Financial information Paris, 26 March 2014 SOLVING EFESO INTERNATIONAL 2013 financial results 1 Profit from recurring operations: up 18% to 5.8 million Net profit: up 17% to 3.6 million Group share of net profit: up 16% to 2.8 million Proposed dividend: 33% increase to 4 cents per share Third consecutive year of double-digit growth in profit from recurring operations (average growth of 38% per year since 2010) Solving Efeso International (Alternext: ALOLV), a consultancy firm specialised in strategy and operational excellence positioned in rapidly growing international markets, today announces its full year financial results 2013. Profit from recurring operations and net profit posted increases of 17.6% and 17.1% respectively to reach 5.8 million and 3.6 million. These results were particularly driven by successful mergers and acquisitions, the development of services with high added value and strict cost control. Filippo Mantegazza, Chairman of Solving Efeso International commented: The double digit growth in our 2013 financial results testifies to the relevance of our strategic decisions, which are reflected by a strong international presence enabling us to secure major accounts and position ourselves in markets with high growth potential, and by the rollout of a range of services that meets the needs of our clients. The Group s sound financial position provides it with flexibility to seize acquisition opportunities. 1/ Continued growth and increased profitability a) 9.1% sales growth in a contrasting market Strong international growth EBITDA exceeding the 10% threshold Solving Efeso achieved sales of 65.6 million for the year 2013, an increase of 9.1% compared to 2012, with 14% of these sales generated by new clients. Growth was 11.4% at constant exchange rates. Excluding the four acquisitions made by the Group since the beginning of 2012 2, and at constant exchange rates, the Group s sales growth was 4%. 1 Financial statements approved by the Management Board and submitted to the Supervisory Board on 24 March 2014 2 Solving Efeso India, Flecto, RighSelect.com and Blupeter. 1
The Group s international expansion continued. North America, which now accounts for 15% of sales, recorded growth of 18%, and emerging countries grew by 9% to 14% of total sales. The Italian subsidiary represents 16% of total sales and reported outstanding growth of 86%. This reflected the successful integration of Blupeter (a consultancy firm acquired in November 2012) which strengthened the range of consultancy services and accelerated the business development of the Group, which secured major contracts with leading Italian groups. Organic growth thus attained 15% in a challenging Italian market. 2013 sales 3 Sales % change vs. 2012 % of sales France 14.7 million (3.6%) 22% Europe (excluding France) 31.9 million 14.3% 49% Emerging markets 9.5 million 9.3% 14% North America 9.6 million 18.2% 15% Total 65.6 million 9.1% 2013 EBITDA 4 totalled 6.6 million, equating to 10.1% of sales, compared with 5.6 million in 2012 (9.4% of sales). Profit from recurring operations was 5.8 million compared with 4.9 million in 2012. Sales volumes increased, the average billing per assignment was stable at constant exchange rates and the Group s structure costs were strictly controlled. This aggregate has achieved double-digit growth every year since 2010, the date on which the strategic business plan was launched. Other non-recurring income and expenses was an expense of 0.2 million and included non-recurring items for the financial year relating to the Swedish subsidiary s restructuring operations following the repositioning of the local business. In 2012, the Group had recorded non-recurring operating expenses of 2.6 million, primarily due to costs of 2.15 million related to the final settlement of a dispute arising from an acquisition in Spain. The cost of gross financial debt was 0.5 million, an increase of 0.2 million compared with 2012, due to medium-term borrowings and debt taken on to pay due debts related to equity shareholdings and to settle the Spanish dispute. This cost comprised interest charges on bank loans, financial debt and factoring. The income tax charge totalled 1.2 million, including a positive deferred tax impact of 0.6 million. In 2012, the Group recorded a net tax gain of 1.3 million related to the reversal of the capitalisation of losses carried forward (tax income of 2.4 million) in the light of its renewed capacity to generate significant taxable profits in France Consolidated net profit amounted to 3.6 million compared with 3.1 million in 2012 and the Group share of net profit, which excludes profit attributable to non-controlling interests of 0.8 million, totalled 2.8 million, compared with 2.4 million in 2012. 3 2013 and 2012 figures based on the location assignments are carried out. The total figure derived from the consolidated financial statements is the same but its geographical breakdown is different, as invoices are sometimes issued in a region other than the location the assignment is carried out. The Group has decided to ensure consistency of all sales communications by using the location of assignments as the benchmark. 4 Profit from recurring operations restated for amortisation, depreciation and provision charges. 2
