Intertrust Realises Sound Performance in HY 2016 and expects Full Year 2016 Adjusted net income per share of at least €1.30 Intertrust N.V. HY 2016 results Amsterdam, August 25, 2016, Intertrust N.V. (“Intertrust” or “Company”) [ticker symbol INTER] a leading global provider of high-value trust and corporate services, today announces its results for the half year ended June 30, 2016. Presentation of financial and other information Financials are presented on adjusted basis before specific items and one-off revenues/expenses. This press release includes unaudited financial information. The condensed consolidated interim financial statements for the half year ended 2016 and have been prepared in accordance with IAS 34 and a review report has been issued by the company’s auditors KPMG Accountants N.V. In € millions HY 2016 HY 2015 Adjusted revenue 176.7 166.1 Adjusted EBITA 71.1 67.8 Adjusted EBITA Margin 40.2% 40.8% Adjusted net income* 51.9 Adjusted net income per share (€)** 0.61 Adjusted revenue of €176.7 million grew by 6.4%. At constant currency and on a proforma*** basis, Adjusted revenue grew by 3.5%. Adjusted EBITA of €71.1 million grew by 4.8%. At constant currency and on a proforma*** basis, Adjusted EBITA grew by 3.5%. Adjusted EBITA margin of 40.2%. This is in line with HY 2015 on a proforma*** and constant currency basis. Strong operating cash flow conversion of 96.7 % versus 97.6% HY 2015, the difference being attributable to timing. * Adjusted net income is defined as Adjusted EBITA less net interest costs and less tax costs ** Adjusted net income per share is defined as Adjusted net income divided by the number of shares outstanding before additional issuance for the acquisition of Elian (85,221,614) *** Proforma including the CorpNordic contribution for the period January-June 2015. CC is defined as constant currency Note: Rounding differences may occur as calculations are based on half year figures not rounded to millions.
41
Embed
Intertrust Realises Sound Performance in HY 2016/media/Files/I/Intertrust-IR/docum… · This press release includes unaudited financial information. The condensed consolidated interim
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Intertrust Realises Sound Performance in HY 2016 and expects Full Year 2016 Adjusted net income per share of at least €1.30
Intertrust N.V. HY 2016 results
Amsterdam, August 25, 2016, Intertrust N.V. (“Intertrust” or “Company”) [ticker symbol
INTER] a leading global provider of high-value trust and corporate services, today
announces its results for the half year ended June 30, 2016.
Presentation of financial and other information
Financials are presented on adjusted basis before specific items and one-off revenues/expenses.
This press release includes unaudited financial information. The condensed consolidated interim
financial statements for the half year ended 2016 and have been prepared in accordance with IAS
34 and a review report has been issued by the company’s auditors KPMG Accountants N.V.
In € millions HY 2016 HY 2015
Adjusted revenue 176.7 166.1
Adjusted EBITA 71.1 67.8
Adjusted EBITA Margin 40.2% 40.8%
Adjusted net income* 51.9
Adjusted net income per share (€)** 0.61
Adjusted revenue of €176.7 million grew by 6.4%. At constant currency and on a proforma***
basis, Adjusted revenue grew by 3.5%.
Adjusted EBITA of €71.1 million grew by 4.8%. At constant currency and on a proforma***
basis, Adjusted EBITA grew by 3.5%.
Adjusted EBITA margin of 40.2%. This is in line with HY 2015 on a proforma*** and constant
currency basis.
Strong operating cash flow conversion of 96.7 % versus 97.6% HY 2015, the difference being
attributable to timing.
* Adjusted net income is defined as Adjusted EBITA less net interest costs and less tax costs
** Adjusted net income per share is defined as Adjusted net income divided by the number of shares
outstanding before additional issuance for the acquisition of Elian (85,221,614)
*** Proforma including the CorpNordic contribution for the period January-June 2015. CC is defined as
constant currency
Note: Rounding differences may occur as calculations are based on half year figures not rounded to
millions.
Intertrust N.V.
2
David de Buck, Chief Executive Officer of Intertrust, commented:
“I am pleased with our sound results for the first half of this year. We continue to see a solid
pipeline of business and reiterate our guidance for 2016 that the full year Adjusted net income per
share will be at least €1.30. An important development in the second quarter is the successful
acquisition of Elian. Preparations for integration are well underway and we expect to close the
transaction in September. We are excited about the prospects for cross-selling and synergies from
the integration of Elian and Intertrust. Elian will significantly strengthen our capital markets and
funds capabilities, reinforcing our global leadership.”
