DJ 2CRSi SA: First half trading update and results. Stronger business momentum in the second half of the year. 2020-21 annual target confirmed: full year revenue of ?170-200m expected.
2CRSi SA
2CRSi SA: First half trading update and results. Stronger business momentum
in the second half of the year. 2020-21 annual target confirmed: full year
revenue of €170-200m expected.
01-Dec-2020 / 01:07 CET/CEST
Dissemination of a French Regulatory News, transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
Press release
First half 2020-2021 results
First half trading update and results:
· Revenue of €78.5m, in line with the objective of €170-200m
revenue for the full year
· EBITDA of €1.1m despite strong increase in procurement costs due to
COVID and structuring costs
Stronger business momentum in the second half of the year
2020-21 annual target confirmed: full year revenue of €170-200m expected
Strasbourg (France), 30 November 2020 - 2CRSi, a designer and manufacturer
of high-performance, energy-efficient servers, today presents its results
for the first half of 2020-2021 (from 1 March 2020 to 31 August 2020).
The Board of Directors met on 30 November 2020 to approve the Group's
financial statements for the period ended on 31 August 2020. The auditors'
limited review of the consolidated financial statements is ongoing. The
consolidated financial statements will be released within the next few days.
Due to the integration of Boston Limited, which did not previously produce
interim figures, and the alignment of 2CRSi and Boston's reporting dates on
28 February (with the 2019/2020 financial year exceptionally lasting 14
months), comparable data for the first half of 2020/21 are not available.
H1 2020-21 RESULTS
A satisfactory level of activity
As announced in the publication of H1 revenue on 13 October 2020, 2CRSi
generated a satisfactory level of business, with revenue of €78.5m over
the period. The historic reporting scope recorded an increase in revenue to
€24.5m, compared with €21.5m in the first half of 2019 (from 1
January to 30 June 2019).
Trading is in line with the Group's targets for the full year. Business is
traditionally stronger at the end of the calendar year.
In addition, 2CRSi made further progress on all its strategic priorities
over the period: (i) internationalisation of business, (ii) diversification
of the client portfolio and (iii) the ramping up of business activity, the
impact of which is not yet fully reflected in first half revenue.
EBITDA of €1.1m despite the impact of COVID on procurement costs and
investments in staff to support growth
2CRSi recorded EBITDA of €1.1m in the first half of 2020-21. As well as
reflecting a satisfactory level of business, this profitability reflects a
combination of factors.
First, the health crisis caused a temporary increase in procurement and
transport costs, which has continued in the second half of the year. This
increase in costs was only partially offset by the improved purchasing terms
arising from the acquisition of Boston Limited. Overall, this had a negative
impact on the gross margin on orders during the period.
Secondly, as expected, the Group's profitability reflects recent structural
expenses incurred by the Group. Attracting the best talents is in fact key
to support and accelerate growth and seize all opportunities on its markets.
These expenses included the hiring of more experienced staff, especially in
the marketing and sales teams. In addition, the large number of new hires
made at the end of the previous period had an impact over the entire first
half of the year compared with just a few months in the 14-month 2019-20
financial year.
Simplified income H1 2020-21 FY 2019-20 H1 2019
statement - ongoing pro forma[i]
limited review
12 months
In millions of EUR -
IFRS[1]
6 months 6 months
1 March 2020 1 March 2019 - 1 January 2019
- 29 February -
31 August 2020 30 June 2019
2020
Revenue 78.5 141.1 21.5
Change in finished 1.1 0.2 0.8
goods inventories
Other ordinary 0.2 0.8 0.3
operating income
Revenue from 79.8 142.0 22.5
ordinary activities
Consumed purchases (65.6) (109.0) (17.6)
External charges (4.2) (11.7) (1.9)
Personnel expenses (8.5) (16.8) (3.7)
Tax (0.4) (0.6) (0.2)
EBITDA 1.1 3.8 (0.8)
EBITDA margin 1.5% 2.7% (3.9)%
Other current - (0.6) -
operating income and
expenses
Depreciation, (3.2) (4.8) (1.4)
amortisation and
impairment
Current operating (2.1) (1.6) (2.2)
income
Operating profit (2.1) (1.7) (2.2)
Financial income (1.0) 0.9 (0.2)
(expense)
Consolidated net (2.6) (0.6) (2.2)
income (expense)
Net income (Group (2.5) (0.8) (2.2)
share)
In the first half of 2020-21, current operating income amounted to
€(2.1)m, for revenue of €78.5m, compared with €(2.2)m in the
first half of 2019, when revenue came to €21.5m. For the full year
2019-20 (pro forma), the loss came to €(1.6)m, for revenue of
€141.1m. The change in current operating income was mainly due to the
increase in depreciation, amortisation and impairment recorded for the
amortisation of right-of-use assets on real estate leases (IFRS 16), in
particular in Nanterre and Strasbourg, over the period.
