net cash generated from operating activities (including non-recurring expenses). Excluding non-recurring expenses, the net cash generated from operation activities amounts to compared to for H Personnel The company s main assets are its people. The company will continue to invest in the growth of its expert salesforce and its consulting teams. These investments require careful timing as the investment in the expert workforce usually takes between 6 and 12 months to start paying back. On December 31 st, 2017, the company employed 646 FTE. On June 30, 2018, the number of employees had increased to 653 FTE. SL Bidco B.V. - Trapezium 224, 3364DL Sliedrecht - The Netherlands P 9