Highlights HY 2016
On June 6, Intertrust announced its agreement to acquire Jersey-based regional trust and
corporate services provider Elian for £435 million (€557 million). The transaction is on-track to
close before the end of September, pending regulatory approvals. An integration project is fully
operational with several functional workstreams preparing for closing. Financing of the
transaction was successful and included:
o €122 million in a share offering on June 13, 2016;
o syndication of 2 new debt acquisition facilities, one for £94 million and the other for
€147.5 million to a group of nine banks.
Intertrust opened a sales office in Chicago in January, and is gaining a foothold in the region
with Mid-western multinationals. CorpNordic integration was completed in Q1 – annualised synergies of €0.9 million have been
achieved and the activities show growth in line with expectations. Completed rollout of the Business Application Roadmap (BAR) IT project. Irish AIFMD ManCo services were successfully launched in HY 2016 and the onboarding of
Revenue increased by year-on-year €10.9 million, or 6.6%, to €176.7 million for HY 2016. Adjusted
revenue increased by €10.6 million, or 6.4%, to € 176.7 million for HY 2016. The increase in
revenue was driven by growth in the Netherlands mainly due to time-based fees following the
increase in billable FTE’s, growth in Luxembourg was driven by additional FTE’s and higher fixed
fees. Revenue growth in Guernsey was driven by increase in compliance activity and more activity
on time based fees and on the former Cayman clients. Revenue was impacted negatively by a
slightly higher loss of registered office business in Cayman. Revenue growth also benefitted from
the acquisition of CorpNordic, which results were consolidated as of July 1, 2015, partially
compensated by a negative impact of exchange rate variances.
Staff expenses
Staff expenses increased by €7.5 million year-on-year, or 10.4%, to €79.0 million for HY 2016.
Staff expenses in HY 2016 comprised €2.4 million of equity share based payments upon IPO,
presented in Specific items in Intertrust’s adjusted results. On a constant currency basis, and
excluding one-offs and equity share based payments, staff expenses increased by €5.8 million or
8.1%. This increase was primarily driven by the inclusion of LTIP costs in HY 2016 and by an
increase of 92 billable FTE’s to support business growth (mainly in the Netherlands, Luxembourg
and from the CorpNordic acquisition), and an increase of five non-billable FTE's, mainly in IT to
support IT infrastructure and system applications.
Rental expenses
Rental expenses increased by €0.8 million year-on-year, or 1 0%, to €9.0 million for HY 2016.
On a constant currency basis, Rental expenses increased by 11.3%. This increase was mainly
driven by the consolidation of the CorpNordic acquisition.
Other operating expenses
Other operating expenses increased by €2.9 million year-on-year, or 15.3%, to €21.8 million for
Intertrust N.V.
14
HY 2016. Excluding Transaction & Monitoring costs and Integration costs, Other operating expenses
increased by €0.6 million. This increase was mainly driven by the consolidation of CorpNordic
and IT costs.
Other operating income
The Other operating income was €0.1 million for HY 2016 and €2.4 million for HY 2015.
The operating income reported for HY 2015 consisted of indemnities received from former
shareholders in relation to tax settlements of past years.
EBITDA
As a result of the aforementioned factors, EBITDA decreased by €2.5 million, or 3.6%, to €67.0
million for H Y 2016 from €69.5 million for HY 2015. The decrease is mainly driven by higher
specific cost related to the Elian transaction and the stock ownership program. Excluding specific
costs and one-off revenues and expenses, our Adjusted EBITDA increased by €3.8 million year-on-
year, or 5.4%, to €75.1 million for HY 2016.
Depreciation and Amortisation
Depreciation and Amortisation charges increased by €0.7 million year-on-year, or 4.5%, to €19.1
million for HY 2016. The €19.1 million in 2016 includes amortisation of brand and amortisation
of intangibles of €15.1 million and depreciation and software amortisation of €4.0 million. The
increase of €0.7 million in Depreciation was mainly due to higher capital expenditure relating to
the implementation of BAR and other IT projects.
