Aubay — Annual Report 2020

Mar 24, 2021

Boulogne-Billancourt, March 24, 2021

2020 annual results:

Exceptional resilience and strong increase in cash flow

Operating margin: 9.7%

Net income attributable to owners of the parent: €26.1 million Net cash: €44.7 million

In € thousands	2020	2019	Change
Revenue	426,382	417,757	+2.1%
Operating profit from ordinary activities	41,215	42,801	-3.7%
As a % of revenue	9.7%	10.2%
Cost of performance shares	(1,112)	(1,484)
Other operating income and expenses	(1,463)	(1,464)
Operating profit	38,640	39,853	-3.0%
Financial income/(expense)	(419)	(309)
Tax (expense)/income	(12,036)	(13,135)
Net income from consolidated companies	26,185	26,409	-0.9%
As a % of revenue	6.1%	6.3%
Net income attributable to owners of the parent	26,132	26,409
Earnings per share	€1.98	€2.0
Headcount	6,562	6,503

Aubay's Board of Directors, which met on March 24, 2021 under Chairman Christian Aubert, approved the statutory and consolidated statements for 2020. The financial statements have been audited by the Statutory Auditors. and the auditors' report will be issued once the procedures required to publish the company's Universal Registration Document have been completed.

Despite the unprecedented crisis, the Group demonstrated exceptional resilience in 2020, with an operating performance placing it among the frontrunners of the industry. This resilience is reflected in all the indicators, which have remained at a high level. Our teams were able to adapt quickly to new ways of working. The second half of the year was dynamic from a commercial perspective, accelerating a return to normal business conditions. There was a similar upturn in the recruitment process, following the slowdown observed at the start of the pandemic.

Operating margin from ordinary activities above projections

Operating margin was higher than estimated when the annual results were published in January, at 9.7%. It is once again perfectly in line with our profitability benchmark (between 9.5% to 10.5%).

The Group's operating margin for the period came in at 9.3% for activities in France and 10.0% for activities overseas, compared with 11.3% and 9.1% in 2019, respectively.

Operating profit: €38.6 million

Operating profit came to €38.6 million, a contained decline of 3.0%, after taking into account the cost of performance shares of €1.1 million and "Other operating income and expenses" representing a net expense of €1.5 million, primarily comprising restructuring expenses.

Contacts

Net income attributable to owners of the parent down to almost break-even (6.1% of net margin)

Net income attributable to owners of the parent remained high at €26.1 million, very close to the record figure achieved in 2019, after taking into account a tax expense of €12 million, which represents an effective tax rate of 31%, versus 33% in 2019.

Sharp increase in net cash (excluding rental liabilities): €44.7 million

Our financial position was considerably strengthened in 2020 thanks to a remarkable increase in cash flow from operations of €47.2 million, versus €34.9 million in 2019. The company has not requested any extension for paying its expenses, particularly with regard to tax or social security. Aubay's net cash therefore improved from €11.6 million at December 31, 2019 to €22.6 million at June 30, and then €44.7 million at end-2020.

Proposed dividend of €0.66 per share

In light of this remarkable performance and its excellent financial position, the Board of Directors has decided to propose a dividend of €0.66 per share in respect of 2020 to the Annual General Meeting, representing a payout ratio of around 33% of net income. An interim dividend of €0.33 was already paid in November 2020.

Outlook for 2021

Aubay operates on a dynamic market, that still offers good visibility. The health crisis has acted as a means to step up investment in digital transformation and in strengthening system resilience. In addition, major groups are constantly seeking to reduce costs related to modernizing their information systems by engaging the services of partners such as Aubay that have long since demonstrated their efficiency.

As a result, demand for our services has not weakened since the start of the year – quite the opposite. With our tailor-made services, the Group is continuing its development and gaining market share.

Our consultants' productivity rate is high at the start of the year and our hiring plan particularly robust. The headcount has been increasing at a slightly faster rate than anticipated, particularly in France.

