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INTERIM REPORT Q2 2015
Alastair Sorbie, CEO and Paul Smith, CFO
JULY 21, 2015
© 2015 IFS
FINANCIAL AND OPERATIONAL HIGHLIGHTSSTRONG LICENSE GROWTH
INTERIM REPORT Q2 2015
APRIL–JUNE 2015 (SECOND QUARTER)
License revenue amounted to SKr 181 million (Q2 '14: SKr 134 million),
an increase of 25 percent currency adjusted.
Maintenance revenue was SKr 287 million (Q2 '14: SKr 256 million),
an improvement of 3 percent currency adjusted.
Consulting revenue amounted to SKr 396 million (Q2 '14: SKr 354 million),
an increase of 5 percent currency adjusted.
Net revenue totaled SKr 867 million (Q2 '14: SKr 745 million),
an improvement of 8 percent currency adjusted.
Adjusted EBITDA was SKr 96 million (Q2 '14: SKr 85 million).
EBIT amounted to SKr 64 million (Q2 '14: SKr 70 million).
Cash flow after investments was SKr -8 million (Q2 '14: SKr 30 million).
Earnings per share after full dilution were SKr 1.83 (Q2 '14: SKr 1.91).
© 2015 IFS
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FINANCIAL AND OPERATIONAL HIGHLIGHTSSTRONG LICENSE GROWTH
INTERIM REPORT Q2 2015
JANUARY–JUNE 2015 (SIX MONTHS)
License revenue amounted to SKr 296 million (YTD '14: SKr 241 million),
an increase of 12 percent currency adjusted.
Maintenance revenue was SKr 578 million (YTD '14: SKr 505 million),
an improvement of 4 percent currency adjusted.
Consulting revenue amounted to SKr 770 million (YTD '14: SKr 689 million),
an increase of 4 percent currency adjusted.
Net revenue totaled SKr 1,649 million (YTD '14: SKr 1,439 million),
an improvement of 5 percent currency adjusted.
Adjusted EBITDA was SKr 159 million (YTD '14: SKr 135 million).
EBIT amounted to SKr 115 million (YTD '14: SKr 95 million).
Cash flow after investments was SKr 64 million (YTD '14: SKr 163 million).
Earnings per share after full dilution were SKr 3.33 (YTD '14: SKr 2.50).
© 2015 IFS
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PRODUCT GROWTHGOOD PERFORMANCE IN TARGET MARKETS
INTERIM REPORT Q2 2015
LICENSE SALES
Winning highly competitive sales to new
customers in our target markets.
Notable success in delivering global projects at
lower cost and risk.
Release of Applications 9 has further increased
the appeal of IFS.
MAINTENANCE REVENUE
Strong loyalty of customers who, by extending
their use of IFS Applications, will continue to
contribute to the future growth.
Underlying growth of 6 percent adjusted for
previous year’s one-off bad debt payment.
‘Churn’ in the customer base remains very low.
© 2015 IFS
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50%
55%
60%
65%
70%
75%
80%
Q1
'1
1
Q2
Q3
Q4
Q1
'1
2
Q2
Q3
Q4
Q1
'1
3
Q2
Q3
Q4
Q1
'1
4
Q2
Q3
Q4
Q1
'1
5
Q2
MAINTENANCE MARGIN (R12)
0
500
1,000
1,500
2,000
'10 '11 '12 '13 '14 R12
PRODUCT REVENUE
Maintenance Licenses
CONSULTING REVENUEAN EVOLVING BUSINESS
INTERIM REPORT Q2 2015
CONSULTING REVENUE
Larger proportion of services being delivered from the partner ecosystem.
Over time, customers will increasingly contract with partners, resulting in a
slow down in the growth of IFS delivered services revenue.
PARTNER PROGRAM—INCREASING MOMENTUM
Offer customer choice and greater global reach for international projects.
Create go-to-market alliances and thereby increase market penetration.
Offer greater business scalability and better manage peaks in demand.
Increase in the consulting margin to 25 percent (Q2 '14: 19 percent).
