4 april 2017
MAYKOR Announces 2016 Performance
MAYKOR, a leading Russian provider of IT and business process outsourcing services, announces its 2016 results. Revenue for 2016 remained at the previous year's level, exceeding RUB 10.2 billion. The company has refocused its contract portfolio towards large-scale projects, expanded existing contracts with key customers, and decreased the number of smaller regional projects.

In 2016, MAYKOR had more than 1,200 customers with over 90% of signed contracts accounting for renewed cooperation. One of every three renewals also came with expansion – either by locations, by services provided, or by equipment maintained.

As reflected in the 2016 results, the retail sector brought in 55% of MAYKOR's revenue (RUB 5.3 billion), with growth in this segment exceeding 5%. This proportion of revenue has been consistently increasing for several years in a row. Key federal contracts include POS equipment and IT infrastructure maintenance for the retail chains MTS'MTS’s stores, MegaFon Retail, Svyaznoy, Magnit, Dixy, X5 Retail Group, Fix Price, L'Etoile, and Kari. Engineering system services were also provided to retail chains such as Auchan and Sportmaster. Major projects for this sector include ERP system development and support for Leroy Merlin and Hoff.

Outsourcing contracts for the telecommunications industry showed positive movement. The company's customers in this segment include Russian Post, the Big Three ((MTS, Beeline and Megafon), Yota, and TELE2. In 2016, MAYKOR signed a series of contracts with Rostelecom to outsource the operation of local communication networks in several small regions. As part of this project, MAYKOR implemented a gainsharing model for the first time – MAYKOR’s revenue is based on the profit the customer gets by using MAYKOR-maintained infrastructure.

Compared to 2015, the application support outsourcing segment has grown by 20%. For the second year in a row, growth is demonstrated in the area of business applications implementation and support, which is managed mainly by MAYKOR's subsidiary, MAYKOR-GMCS. The company demonstrated growth in all the key areas: ERP, CRM, BI, and mobile and custom software development. The growth is backed by long-term contracts, including those for technical support of customer systems, as well as new projects. Over the last year, MAYKOR-GMCS expanded its solutions portfolio, particularly with Russian-developed IT solutions.

In the financial sector, there is an increasing demand for bank equipment service as well as comprehensive outsourcing that includes IT infrastructure support. Throughout the year, MAYKOR has been providing comprehensive services to key customers such as Raiffeisenbank, Alfa-Bank, Russian Agricultural Bank, and Sberbank. Bank equipment services provided by MAYKOR's subsidiary MAYKOR-BTE demonstrated 30% growth. One of this year's key achievements in this area is winning the tender to maintain ticket selling machines and POS terminals for the Moscow Metro. In addition, MAYKOR BTE opened new repair centers in Cheboksary, Krasnodar and Novosibirsk. Previously there had only been a repair center in Moscow.

For the second year in a row, both energy and manufacturing industries remain positive where previously there had only been occasional demand for outsourcing. In the energy industry, the largest projects were implemented for Unipro, RusHydro, SUEK, Rosseti while in manufacturing, for Ammonium, Stora Enso, Heineken, MMK, and Tikhvin Freight Car Building Plant.

As in the previous year, the volume of IT outsourcing for the transportation sector almost doubled. High growth rates also reflect the quick project implementation of the the Strelka universal travelcard in Moscow Region for UEC, which MAYKOR has been working on since 2015.

"For the last three years, MAYKOR has been actively building up the contract base for a wide range of services. Today's market realities – competitors' increasing IT outsourcing activities, undercutting by regional players, and optimization of IT budgets – urge us to look at our contracts more critically. We focus our resources on key large-scale projects with maximum value for the clients and optimal costs for us as a service provider," stated Sergey Sulgin, President of MAYKOR.

The company's personnel exceeded 6,100 employees, which is a 19% increase over the previous year. The increasing number of employees is connected, among other factors, to major outsourcing projects that resulted in customers' specialized service employees being transferred to MAYKOR. The growth in number of employees has strengthened MAYKOR's position as one of Russia's major IT employers. MAYKOR also retained its position among IAOP’s Top 100 global leaders in outsourcing. As of the beginning of 2017, there are plans to update MAYKOR's development strategy, which will support expanding the market share for the company's traditional services and define innovative approaches aimed at increasing clients' business efficiency while reducing their costs.
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