Business
SYZYGY : Annual Report 2023
SYZYGY : Annual Report
About this update from Syzygy Ag
Annual Report 2023 Content 3 Key figures 6 Letter from the Management Board 12 The SYZYGY GROUP 17 Our Values 18 Responsibility 23 Togetherness 26 Innovation 32 Cases 33 Miles & More 36 RTV EURO AGD 38 d&b audiotechnik 40 Mumm 42 The Stock 46 Report of the Supervisory Board Financial Information 2023 Group Management Report Financial figures Notes Independent Report Auditors' Responsibility Statement by the legal Representatives Corporate Governance Report 182 Remuneration Report 193 Financial calendar 2024 / Contact SYZYGY Frankfurt Key Figures Key financial figures 2023 71,742 2022 70,612 2021 60,124 2020 55,521 2019 64,243 Development of sales (in kEUR) 9 % Poland 80 % 11 % United Kingdom Germany & USA Sales by segments 2023 4,080 2022 6,208 2021 6,379 2020 3,999 2019 5,497 Operating income before goodwill write-downs (in kEUR) 2023 -1,949 2022 -6,053 5,394 2021 2020 3,302 2019 5,194 Income before taxes (in kEUR) 2023 -0.22 2022 -0.56 2021 0.30 2020 0.15 2019 0.26 Earnings per share undiluted (in EUR) 2023 -1,293 2022 -848 2021 -985 2020 -697 2019 -303 Financial income (in kEUR) 2023 -2,763 2022 -7,381 2021 4,133 2020 2,083 2019 3,540 Net income (in kEUR) 2023 7,067 2022 12,563 2021 8,140 2020 10,010 2019 -4,458 Operating cash flow (in kEUR) Key Figures Despite all the challenges, we achieved a new sales record of EUR 71.7 million with a sales increase of 2 per cent. 50.33 % 35.11 % 9.63 % 4.93 % 46 % 54 % 72 % 28 % WPP plc., St. Helier Equity Private investors/others Liabilities Institutional investors Non current assets HANSAINVEST Current assets Shareholder structure Balance sheet structure 32 % Services 21% Automotive 20 % Finance/insurances 16 % Consumer goods 5 % Telecommunication/IT 6 % Others Sales allocation by vertical markets 2023 109 2022 113 2021 108 2020 99 2019 106 32 % 17 % 51 % Top 5 Top 6-10 Others Sales by clients volume 21 % Technology 17 % Strategy/consulting 16 % Performance marketing 16 % Design 16 % Project management 14 % Administration Sales by employee (in kEUR) Employees by function Key Figures Key sustainability figures Sustainable business is not just about cutting costs, but also about creating value and ensuring long-term success. -29% Reduction of the CO 2 emissions in Scope 3 2023 0,25 2022 0,28 Scope 1+2 by employees (in t CO 2 e) Electricity 100% from renewable energies in all offices 51 % 49 % Women Men Employees by gender 38 % 38 % 20 % 4 % 20-29 years 30-39 years 40-49 years 50-59 years Employees by age Female employees 35% in management positions 100% Access of all Employees to the Employee Assistance Programme (EAP) 38 % 36 % 26 % Up to 5 years 6-10 years More than 10 years Client relationships Letter Letter from the Management Board The quality of the customer relationship and therefore brand and corporate success are hugely influenced by a positive digital experience. Business performance 2023 was marked by a generally weak economic environment, culminating in a recession. This led to many of our clients becoming reluctant to invest and applying budget cuts, resulting in a significant decline in sales, particularly at strategy consultancy diffferent and our UK company. We did, however, continue to see momentum and significant growth in the development and operation of digital platforms and in our technology services. Dear shareholders, dear colleagues, Management Board of the SYZYGY GROUP dear friends of the SYZYGY GROUP, A positive digital experience has a crucial impact on the quality of the customer relationship, making it vital for brands and corporate success. Positive digital experiences exceed expectations: they focus on user needs while delivering a seamless and compelling experience. They create added value, convenience and satisfaction - and strengthen a company's market position. As one of the leading consultancy and implementation partners for digital experiences, we have been supporting and assisting our clients in meeting these challenges for more than 28 years. Letter Sales in 2023 (in Euro) Mio. 71,7 This meant that despite all the challenges, we posted a new all-time sales high of EUR 71.7 million in 2023, representing a year-on-year rise of 2 per cent. The company generated operating income of EUR 5.3 million before goodwill write-downs and restructuring costs, corresponding to an operating EBIT margin of around 7 per cent. Our core SYZYGY brand and technology specialist SYZYGY Techsolutions again performed very strongly, achieving high growth rates. Our performance marketing specialist SYZYGY Performance also held its own in a challenging market environment. We were able to partly compensate for the situation at diffferent, with the result that the Germany region generated overall sales growth of 4 per cent to reach EUR 57.4 million, with operating profitability coming in at 10 per cent. The core German market thus proved to Although we are again able to report record sales, in mid-year we had to adjust our forecast for the full year to reflect the latest business performance. A major reason for this was that our strategy consultancy did not perform as planned, due to the recessionary market environment and a change in client demand. As a result, we introduced restructuring measures following a thorough review and planning process, which led to additional costs totalling EUR 1.2 million. Positioning was tightened and the service portfolio realigned. The cost structure was also adapted in line with the latest performance figures, while efficiency was boosted through organisational changes. A goodwill write-down of EUR 4.7 million was required as part of this programme. The SYZYGY GROUP's operational viability and cash flow are unaffected by this write-down. The restructuring measures were completed in 2023 and we believe that diffferent is now well positioned for the future. SYZYGY Frankfurt be stable overall and now accounts for 80 per cent of total sales. 