IBS Group Reports its Operating Results for the Year Ended 31 March 2011

MOSCOW, May 31, 2011 /PRNewswire-FirstCall/ -- IBS Group Holding Limited (IBSG:GR) announces today its preliminary unaudited operating results for the year ended 31 March 2011 (FY'2010).

    Consolidated Revenues

    US$ million                                       FY'2010 FY'2009 Change,
    Revenues by Segments                                                 %
    IT Services                                        389.8   310.6   25.5%
    Software Development                               206.2   149.0   38.4%
    Online Software Delivery                            61.6    46.5   32.5%
    Consolidated revenues (Net of Intercompany Sales)  656.7   505.1   30.0%

Based on the preliminary unaudited management accounts for the year ended 31 March 2011, and the financial statements for the year ended 31 March 2010.

- The IT Services segment (IBS IT Services) demonstrated a 25.5% revenue growth on the back of a rapid recovery in the system integration services and the infrastructure projects market.

- The Software Development segment (Luxoft) demonstrated a 38.4% revenue growth as a result of increasing global demand for software and application development outsourcing.

- The Online Software Delivery segment (Softkey) demonstrated a 32.5% revenue growth, reflecting an increasing popularity of licensed software and an expanding client base.

- Consolidated revenues for FY'2010 totalled US$656.7 million, a 30.0% increase from FY'2009, driven by continued sales growth in all business segments.

    Consolidated EBITDA

    US$ million                   FY'2010 FY'2009 Change, %

    Consolidated EBITDA            48.8    34.9     39.8%

Based on the preliminary unaudited management accounts for the year ended 31 March 2011, and the financial statements for the year ended 31 March 2010.

- The EBITDA at IBS IT Services grew 31.5% in absolute terms.

- Luxoft demonstrated an EBITDA growth of 56.4% in absolute terms and EBITDA margin of 18.7%, reflecting an increased profitability of software and application development outsourcing.

- Consolidated EBITDA for the FY'2010 totalled US$48.8 million, while consolidated EBITDA margin amounted to 7.4%.

    Consolidated Revenues by Geographies

    US$ million                   Revenue              Revenue
                               Contribution          Contribution
                       FY'2010    FY'2010    FY'2009   FY'2009

    Russia and the CIS  462.0      70.4%      363.5      72.0%
    Europe              131.0      19.9%       77.8      15.4%
    North America        63.7       9.7%       63.8      12.6%

Based on the preliminary unaudited management accounts for the year ended 31 March 2011, and the financial statements for the year ended 31 March 2010.

- Revenues generated in Russia and the CIS decreased slightly and totalled 70.4% as a percentage of total revenues, while demonstrating a 27.1% increase in absolute terms.

- Revenues generated in Europe increased by 68.4% in absolute terms, while their share as a percentage of total revenues reached 19.9% for FY'2010.

- Revenues generated in North America were stable, however their share in total revenues fell from 12.6% to 9.7%.

    Group Headcount

    Number of employees 31.03.2011 31.03.2010  Change  31.12.2010 Change from
                                                from                previous
                                              previous               quarter
                                                year

    Group headcount       7,355      6,040      21.8%     7,272       1.1%

Based on the unaudited management accounts.

As of 31 March 2011, the headcount of the Group reached 7,355 employees, an increase of 21.8% compared to the end of FY'2009, and a 1.1% gain over the figure at the end of third quarter of FY'2010. Most of the growth was due to an expansion of the Software Development segment, where the number of employees rose 42.0%, from 3,016 as of 31 March 2010 to 4,282 as of 31 March 2011. The increase in Luxoft's headcount is driven by growing demand for software and application development outsourcing.

Debt

Debt financing has been historically used by the Group to cover short term cash requirements, to finance acquisitions and capital expenditures.

    US$ million         31.03.2011 31.03.2010 Change   31.12.2010 Change from
                                               from                previous
                                             previous              quarter
                                               year

    Total debt, including  58.2       41.9      16.3      69.6    -11.4
    Short term debt        24.3       25.3      -1.0      31.3    -7.0
    Long term debt,
      including            33.9       16.6      17.3      38.3    -4.4
    Current portion of long
      term debt             8.5       12.6      -4.1      11.2    -2.7
    Non-current portion of
      long term debt       25.4        4.0     +21.4      27.1    -1.7
    Net debt               31.7       27.3      +4.4      33.5    -1.8

Based on the preliminary unaudited management accounts for the year ended 31 March 2011, and the financial statements for the year ended 31 March, 2010.

- Total borrowings increased by 38.9% during the FY'2010, mainly due to a long term loan of US$20 million granted by the European Bank for Reconstruction and Development ("EBRD") to support the development of new software products and technologies, and to finance the Group's personnel training. The net debt increased by 16.1% in absolute terms in FY'2010, and stood at US$31.7 million as of 31 March 2011 compared to US$27.3 million as of 31 March 2010.

- Total borrowings fell 16.4% in the last quarter of the FY'2010 due to repayment of short term loans that had been used to finance working capital requirements over the first half of the fiscal year, and a partial repayment of the long term debt.

FY'2011 Revenue Forecast

IBS Group expects its consolidated revenue to reach US$815 million for the financial year ending 31 March 2012 (FY'2011) based on the growing demand for software and application development outsourcing and the continued recovery of the Russian IT services market.

IBS Group is a leading emerging European IT company. Through its two principal subsidiaries, IBS IT Services and Luxoft, it provides a wide variety of information technology services, such as business and IT consulting, business applications implementation, IT outsourcing and software development. IBS Group is headquartered in Russia and has business operations in Russia, Canada, Germany, Romania, Poland, Switzerland, the UK, Ukraine, the USA, Vietnam and Singapore. IBS Group employs more than 7,200 people worldwide. In 2009 financial year, IBS Group reported US GAAP revenues of US$505m.

IBS Group's Global Depositary Receipts are listed on the Regulated Market (General Standard) at the Frankfurt Stock Exchange (Bloomberg: IBSG:GR; Reuters: IBSGq.DE). IBS Group is majority-owned by management with portfolio investors holding 32% of the Group's share capital. For more information on IBS Group, please visit http://www.ibsgr.com

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For more information about IBS Group please visit http://www.ibsgr.com or contact Investor Relations:

    Dmitry Ivanov

    Investor Relations Director
    tel: +7(495)967-8000
    fax: +7(495)967-8099
    mob: +7(916)618-4034

SOURCE IBS Group Holding Ltd