Econocom, a European business-to-business digital service provider, reported revenue of €383 million for the third quarter of 2013 (versus €313 million in Q3 2012), bringing cumulative revenue since the beginning of the year up to €1,175 million (€1,050 million for the previous year). This represents a 12% rise in revenue for the Group for the first nine months of the year.
Growth in the group’s three business lines
At the end of September, all the group’s business lines posted growth in revenue, both overall and organic. Econocom has taken advantage of its strategic position in key growth sectors of the digital market (mobility, security, virtualisation, connected objects, etc.) and the growing demand for enterprise solutions which draw on the full spectrum of the group’s expertise (distribution, services, and technology management & financing).
As at the end of the first half, all geographical areas posted a significant increase in revenue, with the exception of Northern and Eastern Europe, (which account for around 10% of the group’s revenue).
Growth speeds up
This strong performance is the result of a rapid increase in organic growth, which stood at 4% at the end of September (compared with 3% at the end of June 2013), and the contribution of the companies acquired over the past twelve months.
The group is benefiting from the successful integration of the companies acquired over the past eighteen months, whose growth in revenue exceeded initial forecasts (around 20% organic growth).
Finally, Osiatis, a major player in infrastructure services and a specialist in related applications, was integrated into the group on 1 September 2013, contributing €30 million, i.e. a quarter of the group’s growth.
The birth of a major new player in the digital service sector
The alliance between Econocom and Osiatis will result in the creation of a major new player in the digital service sector (over 8,000 employees in twenty countries and around €2 billion cumulative revenue), and will contribute to the sustaining of this profitable mixed growth dynamic in the future.
The first step of this alliance was finalised on 12 September when Econocom acquired 51.90% of Osiatis’ capital from the main shareholders, managers and former managers.
From an operational standpoint, Jean-Maurice Fritsch and Bruno Grossi, co-chairmen of the Osiatis Management Board, have joined the Econocom Executive Board and are in charge of overseeing the integration of Osiatis into Econocom. Teams from both groups are currently working on the integration using the same methodology that led to the successful merger between Econocom and ECS in 2010. The key decisions should be reached by the end of the year.
In addition, the group has recently unveiled its new visual identity in line with the strategic plan it announced in April 2013 (see the press release of 16 October 2013). In order to leverage Osiatis Group’s strong brand image and reputation in the service sector, the group has created a separate brand for its Service business.
Friendly public offer for Osiatis underway
A friendly public offer for Osiatis’ remaining share capital was launched on 4 October and those Osiatis shareholders who wish to do so have until 31 October to tender their shares, as recommended by Osiatis’ Supervisory Board1. The information and documents about the public offer can be found on the website of the AMF (French financial markets authority) - www.amf-france.org and on econocom-osiatis.com.
Rise in full-year revenue and recurring operating profit expected
The healthy business trend at the end of September means Econocom can confirm its annual guidance for growth in 2013, both organic and via external growth, in revenue and recurring operating profit.
The preliminary full-year revenue release will be published after the close of trading on 27 January 2014.