Half-year results 2010/11: strong improvement in current operating margin at 13.7%

At its meeting on 22 November 2010, Solucom's Supervisory Board approved the consolidated half-year financial statements, at 30 September 2010.

Data consolidated to 30/09 (in €M)	H1 2010/11	H1 2009/10	Variance
Turnover	52.4	48.3	+ 9%
EBIT	7.2	3.2	+ 126%
Operating margin	13.7%	6.6%
Operating income	7.2	3.2	+ 125%
Group's share of net profit	4.2	2.0	+ 112%
Net margin	8.0%	4.1%

The auditors have summarily examined these financial statements. The EBIT complies with the CNC 2009.R.03 recommendations.

At the end of the first half of the 2010/11 financial year, Solucom's turnover was € 52.4M, up purely organically 9%.

In a market that is gradually on the way to recovery, Solucom has benefited from the sales investments it approved 18 months ago to post a significant rebound in business.

 

High activity rate in first half

In the first half of 2010/11, the company's activity rate was up sharply to 86%, as compared with 78% for the corresponding period last year. All the company's practices have contributed to this improvement. For the record, the standard activity rate of Solucom is situated between 82% and 84%.

The daily sales price came to € 707 for the first half, down 1% by comparison with the previous period. Based upon a reduction in pressure on prices over the last few months, Solucom is expecting a stabilization of its prices in the second half, which is supported by the first signs of a pick up in new projects.

In terms of Human resources the first half-year was marked by a 3% drop in the company's staff, to 945 employees at the end of September as against 978 at 31 March 2010. This figure reflects the acceleration of turnover to an annualised 19%, as compared with the 12% – 15% budgeted, and relative inertia in the recruitment rate.

 

Increase of 126% in half-year EBIT

With the benefit of an optimal activity rate, EBIT came to € 7.2M, up 126%. The operating margin was sharply improved at 13.7% for the first half-year as compared with 6.6% a year earlier. This figure takes into account the reclassification for tax purposes on income of part of the Contribution Économique Territoriale local tax, which replaces the previous Professional Tax. Without this reclassification, EBIT would have been 12.4%.

 

Group's net margin 8.0%

After netting off the cost of borrowing and taxes on profits, for the first half-year Solucom has posted a net profit for the Group's share of € 4.2M, which represents a net margin of 8.0%.

As at 30 September 2010 Solucom's equity stood at € 37.3M. Net borrowings, without any early repayment covenants, stand at € 5.3M at 30 September 2010 as against € 2.5M a year earlier. It should be noted that this borrowing includes the effect of heavy pressure on client receivables. This does not, however, put in question Solucom's target to increase its cash flow for the entire period in order to have a net cash flow greater than € 5M at 31 March 2011.

 

Human resources: stakes for the 2^nd Half-Year

During the first half Solucom consolidated its fundamentals by restarting growth with a high operating margin due to a rapid recovery and strengthening those parts of the business that had been in difficulty in 2009/10. The company has increased its market share by bringing in major upgrade projects at clients while readjusting its sectoral sales positioning; this has included in particular greater weight in the financial sector than in the previous year.

Thus while the upturn dynamics of the consulting market ought to continue into the second half, human resources constitute Solucom's major challenge over the coming months on account of the likely lasting pressures in this area. Solucom intends to accelerate implementation of various actions to speed up recruitment and to keep its staff turnover under control.

 

2010/11: Financial targets stated and confirmed

H1 2010/11 results exceed the annual objectives of the company.

Despite the decline of the, which could slow down the H2 performance, Solucom lays out and confirms its annual targets, set in June: relaunch its rate of organic growth, with an annual growth rate in excess of 4% and have a double digit operating margin, somewhere between 11% and 13%, while making the necessary investments to prepare for the future.

Upcoming dates: Turnover for Q3 of the 2010/11 financial year on 26 January 2011 (after close of trading).

To consul the annexes, please download the pdf of the press release.

 

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 nearly 1,000 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 is included in the SBF 250 Index.

Solucom has been granted the innovative company award from OSEO Innovation.

all our news on : www.solucom.fr

Solucom Pascal IMBERT CEO Phone: +33 1 49 03 20 00 Pascale BESSE Finance 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