IBS Group Holding Ltd : IBS Group announces audited financial results for the year ended March 31, 2012

IBS Group announces audited financial results for the year ended March 31, 2012

Please refer to relevant legal information at the end of the document

Ramsey, the Isle of Man, July 30, 2012 - IBS Group Holding Limited (IBS Group), a leading software development and IT services provider in Central and Eastern Europe, announces today its audited consolidated financial results in conformity with US GAAP for the year ended  March 31, 2012.

Highlights

• Consolidated revenues rose by 24% y-o-y to USD816.3 million.
• Consolidated EBITDA grew by 55% y-o-y to USD79.6 million and EBITDA margin increased to 9.8% from 7.8% in the prior year.
• Net Income attributable to IBS Group increased by 59% y-o-y to USD 40.9 million and net margin improved to 5.0% from 3.9% a year ago.
• Net debt down to USD24 million, a decline of USD 7.7 million y-o-y.
• Headcount increased 12% y-o-y to 8,252 employees.

Comment from Anatoly Karachinsky, President of IBS Group:
"This reporting year was notable for IBS Group as we solidified our position as one of the leading information technology (IT) companies in Central and Eastern Europe. Despite the challenging global economy, it was also a year of robust, profitable growth for us. Both of our principal business segments, IT Services (represented by IBS IT Services) and Software Development (represented by Luxoft), were integral to our success.

The IT Services segment continued to tap the rising demand from major Russian companies for developing new IT infrastructure and implementing business application software, including complex management information systems (MIS).

The Software Development segment continued its advancement as a leading niche provider of high-end outsourced software and application development services. Over the past year, the evolving requirements of our global clients were driven not only by efficiency gains, but by the growing need for value-added offerings and measurable innovation requiring advanced technical skills. Our creative approach to software engineering combined with the ability to deliver complex solutions contributed to success of this segment.

We are very pleased with the results we've achieved as they cement our foundation for future development."

Overview

Revenues

USD million	FYE March 31, 2012	2011	Change, %
IT Services	476.7	389.8	22%
Software Development	271.1	198.4	37%
Other and eliminations	68.5	69.1	(1%)
Consolidated revenues	816.3	657.3	24%

Consolidated revenues rose by 24% y-o-y to USD816.3 million. Revenues were driven up by rapid growth in both our principal business segments - IT Services and Software Development.

The IT Services segment revenues increased by 22% y-o-y to USD476.7 million on the back of continuing expansion in the Russian IT market. Increasing revenues in the segment are attributable to the growth of our business across diversified sectors of the domestic economy.

The Software Development segment revenues were up 37% y-o-y, totaling USD271.1 million. The growth stemmed from the expansion of our current clients in financial services, automotive and transport, travel and aviation and telecom industries, as well as business with prospective clients in technology and financial services verticals.

Profitability

USD million	FYE March 31, 2012	FYE March 31, 2011	Change, %
EBITDA IT Services	30.6	18.6	65%
EBITDA margin	6.4%	4.8%
EBITDA Software Development	51.8	39.7	30%
EBITDA margin	19.1%	20.0%
EBITDA Other and eliminations	(2.8)	(6.8)
Consolidated EBITDA	79.6	51.5	55%
EBITDA margin	9.8%	7.8%
Net income attributable to the Group	40.9%	25.8%	59%
Net income margin	5.0%	3.9%

IBS Group demonstrated a strong financial performance in the reporting year - solid revenues growth was underpinned by increasing profitability. Consolidated EBITDA grew by 55% to USD79.6 million. Consolidated EBITDA margin increased from 7.8% for the prior year to 9.8% due to a significant improvement in the profitability of the IT Services segment.

The IT Services segment achieved excellent EBITDA growth of 65% to USD30.6 million. This was largely a result of improvements in the average profitability of business applications projects.

The Software Development segment remained the largest contributor to EBITDA and posted EBITDA of USD51.8 million with EBITDA margin of 19.1%.

Due to a strong earnings performance in the reporting year net income attributable to IBS Group increased by 59% to USD40.9 million for the year ended March 31, 2012. Net income margin rose to 5.0% from 3.9%.

Debt position

USD million	FYE March 31, 2012	FYE March 31, 2011	Change y-o-y
Total debt	42.5	58.2	(15.7)
Current debt	20.9	32.7	(11.8)
Non-current debt	21.6	25.5	(3.9)
Net debt	24.0	31.7	(7.7)

The Group gradually followed its risk-averse policy of reducing debt and ended the reporting year with total debt of USD42.5 million, down USD15.7 million y-o-y, and net debt of USD24.0 million, down USD7.7 million y-o-y.

Headcount

The Group headcount reached 8,252 as of March 31, 2012. We added 905 employees on a net basis in the reporting year, representing a 12% increase since the prior year. This year we continued to expand our international footprint, with the most rapid growth in head count in Ukraine (30% y-o-y) and Poland (a threefold increase y-o-y).

The consolidated financial statements of IBS Group for the years ended March 31, 2012 and 2011 are available on our web-site:
http://ibsgr.com/investor-relations/financial-reports/fy2011.aspx

Conference Call Details
Management of the Group will host a conference call for investors and analysts today July 30th at 6:00 pm (Moscow) / 3:00 pm (London) / 10:00 am (New York).

To access the call, please dial:

Russian Federation dial-in #:	810-8002-198-4011
UK dial-in #:	44-20-7190-1595 (Local access) 0800-358-5263 (Toll free)
Germany dial-in #:	49-6971-044-5555 (Local access) 0800-330-4463 (Toll free)
USA dial-in #:	1-480-629-9822 (Local access) 1-877-941-6013 (Toll free)
Confirmation code:	4556271

The slide presentation accompanying the call will be available on our website on Monday, July 30th 2012 at Investor Relations section of the website:
http://ibsgr.com/investor-relations.aspx

About IBS Group Holding Limited
IBS Group is a leading software development and IT services provider in Central and Eastern Europe. Through its two principal subsidiaries, Luxoft and IBS IT Services, it offers a wide variety of information technology services, such as software development and IT services outsourcing,  IT infrastructure and business applications implementation. IBS Group has business operations in Russia, Ukraine, Romania, Poland, Germany, Switzerland, the UK, the USA, Vietnam and Singapore. IBS Group employs more than 8,000 people worldwide. IBS Group's Global Depositary Receipts are listed on the Regulated Market (General Standard) at the Frankfurt Stock Exchange (Bloomberg: IBSG:GR; Reuters: IBSGq.F).

For more information about IBS Group please visit www.ibsgr.com or contact

Investor Relations: Andrei Novikov IR Director tel: [phone] (ext.3095) [e-mail]

Media Relations: Ekaterina Beskhizhko PR Manager tel: [phone] (ext.2363) [e-mail]

Disclaimer
The information contained in this press release is not for publication, distribution or release, directly or indirectly, in any jurisdiction where such publication, disclosure or release would be unlawful. This press release does not constitute an offer for the sale of securities in the United States of America, Canada, Australia, Japan or any other jurisdiction in which an offer would be subject to legal restrictions.