Hello, good morning. I'm Philippe Renauld. Welcome all of you for the 2025 Annual Result Presentation. We, Angel Benguigui and myself, will be presenting the 2025 Econocom Results. Today, stand around a strategic update, 2025 financial performance, outlook for the forthcoming 2026 and years, and a Q&A sessions. Before leaving the floor to Angel, our CEO, we have a small video around the achievement of 2025.
A long time ago, life began to beat. Imperceptible, microscopic pulses from which all living beings emerged, humanity emerged. In constant evolution, ready to dream big and to create new worlds, we chose to embrace technology as a way to stay close to our origin while propelling our future forward. Because the unit of life is a heartbeat, and the unit of technology is a bit, and we set out to keep them united, because technology without people is only noise. Yet in our hands, it becomes true music for the senses, live, unique, unrepeatable, soulful, and unforgettable. Here, we open a new chapter in Europe's technological story with the ultimate purpose of creating living spaces. Where every heartbeat of innovation sparks emotion, and every emotion transforms into unforgettable experiences, all while keeping technology practical, human, meaningful, and alive.
This is your purpose, our purpose, the purpose of Econocom, where every bit meets every beat.
Thank you, and now leaving the floor to Angel Benguigui, our CEO, for the strategic update.
Thank you, Philippe. So, thank you to be here with us today. You had our press release, but we will try to tell you about the main points in our opinion of 2025 and for the next years. 2025 was a very rich, intense year for Econocom, and I will try to tell you the main achievements in our opinion of the year. First of all, we keep on going with our strategic plan, transforming the, the model, the profile model of the company and working more and more far around our four strategic verticals: workplace solution, audiovisual solution, infrastructure, networks and security solution, and financing solution.
We keep on going with the growth 4.3%, of which 2.7% organic is quite correct, in our opinion. It's not exactly what we said, because it's true that first half of the year we had a 6.6, and we thought that it would be on the second half of the year the same environment, but it was not the same environment. It was much more tough. So we lost in Q3 some trend of growing in October, November, also, but December was a very good month in terms of growth and in terms of profitability. So at the end, we are at 4.3%.
We created a new vertical around the audiovisual solutions that we think are integration around these AV solutions in Europe, in our opinion, is a market with a big potential. With the acquisitions we made around that, we are the number one in Europe, with more than EUR 300 million revenue and 750 people working on that. With the subsidiaries in all the main countries, France, Spain, Germany, the Netherlands, Belgium, UK, Ireland, Italy, and so on. Then if we go to the next slide, I think that the organic growth focus is the main point of our strategic plan.
In Econocom, it was not so easy to push for organic growth, because we were for many years used to acquire many companies. In this plan, organic growth is the main focus, and we kept on going with organic growth, improving and strengthening our net force, sales force, sorry. So, we increased in 88 sales and agents in 2024 and 2025 in net. Remember, the attrition in the sales floor is quite big, mainly in sales. So, we increased in 53 agents and the rest in sales, and we will be keep on going with that. This is what will support our organic growth.
We are very focused on profitability, so Econocom was, for many years, very focused on the, on the revenue. When I read your comments, I always see that revenue is very important, but in my opinion, profitability is more important than the revenue. We are trying to push the mindset of profitability in the group, going to value-added integration solutions in the main verticals we cover. Using technology for improving our efficiency and to improve the way we serve our clients. We signed a partnership with Palantir in the artificial intelligence, and then we are investing in artificial intelligence, and we will keep on going with that because we think that for the next years, it is mandatory.
In the next slide, we keep on shaping the organization for the transformation. So, more synergies, more collaboration, more alignment, more monitoring of the business, of the performance, of the sales. And with a solid ComEx, then is consistent and aligned. And we keep on recruiting talents, sales agents, and managers. Also, of course, and I want to make a point on that, we made a big transformation of the central support functions of the group in 2025. I think that we improved a lot the quality of all the central support functions on legal, on HR, on talent, on IT, on finance, and we all also onboarded very good new talents, managers in these, in these functions.
Now we will go to the figures, and I will let the floor to Philippe.
Thank you, Angel. Thank you very much. So moving on the 2025 fiscal year result. In terms of revenue, as mentioned by Angel, we had a growth of 4.3% in total, including 2.7% of organic growth. In 2025, we benefited from January of the consolidation of the revenue of bb-net, the company we acquired in the refurbishment space in Germany for circa EUR 20 million. And for the audiovisual deals, which were acquired in July and August, they contributed for circa EUR 33 million of revenue. Throughout the years, have you been able to observe it throughout our quarterly communication, financial communication, we had a slower dynamic in the second half of the year, despite some encouraging signal in the very end of the year in December.
