Intertrust expects continued growth and near-term margin pressure in second quarter
Amsterdam, The Netherlands – July 28, 2022 – Intertrust NV (“Intertrust” or “Company”) [Euronext: INTER]a global leader in providing enterprise and fund technology solutions to clients operating and investing in international trade, today reports results for the second quarter and six months ended June 30, 2022.
Q2 2022 Highlights
- Continued growth in underlying revenues (+2.3%), driven by Rest of the World, US Fund Services and Luxembourg
- Solid pipeline at €86.6 million (+8.6% year-on-year); contracts won for an annual contract value of 18.4 million euros
- Adjusted EBITA of €34.9 million (Q2 2021: €39.9 million), including non-recurring costs of €5.4 million related to remediation activities. Adjusted EBITA margin of 22.9% (Q2 2021: 27.8%), mainly driven by higher staff costs (+11.5% YoY)
- Maintenance of revenue growth forecasts for the 2022 financial year; Adjusted EBITA margin expectation of 26-28% to reflect increased workforce investment and one-time remediation costs; reiterated medium-term ambitions
- The transaction is progressing as planned and is expected to close in H2 2022; The General Meeting approved all the resolutions relating to the Offer; Offer period extended to two weeks after all regulatory approvals have been obtained or waived; Regulatory clearance obtained from Curacao, Guernsey, Hong Kong, Jersey, UAE and UK
Shankar Iyer, CEO of Intertrust, said:
“We continue to see solid growth in underlying revenues in Luxembourg, in fund services in the United States and in the rest of the world. Our pipeline was at an all-time high at the end of the second quarter and the value of contracts won remains strong. In addition, after several quarters of increasing working capital, we now see that it is stabilizing compared to the previous quarter.
As we help our clients navigate the current challenging macroeconomic and geopolitical environment, we continue to position the Group for long-term growth. This is achieved by further strengthening our foundations and as a result we are investing in compliance and remediation and expanding our talented workforce. While employee attrition remained high, we welcomed over 1,100 new colleagues to our offices around the world in the first half of the year, which in the current tight labor market has resulted in personnel costs significantly higher. In addition, we are looking for targeted price increases to partially offset the various inflationary pressures that inevitably impact our cost base in the short term.
Given all of this, we are reiterating our revenue target of 3-5% underlying growth for the year and adjusting our EBITA margin target to 26-28%. Our medium-term ambitions of accelerated top line growth and margin expansion remain unchanged and reflect our commitment to long-term growth and strong cash generation.
We appreciate the support of our shareholders in the transaction with CSC, as evidenced by the AGM last May. In collaboration with CSC, we prepare the integration once the transaction is concluded. We are on track with the regulatory approval processes and expect the transaction to close in the second half of this year. »
Intertrust Q2 2022 results press release