Annual results 2013/14: current operating margin of 12.9% – Solucom, 2nd independent consulting firm in France

At its meeting on 2 June 2014, Solucom's Supervisory Board approved the consolidated annual financial statements at 31 March 2014, summarised below. The audit procedures have been carried out and the audit report relating to their certification is in the process of being issued by the independent auditors.

 

Consolidated data at 31st March  (In €m)	2013/14	2012/13	Change
Turnover	141.6	130.5	+ 8%
EBIT	18.2	15.5	+ 18%
Current operating margin	12.9 %	11.9 %	–
Operating income	17.7	15.4	+ 15 %
Group's share of net profit	10.9	10.3	+ 6 %
Net margin	7.7 %	7.9 %	–

 

At the end of the 2013/2014 financial year Solucom posted consolidated turnover of €141.6m, representing growth of 8%, of which 6% at constant scope.

Despite a persistently difficult market, the firm has far exceeded the annual growth target of 5% it had set for itself at the beginning of the year, a figure which was raised to 6.5% and then to 7.5% during the year.

This growth has been accompanied by a steady increase in staff, which rose from 1,185 to 1,327 as at 31 March 2014, up 12% in a year, of which 9% at constant scope.

As a result of this dynamic year, Solucom has now become the second independent consulting firm in France (source PAC – 2014).

 

Strong operational indicators

The activity rate established itself at a solid level, 83%, up one point on the previous year.

The average daily rate remained stable from one year to the other, at €713. Excluding Lumens Consultants and Trend Consultants, the annual sales price amounted to €710, in limited decline of -0.4%, in line with the trend of 0% to -1% anticipated at the start of the year.

 

Operating profitability improved

EBIT amounted to €18.2m, up 18% on the previous year.

The net margin was 12.9% in 2013/14, as against 11.9% a year earlier. Excluding the research tax credit, the operating margin stood at 12.4% against 11.2% the previous year.

The firm has once again seen its current operating margin rise, establishing itself beyond the target of 10% to 12% set at the beginning of the year.

Other operating income and expenses, at -€0.6 million, include acquisition and reorganization costs, as well as endowment for the Solucom Enterprise Foundation. After consideration of these items, operating income amounted to €17.7 million.

The Group's share of net profit stood at €10.9m, up 6%. For the record, the firm enjoyed a reduced taxation rate in 2012/13 due to the tax credits it had recorded. Net margin stands at 7.7%, against 7.9% the previous year.

Net cash up at €16.6m

At 31 March 2014, the consolidated shareholders' equity of Solucom amounted to €63.9m.

Net cash increased to €16.6 million against €14.5 million a year earlier, despite the amounts disbursed for acquisitions during the year.

In late March, the firm benefited from substantial financial resources: €20.0m gross cash and €12.8m confirmed lines of credit. The amount of financial liabilities related to acquisitions remains meanwhile limited at less than €1.0 million.

At its Annual General Meeting of 11 July 2014, Solucom will propose the payment of a dividend of €0.33 per share, up 3%.

 

Towards a calmer consulting market in 2014

At the beginning of this year 2014, the economic environment remains uncertain. Visibility is still limited while sectoral dynamics remain largely differentiated.

However, after several years of restricted budgets, major buyers seem calmer and better prepared to enter a new investment cycle. The buoyant themes of the post-crisis era are emerging as part of the vast movement of digital transformation affecting all businesses.

Solucom has leading expertise in operational excellence, business process transformation, digital innovation and cybersecurity, all of them key topics in terms of digital transformation. Bolstered by its know-how, its growth momentum that is now well established and the potential of its sectoral portfolio, the firm considers itself to be in good position to capture the future market recovery.

 

Objectives for 2014/15: 8% growth, 11% to 13% current operating margin

In this gradually more favourable context, Solucom intends to maintain its offensive approach, both in terms of organic growth and external growth, while accelerating its sectoral deployment towards banking.

The firm also plans to pay particular attention to the issue of human resources, in a market that is expected to quickly become more competitive.

For the year 2014/15, Solucom has set itself the following goal: to deliver sales growth of over 8%, excluding new acquisitions, and operating margin of between 11% and 13%.

 

Upcoming dates: 11 July 2014, Annual General Meeting; 17 July 2014 (after stock market close), Q1 2014/15 turnover.

 

About Solucom

Solucom is a management and IT consulting firm.

Solucom's customers are among the top 200 large companies and public bodies. For them, Solucom is capable of mobilizing and combining the skills of 1,300 staff members.

Our mission statement? To place innovation at the heart of business lines, target and steer transformations that are sources of added value, and turn the information system into an actual asset designed to serve corporate strategies.

Solucom is listed on NYSE Euronext Paris and Solucom shares are eligible for the 'PEA-PME' scheme.

