Emakina Group Results 2019: More sustained growth in activities in the second half of the year and operating performance under control

Emakina Group Results 2019: More sustained growth in activities in the second half of the year and operating performance under control
27 March 2020

(Embargo 6.00 pm CET)

Inside and regulated information - Free translation of the official French version

Emakina Group (Euronext Growth Brussels: ALEMK) announces its 2019 annual results today.

1. Key figures for 2019

  In thousands of EUR

  2019

  2018

  Variation

  Income

  96,618

  92,390

  +4.6%

  Earnings before interest, depreciation
  and amortisation (EBITDA)

  5,881

  6,107

  -3.7%

  Operating margin %

  6.1%

  6.6%

 

  Result before tax

  235

  1,093

  -858

  Net result

  -71

  57

  -128

2. Key events in 2019

a) New business

In 2019, many national and international companies chose an Emakina agency as their partner.

These include, among others: Allergan, Al Tayer Group - Bloomingdales, Arcelik, Basic-Fit, Beko, Brussels Expo, Chalhoub Group, Courrèges, Fluxys, FrieslandCampina, Gulf Marketing Group, Heineken Blade, Honda, Majid Al Futtaim Fashion, Moteo, Nike, Nuskin, Olympique de Marseille, Sodexo, Stockmann, Suitsupply, Sunweb, TVH, UnifiedPost and VOO.

b) New activities

In 2019, the group continued its strategy of expanding its service range, in particular in the field of marketplace activity, influencer marketing and e-commerce.

Selecting the best technological partners to come out of this is therefore crucial to support its clients as well as possible with their digital challenges.

c) Continued acquisitions

The group’s policy of expanding via external operations is continuing in line with the strategy set out. In October 2019, Emakina Group acquired 100% of the shares in the company Cloudworks Consulting DMCC (Dubai Multi Commodities Center), an innovative Cloud IT consultancy firm with offices in Dubai and 27 experts, through its subsidiary Emakina FZ‑LLC, based in Dubai. This operation confirms Emakina’s ambition to be a sound partner in the Middle East.

d) Geography

In geographic terms, international income increased by over 5.4% during 2019 and accounted for 63% of the consolidated income in 2019. The commercial pipeline and the expansion policy of the group (in particular with the new Dubai offices) will support this growing share of activities located outside Belgium in the coming months.

e) Integration and processes

In 2019, Emakina Group continued to invest in integration and synergies within its network, particularly in the Netherlands and in France, where the new centralised management platform for projects combined with the new version of the ERP was successfully deployed. These platforms are scheduled to be put in place in the group’s main operating entities over the course of the next two financial years.

Finally, the Emakina teams worked hard to ensure that its processes comply with the new European General Data Protection Regulation (GDPR).

f) Talents

The management of human capital remains a key element in the group’s development. 

With over 1,000 talented individuals at Emakina, the management’s priority is to attract the best people and accompany them in their career while maintaining a subtle balance between the skills required by clients and technological progress and the need to keep costs under control. 

g) Partnerships

 Through its commercial partners, Emakina Group continues to offer its clients a wide geographic scope combined with in-depth local knowledge: Air (Belgium); Asiance (South Korea, Japan); Bubblegum (Spain); Domino (Italy); Metia (Great Britain, United States, Singapore) and SinnerSchrader (Germany).

h) Prizes and awards

In 2019, Emakina Group won several awards, including five ‘AVA Website Awards’, with The Athlete’s Foot, Van Cleef & Arpels, ECCO and Boucheron, as well as a special award for its own brand communication platform. Other awards include the ‘Trends Digital Pioneer Award’ with DP World, the ‘Gold Best e-commerce SpinAward’ with Rituals, the ‘YouTube Works Award’ and two ‘Swedish Content Awards’ with SBAB.

The teams also won several technological awards including the ‘Best Kentico Website of the Year Award’ with Bardahl and the ‘Kentico MVP Award’, the ‘Umbraco Best Cloud Solution Award’ with Vivaldis Interim and four ‘Sitecore MVP Awards’.

3. General comments

Growth in activities on the international scene in particular

In 2019, Emakina Group’s consolidated sales amounted to EUR 96,618,148 compared with EUR 92,389,601 in 2018, an increase of +4.6% (+4.2% at constant scope).

This progression is driven in particular by the growth in activities ‘outside Belgium’ of 5.4%. The commercial pipeline and the group’s expansion policy continue to support this growing share of activities located outside Belgium.

Development of EBITDA

Consolidated earnings before interest, depreciation and amortisation (EBITDA) amounted to EUR 5,881,414 (EUR 5,820,909 at constant scope) in 2019, compared with EUR 6,107,455 in 2018, a fall in absolute terms of 3.7% (4.7% at constant scope). Expressed as a percentage of total sales, EBITDA passed from 6.6% to 6.1% (6.0% at constant scope) between 2018 and 2019.

