GFT strengthens growth with artificial intelligence and expansion in Latin America
EQS-News: GFT Technologies SE / Key word(s): Annual Results/Forecast
GFT strengthens growth with artificial intelligence and expansion in Latin America
07.03.2024 / 07:32 CET/CEST
The issuer is solely responsible for the content of this announcement.*GFT strengthens growth with artificial intelligence and expansion in Latin America*
Turnaround in Brazil completed, positive outlook
· Stable *revenue growth of 10 percent* in the financial year 2023
· *Adjusted EBIT rose by 9 percent* to around EUR 73 million
· *AI solutions generate significantly more demand *after launch of GFT AI.DA Marketplace
· *Increase in dividend *from EUR 0.45 to EUR 0.50
· *Acquisition of Sophos Solutions *successfully completed
· Guidance 2024: *growth set to continue; revenue *of approx. *EUR* *920 million* and *adjusted EBIT* of approx. *EUR* *85 million* expected
Stuttgart, 7 March 2024 – *GFT* Technologies SE (GFT) continued its *solid growth trajectory *in 2023. *Revenue rose *by *10* *percent* compared to the previous year.* *Business* *with *banks and industrial clients *made *particularly strong progress* with revenue growth of *13 and 12 percent, respectively*. Adjusted earnings before interest and taxes* *(*adjusted EBIT*) *rose by 9 percent*; adjusted for currency effects by as much as 14 percent. For the current year, the company expects revenue of around EUR 920 million and adjusted EBIT of around EUR 85 million.
The company achieved above-average growth in *Europe* with a* 23 percent increase in* *revenue*. Moreover, *GFT’s largest market Brazil* *completed its turnaround* in the second half of the year and is making good progress again. Growth was driven in all sectors by the noticeable *uptick in demand for AI solutions* – especially since the launch of the GFT AI.DA Marketplace in late September.
“A successful digital transformation is the prerequisite for long-term success. Not even an adverse economic environment can change this – and our clients rely on our expertise to shape their transformation,” says GFT CEO Marika Lulay. “New developments, especially in the field of AI, are accelerating the trend. We have established ourselves as a leader also in this field, as confirmed by numerous analyst reports from the past year. This positioning, as well as the further strengthening of our global footprint with the acquisition of Sophos Solutions in Latin America, will continue to drive our growth in 2024.”
The GFT Group generated *revenue of EUR* *801.74 million *in* *its financial year 2023. The company thus *exceeded* the *prior-year figure* of EUR 730.14 million by *10 percent*. In the *Banking* sector, GFT achieved *growth of 13 percent* and in the *Industry & Others *sector* *revenue rose by *12 percent*. Whereas revenue in the *Insurance* sector fell slightly (*-2%*), business in the *other sectors remained very positive*.
*Disproportionately strong growth in Europe, turnaround in Brazil *
In the *Continental Europe *segment, GFT’s revenue *grew *by *23 percent*. This was aided in particular by the *acquisition of targens GmbH,* completed in April, with a revenue contribution of around EUR 30 million. As a result, *Germany *has now become *GFT’s third-largest market. *The segment also benefited from a shift in revenue from the UK to Poland.
Revenue in the *Americas, UK & APAC* segment rose year on year *by 2 percent*. Demand for *complex modernisation and transformation projects* *in the finance sector* also remained high in this segment, with further dynamic growth *in the USA and Mexico in particular*. Due to the aforementioned shift in revenue to the Continental Europe segment, growth in this segment was slightly weaker.
“We achieved a further significant increase in revenue and earnings last year, despite numerous market uncertainties. At the same time, our prudent financial management enabled us to finance the acquisition of Sophos largely from our own funds,” says GFT CFO Jochen Ruetz. “In the medium term, Sophos will not only contribute to our revenue growth, but also help boost our profitability.”
*Further growth in earnings*
There were also improvements in the Group’s *key earnings figures *compared to 2022. *Adjusted* *EBIT* *rose* year on year *by 9 percent to EUR** **73.33 million* (2022: EUR 67.48 million). Despite burdens from necessary capacity adjustments, *adjusted EBIT* without currency effects *rose* *by 14 percent*. In the financial year 2023, the adjusted EBIT margin amounted to 9.1 percent (2022: 9.2 percent). Due to a high capacity utilisation rate, the adjusted EBIT margin remained* *high in the fourth quarter at 10.2 percent (Q4 2022: 10.1 percent). Compared to the prior-year period, *EBT* *increased *by* 3 percent* to *EUR* *68.00 million* (2022: EUR 66.05 million).
Due to the positive development of earnings, the Administrative Board will recommend to the Annual General Meeting on 20 June 2024 the distribution of a *dividend* of *EUR* *0.50* per no-par share for the financial year 2023 (2022: EUR 0.45). This corresponds to a *total payout* to shareholders of *EUR** **13.16 million* (2022: EUR 11.85 million) and a *payout ratio of 27%* (2022: 26%) based on net income.
