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Investor Presentation
GFT Technologies SE Dr Jochen Ruetz, CFO April 2016
2 GFT business model
3 Financial Results 2015
1 GFT at a glance
4 Outlook
Agenda
IT solutions for financial services 1 GFT at a glance
April 2016 | Investor Presentation 3
Business change and technology consultancy for financial institutions:
Capital Markets
Retail Banking
Private Wealth
Insurance
Need for digital transformation in banks and insurances
Increasing compliance and regulatory requirements esp. for Investment Banks
4,000 employees (FTE) and 400 freelance IT experts
Integrated onshore/ nearshore approach with development centers in Spain, Poland, Brazil and Costa Rica
Strategic IT partner Growth drivers Global delivery model
Proven onshore / nearshore delivery model 1 GFT at a glance
Canada (10)
Toronto
USA (71)
Boston New York
Costa Rica (62)
Mexiko (100)
Heredia
Mexico City
Brazil (454)
Alphaville Sorocaba
Germany (276)
Bonn Eschborn/Frankfurt St. Georgen Stuttgart
Italy (499)
Florence Genoa Milano Montecatini Terme Padova Piacenza Siena Torino
Spain (1,802)
Alicante Barcelona Lleida Madrid Valencia Zaragoza
Switzerland (46)
Poland (489)
Lodz Poznan Warsaw
Basel Zurich
UK (241)
London
North America & UK
Latin America
Central Europe
Southern & Eastern Europe
Peru* Lima
April 2016 | Investor Presentation 4
* Founded in Q1/2016
Key figures
1 GFT at a glance
April 2016 | Investor Presentation 5
121 174
279
374 410
0
50
100
150
200
250
300
350
400
450
2012 2013 2014 2015 2016e
Revenue in m€
11 19
33
45 49
0
10
20
30
40
50
60
2012 2013 2014 2015 2016e
EBITDA in m€
10
16
25
33 35
0
5
10
15
20
25
30
35
40
2012 2013 2014 2015 2016e
EBT in m€
1.300 2.016
3.131
4.050 4.450
0500
100015002000250030003500400045005000
2012 2013 2014 2015 2016e
Employees (FTE)
April 2016 | Investor Presentation 6
1 GFT at a glance
Biggest Customers
Capital Markets
Private Wealth
Insurance & Others
Retail Banking
7
1 GFT at a glance
GFT share and shareholder structure
15 15
25 25 30
0
5
10
15
20
25
30
35
2012 2013 2014 2015 2016
Dividend per share
26,2%
9,7% 64,1% Ulrich Dietz
Maria Dietz
Free float
Shareholder structure
01/01/2014 € 6.45
31/03/2016 € 22.32
50
100
150
200
250
300
350
400
450
500
550
31.12.13 31.03.14 30.06.14 30.09.14 31.12.14 31.03.15 30.06.15 30.09.15 31.12.15 31.03.16
GFT share indexed %
GFT TecDAX
April 2016 | Investor Presentation
April 2016 | Investor Presentation 8
1 GFT at a glance
Acquisition of Habber Tec Brazil
www.habber.com/br/
Established in 2000 and approx. 105 Employees
Based in Sao Paulo with branches in Curitiba and Porto Alegre
Brazil’s largest IBM partner for Business Process Management
Expert for complex integration and implementations of BPM EAI, ECM, Big Data & Analytics and Mobile
Revenue 2015: BRL 22.4 million (approx. EUR 5.4 million), approx. 60 % financial services industry.
Planned Revenue 2016: around BRL 29 million (approx. EUR 7 million)
Robust and long standing relationships with renowned financial services clients
Client base (no overlap with GFT)
2 GFT business model
3 Financial Results 2015
1 GFT at a glance
4 Outlook
Agenda
Business areas of GFT inside the banks
April 2016 | Investor Presentation 10
2 GFT business model
Sun deck Innovation
-> approx. 10% of ITS budget
Engine room Core Banking, middle & back office projects
-> approx. 50% of ITS budgets
Tween deck Risk & Compliance projects, front office
-> approx. 40% of ITS budget
Three main growth drivers 2 GFT business model
Regulation
Increasing compliance and regulatory requirements esp. for Investment Banks
Implementing of applications for new data analysis and reporting standards
Onshore consultancy by industry experts and nearshore implementation services
April 2016 | Investor Presentation 11
Challenges Needs Solutions
Digitalisation
FinTechs increasingly occupying parts of the value chain
Restructuring of business model to offer more digital customer-centred services
Digital Banking Lab with protoypes for innovative solutions for the bank of the future
Margin pressure
Pressure to reduce costs for maintaining core banking systems
Outsource IT Services to geographical areas with cost-effective workforce of IT experts
IT services at attractive prices by nearshore hubs in Spain, Poland, Brazil and Costa Rica
Regulation 2 GFT business model
April 2016 | Investor Presentation 12
Deutsche Bundesbank, Dr Andreas Dombret, 30/09/2015: “All macroeconomic studies on the impact of regulatory reforms are consistent in stressing that the overall economic benefit by far outweigh the costs. And that means that there is no way around fully implementing the reforms that have already been initiated and finalising their outstanding elements.” …
“The process of phasing in the regulatory reforms will continue until 2019.”
