Welcome, everybody. Welcome here in Puteaux for the 2024 Financial Results Meeting. Due to the strike in Brussels, the meeting is taking place here in Puteaux, within our HQ in France. Today's speaker will be Jean-Louis Bouchard, our Founding President, Angel Benguigui, our CEO, and myself. The agenda will be around four points, as usually: strategic updates, 2024 financial performance, outlook for next year, and we'll have a Q&A session. Before leaving the floor to Jean-Louis, let me share with you a small video with a certain number of key transactions and milestone events of the 2024 years.
I'll start in English, but when it gets very difficult questions, maybe I will drop the French.
[Foreign language] I will just address three subjects. First, remind you rapidly what is our business, what is our job. We've been asking ourselves this question for 50 years, and it's still changing. But thanks to Havas and other people, we are starting to understand a little bit what is our business about. The second will be our main challenge, and the third one will be Angel Benguigui. So the first challenge, and we've been working on it, what is Econocom? What do we do? Because every time people try to compare us to other companies, it's never exactly the same. It's always a bit different, but there are bits and things which are the same. But mainly, what is happening?
The tech industry, the tech offering in the last 50 years has been booming, and it's still increasing in speed and in diversity. With this tech offering, we have thousands of customers, mainly in Europe. And those customers, they are like us, they are a bit lost among all this offering. What is Econocom? Econocom is 500 salespeople, but not sales. We have technical sales, very educated in tech, but they're also very good sales. And all those 500 people, they meet with customers all day, and they put together parts of this tech offering, bundle it into contracts and finance those contracts. So this is 500 sales, about 2,000 administrative, and 5,000 technicians, but highly qualified technicians. In most of the countries, we have services in Spain, Belgium, now starting in Germany, in France, most everywhere. And as you see, we can sign contracts.
We also have partnerships with people outside of Europe, and we can sign support contracts with very large companies in 100 countries throughout the world, so our business is really technology-oriented. We try to master this technology, or anyway, we put pieces to pieces and make it together so we can install it and make it work at customer space, and on top of it, we finance it most of the time. One third of our business is financing, one third is equipment, delivering equipment, and one third is servicing those equipment, making those equipment and solutions work, so this is our business. Our challenge, the main challenge, because we'll be presenting you what we have done in 2024 and what we forecast for 2025. The main challenge that we've been enduring, but it's more and more every year, is that we call it One Econocom.
It's our strategic plan, but what does it mean? Customers are getting larger and larger and larger all the time. And those customers, they want an offer not in one country, they want an offer worldwide or at least European-wide. And also our suppliers, people that provide tech, which are software, hardware, whatever they provide, even finance, they also want to address large companies covering Europe. They don't want to address companies only in Belgium or only in Spain. So we need to have a European coverage. To have a European coverage means we have to be. That's what we call One Econocom. But it's a huge challenge for us because we have been resilient for 50 years. The reason we have been resilient, not only is it because we have very talented people in our group, but because it was very diversified geographically and business-wise.
But now, if you want to have one Econocom, then you have to put things together. You have to have more unity. So you have to change communication. You have to change rules. You have to change the world, the way you operate. But you want to also keep the creativity. So it's a double challenge to make one Econocom bigger and stronger and operating smoother. But at the same time, we need to keep all the creative people and talented people and keep them from fighting too much together. So it's fun to do it. But it's not only Econocom. All big organizations have this challenge. But it's even more challenging for Econocom because we don't have a major product with our name on it. We have creativity all the time. The first thing I wanted to talk to you about is Angel Benguigui.
Okay, I've been working with Angel 19 years, and I've been very stupid for the last seven or eight years because seven or eight years ago, Angel came to me and said, "Okay, I'm having fun in Spain." Well, he started Spain with 10 people. Now they're 1,800 people. So he was having a lot of fun. Thank you. But at the same time, he said, "Okay, I'm free in France. I like this group. I would like to work with administration, with the management of the group." And well, we both agreed on it, but other people did not agree on it. So eventually, it did not happen. So I tried to pass the helm to my son, Robert, but the group was not ready for it. And he did not know enough Econocom to be able to be successful too soon. So it did not work.
About two, two and a half years ago with Angel Benguigui, we hired Patrick van den Berg to help us to manage the group. Eventually, well, it was okay, but not successful enough. We decided last July, July 2024, to promote Angel Benguigui as CEO. I should have done this 10 years ago because I'm so fond of Angel Benguigui. He's been doing such a very good job. He has a very good team. He will present it to you. As you see, I am very happy with it. I'm very relaxed. I'm doing my job better than before. My job being I still handle the group attractivity, communication with Havas team and Brussels. I'm in charge also of hiring or coaching the hiring of the 50 key people to manage with Sophie Latourrette. That's mine too. And also Chairman of the Board.
And I'm learning how to chair the board. So I still have a lot of activity. I'm working half-time, but I love it. Thank you, Angel Benguigui.
Thank you, Jean-Louis. Thank you very much. So the first thing I wanted to say is to explain what happened in 2024. And we will be speaking about the new government and so on. And the first thing I want to tell you, I'm very glad to keep on being the CEO because you know that from 10 - 10, six months is enough. But I will be keeping being the CEO, and I will try to do my best efforts to keep on being the CEO of the group. So what happened in 2024? We make a good year in terms of first year of the strategic plan, meaning that we are preparing the group for the future.
