Results 2017: Continued international growth and positive operating margin trend

Income of EUR 80,305,000, up 3.8%; 
EBIDTA of EUR 5,727,000, up 6.1%

Friday, March 16, 2018 — BRUSSELS, 16 MARCH 2018 (EMBARGO à 6.00 PM CET) – Emakina Group (Euronext GROWTH Brussels: ALEMK) announces its annual results for 2017 today.

1. Key figures year 2017

In thousands of EUR

2016

2017

Variation

Income

77,339

80,305

+3.8%

Earnings before interest, taxes, depreciation and amortisation (EBITDA)

5,400

5,727

+6.1%

Operating margin %

7.0%

7.1%

 

Result before tax

2,012

1,239

-773 

Net result

1,150

32

-1,118

2. Key events in 2017

a) New business

In 2017, new national and international clients partnered with one of Emakina Group’s agencies. These included, among others: BCGE Bank, Boucheron, Carrera, Courir, ECCO, First Stop, International Ice Hockey Federation, Intersport, Konica Minolta Europe, Le Pain Quotidien, Maxeda, Mondi, Öcard, Renault Nissan Consulting, Transdev, Vienna Tourism Board.

b) Continued acquisitions

In January 2017, Emakina acquired all the capital in the Swedish agency Doe Blomberg Gottberg (DBG), which has 15 staff and has won the Swedish ‘Communication Agency of the Year’ award three times. This transaction strengthens Emakina’s presence in Scandinavia, where it now has over 30 colleagues.

c) Internationalisation

In geographic terms, sales ‘outside Belgium’ increased by over 9% during 2017 as a whole and now account for 61% of the consolidated income, compared with 59% in 2016. Emakina Group, one of the leading independent agencies in Europe, is also investing in the growth of its American and Asian activities.

d) Talents

Attracting and retaining talented individuals remain the main challenges facing the Emakina Group owing to the keen competition on the employment market and the scarcity of resources, particularly in Europe. Furthermore, maintaining a relevant portfolio of expertise in line with the needs of clients remains a subtle art in a technological context marked by accelerated obsolescence.

e) Technological partnerships

In 2017, Emakina Group heightened its mastery of strategic partner technologies and continued its commercial development around them. The Group agencies offer a full range of technical platforms with integrated digital experience platforms on the one hand (Adobe, Salesforce, Kentico, Sitecore, Sitefinity) and specialised solutions on the other (Drupal, Magento, Umbraco, Selligent Marketing Cloud, Marketo, etc.).

f) Prizes and Awards

In 2017, Emakina won over 40 awards for various projects involving web-building, e-commerce, user experiences, video, design, writing and creativity, emphasising the quality of the services we provide.

Several technological partners also honoured Emakina with major international prizes in 2017: Kentico ‘Consumer Goods Site of the Year’, Progress Sitefinity ‘Meilleur Site Web Q1’, Sitecore ‘Agility Award’ and three Sitecore ‘Most Valuable Professional Awards’.

3. General comment

Growth in activities, especially at international level

Over 2017 as a whole, Emakina Group’s consolidated sales amounted to EUR 80,304,612 compared with EUR 77,339,180 the year before, representing an increase of 4% (stable at constant scope), boosted in particular by 9% growth in activities ‘outside Belgium’.

6% rise in EBITDA

The consolidated earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 5,726,817 (EUR 5,180,967 at constant scope) in 2017, compared with EUR 5,400,484 in 2016, an increase in absolute terms of 6.0%. Expressed as a percentage of total sales, EBITDA rose from 7.0% to 7.1% between 2016 and 2017.

This development in the operating profitability can be attributed in particular to a better occupancy rate, improved production efficiency and a cost structure under control.

Current profit under control and positive net result

The current profit before tax amounted to EUR 1,375,730 in 2017, mainly owing to (i) the increase in the amortisation of goodwill linked to the group’s external growth strategy and to (ii) the fall in the financial result in 2017 which, it should be remembered, benefited greatly in 2016 from the favourable trend in the Turkish lira and the Swiss franc against the euro.

The net profit in 2017 (EUR 32,206) may be attributed to the development of the current profit and non-recurrent charges linked in particular to moves to other premises. This net profit helps maintain the group’s equity base.