The consulting has been granted the innovative company award from BPIFrance.

All our news on: www.solucom.fr

Solucom Pascal IMBERT CEO Phone: +33 1 49 03 20 00 Sarah LAMIGEON Communication Director Phone: +33 1 49 03 20 00

Actus Finance Mathieu OMNES Analysts & investor relations Phone: +33 1 72 74 81 87 Nicolas Bouchez Press office Phone: +33 1 77 35 04 37

 

 

Annex 1: consolidated income statement at 31/03/2014

In €'000 – Audited data – IFRS standards	31/03/2014	31/03/2013
Turnover	141,622	130,545
Purchased consumables	3,185	4,449
Personnel costs (including profit share)	102,155	94,011
External costs	14,290	13,318
Taxes and duties	2,347	2,409
Net depreciation and provision charges	1,493	896
Other income and expenses on ordinary activities	-92	-18
EBIT	18,243	15,480
Other operating revenues and charges	-557	-46
Operating income	17,686	15,434
Interest Income	56	11
Financial expenses	254	154
Net interest expenses	198	143
Other financial income and expenses	-12	43
Profit Before Tax	17,476	15,334
Tax burden	6,530	4,998
Net profit for period	10,946	10,336
Minority interests	0	0
Group's share of net profit	10,946	10,336
	,
Net earnings (Group's share) per share (€) (1) (2)	2.23	2.11
Diluted earnings (Group's share) per share (€) (2)	2.20	2.08

(1) Average weighted number of shares over the period

(2) In accordance with IAS 33, a retrospective restatement has been made to calculate the net earnings per share as at 31 March 2013, on the basis of the number of shares as at 31 March 2014.

 

Annex 2: consolidated balance sheet as at 31/03/2014

In €'000 – Audited data – IFRS standards	31/03/2014	31/03/2013
Goodwill	41,077	36,603
Intangible fixed assets	1,292	634
Tangible fixed assets	2,220	2,083
Investments – due in more than one year	975	834
Other non-current assets	3,210	2,509
Non-current assets	48,774	42,663
Inventories	0	0
Clients and apportioned accounts	49,367	43,610
Other debtors	6,696	7,551
Investments	0	0
Cash and cash equivalents	20,034	18,145
Current assets	76,097	69,307
Total assets	124,871	111,970
Share capital	497	497
Issue, merger, and contribution premiums	11,218	11,218
Consolidated reserves and earnings	52,165	42,696
Equity – Group's share	63,880	54,411
Minority interests	0	0
Total shareholders' equity	63,880	54,411
Long-term provisions	3,934	3,362
Borrowings – due in more than one year	3,131	3,258
Other long term liabilities	1,002	296
Non-current liabilities	8,067	6,916
Short-term provisions	1,637	1,102
Borrowings – due in less than one year	345	361
Suppliers and apportioned accounts	5,653	6,160
Income tax and social security liabilities	38,388	34,800
Other current liabilities	6,901	8,221
Current liabilities	52,925	50,643
Total liabilities	124,871	111,970

 

Annex 3: Table of consolidated cash flow at 31/03/2014

In €'000 – Audited data – IFRS standards	31/03/2014	31/03/2013
Total net consolidated profit	10,946	10,336
Elimination of non-cash items
Depreciation and provisions charges	1,940	1,727
Capital losses / (Gains) from disposals, net of tax	3	-10
Other expenses and income	-1,218	139
Gross cash flow margin (1)	11,671	12,193
Change in working capital requirements	-1,022	2,359
Net cash flow from operating activities	10,648	14,552
Acquisition of intangible and tangible assets	-1,428	-927
Disposal of fixed assets	0	1
Change in long-term investments	864	222
Impact of changes in consolidation scope (2)	-5,949	-10,150
Net cash flow from investment operations	-6,513	-10,854
Dividends paid to shareholders of the parent company	-1,571	-1,066
Dividends paid to minority interests of consolidated companies	0	0
Other cash flows from financial operations	-650	890
Net cash flow from financing operations	-2,221	-176
Net change in cash and cash equivalents	1,914	3,521
Impact of change in foreign exchange rates	-1	0
Opening cash position	18,098	14,577
Closing cash position	20,012	18,098

(1) After net borrowing costs and after tax
The amount of taxes paid amounted to € 7,211 thousand as at 31/03/2014 and € 2,490 thousand as at 31/03/2013.
The amount of interest paid amounted to € 226 thousand as at 31/03/2014 and to € 121 thousand as at 31/03/2013.

(2) The line item "Impact of changes in consolidation scope" refers to the purchase of the companies Lumens Consultants and Trend Consultants, the acquisition price supplement of the company Eveho and the acquisition of the capital balance of the company Stance.