So the good thing is that when you structure a strategic plan, you know what you want to do at the end of the building of the plan, and you know what you don't want to do. So we decided to divest some activities. We decided to invest in some activities. We decided mainly to have a very strong organic growth because we don't want to have a lot of debt. And then in the first year, it was a very big challenge to recruit a lot of new sales and agents in order to reinforce the group. So this is what we called Mission Impossible. And it was a success in 2024. So the recruitment, and we will be coming back to that afterwards, has been a success.
Also, from the marketing point of view, also from the organization of the cross-selling between activities and countries, we made many evolutions in the organization. And I think that we are ready for the future in this sense. So the top line is good. I know that the bottom line is different, and we will be speaking about the reasons why. And Philippe will show the figures, and I will be coming back after Philippe will show the figures. But in the top line, I have to say that 3.6% total growth, organic growth, because we did not have the acquisitions in 2024, as you know. Personally, I think it's a very good trend because the market was bad. And in the distribution, for example, that is now the main activity of the group, is more than EUR 1.2 billion turnover. We had a flat market in Europe.
We have a negative market in France. That is our main activity. It was less 2% in France. It was flat all over 2024, and we started in the 1st half of the year with a slowdown, but the last months were better. We expect, and we will be speaking about the trends for the next year, the last months were better, and at the end, we are also positive in the distribution activity all over the group, + 0.5%, so very good organic growth. Compared to the previous year, it was 1.2%, and then we are at 3.6%, then we did not have any opportunities of acquisitions, and we preferred to start selling that back in, but we closed a tactical deal in January in Germany. That is a target country for the group and in refurbishment. That is a strategic vertical for the group.
The new government, you know that the board decides about the strategy. The executive committee, I'm very happy with this executive committee. We are mixing experience and different capabilities with Philippe. That is a newcomer because he came in September. Israel, that is here from 2018, coming from Altabox. That is a very nice company that Econocom bought. And Quentin is a global group tech. And now facing all the challenges in artificial intelligence is a very nice combo. So we meet twice a month. And it's a very good environment. But we are not alone. We have a general management committee that is based everywhere because it's all the country managers of the group. And it's very business-focused. We meet once a month in different cities. And this is the engine for the business and the development of the group.
And we also have four women that are very good ones with the main support functions of the group. These are the management that is in the website. This is a very good team and I'm very proud about. And I want also to say, and it was in the video, that we onboarded almost 20 top managers in 2024. So we onboarded a lot of sales. We onboarded also a lot of managers. For the Q&A, we will be all the COMEX on stage. You will be able to ask about anything. And we will be able, I think, to answer about anything because we are very complementary. So if you have marketing business issues, it will be Israel. All the issues coming from artificial intelligence, it will be Quentin. All the things about Finance and M&A, it will be Philippe.
And I will be also there, but it's not so important. We have also Anne Bruchon. That is the secretary of the company and very nice to work with Anne and to prepare all these sessions that are very important. This is the main point for our future. The salesforce recruitment, the reinforcement of the salesforce of the group. And I am very proud to say that we onboarded more than 60 agents and sales in net in 2024 in the group. That is more than expected. I remember that we are now about 500 sales and agents in the group. Then we said at the beginning of the strategic plan that we wanted to onboard 100 new agents in the three first years and 160 sales and agents in net.
Then we expect to be about 600 sales and agents at the end of the three 1st years of the plan. 600, it's a lot of money because the revenue on average between EUR 5 million and EUR 8 million for a good agent or a good sales. So you can make the calculations, and it can be a very powerful improvement of our organic growth. The marketing and the organization of the cross-selling of the group between the hands of Israel, I think that that is a huge work that was done in 2024. It was one portfolio, we mean. It's all the offerings of the group. This is quite a huge document, very nice.
We are training all the sales of the group in order to be able to tell to the clients which are all the offerings that we can deliver, all the offerings of the group. Then we put in place also the new Gather brand for audiovisual. Audiovisual, it's a business where we want to become the leader in Europe. We could say that we are the leaders because we have already EUR 230 million turnover, but we are looking for some other companies in Germany, in the U.K., because we are very present in France, in Spain, and in the Netherlands. This will be a development. We will be seeing that in the next years. Gather will be a powerful brand in Europe. From the point of view of the tools, we finalized with Quentin in place all the tools for the leasing activity.
We have new tools, sustainable tools, and it allows for us. It's important because it's much more easier to make international deals. We are going to the P&S and services activities. Also on this side, a big effort is to be done on artificial intelligence, and I will come back on that. We sold Les Abeilles. It was very good. We were not aggressive in 2024 because we want to preserve our financial solidity. That's very important. The acquisition in Germany is not a big company. It's a medium company, but it's strategic because it's first Germany, second reconditioning, refurbishment. Refurbishment with leasing, it's all the life cycle of the assets, and it's one of the businesses of the future. We are very glad about that.