10% operated EBIT margin in core market Germany Letter 9% Operating EBIT margin in the United Kingdom & USA In the UK and US, we posted a 16 per cent drop in sales to EUR 8.4 million, due to a reluctance on the part of some existing clients to invest. We took early action to cut costs in response, focusing on rental space and overheads. This enabled an EBIT margin of 10 per cent to be achieved. Looking ahead to 2024, we have introduced additional cost-cutting measures due to a further budget cut by a major client. The size of the team has been aligned with future requirements and the staff moved into much cheaper office premises. These measures were also completed in 2023, so in this respect we believe we are likewise well positioned for the future. The performance of our Polish specialist for creative production, Ars Thanea, and SYZYGY Poland remained stable overall. Sales were up 3 per cent to EUR 6.1 million year-on-year, with an EBIT 16% margin of per cent. Operating EBIT margin in Poland We are committed to sharing business performance appropriately with you, dear shareholders, and at the same time maintaining the continuity of dividends. As a result, it was not easy for us to make the decision to suspend the dividend for one year. The Management Board and Supervisory Board have decided to recommend suspending the dividend payment for the 2023 financial year as a one-off measure at the Annual General Meeting, due to negative total net income and in order to strengthen the capital base and liquidity reserves. This move underlines our commitment to creating a solid financial basis for sustainable growth. diffferent Berlin 80 % Germany 11 % United Kingdom & USA 9 % Poland Sales by segments Letter Strategic decisions We have taken a number of key strategic decisions with the aim of becoming more efficient and more focused. By doing so, we are creating a solid foundation for sustainable growth and the long-term success of the SYZYGY GROUP. Developments in generative artificial intelligence in particular are having a major impact on our business. Generative AI, as a subset of AI, can produce new content. Instead of just analysing or classifying information, generative AI actually creates new content. Generative AI will change the SYZYGY GROUP's services and the way we provide those services. The most obvious impact will be productivity SYZYGY Techsolutions Bad Homburg improvements. With the help of generative AI, it will be possible to automate work processes, e.g. in areas such as text creation, image processing and software development, where this has previously not been possible. In the medium and long term, generative AI will also change the digital experience itself, creating a wide range of opportunities for consulting, conceptualisation, implementation and operation of new and different digital experiences. Our goal is to make the SYZYGY GROUP an industry pioneer in adopting these new technologies. To do this, we have already introduced appropriate tools throughout the Group and developed our own solutions. We have also drawn up corresponding guidelines and policies to ensure that this is done within a safe framework. In addition, we have tightened and simplified the SYZYGY GROUP's positioning. We have brought together our extensive range of services for the design, development and operation of digital experiences in the central Digital Experience Services business area. This area offers a comprehensive portfolio for developing and implementing customer- centric end-to-end strategies, and represents the main focus of our proposition. The Transformational Consulting Services offered by our strategy consultancy, diffferent, serve as a strategic extension. The aim here is to identify and unlock additional growth levers for clients around brand, sustainability, organisational design and innovation. Lastly, we have discontinued the SYZYGY Extended Realities brand. Our virtual, mixed and augmented reality services will now be handled by our creative production specialist, Ars Thanea. This new structure simplifies our offering, provides greater clarity and enhances the profile of each of the SYZYGY GROUP brands. It will facilitate the marketing of our services and access to our clients. Letter Sustainable corporate development is the basis for long-term success. SYZYGY GROUP Bad Homburg We are also acknowledging the fact that the two business areas target different audiences, thus requiring different routes to market. This reality can now be addressed more clearly and effectively, particularly through diffferent, our strategy consultancy. Going forward, we will continue to extend our partnerships within the WPP network. British advertising holding company WPP is the main shareholder of the SYZYGY GROUP with a 50.3 per cent stake at present. As part of a modified strategy, WPP is currently creating structures to improve collaboration between the WPP companies in Germany. One of the steps taken is to appoint a Country Manager for the first time. The SYZYGY GROUP's integration into these structures could lead to potential sales opportunities. For us, sustainable corporate development is the foundation for long-term success. That makes it essential to integrate corporate social responsibility into the company's overall strategy. Sustainable and partnership-based client relationships in particular and the retention of talented people within the company are key success factors that are embedded in our sustainability strategy. The SYZYGY GROUP attaches great importance to an attractive working environment in which our employees can learn new technologies and other skills, and apply them every day. Another factor in our employees' job satisfaction is the high degree of flexibility in organising their work. Former CEO Franziska von Lewinski opted not to renew her contract, which expired at the end of 2023. We, Frank Ladner and Erwin Greiner, are continuing our management board work and have accepted the offer to extend our contracts until the end of 2026. The Supervisory Board has already started the process of selecting a new CEO. There have been no other changes to the senior management team, thus ensuring continuity and stability in the running of the company. This gives us the ability to act effectively and drive forward the operational and strategic development of the SYZYGY GROUP. Outlook Having taken these strategic decisions and following completion of the restructuring programme, the SYZYGY GROUP is very well positioned for the current financial year.