Amsterdam - 4 May 2017 - Intertrust N.V. ("Intertrust" or the "Company") [ticker symbol INTER], a leading global provider of high-value trust, corporate and fund services, today announces its results for the first quarter of 2017.
Intertrust financial and operating performance for Q1 2017
Intertrust Group Q1 2017 figures
As reported | Adjusted 3 | ||||||||||
Q1 17 1 | Q1 16 | % Change | Q1 17 1 | Q1 16 | % Change | % Underlying change 2 | |||||
Revenue (€m) | 121.6 | 87.9 | 38.4% | 121.6 | 87.9 | 38.4% | 4.2% | ||||
EBITA (€m) | 44.7 | 34.3 | 30.3% | 46.2 | 36.0 | 28.4% | 0.9% | ||||
EBITA Margin | 36.8% | 39.1% | -230bps | 38.0% | 40.9% | -298bps | -125bps | ||||
Net Income (€m) | 20.8 | 15.9 | 30.8% | 33.0 | 25.5 | 29.4% | |||||
Earnings per share (€) | 0.23 | 0.19 | 21.2% | 0.36 | 0.30 | 19.9% | |||||
Cash from operating activities (€m) | 65.9 | 54.6 | 20.8% |
1
Q1 2017 figures include Elian and Azcona
2
Underlying: Q1 2017 at constant currency and Q1 2016 including proforma Elian and Azcona figures
3
See definitions for further information on Adjusted figures
David de Buck, Chief Executive Officer of Intertrust, commented:
"We are pleased with our first quarter top-line performance, and our revenue base is now well diversified, with 24% of revenue coming from the Netherlands, 20% from Luxembourg, 14% from Cayman, 12% from Jersey and 30% from Rest of the World. Luxembourg had a strong performance on the back of new entity inflows and additional regulatory and compliance work. The Netherlands saw modest growth in Q1, but we expect a pick up in the latter part of the year. Cayman continues to stabilise and strengthen, though 2017 will continue to be impacted by the competitive landscape. Jersey continues to perform in line with our expectations. The Elian integration is on track, and we see our employees truly acting as one team. Our recent transaction with Azcona has made us a leading independent provider of capital markets, funds and corporate services in Spain."
Intertrust Group Q1 2017
Q1 17 1 | Q1 16 | % Change | % Change (CC) | % Underlying change 2 | |
Revenue (€m) | 121.6 | 87.9 | 38.4% | 40.8% | 4.2% |
Adjusted 3 EBITA (€m) | 46.2 | 36.0 | 28.4% | 30.1% | 0.9% |
Average number of FTEs | 2,392 | 1,721 | 39.0% | ||
Number of entities (000's, end of period) | 51.0 | 39.2 | 30.0% | ||
ARPE (€k, annualised) | 9.5 | 9.0 | 6.5% | ||
Revenue/FTE (€k, annualised) | 203.4 | 204.2 | -0.4% | ||
Adj. EBITA/FTE (€k, annualised) | 77.2 | 83.6 | -7.6% |
1
Q1 2017 figures include Elian and Azcona
2
Underlying: Q1 2017 at constant currency and Q1 2016 including proforma Elian and Azcona figures
3
See definitions for further information on Adjusted figures
Financial Highlights Q1 2017
Operational Highlights Q1 2017
Guidance
Management reiterates the guidance given at the time of the announcement of the Q4 2016 results, with the exception of capex, for which more precise guidance is given. The guidance below pertains to 2017. Management will update the medium term guidance at the Capital Markets Day on 21 September 2017.
Performance in key jurisdictions
Due to integration of Elian, as of Q1 2017 Intertrust no longer breaks out Elian results but will use the following segmentation: the Netherlands, Luxembourg, Cayman Islands, Jersey, and Rest of the World (ROW), whereby Guernsey is included in ROW in both 2016 and 2017 figures.
The Netherlands
Q1 2017 1 | Q1 2016 | % Change | % Underlying change 2 | |
Revenue (€m) | 29.1 | 28.6 | 1.8% | 1.2% |
Number of entities (000's) | 4.2 | 4.4 | -5.2% | |
Annualised ARPE (€k) | 27.9 | 26.0 | 7.3% |
1
Q1 2017 figures include Elian
2
Underlying: Q1 2017 at constant currency and Q1 2016 including proforma Elian figures
Intertrust Netherlands' revenue grew by 1.8% year-on-year of which approximately 1.2% was underlying growth. ARPE increased 7.3% on the back of increased transaction complexity and an ongoing trend of enhanced corporate governance. Based on the current pipeline, a pick-up of revenue across the Netherlands business over the latter part of 2017 is expected.
