Hello, everybody. Thank you for being with us today. On our side, all the Comex is present for this presentation. Israel Garcia, Managing Director of Business Development and Support, Director of the Services and Distribution in France, and responsible for the Global Group Tech. And as always, Philippe Renauld, Managing Director of Finance and M&A, and myself. The agenda will be first a strategic update with Israel and Quentin. The numbers, the key figures of H1 that will be presented by Philippe. An outlook for the future that I will be telling you, and the Q&A for any of us. We are now with Israel going on the strategic update. Thank you.
Thank you very much, Angel. Thank you very much, and really good morning to everyone, and thank you for joining us in this presentation of the Econocom First Half 2026 Results. Over the next few minutes, we would like to explain to you a bit how was the first semester. What I would like just to summarize a bit, it was a first semester of a resilient group that was able to navigate into a really difficult market, and later we will have some explanation around this, and disciplined execution of our strategic plan and absolutely unchanged confidence in our trajectory and the job we are doing. Yes, it's true, it's been a really difficult market. As I'm sure you all know, the supply chains for key IT components have stayed really under pressure.
There was really a lot of movements around players, and later the Apple base with changes in the last weeks. Sure, it's the whole industry attention more focused on AI of our customers and the customers into a wait and adapt posture, really managing in a very careful detail the budgets and reviewing every euro they are spending. Of course, this could cause a delay larger investments, which sometimes is difficult in our finance business. Let me start with the first slide, talking about the first frame, that is the part of the group transformation. Really that means that we've been working with a sharper commercial positioning, a leaner organization, and a really strong job done in order to manage and control our debt management.
Later, we will talk a bit more about this, but I use these three main points in order to explain a bit the revenue done that we had with the 3.7%, just moving us into near the EUR 1.4 billion figure. Just to explain and give you a bit more detail where it's coming from, it's mainly based and concentrated in a single business, that is the technology management financing, and really specifically about our on-book deals, where we really kept a cautious situation and in order to preserve our financial debt. Later, I'm sure that Philippe will make a stronger conversation around this and a stronger explanation around this that will give you more information. For sure, this is maybe one part of the information. The strong information we have is we had a quite good business in P&S.
Quite good, talking about strong growth, being able to manage this curve. Of course, joining to the third panel, being able to have a positive portfolio effect that, as you know, under our strategic plan, we've been working a lot under our strategic plan, under our portfolio. This momentum that is in P&S, of course, is based on that. Maybe if we move into the next slide, we can discuss, and this slide is trying to answer our logical question is: If this environment is a bit difficult, what Econocom is doing internally to improve? The answer is resting in many things, but of course we have three main levers. We've been executing with discipline throughout the Econocom plan. We are repositioning our commercial offering toward higher value solutions.
As you know, this was one of our main levers in our strategic plan, we are doing it structured around the four strategic domains that we have. Remember, workplace, infrastructure, audiovisual, and finance solution. Of course, we are doing that with a good and very, let me say, very special IT investment in order to have all the information in place that, as you know, this information is needed in order to manage correctly our business. We are really addressing same time a cost reduction process. It's a structural cost reduction process, not really an opportunistic view. It's just I'm talking about the structure through the cycle with a specific focus in our processes in order to make it leaner.
The objective we have is to really work on a leaner organization with a better operational leverage and, of course, being able to improve the way we're going to focus in the next years. These three levers. The last one should be talking about the debt management. As you know, we've been working strongly on some different internal projects in order to improve our working capital, what is starting to give us very good results in the first part of the year. Of course, really pushing into our group a cash culture with really strong CFOs working with all the teams, with the different P&L managers in order to improve the situation of our cash.
If we go into the next slide, I think we have to close this block by putting the half of the year into its external context, because I'm sure it is going to help us to explain why we're acting the way we are doing. The first one, as you can see, is the geopolitical uncertainty, which is leading customers to adopt a wait-and-adapt approach, as I was explaining before. This is really a situation that is not only on Econocom side, but is really through all the markets. The second one is pressure, as I explained before, in our IT components with the situation of the whole industry moving and focusing into AI.