This is a company that is now a B2B company for IT devices and is now refurbishing about 100,000 devices with a capability of refurbishing 150,000, and we will be seeing the refurbishment at Econocom Group. [Foreign language]
[Foreign Language]
[Foreign language]
Refurbishment is our pledge to extend the lifespan of IT and reducing electronic waste, which is part of our Econocom Impact, being responsible, useful, and innovative.
To expand our business in Germany, we want to be a strong partner for our existing and new customers, offering all of Econocom's capabilities, and now, Philippe, the floor is yours.
Thank you, Angel. I will present the 2024 financial results. As mentioned by Angel, in 2024, Econocom benefits from a very strong growth, fully organic, standing at 3.6% compared with 1.2% on the previous year, which I think is a true testimony of the effort which has been put in the salesforce enhancement and development. This, and I think it's quite important to mention, has been delivered through all our three business units in a context of a mixed market in Europe with certain geographies experiencing difficulty, with a lack of orders, including particularly France, which has been exposed to political turmoil.
One other thing which is, I think, important is that last year, the guidance given by Econocom to the market in respect of the development of the revenue was a bracket of 3%-5%, and we've been able to fully deliver the guidance. Coming on the three business units, as you can see, we experimented with significant growth in the TMF segment, benefiting from the development of the usage and leasing approach compared to the ownership approach. The product and services business unit also experimented with positive growth, and services was able to deliver a 3% growth in a market challenged by a certain number of forces that will come back on it later, including particularly AI.
In respect of the margin, as mentioned, in 2024, we invested quite a lot in the enhancement of the salesforce with the 60 sales and agents, which led us to have EUR 7 million additional expenses on the back of the P&L. Nevertheless, we were able to maintain our operational margin at a 4% stable profitability compared to last year, which I think is quite an achievement. Without this EUR 7 million investment in the P&L, we would have been able to grow and enhance the profitability of the group compared to last year. And we expect that next year, both investment in the salesforce will not only turn into turnover development, but as well into profitability with enhanced profit margins. Then, when we look at business unit by business unit, so on the product and service and solution business unit, the growth was of 0.5%.
So we topped up EUR 1.2 billion revenue in a market marked by certain adverse events, including France, which we think now is fixed, obviously. Significant growth experienced in certain geographies, and my colleague Israel will come back on that. And we maintain a 3.3% profitability in this context. It's worth noting that Products and Solutions is one of the business units who bear probably most of the investment in the sales force development and the EUR 7 million I mentioned. On the Technology Management and Financing, we experienced very significant growth, led by the attractiveness of the financing solutions. The development was, in particular, strong in the Southern Europe area, including Italy, including Spain, where the development of the business was significant. France also experienced positive development, and the profitability remained robust at 4.4%. For the Services business, we had the growth of 3%, as mentioned.
France and Spain delivered strong development of their turnovers, and the profitability there stands at 5.1%, which is the highest profitability in the group. Then, looking at the overall P&L, as mentioned and explained, so in respect of the revenue, we had a solid development of the revenue standing at 3.6%. Operational margin remained robust despite investments in the salesforce, as discussed. We had a lower operational profit as the P&L was marked by a certain number of exceptional items, including in particular exit costs, write-offs, and a certain number of transformation investments for the future. The profit stands hence at 38.4%, decreasing compared to last year due to those two items, i.e., investment in the salesforce and those one-off items. Net profit stands at 37.7%, as we had a certain number of negative events, including in particular on discontinued operations.
As you may recall, during the first semester, we were able to show a positive development of the discontinued operation, thanks to the profit in conjunction with the disposal of Les Abeilles. During the 2nd semester, one of our operations, SynerTrade, which is an e-procurement platform, experimented with a certain number of cyberattacks, which led us to have a certain number of extraordinary costs in conjunction with the remediation of these cyberattack impacts. Adjusted for non-recurring items, the profitability of the group stands at EUR 60 million, which is totally in line with what we experimented last year. Besides the P&L, we had a very significant reduction in the net financial debt at Econocom. One point which I think is worth to be mentioned is, in 2024, the group was able to recoup a positive cash flow generation at operational level, unlike what we experimented in 2023.
Free cash flow arising from the operation stands at a positive EUR 45 million, which is very solid figures and a turnaround compared to 2023. Then we had the benefit of the disposal of Les Abeilles and a certain number of share buyback and dividends that you can see on the table, and the negative costs of the IFRS 5, the cash cost of the remediation of SynerTrade, which is an asset marked to be disposed next year in 2025. In respect of debt ratio, we had now underpinned by this EUR 96 million of debt, net financial debt, very solid debt ratios with a gearing of 0.2 and a leverage below one times EBT. Besides financial figures, as you know, Econocom is very much involved in the extrafinancial items. So I will not go into details around all those achievements in the ESG.
One point really worth mentioning is that, in today's environment, more and more of the tender offer that we have to respond to all our clients needs to be fit in respect of ESG requirements. So it's not only an option. Besides the fact that Econocom is for quite a long time involved and committed in this ESG route, it is now a prerequisite to be in a position to answer positively to those tender offers. On top of those milestones, we achieved, in 2024, three major events. So we were able to improve our gold medal at EcoVadis with an increase of four points. That's quite an achievement in a difficult and even more challenging environment compared to 2023. That's the first point. Second point is we had our target at SBTi, which were approved, and it's also quite an achievement. Not so many companies can tell the same.
