(BFM Bourse) – The digital services company exceeds one billion billings over one year, thanks to double-digit growth over its entire 2022/2023 financial year.
Discreetly but surely, SII announces that it has reached a symbolic milestone. The digital services company reached for the first time in its history the symbolic bar of one billion euros in annual turnover at the end of its staggered 2022-2023 financial year ended at the end of March.
The technology consulting group (IT, electronics and telecoms) and digital services (technical IT and networks) achieved a turnover of exactly 1.02 billion euros. This historic performance was fueled by a solid growth dynamic: SII saw its billings increase by more than 23% over one year.
By geographical area, the company’s revenues in France increased by 12.1% organically to reach 434.1 million euros. Even if growth in the country has decelerated over the quarters, it reached 13.8%, including 10% organic in the fourth quarter. SII’s performance over the period is “slightly above” Stifel’s expectations. In its note, the design office recalls that SII has generated double-digit organic growth just like its rival Alten, which nevertheless weighs three times more on the French market.
The slowdown in the outsourced R&D sector in France was ultimately “more limited” than anticipated by Stifel, which explains why the slowdown in SII in France was less significant than imagined by the design office.
>> Access our exclusive graphic analyses, and enter into the confidence of the Trading Portfolio
Poland, the growth engine of the group
It is therefore the international sector that has contributed the most to growth for SII. Outside our borders, the activity of the group created by Bernard Huvé in 1979 continues to grow and reached nearly 590 million euros in turnover over the period, i.e. an increase of 33.8% in organic terms compared to the 2021/2022 financial year.
In detail, Poland, which contributes two-thirds of international turnover, posted growth of 30%. The share of Poland is explained by the fact that this is where SII established itself in 2006 by creating SII Poland – the first of its 18 current subsidiaries.
Here too, Stifel praises the performance of SII in Poland which is “the main driver of growth outside France”. The group recorded “once again good performance, despite a high inflationary context (16% year-on-year in March in this country),” adds the research department.
“With the exception of Spain, all geographical entities contributed to this growth, fueled by a high activity rate and continuous commercial development”, specifies Eric Matteucci, Chairman of the Management Board of SII.
An exceptional stock market performance for 10 years
For the other lines of the income statement, investors will have to wait until Tuesday, June 6, the date of publication of SII’s annual results. The digital services company gave a few indicative elements ahead of this annual update. It has confirmed that it wants to achieve an operating margin of between 9 and 10% over the whole financial year.
“The most important driver of the group’s profitability is SII Poland which represents around 70% of SII’s profits and should cap at 15% at the level of EBIT (operating result, editor’s note)”, according to Stifel.
“In France, the investment effort to strengthen relationships with major clients and the compression of margins linked to inflation are weighing on the margin. Outside of France and Poland, the restructuring of SII Spain is slowing down the margin evolution, while SII Germany should start to reap the benefits of the recent restructuring” adds the research office.
For the 2023/2024 financial year, the management is a little more cautious, which “underlines low visibility” for Stifel. SII intends to continue its development “through a dynamic of organic growth higher than that of its market”. The company will specify its roadmap when publishing its 2022/2023 results in order to take “taking into account all the elements of context” part of which “darkens visibility”.
“The group still aims to outperform its market, which supports our conservative revenue estimates for the 2023/2024 financial year, with growth of +7%. We also see a stable margin in a still inflationary environment”, advances the design office which is the buyer of the file with a target price of 60 euros.
On the stock market, the annual performance of SII goes unnoticed, the title gaining only 0.4% to 50.20 euros, around 4:20 p.m. The action of the digital services company is however evolving not far from its historic highs at 55 euros, hit last February. Since the start of the year, the stock has therefore risen by 10% and has even enjoyed an exceptional stock market performance for much longer, its value having increased more than tenfold over the past 10 years.
Sabrina Sadgui – ©2023 BFM Bourse
Are you following this action?
Receive all the information about SII in real time: