Ordina N.V. results third quarter 2015

Turnover Public sector declines, (slight) growth Financial Services and Healthcare
Cost savings raised to EUR 15 million

Nieuwegein, 3 November 2015

Highlights Q3

• Recurring EBITDA falls to EUR 3.7 million (Q3 2014: EUR 5.3 million);
• Recurring EBITDA margin 4.3% (Q3 2014: 6.0%);
• Turnover declined by 3.8% to EUR 84.8 million (Q3 2014: EUR 88.2 million );
  • Turnover Netherlands down 6.0% at EUR 66.6 million (Q3 2014: EUR 70.6 million)
  • Turnover Belgium / Luxembourg up 3.6% to 18.2 million  (Q3 2014: EUR 17.6 million)
• Net debt position increased to EUR 11.1 million (Q3 2014: EUR 5.4 million);
• Giarte survey shows further increase in client satisfaction among our Sourcing and Application Management clients;
• Ordina Open Innovation days prove popular, with 540 visitors.

Highlights Q1-Q3

• Recurring EBITDA falls to EUR 7.0 million (YTD Q3 2014: EUR 13.6 million);
• Recurring EBITDA margin 2.7% (YTD Q3 2014: 5.0%);
• Turnover declined by 5.8% to EUR 257.5 million (YTD Q3 2014: EUR 273.4 million).

Strategy update

• Streamlining and simplifying organisation
• Structural cost savings raised to EUR 15.0 million annually;
• Acceleration of innovation and growth in Smart Technology, Security and Digital Services;

Stépan Breedveld, CEO Ordina, about the results
"Despite the improvement in margin compared to the second quarter of the year, our results are lagging when compared to the third quarter of 2014. This is largely due to the delays in the public sector market in the Netherlands. Although we are winning new business in certain areas in the public sector, this was not enough to compensate for the lag in turnover in the segment as a whole. We booked slight growth in Financial Services and Healthcare sectors. Ordina continues to perform well in Belgium and Luxembourg, both in terms of turnover and profitability.

Ordina is in transitional phase and wants to adapt more rapidly to developments in the (public sector) market. By streamlining and simplifying our organisation, we have extended the previously announced cost savings programme from EUR 8 million to EUR 15 million on a structural basis per year. The proposed integration of Sourcing and Commerce means we can now place more focus in the commercial development of our clients. We are also boosting our operational effectiveness by placing all delivery units in the Netherlands under the management of a single Operational Director.  We continue to focus strongly on productivity, costs and operational excellence.

In the coming period, Ordina will accelerate the roll-out of its innovation strategy. We will book growth in fields such as Smart Technology, Security and Digital Services and remain fully committed to investment in new innovative applications and the development of our employees. For instance, this year Ordina will hire around 170 Young Professionals and we will continue the Young Professionals Programme in 2016. The very strong interest in the third edition of the Ordina Open Innovation Days shows that many organisations are involved in innovation. The 540 visitors showed enormous interest in the Ordina propositions that were demonstrated during the Innovation Tour."

Strategy update: Streamlining and simplifying organisation. Higher savings. Acceleration innovation and growth
At the presentation of the interim results (H1), we announced a strategy update. The main results are outlined below. We will provide more details and give a progress update at the presentation of the full-year results.

Streamlining and savings 
By streamlining and simplifying the organisation, Ordina has raised the structural annual cost savings from EUR 8 million to EUR 15 million. The savings will be realised as of Q4 2016 and involve reductions in direct and indirect costs and process improvements. This will result in reduced overheads and availability structurally lower than 10%, which will in turn boost returns.

Acceleration and growth
Due to the proposed integration of Sourcing and Commerce, Ordina is increasing its focus in the commercial developments of its clients in the Netherlands. In addition to this, we are increasing operational efficiency by putting all delivery units in the Netherlands under the management of a single Operational Director.