We launched Econocom Impact, which is a new digital outlet to present our roadmap and commitment, which is fed by all the commitments and the initiatives at group level through the various business units and throughout the various teams. So now, Angel Benguigui will share with you some outlook for 2025.
Thank you, Philippe. So takeaways, we said that the organic growth in revenue seems to us to be a good one, but mainly the most important thing is that we reinforced a lot our salesforce for the future. Strong reduction in the debt. We are very prudent in that sense. So we want to sell before buying a lot. So that's very easy to understand. We will keep on. We had our first acquisition that is completely in our strategy, bb-net.
And very important because I don't want to forget that on the bottom line, we are not so good this year. We have a big challenge. We have a big challenge we are facing, everybody, is artificial intelligence. Artificial intelligence is impacting our business, and we have to prepare our operations in order to be able, for the next years, to be prepared on that. It means that we have to face transformation, and we have to reorganize some business models, some delivery models. And this is something where we have to make some investments and also some expenses in order to be able to be profitable for the future. So for 2025, our guidance will be to have a growth higher than the one we had in 2024. Why do we think that this is possible?
First of all, because we expect a return from the investments on the reinforcing of the salesforce we made in 2024. Second, because the market trend we think that will be good, will be better, at least. So if I tell you about what the Context the U.K. analyst company is telling us, they are telling us that we were in distribution in Europe + 1% in 2022, - 2% in 2023, flat in 2024, and expected to be + 3% in 2025. So this is the second reason that we will be good for our development. So also, we will have, for our total growth, some new acquisitions, very targeted, strategic, targeted, synergetic. And we will keep on going with the transformation needs that we will have because our main aim is to be preparing the group for a very solid performance for the next years.
We are not just only working for the short term, we are working for the medium and long term. We have a strategic plan that is coming to 2028. We want to have a solid group, from the financial point of view, profitable growth, and very good efficiency, becoming the leaders in Europe about the digitalization for our clients. Questions and answers. Jean-Louis, do you want to, or we? I can do it. And maybe we can ask our colleagues to come and. Anne, do you have the questions? Yes. I think you already received some questions.
Yes, we've received several questions on the platform. The first one is about the situation of the growth for Econocom compared to the market.
And globally, how is Econocom positioned in the face of the evolution of the IT market?
I can help with that if you want, Philippe. Do it.
Okay. So regarding that question, I think it's good to make a we already talked a bit about this, but it's good to make a bit of story on this. When we were preparing the figures for 2024, the year Context was telling us that it was going to be a year of growth, between 3% - 5% at the moment. And then we started the year. Q1, suddenly everything changed. No, no, no problem. The growth is going to be in Q2, later Q3. But finally, we were able to find that growth in Q4. So as Angel explained, our situation was quite good compared to them. Market flat, Econocom growing more than 2%.
Maybe, if you want, I can also speak about 2025. That's going to be good. Angel Benguigui explained that the market for 2025 is expected to grow 3%. Angel Benguigui explained on that. You want my opinion, apart from reading Context, IDC, and so on. I see that the next year is going to happen. Why? Q4 was a good period, so there was a clear growth. There are three other main reasons. First one is artificial intelligence is really happening, so that's really a trend that's going to happen. Second point, for me, much more important, is that Windows 10 is going to finish in October this year, or to finish. We have to operate into Windows 11 October this year.
So many of the laptops that are right now running in all the markets should be changed into a new one thanks to that beautiful chip that is needed for Windows 11. That is good, and also, I think the last trend is it's now a period, if you remember and go back one minute to the COVID, when we were in the middle of the COVID, there were no laptops in the market, so all our main customers were trying to find whatever that was there, so many of them right now, they are having laptops from Dell, Lenovo, HP, or whatever it was in EMEA markets, so it was really, really a tough moment, and now is the period after four, five, six years that when everything should be changed, so that's why, again, the trend, I think, is really positive.
If we compare that with 2024 and the resilience that I think is one of the main points that is for us good, is the resilience of Econocom, is how it's possible that in 2024, the market is flat, but be careful with that word, because it's flat in general in the market. If we compare really with our product mix, it was really depreciating in some of the countries, especially in France. We had the resilience to grow in that market, more than nearly 3.6%, which is, for me, fantastic. If we go to 2025, what we have to cover is it's a good moment. If we are expecting that growth of 3%, we need to change that resilience in the opposite way. For me, for us, the good point should be increase our growth. Angel Benguigui was telling more than 3.6% for that.
Thanks because it's going to be in our bonus, so I hope it's going to be good. I'm sure. I'm sure. But I think it's possible. So I think the IT market, for sure, needs that growth. And
I'm sure that Econocom is going to be able to change it and develop a higher growth than expected.
So I think it's enough for any other about the market.
We received several questions on exceptional costs and on recurring expenses. Can you elaborate on this topic? And can you give the trajectory for the coming years?
Yes, I will tell. Transformation means, in many of our activities, exit costs. So these are exceptional exit costs that are in exceptional because these are positions that are now to be replaced.