Profit/(Loss) from Operating Activities
As a result of the aforementioned factors, the Profit from operating activities decreased by €3.4
million year-on-year, or 6.5%, to €47.8 million for HY 2016.
Net finance costs
The Net finance costs decreased by €23.3 million year-on-year or 60.9%, to €14.9 million for HY
2016.
This decrease is mainly due to the refinancing in October 2015 of the Senior Facilities, the Second
Lien Facilities, using a combination of proceeds from the primary offering, and a drawdown from
new facilities and the restructuring of shareholder loans.
The Finance costs in HY 2016 of €14.9 million include €7.0 million bank interest, €1.9 million
amortisation of financing fees, net foreign exchange losses of €5.6 million, as well as other costs of
€0.4 million. Finance costs in HY 2015 of €38.2 million included €27.6 million in bank interest, €4.3
million in shareholder loan interest, €2.9 million in amortisation of financing fees, net foreign
exchange losses of €2.5 million, as well as other costs of €0.9 million.
Income tax
Income tax expense increased by €4.5 million year-on-year to an Income tax charge of €9.9
million for HY 2016.
The increase was primarily the result of the increase of the profit before income tax by €19.9
million.
In HY 2016 the income tax rate as a percent of Profit before taxes was 30% and was impacted by
non-tax-deductible interest expenses in the Fiscal Unity of Intertrust Luxembourg and non-tax-
deductible specific items (transaction costs related to Elian acquisition and share-based payment
expenses).
Intertrust N.V.
15
Profit/(Loss) HY 2016
As a result of the foregoing factors, the profit for the period increased by €15.4 million year-on-
year to €23.0 million for HY 2016 from €7.6 million for HY 2015.
Other Comprehensive Income
The loss in equity in other comprehensive income of €24.8 million (reference is made to
“Condensed Consolidated Interim Statement of Comprehensive Income“, page 21) is mainly driven
by losses related to movements in the translation reserves of €9.7 million due to changes mainly in
USD and GBP and mark to market losses on interest rate swaps (€3.3 million) and on forward forex
exchange contracts (€13.8 million net of tax) taken to fix the EUR/GBP rates to cover the risk of
fluctuations in view of the Elian Group acquisition.
Risk paragraph
The Annual Report 2015 includes a section for Intertrust’s Risk Management function with an
overview of the main risks and controls and mitigation actions. Reference is made to pages 52 to
57 of the Annual Report 2015. In the Company’s view, the nature and potential impact of these
risks have not materially changed in the first half of 2016.
In the first half of 2016, Intertrust reorganised Internal Audit & Risk Management by separating the
two functions. Risk Management & Compliance were then combined and a new Global Head
Compliance & Risk Management was hired. Internal Audit was made a separate and independent
function, with unchanged management.
Intertrust N.V.
16
Balance Sheet
Intertrust N.V.
In € millions 30.06.2016
31.12.2015
Assets
Property, plant and equipment 11.2 11.3
Intangible assets 1,038.7 1,064.5
Investments in equity-accounted investees 0.2 0.3
Other non-current financial assets 4.2 4.1
Deferred tax assets 4.6 7.1
Non-current assets 1,059.0 1,087.2
Trade receivables 56.3 81.0
Other receivables 15.4 16.5
Work in progress 26.1 18.0
Current tax assets 0.8 0.7
Other current financial assets 1.3 1.2
Prepayments 8.1 5.4
Cash and cash equivalents 261.4 80.5
Current assets 369.5 203.2
Total assets 1,428.4 1,290.4
Equity
Share capital 55.2 51.1
Share premium 630.4 513.4
Reserves (23.4) 0.1
Retained earnings 22.0 (2.5)
Equity attributable to owners of the Company 684.2 562.2
Non-controlling interests 0.1 0.1
Total equity 684.4 562.3
Liabilities
Loans and borrowings 523.8 523.7
Other non-current financial liabilities 3.3 0.0
Employee benefits liabilities 4.2 2.8
Deferred income 7.2 8.3
Provisions 0.7 0.8
Deferred tax liabilities 69.7 72.3
Non-current liabilities 608.9 607.9
Loans and borrowings - 0.1
Trade payables 5.2 6.2
Other payables 49.4 54.9
Other current financial liabilities 15.2 -
Deferred income 50.1 46.7
Provisions 0.6 1.0
Current tax liabilities 14.7 11.1
Current liabilities 135.2 120.1
Total liabilities 744.1 728.1
Total equity & liabilities 1,428.4 1,290.4
Intertrust N.V.
