H1 2021-2022 results Stable earnings in the period
• H1 2021-2022 revenue: €281m (+1%)
• EBITDA1 steady at €23m with an EBITDA margin of 8.2%
• Cash flow2 stable at €22m (vs. €23m for the same period last year)
• FY 2022-2023 revenue target moved forward one year to reflect uncertainties related to changes in PlanetArt's customer acquisi-tion methods (with no impact on the EBITDA margin target)
This press release presents Group consolidated figures prepared on the basis of IFRS that were subject to a limited review.
"With €281m in revenue and €23m in EBITDA in H1 2021-2022, we were successful in stabilizing earnings despite the unprecedented context, particularly for PlanetArt, impacted by the combined effects of the end of lockdown measures, supply chain constraints that continued during the year-end holiday season and a struc-tural transformation in customer acquisition channels. However, by leveraging its strategic strengths based on a fabless3, multi-channel and global approach supported by significant expertise in digital marketing, the division was able to overcome these challenges and outperform its competitors in terms of revenue growth, while maintaining its EBITDA margin.
With revenue of €51m and EBITDA of €8m, up 22% and 56% respectively over the period, Avanquest con-tinues to benefit from its move to a SaaS4 subscription-based business model. On this basis, the virtuous circle of subscription renewals is now boosting both its growth and profitability.
Finally, our IoT business has taken advantage of the improved COVID-19 situation to accelerate commercial deployments and expand its network of channel partners. World-class leaders like Sodexo are continuing to join our network, highlighting the interest of manufacturers in this maturing sector.
This first half performance offered further confirmation of the value of our diversified approach within a global context that nevertheless calls for considerable caution and has led us to postpone our medium-term reve-nue target.
Finally, it is not possible for me to speak during this period of renewed armed conflict in Europe, without hav-ing a thought for our Ukrainian partners and subcontractors. While Claranova has a limited commercial ex-posure to Ukraine or Russia, our Avanquest division has maintained close relationships for years with IT development and customer support partners based there. Our efforts are focused on supporting them on a daily basis during this tragic period" declared Pierre Cesarini, CEO of Claranova.
1 EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP aggregate used to measure the operating performance of the businesses. It is equal to Recurring Operating Income before depreciation, amortization and share-based payments including related social security expenses and the IFRS 16 impact on the recognition of leases. Details on the calculation of EBITDA are provided in the Appendix to this presentation.
2 Cash flow from operations before changes in working capital.
3 A business model that involves outsourcing production to third-party partners
4 Software as a Service.
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Paris, France - March 30, 2022, 6:00 p.m. (CET). Claranova reported revenue for H1 2021-2022 (July-December 2021) of €281m, up 1% at actual exchange rates and down 2% at constant exchange rates (-6% like-for-like5).
Despite an unprecedented and challenging environment, Claranova has maintained the level of its H1 2021- 2022 operating profit. Group EBITDA amounted to €23m in the period, in line with the level of H1 2020-2021, which had already registered a twofold increase. The Group's EBITDA margin also remained stable at 8.2%, compared with 8.3% in H1 2020-2021.
With €152m in cash and cash equivalents and an increase in financial debt6 to €150m, the Group's net debt amounted to -€2m at December 31, 2021 after taking into account the OCEANES bond issue and the buyout of the minority interests in the Avanquest division in respectively August and November 2021.
Claranova is still anticipating a gradual rebound in PlanetArt's growth over the next few quarters, after a phase devoted to restructuring its customer acquisition channels in response to the introduction of Apple's iOS 14.5, along with continuing momentum for Avanquest. However, lower growth in the period by the per-sonalized e-commerce division is expected to delay the achievement of the Group's medium-term objectives. Claranova is thus now expecting to reach the €700m revenue milestone at the end of FY 2023-2024.
The Group maintains its target for an EBITDA margin above 10% in FY 2022-20237.
