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Presentation of Sygnity Group’s consolidated results for Q1 2009
Warsaw, 15 May 2009
2
Note
This presentation was prepared for information purposes only. It does not constitute
an advertisement or an offering of publicly traded securities. It uses sources of
information that Sygnity SA considers to be reliable and accurate, but there is no
guarantee that they are exhaustive and fully reflect the factual status. The
presentation may contain forward-looking statements that constitute an investment
risk or a source of uncertainty and may significantly differ from the actual results.
Sygnity SA is not liable for the results of decisions made on the basis of this
presentation. Liability rests exclusively with the entity making use of the presentation.
The presentation is protected under the Act on Copyrights and Related Rights. Its
reproduction, publication or dissemination require the written consent of Sygnity SA.
3
Summary of results for Q1 2009
4
Results for Q1 2009 vs Q1 2008
[PLN '000] Q1 2009 Q1 2008
Revenues 140 376 208 782
Operating profit (loss) (16 125) (24 844)
Net profit (loss)(16 979) (26 295)
GM1* margin79 487 75 578
Factors affecting the results:
Effects of the economic slowdown
Clients postponing certain projects into following months of 2009
Decrease of orders for infrastructure deliveries (according to IDC, 28% drop market-wide)
Higher profitability – increase of the GM1 margin by 4 million zlotys despite a significant decrease in revenues
* GM1 margin - Revenues less external costs of goods and services
5
Revenues structure in Q1 2009 vs Q1 2008
122,362
18,014
147,314
61,468
0
50,000
100,000
150,000
200,000
250,000
Q1 2009 Q1 2008
Goods and materials
Products and services
Revenues[PLN '000]
87%
29%
71%
13%
Increase in the share of own services
and products in revenues – 87% in Q1
2009 against 71% in the same period of
2008 Fall of the share of goods and materials in
revenues from 29% in Q1 2008 to 13% in
Q1 2009
6
Revenues in Q1 2009 vs Q1 2008 by sectors
Sector
[PLN '000]Q1 2009 Q1 2008
Public 41 677 99 291
Banking and financial 43 265 54 706
Utilities 21 145 11 289
Telco-Industry 31 153 44 057
Others and exclusions 3 136 (562)
Total 140 376 208 782
Factors affecting the results:
Lower revenues from the public sector resulting from the savings programme introduced in the government administration
Decrease in orders from the banking sector caused by the financial situation of the sector
7
Financing
8
Debt situation
[PLN m] 30.9.07 31.12.07 31.3.08 31.12.08 31.3.09 on pub. date
Bonds -85 -61 -56 -63 -64 -71
Loans and credit facilities
-192 -109 -84 -34 -25 -23
Cashfunds on escrow accounts
24 51 4813
5830
36 29
Net debt* -253 -119 -92 -39 -53 -65
* without cash on escrow accounts for contracts
As at 31 March 2009 the Sygnity Group’s total debt from bank loans and credit facilities and issued bonds amounted to PLN 89m (PLN 94m at the date of publication) against the total debt from bank loans and credit facilities and issued bonds of PLN 140m on 31 March 2008.
The Group’s total net debt calculated as the balance of used bank loans and credit facilities and issued bonds minus the balance of cash amounted to PLN 53m at 31 March 2009 (PLN 65m at the date of publication), against PLN 92m on 31 March 2008.
9
Outlook for bonds’ servicing in 2009
Sources offinancing
Operating surplus for 2008 and 2009, and disciplined management of working capital – up to PLN 25m
Income from asset disposals– PLN 15-20m
On-going rolling over of bonds– up to PLN 20m
New financing institutions– up to PLN 10m
Bonds’ maturity
May 2009 June 2009 October 2009 November 2009
PLN 2.4m PLN 5.8m PLN 6.5m PLN 2.1m
July 2009
PLN 53.5m
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2009 Outlook
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H2 2009 – banking and financial sector prospects
Sector challenges:• Delay in the adoption of the euro by Poland• Optimisation of processes and system modernisation using SOA• Increase of financial product profitability• New approach to electronic service distribution channels• Acquisition of new clients
Top prospects, products, services:• Credit factory• Advanced risk assessment methods• Commission systems• Outsourcing of IT services• Portal and bus systems for insurance companies• Merger of BPH and GE Money• Document management systems• Systems for the corporate sector clients• Foreign projects in banking institutions
12
H2 2009 – public sector prospectscentral administration, uniformed services
Sector challenges:
• Concentration on projects implemented with EU funds (Ministry of Internal Affairs, Ministry of Finance, Central Statistical Office)
• Application development and maintenance projects for the Ministry of Foreign Affairs, the Police and the Ministry of Defence
Top tenders underway:
• Central Statistical Office – census test implementation
• Ministry of Finance – development and integration of systems
• Ministry of Internal Affairs – projects implemented as part of PL.ID, emergency number 112, emergency notification system, e-PUAP
• Central Geodetics and Cartography Office (GUGiK) – GIS systems
• Agricultural Social Security Office (KRUS) – systems implemented using World Bank funds
• Agricultural Development and Modernisation Agency – monitoring systems
New areas:
• Preparations for Euro 2012 – security platform
