Gfi Informatique: FIRST-HALF 2015 EARNINGS

STRONG GROWTH IN FRANCE AND INTERNATIONALLY: +13%

MAJOR COMMERCIAL SUCCESSES

SOUND PROFITABILITY (4.8%) GIVEN SEASONAL FACTORS

PROFIT FOR THE YEAR: +167%

GEARING AFTER CONVERSION OF THE OCEANE BONDS: 16%

SOFTWARE GROWTH WITH THE ACQUISITION OF ORDIROPE

 

 

Saint-Ouen (France), 30 July 2015 - At its meeting of 30 July 2015 chaired by Vincent Rouaix, the board of directors of Gfi Informatique reviewed the condensed consolidated interim financial statements^[1] for the first half of the 2015 financial year.

Main items of profit & loss account					30.06.15	30.06.14	Variation	Variation%
in euro '000						restated[2]
Revenues					437,0	386,8	50,2	13%
Operating margin					20,8	19,5	1,3	7%
Operating margin %					4,8%	5,0%	-0,2 point
Operating profit					12,8	9,6	3,2	33%
Net income attributable to the Group					2,9	1,1	1,8	167%
Diluted Earnings per share (in euros)					0,05	0,02	0,03	155%
Cash from operating activities					20,3	15,9	4,4	28%
Principal restated components					30.06.15	30.06.14	Variation	Variation%
de la Conversion de l'Oceane					restated [3]
Shareholders' equity					258,3	195,8	62,4	32%
Net debt					41,1	81,9	-40,8	-50%
Gearing					16%	42%	-26 points

Commenting on these results, Vincent Rouaix, chairman and chief executive officer of Gfi Informatique, said: "The first half marked the start of a new stage for the Group, which following the conversion of the OCEANE bonds is now in a significantly stronger financial position, with profitability that will continue to grow. Gfi Informatique now has all it needs to implement its medium-term plan aimed at boosting its development on the basis of solid organic growth, supported by strong business and sector positioning and reinforced by acquisitions designed to step up its transformation."

REVENUE GROWING STRONGLY AND HEALTHY OPERATING MARGIN

The Group reported revenue for the first half of 2015 of €437.0m, up 13% compared with the same period in the previous financial year. Organic growth came to 6.5%.
Revenue increased by 14.6% in the second quarter, including organic growth of 8.2%.

The Group's operating profit increased by 7% to €20.8m.

• IN FRANCE: strong revenue growth and sound operating profit

Revenue in France came to €373.8m for the six months to 30 June 2015, compared with €330.6m for the corresponding period in 2014, up +13.1% on a reported basis and +5.9% in terms of organic growth. Revenue growth accelerated to +14.6% in the second quarter, including organic growth of +7.5%.

Business activity was very intense over the quarter, resulting in increases in both the pipeline and weighted pipeline of 88% and 63% respectively, compared with last year. The rolling book-to-bill ratio came to 1.13, and the order book was up 25% compared with the same period last year.

Most notably, the Group recorded a number of major commercial successes, including in particular the signing of the CNES global facilities management contract for a six-year period starting from H2, marking the Group's transformation and demonstrating its ability to win complex, major deals. In January 2015, the Group signed a strategic partnership agreement with Alcatel Lucent for the outsourcing to Gfi Informatique of integration and support services for specialised telecoms solutions. There are around 100 people dedicated to this activity.

At €18.5m, or 4.9%, compared with €18.4m, or 5.6% in the first half of last year, operating profit was in line with the Group's expectations. This echoes the Group's statement when publishing its first-half sales figures that seasonal differences between the first and second halves would be more pronounced than last year. This is mainly due to the Public Service markets, which traditionally experience a temporary slowdown during electoral periods, but which should pick up in the second half of the year.
The activity rate and the average daily rate were slightly higher than at 30 June 2014, an indication that all businesses in France are performing well. In the first half of the year, the Group continued to invest in the various segments that will drive future profitability, specifically the IP 20 programme, which is targeting a twofold software revenue increase in the medium term, and outsourcing.

• INTERNATIONALLY: higher profitability against a backdrop of renewed organic growth

International business improves significantly: it accounted for 14.5% of revenue and 11.0% of operating profit in 2015, compared with 14.5% and 5.5% respectively, in the first half of last year. International operations recorded 10.0% organic growth (12.3% in the second quarter) compared with organic growth of 2.7% in the six months to 30 June 2014.

Spain and Portugal:
Revenue came in at €47.2m compared with €39.9m, representing organic growth of 16.5% and an operating margin of 4.4%, up sharply from last year's operating margin of virtually nil and driven mainly by earnings in Spain.

