Turnover for the first nine months of 2019 growth driven by the commerce & experience business and the commitment to increase profitability
European digital services group SQLI, announces a turnover of €177.4 million for the first nine months of 2019, up +4.7%, due to the robust performance of its Commerce & Experience business. At constant exchange rates. Group turnover was up +4.2%.
Turnover for the third quarter 2019 stood at €54.4 million, an increase of 1.6% (up 1.1% at constant exchange rates). The first nine months of the year reflected a mixed performance between the European digital agency business (Commerce & Experience), which grew by 12.1% to €76.4 million (up 7.0% in the third quarter to €23.6 million), and the digital services business in France (Digital & Technology), which dipped by 0.4% to €101.0 million (down 2.2% in the third quarter to €30.8 million). Such performance reflects the priorities set by the ONE FORCE 2022 strategic plan.
Double-digit growth for the Commerce & Experience business
The Commerce & Experience business continued its commercial growth strategy, winning several new contracts throughout the quarter, in France (Intersport), Switzerland (Lycra), BeLux (Brutele / Voo) and the UK (Radley). In Sweden, the Group also won the “Most Innovative Digital Solution” prize at the Episerver Web Awards 2019 for its work with Rapunzel of Sweden.
This further reinforces the business’s reputation as a major player in the application of digital services to leading platforms such as Adobe Magento and SAP Hybris.To keep pace with this growth momentum, a recruitment drives increased headcount of this business from 537 employees at the end of 2018 to 593 at the end of September 2019.
This headcount does not include service centre employees working for both businesses, who numbered 626 at the end of September versus 605 at the end of 2018.Against this backdrop, the Commerce & Experience business is expected to show an upward growth trajectory for 2018 with growth at the top end of the scale set by the Plan (8% to 10% per annum).
Improving profitability of the Digital & Technology business
The Digital & Technology business reported a slight drop in demand, amid a sluggish French digital services market, particularly in the Banking/Insurance sector, and preparation of the strategic plan with a special focus on increasing operating income and reducing non-recurring expenses. The Group therefore took measures to streamline its businesses and reduce branch headcount, reducing the number of employees from 766 at the end of 2018 to 682 at the end of September 2019. Annual earnings for the Digital & Technology business should be up compared to 2018.
Trends for 2019
The end of the financial year will be marked by the setting up of the organisation to implement the strategic plan for 2020 to 2022. As a result, the Group expects to see increased annual turnover and faster earnings growth, affirming the success of the ongoing drive to increase current operating income and reduce non current expenses.
SQLI will publish its annual 2019 turnover on 6 February 2020 after close of trading.