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Presentation of the consolidated results of the Sygnity Group for Q4 2008
Warsaw, 26 February 2009
2
Disclaimer
This presentation has been prepared for information purposes only. It does
not constitute an advertisement or an offering of securities in public trading.
Although it relies on sources of information that Sygnity S.A. deems to be
reliable and accurate, there is no guarantee that they are exhaustive and
fully reflect the factual status. The presentation may contain statements
concerning the future that constitute an investment risk or a source of
uncertainty, which may materially differ from the actual results. Sygnity S.A.
will not be liable for the consequences of any decisions made on the basis
of this presentation - such liability will rest solely on the party that uses it.
This presentation is subject to the protection provided for in the Copyright
and Related Rights Act. Its duplication, publication or dissemination will
require the written consent of Sygnity S.A.
3
Summary of the results for Q4 and Q1-4, 2008
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Results for Q4 2008 vs Q4 2007
[PLN ’000] Q4 2007 Q4 2008
Revenues 371 217 337 087
Operating profit (loss) 54 697 27 475
Operating profit (loss) without restructuring write-offs/revenues from assets’ sale 27 281 27 475
Net profit (loss) * 42 504 18 440
* including one-off gain in the amount of PLN 27.4 million.
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Results for 2008 vs 2007
[PLN ’000] 2007 2008
Revenues 1 206 513 1 001 760
Operating profit (loss) (72 289) 12 596
Operating profit (loss) without restructuring write-offs/revenues from assets sale (54 300) 946
Net profit (loss) * (81 126) 233
Factors affecting the results:
Greater share of sales of own services and products (increase of 10 p.p.)
Greater profitability in all sectors
Positive effect of the restructuring process
* including one-off gain in the amount of PLN 27.4 million and restructuring write-offs.
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Revenues structure in 2008 vs 2007
2007 vs 2008
226 604
144 613
218 800
118 287
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
400 000
Q4 2007 Q4 2008
Q4 2007 vs Q4 2008
Revenue[PLN ’000]
61%
39%
65%
35%
672 494
534 019
657 609
344 151
0
200 000
400 000
600 000
800 000
1 000 000
1 200 000
1 400 000
2007 2008
Goods and materials
Products and services
55%
45%
65%
35%
Increase in the share in sales of own services and products Decrease of subcontractors share in projects execution Revenues from services lower by PLN 16 million as a result of the disposal of
assets servicing the National Health Fund and health service bodies
Revenue[PLN ’000]
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Revenues in 2008 vs 2007 by sector
Sector
[PLN ’000]2007 2008
Public* 506 419 413 136
Banking and finance 320 322 270 725
Utilities 124 657 92 403
Telco industry 255 115 205 330
Total 1 206 513 1 001 760
* Revenues decreased by PLN 18.3 million du to assets disposal
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Financing
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Debt situation
[PLN ’000] 30.9.07 31.12.07 31.3.08 30.6.08 30.9.08 31.12.08 As of the publication
date
Bonds -85 -60 -57 -58 -63 -63 -61
Loans and credit facilities
-192 -107 -84 -68 -56 -31 -23
CashFunds in escrow accounts
24 51 4813
3618
40 5830
56 7
Net debt* -253 -116 -93 -90 -79 -36 -28
* Without taking into account funds in an escrow account for contracts
As of December 31, 2008, the Sygnity Group total debt from bank loans/credit facilities and outstanding bonds amounted to PLN 94 million (PLN 84 million as of the publication date), as compared to total
debt from bank loans/credit facilities and outstanding bonds as of December 31, 2007 of PLN 167 million.
The Group’s net debt amounted to PLN 36 million as of December 31, 2008 (PLN 28 million as of the publication date), compared to PLN 116 million as of December 31, 2007.
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Outlook for bonds’ servicing in 2009
Sources offinancing
Operating cash-flow generated in2008 and H1 2009
Disciplined working capital management
Assets disposals
Roll-over of bonds, on-going basis
Financing from new institutions
Bonds’ maturity:
March 2009 April 2009 June 2009 July 2009
PLN 3,570,000 PLN 1,730,000 PLN 5,860,000 PLN 50,000,000
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2009 outlook
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Backlog
Sector 2009 backlog [PLN ’000]
Banking and finance 98 252
Public 94 480
Telco industry 53 543
Utilities 45 071
Total 291 885
80% of backlog for 2009 consists of own solutions (services, licences and
service support) and covers 50% of estimated margin for the entire year
In addition, backlog for 2010-2011 currently amounts to almost PLN 100 million.