Northern Europe (Belux and Switzerland):
At €12.3m in the first half of 2015 compared with €13.7m in the first half of 2014, revenue recorded an organic contraction of 10.6%. The Group nevertheless expects a strong improvement in the second half of around the same level as in the corresponding period last year.

OPERATING PROFIT UP 33% - PROFIT FOR THE YEAR UP 167%

Operating profit came in at €12.8m compared with €9.6m last year, an increase of 33%. This was due in large part to other operating income and expenses, which showed a net expense of €8.0m, compared with a €9.8m net expense a year earlier. Restructuring expenses fell by €1.0m, and given that most of these costs fall in the first half, at constant scope the Group expects them to decline over the financial year as a whole.
Profit for the year at €2.9m compared with €1.1m last year represented a 167% increase, or earnings per share of 5 centimes compared with 2 centimes last year.

GEARING OF 16% FOLLOWING CONVERSION OF THE OCEANE BONDS - SHAREHOLDERS' EQUITY STRENGTHENED

In accordance with its announcement of 24 June 2015, on 27 July 2015 the Company went ahead with the early redemption of the OCEANE bonds issued on 30 June 2011 and maturing on 1 January 2017. A total of 10,072,350 OCEANE bonds was presented for conversion (representing 99.98% of the OCEANE bonds in issue). As a result of the transaction, the consortium made up of Itefin Participations^[4], Infofin Participations^[5]and Boussard et Gavaudan holds 80.3% of the company's capital. Taking into account this transaction, restated shareholders' equity comes to €258m and gearing to 16%, giving the Group the new debt capacity it needs to carry out its acquisitional growth strategy.

CASH FLOW UP 28% - WCR UNDER CONTROL

Cash flow came in at €20.3m compared with €15.9m in the six months to 30 June 2014, an increase of 28%. Given the growth in business, at €17.8m consumption of working capital was under control for the six months under review, coming in higher than last year's corresponding figure of €16.8m, a low growth considering the change in revenue.

When the Group announced its early redemption of OCEANE bonds, it took out a six-month, €72m maximum bridging loan to refinance its syndicated loan on the one hand, the balance of which stood at €22m, and to cover any OCEANE bond redemptions up to the amount of €50m in cash on the other. Given that the vast majority of the OCEANE bonds were converted, on 27 July 2015 the Group decided not to use the €50m set aside for redeeming them and negotiated a new loan allowing it to significantly increase its funding in order to finance its 2015-2018 expansion plan.

ACQUISITION OF ORDIROPE

On 10 June 2015, Gfi Informatique announced that it had acquired 100% of the capital and voting rights of the Ordirope group, a software solutions developer and integrator serving industrial companies, retail distributors and specialised network distributors. With global functional coverage, a strong degree of responsiveness and a highly developed business specialisation, this developer is the number one provider to a client base of demanding manufacturers and retailers.

The group's flagship product, Minos ERP, is used by clients as diverse and prestigious as Sarbec Cosmetics, Desamais, Point P, Deltaplus, Legrand, Lustucru and Grosfillex.

Ordirope generates revenue of around €10m, mainly in France, and Gfi Informatique expects it to deliver the same level of profitability as its other software businesses. It employs just over 100 people, including nearly 25% in R&D. Ordirope is consolidated in the Group's financial statements as from 1 June 2015.

 

OUTLOOK

Assuming economic conditions remain the same, the Group believes that second-half growth will match that of the first half. As indicated previously, seasonal differences will be more marked in 2015 because of the lag seen in public sector markets as well as the additional working day in the second half compared with the same period last year. The Group therefore confirms that it expects its profitability to improve over the financial year as a whole.
Moreover, with its reinforced financial capacities the Group will actively pursue its strategy of growth by acquisition.

 

 

Next release: Q3 2015 revenue - 4 November 2015

 

 

Disclaimer

The items in this press release other than historical facts are estimates. They do not constitute guarantees because of the inherent difficulties in forecasting results. Actual results may differ considerably from explicit or implicit forecasts.

 

 

About Gfi Informatique

Gfi Informatique is a major player in value-added IT services and software in Europe, and occupies a strategic position in its differentiated approach to global firms and niche entities. With its multi-specialist profile, the Group serves its customers with a unique combination of proximity, sector organisation and industrial-quality solutions. The Group has around 11,000 employees and generated revenue of €804m in 2014.