Taking into account net financial income, which includes the cost of debt
and financial income from server finance leases, and taxes on benefits,
consolidated net income Group share came to €(2.5)m in the first half of
the year.
Financial position
Simplified consolidated balance 31 August 2020 29 February 2020
sheet - ongoing limited review
In millions of EUR - IFRS
Goodwill 6.7 7.1
Intangible assets 15.5 15.8
Property, plant & equipment 22.1 23.6
Non-current financial 15.1 10.9
receivables
Other non-current assets 4.7 4.0
Total non-current assets 64.1 61.4
Inventories 38.9 34.5
Trade receivables 22.7 21.8
Other current assets 11.4 17.8
Current financial receivables 11.6 11.8
Cash and cash equivalents 5.3 10.2
Total current assets 89.9 96.1
TOTAL ASSETS 153.9 157.5
Capital attributable to equity 43.5 47.2
holders of the parent
Non-controlling interests (0.2) (0.1)
Consolidated capital 43.3 47.1
Borrowings and financial debt 52.6 53.0
(including lease liabilities)
Other non-current liabilities 3.2 3.5
Total non-current liabilities 55.7 56.5
Trade payables 22.3 20.3
Financial liabilities (including 16.9 16.6
lease liabilities)
Other current liabilities 15.7 17.0
Total current liabilities 54.9 53.9
TOTAL LIABILITIES 153.9 157.5
At 31 August, inventories had risen to €38.9m, compared with €34.5m
as of end-February, mainly due to business growth and the building of
inventories for forthcoming deliveries. The level of inventories at 31
August 2020 was equivalent to just over three months of revenue (on an
annual basis).
The strong level of business was also reflected in the increase in trade
accounts receivable to €22.7m (versus €21.8m at the end of February)
and the rise in trade accounts payable to €22.3m (from €20.3m at the
end of February). Current and non-current financial receivables, comprising
finance leases signed with clients (in particular Blade and Linkoffice),
also increased to €26.7m, compared with €22.7m at 29 February,
reflecting the fact that order deliveries rose at a stronger pace than the
settlement of these financial receivable.
Gross financial liabilities excluding lease liabilities (IFRS 16) at 30
August 2020 were stable at €52.9m, versus €51.9m at end-February
2020. It includes €11.6m of a liability related to minority shareholders
in Boston Limited recorded as debt (earn-out and exit option), as well as
€3.5m of debt related to preference shares.
The Group's net cash position stood at €3.1m at 31 August 2020. In
addition to cash, the Group also has available undrawn credit lines
totalling €7.9m. Furthermore, at the end of September, after the
reporting date, the Group has secured a State-guaranteed loan (PGE) of close
to €10m. Taking into account increasing available cash and undrawn
credit lines at end of November, the Group does not anticipate any cash flow
issues in the short term.
Impact of the health crisis in the short term
In addition to impacts on procurement and transport costs mentioned above,
the health crisis has also disrupted the timetable of certain projects with
longer customer investment decision-making, and delivery and installation
delays. The length of delays depends on the restrictions in place in the
countries concerned.
However, while the health crisis remains a source of uncertainty for the
short term, market fundamentals remain strong.
