Growing, solid and profitable Esker

Interesting interview with Jean-Michel Bérard, CEO of Esker, at the Oddo BHF Forum. The manager founded this company 36 years ago and has remained a major shareholder (6 to 7% of the capital), alongside American funds in particular. The company is indeed known in the United States, where it generates 42% of its turnover. Esker helps companies in their digital transformation by offering a subscription-based IT solution (Saas mode) to support two major administrative cycles, customer and supplier orders and invoices.

The solution ” doubles the productivity of an accountant », Explains the leader, compared to the traditional process based on printed documents. In addition, data hosted in the cloud is proving to be more secure than within the company… Esker has its own hardware, but it will disappear very gradually since, since 2015, the hosting is done on the servers of Microsoft Azure. Well distributed around the world, they make it possible to meet the strong demand from companies for localization of data in their own territory.

Esker is very profitable, with a net margin of 12% in the first half of 2021, despite significant R&D costs (12% of turnover). Its growth is strong, with a revenue target of over 130 million euros for 2021 (+ 18%). It is true that half of the companies in the world have not yet digitized their accounting services.

The balance sheet is particularly strong with 40 million euros of net cash and a similar amount invested in treasury shares. Jean-Michel Bérard estimates the strike force available for acquisitions ” between 100 and 120 million euros “, But he notices that” targets are paid 15 to 20 times their annual sales ”, Even beyond Esker’s valuation ratio of 12 to 13 times. The competitors are of similar size, with no dominant player. External growth is rather envisaged in areas that would complement Esker’s solution, for example fintechs specializing in payment or treasury management.