ICAPE Group Reports 2024 Half-Year Results, Announces Strategic Acquisitions to Drive Growth

ICAPE Group Reports 2024 Half-Year Results, Announces Strategic Acquisitions to Drive Growth712370

The ICAPE Group, a global technology distributor of printed circuit boards ("PCB") and custom-made electromechanical parts, announced its half-year results for the first half of 2024, which ended on June 30, 2024, and approved by the Board of Directors on September 25, 2024.

Yann DUIGOU, ICAPE Group’s CEO, stated: "Our profitability indicators were impacted by a sluggish market environment. In this context, we are actively stepping up the deployment of synergies, accelerating cost rationalization, to return to higher levels of profitability as soon as possible. Having completed the major acquisition of NTW in Japan, we are also announcing the acquisition of François Frères, enabling the Group to achieve an immediately accretive transaction and to integrate our principal intermediary and long-standing business partner into our structure. The implementation of our operating levers, the success of our external growth policy, and the synergy potential of our recent acquisitions will enable us to take full advantage of the upturn in business. We are confident of achieving our sales and profitability targets.”

Simplified income statement

In € thousands (IFRS standards)

30/06/2023

30/06/2024

Var. %

Revenue

94,519

86,619

-8.4%

Cost of goods

-65,400

-57,256

-12.5%

External expenses

-9,518

-10,150

+6.6%

Payroll costs

-12,231

-13,544

+10.7%

Taxes, other operating income, and expenses

-296

-162

-45.3%

 

 

 

 

EBITDA

7,074

5,507

-22%

% revenue

7.5%

6.4%

-1.1 pts

Operating depreciation and amortization

-1,900

-1,854

-2.4%

 

 


 

EBITA

5,174

3,653

-29%

% revenue

5.5%

4.2%

-1.3 pts

Amortization of acquisition-related intangible assets

-443

-736

+66.1%

 

 


 

EBIT

4,731

2,917

-38%

% revenue

5.0%

3.4%

-1.6 pts

Other operating income and expenses

-866

-137

-84.2%

Financial result

-1,290

-1,452

+12.6%

Income tax

-1,029

-70

-93.2%

Income from discontinued activities

375

-218

-158.1%

 

 


 

Net income

1,921

1,040

-46%

% revenue

2.0%

1.2%

-0.8 pts

Business activity and financial results

As of June 30, 2024, Group revenue stood at €86.6 million, down 8.4% compared with the first half of 2023, reflecting the economic downturn in the first quarter, followed by an improvement in the following quarter. On a sequential basis, sales were up 1.9% on the previous half-year, indicating the first signs of the recovery expected in the second half.

The backlog maintained at a high level of €47.2 million as of June 30, 2024, compared with €50.9 million at the end of December 2023.

External expenses and payroll costs increased by 7% and 11% respectively compared with the same period last year, mainly because of recent acquisitions. Against this backdrop, the Group is actively deploying operational synergies to support short-term profitability.

Taking all these factors into account, EBITDA margin fell by 110 basis points over the period to 6.4%. Operating income recurring followed a similar trajectory, falling by 38% to €2.9 million at the end of June 2024. After taking into account financial result of € -1.5 million, other operating income and expenses of €-0.1 million, and income from discontinued operations of € -0.2 million, net income stood at € 1.0 million as of June 30, 2024, compared with € 1.9 million at end-June 2023, down 46%.

As of June 30, 2024, the Group's cash position stood at €28.2 million. Financial debt stood at €56.3 million, compared with €59.5 million as of December 31, 2023, giving the Group net debt as of June 30, 2024, of €28.1 million, compared with €26.8 million as of December 31, 2023.

An extract from the IFRS financial statements (balance sheet and income statement) is provided in the appendix to this press release.

The 2024 half-year financial report is scheduled for publication on October 4.

Continuation of the Group's external growth strategy in H1 2024 and beyond

In line with its strategy for 2022 and 2023, the Group pursued its policy of selective acquisitions in the first half of 2024 and beyond. The operating assets of Italian distributor P.C.S and design company Studio E2 were acquired in February 2024, consolidating the Group's position on the Italian peninsula and adding printed circuit board design to its already extensive range of services.

On September 19, 2024, the Group also announced the closing of its acquisition of the NTW group, one of the leading PCB distributors in Japan and in Southeast Asia. With proven market expertise and 7 subsidiaries located close to the world's PCB production centers, the NTW group has developed a portfolio of major Japanese accounts that the ICAPE Group had not previously addressed. NTW's management will support the ICAPE Group in this integration, to deploy all necessary synergies between the two organizations.

Finally, the Group today announces the acquisition of François Frères. This transaction is immediately accretive, internalizing the Group's main intermediary and reducing the agent fees paid by the ICAPE Group. It also brings highly experienced PCB market experts into the ICAPE Group.

All Group objectives confirmed

Having achieved €45 million in additional revenue through external growth since the beginning of 2023, and with solid fundamentals in a gradually improving market context, the Group confirms all its commercial and financial objectives, namely:

  • an average annual organic growth rate of 10% between 2023 and 2026;
  • around €120 million in additional revenue from external growth between the beginning of 2023 and the end of 2026;
  • an EBIT margin of around 9.5% by 2026;
  • medium-term sales of around €500 million.

Next Financial release

  • 2024 Third-Quarter Revenue, Wednesday, November 13th, 2024, after market close

Appendices – Financial Statements (IFRS)

CONSOLIDATED BALANCE SHEET

(In € thousands)

31/12/2023

30/06/2024

Goodwill

23,667

23,788

Intangible assets

23,269

23,597

Tangible assets

3,755

3,479

Rights of use and other fixed assets

7,503

6,622

Total fixed Assets

58,194

57,487

Inventories and work-in-progress

11,357

9,828

Trade and other receivables

41,888

41,896

Other current assets

1,508

2,149

Cash and cash equivalents

32,747

28,216

Total current assets

87,500

82,090

Total assets held for sale

5,149

4,988

Total Assets

150,843

144,565

Share capital

3,235

3,235

Additional paid-in capital

16,912

15,301

Retained earnings

6,746

11,381

Net income for the year

4,482

994

Total equity - Group share

31,375

30,912

Non-controlling interests

312

378

Total equity

31,687

31,290

Borrowings

32,263

30,271

Non-current lease liabilities

4,386

3,569

Other non-current liabilities

3,788

3,775

Total non-current liabilities

40,436

37,615

Current borrowings and bank overdrafts

20,983

20,657

Current lease liabilities

1,870

1,822

Trade and other payables

48,664

46,834

Other current liabilities

5,575

4,697

Total current liabilities

77,089

74,011

Total liabilities associated with assets held for sale

1,630

1,650

Total liabilities and equity

150,843

144,565

CONSOLIDATED CASH FLOW STATEMENT

(In € thousands)

30/06/2023

31/12/2023

30/06/2024

Net income

1,921

4,230

1,040

Elimination of depreciation, amortization and provisions

2,707

5,399

2,913

Elimination of income tax expense, net of taxes paid

-200

-1,059

-564

Elimination of net cost of debt

571

853

1,173

Change in working capital requirement

-9,461

-1,174

-1,259

Other operating cash flows

-65

-20

-43

Cash flows from operating activities

-4,528

8,229

3,260

Acquisition of operating assets and subsidiaries

-5,438

-11,214

-732

Acquisition of property, plant and equipment, and intangible assets

-1,625

-1,621

-1,085

Other cash flows from investing activities

90

-2,344

-6

Cash flows from investing activities

-6,972

-15,179

-1,822

Issuance of borrowings

15,348

44,346

277

Repayment of borrowings

-4,566

-28,517

-3,724

Interest paid

-628

-1,654

-1,024

Dividends paid to Group shareholders

-1,614

-1,614

-1,610

Other cash flows from financing activities

384

-730

-297

Cash flows from financing activities

8,926

11,832

-6,378

Impact of changes in exchange rates and application of IFRS 5

-63

-140

403

Change in cash and cash equivalents

-2,636

4,743

-4,538

Opening cash position

27,941

27,941

32,684

Closing cash position

25,305

32,684

28,146

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