Econocom Group Se Class D · EURONEXT:ECONB
Econocom Group Se Class D — Investor Day (November 2023)
72 slides from Econocom Group Se Class D's investor day presentation, Nov 16, 2023
Slide 1: Strategic plan Capital Markets Day
Strategic plan Capital Markets Day November 16th 2023
Slide 2: Welcome
Welcome
Slide 3: The speakers
The speakers Jean-Louis Patrick Angel BOUCHARD VAN DEN BERG BENGUIGUI Chairman and CEO Managing Director Managing Director
Slide 4: Agenda
01 Introduction 02 Where do we stand? 03 A new market paradigm AGENDA 04 Strategic orientations 05 Trajectory 06 Conclusion 07 Q&A
Slide 5: 01. Introduction
01. Introduction Jean-Louis Bouchard Chairman and CEO
Slide 6: Why a strategic plan?
Why a Why a strategic strategic plan? plan now? 01 INTRODUCTION 6
Slide 7: Econocom has 25-year history of strategic planning
Econocom has 25-year history of strategic planning ECO 2000 1997 - 1999 Ambition 1,000 employees by 2000 Share price target 2000 BEF (vs. 600) 01 INTRODUCTION 7
Slide 8: Econocom has 25-year history of strategic planning
Econocom has 25-year history of strategic planning ECO 2000 Horizon 2002 2000 - 2002 Ambition 2,000 employees by 2002 €1.2 Bn revenue 2% net profitability 01 INTRODUCTION 8
Slide 9: Econocom has 25-year history of strategic planning
Econocom has 25-year history of strategic planning ECO 2000 Horizon 2002 Share five 2003 - 2007 Ambition 5% profitability Econocom share at €12 01 INTRODUCTION 9
Slide 10: Econocom has 25-year history of strategic planning
Econocom has 25-year history of strategic planning ECO 2000 Horizon 2002 Share five Horizon 2012 2008 - 2012 Ambition €1.0 Bn revenue 6% profitability Bundled offers 01 INTRODUCTION 10
Slide 11: Econocom has 25-year history of strategic planning
Econocom has 25-year history of strategic planning ECO 2000 Horizon 2002 Share five Horizon 2012 Mutation 2013 - 2017 Ambition €3.0 Bn revenue 5% profitability New competencies Digital solutions 01 INTRODUCTION 11
Slide 12: Econocom has 25-year history of strategic planning
Econocom has 25-year history of strategic planning E for ECO 2000 Horizon 2002 Share five Horizon 2012 Mutation Excellence 2018 - 2022 Ambition €4.0 Bn revenue €300m current result €0 net debt Delivery and offer improvement 01 INTRODUCTION 12
Slide 13: After a strong period of growth until 2017, Econocom has plateaued in revenue
After a strong period of growth until 2017, Econocom has plateaued in revenue while maintaining healthy financials 2,980 2,927 2,846 2,718 2,536 2,559 2,505 2,316 2,093 1,773 1,584 1,538 1,021 759 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Consolidated revenue(1) (€M) (1)
Slide 14: After a strong period of growth until 2017, Econocom has plateaued in revenue
After a strong period of growth until 2017, Econocom has plateaued in revenue while maintaining healthy financials 2,980 2,927 2,846 2,718 2,536 2,559 2,505 2,316 2,093 1,773 154 1,584 140 139 1,538 136 118 126 115 123 95 1,021 89 74 67 759 47 29 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 15: After a strong period of growth until 2017, Econocom has plateaued in revenue
After a strong period of growth until 2017, Econocom has plateaued in revenue while maintaining healthy financials 2,980 2,927 2,846 2,718 2,536 2,559 2,505 2,316 2,093 1,773 154 1,584 140 139 1,538 136 118 126 115 123 95 1,021 89 74 67 759 47 29 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 16: After a strong period of growth until 2017, Econocom has plateaued in revenue
After a strong period of growth until 2017, Econocom has plateaued in revenue while maintaining healthy financials 181 179 2,980 2,927 2,846 2,718 2,536 2,559 2,505 2,316 2,093 1,773 154 1,584 140 139 1,538 136 118 126 115 123 95 1,021 89 74 67 759 47 29 16.0 12.0 12.0 12.0 14.0 10.0 8.8 4.4 7.5 6.0
Slide 17: Why a strategic plan now?