GFT is currently engaged with several tier 1 global banks to help them achieve compliance with BCBS239
April 2016 | Investor Presentation 12
Regulation GFT Regulatory Change Management Service
2 GFT business model
April 2016 | Investor Presentation 13
Home screen shows the firm-wide status of compliance, with action areas highlighted in red
Enormous value for banks - each regulation is interpreted as it evolves, and banks can clearly see the areas of their business that need to be addressed to ensure they achieve regulatory compliance
| Investor Presentation 13
April 2016 | Investor Presentation 14
Social Network TV-Banking
Tablet
Mobile Banking
Telefone- and Webbanking
Terminal
Branch
I am digital, mobile, connected 24/7, highly
informed, willing to offer data, social
Digitalisation Digital customer will change the use of bank channels
2 GFT business model
Digitalisation From a multi-channel to an omni-channel approach
2 GFT business model
Digital Channels Face-to-face Channels
Omni-channel user interface
SS-Terminal TV-Banking
Mobile Banking
Tablet Social Network
Online Banking
Sales Force
Branch Agent Telephone- and Webbanking
April 2016 | Investor Presentation 15
Digitalisation Existing GFT solutions
2 GFT business model
April 2016 | Investor Presentation 16
Better access to digital banking products and services
Omni-channel user interface
All channels are linked to one platform with integrated devices
Providing a seamless banking experience for customers
Key areas of transformation GFT is on track
Digital payments Jiffy
SEPA based person-to-person service to transfer money real time through a smartphone app.
About 50 banks offer the service in Italy. GFT and SIA sales cooperation launched in Germany.
Margin pressure in banks 2 GFT business model
April 2016 | Investor Presentation 17
Advi
sory
ser
vice
s
Execution services
Business Consulting
Application Management
Governance
Architecture
Testing Engineering and QA
User Experience and Creative
Solution Development
Increasing nearshore activities Onshore
Onshore business process expertise and nearshore high quality technical skills ensure the successful migration of support of large, complex applications such as Sungard Global One
Onshore, onsite programme/project mangers use proven methods (e.g. MSP) to execute complex work supported by nearshore analysts/technical PMs and our PMO method (P3O)
Senior technical architects work with client technologists to design leading edge solutions which are then transitioned for detailed design and implementation to nearshore centres
Test architects and engineers design complex test automation frameworks and processes and then moves them into lights-out test architectures or nearshore testing teams
Working hand in hand with users via a user-centric approach to design, UX specialists create intuitive and efficient IT systems to be executed in nearshore centres via leading technologies
Onshore technical architects (consultant or client) work directly with large nearshore teams to implement complex solutions using Agile methodologies
Nearshore
Onshore business consultants help clients with strategy, specialist knowledge, process change and business case creation. Nearshore analysts support data analysis and artefact production
2 GFT business model
3 Financial Results 2015
1 GFT at a glance
Agenda
4 Outlook
April 2016 | Investor Presentation 19
3 Financial Results 2015
Highlights
… recruitment partner for selected growth industries
On 27 July 2015, GFT sold all companies belonging to the emagine division in Germany, France and the UK
The transaction was closed on 30 September 2015
Revenue and earnings generated by emagine in 2015 and 2014 are not included GFT’s key financial figures
… implementation of digital solutions focusing on the financial sector
