Earnings Release • Mar 25, 2009
Earnings Release
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Paris, March 25, 2009
HIGHCO: 2008 MARKED BY SUCCESS
OUTLOOK FOR 2009: A ROBUST GROUP CAPABLE OF WEATHERING THE CRISIS
In a market where communication expenditures are on the decline, the Group has set a 2009 target of stable gross profit and a slight operating margin dip (vs. PF 2008)
| (in € m) | 2008 | 2007 | Change N/N-1 |
|---|---|---|---|
| Gross profit | 68,64 | 62,19 | +10,4% |
| Headline PBIT (1) | 13,07 | 11,90 | +9,9% |
| Operating margin (2) | 19% | 19,1 % | - |
| Adjusted net income (3) |
8,0 | 7,21 | +10,9% |
| Cash flow | 10,68 | 10,19 | +4,8% |
| Net cash (4) | 13,23 | 13,49 | -1,9% |
(1) Headline PBIT = Profit Before Interest, Tax and restructuring costs.
(2) Operating margin = headline PBIT/gross profit
(3) Net income adjusted for non-recurring items (capital gain of EUR 3.34 million from the sale of minority shares in WRT and
Mediastay in 2007; goodwill amortisation of EUR 3.5 million in 2008). (4) Net cash = net cash surplus = cash minus gross financial debt
Richard Caillat, Chairman of the Management Board, stated:
"2008 was a successful year for HighCo, both in terms of financial performance and strategic 'Store & Digital' advances, thanks in large part to the acquisitions of BleuRoy.com and VMS (formerly Valassis France). Our core business – 'In-Store services' – was buoyant and 'Digital Marketing' also saw strong development. Our consulting activities may have flagged, but they have been restructured and their digital development accelerated.
Against a trying economic backdrop, HighCo began 2009 with a strong positioning that will enable it to weather the crisis. Having risen to become a key player in European point-of-sale advertising and the pioneer of digital marketing, the Group is prepared to withstand the cuts its clients will inevitably have to make in their communication budgets."
Gross profit for financial year 2008 came out at EUR 68.64 million, up 6.2% like-for-like on 2007. Organic growth was strong over all four quarters, but was particularly sharp in Q4 (+6.2%).
Even in a difficult economic environment, Headline PBIT rose by 9.9% on 2007 and the operating margin (headline PBIT/gross profit) held steady at 19%, in line with March 2008 guidance.
Group net income stood at EUR 4.5 million, down 57.4% on 2007, due to a non-cash goodwill depreciation expense of EUR 3.5 million on the Group's consulting activities.
Net income adjusted for capital gains on the sale of minority shareholdings in WRT and Mediastay (EUR 3.34 million in 2007) and the goodwill amortisation expense (EUR 3.5 million in 2008) totalled EUR 8 million, versus EUR 7.21 million in 2007 (i.e. an 10.9% increase).
In line with its previous announcement, HighCo used its cash flow in 2008 (cash flow up 4.8% to EUR 10.68 million) to carry out acquisitions (EUR 6 million), share buybacks (EUR 4.2 million), investments (capex of EUR 1.2 million) and a dividend payout (EUR 1.1 million). The Group also continued to post a solid balance sheet at December 31, 2008, with a net cash surplus maintained at EUR 13.23 million.
All of these positive performances allowed the Group to maintain a dividend of EUR 0.10 per share.
In a market plagued by declining communication expenditures in 2009, as relations grow tense between manufacturers and retailers owing to the LME (France's economic modernisation law), HighCo's "Store & Digital" strategy is more in tune with market requirements than ever before.
Everything hinges on point-of-sale advertising (the "home stretch of the race" so to speak), and operational communication is now a top priority in advertisers' communication policies. HighCo had anticipated this development, thus succeeding in confirming its leadership on the "in store" market thanks to its core business expertise and the development of innovative services.
In addition to expanding the uses of new technologies, digital solutions have become the preferred offline marketing media for advertisers. With a broad client portfolio, coupled with a dynamic and proactive R&D investment policy (participation in the NFC contactless technology project and definition of an m-couponing standard), HighCo plans to continue going digital (a project begun two years ago) and to duplicate its offering in Belgium and Spain.
In early 2009, the Group started rebranding all of its subsidiaries under a single HighCo brand. This enhances both the commercial strength and visibility of the Group as a key player in Europe's marketing solutions sector, and creates a greater sense of belonging for its 850 employees.
Even in light of today's harsh market environment, HighCo expects business to hold up well in 2009, with organic growth in gross profit in the zero range and a slight decline in the operating margin (based on a 2008 PF operating margin of 17.9%, consolidating 12 months of BleuRoy and VMS).
The Group will also continue to use its cash flow in 2009 to carry out estimated investments of EUR 1 million to EUR 1.5 million, a dividend payment of about EUR 1 million, share buybacks of EUR 2 million to EUR 3 million and, perhaps, new acquisitions.
HighCo is a digital and offline Marketing Solutions group for mass-market retailers and consumer goods manufacturers. HighCo employs close to 850 employees in France, Benelux, Spain and Italy. HighCo is listed in compartment C of Eurolist by Euronext.
Olivier Michel Cynthia Guillemin Managing Director and CFO Press relations +33 1 77 75 65 06 +331 77 75 65 16 [email protected] [email protected]
Upcoming events
Q1 2009 Gross profit April 21, 2009(after market close) Q2/H1 2009 Gross profit July 16, 2009(after market close) H1 2009 results August 26, 2009(after market close)
HighCo is a component stock of the following indices: CAC Small90, CAC Mid&Small 190 and SBF250.
ISIN: FR0000054231 Reuters: HIGH.PA Bloomberg: HCO FP
For further financial information and press releases, go to www.highco.fr.
This English translation is for the convenience of English-speaking readers. Consequently, the translation may not be relied upon to sustain any legal claim, nor should it be used as the basis of any legal opinion. HighCo expressly disclaims all liability for any inaccuracy herein.
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