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Assets planned for disposal in 2009
Sale of land surveying and outsourcing
companies;
Sale of one real estate property;
Sale of the above assets (currently in
progress) is estimated to generate revenues
of approx. PLN 40 million. The effect on the
operating profit will amount to approx. PLN
15 million with a loss of revenues of approx.
PLN 50 million.
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Banking and finance sector – prospects for 2009
Challenges in the sector: Reduction of IT costs, i.e. increasing cost effectiveness Response to regulatory changes, including the prospect of converting to the euro Optimisation of processes and modernisation of systems using SOA and EDA Increase in product profitability and risk reduction
Key prospects: Renewal of the service support agreement with NBP Automation of obligatory reporting for DnB Nord Implementation of the Flexcube system in Snoras Bank (Lithuania) The Company Banking Centre (Loan Servicing) in BZ WBK
New products and services: BILIX Dimension.CL SCAD (a system for calculating a bank’s capital requirements) RCIH (a system for integrating information on a retail customer) Outsourcing of Development Services for financial institutions
1515
Public sector – prospects for 2009
Challenges in the sector:
Concentration on projects financed from European funds (the Ministry of Internal Affairs and Administration, the Ministry of Health, and the Ministry of the Economy)
Local government projects
Continuation and maintenance of existing projects (the Ministry of Labour and Social Policy, the State Fund for the Rehabiilitation of the Disabled, the Ministry of Justice, the Ministry of Foreign Affairs, and the Polish Post Office)
Key prospects:
Projects financed by the World Bank
Projects as part of the Polish State Computerisation programme
The Ministry of Justice, the Ministry of Finance and other ministries
New products and services:
GIS (land surveying portals and cartography)
New products for local government organisations (e-services, crisis management, solutions for the health service)
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Utilities sector – prospects for 2009
Challenges in the sector:
The commencement of the implementation of centralised customer service systems in Power Groups
The commencement of the implementation of network asset management systems at electricity and gas network operators
A further increase in sales in the municipal utilities sector
Key prospects:
PSE Operator S.A. – modification of the zSIRE system to serve the current day market
Gaz System S.A. – supply and construction of a system for archiving and securing data and an information exchange system
GSG, MSG – network asset management systems
Vattenfall – low voltage network control system
ENEA, TAURON – PMS system
New products and services:
Strengthening the offer of consulting and application integration services
Systematic development of own products: billing, asset management, and trade and distribution servicing
Development of cooperation with Microsoft on the power market
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Telco sector – prospects for 2009
Challenges in the sector:
Signing a long-term agreement with Telekomunikacja Polska
Increasing cooperation with Dialog, Netia and Exatel
Signing agreements for Inventory.cl with operators other than Telekomunikacja Polska
Key prospects:
TP – subsequent Editions
TP – prequalification and scanning
Exatel – modernising the network management framework and system
Telekomunikacja Kolejowa – new projects
Dialog – the SoftSwitch platform
New products and services:
Provisioning and automation of processes related to the activation and settlement of telecommunications services
SoftSwitch
Inventory.cl – a new passporting product
18
Industry sector – prospects for 2009
Challenges in the sector:
Cable Television Companies – increasing market share
Signing an agreement with Bliska, the second largest chain of petrol stations in Poland
Signing a cooperation agreement with the Coal Corporations
Expanding cooperation with PKP (Polish State Railways)
Signing agreements with retail networks
Key prospects:
Bliska – Petrol Station Servicing System
SPEC, Animex, Siódemka – an ERP solution
Vectra, Multimedia – provisioning, NMS, passporting
New products and services:
A new version of Petrostation for serving a chain of petrol stations
A system for serving a retail sales network
Gemcom – a three-dimensional deposit visualisation and a system for managing mining damage
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2009 outlook
Revenues of approx. PLN 1 billion
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 15 million (2-3 transactions to be carried out)
Maintaining gross margin at the level of 2008 (despite the sale of assets) due to an improvement in the revenues structure
Reduction of net debt to PLN 10-15 million
Expected increase in revenues from the utilities and telco sectors and decrease in revenues from the banking and finance sector