On 28 July 2015, GFT Iberia Holding
S.A.U., Sant Cugat del Vallès, Spain, acquired the Spanish IT service provider Adesis Netlife S.L., Madrid, Spain, and its subsidiaries
Revenue and earnings generated by Adesis included in Q3 - Q4 2015 numbers
… leading IT solutions provider for the international finance sector
Focus on IT solutions for the finance sector after sale of emagine
High demand for projects to achieve regulatory compliance
Strong growth in revenue and earnings
Rule Financial integration on track, financial performance in line with business case
EBT + 28 %
Key figures
April 2016 | Investor Presentation 20
3 Financial Results 2015
Strong organic growth of 20%
Rule companies contributed € 78.86m (Q1-Q4) and Adesis € 6.42m (Q3-Q4)
Positive revenue trend
High capacity utilisation rate of 89%
EBT includes costs for innovation project CODE_n and CeBIT fair presence of -€ 2.28m
CODE_n will in future concentrate on the platform & minor events
Revenue +34 %
EBITDA +36 %
Employees + 29 %
Continuous ramp up of employees in nearshore centers Spain, Poland and Brazil
Adesis acquisition adds 300 employees in Spain and Mexico
Profit & loss statement
April 2016 | Investor Presentation 21
3 Financial Results 2015
In €m 2014 2015 2015 vs. 2014
Thereof FX effects
Revenue 279.24 373.51 34% 5%
Revenue w/o Rule & Adesis 240.85 288.23 20% 2%
EBITDA 32.82 44.56 36% 2%
EBIT 26.42 34.23 30% 2%
EBT 25.41 32.52 28% 1%
Net income 18.59 26.55 43% -3%
IAS earnings per share 0.71 € 1.01 € 43%
Employees (FTE) 3,131 4,050 29%
Profit & loss development per quarter
April 2016 | Investor Presentation 22
3 Financial Results 2015
In €m Q1 2015 Q2 2015 Q3 2015 Q4 2015 FY 2015
Revenue 88.52 90.24 92.72 102.03 373.51
Revenue w/o Rule Financial & Adesis 68.82 71.45 69.61 78.35 288.23
EBITDA 9.56 10.24 11.50 13.26 44.56
EBIT 7.20 7.78 8.87 10.38 34.23
EBT 6.89 7.35 8.51 9.77 32.52
Net income 4.67 4.18 6.59 11.11 26.55
IAS earnings per share 0.18 € 0.16 € 0.25 € 0.42 € 1.01 €
Employees (FTE) end of period 3,257 3,421 3,897 4,050 4,050
Revenue and EBT per quarter
April 2016 | Investor Presentation 23
3 Financial Results 2015
Revenue increased by 16% in Q4 to € 102.03m (Q4/2014: € 87.77m), due to a positive development of the GFT entities and the acquisition of Adesis
Revenue growth (Q4/2015 vs. Q4/2014) excluding Adesis +12%
EBT of € 9.77m in Q4/2015 increased by 32% (Q4/2014: € 7.39m)
56.22 56.00 58.08
77.39
87.77 88.52 90.24 92.72
102.03
Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
Revenue €m
5.71
4.74 5.50
7.78 7.39
6.89 7.35
8.51
9.77
Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15
EBT €m
M&A effects on results
April 2016 | Investor Presentation 24
3 Financial Results 2015
In €m GFT GFT Rule* Adesis* Others Total
Revenue 288.18 78.86 6.42 0.05 373.51
EBT 33.72 1.84 -1.08 -1.96 32.52
Employees 2,877 776 300 97 4,050
* operating EBT w/o Group Allocation
2015
+ € 0.40m Adesis operting EBT - € 0.55m PPA amortization - € 0.93m PPA orderbook adjustment
2014
+ € 4.77m Rule operating EBT - € 2.93m PPA amortization
In €m GFT GFT Rule* Adesis* Others Total
Revenue 240.83 38.39 0.00 0.02 279.24
EBT 30.99 -2.92 0.00 -2.66 25.41
Employees 2,390 674 0 67 3,131
+€ 1.14m Rule operating EBT -€ 1.34m PPA amortization -€ 1.68m PPA orderb. adjustm. -€1.04m M&A acquisition costs
+20%
+9%
+20% +15%
Revenue by countries
April 2016 | Investor Presentation 25
3 Financial Results 2015
2014: € 279.24m 2015: € 373.51m
UK
Italy
Spain
Germany
USA
Switzerland
Brazil
Other Countries
€ 110.00 m
€ 50.20 m
€ 30.65 m
€ 41.66 m
€ 26.17 m
€ 10.46 m
€ 4.23 m
€ 5.87 m
39%
18%
11%
15%
9%
4%
2%
2%
€ 161.82 m
€ 54.33 m
€ 48.45 m
€ 43.15 m
€ 37.12 m
€ 10.68 m
€ 7.31 m
€ 10.65 m
43%
14%
13%
12%
10%
3%
2%
3%
47%
8%
58%
4%
42%
2%
73%
81%
Growth
Cash & Securities
Other Current Assets
Non-Current Assets
Non-Current Liabilities