Why a Why a strategic strategic plan? plan now? 01 INTRODUCTION 17
Slide 18: We are now ready to open a new cycle of development for the Group
Confidence in our market sector We are now ready to open a new cycle of Confidence in our activity mix development for the Group Confidence in our team 01 INTRODUCTION 18
Slide 19: Why a strategic plan now?
Why a strategic plan now? 1 2 3 4 To answer to as we are surfing can finance it in and have the clients’ demand on growing standalone right team on markets board 01 INTRODUCTION 19
Slide 20: 02. Where do we stand?
02. Where do we stand? Angel Benguigui Managing Director
Slide 21: Econocom is a leading player of workplace distribution, financing and services in Europe
Econocom is a leading player of workplace distribution, financing and services in Europe United-Kingdom: Netherlands: 3% €0.1 Bn €0.1 Bn €2.7 Bn estimated revenue in 2023 1 5% Germany: BeLux: 9% €0.3 Bn €0.3 Bn 9% France: ~65% Workplace €1.3 Bn 49% 11% Italy: 14% €0.3 Bn ~35% Beyond workplace Spain:
Slide 22: Econocom has built a unique set of capabilities
Econocom has built a unique set of capabilities Workplace Audiovisual & Infrastructure Financing of digital signage & network strategic assets ~65% ~7% ~15% ~11% revenue revenue revenue revenue 02 WHERE DO WE STAND? 22
Slide 23: 03. A new market paradigm
03. A new market paradigm Angel Benguigui Managing Director
Slide 24: Econocom operates in growing markets…
Econocom operates in growing markets… Workplace ~5% Audiovisual expected 2023-2028 CAGR Infrastructure & network 03 A NEW MARKET PARADIGM 24
Slide 25: But our markets are evolving
But our markets are evolving Device as a Service is becoming the "new normal" Environmental & societal considerations are becoming key purchasing criteria Generalization of hybrid work increasing need for modernization Rise of complex IT architectures (public and private cloud, on-premise) 03 2 A NE
Slide 26: 04. Strategic orientations
04. Strategic orientations Angel Benguigui Managing Director
Slide 27: Our clients needs
Design Our Distribution clients Financing needs Managed Services Refurb. 04 STRATEGIC ORIENTATIONS 27
Slide 28: Today our Group organization is based on an expertise-driven approach
Today our Group organization is based on an expertise-driven approach ... Hardware Infra & Strategic …. Workplace Audiovisual Software network assets & equip. Design Limited capabilities spread across Europe Distribution Financing Managed Services Refurb. Core business Beyond core business 04 STRATE
Slide 29: … and will move towards unique, end-to-end solutions addressing 4 key client needs
… and will move towards unique, end-to-end solutions addressing 4 key client needs Hardware Infra & Strategic …. Workplace Audiovisual Software network assets & equip. Design Distribution … Built upon 5 Financing expertises Managed Services Refurb. Core business To be developed, mostly via partners
Slide 30: Our growth will be based on 4 levers
Growth contribution Acquire selected capabilities ~30% Our growth Develop new offerings will be in particular end-to-end, as-a-service offerings based on 4 levers Increase cross-sell between client solutions and geos ~70% Disrupt salesforce capacity & effectiveness 04 STRATEGIC ORIENTATIONS 30
Slide 31: Strategic orientations
04 STRATEGIC ORIENTATIONS 31
Slide 32: 05. Trajectory
05. Trajectory Patrick Van Den Berg Managing Director
Slide 33: We revised our 2028 ambition due to several factors
Shift in growth levers contribution from external growth towards organic growth We revised our 2028 ambition A plan fully funded by Econocom in due to standalone, preserving healthy balance sheet several factors Increased focus on value creation versus topline growth (e.g., cash flow generation) 05