In €mRevenue
EBITDA
EBITDA margin (% of Revenue)
Recurring Operating Income
Net Income
Net cash flow from (used in) operating activities
Of which Cash flow from operations before changes in working capital
Closing cash and cash equivalents
H1 2021-2022 | H1 2020-2021 |
281 | 278 |
23 | 23 |
8.2% | 8.3% |
20 | 21 |
4 | 11 |
52 | 40 |
22 | 23 |
152 | 118 |
Change
+1%
-
-0.1pt
-4%
-59% +31%
-3%
+29%
PlanetArt: personalized e-commerce remains resilient in an unprecedented market context
PlanetArt reported revenue of €227m, down 3% at actual exchange rates and 6% at constant exchange rates (-10% like-for-like)
And while this pace of revenue growth is considerably lower than the division's historical levels, it remains higher than that of its competitors and was achieved during a period of unprecedented market conditions. H1 2021-2022 was clearly impacted by the cumulative effects of post-lockdown impacts on online consump-tion, additional pressure on supply chains during year-end holiday period, and new constraints on targeted marketing within Apple's iOS ecosystem since the rollout of its App Tracking Transparency feature.
However, by combining its mostly fabless, multi-channel and global approach with the digital marketing ex-pertise of its teams, PlanetArt is continuing to strengthen its market position. The work carried out in the first half to redirect and diversify the division's marketing investments helped PlanetArt's revenue return to a level largely back on track in the second quarter (-1%, compared to -8% in the first quarter at actual rates).
5 Like-for-like (organic) growth equals the increase in revenue at constant consolidation scope and exchange rates.
6 Excluding the IFRS 16 impact on the accounting of leases
7 EBITDA as a percentage of revenue.
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New marketing initiatives launched in H1 2021-2022 helped contain the overall increase of variable costs (customer acquisition, logistics and raw materials) and partially offset the rise in the division's embedded fixed costs. PlanetArt preserved the profitability of its businesses with €17m in EBITDA, or an EBITDA mar- gin of 7.6% compared to 8.3% for the previous period.
In €m | Change |
Revenue | -3% |
EBITDA | -11% |
EBITDA margin (% of Revenue) | -0.7pt |
Avanquest: positive momentum initiated in prior periods remains on track |
H1 2021-2022 | H1 2020-2021 |
227 | 234 |
17 | 19 |
7.6% | 8.3% |
With €51m in revenue, Avanquest passed the symbolic €50m milestone in H1 2021-2022. The software pub-lishing division thus registered growth in revenue of 22% in actual rates in the first half (+17% like-for-like). Each software segment (PDF, Security, Photo) has contributed to this performance, with growth rates ex-ceeding 20% for all three verticals.
This positive momentum across the entire software portfolio confirms the success of the shift in business model implemented over the last few years. This growth is accompanied by the increasing contribution of recurring revenue, both from the acquisition of new subscribers and the renewal of existing subscriptions acquisition, which now stands at 60%8 and reinforces visibility for the future growth and margins of these activities.
This increase in recurring revenue also contributes to an improvement in operating profitability. The division achieved EBITDA of €8m, an increase of 56%, with an EBITDA margin of 14.7% compared to 11.5% for the previous period. This virtuous circle, which reinforces both Avanquest's growth and profitability, should help the division gradually raise the level of its standards in line with the best practices of the SaaS industry.
In €m | Change |
Revenue | +22% |
EBITDA | +56% |
EBITDA margin (% of Revenue) | + 3.2 pts |
myDevices: investments ramped up to accelerate commercial deployments |
H1 2021-2022 | H1 2020-2021 |
51 | 42 |
8 | 5 |
14.7% | 11.5% |
myDevices reported revenue of €2.3m during the period, an increase of 5% at actual exchange rates (3% like-for-like). Adjusted for non-recurring items related to the partnership with the US carrier T-Mobile, recog- nized in the prior year's first half, revenue in the first half grew 49% (46% like-for-like).
This performance reflects the acceleration of commercial rollouts that benefited from easing of COVID-19 restrictions in the division's main business sectors. In particular, at December 31, 2021, ARR (Annual Recur- ring Revenue) stood at €1.8m8, up 82% from one year earlier at constant exchange rates.
8 Based on management reporting
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myDevices has supported the acceleration of its commercial deployments through new investments over H1 2021-2022. In particular, the division has bolstered its sales teams to support this expansion. The IoT division's EBITDA registered a loss of €1.6m, up from a €1.0m loss one year earlier.
