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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Excellon Resources Inc | AMEX:EXN | AMEX | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.295 | 0 | 01:00:00 |
Exclusive Networks reports a new record-breaking year in FY-23 Profitability outpacing top line growth
FY-23 outlook exceeded on all financials Further performance improvement expected in FY-24
OPERATING PERFORMANCE
CASH PERFORMANCE
Regulatory News:
Exclusive Networks (Euronext Paris: EXN), a global leader in cybersecurity, today announces its financial results for the full-year ended December 31st, 2023. Management will hold a conference call at 9:00 am (CET) today, available via webcast (https://ir.exclusive-networks.com/). A replay will be available.
Jesper Trolle, Chief Executive Officer, commented:
“Exclusive Networks delivered record sales and profits in FY-23 surpassing our financial guidance.
We are thrilled with the profitability of the year, which exceeded the upper range forecasted in August 2023. Our teams demonstrated resilience and adaptability in sustaining growth momentum following a remarkable performance in FY-22, and I extend my gratitude to them for their unwavering commitment to maintaining high standards of quality.
This outcome reflects the strength, diversification and resilience of our model. Our reputation as a trusted partner is valued by both vendors and customers, serving as the foundation of our ongoing growth. Acquisitions remain an important growth lever for us and we made two acquisitions in 2023 – Ingecom and Consigas – which are an excellent strategic fit and progressing well.
Looking ahead to FY-24, we remain optimistic about our prospects, while the environment is expected to remain soft in the first half. The continued emphasis on cybersecurity by CIOs, combined with our unique business model and established growth strategies, positions us for further advancement in the coming year.
We are excited about the opportunities that lie ahead and are committed to building upon our achievements to drive sustained growth and success.”
_________________ 1 Adj. Operating FCF / Adj. EBITDA
IFRS 15 CHANGE IN ACCOUNTING TREATMENT
IFRIC and ESMA published clarifications on IFRS 15 Revenue recognition principles. The publication implied a change in the accounting treatment for Exclusive Networks on IFRS 15 Revenue recognition. Before the publication, only Support and maintenance services were netted in the IFRS 15 Revenue presentation.
As a result of ESMA precisions and concluding illustrations, the Group decided to change the accounting treatment. For its performance obligation, the Group considers now acting as an agent for the sale of software licenses.
After change in the accounting treatment, distribution of software licences are also netted in the IFRS 15 Revenue recognition, in addition to Support and maintenance services. Group Net margin remains unchanged. Please find below information on the restatement for Q4-23 and FY-23 IFRS Revenue compared to Q4-22 and FY-22. Full quarterly restatement for FY-22 and FY-23 is presented in Appendix.
in € million
Before Change in accounting treatment
Variation
After Change in accounting treatment
Variation
Q4-22
Q4-23
Reported
Constant currency
Q4-22
Q4-23
Reported
Constant currency
EMEA
911
920
+1%
+3%
331
299
-10%
-8%
AMÉRICAS
116
137
+18%
+24%
56
63
+14%
+20%
APAC
95
82
-14%
-9%
53
43
-19%
-14%
GROUP
1,122
1,139
+1%
+4%
439
405
-8%
-5%
in € million
Before Change in accounting treatment
Variation
After Change in accounting treatment
Variation
FY-22
FY-23
Reported
Constant currency
FY-22
FY-23
Reported
Constant currency
EMEA
2,704
3,072
+14%
+16%
1,084
1,140
+5%
+7%
AMÉRICAS
348
467
+34%
+38%
186
242
+30%
+34%
APAC
352
324
+8%
-4%
195
177
-9%
-5%
GROUP
3,404
3,863
+14%
+16%
1,466
1,559
+6%
+9%
Q4-23 GROSS SALES
in € million
Q4-22
Q4-23
Variation
Reported
Constant Currency1
EMEA
1,154
1,241
+7%
+9%
AMERICAS
176
234
+33%
+38%
APAC
123
110
-10%
-5%
GROUP
1,454
1,585
+9%
+12%
In Q4-23, Gross sales were €1,585 million, an increase of +9% year over year on a reported basis, +12% at constant currency. Most of the organic growth was driven by business with existing vendors in their current geographies (+6.1%), and to a lesser extent to vendor expansion (+1.3%), which is a combination of vendors entering into new geographies (+0.8%) and new vendor relationships (+0.5%). The remainder of the growth is attributable to acquisitions (+1.7%).