As a reminder, the amortisation of goodwill (which is compulsory under Belgian accounting standards) had a negative impact of EUR 2,390,944 on the company’s net result in 2017, compared with EUR 1,944,636 in 2016 further to the development of the group’s scope. This element of Belgian accounting law, which imposes systematic amortisation (booked under financial charges), weighs significantly on the consolidated net result.

4. Financial health

The group maintained its financial stability in 2017 thanks to a net positive result, a level of financial indebtedness in line with its internationalisation strategy, working capital requirements under control and the availability of adequate credit lines.

5. Event after closure

In February 2018, Emakina announced the acquisition of all the shares in Karbyn, a New York agency with a workforce of around ten, through its subsidiary, The Reference. Karbyn recorded an annual turnover in 2017 of over USD 2 million, while its EBITDA stands at around USD 0.3 million. This is the most recent example of Emakina’s determination to operate beyond the borders of Europe in order to better serve its international clients, including in particular Le Pain Quotidien.

The Emakina Group Board of Directors endorsed this transaction in March 2018.

6. Outlook for 2018

Based on current commercial indicators and the existing scope, Emakina Group is expecting one-digit growth of its consolidated income in 2018.

7. Statement from the company directors

The Board of Directors of the company declares that, to the best of its knowledge, the condensed and consolidated financial statements as at 31 December 2017, established in accordance with Belgian accounting standards, give a true and fair view of the assets, financial status and results of Emakina Group. The annual financial report contains an accurate description of the information that must be included in it.

8. Miscellaneous

a) Auditor’s report

The auditor has confirmed that his audit of the consolidated accounts is complete in terms of substance and has not revealed any significant adjustment to be made to the accounting data presented in the annual report.

b) Belgian accounting standards

All the consolidated figures set out in the appendices have been established in accordance with Belgian accounting standards (in particular as regards the mandatory amortisation of goodwill).These figures provide a summary of the financial results that are presented in detail in the 2017 annual report.

c) Shareholders’ diary 2018

  • 30 March 2018:Annual report 2017 (brochure);
  • 23 April 2018:General meeting of shareholders;
  • 14 September 2018: Publication of first half-yearly results 2018.

 

CONSOLIDATED FIGURES 2017 – EMAKINA GROUP SA

CONSOLIDATED INCOME STATEMENT (EUR) *

31/12/2017

31/12/2016

31/12/2015

SALES AND SERVICES

80,304,612

77,339,180

70,340,217

Turnover

75,916,133

73,987,356

67,561,421

Variations in projects in progress

1,210,431

656,683

-436,797

Capitalised production

999,717

149,075

102,199

Other operating income

2,178,331

2,546,066

3,113,394

OPERATING CHARGES (BEFORE AMORTISATION)

-74,577,795

-71,938,696

-64,270,428

Purchase of equipment and services linked to sales

-34,115,576

-33,845,013

-33,621,620

Staff costs

-40,302,954

-37,913,614

-30,458,796

Other operating charges

-159,265

-180,069

-190,011

EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTISATION = EBITDA

5,726,817

5,400,484

6,069,790

AMORTISATION AND DEPRECIATION

-1,581,827

-1,408,302

-1,898,211

Amortisation of intangible and tangible fixed assets

-1,438,455

-1,400,682

-1,367,209

Depreciation of trade receivables

-58,166

-1,230

-503,482

Provisions for liabilities and charges

-85,206

-6,390

-27,520

OPERATING PROFIT

4,144,990

3,992,182

4,171,579

FINANCIAL RESULTS

-378,316

-98,864

-599,806

Financial income

778,476

633,775

238,706

Financial charges

-1,156,792

-732,639

-838,513

CURRENT PROFIT BEFORE AMORTISATION OF CONSOLIDATED DIFFERENCES

3,766,674

3,893,318

3,571,772

AMORTISATION OF GOODWILL**

-2,390,944

-1,944,636

-1,645,235

CURRENT PROFIT

1,375,730

1,948,683

1,926,537

EXTRAORDINARY RESULTS

-136,583

63,351

25,576

RESULTS BEFORE TAXES

1,239,147

2,012,033

1,952,113

DEFERRED TAXES

970

5,465

-74,957

INCOME TAXES

-1,207,911

-867,078

-729,979

SHARE IN THE RESULTS OF COMPANIES IN CONSOLIDATION
USING THE EQUITY METHOD

0

0

0

NET PROFIT BEFORE AMORTISATION OF CONSOLIDATED DIFFERENCES

2,423,150

3,095,055

2,792,412

NET RESULTS

32,206

1,150,420

1,147,177

A. Share of minority interests

143,388

431,757

590,055

B. Group share

-111,182

718,663

557,122

 