17
Cash flow In € millions HY 2016 HY 2015
Net cash from operating activities 82.3 68.3
Net cash from/(used in) investing activities (3.9) (28.7)
Net cash from/(used in) financing activities 113.2 (40.4)
Net changes in cash and cash equivalents 191.6 (0.9)
Cash and cash equivalent at the begining of the period 66.5 23.2
Effect of exchange rate fluctuations on cash held (6.1) 0.9
Cash attributable to the Company at the end of the
period 252.0 23.3
Cash held on behalf of clients at the end of the period 9.4 6.2
Cash and cash equivalents at the end of the period 261.4 29.5
Intertrust N.V.
18
Definitions
Adjusted EBITDA is defined as EBITDA before specific items and before one-off revenue /
expenses. 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 revenues 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 Adjusted revenue, and is
expressed as a percentage.
Adjusted revenue is defined as revenue adjusted for one-off revenue as defined under Adjusted
EBITDA.
Capital expenditure is defined as investments in property, plant, equipment and software not
related to acquisitions.
Cash conversion ratio including strategic capital expenditures is defined as Adjusted EBITDA
less capital expenditure, including strategic capital expenditures, divided by Adjusted EBITDA and is
expressed as a percentage
Cash conversion ratio excluding strategic capital expenditures is defined as operating free
cash flow divided by Adjusted EBITDA and is expressed as a percentage.
EBITDA is defined as earnings before interest, taxes, depreciation and amortisation.
Operating free cash flow is defined as Adjusted EBITDA less capital expenditure, excluding
strategic capital expenditures. We define strategic capital expenditures as capital expenditures
relating to the Business Application Roadmap, or relating to investments in IT infrastructure in
connection with the Business Application Roadmap.
Forward-looking statements
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.
Intertrust N.V.
19
Statements of the Management Board
Management Board responsibility statement under the Dutch Financial
Markets Supervision Act (“Wet op het financieel toezicht”)
With reference to section 5:25d paragraph 2 under c of the Dutch Financial Markets Supervision Act
(“Wet op het financieel toezicht”), the Management Board confirms that, to the best of its knowledge, the condensed consolidated interim financial statements for the six month period ended June 30, 2016, which have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company.
The management report of the Management Board for the six month period ended June 30, 2016,
as set out on pages 1 to 18 of this press release, includes a fair review of the information required pursuant to article 5:25d paragraphs 8 and 9 of the Dutch Financial Markets Supervision Act (“Wet op het financieel toezicht”).
Amsterdam, the Netherlands
August 24, 2016 David de Buck, CEO Ernesto Traulsen, CFO
Intertrust N.V.
20
Condensed consolidated interim financial statements for the six month period ended June 30, 2016
Condensed consolidated interim statement of profit or loss 21
Condensed consolidated interim statement of comprehensive income 21
Condensed consolidated interim statement of financial position 22
Condensed consolidated interim statement of changes in equity 23
Condensed consolidated interim statement of changes in equity (continued) 24
Condensed consolidated interim statement of cash flows 25
Notes to the condensed consolidated interim financial statements 26
Intertrust N.V.
21
Condensed consolidated interim statement of profit or loss
Condensed consolidated interim statement of
comprehensive income
The notes on pages 26 to 40 are an integral part of these condensed consolidated interim financial
FTE’s employed by CorpNordic which was acquired in June 2015).
2. Basis of preparation
Statement of compliance 2.1.
These condensed consolidated interim financial statements have been prepared in accordance
with IAS 34 Interim Financial Reporting. They do not include all the information required for a
complete set of IFRS financial statements. However, selected explanatory notes are included to
explain events and transactions that are significant to an understanding of the changes in the
Group’s financial position and performance since the last annual consolidated financial statements
as at and for the year ended December 31, 2015.
These condensed consolidated interim financial statements were authorised for issue by the
Management Board on August 24, 2016.
Functional and presentation currency 2.2.
These condensed consolidated interim financial statements are presented in Euro, which is the
Company’s functional currency. All financial information presented in Euro has been rounded to
the nearest thousand (EUR 000), unless otherwise indicated.
Intertrust N.V.
27
Use of estimates and judgements 2.3.