When we speak about artificial intelligence and the impacts, and I will let Quentin develop on that, we need also to write off a certain number of obsolete tools in order to be replaced by other ones. Quentin, maybe you can develop on the artificial intelligence subjects that we are developing on group level. I was not prepared to talk about it, but let's improvise.
On artificial intelligence, I really think it's a race that we are running, both on the Global Tech providers. They are racing. It's really fascinating to follow this race. For us as well, it's a race to be able to leverage it, to use it as much as possible for our customer, for our performance.
We are working a lot with Philippe Goullioud, who is leading the services activity, to really be able to leverage it and make it good for our customers and also for our employees. It's really a good experience to work with you on this, Philippe, because Philippe also is really willing to win the race, and we are trying to win the race. How do we know if we win the race or not? It's the customers who are telling us if we are ahead of the race or not. We have already a lot of pilots in production where the feedback from customers and from employees is very good. Also, we are doing a lot of presentations to our customers in France, in Spain, in Belgium.
Customers are saying, "You are well positioned in the race." So if we know that we are well positioned, we want to run even faster to win this race. And it's a really, again, fascinating topic that we are experimenting. And for the next years, I will complete because I don't forget completely the question. I think that in 2025, we will have to keep on making efforts. And our objective is to be 2026, and mainly 2027 and 2028, a very profitable and growing company.
I may adjust because he's shy. When you change management, usually you have this kind of thing happening. The new management tries to come up and look at what the previous management has done and make some changes. And those changes can be costly.
And also, the former management did not always have the courage to address all the subjects at the same time and at the same level. But the new management has this courage. So thanks to them, the profit is less, but the future is brighter. Yes.
We also received a question on the treasury shares. Can you elaborate on share buyback policy?
It has not changed since a few years. I believe, as main shareholders, that the share price is very low. And I think a good investment for Econocom is to buy back its own shares because it's underpriced. But this is my belief. But I might be wrong. I might be right. But in the last 50 years, I may need to be right more than wrong. Maybe we have some questions in the room. Marion, vous pouvez passer.
If somebody wants to ask a question in the room. All the other questions were prepared by us to be easy, so.
Hello. Excuse my English. Yes, please. Could you tell us a little bit more about what sector you consider as tactical for Econocom to make an acquisition? What kind of sector, kind of businesses?
Yes. In respect of tactical acquisition, I would say there are a certain number of geographies where we feel there are room for growth for Econocom. Germany is one. Northern Europe, like Netherlands, is another one. And countries like Italy and Spain as well. In respect of underlying business, we think that audiovisual is quite an attractive segment, experimenting quite growth, slightly higher than other segments. Infrastructure and networks also, as we have a positive competitive advantage thanks to our size and our knowledge.
Also, it's a faster growing market than others. So I think that those segments are probably the segment where we look at the most in terms of potential acquisitions.
If I can add something on that, the strategy of Econocom has not been like some other competitors with only one product in many countries. And this is why the profile of Econocom is so resilient. So we are about mainly in 10 countries in Western Europe that are not risky countries. These are very good countries now.
I know that we speak about Europe is not in good shape and so on, but I remember that I was speaking with a general manager of an insurance company saying, "Yes, risk in Europe maybe it's a little bit higher, but there are no other places where the risk is better." So we are targeting very rich and good countries, and we are diversified in activities. And this is why the model is very resilient. Then what we would like is to have all our activities in these main countries. As Philippe was saying, in Spain, we already have a good operation, but we also want to improve in Germany, in Italy, in The Netherlands, in Belgium, in the U.K. So we really want to be One Econocom in all these countries, to be a real player in each of these countries.
And we are completing our activities in these countries, of course, depending on the opportunities, but with the aim of being a complete One Econocom in each of these very good countries that we think that in Western Europe will have in the next years good prospects. Remember, our strategic plan is two-thirds organic, one-third acquisition. So organic, we just recruited 60 people. As Angel said, the average production per sales is between EUR 5 million and EUR 8 million. This is prudent, let's say EUR 6 million. And if you divide our revenue, which is 2.7 by 450, which was, it's about an average of EUR 6 million. Now, 60 more people and 150 more people at the end of the plan or three years because it takes time to ramp up. That's about EUR 900 million. So the organic is being taken care of. It's not finished. It's a big job.
It's very difficult because we recruit people and we need to make them succeed, which is the second step. We still need to hire 60 more this year and next year. We have challenges. Acquisition, we're aiming at EUR 400 million. What? 400. 400. EUR 400 million. Okay, we're starting. There's nothing urgent. We don't want, as Angel said, we don't want to spend too much money too fast because it's easy to be shiny, but it's difficult to manage. Can you speak loudly because we can't hear you very well from.
Sorry. Yes. A question on the result from discontinued activities. How do you explain the gap between the result posted end of June versus the result end of year? Discontinued activity? Yes. Yes. Yes.