DATA PER SHARE

31/12/2017

31/12/2016

31/12/2015

NUMBER OF SHARES

3,893,353

3,893,353

3,893,353

NUMBER OF SHARES AND WARRANTS

3,893,353

3,893,353

3,931,293

CURRENT RESULTS / SHARE (in EUR)

0.3534

0.5005

0.4948

CURRENT RESULTS / SHARE AND WARRANT (in EUR)

0.3534

0.5005

0.4899

GROUP SHARE / SHARE (in EUR)

-0.0286

0.1846

0.1431

GROUP SHARE / SHARE AND WARRANT (in EUR)

-0.0286

0.1846

0.1417

NET RESULT / SHARE (in EUR)

0.0083

0.2955

0.2947

NET RESULT / SHARE AND WARRANT (in EUR)

0.0083

0.2955

0.2918

 

 

ASSETS (EUR) *

31/12/2017

31/12/2016

31/12/2015

       

FIXED ASSETS

17,471,191

15,290,743

12,922,391

Formation expenses

175,937

88,410

141,733

Intangible assets

2,344,601

1,697,932

1,829,716

Consolidation differences

12,578,751

11,917,967

9,621,685

Tangible assets

1,828,617

1,289,929

1,069,198

Financial assets

543,285

296,505

260,059

CURRENT ASSETS

30,541,335

29,528,681

28,822,802

Stocks and contracts in progress

4,835,151

3,479,708

2,818,607

Deferred taxes

0

0

0

Amounts receivable within one year

21,131,512

21,921,645

20,560,092

Current investments

238,980

339,422

65,395

Cash and cash equivalents

3,003,982

2,331,209

4,314,371

Accruals and deferrals

1,331,710

1,456,697

1,063,797

TOTAL ASSETS

48,012,526

44,819,424

41,745,193

       

LIABILITIES (EUR) *

31/12/2017

31/12/2016

31/12/2015

       

CAPITAL AND RESERVES

10,729,513

10,735,919

10,116,550

MINORITY INTERESTS

287,513

1,012,558

760,445

PROVISIONS FOR LIABILITIES AND CHARGES

196,906

111,700

105,310

DEFERRED TAXES AND DEFERRED TAX LIABILITIES

1,455

2,425

7,889

DEBTS

36,797,139

32,956,822

30,754,999

Amounts payable after one year

3,766,343

3,822,243

2,515,600

Amounts payable within one year

32,509,046

28,895,668

27,610,416

Current portion of amounts payable after one year

1,715,265

1,463,613

1,513,116

Financial debts

7,462,653

6,182,009

3,148,934

Trade debts

7,698,382

5,630,216

7,040,325

Advances received

5,135,502

5,623,111

6,245,727

Taxes, wages and social security

6,837,322

5,843,238

5,520,916

Other debts

3,659,922

4,153,481

4,141,398

Accruals and deferrals

521,750

238,911

628,983

TOTAL LIABILITIES

48,012,526

44,819,424

41,745,193


* Drawn up in accordance with Belgian accounting standards.

** In accordance with the valuation rules, the consolidation differences (or goodwill) are amortised over eight years, irrespective of all consideration of any excess value in accordance with Belgian accounting standards.

In accordance with the Euronext GROWTH Brussels regulations, this annual press release is optional. It will be followed by the publication of the Emakina Group annual financial report 2017, which contains all the regulatory information. This report will be available on our website, www.emakina.com (section “Financial - Reports”) as of 30 March 2018 in accordance with the legal provisions on this matter.

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Contact

Karim Chouikri           Chief Executive Officer          +32(0)2 400 40 75       kch@emakina.com

Frédéric Desonnay    Chief Financial Officer            +32(0)2 788 79 26       fds@emakina.com

Luc Malcorps              Director of Media Relations   +32(0)2 788 79 73       lma@emakina.com