_________________ 1 Variation at constant currency is computed using FY-22 rates applied to FY-23 Gross sales. The USD, GBP and PLN evolved as follows: 1EUR: 1.082 USD; 1EUR: 0.870 GBP, 1EUR: 4.592PLN respectively for FY-23 and 1EUR: 1.059 USD; 1EUR: 0.853 GBP, 1EUR: 4.684 PLN respectively for FY-22.
FY-23 PERFORMANCE
Gross sales and adjusted profitability metrics are non-GAAP measures. Revenue and Net margin are reported in IFRS format. Full results as per IFRS are presented in the Appendix along with the reconciliation detailing the differences with non-GAAP measures. Please refer to the glossary at the end of the press release for further explanations.
in € million
FY-22
FY-23
Change
Reported
Constant Currency
Gross sales
4,528
5,145
+14%
+16%
Revenue
1,466
1,559
+6%
+9%
Net margin
411
468
+14%
-
% Gross sales
9.1%
9.1%
-
-
Adj. EBIT
154
186
+21%
-
% Net margin
37.5%
39.7%
+225bps
-
Adj. net income
100
108
+8%
-
Gross sales were up 16% at constant currency and up 14% reported at €5,145 million. The bulk of the growth was organic, with existing vendors in current geographies (13.9%), and vendor expansion (+0.5%), composed of vendors entering into new geographies (+0.3%) and new vendors (+0.2%). The remainder of the growth is attributable to pricing effect (+1.2%), to recent acquisitions (+0.8%) and to currency effect (-2.7%).
Vendor retention rate1 in FY-23 remained above 100%, reflecting the continued engagement of our channel partners. Net vendor retention rate1 on a rolling 12-month basis at FY-23 was 113% (vs 136% in FY-22) with net reseller retention rate1 on a rolling 12-month basis in FY-23 at 112% (vs 133% in FY-22).
In FY-23, Gross sales mix grew towards Software and Support & Maintenance, in line with the strategy in place and confirming the relevance of the value proposition. Hardware decreased to 25% of the Group (vs 27% in FY-22), Software was 49% (in line with FY-22) and Support & Maintenance was up at 26% (vs 24% in FY-22). Cloud-based business accounted for 32% of the Group in FY-23, up 4 points compared to FY-22 in line with our digital growth strategy.
IFRS Revenue as reported in the Consolidated Financial Statements takes into account the recognition of the sales of software licences and support and maintenance on a Net margin basis as per IFRS as explained above. IFRS Revenue reached €1,559 million, up 6% reported.
Net margin was €468 million in FY-23, a sharp increase of 14% year on year, reflecting the strong execution with a consistent mix evolution of geography and deal size.
Operating expenses increased 10% to €282 million, below Gross Sales growth, aligned with tight monitoring of the cost structure. This resulted to the strong improvement realised on the operating leverage.
Adjusted EBIT rose to a record €186 million, up 21% year over year. Adj. EBIT margin over Net margin was up 225 bps year on year to 39.7% as the Group benefits from a decrease in the weight of Opex by 170bps at regional level.
Adjusted net income was €108 million, representing an increase of 8% year over year, resulting mainly from the sound Adj. EBIT partially offset by higher financial expenses.