© 2015 IFS
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FINANCIAL OVERVIEW
INTERIM REPORT Q2 2015
A GROWING BUSINESS
margin
22%
margin
94%
margin
74%
© 2015 IFS
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300
400
500
600
700
'10 '11 '12 '13 '14 R12
LICENSES
800
900
1,000
1,100
1,200
'10 '11 '12 '13 '14 R12
MAINTENANCE
800
1,000
1,200
1,400
1,600
'10 '11 '12 '13 '14 R12
CONSULTING
0
100
200
300
400
'10 '11 '12 '13 '14 R12
EBIT
18%
35%
47%
REVENUE MIX R12
License Maintenance Consulting-100
0
100
200
300
'10 '11 '12 '13 '14 R12
CASH FLOW AFTER INVESTMENTS
MARKET AND PRODUCT UPDATE2ND QUARTER
INTERIM REPORT Q2 2015
MAJOR COMPANY ANNOUNCEMENTS AT IFS WORLD CONFERENCE
Launch of IFS Applications 9, the new core version of IFS’s enterprise suite.
Global availability of IFS Managed Cloud on Microsoft Azure.
Plans to launch in-memory capabilities.
There are now more than one million users of IFS Applications.
CAPGEMINI JOINS IFS PARTNER NETWORK
Capgemini will train and certify around 90 consultants through IFS Academy to
develop its IFS competence.
MARKET OUTLOOK—THE ANALYSTS’ VIEW
For 2015, industry analyst firms such as Gartner remain cautious and expect the
ERP market’s development to be slightly below the past year’s, with a growth in
software revenue in the 7 percent range.
© 2015 IFS
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ACQUISITION OF VISIONWAVES A LEADER IN OPERATIONAL INTELLIGENCE
INTERIM REPORT Q2 2015
ADDS FURTHER BREADTH TO IFS’S OFFERING
Founded in 2000 in the Netherlands; strong
presence in North America and the Middle-
East.
Blue-chip customers worldwide in aerospace
& defense, energy & utilities, engineering,
finance, healthcare, mining, service
providers, and transportation.
Partners: Cap Gemini, Microsoft, and Serco.
Previously a strategic partner of IFS with
proven record of successful implementations.
Recognized by top industry analysts as a
leader in operational intelligence.
© 2015 IFS
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IFS + VisionWaves helps boost
business process performance and
accelerate strategy realization in a
truly integrated and optimized way.
THE STRATEGY CONTINUESTO BE THE INTELLIGENT ALTERNATIVE
INTERIM REPORT Q2 2015
INVEST IN A STRATEGY TO:
Deliver global projects on time and on budget with a lower TCO.
Focus on specific sectors that see sustained long-term investment.
Work close with customers, to share ideas and have an ‘open’ customer-
centric R&D organization.
Have an ‘open’ technology that seeks to enable customers to benefit from
new innovations and not aim to achieve ‘lock-in.’
Grow the business organically and profitably; using the cash generated to
undertake complimentary M&A.