The number of entities managed by Intertrust Netherlands decreased by 5.2%. Inflow of entities in Q1 2017 was comparable to Q1 2016. Outflow was mainly due to end-of-life.
Luxembourg
Q1 2017 1 | Q1 2016 | % Change | % Underlying change 2 | |
Revenue (€m) | 24.1 | 18.8 | 27.9% | 18.4% |
Number of entities (000's) | 3.1 | 2.6 | 19.9% | |
Annualised ARPE (€k) | 31.2 | 29.3 | 6.6% |
1
Q1 2017 figures include Elian
2
Underlying: Q1 2017 at constant currency and Q1 2016 including proforma Elian figures
In Luxembourg, increased transaction complexity and an ongoing trend of enhanced corporate governance contributed to a growth in ARPE of 6.6%. Intertrust Luxembourg's revenue increased 27.9% year-on-year or 18.4% on an underlying basis, mainly driven by existing clients.
Entity inflow was higher than inflow over the same period last year, largely driven by Private Equity and Real Estate funds.
Cayman Islands
Q1 2017 1 | Q1 2016 | % Change | % Change (Constant currency) | % Underlying change 2 | |
Revenue (€m) | 17.5 | 13.3 | 31.3% | 26.9% | -2.1% |
Number of entities (000's) | 19.7 | 16.5 | 19.5% | ||
Annualised ARPE (€k) | 3.6 | 3.2 | 9.9% | 6.2% |
1
Q1 2017 figures include Elian
2
Underlying: Q1 2017 at constant currency and Q1 2016 including proforma Elian figures
In Cayman, entity outflow to competitors continued to reduce in Q1. ARPE grew 9.9% (or 6.2% at constant currency) year-on-year, reflecting the growing portion of higher value-added services and increased cross-sell activities.
Revenue increased 31.3%, largely due to the Elian contribution and currency effects. Q1 underlying revenue was down 2.1% year-on-year. Q1 year-on-year comparisons for Cayman are impacted by prior-year entity losses and related one-off transfer revenue in Q1 2016.
Jersey
Q1 2017 | Q1 2016 | % Change | % Underlying change 1 | |
Revenue (€m) | 14.6 | n.a. | n.a. | 3.7% |
Number of entities (000's) | 4.5 | n.a. | n.a. | |
Annualised ARPE (€k) | 12.9 | n.a. | n.a. |
1
Underlying: Q1 2017 at constant currency and Q1 2016 based on proforma Jersey figures
n.a.: no reported results available as Intertrust had no operations in Jersey in Q1 2016
Jersey continued to perform in line with expectations. Underlying revenue growth in Q1 is estimated to be 3.7%, impacted by alignment of Elian revenue allocation policies with Intertrust as well as one-off income in Q1 2016. Accelerated growth in the second half of 2017 is expected to lead to overall high-single digit growth for the full year.
Rest of the World (ROW)
Q1 2017 1 | Q1 2016 | % Change | % Change (Constant currency) | % Underlying change 2 | |
Revenue (€m) | 36.3 | 27.1 | 34.0% | 37.6% | 1.8% |
Number of entities (000's) | 19.5 | 15.8 | 23.7% | ||
Annualised ARPE (€k) | 7.4 | 6.9 | 8.3% | 11.2% |
1
Q1 2017 figures include Elian and Azcona
2
Underlying: Q1 2017 at constant currency and Q1 2016 including proforma Elian and Azcona figures
In Rest of the World (ROW) revenue grew by 34.0%, of which underlying growth was 1.8% year-on-year. Underlying revenue growth was driven by the performance of Guernsey, Asia and Spain but impacted by Belgium and Switzerland. Growth continues to be driven by ongoing M&A activity, increased real estate activity and additional reporting requirements. ROW drove the majority of the Group's total cross jurisdictional sales in Q1 2017, with the largest contributions coming from the US, UK and Asia.
Annualised ARPE increased from EUR 6.9 thousand in Q1 2016 to EUR 7.4 thousand in Q1 2017. The addition of the Elian entities and more complex services contributed to the ARPE increase.
