Analyst-Presentation 2015 preliminary52b74a93-9555-4352-abfa...2016/03/03 · GFT at a glance Agenda 4 Outlook 19 April 2016 | Investor Presentation 3 Financial Results 2015 Highlights

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


* Founded in Q1/2016

Key figures

1 GFT at a glance


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)


1 GFT at a glance

Biggest Customers

Capital Markets

Private Wealth

Insurance & Others

Retail Banking

http://www.ibercaja.es/index.php?id=a213529ee2bffcb28e3bfa5e8158b3be4ba9e970e15eb7c6

http://www.intesasanpaolo.com/scriptIbve/retail20/RetailIntesaSanpaolo/ita/home/ita_home.jsp

http://www.mps.it/

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


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)

http://www.habber.com/br/

http://www.habber.com/en



1 GFT at a glance

4 Outlook

Agenda

Business areas of GFT inside the banks



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


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


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


Regulation GFT Regulatory Change Management Service



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


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


Digitalisation From a multi-channel to an omni-channel approach


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


Digitalisation Existing GFT solutions



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


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



1 GFT at a glance

Agenda

4 Outlook



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



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



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



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



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



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



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)



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)



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



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



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)



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



1 GFT at a glance

Agenda

4 Outlook

Banking and Securities IT Spending


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


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


Business priorities of European banks and insurance companies for 2016


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)


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


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


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

Documents

Analyst-Presentation 2015 preliminary52b74a93-9555-4352-abfa...2016/03/03 · GFT at a glance Agenda 4 Outlook 19 April 2016 | Investor Presentation 3 Financial Results 2015 Highlights