- Preliminary un-audited Q4 2003 data demonstrates a strong performance for Getronics, in a hesitant and highly competitive market
- Improved productivity resulted in increased service revenue per average employee of circa 7%, at constant rates compared to Q4 2002 ongoing*
- Preliminary un-audited EBITAE** figures for Q4 2003, including a negative currency impact of 7%, are within the range EUR 33-37 million (Q4 2002 ongoing*: EUR 11 million)
- Over EUR 400 million in cash and cash equivalents at 31 December 2003 (2002: EUR 295 million)
- Total Q4 revenue of circa EUR 705 million (Q4 2002 ongoing*: EUR 826 million)
- Decrease in Q4 total revenue of circa 15% compared to Q4 2002 ongoing* is mainly caused by a significant planned reduction in product sales (circa 24%), and a stronger Euro (circa 5%)
- Service-Product revenue mix continues to improve in Q4 2003: 71% services vs 29% products (Q4 2002 ongoing*: 68% services vs 32% products)
- Restructuring programme largely completed
- Due to the improved profitability of various countries, the recognition of deferred tax assets may lead to a non-cash tax gain. This gain will be quantified by the full year audited results, but is expected to be in the range EUR 28-34 million
- A review of the pension obligation under IAS 19 in Italy, to be completed by the audited annual results, is expected to show a release of pension provisions.
* Ongoing business: 2002 excludes divestments
** EBITAE: Earnings before interest, taxes, amortisation and exceptional operating items
Chairman & CEO Klaas Wagenaar comments:
“With operational restructuring largely completed, Getronics is now entering a new phase of its development. In 2004 we will focus on improving the quality of our already significant volumes of business with existing international clients, increasing our international collaboration with our strategic alliances, Microsoft, Cisco, and Dell, and the implementation of a consistent internationally adopted sales and marketing portfolio. Our continuing efforts to optimise the Getronics international network will enable us to continue to create new valued solutions for our clients, strengthen and improve our core business, and unlock more of the Company’s intrinsic value.”
Preliminary un-audited fourth quarter trading update
Q4 typically can be characterised as the Company’s most robust seasonal quarter. The Company closed the quarter strongly and continued to improve its cash management, resulting in cash and cash equivalents of over EUR 400 million at 31 December 2003.
The global ICT-market, with the exception of Southern Europe, showed modest positive signs of recovery during the quarter. Management, however, believes that the overall economy needs at least another 6 to 9 months of proven stability before clients will feel confident enough to increase their ICT-spending.
The Company was able to secure all major managed ICT-services contract renewals in Q4, as well as close a significant number of project based ICT-services and solutions at existing and new clients. A number of contracts for desktop & network outsourcing were won during the quarter. Demand for the Company’s key service offerings such as voice over IP, and security, contributed to the commercial success of Q4, as did the contracts and projects generated through our strong relationship with Microsoft, Cisco and Dell. This resulted in improved service revenue productivity at constant rates of 7% per average employee.
All countries performed on or above target in Q4 2003. Italy achieved a positive EBITAE** in the quarter. The quarter demonstrates that the restructuring programme implemented as part of the Entrepreneurial Solution, together with the new financial reporting system and procedures introduced in early Q2, started to have a positive impact.
Getronics has performed better than the ongoing business in the previous year for the third consecutive quarter. Management believes that there is potential for further improvement in the quality of revenue during 2004, as it continues to focus on improvements in operational performance.
Other updates
Today, Getronics will also publish an updated Company presentation on its website: www.getronics.com
Today’s announcement replaces the Q4 2003 trading update scheduled for 18 February 2004.
Getronics will organise an investor relations day on 5 February 2004 to update the investment community on the Company’s strategy and Q4 2003 performance. The accompanying presentation will also be published on the Getronics’ website: www.getronics.com
About Getronics
With approximately 22,000 employees in over 30 countries and forecast revenues of circa EUR 2.7 billion in 2003, Getronics is one of the world's leading providers of vendor independent Information and Communication Technology (ICT) solutions and services. Getronics today combines the capabilities of the original Dutch company with those of Wang Global, acquired in 1999, and of the systems and services division of Olivetti. Getronics is ranked second worldwide in network and desktop outsourcing and fourth worldwide in network consulting and integration (Source: IDC 2002-2003).
Getronics designs, integrates and manages ICT infrastructures and business solutions for many of the world's largest global and local companies and organisations, helping them maximise the value of their information technology investments.
Getronics headquarters are in Amsterdam, with regional offices in Boston, Madrid and Singapore. Getronics’ shares are traded on Euronext Amsterdam (‘GTN’). For further information about Getronics, visit www.getronics.com
For further information:
Press enquiries Investor enquiries
Getronics Media Relations Getronics Investor Relations
Tel: +31 20 586 1581 Tel: +31 20 586 1964
Fax: +31 20 586 1455 Fax: +31 20 586 1455
media@getronics.com investor.relations@getronics.com
Caution regarding forward-looking statements
Certain statements contained in this announcement are ‘forward-looking statements’. These forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from future results expressed or implied by them. Important factors that could cause actual results to differ materially from the information set forth in any forward-looking statements include, but are not limited to (i) conditions in the ICT market (ii) general economic conditions (iii) performance of the financial markets (iv) interest level rates (v) currency exchange rates (vi) competitive factors on a global, national and/or regional basis (vii) amendment of legislation and/or regulation(s). Many of these factors are beyond the Company’s ability to control or predict. Given these uncertainties, readers are cautioned not to place undue reliance on any forward-looking statement.