(Boursier.com) — The cross fall of 10% to 23.40 euros this Wednesday, while in 2023, the group’s turnover stood at 761.2 million euros, in line with the cap set by the Group (higher than 750 ME). Activity was up 7.5% (+7.2% at constant exchange rate). Obtained entirely through internal growth, this solid performance was achieved despite a demanding basis of comparison (+8.6% growth in 2022 on a comparable basis). It results from contrasting dynamics, very sustained in the first half of 2023 (+14.6%) and weaker in the second half (+1.1%), linked to the slowdown in Electronics activity.
Over the entire financial year, LACROIX’s current EBITDA stood at €41.6 million, representing a margin rate of 5.5% compared to 6.3% in 2022. This decline is entirely due to the subsidiary’s difficulties. LACROIX Electronics North America, and for which exceptional inventory differences totaling €3.1 million were also recorded. Excluding LACROIX Electronics North America, the current EBITDA margin would have reached 6.5%.
LACROIX’s current operating profit stood at €17.8 million in 2023, a margin of 2.3%. After taking into account non-recurring items, notably linked to the ongoing sale of the Signaling BU and the exceptional amortization of intangible assets, operating profit came to €3.8 million for the financial year.
After accounting for financial charges (-8.5 ME) and a positive tax balance (+1.9 ME) from the activation of deferred taxes, the Group’s share of net income stands at 4.3 ME , compared to 11.9 ME in 2022.
A strengthened financial structure
As of December 31, the Group’s equity is almost stable at 190.1 ME, compared to 193.9 ME a year earlier. At the same time, net debt was reduced from 138.8 ME to 112.9 ME, leading to a sharp drop in gearing, to 59% at the end of 2023 (compared to 72% at the end of 2022). This level remains well below the 80% ceiling set for 2025.
The drop in net debt is notably linked to very good control of WCR. Despite the increase in activity, the WCR is down by 8.9 ME over 2023, reflecting the normalization of the inventory level after the significant overstocking in 2022, linked to tensions on the supply of electronic components.
Quoting…
In accordance with the shareholder remuneration policy usually practiced by the Group, a distribution rate of approximately 30% of restated net profit is proposed for the 2023 financial year. A dividend of 0.70 euros per share will thus be subject to the vote at the general meeting of May 17, 2024.
New progress in the deployment of the 5 strategic pillars Leadership2025
During the 2023 financial year, the Group continued its strategy of increasing value based on the five strategic pillars defined as part of the Leadership2025 plan; this strategy should enable it to establish itself as a global leader in industrial IoT solutions and electronic equipment for critical applications.
LACROIX has thus strengthened its technological leadership by continuing the deployment of IoT platforms generating synergies in three areas of expertise (Edge/Cloud, Low power, Cybersecurity) and the enrichment of its network of technological partners. Geographically, the strengthening of local roots in the 3 key markets (France, Germany, North America) was accompanied by an acceleration in areas with high potential, including the Middle East. In terms of industry 4.0, the progress made through increased automation and digitalization of operational flows continued, embodied in the strong dynamics of the Beaupréau factory (Symbiose), whose turnover increased by 30 % in 2023, well beyond the objectives.
LACROIX is also moving forward in the transition of its model towards the sale of recurring services with the gradual growth in sales of its software applications for the City and Environment activities.
Another major strategic step forward, in March 2024, the Group finalized the sale of the Signaling segment to the American company AIAC, in accordance with the announced schedule.
For the 2023 financial year, this segment generated a turnover of €59 million.
2024 financial objectives: increase in turnover and profitability
At the end of a financial year marked by solid growth and good resilience of its profitability, LACROIX expects a year 2024 to be mixed depending on its markets.
The Group continues to benefit from very good visibility on the Environment and City activities, with strong order books auguring solid commercial and operational performances. In 2024, dynamic growth is expected in several segments with high profitability within the Environment (Water, HVAC, Smart Grids) and City (Public Lighting) activities, with however the City – Traffic Management segment which should experience greater dynamics. difficult.
For its part, the Electronics activity in EMEA should continue to benefit from positive dynamics in the Industry and Avionics markets; on the other hand, visibility remains low in the HBAS and Automotive segments. This will have an impact on profitability which may not improve despite the continued improvement of the product mix and optimization of the customer portfolio, combined with price increases intended to compensate for salary inflation.
If the strategic interest of LACROIX Electronics North America is confirmed through the structuring opportunities of new transatlantic projects with strategic customers, its operational recovery is a priority in 2024.
The group has initiated a proactive action plan from the last quarter of 2023 materialized by the strengthening of local management and a review of the commercial policy (price increases). The challenge at the start of 2024 is the launch of the complete integration of the North American entity with an emphasis on securing processes and pursuing synergies.
At the same time, the ramp-up of the new Juarez site, operational at the start of 2024, will continue and will make it possible to resize production capacities, resulting in a normalization of productivity.
Taking into account the economic uncertainties of 2024, LACROIX plans to achieve a turnover excluding signaling greater than 710 ME in 2024, up slightly compared to its level in 2023 excluding Signaling (i.e. 702 ME). The current EBITDA margin is expected to exceed its 2023 level, in a range of 5.5% to 6.5%.
By 2025, the Group confirms that it is targeting a turnover target of €800 million, conditional on a more favorable evolution of demand in the automotive and HBAS markets and the completion of an external growth operation. An EBITDA margin of around 9% remains the objective, but, realistically, it seems difficult to achieve from 2025. LACROIX nevertheless remains fully confident in its ability to reach this new milestone in the medium term…
The scenario of revision of the expected margin (2024 Ebitda expected from 6.3% to 6%) is offset by better debt reduction according to Portzamparc who believes that the momentum still remains delicate, but “the worst is over”. Enough to aim for a price of 30 euros, compared to 31 euros previously with a notice to ‘reinforce’.