So in the June 30th result, we had the benefit of the capital gain of the disposal of Les Abeilles in the discontinued activity at P&L level. Within the discontinued activities, there is one operation named SynerTrade, which is an e-procurement platform, which was negatively affected two times by a cyberattack by Cactus during the 2nd half of 2024. In conjunction with those attacks, there have been a certain number of consequences. One was the, let's say, slowdown in the commercial activity for obvious reasons. Each and every of the potential clients, prospects slowed down their decision-making process in respect of becoming effective customers at one point. And the second aspect was the need for a certain number of investments to fix the IT infrastructure. So this operation is under very close monitoring by the Econocom Group. This is something we closely monitor at COMEX level.
We had some sharp decisions, including in particular the change in the management team of this operation. We expect SynerTrade to be disposed in 2025 on the back of the initiatives which are taken, both in terms of reorganization, fixing the IT tools, and regaining some momentum in the commercial space.
Another question about the footprint of the group in 2030. How do you envision just after the strategic plan is achieved?
I will try to make that question short if I can. Because you notice when the questions become very difficult, we send a very tall guy. Okay, this is already a difficult question. Quentin will be with me. I will be last.
No, well, the question is not easy, but there is an answer for that.
When we prepare the strategic plan with the team of BCG, Boston Consulting Group, one of the things we prepare is we are always talking about finance, products, and solutions, and services. Okay? So the first thing we prepare is how our customers are expecting. Now I go to the answer, okay, but just to put a bit of context on that. Okay? So we have to prepare that, and we change all this language into more related to workplace, infrastructure, audiovisual. That is the same, but with a different wording, okay, that really our customers are really understanding much better. Based on that, we prepare a matrix. So which is the Econocom situation right now in workplace, in infrastructure, in audiovisual, and in finance, country- by- country, and then the next thing is we have to fill the gaps.
So if we go to U.K., that's right now I know it. We are quite good in finance. We are quite good in workplace, but we have to develop infrastructure and audiovisual. So making the answer short, how I see the situation in 2030, I see the situation filling these gaps correctly because that's something that is going to happen. But more important than that is being really, really creative because maybe that matrix related to workplace, infrastructure, audiovisual maybe can have changes because the market is changing. The market is evolving. The situation is changing every day. But that's more or less the strategy under our view. Is it okay the answer? Line?
About 2042. I will be 100 years old, so I'm very interested.
Oui. On the platform, we have a question on the dividend and the repayment to shareholders.
So why did you cut your dividend even though the balance sheet is strong and profits should recover in 2025?
[Foreign language] I'm not on mic.
Why did you cut your dividend?
Why did I cut the dividend? Well, we had this discussion yesterday at the board. We decided to keep the same level of dividend compared to the profits. So compared to the total profit, we decided to do about 40% of the profits as dividend, which has been the policy in the last probably five years or six years. So the number would be between EUR 0.09 and EUR 0.10 per share because the number of shares has decreased. So we have decided to keep the same policy. No questions in the room? Question on the side.
Hi. Can you hear me?
Yes. Yes.
So two questions.
First on Microsoft. I mean, you're a big partner for Microsoft in Europe. And I understand they are changing their incentives for their partners, financial incentives. So could you elaborate on how you could be affected one way or another?
Okay. Yes, that's right. Microsoft is changing that part. But they are not trying to because the first idea you can get is, "Oh, these guys are trying to pay less to the partners." Okay? That's the first sentence. They're really trying to change a bit the rules that for me make absolutely sense. So if in the future you want to be a pure reseller of licensing, that's not the future for a company. If you want to really be involved in this, you have to deliver services around those licensing. And if you are doing that, you are getting the same level of rebates and even more.
So that's for me, it's not a change decreasing the Microsoft relation or whatever. We are happy with them, really happy with them. Of course, we always want more rebates. That's normal. But we are happy with that. But it's a change on the rules of the market. No more than that.
And you think it will have a neutral, positive, negative impact?
In the short term, if I check the I will tell you, I will answer the question in the short, medium, and long term. Okay? In the short term, it's going to be a big shock for many of the companies right now because there are companies really fully related only to distribution of software. If they are not prepared to ramp, it's going to be a huge change. For Econocom, we are already prepared on that.
We have a huge number of people making services around that, so we're able to do it. I don't see a big problem with that. If I check the medium and the long term, for Econocom is a good opportunity. Because Econocom, again, let me go back to the first part of my answer before it. It's a resilient company, so it's really able to understand the situation of the market and really able to change internally into focus on that. So that's why I think we can do it. It's quite flexible, and we change very quickly our capabilities.
And I think that if I can add, Israel, we are aiming value-added services. And when we speak about we don't want to be box movers. When we speak about finance, about distribution, about services, we want to be oriented to value-added services. So this is completely in our strategy.
Another one, sorry. And just on 25, you have mentioned some idea of the growth you plan to achieve. But where are you most confident in terms of segment? Is it more in TMF or Products and Solutions? And also linked potentially to the hires that you have done.
I think that I would say we have a very good trend in leasing. So we had +7.7% in 2024. But do not forget that we also had +10% in 2023 compared to 2022. And I think that it will be also a good year in Products and Solutions because for the base effect,
it will be a good year. I am sure about. Services is much more linear. So it is more in the trend of three years, four years.
Good morning. I have a question for Quentin Bouchard.
It has to do about the impact of AI on the working population on the platforms at Econocom. Do you have a roadmap for that, and how do you want to proceed to adapt the increase of one and the decrease of the other one?