2009 2010 2011 2012 2013 2015
© 2015 IFS
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LATINIFSDEFENCE
CUSTOMER WINS IN Q2 2015
INTERIM REPORT Q2 2015
© 2015 IFS
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Aerospace and Defense
High Tech
Oil and Gas
Retail and Wholesale
BAE Systems
BHE Bonn Hungary Elektronikai
Interwell
Ingram Micro Mobility
Asset Intensive
Sierra Wireless
Maersk Drilling Services
Sanitec Europe
Holmen
Sunbelt Transformer
Process Manufacturing
Systembolaget
Construction and Contracting
Industrial Manufacturing
Açotubo
Service Providers
AIC Steel
Aludium Transformación de
Productos
Diamond Pet Foods
Eltel Networks Infranet
Mostostal Zabrze
AOA Apparatebau Gauting
Evotec (UK)
J Tomlinson
MWH Treatment
CC Höganäs Byggkeramik
Kanes Foods
Lassila & Tikanoja
NG Bailey Group
OSMA-Aufzüge
Marabu
Reliance Home Comfort
Energy and Utilities
Polypipe
Oxford Biomedica
Sporveien Oslo
Chesapeake Utilities Corporation
Robertson Fuel System
Richardson International
Other
Jönköping Energi
Saueressig
Tribunal de Justiça RJ
JSC Energo-Pro
Shapes Precision Manufacturing
Nordmøre Energiverk
Superior Graphite Company
Tennsco Corporation
Vegum
CUSTOMER WINS IN THE PAST 12 MONTHS
INTERIM REPORT Q2 2015
© 2015 IFS
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Aerospace and Defense MWH Treatment
NEC Corporation
Polypipe
EP Minerals
Eltel Networks Infranet
Advanced Integration Technology
NG Bailey Group
Olympus KeyMed
Robertson Fuel System
Evotec (UK)
J Tomlinson
Babcock Marine Division
Pindan Group
Sierra Wireless
Saueressig
Fundação Butantan
JEOL USA
BAE Systems
Serimax Holdings
Sunbelt Transformer
Shapes Precision Manufacturing
Grecian Delight Foods
Lassila & Tikanoja
Forsvaret / Norw. Armed Forces
Systra
Teledyne Oil & Gas
Stolle Machinery Company
Guangzhou Grain Group
Loomis Sverige
General Dynamics Info Tech Energy and Utilities
Terumo Cardiovascular Systems
Superior Graphite Company
Isofarma Industrial Farmaceutica
PHS Group
KVG Stade
Agder Energi
Trüb
Tatsuno Engineering & Service Co.
Kanes Foods
Polygon International
Lockheed Martin JSF
Caruna
Young Innovations
Tennsco Corporation
Legacy Pharmaceuticals Interntl
Reliance Home Comfort
Portsmouth Aviation
Central Nuclear Embalse Industrial Manufacturing
Tomra
Marabu
Sporveien Oslo
Saab
Chesapeake Utilities Corporation
ACS Industries
Vegum
Omega Protein
SSI Services
Thai Aviation Industries Co. (TAI)
CYPC Jinsha River Hydropower
Advanced Integration Technology
V-Zug
Oxford Biomedica
Swarco Nordic
Asset Intensive Hafslund
Allu Group
WNA
Prince Minerals
Tatsuno Engineering & Service Co.
BillerudKorsnäs
Jönköping Energi
Aludium
Zeon Advanced Polymix Co.
Probiotics International
Tibah Airport Operations Co.
Forest-Papír
JSC Energo-Pro
AOA Apparatebau Gauting Oil and Gas
Richardson International
United Subcontractors
Holmen
Mørenett
Avanco
British Engines
Rovese
Veolia Water Solutions & Technologies
SCA Graphic Sundsvall
Nanjing Metro
Baier + Köppel
BW Offshore Norway
Silvermill Holdings
Wilhelmsen Ships Service
Automotive Nordmøre Energiverk
Belvac Production Machinery
Ceona Services
Sumi Agro Europe Other
CalsonicKansei North America
OKG Aktiebolag
CC Höganäs Byggkeramik
Interwell
William Grant & Sons
ADP Ingénierie
Dan T. Moore Company
Onesourcewater
CSIC Haizhuang Windpower Equip
Maersk Drilling Services
Wolf Minerals (UK)
Beijing Mass Transit Railway Operation
Huf Hülsbeck & Fürst
PGNIG Termika
Dankotuwa Porcelain
Maersk Supply Service Retail and Wholesale
CD Projekt
Runner Group
SDIC Qinzhou Electric Power Co.