*Financial stability and flexibility maintained despite targens acquisition*
*Operating cash flow* decreased year on year to *EUR* *40.44 million *(2022: EUR 57.49 million), due mainly to a negative special item. *Net liquidity *fell to *EUR* *4.39 million* (31 December 2022: EUR 35.70 million) – an extremely solid development in view of the acquisition of targens GmbH, since renamed GFT Deutschland GmbH. As a result of the increase in net income, *the equity ratio rose by 3 percentage points* *to 43 percent* (31 December 2022: 40 percent).
As of 31 December 2023, the Group had a total of *9,134 full-time employees* (FTE). This corresponds to an *increase of 3 percent* compared to 8,842 FTE at year-end 2022.
*Significant improvement in three ESG ratings*
GFT also made progress in several internationally recognised sustainability ratings. The company achieved *silver status* in the EcoVadis rating – putting GFT in the top *25 per cent* of companies assessed by EcoVadis. In the CDP Score Report, GFT advanced to a B rating and now lies above the IT and software sector average of C. And in the S&P ESG Rating, the company improved from 49 to 51 points.
*Acquisition of Sophos Solutions successfully closed*
The *acquisition of Sophos Solutions* S.A.S. was already *successfully closed *on 01 February, exactly one week after its announcement. This acquisition has expanded GFT’s client base, as well as its global footprint and team by almost 20 percent. Sophos is expected to be fully integrated into GFT by the end of the year.
*GFT expects solid revenue and earnings growth for 2024 *
GFT anticipates significant revenue *growth *and *increased earnings in its financial year 2024*, driven above all by the completed acquisition of Sophos Solutions – included in the outlook on a prorated basis as of the completion of the transaction on 01 February 2024. The pressure on companies to digitalise and the resulting strong demand for cloud solutions as part of the digital transformation will continue to accelerate the growth of GFT’s business.
Specifically, the company expects *revenue growth of 15 percent to approx. EUR** **920 million*. According to guidance,* adjusted EBIT* is expected to *improve by* *16 percent to around EUR** **85 million*. The Group anticipates earnings before taxes (*EBT*) of approximately *EUR* *72 million*, corresponding to growth of around *6* *percent*.
* *
*Key figures (IFRS)*
(Deviations possible due to rounding differences)
*In EUR million* *2023* *2022* *∆*
Revenue 801.74 730.14 10%
EBITDA 89.76 86.04 4%
Adjusted EBIT^1) 73.33 67.48 9%
EBIT 68.40 65.55 4%
EBT 68.00 66.05 3%
Net income 48.36 46.25 5%
Earnings per share in EUR 1.84 1.76 5%
Operating cash flow 40.44 57.49 -30%
*In EUR million* *31/12/2023* *31/12/2022* *∆*
Employees (FTE) 9,134 8,842 3%
Net liquidity 4.39 35.70 -88%
Equity ratio (in percent) 43% 40% 3 PP
^1) Adjusted for special items from M&A activities and share price-based effects in connection with the measurement of variable management compensation.
Further information on the definition of alternative performance measures is provided here on the GFT website.
Marika Lulay, CEO of GFT Source: Ingrid Hertfelder/GFT
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This press release is also available for download via the GFT newsroom.*Your contacts*
*Press*
Dr. Markus Müller
Group Public Relations
GFT Technologies SE
Schelmenwasenstraße 34
70567 Stuttgart
Germany
+49 711 62042-344
markus.j.mueller@gft.com *Investors*
Andreas Herzog
Investor Relations
GFT Technologies SE
Schelmenwasenstraße 34
70567 Stuttgart
Germany
+49 711 62042-383
Andreas.Herzog@gft.com
*About GFT** **– Shaping the future of digital business.*
GFT is a digital transformation pioneer. By leveraging next-generation technologies, we enable clients to boost their productivity with intelligent software solutions. We focus on Digital Finance, Enterprise AI & Data Solutions, and Platform Modernisation.
GFT's strengths include deep technological excellence, a strong ecosystem of partners, and industry expertise. We are agile@scale and boost digital transformation for clients from the finance and insurance sectors, as well as the manufacturing industry. GFT talents create, implement, and manage software applications to enable innovative businesses while complying with regulations.
With locations in 20 markets around the globe, GFT ensures proximity to its clients. We draw on over 35 years of experience and a global team of over 12,000 determined talents. GFT provides them with career opportunities in the most innovative areas of software engineering. The GFT Technologies SE share is listed in the SDAX index of the German Stock Exchange (ticker: GFT-XE).
www.gft.com
www.blog.gft.com
www.linkedin.com/company/gft-technologies
www.twitter.com/gft_tech
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07.03.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
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Language: English
Company: GFT Technologies SE
Schelmenwasenstraße 34
70567 Stuttgart
Germany
Phone: +49 (0)711/62042-0
Fax: +49 (0)711/62042-301
E-mail: ir@gft.com
Internet: www.gft.com
ISIN: DE0005800601
WKN: 580060
Indices: SDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover, Munich, Stuttgart, Tradegate Exchange
EQS News ID: 1853215
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