_________________ 1 Defined as rolling 12 months Gross sales generated in year N from vendors/customers active in year N-1 divided by rolling 12 months Gross Sales from the same vendors/customers in year N-1
FY-23 PERFORMANCE BY REGION
in € million
FY-22
FY-23
Change
Reported
Constant Currency
EMEA
Gross sales
3,539
4,036
+14%
+16%
Revenue
1,084
1,140
+5%
+7%
Adj. EBIT
160
191
+19%
-
AMERICAS
Gross sales
532
689
+30%
+33%
Revenue
186
242
+30%
+34%
Adj. EBIT
14
17
+26%
-
APAC
Gross sales
457
420
-8%
-4%
Revenue
195
177
-9%
-5%
Adj. EBIT
20
19
-5%
-
Total
Gross sales
4,528
5,145
+14%
+16%
Revenue
1,466
1,559
+6%
+9%
Adj. EBIT
154
186
+21%
-
EMEA (78% of the Group): Gross sales were €4,036 million, up 14% year on year, the region benefitted from a consistent positive market demand. Profitability outpaced top line growth and increased significantly, with Adjusted EBIT rising to €191 million, up 19% year on year.
AMERICAS (13% of the Group): Gross sales were €689 million, up 30% year on year. The Region pursued its fast organic development, with the progressive ramp up of both new and existing vendors and supported by the continued high local market demand. Operational gearing increased +26% for Adj. EBIT, resulting from the business model in the US and reflecting the constant focus to drive profitable growth.
APAC (8% of the Group): Gross sales reached €420 million, a decline of 8% year on year. The initiatives implemented locally have managed to bolster the business activity trend that improved towards the second half of the year. The high focus on cost control resulted in protecting the profitability with an Adj. EBIT of €19m for FY–23.
FY-23 CASH FLOW AND FINANCING
Changes in working capital was up €18 million at €76 million vs. FY-22, mainly linked to the stock decrease resulting from the strict inventory monitoring in place and normalization of lead time.
Adj. Operating Free Cash Flow reached a strong level, amounting to an inflow of €254 million in FY-23, compared to €201 million in FY-22 mainly driven by business growth and working capital improvement.
Leverage: Financial gross debt at December 31, 2023 was €516 million (vs. €523 million at end Dec. 2022), with Cash & cash equivalents at €369 million and Net debt improvement at €158 million. This resulted in a significant deleveraging of the company with a leverage ratio of Net Debt / Adjusted EBITDA of 0.8x compared to 1.3x as of June 30, 2023.
FY-24 OUTLOOK
Amid the current environment still challenged by macroeconomic volatility (inflation, interest rates, geopolitical uncertainties), the Group is aiming to achieve for the FY 24:
Shareholders’ return On February 28, 2024, amid the current environment still challenged by macroeconomic volatility, as well as the highly competitive environment, the Board of Directors decided to propose to shareholders not to distribute a dividend and to give priority to the development of the Group to support the external growth and the expansion of the organic business.
Consolidated Financial Statements The Board of Directors approved the consolidated financial statements on 28th February 2024. The consolidated financial statements have been audited.
APPENDIX
Changes in IFRS 15 Revenue Accounting treatment
Up to Q3-23 Gross Sales publication, Exclusive Networks IFRS 15 Revenue was recorded based on the principle that the Group was qualified as agent on the sales of vendors’ support and maintenance.
Following IFRIC and ESMA publications, the Group revised its accounting treatment and considered being agent on the sales of software licenses that should be recognized on a net basis (Net margin) vs on a gross basis (Gross Sales and COGS).