Yes. So it has a big impact, and not only for workers in the service of Econocom, but for all the workers of Econocom, and also for all the sectors, for banks, for financial analysts, for software developers as well. It has a big impact. For example, if you see SAP or Salesforce, maybe in five or six years, you can say to an AI agent, "Develop me a software like SAP or Salesforce," and we'll have the same without paying the licenses. So the impact is for everybody. And for the people you are talking about, we really build the evolution with them.
We have an example in Grenoble in our services. We are building with them the way to leverage AI and to use it as much as possible to be more performance, and we plan to grow. Personally, I want to grow in 2030 or in 2042. I want to grow, and we really need everybody to grow, to do a lot more business, a lot more of tickets that we do with our customers. We need everybody. I want to be with everybody on board and all the people that are motivated and willing to innovate.
Give me one minute on this. Okay? Promise only one minute. We don't have to be catastrophic on the way of artificial intelligence. Okay? Because imagine that we go in five or ten years, none of us will be here because there will be a machine preparing this presentation.
On your side, there will be another machine reading the presentation and sending the communication to the market, but there will be no market because at the end, there will be other machines reading and reading one to the other, and nobody's working. Okay? So I think we don't have to be catastrophic. Step- by- steps. And of course, there is a plan inside Econocom, as Quentin. There is investment. We have to invest there, and we have to really go reading what's happening in the market, but don't be catastrophic. Don't send the message to the people that tomorrow they don't come on. I have to go on a strike because I don't have a place to work. You know what I mean? Make no sense at all, so don't be so catastrophic. Promise not to send all the documents to artificial intelligence. Okay?
We will put our own brain on them.
We have a question on the financial target in terms of leverage. What is expected in 2028?
Right. So in 2028, the target in respect of leverage. At Econocom, we aim to have a solid and, let's say, safe and sound balance sheet. So as you have observed, we have reduced significantly the leverage being below one times. There are significant efforts made within the company in order to optimize the financial position, including in particular work on the working capital requirements. There are still some elements and items to be disposed. As I mentioned, there are discontinued operations that will be disposed during this year and the next. And on the other end, we aim at growing the company with ambitious external growth plan to develop the company with a EUR 300 million-EUR 400 million turnover to be acquired.
In this context, the objective of the management of Econocom is to remain within a low debt multiple. So I think that right now we are below one times. So an ambition to remain in this area is quite, I think, reasonable for the company in the Context whereby right now we are looking at small objects in terms of acquisition with strong synergies. And so the operational leverage and the low valuation will help us. And the discipline in terms of financial approach of the balance sheet is something which is very strong within Econocom, underpinned by the family-rooted background of the company and its President. So I think that its objective to remain within one times EBITDA is a good objective.
Oh, yes. A question on the tax rate. As it was high in 2024, what caused this? And what should we expect for 2025?
Do you want to address, or I will? We expect in 2025 a better tax rate. And we had an increase in. You know that there are many, many companies in the group in many different countries with many different percentages of taxes. And from time to time, we have a fiscal control. And from time to time, we have to pay some money. So we had that in 2024. Yes. But in 2025, we think that from the tax's point of view, we will have a better position.
A question on the M&A pipeline. Are there any large targets in it?
Well, at this point, as I mentioned, there is no large target. We are focusing on very tactical, as mentioned by Angel in the presentation, targets. The objective is really to be relative in terms of valuation, as well as being very synergetic.
And so we are looking at a certain number of deals which are consistent with the presentation I made in respect of strategic sectors, audiovisual, certain geographies, infrastructure, and networks. But we are looking right now at, let's say, small to intermediate objects, both in terms of ability to integrate them as well as financial discipline in the context whereby we want to remain within this leverage. And we still have a certain number of assets to be disposed before moving into bigger M&As.
Absolutely. If I can add something, we have a long background in Econocom buying companies. So we know perfectly what is working and what is not working. And the objectives that we have now, before acquiring a company, we want to be sure that the company first can be completely integrated in at least two, three years.
Second, that the managers remain with us and that the fit on the kind of management profile and objectives are Econocom DNA. And this is the way to have strong synergies. So for us, if we pay your multiple, it's true that the multiple of Econocom is not very good nowadays. And this is the reason why we are buying shares of Econocom. But when we buy a company, the synergy is the main objective. So for example, the acquisition we made in Germany, we have the experience in France, will be very synergetic. And the ones that we are looking in the U.K., in Germany, The Netherlands, in Spain, on audio-visual or infra are very synergetic. So fit with the management and many synergies on that.
Yes. And another question on the growth of TMF.
What is the part driven by strategic leasing versus IT leasing?
Both are growing. I would say that in TMF, the organic growth came before the other activities because we started hiring many sales before, and it's the backbone of the group. We had in 2018, 2019, we had to make a lot of efforts reducing costs at group level. We made a mistake because we reduced costs and we reduced also sales on the TMF activity, so we realized very quickly on 2020 and 2021, so we restarted hiring a lot of sales in TMF. In my opinion, this is the reason why it's the first activity that is growing organically very strongly, and it's a very important objective because we don't have any kind of leasing company to acquire.