Slide 34: Our ambition by 2028 is to increase revenue by +€1.3 Bn and to double net income
Our ambition by 2028 is to increase revenue by +€1.3 Bn and to double net income Revenue growth Revenue €4.0 Bn €3.4 Bn €2.7 Bn €0.9 Bn in organic growth 70% of total increase 20231 2026 2028 Operating margin >4% 4.4% 5.1% €0.4 Bn % of revenue in acquisitions Net income c.€65M €80M €130M 30% of tota
Slide 35: First step at €3.4 Bn in 2026 to reach €4.0 Bn in 2028
First step at €3.4 Bn in 2026 to reach €4.0 Bn in 2028 Expected CAGR Revenue €4.0 Bn €3.4 Bn 0.4 €2.7 Bn 0.3 Total growth +8% p.a. 3.1 3.6 20231 2026 2028 Organic growth n.a. +€0.4 Bn +€0.9 Bn Organic growth Vs. 2023 +6% p.a. Acquisitions Vs. 2023 n.a. +€0.3 Bn +€0.4 Bn Total growth Vs. 2023 n.a. +€
Slide 36: Organic growth will be driven by sales force reinforcement, new offerings and improved cross-sell
Organic growth will be driven by sales force reinforcement, new offerings and improved cross-sell Revenue ~70% ~30% €0.4 Bn €4.0 Bn (~20%) (~20%) +€0.2 Bn €3.6 Bn (~30%) +€0.3 Bn +€0.4 Bn €2.7 Bn Salesforce Offerings Cross-sell Total Acquire selected 20231 capacity 2028 End-to-end, as between soluti
Slide 37: M&A will help accelerate organic growth by completing our offers
M&A will help accelerate organic growth by completing our offers Expected output of acquisitions Expected output of acquisitions Distribution Workplace 10% Refurbishment Targeted 3-year ROI Infrastructure €220M Beyond workplace Audiovisual Total investment 05 TRAJECTORY 37
Slide 38: Econocom revenue evolution by client solution
Econocom revenue evolution by client solution €4.0 Bn +€0.7 Bn €2.7 Bn Workplace will 62% remain a core activity 65% Ambition to grow in 17% +€0.3 Bn Audiovisual and Infrastructure 15% +€0.2 Bn 11% 7% 11% 11% +€0.1 Bn 20231 2028 Workplace Infra & Network Audiovisual Strategic assets & equipment 1. E
Slide 39: Econocom revenue evolution by geography
Econocom revenue evolution by geography €4.0 Bn Revenues will be €2.7 Bn 42% +€0.4 Bn more balanced across core geographies 49% 3.6 15% +€0.3 Bn 13% +€0.1 Bn All markets growing, 9% with acceleration in 14% 11% +€0.1 Bn Germany 11% 8% +€0.1 Bn 9% 6% +€0.1 Bn +€0.1 Bn 3% 5% 5% 20231 2028 France Germa
Slide 40: The plan will be fully funded by Econocom with no additional capital raising
The plan will be fully funded by Econocom with no additional capital raising Strong cash Acquisitions & Return to NFD reduction & flow generation divestments investors improvement of key ratios Free cash flows1 from Acquisitions activities Target Gearing ratio + €420M - €220M Dividends and share buy
Slide 41: This plan is focused on value creation
This plan is focused on value creation 2023 2024 2028 One econocom strategic plan Today Value creation focus Current Market Cap ~€400M 1 2 3 EBIT multiple range Focus on profitable and Plan funded in standalone Decrease in net cash generating growth with no major equity financial debt 6x-7x change 0
Slide 42: Trajectory
04 TRAJECTORY 42
Slide 43: Non-financial: commitments to improve social and environmental impact
Non-financial | As a responsible digital company, Econocom also commits to improve its social and environmental impact Clients Environment People Empower sustainable Contribute to Commit to be an digital transformation positive impact employer of choice x3 refurbished or recycled SBTI validation Int
Slide 44: Non-financial – Clients: empower sustainable digital models
Non-financial – Clients | We will empower sustainable digital models Refurbishment & recycling Life extension & maintenance Econocom Factory Productcare x3 x2 1.5M 1.5M 0.9M # recycled or # maintained 0.5M refurb. assets assets by Econocom by Econocom 2023 2028 2023 2028 05 TRAJECTORY 44
