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Half year results 2020: Net margin rate stable at 9.7%

Neuilly-sur-seine

 

 

H1 2019

H1 2020

Change

REVENUE

84.8

78.5

-7.4%

EBITDA

% of revenue

21.5

25.4%

18.4

  23.4%

 

-14.6%

OPERATING PROFIT

% of revenue

13.3

15.7%

9.8

  12.5%

 

-26.4%

NET INCOME

% of revenue

8.2

9.7%

7.6

  9.7%

 

-7.4%

 

          Rounded, audited figures (€M)

 

Neuilly-sur-Seine, September 9, 2020 Linedata (LIN:FP), a global solutions and outsourcing services provider for asset management, insurance, and credit professionals, showed a moderate decline in its profitability indicators for the first half of 2020 in a global economic environment impacted by the Covid-19 health crisis.

 

The Group achieved half-year revenues of €78.5 million, down 7.4% compared to the first half of 2019. This erosion of revenue is more pronounced in client segments that rely more heavily on consulting and customization resources, due in particular to difficulties for employees to access client sites. Conversely, SaaS (Software-as-a-Service), recurring license rental fees and maintenance are trending well with an overall growth of €1.4 million in recurring income to €64.5 million, representing 84% of total turnover.

 

EBITDA stood at €18.4 million, down 14.6% compared to the first half 2019. The €3.1 million decrease is explained, on the one hand, by the contraction in half-yearly revenue and, on the other, by Linedata’s desire to retain its talents and accelerate the major transformation projects of the Group’s offerings. As a result, many consulting and research resources were reallocated to strategic R&D projects focused on the future. This figure also includes €1.0 million in restructuring costs. The EBITDA margin remains robust at 23.4%, down only 2 points compared to the first half of 2019.

 

EBITDA margin analysis

 

EBITDA Margin Rate

H1 2019

H1 2020

Asset Management (*)

25.2%

24.9%

Lending & Leasing

25.6%

19.7%

 

Total

25.4%

23.4%

 

(*) The “Other” segment consisting of insurance and retirement savings has been integrated into Asset Management

For the first half of 2020, the Asset Management segment posted a more-or-less stable margin rate, close to 25%, despite the decrease in revenue. This good performance is explained by the proportion of recurring income in the business model, which contributes more strongly to profitability.

 

Conversely, the EBITDA margin for the Lending & Leasing business line, with revenue declining 17.7%, was down around 6 points.

 

Result analysis

 

Operating Income reached €9.8 million, down 26.4%, due  to exceptional provision reversals in 2019.

 

Financial income amounted to -€1.0 million compared with -€1.9 million last year. The improvement is mainly due to exchange rate effects. The €1.2 million tax on profits was down €2.0 million compared to the same period in the previous fiscal year, due in particular to the implementation in France of the IP Box system, which allows income from software protected by copyright to benefit from taxation at a reduced rate of 10%.

 

Net result for the first half of 2020 amounted to €7.6 million, i.e. a net margin rate of 9.7%, stable compared with first half of 2019.

 

Balance sheet analysis

 

As of June 30, 2020, shareholders’ equity represented €116.5 million, down €2.1 million compared with the situation at December 31, 2019. This decrease reflects the dividend to be paid in the amount of €6.3 million and the acquisition of the company’s own shares for the amount of €1.2 million.

 

The Group continued its deleveraging efforts in early 2020. Net debt, excluding the impact of IFRS 16 rental liabilities, totaled €65.2 million, down €11.6 million from the end of the previous fiscal year. This represents 1.7 times the EBITDA (on sliding 12-month basis).

 

Outlook

 

The Group anticipates a better trend for revenues in the second half of the year and an improvement in its operating margin.

 

Next announcement: 3rd quarter 2020 revenue, on October 21, 2020

 

 

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For more information, please contact:
Finance Department
Tel: +33 (0)1 73 43 70 27
@ infofinances@linedata.com
Cap Value
Financial communication - Gilles Broquelet
Tel: +33 (0)1 80 81 50 00
@ info@capvalue.fr