So this is an activity where we want to develop organically, and we make a lot of efforts on that. But we started reinforcing the sales before the other activities.
Come on now. You need to earn to drink or to eat because all the questions come from people remote that won't have anything to drink or eat. So you have to take your share. Thank you. Bonjour.
Hello. I have a question about turnover because people are very important. And you just mentioned that the sales force and also experienced technicians are very important for your development. What are the respective turnover rates? And if important, what are your retention scheme to make sure that all the sales force and all the people are enabled to achieve your plan? Thank you.
We have 2,000 people leaving the group last year and 2,000 people entering the group last year.
It's mainly about the services because we have about 5,000 people in services at group level. This is normal in all these IT companies with services activity. On the rest of the TMF and P&S activities, I would say that we have retention plans on one side in place and that we are building and improving. And second, for the management. And second, the agent model, and this is the reason why we are developing and deploying the agent model all over the group, is very resilient because the sales, when they are successful, they can probably be attracted by like Vinicius, by Saudi Arabia. But an agent, no, because he is an entrepreneur. And we did not have agents going out. So for the sales force, to have a sales force balance between agents and sales, this is the retention plan. Did you?
I can add also because it all depends where you are located in the company. At the very top of the company, the retention rate is very high and rotation very low.
A question on the factoring level. What is the level at the end of the year?
Yeah. So at year-end, factoring is part of the organization of the accounts receivable management within Econocom. So it's a way also to recoup and monitor the quality of our receivable. Part of the process of invoicing and recouping the receivable is outsourced towards our financing partners. At year-end, we stand slightly above EUR 200 million in terms of factoring level. Non-recourse.
Because Mr. Bouchard asked us for working and asking questions, I ask another question. Did you say you had a turnover of 2,000 people, 2,000 people out of 5,000? Is that what you said?
2,000 out and 2,000 in 2024. Out of how many people? 8,500 people. Out of 8,000. And it's mainly in the Services activity. Maybe Philippe, that is responsible for the Services, can tell something about that. Do you want, Philippe? [Foreign language] There is a big turnover in the Services activity because there
Is a turnover depending on the type of services and the size of services made. In average, it's on the market level. It can be between 17 to 22, 25, depending on the type of services and depending on the type of technician and depending on the type of site and somewhere all over Europe. So this is an average.
I had another question. It has to do about the balance between agents and sales force. Okay. What's your opinion about this model?
Do you think agents are as productive as the internal sales force? I know you put the money, the cost out when you have agents, but is it the most productive way of approaching the market?
I learned the agent model when I entered Econocom. And Jean-Louis Bouchard founded Econocom with agents. And from 50 years, always profitable and resilient. So in my case, I learned about the resilience of the agent model when I came into Econocom. I have to be clear about that.
When we decided to develop this strategic plan, we said, "Okay, we have to be careful with all the attrition rate that we have in the sales because we had already a lot of numbers about the new entrants and the attrition rate in the sales force." We decided that a big part of this increase in the sales force would have to be done through agents because it's a very resilient way to preserve the people. And the good ones, when they have a good agency, they have colleagues and they hire people. It's a very good way for a very good sales that is not a management profile to be a sales director, but he is already a very senior sales to be able to put in place his own agency and then to be in some way an entrepreneur working with Econocom.
This kind of profile will never leave. And when the agents are becoming older, they want to retire, we negotiate with them. We always have contracts that are exclusive, and then we can buy back the portfolio. So we buy back the portfolio and we put it in another agent. So it's a very good system. Of course, it doesn't have only advantages. An agent is more independent. It's not so easy to manage. And in France and Belgium, they are very used to. In the other countries, it was a new way to do it. And I am very happy for the deployment of the reinforcing of the sales and agents in the group in 2024 because now it's a model that exists in all the countries in the group. And the ones that were somewhat suspicious about the model are now very convinced about that.
The balance has to exist because you need both.
My understanding is that Northern European countries are driving the growth. But what about countries such as Poland? What is Econocom's ambitions in terms of development for those countries? Thank you.
Poland depends on the region, Germany, Poland. And because I think that there are many synergies between Germany and Poland, we are still trying to develop the business there. We developed a lot in Germany, not so much in Poland. So I would say there is a pain point. Yes. But I think that Poland is a very industrial and powerful country with many good profiles in terms of education, a lot of banks, finance people. And I think that we have a lot of possibilities there. But step by step, we can do everything at the same time.
Yes, a question on the platform.
Regarding the cyberattack that happened in 2024, what has been put in place regarding risk management?
So we have a risk management policy for the group led by François-Xavier Vincent, who is our Chief Information Security Officer. And we review the risk that we have. The first one is this one, is ransomware and data leak. And this is what happened in SynerTrade. And we deployed all the group policy, the checklist of all the requirements that we need to have in every entity. And now it's deployed in all entities in order to be at the good level of security for Econocom. And we will enter in a more certification-oriented approach in order to be sure that we are at the right level and to demonstrate to customer and partner that we are at the right level of security.
It's a really strong focus that we have. More questions? Thank you very much. Thank you. We will have a glass, some glass of wine or something. Okay? Or coffee.