Reply, which released its Q1 results on Friday, continues to outperform the broader economic climate: both revenue and operating profit rose by over 6% y-o-y, with positive momentum across all regions and sectors, barring Germany and the logistics vertical.
The group has enjoyed a decade of exceptional growth, tripling its revenue and quadrupling its operating profit. It also boasts some of the highest profitability levels in the industry, almost matching Accenture, largely due to its long-standing expertise in offshoring services to low-cost jurisdictions, particularly India.
Reply remains perfectly capitalized, with no net debt and €775m in free cash, while its cash flow momentum remain very healthy. Overall, the group generated a total cash profit - or free cash flow - of €1.7bn between 2016 and 2025, of which €650m were deployed into acquisitions and €240m were paid out as dividends.
Relative to the profit growth observed over the cycle, the value creation achieved through this external growth strategy has been nothing short of staggering and, to MarketScreener's knowledge, unparalleled in the IT consulting sector. While the advent of artificial intelligence does not threaten Reply's core business - a point on which opinions may differ - it could serve as a further catalyst for growth.
The group, controlled by its discreet founder and renowned strategist Mario Rizzante - who still holds over a third of the capital - is currently valued at its lowest levels in ten years.