Group HQ and IT
Q1 2017 1 | Q1 2016 | |
Group HQ and IT costs (€m) | -16.1 | -9.5 |
1 Q1 2017 figures include Elian and Azcona
Group HQ and IT costs increased by EUR 6.6 million, of which EUR 2.7 million (net of synergies) is related to the inclusion of Elian.
In addition to the former Elian overhead costs, the increased HQ costs (EUR 2.4 million) were mainly driven by higher Long-Term Incentive Plan (LTIP) and bonus related spend (EUR 0.8 million), higher professional fees and other expenses (EUR 0.7 million), and higher staff cost (EUR 0.9 million) related to, amongst others, the strengthening of the business operations and duplication of staff cost due to the shift of Group Finance from Geneva to Amsterdam.
IT costs after inclusion of former Elian costs increased EUR 1.5 million due to higher IT depreciation following the completion of IT investments in the Business Application Roadmap (BAR), and higher operating expenses related to the migration of data centres and increased outsourcing costs. IT spend on the migration of the data centres is front loaded, and related operating expenses costs are expected to decrease over the course of the year. IT capital expenditures are lower due to the migration to Software as a Service and Infrastructure as a Service.
Financial Calendar
Date | Event |
16 May 2017 | Intertrust N.V. AGM |
18 May 2017 | Intertrust NV share quotation ex-final dividend 2016 |
19 May 2017 | Record date final dividend 2016 entitlement |
12 June 2017 | Payment date final dividend 2016 |
24 August 2017 | Q2 & Half Year 2017 results & announcement of interim dividend |
21 September 2017 | Capital Markets Day |
9 November 2017 | Q3 2017 results |
Press and analyst calls
Today, Intertrust's CEO David de Buck and CFO Maarten de Vries will hold an:
For further information
Intertrust N.V. annelouise.metz@intertrustgroup.com
Anne Louise Metz Tel: +31 20 577 1157
Director of Investor Relations, Marketing & Communications
About Intertrust
Intertrust is a leading global provider of high-value trust, corporate and fund services, with more than 2,500 employees located throughout a network of 41 offices in 30 jurisdictions across Europe, the Americas, Asia and the Middle-East. The Company delivers high-quality, tailored services to its clients with a view to building long-term relationships. Intertrust's business services offering is comprised of corporate services, fund services, capital market services, and private wealth services. Intertrust has leading market positions in selected key geographic markets of its industry, including the Netherlands, Luxembourg, Jersey and the Cayman Islands. Intertrust works with global law firms and accountancy firms, multi-national corporations, financial institutions, fund managers, high net worth individuals and family offices.
Intertrust N.V. - Consolidated Profit/Loss
(unaudited)
(EUR 000) | 01.01.17 - 31.03.17 | 01.01.16 - 31.03.16 | |
Revenue | 121,624 | 87,864 | |
Staff expenses | (54,450) | (38,796) | |
Rental expenses | (6,069) | (4,499) | |
Other operating expenses | (13,685) | (8,265) | |
Depreciation and amortisation of software | (2,690) | (1,969) | |
Amortisation of acquisition-related intangible assets | (10,128) | (7,582) | |
Profit/(loss) from operating activities | 34,602 | 26,753 | |
Net finance costs | (7,734) | (5,103) | |
Share of profit of equity-accounted investees (net of tax) | (3) | (9) | |
Profit/(loss) before income tax | 26,865 | 21,641 | |
Income tax | (6,069) | (5,741) | |
Profit/(loss) after tax | 20,796 | 15,900 | |
Profit/(loss) after tax attributable to: | |||
Owners of the Company | 20,744 | 15,919 | |
Non-controlling interests | 52 | (19) | |
Profit/(loss) | 20,796 | 15,900 | |
Earnings per share (EUR) | 0.23 | 0.19 |
Intertrust N.V. - Balance Sheet
(unaudited)
(EUR 000) | 31.03.2017 | 31.12.2016 |
Assets | ||
Property, plant and equipment | 19,620 | 20,167 |
Software | 14,021 | 15,120 |
Goodwill and acquisition-related intangible assets | 1,560,273 | 1,565,367 |
Investments in equity-accounted investees | 578 | 707 |
Other non-current financial assets | 3,708 | 3,820 |
Deferred tax assets | 354 | 2,480 |
Non-current assets | 1,598,554 | 1,607,661 |
Trade receivables | 94,517 | 99,160 |
Other receivables | 20,917 | 15,021 |
Work in progress | 37,105 | 31,984 |
