Highco: 2018 Annual Earnings
Paris, 26 March 2019 (6.00
p.m.)
2018: ANOTHER YEAR OF BUSINESS GROWTH AND INCREASE IN
EARNINGS FOR HIGHCO
Sixth consecutive year of business
growth
- Full-year 2018 gross profit of €87.57 M, up 6.5% on a
reported basis and 2.6% LFL1.
- Development of digital businesses: LFL growth of 9.2%,
accounting for 52.9% of the Group’s total business in 2018, and
acquisition of the mobile-first agency Useradgents.
Strong growth in earnings
- Adjusted headline PBIT2 of €16.04 M, up 8%.
- Adjusted operating margin2 of 18.3%, up 20 basis
points.
- Recurring operating income of €14.12 M, up 16.6%.
- Adjusted attributable net income3 of €9.75 M, up
14.9%.
- Dividend of €0.16 per share to be proposed at the AGM in
May 2019, for a 14.3% increase.
Strong cash generation
- Operating cash flow of €14.65 M, up €3.29 M or
28.9%.
- Net cash4 of €52.17 M at 31 December 2018, rising
€6.26 M; net cash excluding operating working capital of
€0.97 M at 31 December 2018, for an increase of
€0.63 M.
Governance
- Return of Didier Chabassieu as Chairman of the Management
Board, and Cécile Collina-Hue as Managing Director.
(€ M) |
2018 |
|
2017 |
|
2018/2017 Change |
Gross profit |
87.57 |
|
82.24 |
|
+6.5%(+2.6% LFL1) |
Adjusted headline PBIT2 |
16.04 |
|
14.85 |
|
+8.0 |
% |
Adjusted operating margin2 (%) |
18.3 |
% |
18.1 |
% |
+20 bp |
Recurring operating income |
14.12 |
|
12.10 |
|
+16.6 |
% |
Adjusted attributable net income3 |
9.75 |
|
8.49 |
|
+14.9 |
% |
Net cash4 |
52.17 |
|
45.91 |
|
+€6.26 M |
1 Like for like: Based on a comparable scope
(i.e. including Useradgents over six months in 2017 and 2018, as of
1 July) and at constant exchange rates (i.e. applying the
average exchange rate over the period to data from the compared
period).2 Adjusted headline profit before interest and tax:
Recurring operating income before restructuring costs (€0.71 M
in 2018; €0.44 M in 2017) and excluding the cost of performance
share plans (€1.21 M in 2018; €2.31 M in 2017). Adjusted
operating margin: Adjusted headline PBIT/Gross profit.3 Adjusted
attributable net income: Attributable net income excluding the
after-tax cost of performance share plans (€0.87 M in 2018;
€1.52 M in 2017), excluding other operating income and
expenses (income of €0.54 M in 2018; 0 in 2017), and excluding
net income from assets held for sale and discontinued operations
(expense of €0.77 M in 2018; income of €0.15 M in 2017).4
Net cash (or net cash surplus): Cash and cash equivalents less
gross current and non-current financial debt.
Cécile Collina Hue, Managing Director, stated:
“HighCo, which turned in another year of profitable growth in 2018
thanks to the development of its digital businesses, operates in a
market guided by the digitisation of retail and by consumers who
expect more personalised service. As such, the Group has fine-tuned
its mission and adjusted its offer to work with its brand and
retailer clients in meeting new challenges. Building on its
positioning as a data marketing expert and its financial
performance over the past five years, the Group now has the
resources necessary to continue accelerating its growth while
investing in its two strategic focuses: digital technology and data
management.”
2018 FINANCIAL PERFORMANCE
Sixth consecutive year of business
growth, still driven by Digital
2018 gross profit amounted to
€87.57 M, up 6.5% on a reported basis and 2.6% like for
like. Growth improved with each quarter to reach 3.5% in
Q4 2018. As a result, the Group posted its sixth consecutive
year of organic growth, driven by digital businesses, which grew
9.2% like for like.
In France, growth remained
steady: up 4.4% like for like to
€64.68 M, accounting for 73.9% of the Group’s gross
profit. Growing sharply by 9.2% over the year, digital businesses
in France accounted for 59.8% of total business in 2018.
