The IT services outsourcing market continues to grow robustly and is projected to reach nearly USD 400 billion by the end of 2025. For comparison, the global IT services outsourcing market was valued at approximately USD 334 billion at the end of 2019. Last year was also very successful for the industry. According to the technology advisory firm Information Services Group (ISG), organizations across Europe spent more on IT and business services outsourcing than ever before.
Observing the global IT market in 2021, we see that more and more companies are utilizing IT services outsourcing. From our perspective, it is particularly significant that, according to the data available to us, we are growing even faster than the market. We achieved excellent results in the first three quarters of 2021 and are very optimistic about our further growth potential,” emphasizes Sebastian Sokołowski, President of the Management Board of TTMS.
From January to September 2021, with a 26% increase in operating revenues (to PLN 94.4 million), TTMS achieved a net profit of PLN 13.8 million (+49% YoY).
Key events impacting the results in the first three quarters of last year include the expansion in the second quarter of framework agreements with long-term clients, such as Roche and Schneider Electric, favorable indexing of collaboration rates positively impacting profitability in the third quarter of 2021, and the acquisition of new contracts. The company plans to debut on the Warsaw Stock Exchange (GPW) in 2022, which aims to help achieve an ambitious plan for further development.
We intend to gradually complement organic growth with development through acquisitions. These will help us reach a new group of clients in new markets and increase the number of high-margin projects. It is also a potential way to attract high-class specialists and managers from local markets, strengthening our international team. We have developed effective HR solutions, successfully increasing employment with low employee turnover. We have experience in building companies from scratch, such as the company in Malaysia, which opened us up to the Asian market. We have also completed acquisitions, including the acquisition of a Danish company, which will help us increase our presence in Scandinavia. The IT outsourcing market is an international market with tremendous growth opportunities,” says Sebastian Sokołowski.
Market Trends and TTMS
The global digitization trend generates a steady increase in demand for IT outsourcing services. Global players, using IT outsourcing on an increasing scale, require high technical competencies, including having unique certifications confirming the fulfillment of a range of requirements allowing for work in specific industries such as pharmaceuticals or defense. TTMS responds to these needs.
Unique certifications, access to specialists, and the use of the latest software constitute strong barriers to entry for new players. A large portion of the services offered by TTMS is characterized by high specialization and a low number of competitive entities. It is estimated that the IT services outsourcing market accounts for about 32% of the IT services market.
Selected Financial Data for 1-3Q 2021
| Selected Financial Data (in thousands PLN) | 1-3Q2021 | 1-3Q2020 | Change |
|---|---|---|---|
| Operating revenues | 94 443 | 75 233 | 26% |
| EBITDA | 19 421 | 14 046 | 38% |
| EBITDA margin | 20,6% | 18,7% | 1,9 pp. |
| Operating profit | 17 134 | 11 810 | 45% |
| Operating profit margin | 18,1% | 15,7% | 2,4 pp. |
| Net profit | 13 833 | 9 288 | 49% |
| Net profit margin | 14,6% | 12,3% | 2,3 pp. |
Magda Kołodziejczyk
e-mail: magda.kolodziejczyk@mplusg.com.pl
T: 22 416 01 02, 501 16 88 07
Marta Kornet
e-mail: marta.kornet@mplusg.com.pl
T: 22 416 01 02, 503 186 855
About the Company
Transition Technologies MS S.A. (“TTMS”) is a rapidly growing provider of modern IT outsourcing in Poland and international markets. TTMS is part of the Transition Technologies Group, one of the largest entities in the IT industry in Poland.
Managed services, the primary operational model adopted by TTMS, differ from typical IT staffing services (such as body leasing or team leasing) as they require unique technological competencies. The responsibility for maintaining and developing the selected IT solution lies with the service provider – TTMS. Managed services are carried out through long-term contracts.
The core services provided by TTMS include IT systems development and maintenance, comprehensive project execution, IT consulting, e-learning training, and dedicated service centers. Among the technologies and competencies utilized by TTMS are: Salesforce platform, Adobe Experience Manager (AEM), cloud computing, Microsoft solutions, Enterprise systems, Data Science, and Business Intelligence.
The use of the most innovative technologies in its services allows the company to secure interesting contracts, including with the NATO Innovation HUB and Data Science collaborations with clients in the pharmaceutical industry. TTMS is a global provider of advanced IT services for Roche. The company also holds R&D center status in France, a result of its collaboration with one of its largest industrial sector clients, Schneider Electric.
TTMS has a highly qualified staff familiar with local markets and operates on three continents. TTMS has two subsidiaries: Transition Technologies Managed Services Ltd based in London (UK) and TTMS Software SDN Bhd based in Kuala Lumpur (Malaysia). In Denmark, TTMS operates through its subsidiary ConCor A/S, in which it acquired a majority stake (56%) in October 2021. In Poland, it has 8 offices, including its headquarters in Warsaw, and international sales offices in Austria, the USA (San Francisco, Tampa), and Singapore. TTMS employs approximately 675 people (as of the end of December 2021).
The largest shareholder of TTMS is Transition Technologies S.A., holding 33.38% of the shares. The remaining shares are owned by managers associated with the TT Group and directly with TTMS.
More information at: https://ttms.com/
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This material is for informational purposes only and under no circumstances does it constitute an offer or invitation, nor does it serve as a basis for making any investment decision regarding the securities of Transition Technologies MS S.A. (“Company”). The prospectus (“Prospectus”), prepared in connection with the offer and admission of the Company’s shares to trading on the Warsaw Stock Exchange, will be, if approved, the only legally binding document containing information about the Company, its group, and the public offering of its shares in Poland (“Offer”). The Company will be entitled to conduct a public offering in Poland after the Prospectus has been approved by the Polish Financial Supervision Authority.
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