In terms of geography, the growth was mainly driven by the Southern Europe countries, namely Spain and Italy, as well as strong dynamics in Germany. In terms of profitability, we had a stable 4% operational margin in the context of strong reorganization and transformation of the growth, as mentioned by Angel, with the shaping of a new vertical in the audiovisual space, as well as certain number of reinforcements from the frontline, with the increase of the sales force and agents, as well as improvement of the overall organization, setting the foundation for future growth. In the leasing business, we had a total growth of 4.7%, including 3.1% organic. As you know, the refurbishment business is in the leasing operation, as it is the very end of the cycle of the product with this recycling.
In terms of margin, we have strong improvement of the margin, raising to 45.3%, benefiting from strong operational improvements and operational leverage, thanks to the dynamic of the revenue. In the product and solution business, we return to positive development of revenue. As you know, we had some negative momentum in the first half of the year, and we were able to recoup growth with a 2.9 organic and a 35.3 total. It is in this segment that the audiovisual businesses acquired were accounted for. In terms of operational margin, we had slight erosions due to the impact of the market. The market was quite challenging, with competitive tensions in a certain number of countries. Slowdown in France, as you may know, due to uncertainty.
Nevertheless, the business was able to deliver a margin of EUR 34 million in 2025. Finally, on the service businesses, the growth is limited to 1.1%, with a total revenue of EUR 526 million and stable operational margin due to the number and volume of contracts which were renewed during 2025. So we had a slight erosion, and we have good hope to restore margin on the long run of those long-term revenues and long-term contracts benefiting from J-c urve. In total, looking at the full P&L, so we had a growth trajectory underpinned by our strategy, with a 4.7% development growth. Operational margin growing to EUR 118 million. Operating profit impacted by continued exceptional in conjunction of the transformation of the group.
It's fair to say that we had a certain number of people that came in and came out of the group, as well as certain number of elements which needed to be written off. A strong growth of the net profit. As you can see, it improved by nearly 50%, moving from EUR 37 million up to EUR 53 million. In terms of net profit, as you know, we had in the first semester, the impact of a write-off on the discontinued operation of Synertrade of EUR 10 million that we had to complement by an additional EUR 27 million in the second semester, which were finally complemented by the losses on Synertrade for an additional EUR 10 million.
We are quite good hope to be in a position to de-invest this operation, which is the last remaining software edition businesses within the group and the last remaining non-core business within the group in the forthcoming weeks or months. In total, the net profit of the group for 2025 is standing at EUR 6.4 million. Following those operations, the group was able to deliver quite a positive cash flows, with 142 million euros of cash flows, benefiting from the operational cash flows, as well as improvement of the working capital requirement by EUR 86 million, which is a combination of slight increase in factoring, as well as structural improvement of the working capital requirement.
In terms of M&A, we invested for the future of the group with the acquisition of bb-net and the audiovisual deals for a net amount of EUR 41 million. The losses, as well as the reduction of cash flows of Synertrade, impacted negatively our cash flow statement, hence, making that we stand in total at a limited leverage of EUR 36 million at the end of the years. Looking at the structure of our leverage, as of December 31, 2025, we had the benefit of a significant treasury of more than EUR 500 million, some short-term debt, namely, commercial papers for EUR 10 million, bonds, the 2022 Schuldschein, as well as the 2025 Schuldschein for a total of EUR 369 million and other corporate financing for EUR 174 million.
In total, our net financial debt stands at EUR 36 million, benefiting from factoring at EUR 318 million as of December 2025, to be compared with 263 as of December 2024. In terms of ESG achievement, as you know, ESG is very important, both for the company in light of its family and roots, as well as the commitment we had to our all our stakeholder, our clients, our people, our the environment, our teams. So we had significant development toward our clients, with a significant increase of the hardware product under maintenance, thanks to the acquisition of bb-net, as well as organic development. We approved our SBTi targets with the SBTi environment, and now we are rating at 76 out of 100 in terms of EcoVadis rating, compared to 74 last year.
We were able to reduce our gender pay gap and increase the number of disabled people working within our organization. Now, I'm leaving the floor to Angel for the outlooks.
