• Recurring operating profit from ongoing operations estimated at €126m, versus €111m in 2018 on a like-for-like basis: a 13% growth rate
• Net book debt: in line with that of end-2018, which was €252m
• Revenue 2019 from ongoing operations: €2,927m, identical to that of 2018 and up 4.5% excluding TMF Italy
• Two sales completed: Jade in July and Rayonnance in December
Business 2019 in good shape
In 2019, the Econocom group made €2,927m in revenue from its ongoing operations, which is identical to its revenue in 2018. Organic revenue was down slightly – by 0.8% – on the previous financial year. Restated with TMF Italy’s fall in revenue, growth reached 4.5% (3.7% of which was organic):
• Technology Management & Financing (TMF), having made €1,124m in revenue, posted a 10% drop, mainly due to the slowdown of business at its Italian subsidiary, which represented €134m over the full year. Without this impact, TMF’s revenue would have been up 0.6% thanks to the performance of other regions (mainly France, Belgium, Spain and the United Kingdom) and despite the voluntary €32m reduction in business at the group’s internal refinancing entity Econocom Digital Finance Limited (EDFL).
• Digital Services and Solutions (DSS, made up of Products and Solutions and Services) made €1,802m in revenue, an increase of 7.4%, of which 6.2% was organic. This strong growth was driven by the distribution of products and solutions, revenue from which grew by over 10% (at €1,132m), with large-scale projects in IT equipment for secondary schools and major local public authorities, for example. At the same time, Econocom introduced services relating to its solutions at a faster pace, especially from its Verrières-le-Buisson site in the Paris region. Lastly, the group made the most of the high performance of its services entities, which posted revenue up 2.9% at €670m, mainly through digital technology.
In 2019, ongoing operations generated €161m in revenue. By streamlining its business activities, the group slightly widened its range of entities in the IFRS 5 scope of application over the fourth quarter by adding five small entities (unimportant ROP impact) whose accounts had to be closed.
In 2020, Econocom will pursue the major strategic projects it has begun since the start of 2018 to streamline the group in the market’s high added-value growth sectors. Several operations for selling and closing entities are currently underway. With the restructuring of Technology Management & Financing in synergy with tailored services and technological solutions, this historical business line should return to lasting growth. True to its tradition of innovation, Econocom will continue to develop offers that stand out so it can meet the many challenges of digital transformation and its clients.
The group will also stay focussed in 2020 on improving its operating margin as part of its cost-reduction plan aiming to reduce its gross outgoings in 2021 by €96.5m in relation to those of 2018. Profitability in 2020 should also be boosted by the favourable base effect of the Italian subsidiary’s underperformance in 2019. The new ROP guidance will be provided in the next publication of the 2019 results for the financial community on 11 March.
Lastly, debt control will remain a key pillar of the 2020 financial year, with special attention paid to the WCR of the different business lines.
After two financial years of major transition, the group is now confident in its capacity to reproduce a lasting, profitable path of growth in an environment that remains buoyant for players in digital transformation.
Please download the PDF version for the detailed results.