For you to know, our portfolio right now is really developed into the AI business with fantastic first projects done into this sector that are really moving us into more consulting approach, helping us to add more value to our solutions. Of course, against the backdrop that we were having, our business model is really resilient. I think is one of the most important thing because this portfolio effect, as I explained before, the combination of activities, products, geographies, and customer types allows us to offset weakness in one part of the business with a strength in another, rather than purely relying on a single growth engine. Operationally, we are responding in a coordinating way as a group through an active procurement strategy, pushing offers built around extended equipment life cycles and refurbished products.
What, as you know, during the last years, we've been strongly investing in this part of the refurbished products, what is really supporting us in this first part of the year, and we are sure is going to give us very good news for the future. This is not just a tactical response to component shortage. It connects directly to our value proposition in financing solutions and to our sustainability commitment. In short, the environment has not been easy, but Econocom's model, in our opinion, is designed to navigate exit in this cycle that we are living right now. Its combination of internal discipline, portfolio resilience, is giving the group a solid platform for the rest of the year. As I stated, the word resilience is part of us with these different kind of business we are doing.
Let me now pass, hand over to Quentin Bouchard, who is going to be explaining you this another interesting news about our first part of the year.
Thank you, Israel. Yes, thanks a lot. As part of the strategic update, I would like to update you on two pillars of the strategic plan. We had a strong focus in the strategic plan about organic growth and also a lever on inorganic growth on M&A with some tactical acquisitions I will update you about. Israel mentioned it, the group is transforming toward vertical solutions, and I will explain a bit more in detail where we are in this area. Until now, for many years, the group was mainly oriented around distribution, services, managed services, and financing. Since the beginning of the plan in 2024, our goal is to present us to the markets and deliver with verticals that are audiovisual solutions, workplace infra network solutions, and financing solutions.
As Israel was saying, we have been working and we are working a lot in order to produce this. The good news is that now it's in place, and this is one of the explanation of the good momentum that we have in a P&S activity, which is the most showing those offers to the customers. Audiovisual solutions, thanks to the acquisition we did last year, we now have a strong offering in the audiovisual solutions, allowing us to capture this interesting market.
What's more, Israel's team have been putting in place also a strong governance on this audiovisual solution in order to have in the countries, but also at European level, a very good coverage and offering on this audiovisual with design, distribution, financing that is beginning, and managed services of big networks of stores, of car dealer stores that are a very interesting business. In workplace and infra network, that I will address together. All the countries are also in place, Spain, France, Germany, and also U.K. Italy was already really strong in this sector, but we reinforced the sector as I will show later on. On those sector, being focused on workplace and on infra allow us also to foster the innovation that is needed with the technological innovation with data and AI.
AI relying a lot on data. This allows us to show to the customer and to deliver innovation in AI and to embed AI in the workplace and infra network offers. In workplace, it's mainly chatbot and virtual bots that we are developing and also that we are in product with our customers, which is really important, and measuring a lot where we can improve and make more efficient our services for the customers. As you know, and as you saw in all the newspapers, it's really hard work to have a lot of efficiency gain, but we are having them, which is really interesting. Also in infra network, we talk a lot about the sovereignty. I think sovereignty is really in this vertical where it happens the most.
We are also, whether in Spain or in France, and I'm sure soon in other countries, having application and AI running on on-prem services thanks to hard work with our partners, big infra partners that we have. Very different as well because they are all interested in this topic. We are running application and AI model on-prem for our customers, which is really interesting and exciting to be part of. In the next slide, I will focus more on the inorganic growth and tactical acquisition that we do. We are pleased to announce the acquisition of Bagnetti in Italy. Italy is really a strong country for Econocom, and we are really pleased to announce this tactical acquisition of a company that is mainly in workplace and infra distribution and services. Already in the vertical approach that I just talked about.