Exclusive-Networks has applied this restatement for FY-23 publication with a pro-forma on FY-22 as follows:
IFRS 15 Former Accounting Treatment
€ million
Q1-22
Q2-22
Q3-22
Q4-22
FY-22
Q1-23
Q2-23
Q3-23
Q4-23
FY-23
EMEA
567
595
630
911
2,704
698
695
760
920
3,072
AMERICAS
70
74
89
116
348
106
115
109
137
467
APAC
76
93
89
95
352
90
73
79
82
321
Total
712
762
809
1,122
3,404
893
883
948
1,139
3,863
IFRS 15 New Accounting Treatment
€ million
Q1-22
Q2-22
Q3-22
Q4-22
FY-22
Q1-23
Q2-23
Q3-23
Q4-23
FY-23
EMEA
233
252
268
331
1,085
291
275
275
299
1,140
AMERICAS
35
42
53
56
186
53
62
64
63
242
APAC
41
50
52
53
195
54
42
39
43
177
Total
309
344
373
439
1,466
399
378
378
405
1,559
FY-23 CONSOLIDATED P&L
€ million
31 Dec 2022
31 Dec 2023
Revenue
1,466
1,559
Costs of purchases goods and services
(1,048)
(1,084)
Freight on sales
(6)
(7)
Net margin
411
468
Personnel costs
(183)
(200)
Other operating costs
(71)
(81)
Amortization of intangible assets
(60)
(60)
Depreciation and amortization of tangible assets
(13)
(13)
Recurring operating profit
85
114
Non-recurring operating income and expenses
(5)
(3)
Operating profit
79
111
Finance debt costs
(18)
(28)
Interest on lease liabilities
(1)
(1)
Other financial income and expenses
(9)
(26)
Financial result
(27)
(55)
Income before taxes
52
56
Income taxes
(13)
(11)
Net income
39
45
Net income attributable:
- To the owners of the parent company
36
43
- To non-controlling interest
3
2
Earnings per share attributable to parent company (in €):
- Basic earnings per share
0.40
0.47
- Diluted earnings per share
0.40
0.47
FY-23 CONSOLIDATED BALANCE SHEET
€ million
31 Dec. 2022
31 Dec. 2023
ASSETS
Goodwill
295
297
Other intangible assets
1,112
1,055
Property, plant and equipment
7
8
Right-of-use assets
26
26
Other non-current financial assets
40
51
Deferred tax assets
8
7
NON-CURRENT ASSETS
1,488
1,444
Inventories
271
220
Trade receivables and related accounts
1,132
1,381
Income tax receivables
12
10
Other current financial assets
19
9
Cash and cash equivalents
268
369
CURRENT ASSETS
1,703
1,989
ASSETS
3,191
3,433
EQUITY AND LIABILITIES
Share capital and share premium
976
976
Retained earnings and other reserves
(27)
(4)
Foreign currency translation reserve
4
(13)
Equity attributable to the owners of the parent company
952
959
Non-controlling interests
3
2
EQUITY
956
961
Other non-current financial liabilities
488
500
Non-current lease liabilities
20
19
Non-current provisions
4
3
Other non-current liabilities
0
0
Deferred tax liabilities
274
253
NON-CURRENT LIABILITIES
785
776
Trade payables and related accounts
1,304
1,583
Other current financial liabilities
128
91
Current lease liabilities
8
8
Current provisions
0
0
Current tax liabilities
11
14
CURRENT LIABILITIES
1,450
1,696
EQUITY AND LIABILITIES
3,191
3,433
FY-23 CASH FLOW STATEMENT
€ million
31 Dec 2022
31 Dec 2023
OPERATING ACTIVITIES
Net income
39
45
Adjustments for:
- Depreciation, amortisation, impairment and change in provisions
74
73
- Financial debt costs & interest on lease liabilities
19
29
- Income tax expenses
13
11
Other adjustments and non-cash items
8
13
Income tax paid
(25)
(26)
Cash flows from operating activities before change in working capital
129
144
Change in working capital
58
76
NET CASH FROM OPERATING ACTIVITIES
186
220
INVESTING ACTIVITIES
Additions to property, plant and equipment and intangible assets
(6)
(7)
Disposal of fixed assets
0
0
Changes in other financial assets
(2)
(10)
Interests received
0
2
Acquisition/(disposal) of subsidiary, net of cash acquired/(disposed of)
(2)
(5)
NET CASH FROM INVESTING ACTIVITIES
(9)
(20)
FINANCING ACTIVITIES
Dividends paid
(19)
(1)
Disposal (acquisition) of treasury shares
(1)
(25)
Purchase of non-controlling interest
(3)
(25)
Proceeds from issuance of bank borrowings & from other financial liabilities
44
45
Factoring liabilities
12
(31)
Short-term financing
(14)
8
Interest Paid
(17)
(28)
Repayment of bank borrowing & other financial liabilities
(24)
(36)
Other cash-out flow from financing activities