Slide 45: Non-financial – Environment: contribute to a positive global impact
Non-financial – Environment | We will contribute to a positive global impact SBTI commitment Ecovadis certification -60pts 100 pts % companies with Ecovadis certification 40 pts Scopes 1 & 2 Carbon footprint 2018 2028 50% (SBTI ref.) 25% +20pts 10% Top 1% 80% Bronze Silver Gold Platinum 60% Scope 3
Slide 46: Non-financial – People: commit to be an employer of choice
Non-financial – People | We commit to be an employer of choice HR employer certification Gender equality Inclusive social model x2 >90 / 100 6% 3% 2023 2028 2023 2028 HR label examples Econocom rate on % Econocom employees gender equality with disabilities 05 TRAJECTORY 46
Slide 47: 06. Conclusion
06. Conclusion Jean-Louis Bouchard Chairman and CEO
Slide 48: One econocom
‘one econoco;>
Slide 49: Executive Team
Econocom Executive Team 49
Slide 50: One econocom plan in few key messages
One econocom plan in few key messages 1 2 3 4 A plan to answer to as we are surfing on can finance it in and have the right clients’ demand … growing markets standalone team on board 2028 €4 Bn x2 0.1 x Revenue Net result Gearing ratio 06 CONCLUSION 50
Slide 51: 07. Q&A
07. Q&A
Slide 52: Appendix
01 Where do we stand? APPENDIX 02 A new market paradigm 03 Strategic orientations 04 Trajectory
Slide 53: Appendix 01. Where do we stand?
Appendix 01. Where do we stand?
Slide 54: Econocom has built a unique set of capabilities
Econocom has built a unique set of capabilities Workplace Audiovisual & Infrastructure & Financing of digital signage network strategic assets Laptop Camera Server Green transition Industrial Smartphone Soundbar Network equipment Production Desktop Display Storage line Digital Software Cloud Fleet a
Slide 55: Econocom expanded on workplace to cover the full value chain and diversified
Econocom expanded on workplace to cover the full value chain and diversified beyond workplace Workplace Audiovisual & Infrastructure & Financing of digital signage network strategic assets 2010 ECS 2013 Exaprobe 2013 Exaprobe Organic development on various assets acquisition acquisition acquisition
Slide 56: Appendix 02. A new market paradigm
Appendix 02. A new market paradigm
Slide 57: Solid market underlying drivers
Solid market underlying drivers Companies expected to continue to invest in IT Increasing number of devices per employee to adapt to hybrid ways of working Leasing penetration rate expected to continue to rise Customers are looking for more services, especially adding-value services APPENDIX - 02 A
Slide 58: Market drivers | Device as a Service is becoming the new normal
As a service requested by all customers interviewed As a service expected to represent 50% of total workplace spending by 2027 Market drivers | Device as a Service is becoming the "new normal" All direct competitors developing and promoting As a Service offerings Major vendors have entered the DaaS
Slide 59: Market drivers | Environmental & societal considerations are becoming key purchasing criteria
Market drivers | Environmental & societal considerations are becoming key purchasing criteria … as regulations evolves and IT represents a ESG is becoming a priority in companies IT significant share of companies' carbon purchasing criteria … emissions • Visibility on life cycle management • Regulat
Slide 60: Market drivers | Generalization of hybrid work increasing need for modernization