Okay, so on the next slide, as main takeaways for 2025, we can say that we keep on going with quite solid organic growth, thanks to the strengthening of the sales force and sales and agents. We keep on going with our strategic plan, go into solutions around our four main verticals. And we made possible a net debt reduction at the end of the year. Our main objectives for 2026 will be to keep on going with organic growth. So we don't want to depend on external growth because acquisitions are not so easy. Prices are challenging and because we want to be prudent from the debt point of view, so very focused on organic growth.
We will keep on going with the group transformation, and when we say transformation, is around our four verticals, the offering around our four verticals, the synergies, the cross-selling, the alignment in strategy between all the countries. And the third, we will be focusing on cash flow generation. Cash flow generation will be our obsession for 2026. In terms of guidance, the only thing that I can tell you is that, because of these reasons, we have to change, we have to change, from the quantity point of view, the main points of our strategic plan in terms of figures. We keep on thinking that our strategic plan from the qualitative point of view is very strong, very good, and we will keep on going with that.
It will be the base for the transformation of the group, very focused and improving the operational efficiency and our profitability. But in terms of revenue, we prefer to be prudent, because the market is not good. The market in distribution, you know, that is very challenging. It was challenging in 2025. Last months of 2025 were better, but this year we are seeing that all the prices are going up strongly. So there are many uncertainties in terms of the market of the distribution.
In terms of services, as you all know, there is a challenge about improving the investments in artificial intelligence in order to be able to deliver the services to our clients in a more efficient way and to be competitive with the main competitors in the market. So, we focus on growth between 2% and 3% for 2026, for 2027, and for 2028. And now we are at your disposal for any question you may have.
Thank you. We will now begin the question and answer session. If you'd like to ask questions on the phone, please press star one, one and wait for your name to be announced. Your first question comes from the line of Luuk Van Beek from Degroof Petercam. Please go ahead.
First of all, a question about your target for 2%-3% organic growth. Is that organic or including acquisitions?
Including acquisitions, but really, we don't bet on many acquisitions. It's it will be very tactical medium-sized companies, and we don't foresee really many acquisitions for 2026, and we'll see for 2027. But we count on the organic. When we say 2-3, it's more on the organic, but globally, we can say that 2-3 is our target for global and total growth. But it will be mainly, mainly, mainly organic, because we don't look for acquisitions to be done.
Yes. And you stressed that you want to keep a strong balance sheet to maintain full strategic flexibility. And I'm a bit puzzled, because on the one hand, you indicate that you will have a little bit positive organic revenue growth, and then your margins should go up. You will not spend a lot of money on acquisitions if I hear you. So why is it so important to have such a strong balance sheet, and what kind of strategic flexibility are you referring to then?
Well, I think that we were very focused on growth, and now we want to be focused on profitability. So personally, since I became CEO of the company, I will try to focus on profitability more than growth in terms of revenue. If we can be with a EUR 3 billion, around EUR 3 billion company, more diversified, because we are more and more diversified. France now is just 42% of the business of the group, while 3 years ago it was 65%. Diversified in the main countries of Europe, diversified in 4 verticals and with organic growth, correct organic growth. I would like that the company could be more efficient in terms of profitability. So we will be focusing on cash flow generation and the profitability.
So we will be we put in place already a plan for reducing expenses, so what we call internally smart savings, because we will keep on going with all the investments on the sales side. So we will be keep on going with investments in artificial intelligence, on Salesforce, on good managers, but we will try to reduce expenses on a smart way. We will intensify the training of the sales. We will intensify the analysis of the performance of all the salesforce of the group, more than 500 people, in order to improve our operational efficiency and to be more profitable. Now we are at 4%. Two years ago, we were at 4.3%. Of course, the revenue was lower, okay?
Last year we were at 4%, but we want to become at 4.1%...4.1% and 4.3% for 2027-2028. So we will be focusing on profitability improvement, and of course, when we will be able to make some good acquisitions, we will do it, and it will be more than that. But we are not telling 2-3%, thinking that we will be doing that with acquisitions. It will be mainly organic. So we focus on profitability.
Okay, that is clear. Now, my final question is about the impact of the rising component prices, because we hear lots of stories about rising memory prices and other costs. Does that help your leasing business in the sense that customers are willing to use your equipment for longer time, and also your refurbishment business, where you may be able to refurbish things and resell them to new customers?
So our refurbishment business, you know, that we have two quite good subsidiaries in France and in Germany, is our part of what we call the vertical of financing solutions. Why? Because leasing nowadays is more and more, thanks to CSR guidelines, related to this refurbishment, and we are developing offers around all the life cycle of the equipments. Meaning that many clients ask us for leasing with the commitment of keeping at the end of the contracts, a certain percentage of these equipments to be refurbished in our subsidiaries of refurbishment, and then to be re-leased. So this is why refurbishment is important and part of the financing solutions. But I'm not sure if I answered completely your question. Maybe there was something more?