This has boosted the confidence of Aubay's management for the current year and those to come.

The objectives for 2021 are:

Contacts

• Annual revenue of between €440 million and €450 million,
• Operating margin from ordinary activities of between 9.5% and 10.5%.

Aubay will publish its 2021 first-quarter revenue on April 21, 2021 after the close of trading.

Glossary

Organic revenue growth: This refers to growth calculated for a constant scope of activity for a given period, excluding revenues from companies that were acquired or sold during the period. As Aubay conducts most of its business in the euro zone, any impact from changes in exchange rates is minimal.

	2020
Organic growth	-1.5%
Impact of changes in scope	+3.6%
Growth as reported	+2.1%

Operating profit from ordinary activities: this indicator corresponds to operating profit before the cost of free shares and other income and expenses that are unusual, abnormal or infrequent and that are booked separately in order to facilitate understanding of an entity's recurring operating performance.

Operating margin from ordinary activities: this indicator, which is expressed as a percentage, is the ratio of operating profit from ordinary activities to revenue.

Net debt or net cash (excluding rental liabilities): this indicator represents the difference between an entity's cash and debt. If the result is negative, it is referred to as net debt. If it is positive, it is referred to as net cash.

About Aubay

Aubay is a digital services company working alongside some of the biggest names in the Banking, Finance, Insurance, Manufacturing, Energy, Transport and Telecoms sectors. With 6,562 employees in 7 countries (France, Belgium, Luxembourg, Italy, Spain, Portugal and the United Kingdom), Aubay generated revenue of €426.4 million in 2020.

Euronext, Compartment: B ISIN FR0000063737-AUB Reuters AUBT.PA Bloomberg

AUB:FP

Nicolas Bouchez - Actus Finance - Tel.: +33 (0)1 53 67 36 74 - E-mail: nbouchez@actus.fr David Fuks – Co-Chief Operating Officer – Finance Department – Tel.: +33 (0)1 46 10 67 67 – E-mail: dfuks@aubay.com

Contacts

APPENDICES

Statement of financial position at December 31, 2020

ASSETS (in € thousands)	Dec. 31, 2020	Dec. 31, 2019
Goodwill	131,305	131,412
Intangible assets	771	828
Property, plant & equipment	5,166	5,575
Right of use relating to leases	18,611	22,996
Equity-accounted investees		-
Other financial assets	2,263	2,661
Deferred tax assets	2,472	2,796
Other non-current assets	118	277
NON-CURRENT ASSETS	160,706	166,545
Inventories and work in progress	516	411
Assets on contracts	29,148	29,216
Trade receivables	105,432	115,097
Other receivables and accruals	33,496	37,209
Marketable securities	579	1,056
Cash at bank and in hand	51,883	23,411
CURRENT ASSETS	221,054	206,400
TOTAL ASSETS	381,760	372,945

EQUITY AND LIABILITIES (in € thousands)	Dec. 31, 2020	Dec. 31, 2019
Capital	6,604	6,597
Additional paid-in capital and consolidated reserves	170,016	151,164
Net income attributable to owners of the parent	26,132	26,409
Shareholders' equity attributable to the Group	202,752	184,170
Minority interests	144	91
SHAREHOLDERS' EQUITY	202,896	184,261
Borrowings and financial liabilities: non-current portion	3,913	5,697
Rental liabilities due in more than 1 year	13,756	17,823
Deferred tax liabilities	1	5
Provisions for contingencies and expenses	6,751	6,129
Other non-current liabilities	273	489
NON-CURRENT LIABILITIES	24,694	30,143
Borrowings and financial liabilities: current portion	3,907	7,124
Rental liabilities due within 1 year	5,240	5,435
Trade and other payables	30,572	30,576
Contract liabilities	18,319	14,722
Other current liabilities	96,132	100,684
CURRENT LIABILITIES	154,170	158,541
TOTAL EQUITY AND LIABILITIES	381,760	372,945