The preparation of the condensed consolidated interim financial statements in conformity with
IFRS requires management to make judgements, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates.
The significant judgements made by management in applying the Group’s accounting policies and
the key sources of estimation uncertainty were the same as those applied to the consolidated
financial statements as at and for the year ended December 31, 2015.
Determination of fair values
A number of the Group’s accounting policies and disclosures require the determination of fair
value, for both financial and non-financial assets and liabilities.
When measuring the fair value of an asset or a liability, the Group uses market observable data
as much as possible. Fair values are categorised into different levels in a fair value hierarchy
based on the inputs used in the valuation techniques as follows:
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data
(unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorised in
different levels of the fair value hierarchy, then the fair value measurement is categorised in its
entirety in the same level of the fair value hierarchy as the lowest level input that is significant to
the entire measurement.
The Group recognises transfers between levels of the fair value hierarchy at the end of the
reporting period during which the change has occurred.
Further information about assumptions made in measuring fair values is included in the following
notes:
Note 23.2 “Fair values of financial instruments”
3. Significant accounting policies
The accounting policies applied in these condensed consolidated interim financial statements are
the same as those applied in the Group’s consolidated financial statements as at and for the year
ended December 31, 2015.
None of the new amended IFRS standards adopted by the Group as of January 01, 2016 had any
impact on these condensed interim financial statements.
Intertrust N.V.
28
4. Non IFRS Financial measures
Definitions 4.1.
EBITDA is defined as earnings before interest, taxes, depreciation and amortisation.
Adjusted EBITDA is defined as EBITDA excluding specific items and adjusted for one-
off revenue / expenses.
Adjusted Revenue is defined as Revenue adjusted for one-off revenue.
Specific items of income or expenses are income and expenses items that, based on
their significance in size or nature, should be separately presented to provide further
understanding about the financial performance. Specific items include:
- Transaction and monitoring costs
- Integration costs
- Share-based payment upon IPO
- Income/expenses related to disposal of assets
Specific items are not of an operational nature and do not represent the core
operating results.
One-off revenue consists mainly of revenues 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 net income is defined as Adjusted EBITA less net interest costs and less tax
costs.
Adjusted net income per share is defined as adjusted net income divided by the
weighted-average number of basic shares for the period.
5. Operating segments
Basis for segmentation 5.1.
The Management Board is the Chief Operating Decision Maker of the Group (CODM). The
responsibility of the Management Board is to assess performance and to make resource allocation
decisions across the Group.
The analysis of the business is organised and managed on a geographical perspective. Operating
segments are defined as Netherlands, Luxembourg, Cayman, Guernsey and Rest of the World. All
operating segments are regarded as reportable segments due to their size/importance for the
overall understanding of the geographical business.
They are reported in a manner consistent with the internal reporting provided to and used by the
Management Board.
The Management Board evaluates the performance of its segments based on Adjusted Revenue
and Adjusted EBITA (“segment Adjusted Revenue” and “segment Adjusted EBITA”). Management
considers that such information is the most relevant in evaluating the results of the respective
segments.
Intertrust N.V.
29
The individual Adjusted EBITA by operating segment excludes the allocation of Group IT and HQ
costs, that is then deducted from the total.
Profit/(loss) before income tax is not used to measure the performance of the individual segment
as items like amortisation of intangibles (except for software) and net finance costs are not
allocated to individual segments. As such the reconciliation to Profit/(loss) before income tax
according to IFRS is done on Group level.
Consistent with the aforementioned reasoning, segment assets/liabilities are not reviewed
regularly on a segment basis by management and are therefore not included in the IFRS
segment reporting.
Information about reportable segments 5.2.
For the six months ended June 30, 2015, the reportable segments to measure the performance
of the Group were “Adjusted Revenue” and “Adjusted EBITDA”. From December 31, 2015,
“Adjusted EBITDA” was replaced by “Adjusted EBITA” so for the six months ended June 30, 2015,
the figures have been aligned accordingly.
Reconciliation of reportable segment revenue 5.3.