Current tax assets | 512 | 945 |
Other current financial assets | 1,344 | 1,627 |
Prepayments | 10,139 | 8,167 |
Cash and cash equivalents | 91,143 | 69,858 |
Current assets | 255,677 | 226,762 |
Total assets | 1,854,231 | 1,834,423 |
Equity | ||
Share capital | 55,200 | 55,200 |
Share premium | 630,441 | 630,441 |
Reserves | 37,385 | 42,345 |
Retained earnings | 50,801 | 29,887 |
Equity attributable to owners of the Company | 773,827 | 757,873 |
Non-controlling interests | 178 | 1,930 |
Total equity | 774,005 | 759,803 |
Liabilities | ||
Loans and borrowings | 781,125 | 781,221 |
Other non-current financial liabilities | 2,980 | 1,763 |
Employee benefits liabilities | 2,785 | 3,082 |
Deferred income | 7,577 | 8,677 |
Provisions | 847 | 1,147 |
Deferred tax liabilities | 85,320 | 85,659 |
Non-current liabilities | 880,634 | 881,549 |
Loans and borrowings | 62 | 18,072 |
Trade payables | 5,629 | 10,636 |
Other payables | 60,615 | 66,974 |
Other current financial liabilities | 4,975 | - |
Deferred income | 99,272 | 71,467 |
Provisions | 1,182 | 2,219 |
Current tax liabilities | 27,857 | 23,703 |
Current liabilities | 199,592 | 193,071 |
Total liabilities | 1,080,226 | 1,074,620 |
Total equity & liabilities | 1,854,231 | 1,834,423 |
Intertrust N.V. - Condensed Cash flow statement (unaudited)
(EUR 000) | 01.01.17 - 31.03.17 | 01.01.16 - 31.03.16 |
Cash flows from operating activities | ||
Profit/(loss) | 20,796 | 15,900 |
Adjustments for: | ||
Income tax expense | 6,069 | 5,741 |
Share of loss/(profit) of equity-accounted investees | 3 | 9 |
Net finance costs | 7,734 | 5,103 |
Depreciation and amortisation of software | 2,690 | 1,969 |
Amortisation of acquisition-related intangible assets | 10,128 | 7,582 |
(Gain)/loss on sale of non-current assets | 10 | 5 |
Other non-cash items | 1,128 | 1,145 |
48,558 | 37,455 | |
Changes in: | ||
(Increase)/decrease in trade working capital (*) | 21,200 | 24,709 |
(Increase)/decrease in other working capital (**) | (1,639) | (7,210) |
Increase/(decrease) in provisions | (1,309) | (89) |
Changes in foreign currency | 418 | 388 |
67,228 | 55,253 | |
Income tax paid | (1,332) | (691) |
Net cash from/(used in) operating activities | 65,896 | 54,562 |
Net cash from/(used in) investing activities | (6,735) | (2,864) |
Net cash from/(used in) financing activities | (25,656) | (3,827) |
Net increase/(decrease) in cash | 33,505 | 47,871 |
Cash attributable to the Company at the beginning of the period | 51,733 | 66,472 |
Effect of exchange rate fluctuations on cash attributable to the Company | (554) | (1,770) |
Cash attributable to the Company at the end of the period | 84,684 | 112,573 |
Cash held on behalf of clients at the end of the period | 6,459 | 5,681 |
Cash and cash equivalents at the end of the period | 91,143 | 118,254 |
(*) Trade working capital is defined by the net (increase)/decrease in trade receivables, work in progress, trade payables and deferred income
(**) Other working capital is defined by the net (increase)/decrease in other receivables, prepayments and other payables (excluding liabilities for cash held on behalf of clients)
Intertrust N.V. - Reconciliation of performance measures to reported results
(EUR 000) | 01.01.17 - 31.03.17 | 01.01.16 - 31.03.16 |
Profit/(loss) from operating activities | 34,602 | 26,753 |
Amortisation of acquisition-related intangible assets | 10,128 | 7,582 |
Specific items - Transaction & Monitoring costs | 93 | - |
Specific items - Integration costs | 352 | 529 |
Specific items - Share-based payment upon IPO | 480 | 1,039 |
Specific items - Share-based payment upon integration | 404 | - |
Specific items - Other operating (income)/expenses | 103 | 5 |
One-off expenses | - | 55 |
Adjusted EBITA (*) | 46,162 | 35,963 |
(*) Adjusted EBITA is defined as EBITA before specific items. Specific items of income or expense are income and expense items that, based on their significance in size or nature, should be separately presented to provide further understanding on financial performance. Specific items are not of an operational nature and do not represent core operating results. The one-off expenses are related to redundancies, legal costs and settlement fees. The Company uses this measure to analyse the operational performance of the company and its reportable segments.
