GFT TECHNOLOGIES SE - Pressure to digitalise banks spurs growth of GFT
- Strong revenuegrowth in 2022, upgraded guidance reached: +29 percent to EUR730.14 million
- Significantly improved earnings: EBT +65 percent, adjusted EBITDA +33 percent
- Diversification across sectors and clients continued: Insurance sector +44 percent, Industry & Others +21 percent; furthergrowth in core market Banking: +27 percent
- Administrative Board proposes dividend increase of 29 percent to EUR0.45 per share (previous year: EUR 0.35)
- Guidance 2023: growth set to continue; revenue of EUR850 million, adjusted EBIT of EUR80 million and EBT of EUR72 million expected
Stuttgart, 2 March 2023 - A wave of modernisation is sweeping through the banking world. In a 2021 study* by Gartner®, 28 percent of the respondents reported making major replacements to their core banking systems, and 30 percent reported making phased replacements in the past 12 months, or will do over the next two years. In replacing their systems, more and more banks are switching to the latest generation of core banking systems that run in the cloud.
GFT Technologies SE (GFT) benefits from this development in two ways: the Group has made a name for itself with its expertise in state-of-the-art core banking systems and cloud computing. GFT also generated disproportionately strong growth with its clients in the insurance and industrial sectors. This constellation led to highly dynamic and profitable growth for the IT group over the course of 2022: revenue rose by 29 percent, EBT by 65 percent and adjusted EBITDA by 33 percent.
GFT outpaces market growth
"Our strong sector focus, our extensive expertise with cloud-based applications and our close partnerships with all major cloud infrastructure and solution providers have proven to be decisive time and again. We act as one team and are thus able to mobilise our global capabilities for the respective client situation - which is why we have once again grown significantly faster than our market."
In 2022, the GFT Group generated revenue of EUR 730.14 million. As a result, the company exceeded its prior-year figure of EUR 566.19 million by 29 percent. The diversification strategy also proved to be a key driver of this growth once again: in the Insurance sector, revenue was raised by 44 percent, in the Industry & Others sector by 21 percent. In the Banking sector, revenue was 27 percent higher than in the previous year.
Business made particularly strong progress in the Americas, UK & APAC segment with an increase in revenue of 44 percent. This growth was driven above all by complex modernisation and transformation projects of banks and insurers.
Significantly improved earnings
There was disproportionately strong growth in earnings during the past year. This was due to structurally strong demand for digitalisation solutions - especially from insurers and banks - as well as positive currency effects. Compared to the previous year, EBT rose by 65 percent to EUR66.05 million (previous year: EUR 40.03 million). Adjusted EBITDA increased by 33 percent to EUR86.04 million (previous year: EUR 64.79 million); EBIT improved by 60 percent to EUR65.55 million (previous year: EUR 40.88 million). The EBT margin rose to 9.0 percent (previous year: 7.1 percent). These improvements resulted from profitable revenue growth and related economies of scale, as well as from positive, share price-based valuation contributions.
Global team grows to more than 10,000 experts
GFT made significant progress in the fiercely competitive global market for talented experts in 2022. As of 31 December 2022, the Group employed a total of 8,842 full-time employees (FTE), an increase of 15 percent compared to 7,718 employees at the end of the previous year. The number of employees and freelancers has passed the 10,000 mark. This increase is mainly due to strong growth in Brazil. By mid-2022, all GFT companies with more than a minimum of 10 employees had also received the globally recognised "Great Place to Work" certification.
Financial stability and flexibility remain high
In the financial year 2022, cash flow from operating activities improved to EUR57.49 million (2021: EUR 52.99 million), primarily due to EBT. Net liquidity increased to EUR35.70 million (31 December 2021: EUR 1.93 million). Due to the increase in equity capital, the equity ratio of 40 percent was four percentage points up on the previous year (31 December 2021: 36 percent).
Further revenue and earnings growth in 2023
The fundamental digitalisation trends in GFT's markets remain intact and the Group is excellently positioned to benefit from market opportunities thanks to its in-depth sector and technology expertise. The company therefore expects to grow in all segments during 2023 and to achieve further growth in revenue and earnings in the financial year 2023.
Compared to 2022, revenue is expected to grow by 16 percent to EUR850 million. The GFT Group expects earnings before taxes to reach around EUR72 million (2022: EUR 66 million), corresponding to year-on-year growth of 9 percent. Adjusted EBIT is expected to increase to around EUR 80 million (2022: EUR 67 million), 19 percent more than in 2022. This guidance takes into account the acquisition of targens GmbH, as announced on 23 February 2023, pro rata temporis as of 1 April 2023.
"Clients from all sectors want to partner with us for their digital transformation. They know you need a reliable helmsman for such a journey."
(Deviations possible due to rounding differences)
| In EUR million | 2022 | 2021 | ∆ |
| Revenue | 730.14 | 566.19 | 29% |
| Adjusted EBITDA** | 86.04 | 64.79 | 33% |
| EBITDA | 86.04 | 60.75 | 42% |
| Adjusted EBIT*** | 67.48 | 54.19 | 25% |
| EBIT | 65.55 | 40.88 | 60% |
| EBT | 66.05 | 40.03 | 65% |
| Net income | 46.25 | 29.89 | 55% |
| Earnings per share in EUR | 1.76 | 1.14 | 55% |
| Operating cash flow | 57.49 | 52.99 | 8% |
| Employees (FTE, as of 31 December) | 8,842 | 7,718 | 15% |
| In EUR million | 31/12/2022 | 31/12/2021 | ∆ |
| Net liquidity | 35.70 | 1.93 | >100% |
| Equity ratio (in percent) | 40% | 36% | 4 |
* Gartner report "Core Banking Legacy Modernization to Enable Digital Business - What Works and What Doesn't", 27 January 2023.
**Adjusted for special items from M&A activities in the comparative period 2021.
** 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 hereon the GFT website.
GARTNER is the registered trademark and service mark of Gartner Inc., and/or its affiliates in the U.S. and/or internationally and has been used herein with permission. All rights reserved.
- Pressure to digitalise banks spurs growth of GFT
GFT achieved highly dynamic and profitable growth over the course of 2022: revenue rose by 29 percent, EBT by 65 percent and adjusted EBITDA by 33 percent.
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GFT Technologies SE published this content on 02 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 March 2023 06:23:06 UTC.
