Nets A/S: Interim Report for the Third Quarter 2016

Nets A/S - Interim Report for the Third Quarter 2016

Highlights

• Organic revenue growth in Q3 2016 of 6%, driven by a strong performance in Merchant Services and in Financial & Network Services. YTD, organic revenue growth was 6%
• EBITDA before special items margin in Q3 2016 of 39.5%, an improvement of 320 basis points since Q3 2015. YTD EBITDA before special items margin of 35.5%, an improvement of 260 basis points compared to last year
• Special items in Q3 2016 of DKK 298 million, whereof DKK 220 million were IPO-related. YTD, special items were DKK 542 million, whereof DKK 284 million were IPO-related
• Net profit in Q3 2016 of minus DKK 831 million, as expected, significantly impacted by special items and refinancing expenses
• Adjusted net profit in Q3 2016 was DKK 265 million, compared to DKK 212 million in Q3 2015. YTD, adjusted net profit was DKK 627 million, compared to DKK 589 million last year
• Capital expenditure/revenue ratio of 8.5% in Q3 2016 and 8.3% YTD
• Net interest-bearing debt/LTM EBITDA before special items was 3.5x, positively impacted by IPO-related accruals.

Financial performance

Bo Nilsson, CEO of Nets, said:
"We are pleased to report that Q3 2016 was another strong quarter, with 6% organic revenue growth and 18% growth in EBITDA before special items, compared to the same period last year. This results in an EBITDA before special items margin of 35.5% year to date, which is better than expected. Based on the results we raise the guidance for 2016, Medium-term targets are unchanged".

"The growth in EBITDA before special items was mainly due to increased volumes and positive impact from the transformation programme coming through. The DKK 831 million negative net profit in Q3 2016 was as expected significantly affected by special items, costs related to the refinancing and exchange rate adjustments. Had the new post-IPO capital structure been in place from 1 July 2016, the adjusted net profit would have amounted to DKK 417 million in Q3 2016".

Outlook for 2016
The 2016 Guidance at 9 November is changed compared to 13 September. The medium-term guidance is unchanged.

Conference call
In connection with the publication of the results for Q3 2016 Nets will host a conference call on Wednesday 9 November 2016 at 10:00 CET. The conference call can be followed live via the Company's website, https://investor.nets.eu

Dial-in details for investors and analysts:

Participants, DK: +45 38 32 28 69
Participants, UK: +44(0)20 3427 1912
Participants, US: +1 212 444 0481

Confirmation code: 9356450

For further information, please contact:
For media enquiries:
Karsten Anker Petersen, Head of Communications, at +45 44 89 78 83 or kapet@nets.eu

For investor enquiries:
Lars Oestmoe, Head of M&A and IR, at +47 91 34 71 77 or lostm@nets.eu

Information on Nets
Nets is a leading provider of digital payment services and related technology solutions across the Nordic region. Nets sits at the centre of the digital payments ecosystem and operates a deeply entrenched network, which connects merchants, corporate customers, financial institutions and consumers enabling them to make and receive payments as well as, increasingly, utilise value-added services to help them improve their respective activities.