Dopag Dosiertechnik und Pneumatik
Mermaid Marine Australia
Gina Tricot
Cumfin
Schlemmer
Statnett
Eickhoff
Rosenberg WorleyParsons
Ingram Micro Mobility
Evry
Shiloh Industries
Svenska Kraftnät
Hypnos
Shawcor
Midcounties Co-operative
Savex Computers
Toyota Lanka
Teollisuuden Voima Oyj
Jamestown Metal Marine Sales
Songa Offshore
Oriflame Cosmetics
SEFI Transmission
Volvo Lastvagnar
TrønderEnergi Kraft
Kaman RWG Germany
Wood Group Mustang Norway
Sanitec Europe
Shantou Zhongyeda
Volvohandelns Utvecklings AB High Tech
Loram Maintenance of Way
Yinson Holdings Berhad
Swedish Orphan Biovitrum (SOBI)
SII - Société pour l'informatique industrielle
Construction and Contracting
BHE Bonn Hungary Elektronikai Moelven Industrier Process Manufacturing
Systembolaget
Tiga Pilar Sejahtera Food
AIC Steel
Fr. Sauter
Munters Europe
Açotubo
UBM Group
Toronto Transit Commission
Grandweld Shipyards
Genesis Technology USA
Nidec Minster Corporation
Al Rabie Service Providers
Tribunal de Justiça RJ
IMI
H2O Innovation
Nordson Medical
American Iron & Metal Company
Advanced Technology Services
LKS Ingeniería
Habia Cable
OSMA-Aufzüge
Cisbio Bioassays
Associations (Homeside Properties)
Mostostal Zabrze
Integrated Microwave Tech (IMT)
PIPE Sistemas Tubulares
Diamond Pet Foods
Dataprev
STRONG UNDERLYING BUSINESS HIGHLY-COMPETITIVE CONTRACTS IN TARGET SECTORS
INTERIM REPORT Q2 2015
AÇOTUBO PROCESS MANUFACTURING BRAZIL
ALUDIUM INDUSTRIAL MANUFACTURING SPAIN
LASSILA & TIKANOJA (L&T)SERVICE PROVIDER FINLAND
OSMA-AUFZÜGEINDUSTRIAL MANUFACTURING GERMANY
© 2015 IFS
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FINANCIAL OVERVIEW
INTERIM REPORT Q2 2015
© 2015 IFS
14
2ND QUARTER JULY–JUNE FULL YEAR
SKr million 2015 2014 2014/15 2013/14
Net revenue 867 745 3,244 2,844
of which Licenses 181 134 613 562
of which Maintenance and support 287 256 1,110 960
of which Consulting 396 354 1,508 1,312
Gross earnings 480 378 1,724 1,485
of which Licenses 171 119 576 512
of which Maintenance and support 209 194 819 719
of which Consulting 98 66 328 253
EBIT 64 70 295 322
EBIT margin 7% 9% 9% 11%
Earnings before tax 63 64 288 308
Earnings for the period 47 48 235 238
Cash flow after investments -8 30 170 199
CASH FLOW
INTERIM REPORT Q2 2015
© 2015 IFS
15
GROUP 2ND QUARTER JULY–JUNE
SKr million X 2015 2014 2014/15 2013/14
Cash flow before change in working capital 134 107 516 413
Change in working capital -90 -19 -109 64
Cash flow from current operations 44 88 407 477
Cash flow from investments -52 -58 -237 -278
Cash flow after investments -8 30 170 199
Cash flow from financing -119 -98 -163 -99
Cash flow for the period -127 -68 7 100
Cash and equivalents, beginning of period 540 431 370 272
Exchange differences in cash and equivalents -5 7 31 -2
Cash and equivalents, end of the period 408 370 408 370
OUTLOOK
INTERIM REPORT Q2 2015
FOR 2015, IFS EXPECTS
GOOD GROWTH IN BOTH
LICENSE REVENUE AND EBIT.
© 2015 IFS
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www.IFSWORLD.com
THIS DOCUMENT MAY CONTAIN STATEMENTS OF POSSIBLE FUTURE FUNCTIONALITY FOR IFS’S SOFTWARE PRODUCTS AND
TECHNOLOGY. SUCH STATEMENTS OF FUTURE FUNCTIONALITY ARE FOR INFORMATION PURPOSES ONLY AND SHOULD NOT BE
INTERPRETED AS ANY COMMITMENT OR REPRESENTATION. IFS AND ALL IFS PRODUCT NAMES ARE TRADEMARKS OF IFS. THE
NAMES OF ACTUAL COMPANIES AND PRODUCTS MENTIONED HEREIN MAY BE THE TRADEMARKS OF THEIR RESPECTIVE OWNERS.
© 2015 IFS