Yeah, well, I was wondering if the higher costs of basically new equipment is helping you to extend the life of existing equipment and-
I don't know.
... the lease portfolio and the refurbishment activities are, yeah-
Yeah
are better positioned, for that than, than competitors.
You know, when... What I'm seeing is that, I know very few people that knows what happened in the... What will happen. So many big providers, many big companies, they are telling you, "When Windows 11 will come, we will explode in terms of selling our PCs." We made, for Econocom, the analysis, and we are in Windows with Microsoft a lot for our own use, and we are almost 9,000 people, and we had to change 500 PCs. So, and now, last year, some big providers were telling, "No, H2 would be very good." It was not the case. And now they are telling us prices will go up, because all the chips will go to infrastructure, artificial intelligence, and so on.
There will not be chips for the PCs, and then the prices will go up. The impact will be good or not? Theoretically, the impact would have to be good on leasing. Theoretically. Theoretically, it would have to be bad on distribution, but I really don't know. I can't tell. I will not be the one who will be thinking that I am... I know a lot more than many others. I don't know, really. So what I know is that we are a very diversified company. So if it's good on distribution, it will be not so good on TMF, it's okay. If it's good for TMF and for distribution, it's okay. But this is the reason why we choose the profile model that is what it is.
It's very diversified in terms of solutions and diversified in terms of countries, knowing that all other countries where we work are very solid countries.
... Okay, that's clear. Thank you.
Thank you.
Should you can press star one, one. One moment for the next question. We have the questions from the line of David Vagman from ING. Please go ahead. Vagman, your line is open. You can unmute locally.
Yes, sorry, I was on mute. Good morning, everyone, and thanks for taking my question.
Morning.
First question is on the free cash flow for 2026. Any kind of soft guidance you could give us on the working capital evolution? So you did quite some improvement last year. You said slight increase in factoring. If you could comment a little bit on your expectation there. You also say that free cash flow will be your obsession for 2026. And then second point, coming back a bit on the earlier question. So I saw you halving the dividend on the premium share purchase. I don't know, don't remember the technical name. Why is that? Why did you need to, you know, like, to cut the... Because you're not doing much M&A, you say, so you're talking about strategic flexibility.
Why is it so important to further, you know, like, improve the free cash flow? Okay, that I completely understand, but also, why was it needed to cut the dividend? Thank you.
Maybe, Philippe, you can answer the first part. I will answer the second.
Okay. Thank you, Angel. So on the first part, as I mentioned, you know, the objective of Econocom for 2026 and the following year is really to improve the cash flow generation of the operation. It's come back to the first point mentioned by Angel, which is focus on margin. You know, the company for the long term has been focused on revenue development, revenue growth. Now, we want to move the company toward a profit culture, and this profit is, at the end of the day, demonstrated by cash flow generation. This is very important. This cash flow generation come from the margin. It come from the various elements after the margin, namely the CapEx, namely the working capital requirement improvement.
As you know, we are using a working capital requirement to do our own business throughout the years, sometime in the distribution business, sometime in the leasing business, whereby we first make the acquisition of the asset before being refinanced, so that we can serve in a more promptly manner our clients. So we want to improve this throughout the years and be in a position to monitor, in a better manner, the cash flow and improve the generation of cash of the business throughout the years. The objective is to reduce the factor because it has some impact also on the financial performance and operational performance of the group, and we want to retain full flexibility to seize whatever opportunity can be seized by the company in the forthcoming years.
On the second part, the revenue, the dividend, why we decided to reduce the dividend? Okay, I think that you noticed that our net result is not very good this year because we were forced to make a big provision impairment on the last subsidiary that we had in discontinued activities as Synertrade, software as a service platform, that we bought many years ago and that was not well managed. And that we had two cyberattacks last year, and that we returned and we are selling this company. We signed an exclusivity contract for selling that.
Then, even if it's a non-cash issue, and it's just a write-off, we think that it's prudent to cut the dividend related to last year. Last year it was EUR 0.10, this year is EUR 0.05, and it goes also in the sense of preserve the cash flow for the year.
Okay, thank you. So... Could you describe a bit like the payout policy or the dividend policy that you have? Is it-- I would have thought it was more related to the net debt and the adjusted earnings than the net profit, because you said it, as you say yourself, it's non-cash.