Equity
Current Liabilities
Balance Sheet (in €m)
April 2016 | Investor Presentation 26
3 Financial Results 2015
Liabilities Assets
148.61 173.33
114.79
106.38
38.25
47.10 301.65
326.81
100.41 124.45
60.63
111.73
140.61
90.63
301.65
326.81
31/12/2014 31/12/2015 31/12/2014 31/12/2015
Headcount by countries (FTE)
April 2016 | Investor Presentation 27
3 Financial Results 2015
240 267 276
1.046 1.320
1.802
441
471
499 420
489
39
217
241
186
283
454
64
153
289
2013 2014 2015
Others
Brazil
UK
Poland
Italy
Spain
Germany
4,050
3,131
2,016
Overall growth 2015/2014 of +29%
Rule Financial added 674 employees (2014)
Adesis added 300 employees (2015)
Forecast 2016: Further growth of +400 FTEs
Detailed profit & loss statement
April 2016 | Investor Presentation 28
3 Financial Results 2015
In € m 2014 2015 2015 vs. 2014 Revenues 279.24 373.51 34%
Other operating income 3.85 3.44 -11%
Cost of material & purchased services -52.19 -62.49 +20%
Personnel expenses -157.74 -215.45 +37%
Other operating expenses* -40.34 -54.45 +35%
EBITDA 32.82 44.56 +36%
Depreciation and amortisation -6.40 -10.33 +61%
EBIT 26.42 34.23 30%
Interest and similar expenses/income -1.01 -1.71 +69%
EBT 25.41 32.52 28%
Taxes on income -6.82 -5.97 -12%
Net Income continued operations 18.59 26.55 +43%
Net Income discontinued operations 1.36 -1.21 -189%
Net Income of the whole company 19.95 25.34 +27%
IAS earnings per share (in €)** 0.71 1.01 +43%
* Other operating expenses including profit share from associates and depreciation in secruities ** From continued operations
Tax rate 2015 below previous years due to tax refund and lower effective tax rate in Spain based on newly tax deductible local R&D projects.
Operating profit and M&A effects
April 2016 | Investor Presentation 29
3 Financial Results 2015
In € thsd 2014 2015
Operating Profit GFT 36,901 47,209
Operating Profit Holding -2,714 -1,723
Operating Profit 34,187 45,486
Earn-Out Accruals 309 0 Release of Asymo purchase price accrual
PPA orderbook -1,675 -931 PPA orderbook for Rule (2014) & Adesis (2015)
EBITDA 32,821 44,555
Depreciation -3,365 -5,154
PPA amortisation -3,036 -5,174 PPA amortization for Asymo, G2, Sempla, Rule and Adesis
EBIT 26,421 34,227
Interest -1,016 -1,703
Earn-Out Interest 2 0 Interest on remaining purchase price Asymo and G2
EBT 25,406 32,524
Cash Flow analysis (in €m)
April 2016 | Investor Presentation 30
3 Financial Results 2015
Year-end excess payments GFT’s biggest clients overpay in December in order to utilise internal budgets. GFT Balance Sheet at year-end is “untypical” and Operating CFs from Q1 to Q1 are compared to this untypical benchmark. Overpaid amount indicated by light grey colour 31/12/2014 = € thsd 4,475 31/12/2015 = € thsd 6,336
Operating Cash Flow Influenced by very good working capital position and higher earnings compared to previous year
Financing Activities Mainly influenced by raising loans. Dividend pay-out as of June 2015 ( € thsd 6,581 = € 0.25 per share)
Investments Investments in tangible assets, mainly for the new headquarter in Stuttgart influenced this Cash Flow position. Additionally influenced by payment in connection with the Rule & Adesis acquisition
FX effects No special effects. FX gains due to foreign currency evaluation
YE-excess payments
YE-excess payments 38.13
42.60
1.35 46.98
-3.37
-31.73
Cash01/01/2015
OperatingCashflow
FinancingActivities
Investments FX effects Cash31/12/2015
2 GFT business model
3 Financial Results 2015
1 GFT at a glance
Agenda
4 Outlook
Banking and Securities IT Spending
April 2016 | Investor Presentation 32
4 Outlook
89.9 92.2 94.6 97.2 99.8
178.3 186.9 196.0 205.4 215.6
67.5 72.1 77.2
82.5 88.2 28.5
28.2 28.3
28.4 28.9 100.9
100.4 102.0
103.3 104.4 28.0
28.6 29.1
29.6 29.9
2015 2016 2017 2018 2019
Data Center Systems
Telecom Services
Devices