Income statement for 2020

In € thousands	2020	%	2019	%
Revenue	426,382	100%	417,757	100%
Other operating income	421		242
Purchases used in production and external charges	(86,216)		(76,535)
Staff costs	(287,855)		(288,213)
Taxes other than on income	(3,702)		(3,056)
Amortization, depreciation and provisions	(7,628)		(7,412)
Change in inventories of work in progress and finished goods
Other operating income and expenses	(187)		18
Operating profit from ordinary activities	41,215	9.7%	42,801	10.2%
Expenses linked to restricted share units and similar awards	(1,112)		(1,484)
Current operating profit	40,103	9.4%	41,317	9.9%
Other operating income and expenses	(1,463)		(1,464)
Operating profit	38,640	9.1%	39,853	9.5%
Income from cash and cash equivalents
Net borrowing costs	(588)		(725)
Other financial income and expenses	169		416
Financial income/(expense)	(419)		(309)
Income tax expense	(12,036)	31%	(13,135)	33%
Income from equity-accounted investees
Net income before results of discontinued operations or assets held for sale	26,185		26,409
Net income after tax of discontinued operations or assets held for sale
Net income	26,185	6.1%	26,409	6.3%
Attributable to owners of the parent	26,132		26,409
Minority interests	53		0
Basic weighted average number of shares	13,192,494		13,180,717
Earnings per share	1.98		2.00
Diluted weighted average number of shares	13,244,994		13,272,217
Diluted earnings per share*	1.97		1.99

Contacts

Cash flow statement for 2020

(in € thousands)	2020	2019
Consolidated net income (including non-controlling interests)	26,185	26,409
Income from equity-accounted investees		-
Net depreciation, amortization and provisions and right of use relating to leases	6,346	6,857
Non-cash expenses and income relating to share-based payments	1,049	1,484
Other non-cash items	212	-
Dividend income		(89)
Gains and losses on disposals of fixed assets	998	24
Cash flow after net interest expense and tax	34,790	34,685
Net borrowing costs	593	730
Tax expense (including deferred taxes)	11,849	13,135
Cash flow before net interest expense and tax (A)	47,232	48,550
Income tax payments (B)	(9,651)	(15,382)
Change in trade and other receivables (C)	8,541	(2,487)
Change in trade and other payables (C)	1,121	4,180
Change in WCR linked to operations (including debt related to employee benefits)	9,662	1,693
Net cash provided by (used in) operating activities (D) = (A+B+C)	47,243	34,861
Outflows for the acquisition of tangible and intangible fixed assets	(1,023)	(1,938)
Inflows from the disposal of tangible and intangible fixed assets		0
Outflows for the acquisition of financial assets	(7)	32
Inflows from the disposal of financial assets		-
Change in loans and advances granted	356	(70)
Disbursements (cash) related to business combinations, net of cash and cash equivalents		(6,768)
Dividends received		89
Other operating cash flows
Net cash provided by (used in) investing activities (E)	(674)	(8,655)
Proceeds from capital increases
Amounts received upon the exercise of stock options
Purchases of treasury shares for cancellation
Purchases of and proceeds from the sale of treasury shares
Dividends paid in the period:
- Net dividends paid to parent company shareholders	(7,916)	(8,703)
- Dividends paid to the non-controlling shareholders of consolidated companies
Inflows from new borrowings	1,734
Repayment of loan debt	(6,631)	(6,722)
Repayment of rental liabilities	(5,048)	(5,316)
Net interest payments	(595)	(731)
Purchase of non-controlling minority interests
Other financial cash flows
Net cash provided by (used in) financial activities (F)	(18,456)	(21,472)
Effects of changes in foreign exchange rates (G)	(31)	25
Change in net cash (D+E+F+G)	28,082	4,759
Cash and cash equivalents at the beginning of the period	24,131	19,372
Cash and cash equivalents at end of period	52,213	24,131