(12)
(10)
NET CASH FROM FINANCING ACTIVITIES
(33)
(103)
Effects of exchange rate fluctuations on cash and cash equivalents
(6)
(2)
INCREASE IN NET CASH AND CASH EQUIVALENTS
138
96
Net cash and cash equivalents at the beginning of the period
125
263
Net cash and cash equivalents at the end of the period
263
358
GLOSSARY
Gross sales:
Revenue:
Net margin:
Adj. EBIT:
Adj. EBITDA:
Adj. net income:
Adj. Operating FCF:
Cash Conversion:
Non-recurring items:
CONFERENCE CALL Jesper Trolle, Chief Executive Officer, and Nathalie Bühnemann, Chief Financial Officer, will present the Full-Year 2023 financial results during a conference call in English on February 29th, 2024 at 9:00 am (CET). You can follow the conference call live via webcast at the following link: https://ir.exclusive-networks.com/. A replay will also be available for a period of one year. All documents relating to this publication will be placed online on the Exclusive Networks Investor Relations website at https://ir.exclusive-networks.com/
Regulated information related to this press release and presentation is available at https://ir.exclusive-networks.com/
PROVISIONAL CALENDAR
About Exclusive Networks
Exclusive Networks (EXN) is a global cybersecurity specialist that provides partners and end-customers with a wide range of services and product portfolios via proven routes to market. With offices in over 45 countries and the ability to serve customers in over 170 countries, we combine a local perspective with the scale and delivery of a single global organisation.
Our best-in-class vendor portfolio is carefully curated with all leading industry players. Our services range from managed security to specialist technical accreditation and training and capitalize on rapidly evolving technologies and changing business models. For more information visit www.exclusive-networks.com.
DISCLAIMER
This press release may contain forward-looking statements. Such statements may include projections, estimates, assumptions, statements regarding plans, objectives, intentions and/or expectations with respect to future financial results, events, operations and services and product development, as well as statements, regarding future performance or events. Forward-looking statements are generally identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “projects”, “may”, “would” “should” or the negatives of these terms and similar expressions. Although Exclusive Network’s management currently believes that the expectations reflected in such forward-looking statements are reasonable, investors are cautioned that forward-looking statements are subject to various risks and uncertainties (including, without limitation, risks identified in Exclusive Networks’ Registration Document available on Exclusive Networks’ website), because they relate to future events and depend on future circumstances that may or may not occur and may be different from those anticipated, many of which are difficult to predict and generally beyond the control of Exclusive Networks. Actual results and developments may differ materially from those expressed in, implied by or projected by forward-looking statements. Forward-looking statements are not intended to and do not give any assurances or comfort as to future events or results. Other than as required by applicable law, Exclusive Networks does not undertake any obligation to update or revise any forward-looking statement. This press release does not contain or constitute an offer of securities for sale or an invitation or inducement to invest in securities in France, the United States or any other jurisdiction.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228123936/en/
EXCLUSIVE NETWORKS CONTACTS
Investors & Analysts Hacene Boumendjel Head of Investor Relations ir@exclusive-networks.com
Media FTI Consulting Julien Durovray / Charlotte Hewitt +33 (0)6 25 04 57 73 exclusivenetworks@fticonsulting.com
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