International business fell 1.9% like
for like in 2018 to €22.9 M:
- Benelux showed a decline in business for the second consecutive
year, down 2.6% like for like to €21.80 M;
- Southern Europe (Spain and Italy) recorded double-digit growth
of 15.9% to €1.1 M (1.2% of the Group’s gross profit).
Sharp growth in earnings
Business growth in France and sound cost control
enabled the Group to post an increase in adjusted headline
PBIT, for the fifth consecutive year, of 8% to €16.04 M in
2018 with:
- a further increase in adjusted headline PBIT in France of 1.9%
to €13.84 M;
- a rise in adjusted headline PBIT for the International
businesses of 73.4% to €2.2 M.
Adjusted operating margin
(adjusted headline PBIT/gross profit) rose 20 basis
points, coming out at 18.3% (2017: 18.1%).
With this higher adjusted headline PBIT, the
cost of performance share plans at €1.21 M (2017:
€2.31 M) and restructuring costs of €0.71 M (2017:
€0.44 M), recurring operating income came out at
€14.12 M (2017: €12.1 M), showing strong
growth of 16.6%.
Operating income rose significantly by 21.1% to
€14.65 M. This was mainly due to income from of the fair value
remeasurement of the 49.06% stake previously owned in Useradgents,
amounting to €5.08 M, and the €4.48 M goodwill impairment
for Belgian businesses.
The tax expense came out significantly lower,
mainly resulting from a research tax credit, totalling €3.86 M
in 2018 (2017: expense of €4.6 M).
The loss from assets held for sale and
discontinued operations amounted to €0.77 M in 2018 (2017:
income of €0.15 M) following the impairment of the investment
in the associate Yuzu.
Adjusted attributable net income climbed
14.9% to €9.75 M, with a reported figure of
€8.64 M for 2018, an increase of 21.4% (2017:
€7.12 M).
HighCo recorded adjusted 2018 EPS5 of €0.47, up
14.5% compared with adjusted 2017 EPS of €0.41.
A dividend of €0.16 per share, i.e. a
14.3% increase, will be proposed at the next AGM on
20 May 2019.
Strong cash generation
Cash flow increased 28.9% to €14.65 M.
As a result, the net cash position surged €6.26 M to
€52.17 M at 31 December 2018. Excluding
operating working capital, which amounted to €51.2 M at
31 December 2018, net cash remained positive at €0.97 M,
up by €0.63 M with respect to 31 December 2017.
OFFER AND STRATEGY
A shifting market
The retail industry is undergoing major
transformation, mainly relating to new ways of using digital
technology and data. These changes are impacting consumers, who
have become experts in this new technology, and developed high
expectations for brands and retailers. New rules are structuring
the way their data is collected and used and the generosity of
offers that food brands and retailers can deliver. All this is
overhauling the promotional activation approach that drives these
business segments.
HighCo fine-tunes its mission and
adjusts its offer
To help its clients – brands and retailers –
navigate these new challenges, HighCo, as an expert in data
marketing and communication, continuously innovates and draws on
the four complementary areas of expertise which cover the entire
shopper engagement chain, from initial contact to the
transaction:
- building a marketing strategy to create “emotion” between the
shopper and the brand or retail chain;
- use the user experience to enhance “relations”;
- guide advertisers in the “personalisation” of content, through
data marketing and artificial intelligence, which they push to
shoppers;
- trigger the “transaction” through the way activation campaigns
are designed and managed.
Continuing investments in its two
strategic focuses
In
this rapidly changing sector, where new players are emerging in
each field of technology, HighCo continues investing in its two
strategic focuses: digitisation of its businesses and data
management.
#1 – Continue digitising its
businesses
The strong growth in Digital continues, with
digital gross profit rising 9.2% in 2018.
5 EPS adjusted for the net after-tax cost of
performance share plans, other operating income and expenses, and
net income from assets held for sale and discontinued operations
(Yuzu).
Digital solutions resumed strong
growth, with a steep 81% increase in the volume of push
SMS and notifications, and volumes of digital coupons issued up
11%, including a sharp rise (up 25%) in Load to Card and Click
& Collect digital coupons and continued growth in e-CBOs (up
12% in 2018). The percentage of dematerialised coupon clearing rose
further to stand at 21.7% in 2018 (2017: 19%).
The acquisition of the mobile-first
agency Useradgents in July 2018 contributed to
strengthening the Group’s digital businesses in France. Posting
double-digit growth in 2018, Useradgents employs over
50 people and works with a range of clients operating in
retail, banking and insurance.
