(Boursier.com) — Largo an eco-responsible French industrial player and expert in the reconditioning of high-tech products, today publishes its annual results ending December 31, 2023 and its turnover for the first quarter of 2024.
Largo achieved a 2023 turnover of 21.2 million euros, recording a slight increase in its activity (+1%) compared to the previous year.
The “Digital” sales channel, Marketplaces and Largo website, is the majority contributor to 2023 turnover (52% of sales vs. 23% in 2022), up +128% compared to 2022. The “Operators” sales channel represents 11% of the Company’s sales vs. 4% in 2022, an increase partly due to the signing, last year, of the partnership with Orange. Finally, the “B2B” sales channel also saw an increase over the year, following an increase of +71% in Q4 2023 compared to Q4 2022. This progression illustrates the growing share of this channel in the figure. business, notably stimulated by the increase in the number of Largo reseller partners. This new distribution of sales is in line with the strategic plan announced at the start of 2023, favoring higher margin sales channels.
During the past financial year, Largo marketed products purchased before 2023 for a turnover level of 5.3 ME. These sales were made with a lower margin rate. Over the entire year, Largo has sold 86% of the stock prior to 2023, which allows the Company to start 2024 with a cleaned-up stock whose margin will be significantly higher.
Indeed, restated for reversals of provisions linked to the marketing of products purchased before 2023, the gross margin rate stands at 22%, or 6 points more than in 2022. It even reaches 29% for products purchased and sold during 2023, validating the short circuit supply strategy and the need to prioritize sales on high-value channels.
After taking into account reconditioning costs, the restated margin rate stands at 8% over the period and 17% for products purchased in 2023, reflecting the beneficial effects of the new IS & BI (Business Intelligence) tools which make it possible to optimize the industrial management of the Company. Indeed, products purchased before 2023 show a margin after reconditioning cost of -989 KE for a turnover of 5.3 ME, significantly impacting the financial result for the year.
Largo recorded a 2023 EBITDA of -4.3 ME which includes the reversal of provisions on stock recorded in 2022 on products sold. The 2023 operating result stands at -5.1 ME compared to -4.6 ME in 2022.
In total and after taking into account a financial result of -0.2 ME, the net result amounts to -5 ME, a level similar to that recorded in 2022.
As of December 31, 2023, Largo’s cash flow amounts to 3.2 ME compared to 6 ME as of December 31, 2022. This level of cash is in accordance with the Company’s development plan and is explained by the drop in working capital linked to the implementation of the new strategy.
A record level of activity in Q1 2024 at 9.5 ME, +145% vs. Q1 2023
During its last publication, Largo announced a turnover target of +60% in the first quarter of 2024. Performance exceeded expectations, with a record turnover of 9.5 million euros, i.e. increase of +145% compared to the first quarter of 2023.
Like the end of 2023, this growth can be explained by the good dynamics of higher margin sales channels.
For the first time in Largo’s history, the “Operators” channel is the leading contributor to revenue with 43% of quarterly revenue. The “Digital” channel, Marketplaces and Largo.fr site, shows an increase of +74% compared to Q1 2023. This increase is supported by the growth in collection, the IS optimizations carried out, as well as by the improvement of the natural referencing of the Largo.fr site which increased by +88% over the period. Finally, the sales dynamic of the “B2B” channel initiated at the end of 2023 is confirmed during this first quarter with a turnover multiplied by 4.7 compared to Q1 2023.
This continued growth is the result of the development of a strong network of Largo reseller partners, as well as the expansion of the range of products dedicated to companies seeking eco-responsible IT solutions.
Strategy and outlook for 2024: sales growth and continued improvement in profitability indicators
In 2024, Largo will continue the successful execution of its strategic plan which has already borne fruit with a sharply increasing gross margin rate. To achieve this, the Company will endeavor to:
increase short circuit supply, in particular by expanding the range of products sold;
optimize the value of products through industrial management and the use of Business Intelligence tools for financial performance;
strengthen the development of virtuous sales channels.
In parallel with the improvement of its profitability indicators, the Company also intends to return to a more sustained commercial dynamic than in 2023, similar to the first quarter of 2024.
Christophe Brunot and Frédéric Gandon, Co-founders of Largo, declare: “2023 was marked by the success of our strategic repositioning, the objective of which was to improve the profitability of Largo, as evidenced by the increase in our financial indicators. This This improvement is explained by the numerous achievements carried out on our 3 strategic pillars, namely: the acceleration of short circuit collection, the optimization of industrial management and the progression of higher value sales channels. the year 2024 with a cleaned-up stock, which translates into higher margins. This situation allows us to continue improving our profitability. Finally, the signing of the contract with Orange is also a structuring achievement of the year. elapsed and is reflected in a strong acceleration in first quarter sales on the “Operators” channel. In 2024, our objective will be to continue the commercial dynamic initiated in the first quarter while continuing to improve our profitability indicators on a completely renewed stock. .
Next financial communication: 2024 half-year turnover, Tuesday July 23, 2024.