(EUR 000) 01.01.16 - 30.06.16 01.01.15 - 30.06.15
EBITDA 66'968 69'493
Specific items - Transaction & Monitoring costs 8 4'561 2'047
Specific items - Integration costs 8 757 945
Specific items - Share-based payment upon IPO 7 2'447 -
Specific items - Other operating (income)/expenses 8/9 (114) (2'440)
One-off revenue - 348
One-off expenses 507 917
Adjusted EBITDA 75'126 71'310
Depreciation and software amortisation 10 (4'020) (3'477)
Share-based payment long term incentive plan (373) -
Other personnel expenses (5'850) (5'666)
Staff expenses (78'965) (71'513)
In number of shares 01.01.16 - 30.06.16
Outstanding at the beginning of the year -
Awarded during the year 342'425
Forfeited during the year (7'225)
Vested during the period -
Outstanding at the end of the year 335'200
(EUR 000) 01.01.16 - 30.06.16 01.01.15 - 30.06.15
Marketing and sales expenses (1'281) (1'344)
IT expenses (3'766) (3'415)
Travelling (1'865) (1'996)
Professional fees (2'595) (2'475)
Insurance (784) (767)
Transaction & monitoring costs (4'561) (2'047)
Integration costs (757) (945)
Other expenses (6'206) (5'964)
Other operating expenses (21'815) (18'953)
Intertrust N.V.
32
Transaction and monitoring costs for the six months ended June 30, 2016 are mainly related to
external legal fees and due diligence costs in connection with the acquisition of Elian (for the six
months ended June 30, 2015: similar costs incurred in connection with the acquisition of
CorpNordic and other possible transactions that did not materialise). For the six months ended
June 30, 2015, it also includes monitoring fees charged by Blackstone (former parent of the
Group), prior to the listing on Euronext Amsterdam, for management advisory services provided
to the Group.
Integration costs comprises costs incurred for the integration with ATC and CorpNordic.
9. Other operating income
Items that are significant, either because of their size or nature, and are considered specific in
other operating income, were related for the six months ended June 30, 2015 to the indemnity of
EUR 2,443 thousand received from former shareholders for the Dutch tax 2011-2013.
10. Depreciation and amortisation
Amortisation of intangible assets comprises EUR 2,185 thousand (for the six months ended June
30, 2015: EUR 1,834 thousand) related to the amortisation of software and EUR 15,101
thousand (for the six months ended June 30, 2015: EUR 14,821 thousand) related to the
amortisation of brand name and customer relationships (Note 15).
11. Finance income and finance costs
Interest expense on financial liabilities measured at amortised cost includes i) the interests on debt of EUR 7,024 thousand (for the six months ended June 30, 2015: EUR 27,572 thousand) and ii) the amortisation of capitalised financing fees on post-IPO debt for EUR 1,866 thousand
(for the six months ended June 30, 2015: EUR 2,938 thousand on pre-IPO debt).
For the six months ended June 30, 2015, it also includes the shareholder loan interests, prior to
the listing, of EUR 4,271 thousand.
Net foreign exchange loss for the six months ended June 30, 2016 is mainly related to the
At June 30, 2016 the share premium amounts to EUR 630,441 thousand.
The addition to the share premium from the proceeds of the issue of ordinary shares was EUR
122,000 thousand less the costs directly attributable to the equity transaction for EUR 1,220
thousand net of the related tax impact of EUR 305 thousand.
(EUR 000) Note 30.06.2016 31.12.2015
Due to customers 6'815 8'605
Liabilities for cash held on behalf of clients 18 9'413 13'992
VAT and other tax payable 11'658 9'013
Accrued expenses 10'254 6'175
Accrued expenses for short term employee benefits 10'642 16'772
Others 608 327
Other payables 49'390 54'884
(EUR 000) 30.06.2016 31.12.2015
Bank balances 191'872 80'438
Short term deposits 69'510 4
Cash on hand 22 22 Total 261'404 80'464
Of which:
Cash attributable to the Company 251'991 66'472
Cash held on behalf of clients 9'413 13'992 Total 261'404 80'464
Intertrust N.V.
37
20. Loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans
and borrowings, which are measured at amortised cost.
Terms and debt repayment schedule 20.1.
Terms and conditions of outstanding loans were as follows:
(a) If the rates (Euribor or Libor) are below 0%, the rate is deemed to be 0%. The margin can change depending on leverage ratios
(b) Revolver credit facility for EUR 75,000 thousand. At June 30, 2016 this facility was undrawn. An ancillary facility of EUR 2,500 thousand is in place to provide a bank guarantee for a rent lease agreement.