Despite keeping selling prices and staff costs under control, more complex schedule management weighed on the average rate of use of resources and hence on the performance posted in 2019 compared with 2018. Aligning clients’ requests and the talents available remains a constant and major challenge in a context of ever-evolving technologies.

Current profit under control and net result near break-even

The current profit before tax amounted to EUR 1,256,070 in 2019, down 9.2% compared with 2018.
This may be attributed to the operating performance, as explained above, and the increase in amortisation and write-downs, partly offset by a better financial result owing in particular to the fall in charges for the amortisation of goodwill linked to the lengthening of the depreciation period from 8 to 10 years so as to reflect a period more commonly seen in the sector (see point 7 below).

The fall in the net result (EUR -71,265) in 2019 compared with 2018 (EUR 56,727) may be attributed to the development of the current result, a substantial non-recurrent element (EUR -1,020.792) mainly linked to a reorganisation programme, offset by tax credit linked to innovative activities. Despite this fall, the net profit nevertheless remains close to zero, making it possible to maintain the level of the group’s equity base.

4. Financial health

At the end of 2019, the group’s financial health was maintained thanks to a net result close to zero (despite the charges for the amortisation of goodwill), a level of financial indebtedness in line with the growth in activities and the availability of proportionate credit lines. It is important to keep a constant eye on the impact of the growth on working capital requirements and liquid assets.

5. Events after closure and outlook for 2020

The coronavirus pandemic and the impact of the confinement measures will affect Emakina’s economic performance from March 2020. However, it is not possible at this moment to quantify the financial impact. This will be the subject of a specific communication at a later stage, as soon as it is possible to calculate it. The management has already set in motion a raft of precautionary measures needed to limit the impact of this pandemic on the group’s margins and cash position.

6. Statement from the company directors

The Board of Directors of the company declares that, to the best of its knowledge, the condensed consolidated financial statements as at 31 December 2019, established in accordance with Belgian accounting standards, give a true and fair view of the assets, financial status and results of Emakina Group. The annual financial report contains an accurate description of the information that must be included in it.

7. Miscellaneous

Auditor’s report

The auditor has confirmed that his audit of the consolidated accounts is complete in terms of substance and has not revealed any significant adjustment to be made to the accounting data presented in the annual report.

Belgian accounting standards

All the consolidated figures given in the appendices have been established in accordance with Belgian accounting standards. These figures provide a summary of the financial results that are presented in detail in the 2019 annual report.

As a reminder, the compulsory systematic amortisation of goodwill (booked in financial charges and imposed by Belgian accounting law) weighs significantly on the group’s consolidated net profit. Lengthening the period for the amortisation of goodwill from 8 to 10 years had a positive impact on the net result for the 2019 financial year, amounting to EUR 895,829. The valuation rules applied to the consolidated accounts as at 31/12/2019 have been modified accordingly.

Shareholders’ diary 2020

1 April 2020:                                   Annual report 2019 (brochure)

22 April 2020:                                 General meeting of shareholders

25 September 2020:                       Publication of the first half-yearly results 2020

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CONTACTS

Karim Chouikri              Chief Executive Officer           +32(0)2 400 40 75        kch@emakina.com

Frédéric Desonnay        Chief Financial Officer            +32(0)2 788 79 26        fds@emakina.com

Luc Malcorps                Director of Media Relations     +32(0)2 788 79 73        lma@emakina.com

 

Emakina Group S.A.
Rue Middelbourg 64A
1170 Brussels
Belgium

VAT 0464.812.221
ISIN BE 0003843605

In accordance with the Euronext Growth Brussels regulations, all the regulated information is included in the Emakina Group annual financial report 2019, available on our website  www.emakina.group (“Investor Relations” section).

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CONSOLIDATED FIGURES 2019 – EMAKINA GROUP SA

CONSOLIDATED INCOME STATEMENT (EUR)*

31/12/2019

31/12/2018

31/12/2017

SALES AND SERVICES

96,618,148

92,389,601

80,304,612

Turnover

92,485,616

91,972,627

75,916,133

Variations in projects in progress

1,317,713

-1,451,203

1,210,431

Capitalised production

1,228,745

439,660

999,717

Other operating income

1,586,074

1,428,517

2,178,331

OPERATING CHARGES (BEFORE AMORTISATION)

