Highlights:

• Strong performances, mainly driven by Financial Services Institutions and Mobile Network Operators segments, push group revenue up 22.6% (14.0% at constant rate) and EBITDA up 31.3% over the first nine months 2015.
• Organic growth accelerated even more in the third quarter with revenue up 33.0% (at current rates)
• EBITDA margin increases to 15.9% from 14.8% over first nine months 2015

Didier Lamouche, CEO of OT, said: “We are very pleased to report that OT has delivered very strong pure organic growth of both revenues and EBITDA over the first nine months of 2015, driven by high underlying growth in our two largest business areas, payment and telecommunications. We are particularly satisfied by the results achieved thanks to our strategy and tight execution, with a significant increase in our EBITDA margin and also our excellent cash conversion. The transformation of the company over the last 3 years and the momentum we are seeing in our markets mean OT is very well positioned for the future.”
 
Revenues

The Group’s consolidated revenue increased by €156.0 million, or 22.6%, from €690.6 million for the nine months ended September 30, 2014 to €846.6 million for the nine months ended September 30, 2015. The increase was driven primarily by a €154.1 million, or 42.9%, increase in the revenue of the Group’s Financial Services Institutions segment and to a lesser extent by a €19.5 million, or 10.6%, increase in the revenue of the Mobile Network Operators segment. The improved performance in the Financial Services Institutions and Mobile Network Operators segments was partially offset by a €17.6 million, or 11.9%, decrease in the revenue of the Connected Devices and Identity Markets segment.

The increase in the Group’s revenue from period to period was primarily driven by strong organic growth augmented by positive foreign exchange effects, particularly the impact of a stronger U.S. dollar relative to the Euro. On a constant currency basis, the Group’s increase in consolidated revenue between the first nine months of 2015 and the first nine months of 2014 amounts to 14.0%.

FSI - Financial Services Institutions segment revenue improved by €154.1 million, or 42.9%, from €359.6 million in the nine months ended September 30, 2014 to €513.7 million in the nine months ended September 30, 2015. North America continued to post the largest growth, with revenue almost tripling compared to previous year on strong sales in the US of EMV payment cards and personalization services.

On a constant currency basis, FSI segment revenues grew by 29.5%.

MNO - Mobile Network Operators segment revenue increased by €19.5 million, or 10.6%, from €183.1 million in the nine months ended September 30, 2014 to €202.6 million in the nine months ended September 30, 2015.

At current rates, the increase in revenue during the nine months ended September 30, 2015 compared to the same period the prior year was driven primarily by higher sales of classic SIM cards in the Americas. Latam and Asia increased by respectively 13.4% and 15.6% despite the economic environment. The Group continued to see strong progression in Advanced SIM in particular LTE SIM in North America and NFC SIM with European Telecom operators.

On a constant currency basis, MNO segment revenue would have grown by 7.3% in the first nine months of 2015 compared with the first nine months of 2014.

CD&IM - Revenue from the Connected Devices and Identity Markets segment declined by €17.6 million, or 11.9%, from €147.9 million in the nine months ended September 30, 2014 to €130.3 million in the nine months ended September 30, 2015.

The decline was caused primarily by the CAI activity reflecting first and foremost a base effect as the first nine months of 2014 benefitted from a short-term and high-volume contract to supply voting cards to a Middle-Eastern country. The Group’s contract to supply voter ID cards in Bangladesh did not contribute to revenues in the first nine months of 2015 as it is still in the production ramp-up phase. Looking ahead, the Group sees positive momentum with the signing of a multiple-year system and document contract in Western Africa feeding a backlog standing at €222 million at the end of October 2015.

Positive CDM activity was driven primarily by the impact of a large digital television cards contract while revenue from the Group’s principal eSE customer in southeast Asia and revenue from connected vehicles services also progressed well.
On a constant currency basis, CD&IM revenue declined by 15.1%.

EBITDA

The Group’s consolidated EBITDA increased from €102.4 million in the nine months ended September 30, 2014 to €134.5 million in the nine months ended September 30, 2015, a 31.3% increase and the Group’s consolidated EBITDA margin increased from 14.8% for the nine months ended September 30, 2014 to 15.9% in the same period in 2015. The €32.1 million increase in EBITDA was driven by a €27.7 million increase from the Financial Services Institutions segment and a €21.4 million increase from the Mobile Network Operators segment, which together more than offset a €17.0 million decrease from the Connected Devices and Identity Markets segment. Sales and marketing and general and administrative expenses declined from respectively 11.4% and 10.0% in the nine months ended September 30, 2014 to respectively 10.0% and 8.6% in the nine months ended September 30, 2015 reflecting the positive effect of operating leverage.

In line with the above performance, the Group confirms the guidance for 2015 set forth in its Reference Document dated October 19, 2015.

Operating Free Cash Flow

OT’s Operating Free Cash Flow increased from €9.8 million in the nine months ended September 30, 2014 to €49.3 million in the nine months ended September 30, 2015, translating into 59% conversion of EBITDA into Operating Free Cash Flow for the twelve months ended September 30, 2015 reflecting the increased EBITDA and contained capital expenditures.