Condensed consolidated income statement ( thousands) 2 013 2 012 2013 vs. 2012 Sales 65,588 60,097 9.1% EBITDA 6,606 5,631 17.3% Profit from recurring operations 5 778 4,912 17.6% Other operating income and expenses (exceptionals) (206) (2,641) (92.2%) Operating profit 5,572 2,270 145.4% Cost of net financial debt (485) (280) 73.2% Income tax (1,193) 1,254 (195.1%) Net profit 3,584 3,061 17.1% Group share of net profit 2,810 2,417 16.3% b) Sound financial position, increase in equity Condensed consolidated balance sheet ( thousands) 2 013 2 012 2013 vs. 2012 ASSETS Non-current assets 40,149 39,607 1.4% Current assets 29,365 29,033 1.1% Total Assets 69,514 68,640 1.3% EQUITY AND LIABILITIES Shareholders equity 39,542 37,858 4.4% Non-current liabilities 5,529 4,295 28.7% of which long-term financial debt 3,830.4 2,781 37.7% Current liabilities 24,443 26,486 (7.7%) of which short-term debt 8,041 5,985 34.4% Total Equity and Liabilities 69,514 68,640 1.3% Shareholders equity rose from 37.9 million at the end of 2012 to 39.5 million at the end of 2013, an increase of 1.6 million reflecting in particular the profit during the financial year and the payment of dividends. Net consolidated financial debt increased from 3.3 million at the end of 2012 to 6.4 million at the end of 2013, an increase of 3.1 million. The Group used bank financing to complete the funding of acquisitions and to settle the Spanish dispute. The net financial debt to equity ratio increased from 8.8% at the end of 2012 to 16.3% at the end of 2013. The Solving Efeso International parent company financial statements recorded sales of 10.4 million and net profit of 1.8 million, compared with a loss of 0.4 million in 2012, which was due to the 2.15 million transaction to finalise the Spanish dispute. 3
2/ 33% increase in proposed dividend Given the continued improvement in the Group s financial position, the payment of a dividend of 4 cents per share will be proposed to the General Meeting of 31 May 2014, an increase of 33% compared with the previous financial year. 3/ Development dynamic in growth markets Solving Efeso International is pursuing an aggressive strategy to gain market share and to position itself in growth sectors, via the acquisition of companies recognised within their field of excellence and through the expansion of its geographic coverage. In 2013, the Group merged three entities acquired in 2012 and enhanced its range of new expert services with high added value: In the field of Change Management, a service sought by clients requiring operational support in the implementation of a strategy, in late 2012 the Group acquired two Dutch companies specialised in this area: Flecto BV and RightSelect.com BV. Flecto BV has developed a specific approach that can be measured and easily integrated, called Performance Behaviour, which improves performance by involving employees and providing them with the tools to harness Change Management. This innovative approach now forms part of Solving Efeso s range. In Cost, Purchasing, Supply Chain and Innovation Management, in November 2012 the Group acquired Blupeter, an Italian specialist company renowned for these services, thus enabling it to secure new contracts in Italy. In February 2013, the Group finalised the creation of a subsidiary in Singapore, to support the Group s major clients and to secure a new, rapidly growing local client base in Asia, outside China and India. This subsidiary recorded sales of 0.6 million in 2013. These mergers confirm Solving Efeso International s capacity to successfully integrate complementary businesses and markets capable of generating development momentum. 4/ Outlook Kennedy Information LLC s Global Consulting Marketplace 2011-2014 study confirms the trends previously noted. Firstly, Performance Improvement and Brand Strategy Consulting activities are meeting a changing demand and will continue to grow more rapidly than Strategic and Organisational Consulting. Secondly, growth in consulting will be stronger in emerging countries, especially in Asia-Pacific and Latin America, than in developed economies. In line with the momentum in the sector, the Group has built on its flagship offer in Operational Excellence, WCOM, and on its operations in emerging countries to accelerate its growth. In light of the fourth quarter performance, and in an uncertain macroeconomic environment, the Group s objective this year is to outperform growth in its markets while increasing operational profitability at a more rapid pace than sales for the fourth consecutive year. The seasonal fluctuations of 2014 are expected to differ from those experienced in 2013, with stronger growth over the second half as production in relation to new projects currently being launched increases. 4
Shareholders agenda: First quarter 2014 sales: 25 April 2014 (after market close) Contacts: David AUREGAN, Chief Financial Officer Tel: (+33-1) 53 53 57 00 - info.investor-relations@solvingefeso.com Antoinette DARPY, Press Tel: (+33-6) 72 95 07 92 adarpy@tobnext.com SOLVING EFESO INTERNATIONAL is a global leader in corporate strategy and operational performance improvement consulting and is positioned as a niche specialist, capable of providing unique long-term support. Created in 2007 as a result of the merger of two leading niche corporate consultancy firms, the Solving International Group employs a workforce of more than 300 consultants and is established in 23 countries (Europe, Middle East, Asia and North and South America.). www.solvingefeso.com Solving Efeso International shares trade on Alternext Paris Free float: 20% Date of IPO: 02/07/1998 Number of outstanding shares: 22 377 352 Code: 6467 ISIN: FR0004500106 Bloomberg: ALOLV:FP Ticker: ALOLV Reuters: ALOLV.PA This document may contain forward-looking statements (particularly with regard to targets and trends) and forward-looking statements concerning Solving Efeso s financial position and performance, its operations and its strategy. Such disclosures and statements are based on data or assumptions that could ultimately prove inaccurate and are subject to a number of risk factors, and in particular currency fluctuations and general economic and financial conditions. Solving Efeso does not assume any duty or responsibility towards investors or towards any other party to update or revise, whether as a result of new information, future events or otherwise, all or part of the statements, forward-looking information, trends or targets provided in this document. 5