-90,736,734

-86,282,146

-74,577,795

Purchase of equipment and services linked to sales

-40,311,250

-39,612,198

-34,115,576

Staff costs

-50,118,578

-46,357,109

-40,302,954

Other operating charges

-306,907

-312,839

-159,265

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTISATION = EBITDA

5,881,414

6,107,455

5,726,817

AMORTISATION AND DEPRECIATION

-1,995,269

-1,637,892

-1,581,827

Amortisation of intangible and tangible fixed assets

-1,830,219

-1,729,416

-1,438,455

Depreciation of trade receivables

-155,455

12,948

-58,166

Provisions for liabilities and charges

-9,595

78,576

-85,206

OPERATING PROFIT

3,886,145

4,469,563

4,144,990

FINANCIAL RESULT

-2,630,075

-533,278

-378,316

Financial income

636,275

1,375,494

778,476

Financial charges

-3,266,350

-1,908,772

-1,156,792

CURRENT PROFIT BEFORE AMORTISATION OF CONSOLIDATED DIFFERENCES

3,106,643

3,936,285

3,766,674

AMORTISATION OF GOODWILL**

-1,850,573

-2,553,237

-2,390,944

CURRENT PROFIT

1,256,070

1,383,048

1,375,730

NON-RECURRING RESULT

-1,020,792

-289,816

-136,583

RESULT BEFORE TAXES

235,278

1,093,232

1,239,147

DEFERRED TAXES

485

970

970

INCOME TAX

-307,028

-1,037,475

-1,207,911

SHARE IN THE RESULT OF COMPANIES CONSOLIDATED USING THE EQUITY METHOD

0

0

0

NET PROFIT BEFORE AMORTISATION OF CONSOLIDATION DIFFERENCES

1,779,308

2,609,964

2,423,150

NET RESULT

-71,265

56,727

32,206

A. Share of minority interests

152,933

137,169

143,388

B. Group share

-224,198

-80,442

-111,182

 

DATA PER SHARE

31/12/2019

31/12/2018

31/12/2017

NUMBER OF SHARES

3,893,353

3,893,353

3,893,353

NUMBER OF SHARES AND WARRANTS

3,893,353

3,893,353

3,893,353

CURRENT RESULT / SHARE (in EUR)

0.3226

0.3552

0.3534

CURRENT RESULT / SHARE AND WARRANT (in EUR)

0.3226

0.3552

0.3534

GROUP SHARE / SHARE (in EUR)

-0.0576

-0.0207

-0.0286

GROUP SHARE / SHARE AND WARRANT (in EUR)

-0.0576

-0.0207

-0.0286

NET RESULT / SHARE (in EUR)

-0.0183

0.0146

0.0083

NET RESULT / SHARE AND WARRANT (in EUR)

-0.0183

0.0146

0.0083

 

ASSETS (EUR)*

31/12/2019

31/12/2018

31/12/2017

 

 

 

 

FIXED ASSETS

21,721,511

20,593,604

17,471,191

Formation expenses

137,936

152,331

175,937

Intangible assets

3,532,425

2,606,863

2,344,601

Consolidation differences

14,912,079

15,088,160

12,578,751

Tangible assets

2,562,913

2,234,953

1,828,617

Financial assets

576,158

511,297

543,285

CURRENT ASSETS

31,407,847

28,970,708

30,541,335

Stocks and contracts in progress

4,682,577

3,379,452

4,835,151

Deferred taxes

0

0

0

Amounts receivable within one year

20,875,917

19,371,195

21,131,512

Current investments

8,761

584,780

238,980

Cash and cash equivalents

3,824,864

3,846,013

3,003,982

Accruals and deferrals

2,015,728

1,789,268

1,331,710

TOTAL ASSETS

53,129,358

49,564,312

48,012,526

 

 

 

 

LIABILITIES (EUR)*

31/12/2019

      31/12/2018

31/12/2017

 

 

 

 

CAPITAL AND RESERVES

10,082,940

10,542,268

10,729,513

MINORITY INTERESTS

377,994

343,303

287,513

PROVISIONS FOR LIABILITIES AND CHARGES

161,700

230,105

196,906

DEFERRED TAXES AND DEFERRED TAX LIABILITIES

0

485

1,455

DEBTS

42,506,725

38,448,151

36,797,139

Amounts payable after one year

4,257,722

3,677,227

3,766,343

Amounts payable within one year

37,958,605

34,388,316

32,509,046

    Current portion of amounts payable after one year

2,340,100

2,173,540

1,715,265

     Financial debts

10,363,625

8,910,004

7,462,653

     Trade debts

7,375,842

6,144,366

7,698,382

     Advances received

6,762,505

4,308,187

5,135,502

     Taxes, wages and social security charges

7,230,003

7,645,266

6,837,322

     Other amounts payable

3,886,529

5,206,953

3,659,922

Accruals and deferrals

290,398

382,608

521,750

TOTAL LIABILITIES

53,129,358

49,564,312

48,012,526

* Drawn up in accordance with Belgian accounting standards.

** In accordance with the valuation rules, as of 1 January 2019 the consolidation differences (or goodwill) are amortised over 10 years, irrespective of all consideration of any excess value in accordance with Belgian accounting standards.

In accordance with the Euronext GROWTH Brussels regulations, this annual press release is optional. It will be followed by the publication of the Emakina Group annual financial report 2019, which contains all the regulatory information.

The report will be available on the website www.emakina.group (“Investor relations” section) as of 1 April 2020, in accordance with the legal provisions on this matter.