Software
IT Services
Internal Services
Source: Gartner, 2015 Total Banking and Securities IT Spending by Segment, Worldwide, 2013-2019 (Billions of U.S. Dollars)
CAGR 2015-2019
1.7%
0.9%
0.3%
6.9%
4.9%
2.6%
3.5% Total
Banking and Securities Spending - IT Services
April 2016 | Investor Presentation 33
4 Outlook
23.4 25.2 27.2 29.2 31.3
10.1 10.7 11.4 12.0 12.7
39.1 40.5 41.9 43.3 44.7
54.2 56.6 59.3 62.3 65.7
38.9 41.2
43.4 45.7
48.1 12.6
12.7 12.8
12.9 13.0
2015 2016 2017 2018 2019
Hardware Support
Business Process Outsourcing
IT Outsourcing
Implementation
Software Support
Consulting
Source: Gartner, 2015 Total Banking and Securities IT Services Spending by Segment, Worldwide, 2013-2019 (Billions of U.S. Dollars)
CAGR 2015-2019
0.8%
5.4%
4.9%
3.4%
5.9%
7.6%
4.9% Total
Regulatory Roadmap 4 Outlook
Bank Strukt. Reform
2014 2016 2018
EMIR
CRD IV BRRD
MMSR Regulation
MAD II
MiFID II
SM&CR
Money Market Funds STSS (Securitisation)
AMLD IV / WTR
PSD II IFSR 9
FRTB
Basel III
2015 2017 2019
BRRD
IFRS 9
CRDIV net stable funding
ratio will apply Prohibition on proprietary
trading
AMLD IV
HMT MiFID II Level 3
MiFID II FRTB
Small Regulation
Large Regulation
Milestone
Proposal Stage
Consultation Stage
Implementation Stage
MAD II
MMSR reporting
starts SFTs
Regulation due to apply
Cat 1 clearing
obligation starts
EMIR updated reporting
MMSR SM&CR
Bail-in tool applies
BCBS 261 BCBS 279 BCBS 266 BCBS 270
BCBS 270 BCBS 283 BCBS 238 BCBS 255
MAR emission allowance and OTF
provisions apply
April 2016 | Investor Presentation 34
Business priorities of European banks and insurance companies for 2016
April 2016 | Investor Presentation 35
4 Outlook
Source: IDC Vertical Markets Survey, October 2015, 220 Financial Institutions in Europe
Digital transformation
Regulatory compliance
Security and data protection
Sales performance improvement
Customer experience enhancement
Multi-channel delivery strategy
Product or service innovation
Marketing effectiveness improvement
Reducing operational costs
Organizational restructoring or M&A activities
Supply-chain/procurement efficiency
Forecast Fiscal Year 2016 (in €m)
April 2016 | Investor Presentation 36
4 Outlook
374
410
2015 2016
+10%
Revenue EBITDA EBT
Growth Drivers Banking and Securities IT Services spending with CAGR of 4.9 % (2015 – 2019) according to Gartner
Stable demand for solutions to implement compliance requirements
Trend to digitise business processes continues
Margin pressure in banks accelerates outsourcing of IT Services
44.6
48.5
2015 2016
+9%
32.5
35.0
2015 2016
+8%
Revenue
2020
800
EBIT
DA
mar
gin
12%
10% organic growth p.a.
plus acquisitions
Revenue and EBT development
April 2016 | Investor Presentation 37
4 Outlook
* 2007 EBT peak due to the final billing of 5-year fix price project for Bradesco in Brazil (EBT-contribution in 2007 was exceptionally high at about € 4m)
82 101 91 91
116 116 121
174
279
374 410
2006 2007* 2008 2009 2010 2011 2012 2013 2014 2015 2016e
Revenue in €m Adesis GFT Rule GFT Italy GFT
5
10 7
5
9 8 10
16
25
33 35
2006 2007* 2008 2009 2010 2011 2012 2013 2014 2015 2016e
EBT in €m Adesis GFT Rule GFT Italy GFT
CAGR 2006-2016 (total): +18% CAGR 2006-2016 (organic): +11%
CAGR 2006-2016 (total): +20% CAGR 2006-2016 (organic): +17%
2016: split into operating profit and M&A effects
April 2016 | Investor Presentation 38
4 Outlook
In € thsd 2015 2016
Operating Profit GFT 47,209 48,569
Operating Profit Holding -1,723
Operating Profit 45,486 48,569
PPA orderbook -931 -69 PPA orderbook for Adesis (2015 & 2016)
EBITDA 44,555 48,500
Depreciation -5,154 -6,100
PPA amortisation -5,174 -5,600 PPA amortization for G2, Sempla, Rule and Adesis
EBIT 34,227 36,800
Interest -1,703 -1,800
EBT 32,524 35,000
Thanks for your attention!
Dr Jochen Ruetz, CFO April 2016
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