The schedule below shows the movements of the bank facilities during the period:
In 2015, the Group refinanced the Senior Facilities and the Second Lien Facilities using a
combination of proceeds from the primary offering and a drawdown from the new facilities.
During the period ended June 30, 2016, no repayment / prepayment took place.
Under the new facilities agreement there is a requirement to ensure that the leverage ratio in
respect of any relevant period on or after December 31, 2015 shall not exceed 4.75:1 (stepping
down to 4.50:1 on December 31, 2017 and stepping further down to 4.25:1 on December 31,
2018). For the six months ended June 30, 2016 the covenant was met.
The new facilities agreement is guaranteed by the Company, Intertrust Group B.V. and certain
subsidiaries, and secured by, among others, first ranking rights of pledge over all outstanding
shares in the share capital of such subsidiaries.
(EUR 000)
Facilities Currency Year of
maturity
Interest rate Repayment 30.06.2016 31.12.2015
Principal value
Senior Facilities
Facility A EUR 2020 Euribor + 2.50% a) Bullet 440'000 440'000
Facility B USD 2020 Libor + 2.50% a) Bullet 90'074 91'853
Revolver credit facility EUR 2020 Euribor + 2.50% a) b) Revolving - -
530'074 531'853
Financing costs (6'301) (8'048)
523'773 523'805
Total current - 129
Total non-current 523'773 523'676
Total bank debt
Balance at 01 January 2016 Principal value 531'853
Effect of exchange rate (1'779)
Balance at 30 June 2016 Principal value 530'074
Balance at 01 January 2016 Financing costs (8'048)
Capitalised financing costs 11
Amortised financing costs 1'864
Accrued Interest and commitment fees (128)
Balance at 30 June 2016 Financing costs (6'301)
Balance at 30 June 2016 Net 523'773
Intertrust N.V.
38
21. Deferred income
In many of the affiliates, the invoicing of the annual fixed fees is done at the beginning of the
year and recognised in profit and loss in the following twelve months. In Cayman, fixed fees are
invoiced to customers in November-December for the next year. It drives higher trade
receivables and deferred income at the end of the period, with the deferred income released in
the following year. The net impact of both practices is an increase of the current balance of
deferred income of EUR 2,354 thousand for the period. In some cases the fees are invoiced in
advance for the complete life of the structures resulting in non-current deferred income.
22. Provisions
For the six months ended June 30, 2016, the provision for onerous contracts have been used
according to the plan and the new provision for restructuring are related to the integration with
Corp Nordic.
23. Financial instruments
Financial risk management 23.1.
The Group’s financial risk management objectives and policies are consistent with those disclosed
in the annual consolidated financial statements as at and for the year ended December 31, 2015.
Fair values of financial instruments 23.2.
The following table shows the carrying amounts and fair values of financial assets and financial
liabilities, including their levels in the fair value hierarchy. It does not include fair value
information for financial assets and financial liabilities not measured at fair value if the carrying
amount is a reasonable approximation of fair value.
(EUR 000)
Legal matters RestructuringOnerous
contractsOthers TOTAL
Balance at 01 January 2016 489 509 705 172 1'875
Provisions made during the period - 290 60 - 350
Provisions used during the period (75) (392) (426) - (893)
Provisions reversed during the period (2) - (10) - (12)
Effect of movements in exchange rates - (5) (1) (4) (10)
Balance at 30 June 2016 412 402 328 168 1'310
Current - 299 328 - 627
Non-current 412 103 - 168 683
Balance at 30 June 2016 412 402 328 168 1'310
Intertrust N.V.
39
Level 2
The fair value of the interest rate swaps is based on broker quotes and is calculated as the
present value of the estimated future cash flows based on observable yield curves. Fair values
reflect the credit risk of the instrument and include adjustments to take account of the credit risk
of the Group entity and counterparty when appropriate.
The fair value of the forward exchange contracts is determined using quoted forward exchange
rates at the reporting date and present value calculations based on high credit quality yield
curves in the respective currency.
There are only level 2 fair values and no transfers between levels were applicable for the six
months ended June 30, 2016 and 2015.
24. Commitments
During the period the Group has committed to incur future IT operational expenditure related to
managed communication networks and outsourced activities of EUR 16,962 thousand spread in
the next five years.