• Developing competencies in the area of of dedicated solutions for state administration offices
13
H2 2009 – public sector prospects local government, labour market, social services and health
Sector challenges:
• Concentration on national projects financed with European funds (Ministry of Labour, Ministry of Health, Ministry of the Economy)
• Regional and local government projects financed with European funds
• Service product development (Ministry of Labour, State Fund for the Rehabilitation of Handicapped Persons, local government bodies)
Top prospects:
• Projects financed with EU funds (services related to training and the implementation of the Syriusz Std system, building a standards database)
• Contracs for dedicated social services systems
• Projects for local government units related to the building of GIS systems and SIT terrain information systems
• Crisis management support solutions
• E-services implementation projects
New products and services:
• GIS (geodetic portals, cartography)
• New products for local government organisations, e.g. e-Oświata, crisis management
14
H2 2009 – utilities sector prospects
Sector challenges:
• Separation of billing systems into the Trade Service Sale System (T3S) for sellers of electricity and the Distribution Service Sale System (D3S) for operators of distribution systems
• Implementation of network asset management systems for electricity and gas network operators• Offering integrated computer systems to heating and water companies (ERP/Biling/GIS)
Top prospects:
• PSE Operator SA – modification of the zSIRE for day-to-day management• Energa Operator SA, Enea Operator SA and Vattenfall Distribution Poland – supporting applications within
the Sygnity Utilities for Distribution programme• PGE – billing system modifications• PGNiG SA – integration of billing systems and invoicing, contract depositories as part of PGNiG’s trade
with gas recipients, data migration and building of SAP system interfaces • MPWiK Wrocław – integrated computer system• Energa SA, Enea SA, Tauron SA, PGNiG SA – Microsoft solutions
Sector challenges:
• Strengthening product range with regard to consulting services and application integration• Upgrade of sector applications to new versions (metering and billing systems)• Increased collaboration with Microsoft and Cisco in the power sector• Acquisition of contracts for implementing integrated system solutions
1515
H2 2009 – telco sector prospects
Sector challenges:
• Signing an agreement with TP as part of the Vendor Consolidation programme with regard to OSS, Corporate and Reporting areas
• Collaboration with telco operators with regard to compliance with regulations set by the Electronic Communications Office
• Telco operators limiting their investment budgets
Top prospects:
• TP – new versions of OSS and KSP solutions
• TP – prequalification and scanning, expansion of reporting systems, cooperation on EURO 2012
• Exatel – modernisation of the framework and network management
• Telekomunikacja Kolejowa – network management system, the ”Internet na dworcach” (”Internet at Railway Stations”) programme
• Dialog – Inventory.CL new passporting system
• Sferia – addition of MPLS to the network’s framework
New products and services:
• Provisioning – automation of activation processes and settlement of telecommunications services
• Inventory.cl – new passporting system
• CRM and billing for cable television and alternative telco operators (R&D project)
1616
H2 2009 – industry sector prospects
Sector challenges:
• Cable television operators – market consolidation, takeovers
• Diversification of petrol station management system providers for PKN Orlen
• Mining companies – an IT ”greenfield”, large new projects
• Computerisation of PKP (state railways) – adjustment to European standards
• Retail market – demand for new services
• SME market – large market potential with regard to mass product distribution over the Internet
Top prospects:
• Bliska – Petrol Station Management System
• Orlen – petrol station service, internet portal
• SPEC, Animex, Siódemka, Emitel, KHW, KGHM Group – ERP solution
• Vectra, Multimedia – Provisioning, NMS, passporting
New products and services:
• Petrostation – new version for petrol station management
• System for retail sales management
• Gemcom – three-dimensional deposit visualisation, system for managing mining damage
• Loyalty system for PSP (small petrol station chains)
17
2009 backlog
Sector [PLN '000]
Order portfolio
Banking and finance 133 603
Public 114 075
Telco-Industry 82 998
Utilities 65 657
Total 396 332
67% of the current backlog consists of own solutions (services, licences and maintenance)
The backlog for 2010 – 2011 currently amounts to more than PLN 100m
18
2009 outlook
Revenues about PLN 900m – lower revenues as a result of the economic slowdown and concentration on services and application projects
Estimated 2-3% recurrent EBIT margin (not including profit from sale of assets)
Effect of assets disposal on EBIT expecetd to amount to approx. PLN 10-12 million (2-3 transactions to be carried out)
Maintaining margins at 2008 levels (despite the sale of assets), due to improved sales structure
Initiation of development programmes financed with European Union funds (in 2009-2010, subsidies of approx. PLN 10m for projects valued at PLN 25m)
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