Response To The Situation In GreeceJuly 7, 2015
7 July 2015
FOR IMMEDIATE RELEASE
(“Globo” or “the Group”)
Response to the Situation in Greece
Globo plc (LSE-AIM: GBO / OTCQX: GOBPY), the international provider of Enterprise Mobility Management (EMM), mobile solutions and software as a service (SaaS), has the following comments to make concerning the ongoing situation in Greece.
Globo’s operations are predominantly international, and consequently the overall situation in Greece has had limited negative impact on Group operations. Furthermore a Greek Euro exit would effectively lower our underlying cost base.
· In the financial year to 31st December 2014 Globo derived 12% of total Group revenue from Greece. This revenue was from numerous customers, mainly enterprises with international profiles, shipping companies and hotels. All receivables related to the 2014 Greek sales have been collected. In 2015 we continue to expect that revenue from Greece will be approximately 6-7% of total, declining in proportion of total and in isolation of the situation in Greece, as a result of the continued growth in international revenue from our principal operations (Enterprise Mobility Software and Services). As planned, the less profitable 3rd Party Goods segment, which accounted for €3.3 million of revenue in FY2014, will be discontinued.
· Globo employs (as of 30th April 2015) 198 personnel in Athens out of 469 for the Group as a whole, i.e. 42% of total headcount. Our Greek operations are mainly a cost base for the Group, which, in combination with other locations such as Canfield, Ohio and Bangalore, contribute to significant cost savings. In the unfortunate event of Greece exiting the Euro our costs in Greece would be further reduced.
· All systems relating to group operations (CRM, ERP, Mail, Telephony, etc.) and Customer Service Provisioning run in the cloud to serve our international offices in Palo Alto CA, San Francisco CA, Canfield OH, Pittsburg PA, London, Athens, Bangalore, Limassol, Dubai and Singapore. Our buildings in Athens are equipped with power generators, and with fixed and satellite network connectivity, so that in the event of any potential outage our employees can continue to perform their functions. We have had sufficient time to put in position the required arrangements to safeguard normal operations.
· Globo Group currently has its cash reserves located outside Greece, with only a minimal amount (approx. €100K) in Greek bank accounts to cover running costs in Athens. As our revenues from Greece are significantly below our payments to Greek suppliers and to local employees we are comfortable in executing additional payments electronically from our bank accounts outside of Greece. We expect no interruption from the imposed capital controls which are focused on controlling the export of currency from Greek accounts.
· Globo Technologies S.A., the 49%-owned Group affiliate, continues to grow and expand its business as a leader in the Greek IT industry. During 2014 Globo Technologies’ revenue grew by 28% to €32.2 million, while its EBITDA reached €6.1 million. Its business is conducted with private enterprises and the Greek Government through projects which are funded by European Structural Funds (“ESPA”), guaranteeing collection. This is similar to the situation in prior years, 2011-2013.
· The Group has received, on schedule, the fifth installment of €1.65 million from the acquiring entity (GMBO Holdings Ltd, previously Zipersi Consulting Ltd), comprising €1.48 million of principal and €173K in interest due, in respect of the Group’s divestment of 51% of Globo Technologies S.A., the e-business and software service, which was completed on 3 December 2012. We expect that outstanding payments totalling €6.7 million in three installments up to the end of 2016 will be collected on time.
Overall, therefore, the Group is well-prepared. This is because of the structure of our operations and growth orientation towards Western Europe and U.S., where Globo achieved growth of 337% during 2014. The situation in Greece, although regrettable, has not arisen overnight, and is something for which we have had sufficient time to make the necessary preparations.
CEO Costis Papadimitrakopoulos commented: “Globo is an International operation with a clear focus on the markets of Western Europe and the U.S. Our Greek trading and exposure to operational and financial risks is limited to such an extent that a potential Greek exit from Euro would further improve our cost structure. Our trading performance remains strong and we are looking forward to another successful year of growth and to becoming established as one of the global leaders in the Mobile Enterprise Market“.
For further information please contact:
Costis Papadimitrakopoulos, CEO
Dimitris Gryparis, Finance Director
Mike Jeremy, IRO
RBC Capital Markets
(Nominated Adviser & Broker)
Pierre Schreuder or Ema Jakasovic
Simon Bridges or Emma Gabriel
Chris Blundell or Charles Pemberton
Globo plc is a global provider of complete enterprise mobility solutions and SaaS. Our GO!Enterprise (EMM) and GO!AppZone (MADP) offerings help businesses expand their engagement with employees and customers through the mobile channel via a secure and extensible environment that runs on all smart devices. The Group operates internationally through subsidiaries and offices in the U.S., U.K., Europe, Middle East and South East Asia. Globo was included in the 2014 and 2015 Gartner Enterprise Mobility Management Magic Quadrant reports, in Ovum’s 2014-15 Decision Matrix for EMM Solutions and 2015-16 Decision Matrix for MADP Solutions, and in IDC’s January 2015 report on Mobile Enterprise Application Development Platforms. For more information visit www.globoplc.com.
Globo plc is listed on London’s AIM stock exchange, trading under the ticker symbol GBO and has a Sponsored Level 1 ADR traded over the counter on OTCQX under the symbol GOBPY.