Market drivers | Generalization … and has several implications on of hybrid work increasing need provider's offering and delivery for modernization … model Reduction of onsite services Share of workers working fully or partially remote Increase productivity of Service Desk agents Increased security
Slide 61: Market drivers | Rise of complex IT architectures
The use of cloud infrastructure is growing, and organizations are increasingly using multiple cloud providers simultaneously. Market drivers | Rise of complex IT Transition to multi and hybrid cloud driven by architectures agility, scalability, and performance needs. (public and private cloud, on-pr
Slide 62: Appendix 03. Strategic orientations
Appendix 03. Strategic orientations
Slide 63: In workplace, Econocom has a unique competitive edge
In workplace, Econocom has a unique competitive edge Rack Cartridge Unique combination Intimacy with clients Presence in main Long term relation- of expertise and users needs markets ship with vendors allowing to build with capacity to tailor- with diversified exposure With established modular offer
Slide 64: We believe we can outperform the audiovisual market
We believe we can outperform the audiovisual market Unique combination Experienced Strong cross-sell Strong brands of capabilities leadership position capabilities at local level… for an end-to-end offer in Europe in a with existing …to be accelerated at fragmented landscape workplace client base Eu
Slide 65: We see potential to expand our position in infrastructure
We see potential to expand our position in infrastructure Existing building Strong workplace Long term relation- Asset-light model blocks of capabilities client base ship with vendors vs. incumbents For an end-to-end offer Existing access With HW/SW vendors and easing shift towards with Product & So
Slide 66: Econocom's unique value proposition has already been proven
Econocom’s unique value proposition has already been proven Client case illustration : global industrial manufacturer Key figures Workplace Audiovisual Infra Design 30 10,000 countries users Distribution €50M Workplace Financing CAPEX CAPEX over several years as a service Managed Services >500 Roadm
Slide 67: Appendix 04. Trajectory
Appendix 04. Trajectory
Slide 68: Financial main hypothesis
Financial main hypothesis Inflation Interest rates Return to normalized inflation Peak over ’24-’25 and slight decrease over ’26- environment ’28 – integrated in financing modeling 4.0% €STR ~2-3 % 3.0% Euribor 1 mois Euribor 3 mois inflation environment considered 2.0% over the period ’24-’28 1.0%
Slide 69: Other financial hypothesis supporting the financial trajectory
Working capital • Improvement by 1% of revenue by the end of the plan • Increased deconsolidation of strategic assets leasing, from 50% to 75% over the plan Other financial hypothesis supporting the CAPEX Stable CAPEX target below 1% in revenue financial • over the plan trajectory Debt • New financi
Slide 70: Simplified P&L – 2026, 2028
Simplified P&L – 2026, 2028 in Bn€ FY26 FY28 Revenue 3,40 4,00 Operating margin 0,15 0,21 Operating margin (%) 4.4% 5.1% Operating result 0,14 0,19 Financial result (0,02) (0,02) Profit before tax 0,12 0,17 Income tax (0,03) (0,04) Net income 0,08 0,13 APPENDIX - 04 TRAJECTORY 70
Slide 71: Simplified Balance sheet - 12/31/26 and 12/31/28
Simplified Balance sheet - 12/31/26 and 12/31/28 Dec Dec in Bn€ 26 28 Net financial debt (0,14) (0,05) Equity 0,61 0,77 Gearing Net financial debt 0.2 x 0.1 x [Gearing Net financial debt] / [EBITDA] 0.6 x 0.2 x APPENDIX - 04 TRAJECTORY 71
Slide 72: Contacts
Contacts Investor and shareholder Financial Press relations communication relations benjamin.pehau@econocom.com info@capvalue.fr econocom@the-arcane.com 72 Econocom – Résultats annuels 2022