Gfi Informatique is listed on the Paris Euronext, NYSE Euronext (Compartment B) - ISIN Code: FR0004038099.

For more information: www.gfi.fr

 

 

 

For any further information please contact:
GFI Informatique Administrative and Financial Director Cyril Malher Tel.: +33 (0)1 44 04 50 64 cyril.malher@gfi.fr	KEIMA Communication Investor relations Emmanuel Dovergne Tel.: +33 (0)1 56 43 44 63 emmanuel.dovergne@keima.fr	AGENCE YUCATAN Press Relations Caroline PRINCE Tel.: +33 (0)1 1 53 63 27 35 cprince@yucatan.fr

 

APPENDICES

 

 

Quarterly revenue

 

Sales	1st quarter	1st quarter	Reported growth	Like-for-like growth
(in euros '000)	2015	2014
France	187,6	168,1	11,6%	4,3%
Iberian peninsula	23,0	20,1	14,4%	12,2%
Northern Europe *	6,4	6,9	-7,5%	-8,4%
Morocco-Africa	1,8	1,3	41,8%	23,2%
Total	218,8	196,4	11,4%	4,8%

 

 

 

Sales	2nd quarter	2nd quarter	Reported growth	Like-for-like growth
(in euros '000)	2015	2014
France	186,2	162,5	14,6%	7,5%
Iberian peninsula	24,1	19,8	22,0%	20,9%
Northern Europe *	6,0	6,7	-11,7%	-12,8%
Morocco-Africa	1,9	1,4	36,6%	13,8%
Total	218,2	190,4	14,6%	8,2%

 

 

 

First semester revenue

 

Sales	6 months	6 months	Reported growth	Like-for-like growth
(in euros '000)	30/06/2015	30/06/2014
France	373,8	330,6	13,1%	5,9%
Iberian peninsula	47,2	39,9	18,2%	16,5%
Northern Europe *	12,3	13,7	-9,6%	-10,6%
Morocco-Africa	3,7	2,6	39,1%	18,2%
Total	437,0	386,8	13,0%	6,5%

* Belux, Switzerland

 

 

Condensed income statement, cash flow statement and statement of financial position

 

Consolidated income statement					30.06.15	30.06.14
in euro '000						restated (1)
Revenues					437,0	386,8
EBITDA					25,9	23,4
Depreciation and amortization net					5,2	3,9
Operating margin					20,8	19,5
Amortization of assigned intangible assets					(0,8)	(0,9)
Goodwill impairment losses					-	-
Other operating products and expenses					(7,1)	(8,9)
Operating profit					12,8	9,6
Financial result					(3,4)	(3,7)
Income tax expense					(6,4)	(4,8)
Net income attributable to the Group					2,9	1,1
Diluted Earnings per share (in euros)					0,05	0,02

 

 

Consolidated cash flow statement					30.06.15	30.06.14
in euro '000						restated (1)
Cash from operating activities					20,3	15,9
Tax paid					(6,0)	(5,4)
Change in WC requirement					(15,9)	(16,8)
Versement au titre du litige TVA					(1,9)	-
Net cash from operating activities					(3,5)	(6,3)
Net cash from investing activities off perimeter					(9,3)	(5,9)
Net cash linked to perimeter investment					(4,1)	(14,6)
Net cash from investing activities					(13,4)	(20,5)
Repurchases and sales of treasury shares					(0,6)	(1,5)
New borrowings					21,4	17,8
Repayment of borrowings					(21,6)	(4,8)
Interests paid					(0,8)	(1,0)
Change in factoring drawdowns and other					1,4	18,9
Net cash from financing activities					(0,2)	29,4
Effect of changes in foreign exchange rate					0,0	(0,0)
Change in cash and cash equivalents					(17,1)	2,5

 

 

Consolidated statement of financial position					30.06.15	30.06.15	31.12.14
in euro '000					restated (2)		restated (1)
Goodwill					226,5	226,5	218,3
Fixed assets					57,7	57,7	51,5
Current and non current assets					394,0	394,0	359,0
Cash and equivalent cash					18,3	18,3	35,9
Total assets					696,4	696,4	664,7
Net equity - Group share					258,0	209,3	211,8
Minority interests					0,3	0,3	-
Oceane bonds awaiting conversion					-	48,0	-
Borrowings					59,4	60,2	103,6
Current and non current liabilities					364,7	364,7	337,9
Financial liabilities and current provisions					14,0	14,0	11,4
Total liabilities and shareholders equity					696,4	696,4	664,7
(1) restated IFRIC 21
(2) Redemption of oceane bonds restated