H1 2019 results
EBITDA at 10.2%, up 2.8%
Still on the growth path
Investing to build the future
Infotel's financial statements for the first half of 2019 were approved by the
Board of Directors at its meeting of 18 September 2019. These results were
subject to a limited review by the Statutory Auditors.
International accounting standard IFRS 16, concerning the treatment of leases
in the consolidated financial statements, came into force on 1 January 2019.
The Group chose to apply this standard using the simplified retroactive
approach, in which there are no adjustments for the previous year. Note that
the implementation of this standard requires a change in the presentation of
the consolidated financial statements as at 30 June 2019, with the balance
sheet showing a liability in respect of future lease payments and an asset in
respect of rights-of-use. On the income statement, the lease expense previously
recognised under operating costs is now to be recognised partly as a
depreciation charge and partly as a financial cost.
In EURm, at 30 June H1 2019 Impact
(Audited accounts) IFRS 16 H1 2018 Change IFRS 16
Consolidated revenue 122.3 115.2 +6.2%
o/w Services 118.2 110.5 +7.0%
o/w Software 4.1 4.6 -11.3%
Personnel expenses (54.0) (51.7) +4.4%
External expenses (53.5) (49.0) +9.7%
EBITDA(1) 12.5 12.2 2.8% 1.3
as % of revenue 10.2% 10.6%
and provisions (3.0) (1.6) 1.3
Current operating income 9.5 10.7 -11.1%
as % of revenue 7.8% 9.2%
Operating income 9.5 10.9 -12.4%
Financial result (0.03) 0.05
Income tax (4.3) (3.8) +18.8%
Group net income 5.0 7.1 -29.5%
as % of revenue 4.1% 6.1%
(1) EBITDA is calculated as follows: Current operating income + depreciation,
amortisation and provisions - provisions for current assets + provisions for
litigation + amortisation of French research tax credit (CIR) + provisions for
Strong business momentum
Infotel chalks up revenue growth of 6.2% to EUR122.3m, with one less billable
day relative to H1 2018. This compares to an average market growth rate of 4.2%
The Services arm records revenue of EUR118.2m, up 7.0%, driven by the roll-out
of new digital transformation projects and new service centres, particularly in
the Banking and Industrial sectors.
The recruitment market remains tight and the Group took several steps to
enhance its appeal to new talent during the first-half period. Infotel had an
average headcount of 1,721 employees at 30 June 2019 and its inter-contract
rate remained low, at 2%.
As at 15 September 2019, the number of net recruitments made by the Group for
the month underway stood at 45.
The Software business records sales of EUR4.1m, down 11.3% relative to the
previous half-year period and including EUR2.3m in royalties from IBM.
Investments made in H1 to prepare for the future
Operating income comes to EUR9.5m in H1 2019 (compared to EUR10.9m in H1 2018),
implying a slight decline of EUR1.4m. This is notably due to the free shares
granted to company managers to secure and strengthen their position as Group
executives. The cost of allocating these free shares is EUR1.6m in H1 2019.
Excluding this factor, current operating income would have increased slightly,
by EUR0.29m. Note also that the application of IFRS 16 increases current
operating income by EUR119K, which corresponds to interest income. Group net
income thus comes to EUR5.0m.
Robust financial structure
The balance sheet totals EUR173.8m at 30 June 2019, compared with EUR154.9m at
30 June 2018. Shareholders' equity climbs to EUR82.7m, from EUR79.3m a year
Following the application of IFRS 16, the Group records a higher level of
non-current assets, taking into account rights-of-use for a net amount of
The Group has no financial debt at 30 June 2019.
Its cash position increases to EUR62.5m by the end of H1 compared with EUR59.5m
in the first half of 2018.
Upbeat on 2019
In a still dynamic market, and despite difficult recruitment conditions, the
Group confirms its target to outpace the market growth rate while maintaining a
high level of operating profit.
Publication of Q3 2019 revenues: 23 October 2019 after market close
Listed on Compartment B of Euronext Paris since January 1999 (ISIN code
FR0000071797), Infotel specialises in information management systems for major
accounts, from mobile to very high-volume databases (Big Data). Operating at
the forefront of technological innovation, Infotel develops its expertise
across two complementary divisions: IT services and software publishing.
Infotel posted revenue of EUR231.7 million in 2018 and employs over 2,500