A first half in line with the objectives of the One econocom strategic plan
- First-half revenue at €1,335 million, up 3.0%: this growth was driven by all businesses and is in line with 2024 guidance;
- Operating margin at €38.3 million, impacted by the significant investments engaged as planned to implement the plan in both the sales force and IT and security;
- Net financial debt reduced to €180 million at end-June 2024 (vs. €321 million at the end of June 2023) thanks to the sale of Les Abeilles, and solid free cash flow over the past 12 months;
- New governance to support the deployment of the strategic plan; appointment of Jean-Louis Bouchard and Angel Benguigui respectively as Operational Chairman and Group CEO.
Revenue growth across all businesses. A halh-year of investment
The Econocom Group generated revenue of €1,335 million in the first half of 2024, up 3.0% compared with the same period in 2023 (vs. +2.6% in Q1) with all businesses contributing to this growth. In organic terms, growth came to 2.9%, in the absence of major changes to the scope of consolidation.
Over the period, trends in continuing operations were as follows:
- Technology Management & Financing (TMF) posted revenue of €506 million, an increase of 6.1%, including +5.9% organic growth. The group is capitalising on the quality of its flexible, customised financing offers to expand sales in targeted geographical regions. In line with its strategic plan, in the first half, Econocom continues to pursue its investments to recruit Account Managers and agents and update operational sales tools. As a result, operating margin came to €14.6 million, down €2.5 million compared with H1 2023.
- Products & Solutions (P&S) revenue totalled €591 million, up 1.1%. After a first quarter which saw a 2.5% decline in business, growth recovered during the second quarter, driven by stronger trends in the European IT distribution market. Operating margin came to €14.4 million, down slightly by €1.1 million compared with H1 2023.
- At end-June 2024, the Services business reported revenue of €239 million, up 1.2% on a purely organic basis. Operating margin accordingly was €9.3 million, in line with the first half-year 2023.
Overall, the Group’s operating margin was €38.3 million.
Other operating income and expenses amounted to -€4.1 million, i.e. down by €0.3 million compared to the amount recorded for the same period in 2023.
After financial income of -€5.9 million, an income tax expense of -€9.3 million and profit (loss) from discontinued operations of €5.7 million, consolidated net profit totalled €23.1 million for the first half of 2024 vs. €24.7 million for the same period of the previous year.
Sharp decline in net financial debt
In line with the commitments made as part of the One econocom strategic plan for 2024-2028, the group launched its non-strategic asset divestment programme to help self-fund its external growth policy. As part of this programme, in early June, the group finalised the disposal of its Les Abeilles subsidiary, enabling it to raise just over half of the €180 million disposal proceeds planned as part of the One econocom plan.
Furthermore, over the past 12 months, the group generated €88 million in free cash flow thanks to efforts made by all of its entities to reduce their working capital requirements.
Thanks to these two impacts, net financial debt was down to €180 million at end-June 2024, compared with €321 million a year earlier. This level of indebtness at end-June is the lowest seen over the past 10 years at the same time.
New governance
The Econocom Board of Directors unanimously approved the separation of the roles of Chairman and CEO, as well as the appointment of Angel Benguigui as Group CEO. Jean-Louis Bouchard, founder of Econocom, is now the Operational Chairman. Angel Benguigui will be able to rely on his support and advice, in keeping with the excellent dialogue and climate of trust they have built over their many years working together. An Executive Committee will be announced soon, to strengthen the skills and enhance the complementary profiles of the Management team.
2024 Outlook
Given these strong trends at end-June, Econocom confirms its 2024 guidance of generating revenue growth of between 3% and 5%.
Next publication: information meeting on H1 2024 results, 25 July 2024