** Excluding acquisition costs and excluding the amortisation of the intangible assets acquired
- Robust growth in revenue and Licenses activity
As announced on March 21 2012, consolidated annual revenue saw growth of +11.9%, with business volume at €94.2 million.
The key indicators were positive over the financial year:
- License sales increased by +11.2%,
- The License installed base was up +10.5%,
- License repeat business remained at a very high rate of 87.4%,
- License New Business grew +21.8% to €15.9 million,
- Services sales were up +13.9%, at €25.4 million.
- Gross margin stable at 70%
The gross margin remained stable at 70% of sales, despite the increasing proportion of services business. The differential growth of the activity mix reflects increased Services as ESI Group’s teams support implementation of methodological changes by our customers.
- Improvement in EBITDA
EBITDA totalled €10.5 million, an increase of +17.1% over the previous fiscal period; in 2011/12 the EBITDA margin was 11.1%, up from 10.6% in 2010/11. There was a €0.2 million perimeter impact resulting from the Group’s acquisitions but this is not significant given the short consolidation period over the year (IC.IDO was integrated on August 24, 2011 and Efield on December 9, 2011). Organically (excluding the scope effect), the EBITDA margin improved to 11.3%.
- Control of costs structure
In 2011/12, ESI Group maintained its high level of R&D investments, which were up +7.1% in volume and represented 27.2% of Licenses sales compared to 28.2% the previous year. R&D costs were up +5.2%, of which only +0.4% was organic.
Sales & Marketing costs increased by +9.8% to €28.8 million, or 30.6% of sales compared to 31.2% the previous year. Organically, the increase was just +6.7%.
General and Administrative costs were up +12.4% at €11.9 million, compared to €10.6 million in 2010/11 and +10.4% organically. This increase was notably due to structural IT expenditure.
- Improvement in current operating profit
Current operating profit increased by +27.4% to €10.3 million. The 2011/12 current operating margin improved to 11.0%, versus 9.6% in 2010/11.
- Increase in attributable net profit
Attributable net profit increased by 10.4% to €6.0 million, compared to €5.4 million in 2010/11. Net profitability was affected by a higher tax burden than in 2010/11, which is now closer to the normative level. All in all, the 2011/2012 net margin was almost stable at 6.4%.
- Sound financial structure and strengthened financial capacity
The Group had €7.7 million in available cash at the end of the financial year, an increase of €0.9 million over the year. The financial structure remains very solid, with gearing (long-term financial debt over shareholders equity) of 17%. The increase in gearing (from 6% at the end of 2010/11) is the results of an initial drawdown on the syndicated loan renewed in November 2011. This 30 million euro 7-year credit line illustrates the confidence that the banking community has in the Group with its acquisition strategy.
At January 31 2012, ESI Group held 7.25% of its own capital.
Key points and recent events
- Sharp increase in activity from key industrial accounts and continual upramping of BRIC countries
Revenue from our top twenty clients increased by +24% over the year,
twice the global growth. This emphasizes the fact that ESI Group’s major
clients, who already have a substantial number of licenses installed,
are also those who are preparing for significant acceleration in their
use of end-to-end virtual prototyping solutions to support development
of key product elements. BRIC countries (Brazil, Russia, India, China)
now represent 11.5% of sales booking, compared to 10.3% in 2010/11. This
increase reflects the intention of these new and fast-growing economies
to commit to offer high-quality, innovative products at competitive
prices. The systematic integration of virtual prototyping is proving to
be crucial to good decision-making within the ‘product/process’
production cycle, while strengthening the technological contribution and
sustaining the competitive advantages of low labour costs.