What is very interesting, EUR 30 million revenue and 25 employees. Really in a complementary geographic and type of customer zone of Italy. Very in the Latium space. Latium, for those who don't know, is around Rome. I didn't know, Philippe told me that it was the region around Rome, and also very focused in public sector in Italy, where we had to grow before we had this acquisition. We try to replicate the very good acquisition that we did some years ago in Spain with Semic, who was more in Catalonia and also in public sector. We really have good hope in this acquisition in order to make it grow and having a really interesting return on this.
We took 51% of the capital and the founders, the Bagnetti people are keeping 49%, and we will progress with them on this structure. This is it for me, and we have a video showing the capabilities of Bagnetti in Italy.
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Hello, everybody. Let me share with you the financial result outcoming of this first semester of 2026, which has been marked by the severe environment as well as the resilience and the diverse performance of our portfolio of activity. In this first semester, overall revenue declined by 3.7%, mainly marked by the TMF businesses, with an overall margin declining from EUR 41 million down to EUR 31 million. The erosion of the profitability is mainly due to this stiff market environment as a combination of lower demand, higher competitive pressure, as well as our willingness to reduce the on-book deals on the TMF businesses, which are quite high margin and margin relative. The organic growth stand at 5.3%.
The difference is mainly due to the acquisition in the audiovisual segment that have been performed in July, namely the acquisition of ISS in Ireland, AVANZIA in Spain, as well as ICT in Germany. On top of that, we made the acquisition of bb-net in the highly important segment of the refurbishment in January 2025.
TMF segment decline of revenue is 24.5%. Restated by on-book deals, the decline has been only of 8%. If you take this restatement for the overall group, the group has actually demonstrated a growth of 2.5% thanks to the strong momentum of the distribution businesses. The profitability rate has declined due to lower scale effects, lower operational leverage in the context whereby last year, first semester has experiment a very significant increase in margin with a margin in excess of 5%, which was largely due to these on-book deals. The strategic intention to reduce the on-book deals is due to our willingness to reduce our leverage as they are consuming part of the balance sheet of the group. In the distribution business, we experiment a strong growth led by the anticipated demand due to scarcity or fear of scarcity, as well as fear of price increase.
We were able to have an operational margin of EUR 10 million, demonstrating an increase in our profitability, moving from 1% as of first semester 2025 to 1.5% as of first semester 2026. This is a demonstration of our strong capabilities to turn demand in scarcity into opportunities. Also benefited from the momentum of the audiovisual segment, which is of higher margin than your usual workplace in the segment. In the services business, we had a competitive environment, quite stiff, with a margin erosion down from 3.8% to 3% in the context of slow growth. We have in front of us some challenges in terms of commercial performance, and we are working hard on that. We've increased our sales force people as well as strong push toward higher margin segments.
This segment also suffered from restricted demand from clients in the context whereby new element and new device were reduced demanded. We had less project which allow us to have higher margin and higher value-added offers to our clients. Overall, if we look at the full P&L, revenue decline down to EUR 1.4 billion in this challenging macro environment. Overall, operational margin stood at EUR 31 million, a decline from 2.8% down to 2.2%, mainly due to the TMF segment and the pressure from our competition, as well as the pressure from our client in this inflationist environment due to the increase of the price of the chips. Operating margins stood at. We have to change a certain number of things.
The pivoting of the structure and the environment also is costing us a certain level of exceptional, which we expect to have the benefit from in the second half of the year as well as in 2027. Net profit stood at EUR 7.8 million for continued operations. It was impacted by the increase of the financial expenses. Last year, we benefited from a EUR +3 million capital gain in this pocket, in this captions. This year, we did not have such repeated positive capital gain of EUR 3 million. We suffered from the increase of the interest rate, which occurred during the first half of 2026 compared to 2025.
