The Econocom Group generated revenue of €2,718 million in 2022, an increase2 of 10.0% compared with 2021. At constant accounting standards, but without including the revenue of companies acquired in 2022 in the
2021 comparison base, total revenue growth1 was 14.8%, showing the strong contribution from both organic growth and acquisitions.
Over the period, trends in continued activities were as follows: Products & Solutions (P&S) revenue totalled €1,238 million, up1 27.6%, with organic2 growth of 15.5%. The Group outperformed a steadily growing digital asset distribution market. P&S delivered a ROP3 up1 8.9% at €49.0 million, or 4.0% of revenue.
Technology Management & Financing (TMF) continued its growth path, with revenue of €989 million, up1 12.3% as reported and 10.2% on an organic2 basis. The final quarter, traditionally a strong season, saw particularly dynamic growth of 12.7%. Taking advantage of favourable volumes, TMF grew1 its ROP3 by 23.7% to €49.8 million, putting the margin (ROP/Revenue) at 5.0%.
After declining over the first nine months, Services revenue recovered as expected in the fourth quarter, with growth2 of 6.1% taking annual revenue to €492 million, virtually stable2 (-1.9%) compared with 2021. At €40.6 million, the ROP3 was identical to the previous year2, keeping the margin at a sound level of 8.3%.
Benefiting from the Group’s overall growth and despite the increase in costs linked to higher component or transport prices, the Group’s Recurring Operating Profit3 (ROP) was up1 9.2% at €139.4 million, compared with €127.7 million (restated1) in 2021.
After taking into account other net operating expenses of €27.4 million, net financial expense of €14.5 million and tax expense of €22.7 million, the annual net profit from continuing operations was €72.6 million, compared to €69.5 million in 2021, up1 4.5%. After deducting the €7.3 million loss from discontinued operations, consolidated net profit was €65.3 million, down1 €4.8 million. Note that Econocom sold certain non-strategic assets in 2021, generating one-off gains of approximately €7 million that were not repeated in 2022.
Recurring net profit4 increased1 by 20.7% to €95.5 million, resulting in recurring earnings per share6 of €0.53, above the target of €0.50 set for 2022.
Free Cash-Flow increases to €71 million and Net Financial Debt (NFD)5 less than 1x EBITDA. In 2022, Econocom recorded a free cash flow of €71 million, an increase compared with 2021. The Group also returned €57 million to its shareholders and paid out €67 million in net cash for its acquisitions.
NFD5 was consequently €143 million at 31 December 2022, vs €67 million a year earlier, which represents 31% of shareholders equity or 0.9 times EBITDA for the year. NFD should be seen against the 44 million treasury shares held (€124 million based on the average closing share price over the last 20 days).
Operating debt, i.e. NFD5 less expected future receipts from own-booked TMF contracts (at €284 million at the end of 2022 compared with €208 million at the end of 2021), shows a cash surplus of €140 million at the end of 2022.
Shareholder remuneration. The Board of Directors will propose at the next General Meeting to repay shareholders €0.16 per share from the share premium, up 14.3% vs 2022. Based on the average closing share price over the last 20 days, this represents a yield of 5.7%.
Total planned pay-outs in July 2023 would accordingly amount to €28.6 million, or 43.8% of the 2022 net profit, compared to €24.9 million for the prior year.
2023 outlook. Econocom Group targets a 5% revenue growth in 2023, as well as an increase of its consolidated net profit.
In addition, the Group has started developing its 2024-2028 Strategic Plan with the aim of reaching revenues of €5 billion by the end of the Plan. In that respect, the Group has strengthened the operational management of its activities; this is reflected in particular by the appointment to the COMEX of three cross-business directors whose mission is to accelerate business synergies. The 2024-2028 Strategic Plan will be presented to the market in the third quarter of 2023.