(EUR 000) | 01.01.17 - 31.03.17 | ||||
Adjusted | Specific items | Excluded items | Reported | ||
EBITA | 46,162 | (1,432) | - | 44,730 | |
Amortisation of acquisition-related intangible assets | - | - | (10,128) | (10,128) | |
Profit/(loss) from operating activities | 46,162 | (1,432) | (10,128) | 34,602 | |
Net interest | (7,050) | - | - | (7,050) | |
Foreign exchange losses | - | - | (684) | (684) | |
Share of profit of equity-accounted investees (net of tax) | (3) | - | - | (3) | |
Profit/(loss) before income tax | 39,109 | (1,432) | (10,812) | 26,865 | |
Income tax | (6,069) | - | - | (6,069) | |
Net income (*) | 33,040 | (1,432) | (10,812) | 20,796 | |
(EUR 000) | 01.01.16 - 31.03.16 | ||||
Adjusted | Specific items | Excluded items | Reported | ||
EBITA | 35,963 | (1,628) | - | 34,335 | |
Amortisation of acquisition-related intangible assets | - | - | (7,582) | (7,582) | |
Profit/(loss) from operating activities | 35,963 | (1,628) | (7,582) | 26,753 | |
Net interest | (4,686) | - | - | (4,686) | |
Foreign exchange losses | - | - | (417) | (417) | |
Share of profit of equity-accounted investees (net of tax) | (9) | - | - | (9) | |
Profit/(loss) before income tax | 31,268 | (1,628) | (7,999) | 21,641 | |
Income tax | (5,741) | - | - | (5,741) | |
Net income (*) | 25,527 | (1,628) | (7,999) | 15,900 |
(*) Adjusted net income is defined as Adjusted EBITA less net interest and less income tax. The Company uses this measure a.o. in its dividend policy.
Forward-looking statements and presentation of financial and other information
This press release may contain forward looking statements with respect to Intertrust's future financial performance and position. Such statements are based on Intertrust's current expectations, estimates and projections and on information currently available to it. Intertrust cautions investors that such statements contain elements of risk and uncertainties that are difficult to predict and that could cause Intertrust's actual financial performance and position to differ materially from these statements. Intertrust has no obligation to update or revise any statements made in this press release, except as required by law.
Definitions
Adjusted EBITDA is defined as EBITDA before specific items. Specific items of income or expense are income and expense items that, based on their significance in size or nature, should be separately presented to provide further understanding about financial performance. Specific items include (i) transaction and monitoring costs; (ii) integration costs; (iii) income / expenses related to disposal of assets; and (iv) share-based payment upon IPO. Specific items are not of an operational nature and do not represent core operating results. One-off revenue consists mainly of revenue related to the release of one-off provisions. The one-off expenses are related to redundancies, legal costs and settlement fees.
Adjusted EBITA is defined as Adjusted EBITDA after depreciation and software amortisation.
Adjusted EBITA margin is defined as Adjusted EBITA divided by Revenue, and is expressed as a percentage.
Adjusted net income is defined as Adjusted EBITA less net interest and less income tax.
Adjusted net income per share
is defined as Adjusted net income divided by the average number of shares outstanding at 31 March 2017.
Average for Q1 2017: 91,990,328 shares. Average for Q1 2016: 85,221,614 shares.
ARPE is Average revenue per entity.
Capital expenditure is defined as investments in property, plant, equipment and software not related to acquisitions.
Cash conversion ratio is defined as operating free cash flow divided by Adjusted EBITDA and is expressed as a percentage.
CC is Constant Currency .
EBITDA is defined as earnings before interest, taxes, depreciation and amortisation.
Leverage ratio is total net debt divided by Adjusted proforma EBITDA. Proforma means adjusted to take into account the full year effect of acquisitions, including projected synergies.
Net interest is defined as Net finance cost excluding Forex gains and losses.
Operating free cash flow is defined as Adjusted EBITDA less capital expenditure.
Total net debt is nominal value of the senior facilities at the prevailing exchange rates less cash excluding cash held on behalf of clients.
Underlying is Q1 2017 at constant currency and Q1 2016 including proforma Elian and Azcona figures.