On top of that, average notional debt during the first half of the year has been slightly higher than the one we experimented during 2025 due to the on-book deals that I mentioned, which were made in 2025 and have their full year effect in 2026. In respect of net profit, we had the last losses in conjunction of Synertrade for a total aggregated amount of EUR 6 million. Synertrade, as you know, have been disposed on the 31st of March 2026. It occurred losses in between the first quarter consolidated losses, as well as the last impairment of EUR 6 million. In terms of balance sheet and cash flows, we stand at EUR 229 million net debt. The free cash flows stand at EUR 63 million. A few elements worth mentioning on this slide. We had quite a resilient operational cash flows increasing from last year same period.
We have been able to reduce the rent due to the reorganization which are ongoing, moving them down from EUR 16 million down to EUR 14 million. The working capital requirement has been quite a challenge. There have been a program which has been launched within Econocom to improve working capital requirements. We had the negative effect of the mixed growth of our distribution business, which is the highest segment in terms of working capital requirement. Nevertheless, we've been able to improve our working capital to have a positive effect of EUR 38. Financial expense increased, as I mentioned, due to the increase of interest rates as well as increase of notional due to the on-book deals. Income taxes and CapEx remain under control at EUR 20 million. M&As, as you know, is part of the path of growth of Econocom.
Out of those EUR 43 million, it is a combination of acquisition of the audiovisual deal that we made last year, as well as the minority interest of certain number of company which were acquired. As you know, the path of inorganic growth for Econocom is to acquire the control, as we did for Bagnetti this year, and to acquire the remaining stakes over a period of three, four years. We have put on call options with our minority stakeholder, which have been the case for this EUR 43 million.
Roughly half is coming from new acquisition and half from acquisition of minority interest. We've made share buyback program for EUR 24 million in order to support the stock prices, and dividends stood at EUR 16 million. As you know, this year, the dividend proposed for the shareholder meeting has been moved from EUR 0.10 per share down to EUR 0.05.
Next year, the dividend will be standing at EUR 8 million. IFRS 5 and others stand at EUR 2 million thanks to the disposal of Synertrade. Looking at the nature of the debt, our debt is mainly composed out of the Schuldschein bond. As you know, we've been able to make an issuance of Schuldschein in 2025. In terms of nature of debt, we have a debt which is composed of a term loan for EUR 215 million. Schuldschein bond, and this year we've been able to execute the refinancing of our 2027 as well as 70% of the 2028 tranches of our piece of debt.
Our bond now stand at EUR 362 million, some short-term debt and ample of cash for EUR 384 million. We have factoring and reverse factoring, which stand at EUR 234 million as of June this year, compared to EUR 213 million as of June last year.
As mentioned, this is a very important element. In June 2026, we issued a new bond. Initial offer was for EUR 100 million. We were able to top up this initial offer up to EUR 240 million to allow us to refinance the whole 2027 tranches, which was issued in 2022, as well as 70% of the 2028 tranches. We issued three and five years tranches, 90% is floating, 10% is fixed. Right now it allow us to benefit from the interest rate curve as Euribor six month is below the three and five years swap.
During this period in front of us, we'll be keeping on transforming the group, pivoting the organization, reducing our cost, as well as putting in place higher value offer, and be in a position to work on a permanent basis for the debt reduction with a program named Robot, which is implemented within the group.
In terms of ESG, we have achieved the highest performance with the EcoVadis Platinum medal. We are now within the top 1% in the digital segment companies. It allow us to have a competitive positive advantage in the tender offer. It is more and more important in the tender offer and the RFP and RFI to have this position and to be in a position to propose responsible offer. Another element is the circular approach, as mentioned by Israel and Quentin. More and more people, more and more corporate have a strong interest in circular offer with the benefit of used material. This is a very important path in which Econocom has been involved. We made the acquisition of Econocom Factory in France a few years ago. Last year, in 2025, we made the acquisition of bb-net, now Econocom Remarketing GmbH in Germany.
In early this year, in 2026, we made the acquisition of Back IT in France, close to Econocom Factory, in order to strengthen our capabilities as well as to be in a position to have even more inclusive program as Back IT is employing disabled people. This allow us to be very competitive in this segment as well as to share our value in terms of inclusion and to reduce our environmental footprint. Now leaving the floor to Angel, our CEO.