H1 2018 Turnover: up 13% to €115.7 million

This growth reflects a mixed performance, with significant staffing pressure in France (particularly in Paris) offset by the international network which confirmed its profitable growth potential.

The staff turnover rate decreased almost 2 points in the second quarter to 25%, from 26.8% in the first quarter. Improvement was most evident in the Paris agency, which reported a decline of nearly 10 points. The staff turnover rate is now in line with current sector standards.

As a result of this fall in the staff turnover rate, the consolidated rate of employment improved significantly, rising from 83.1% in the first quarter to 85.0% in the second quarter.

36% of turnover generated outside France

Outside France, Group turnover climbed 51% to €40.5 million, driven by strong organic growth and the successful integration of Star Republic (acquired in May 2017) and Osudio (acquired in September 2017). The international network represented 35% of billing in the first half of 2018, versus 26% in the same period in 2017.

Growth was reported across the network, which now covers 13 countries and thus enables the Group to offer a more comprehensive service to its major brand clients. The gradual integration of the new subsidiaries into the digital services center system confirms the strong synergies previously identified. In addition, the Group has opened a new services center in Barcelona to support this strong momentum.

Against this backdrop, the Group is continuing to examine further opportunities for external growth, particularly in Northern Europe where margins are higher. Potential targets find SQLI appealing as they can leverage its international reach without losing any of their identity. Opportunities are currently under consideration, but none have yet been decided, with the exception of the announced acquisition of German agency CodeLux (CDLX)*.

Continued move upmarket

The first six months of 2018 were marked by the acquisition of new key accounts and an increase in activity for existing clients for connected commerce projects. For example, the Group continued the international digital deployment of a world leader in the field of small household appliances.

To date, SQLI has deployed more than 60 e-commerce sites in 40 countries for 7 Group brands. In financial services, SQLI was chosen by Generali – the world’s third-largest insurer – to develop its customer space, upgrade its generali.fr website and create the Generali Vérif mobile application which is used by all Generali agents, brokers and inspectors.

Leveraging its recognized expertise in deploying innovative digital platforms which are crucial to key clients’ digital leadership, the SQLI Group regularly increases its average daily billing rate. In the first half of 2018, this indicator grew a further 4% to €586 for the Group excluding digital services centers, reflecting SQLI’s unique positioning in its core business of connected commerce and customer experience.

In addition, the innovative digital platforms deployed by SQLI require constant upgrades and therefore constitute a strong source of repeat business.

Outlook

For full-year 2018, SQLI maintains its objective of generating turnover of at least €240 million and forecasts EBITDA** of more than €23 million. This objective takes into account the application as of January 1, 2018 of IFRS 9 “Financial Instruments”, IFRS 15 “Revenue from Contracts with Customers” and IFRS 16 “Leases”.

On the basis of ongoing assessments, the application of these accounting standards will have an impact of around €5 million to €6 million on EBITDA. As of 2018, SQLI will have implemented all major changes in accounting standards expected before the end of the Move Up 2020 plan. Comparable data for the entire plan will consequently be available.

Following eight half years of constant growth leading to the successful completion of the Ambition 2016 plan, the Group is confident in its ability to achieve the goals of the Move Up 2020 plan. SQLI boasts a wealth of new assets, including a growing international network with strong margins, a portfolio of international key accounts and the strong fit of its connected commerce offering with the needs of businesses undergoing their digital transformation.

SQLI will publish its first-half 2018 results on September 26, 2018 after the close of trading. 

* See press release of July 16, 2018.

** EBITDA = recurring operating income before depreciation and amortization and provisions.