But, you know that the debt at the end of the year is not the average debt of the year, because if you look at the financial-
Sure
... expenses of the year and you make a calculation, a simple calculation, you will see the average debt is higher. We are focused on improving the cash flow and reducing the average debt all over the year. And we are prudent. So, I think that for the Jean-Louis Bouchard, directly and indirectly, has 89 million EUR shares. After the board yesterday, the company has 162 billion shares. So there are 55% controlled directly by Jean-Louis Bouchard and 45% in the market. We think that is a good management for the company and for the shareholders to be prudent on reducing the dividends for the shareholders. That's all.
Okay. Thanks very much.
Our next question comes from the line of Simon Vlaminck from Degroof Petercam. Please go ahead.
That's okay. Thank you, Simon Vlaminck from Degroof Petercam. Just, I mean, one of my questions was answered on the dividend, actually. But so do you seem to indicate that this one is going to be a one-off, and next year we go back then to a normal dividend payout? Because it's the shareholders have not been rewarded that much, I have the feeling, especially if you see the stock going down. Just can you confirm if we see a normal year next year without write-downs? I mean, there's not a lot to write down anymore. I have the feeling that the dividend will come back.
I can't give you a guideline on the dividends that will be paid next year. That is a decision between the hands of the board of the company, and it will depend on the results of the year. I can't tell you about what will happen next year in terms of dividends.
Mm-hmm. Then on Synertrade, it was quite a big write-off, of course, but you seem to be close in selling or divesting-
Yeah
... that activity. Can you give an indication on, on what the value, the book value is today, still in the books?
So indeed we are. No, we, as mentioned, since the beginning of 2025, we are working hard to dispose this company, which is the last non-core activity within the Econocom Group. It is a software as a service platform for e-procurement. There's been a certain number of discussion. We are now in an exclusive discussion, so the book value of this company in our is right now standing at EUR 10 million, following the various write-down of the goodwills, and we have good hope to conclude the discussion on those basis with the party we are discussing with.
Sorry, you said 10 million positive?
Yeah. Yep.
Okay, very good. Thank you. And then, maybe, just to understand how, how are you looking at the share price development, these days in, in terms of multiples that you see? I see that you are also kind of putting the acquisition policy a bit on hold and gonna be very selective. Has that something to do also with where your stock is trading these days, versus where the sector is trading? And do you intend to do something about it in, in, in the sense of being more, open, doing more roadshows, and being more visible for the investor community?
Really, I have to tell you that I don't understand how the value of the stock is evolving. Maybe, probably, because you are specialists, you will know better than me. But I see millions of shares in the market, 45% of Free Float. Nobody is selling, and nobody is buying. So I can't tell you what will happen with that. I know that the markets are not very interested in European small caps. Maybe the market now is looking for the big American technology companies and companies that are involved in defense and so on. And I can't tell you about the evolution of the share. I don't know. Really, I don't know.
Yeah. A bit of frustration, I feel, but is a share buyback because we've seen a lot of share buybacks in 2024 and the years before. Last year, it was already a bit muted. Your balance sheet, again, is quite strong. Acquisitions seem to be a little bit less of a priority. Can this come back? How are you looking at that part?
We want to preserve the cash flow. But of course, if the stock is going down, we will come back. If not, we will stay as it is. There is no special objective on that because also you can see there is no volume in the transactions. So even if you want to buy, you will not be having a lot of shares.
Yep. Okay. Yeah, it depends a little bit on if there's anybody in the market. I kind of agree. If you would be buying it, it would be very helpful for the stock price, I guess, and a sign of confidence and on belief in the future.
Well, we bought a lot.
There's no acquisition that you could do at these low prices, I guess.
Yeah. We all, we already bought a lot.
Exactly. Yeah, yeah. No, no, no, I know you bought back 25% of the company in the last five years, I think, which is a good thing. And the market is not rewarding, but we're—I mean, I think the last, the highest price that was paid in the last two years was close to EUR 4. We are now at 1.5, or close to it. Just curious, how you looked at it, but it seems to be that you seem to be waiting, that it still can go lower.
I just see what you say. I mean, you were at 220 or 230 or 210, and now you are coming to 190. This is what I see. But I don't know more than you about.
Okay, thank you.
With that, we have come to the end of the Q&A session. There are no further questions from the line. Allow me to hand the call back to the management for closing.
Just to tell you, thank you very much for your interest, for being, sharing this time with us. See you next time. Thank you very much.
Thank you very much.
That does conclude today's conference call. Thank you for your participation. You may now disconnect your line.