Strong H1 earnings, with sales +50% and positive EBIT
Strong H1 earnings, with sales +50% and positive EBITEARNINGS/SALES RELEASES
The pattern of H1 18 confirms the consistency of the business model. After the build-up of both management and workforce in previous years, the pay-back is now visible with a positive EBITDA (€2.1m vs €-1.8m in H1 17) and is on track for the €10m envisaged in 2020.
FACT
Sales up 50%, thanks to new businesses, change in contracting mode and the strong new subsidiary, Knowesia
Organic sales contributed c.25% of the H1 growth, Knowesia’s integration 11% (only H2 in 2017), and the rest stemmed from the substitution effect from SaaS contracts to renewable licences. Significant new clients were gained in both the USA and France.
EBIT turnaround confirmed, with 9% margin vs -16% in H1 17
Breakeven was reached in H2 17, with a 7.7% operating margin, but the H1 18 performance showed a 9% operating margin. The cost base (€16m vs €14m) is still impacted by the 2016-17 hirings (top management US, workforce), but this should now stabilise.
Operating leverage should gather speed
Organic growth should remain in the +15-20% range. As a reminder, EasyVista is a fixed-cost based model and the major staffing effort (195 at 30 June 2018 vs 110 at year end in 2014) is now behind. Therefore, any increase in sales should significantly impact the margin: we reckon the EBIT margin will reach 11% for FY 2018, 12% in 2019 and 18% in 2020.
Improvements in cash and the balance sheet
Significant operating cash flow (€2.5m) was partly offset by seasonal operating WCR (€-1.1m). Net debt reduced to €5.8m vs €8.2m a year ago. However, as €7.5m of total gross debt (€8.2m) is a convertible bond (strike €40 at end 2019, close to the current price), EasyVista has virtually no debt.
Easyvista SA. Easyvista SA is a France-based company that specializes in information technology (IT) management. The Company provides integrated and modular solutions to cover a range of IT management requirements, including programs for inventories, audits, and asset management for IT and telecommunication equipment, among others. In addition, it offers maintenance, training and consulting services relating to its software programs. The Company's products are primarily marketed under the EasyVista brand name, offering EasyVista Classic (the traditional license option) and EasyVista.com (Software as a Service mode). The Company is operational in six countries, including France, the United States, the United Kingdom, Spain, Portugal and Italy, and has also a network of over 60 certified partners in 16 countries in Europe, Africa, the United States, Canada and Asia. It operates through Rift Technologies and Knowesia SAS.
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