In €m | Change |
Revenue | +5% |
EBITDA | +63% |
EBITDA margin (% of Revenue) | -25,7 pts |
Group capital resources and cash flow amounts |
H1 2021-2022 | H1 2020-2021 |
2.3 | 2.2 |
(1.6) | (1.0) |
-72.2% | -46.5% |
Claranova ended H1 2021-2022 with cash and cash equivalents of €152m, up €62m from June 30, 2021, including €4m from net foreign exchange differences during the period. This increase reflected net inflows from operating activities of €52m, including €22m from operations and €35m from changes in working capital requirements in relation to June 30, 2021.
This increase in working capital reflects the seasonal nature of PlanetArt's businesses (significant activity during year-end festivities generating an exceptional peak in cash flow at the end of December) and its spe-cific business model (B2C9 distribution with negative working capital requirements).
Net cash flows used in investing activities represented an outflow of €61m at December 31, 2021. This in- cludes the impact of the cash payment for the acquisition of the minority interests in the Avanquest division finalized in early November 2021 representing an outflow of €48m, and to a lesser extent the acquisition of I
See Me! by the PlanetArt division in July 2021 as well as a joint investment in myDevices with Semtech.
Net cash flows from financing activities represented an inflow of €66m at December 31, 2021 Financing ac- tivities that impacted the Group's cash position included the strategic investment announced in August 2021 that included a €50m convertible bond issue (OCEANES) by the Group, and a reserved capital increase of €15m. Following the acquisition of certain assets of I See Me!, PlanetArt also obtained additional bank fi- nancing of US$11m in H1 2021-2022.
In €m
Cash flow from operations before changes in working capital
Change in working capital requirements (WCR)10
Taxes and net interest paid
Net cash flow from (used in) operating activities
Net cash flow from (used in) investing activities
Net cash flow from (used in) financing activities
Change in cash11
Opening cash position
H1 2021-2022 | H1 2020-2021 |
22 | 23 |
35 | 21 |
(4) | (4) |
52 | 40 |
(61) | (4) |
66 | 3 |
58 | 38 |
90 | 83 |
9 B2C or Business-to-Consumer refers to the process where businesses sell products and services directly to individual consumers.
10 Change in Working Capital Requirements in relation to the opening cash for the fiscal period.
11 Change in cash in relation to the opening cash position for the fiscal period.
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Effects of exchange rate fluctuations on cash and cash equivalents
Closing cash position
4 | (3) |
152 | 118 |
Financial position, borrowing conditions and financing structure
Claranova's financial position remains sound with a cash position of €152m and financial debt (excluding IFRS 16 impact on the recognition of leases) of €150m compared to respectively €90m and €65m at June 30, 2021.
The increase in the Group's financial debt includes the €50m OCEANES convertible bond issue, the issu-ance of €24m in promissory notes related to the buyout of minority interests in the Avanquest division, and
US$11m in new bank financing obtained by the PlanetArt division for the acquisition of certain assets of I See Me!
On that basis, the Group's net debt at December 31, 2021 amounted to €2m, down from net debt of €25m at
June 30, 2021.
In €m | 12/31/2021 | 06/30/2021 |
Bank debt | 23 | 14 |
Bonds | 98 | 49 |
Other financial liabilities | 27 | 2 |
Accrued interest | 2 | 0 |
Total financial liabilities12 | 150 | 65 |
Available unpledged cash | 152 | 90 |
Net debt | (2) | (25) |
Governance |
The Board of Directors duly noted the resignation of Mr. Chahram Becharat as a Director of the Company and, in consequence, from his duties as member of the Appointments and Compensation Committee. The Board would like to thank Mr. Becharat for his constructive participation in the work of the Board and the Committee during term of office.
Availability of the Interim Financial Report
Claranova's Interim Financial Report for the six-month period ended December 31, 2021 was filed with the French Autorité des Marchés Financiers (AMF) on March 30, 2022.
Claranova's Interim Financial Report and the presentation on its H1 2021-2022 results are available on the Company's website:https://www.claranova.com/investisseurs/publications-financieres/
Financial calendar:
May 10, 2022: Q3 2021-2022 revenue
12 Excluding lease liabilities resulting from the adoption of IFRS 16.
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Claranova SA published this content on 30 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 March 2022 19:14:05 UTC.