OUTLOOK
2CRSi's products and services fulfil market expectations more than ever. On
top of its positioning on high performance energy-efficient servers, 2CRSi
proceeds further with its innovation policy to maintain a clear
technological edge.
As mentioned above, although the health crisis has affected the Group's
results in the short term, it will also accelerate in the long term the
requirements 2CRSi intends to meet.
In the months to come and beyond, the Group anticipates an escalation in
demand in its five key vertical segments: cloud computing and 5G, gaming
(two markets that have been boosted by the current crisis), financial
services, industry and defence, and cyber security. 2CRSi will also begin to
reap the rewards of its acquisition of Boston Limited in the coming months.
This integration, which was inevitably hampered by the health crisis, is now
advancing well and the teams are beginning to implement the synergies
arising from the new Group and to promote the complementary nature of their
products and services.
With its solid fundamentals and the sales efforts made in recent years,
2CRSi has already noted an upturn in its business momentum. Following the
orders taken in from Linkoffice and Blade (€25m of which 60% is expected
in the second half), new recent wins including 2CRSi being chosen by OVH,
European cloud leader, to supply servers for its Asian data centers, and
go2cloud, a major European provider of high performance computing (HPCaaS),
to supply additional server capacity in Europe and in the Middle East. These
successes are displays of the recognition of 2CRSi's products and solutions
by market leaders.
Furthermore, the Group should also benefit from the traditional seasonal
increase in activity at the end of the calendar year. Its outlook is thus
positive, despite enduring uncertainties caused by the public health crisis.
Based on its current position, and with a close eye on developments in the
health crisis, 2CRSi maintains its target for full year 2020-21 revenue of
between €170m and €200m. This growth in revenue should automatically
increase its profitability.
- END -
About 2CRSi
Founded in Strasbourg (France), 2CRSi group develops, produces and sells
high-performance customised and environment-friendly servers. In the
financial year 2019/2020, the Group achieved pro forma turnover of
€145.3m. The Group today has approximately 350 employees and markets its
offer of innovative solutions (processing, storage and network) in more than
50 countries. 2CRSi has been listed since June 2018 on the regulated market
of Euronext in Paris (ISIN Code: FR0013341781) and is included in the
European Rising Tech label. For further information please visit:
www.2crsi.com [1]
Contacts
2CRSi Actifin Actifin
Marie de Lauzon Simon Derbanne Jennifer Jullia
COO Financial Communication Financial PR
investors@2crsi.com sderbanne@actifin.fr jjullia@actifin.fr
+33 3 68 41 10 70 + 33 1 56 88 11 14 + 33 1 56 88 11 19
=---------------------------------------------------------------------------
[1] The application of IFRS 16 (recognition of leases in the consolidated
financial statements) had no impact on the financial statements of the
period, as the standard was already applied by the Group on all fiscal
presented here.
=---------------------------------------------------------------------------
[i] The pro forma income statement for the 12 month-period running from
March 1, 2019 to February 29, 2020 was based on:
· Group 2CRSi's historical consolidated accounts for the 14-month period
from which were deducted the consolidated accounts prepared for the period
running from January 1, 2019 to February 28, 2019 on the same scope of
consolidation basis.
· The addition of Boston Limited group's consolidated income statement for
the period from March 1, 2019 to February 29, 2020, assuming adjustments
to fair value as measured at November 18, 2019 would have been identical
at March 1, 2019.
Regulatory filing PDF file
File: 2CRSi RS EN [2]
Language: English
Company: 2CRSi SA
32, rue Jacobi-Netter
67200 Strasbourg
France
Phone: +33 3 68 41 10 70
E-mail: investors@2crsi.com
Internet: www.2crsi.com
ISIN: FR0013341781
Euronext Ticker: 2CRSI
AMF Category: Inside information / News release on accounts, results
EQS News ID: 1151722
End of Announcement EQS News Service
1151722 01-Dec-2020 CET/CEST
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(END) Dow Jones Newswires
November 30, 2020 19:07 ET (00:07 GMT)
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