Digital accounted for 52.9% of the
Group's gross profit in 2018 (2017: 47.8%). Driving the
Group’s growth, digital businesses have, in five years, doubled the
share of Digital business in the Group’s total business activity,
up from 27.1% in 2013 to 54.6% in 2018 (including Useradgents for
the full year in 2018).
#2 – Develop our understanding of
data
To meet consumers’ expectations for greater
personalisation (content, generosity, channels,
etc.), HighCo is consolidating its expertise in data analysis and
use.In compliance with the General Data Protection Regulation
(GDPR), HighCo is sharpening its predictive
algorithms and artificial intelligence
engines to develop its understanding of data, such as in the new
Franprix loyalty programme.
2019 GUIDANCE
For 2019, HighCo forecasts:
- Growth in 2019 gross profit higher than growth in 2018 on a
like-for-like basis (2018 gross profit: up 2.6% like for like),
with a higher share of Digital in the Group’s business in 2019
compared with 2018 (52.9% in 2018);
- Slight rise in adjusted operating margin (2018 adjusted
operating margin: 18.3%).
The Group’s financial resources will be
allocated to:
- Capital expenditure of between €2.5 M and €3.5 M
(€2.57 M in 2018);
- Share buybacks of between €0.5 M and €1 M
(€0.66 M in 2018).
The Group will also move forward in its investment strategy
(acquisitions and/or investments) in the Digital sector, especially
businesses specialised in data technology.
GOVERNANCE
HighCo announces that Didier Chabassieu, who has
been dealing with health problems since 2017, has returned as
Chairman of the Management Board, alongside Cécile Collina-Hue,
Managing Director, and Céline Dargent, member of the Management
Board. Didier Chabassieu will mainly be in charge of Group
strategy, acquisitions and talent management. Cécile Collina-Hue
will continue to oversee the Group’s operational management, and
Céline Dargent will be in charge of marketing and
communication.
The Supervisory Board examined the financial
statements for the year ended 31 December 2018. At the time of
writing, the audit of the consolidated financial statements has
been carried out. The certification reports will be issued once the
required specific verifications have been finalised in order to
file the registration document.
A financial analysts’ meeting is scheduled for
27 March 2019 at 2.30 p.m. (CET) at 8 rue de la
Rochefoucauld, 75009 Paris, France. The presentation will be
available at the beginning of the meeting on the website
(www.highco.com) under Investors>Regulated
Information>Financial Analysts Meetings.
About HighCo
As an expert in data marketing and
communication, HighCo continuously innovates to work with brands
and retailers in meeting the retail challenges of
tomorrow.Listed in compartment C of Euronext
Paris, and eligible for the “long only” DSS, HighCo has more than
750 employees and since 2010 has been included in the Gaia
Index, a selection of 70 responsible Small and Mid
Caps.
Your contacts
Cécile
Collina-Hue
Cynthia LeratManaging
Director
Press Relations+33 1 77 75 65
06
+33 1 77 75 65
16comfi@highco.com
c.lerat@highco.com
Upcoming
events
Publications take place after market
close.
SFAF financial analysts meeting: Wednesday, 27
March 2019 at 2:30 p.m. (8 rue de la Rochefoucauld – 75009
Paris)Q1 2019 Gross Profit: Thursday, 18 April 2019Q2 and H1 2019
Gross Profit: Wednesday, 17 July 20192019 Half-year Earnings:
Wednesday, 28 August 2019Conference call on 2019 half-year
earnings: Thursday, 29 August 2019Q3 and 9-month YTD 2019
Gross Profit: Wednesday, 16 October 2019Q4 and FY 2019 Gross
Profit: Wednesday, 22 January 2020
HighCo is a component stock of the indices CAC®
Small (CACS), CAC® Mid&Small (CACMS) and CAC® All-Tradable
(CACT). ISIN: FR0000054231 Reuters: HIGH.PA Bloomberg: HCO FP For
further financial information and press releases, go to
www.highco.com.
This English
translation is for the convenience of English-speaking readers.
Consequently, the translation may not be relied upon to sustain any
legal claim, nor should it be used as the basis of any legal
opinion. HighCo expressly disclaims all liability for any
inaccuracy herein.
- HighCo CP Annuel 2018_VDEF_EN
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