25. Contingencies
There are a few possible claims against the Group, the aggregate amount of which cannot be
reliably measured. Where necessary legal and/or external advice has been obtained and, in light
of such advice, the risk of litigation is provided adequately.
There is a remaining potential tax liability towards the Swiss tax authorities. This relates to a late
payment interest charge imposed by the Swiss tax authorities in the amount of CHF 9.1 million in
connection with the late payment of Swiss dividend withholding tax on a cash dividend paid in
2010 to its former shareholders. The Group has timely filed a formal tax appeal against the
imposition with the Swiss tax authorities, outlining various arguments as to why we believe the
contingency is not due. This appeal has been put on hold by the competent tax authorities for an
indefinite period of time, pending the outcome of favourable ongoing legislative initiatives which
should apply with retro-active effect. It is therefore believed that an outflow of any resources will
not be the probable outcome of the ongoing proceedings. If such liabilities would materialise, we
believe we can claim under contractual tax indemnity clauses covered by a third party.
The Belgian tax authorities have delivered a notice to the third party liquidator of one of our
former subsidiaries for tax and penalties in the amount of approximately EUR 16.4 million
(excluding interest) in connection with Belgian dividend withholding tax over the payment of
liquidation proceeds of this subsidiary in 2012. The exemption for dividend withholding tax has
been challenged by the tax authorities on technical grounds. A formal tax complaint has been
filed in due course as there are good grounds to challenge the tax assessment. In the framework
of these ongoing administrative proceedings it has been notified by the tax authorities that there
are indeed no grounds for the initially assessed penalties in the amount of approximately EUR 5.4
million. The further treatment and outcome of the tax complaint is pending whereby it is
furthermore believed that it is more likely than not that a full release can be obtained.
26. Related parties
During the six months ended June 30, 2016, the transactions with related parties were conducted
on an arm’s length basis.
The transactions with key management personnel do not deviate significantly from the
transactions as reflected in the financial statements as at and for the year ended December 31,
2015.
The Group has provided services to some entities related to Blackstone in the normal course of
business on an arm’s length basis.
Prior to the listing, that took place in October 2015, the parent of the Company was Blackstone
Perpetual Topco S.à r.l. and was majority controlled by funds managed by Blackstone Group L.P.
(Note 1).
During the six months ended June 30, 2015, parties related to Blackstone Group provided
monitoring services for the amount of EUR 850 thousand. As at June 30, 2015, the payable to
the related party was EUR 687 thousand.
Other outstanding balances with related parties were reflected as at June 30, 2015 in i) Other
receivables for EUR 338 thousand and ii) Other payables for EUR 53 thousand corresponding to a
short term intercompany receivable with the shareholding company to cover operational
expenses.
As at June 30, 2015, there were shareholder loans and interest payable to Blackstone Perpetual
Topco S.à r.l. for EUR 92,791 thousand.
27. Subsequent events
On July 26, 2016, the Extraordinary General Meeting of Intertrust approved the acquisition of
Elian Group.
Intertrust N.V.
41
Review report
To: the Management Board of Intertrust N.V.
Introduction
We have reviewed the accompanying condensed consolidated interim financial
statements as at June 30, 2016 of Intertrust N.V., Amsterdam, which comprises the condensed consolidated interim statement of financial position as at June 30,
2016, the condensed consolidated interim statements of profit or loss, condensed consolidated interim statements of comprehensive income, condensed
consolidated interim statement of changes in equity, and condensed consolidated interim statement of cash flows for the period of six months ended June 30,
2016, and the notes (the ‘interim financial statements’). Management of Intertrust N.V. is responsible for the preparation and presentation of these
interim financial statements in accordance with IAS 34 ‘Interim Financial
Reporting’ as adopted by the European Union. Our responsibility is to express a conclusion on these interim financial statements based on our review.
Scope
We conducted our review in accordance with Dutch law including standard 2410, ‘Review of Interim Financial Information Performed by the Independent Auditor of
the Entity’. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and
applying analytical and other review procedures. A review is substantially less in
scope than an audit conducted in accordance with auditing standards and consequently does not enable us to obtain assurance that we would become
aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the accompanying interim financial statements as at June 30, 2016 are not prepared, in all material respects, in accordance with IAS 34 ‘Interim Financial
Reporting’ as adopted by the European Union. Amstelveen, August 24, 2016