VusionGroup

Ladies and gentlemen, welcome to the SES IMAGOTAC 2022 full-year results conference call. I am pleased to present today's speakers, Thierry Gadou, CEO, and Thierry Lemaitre, CFO. Gentlemen, please go ahead.

Good evening. Thanks for joining our conference call following the disclosure earlier, just a few minutes ago, of our full-year 2022 results. So you can follow the slideshow if you are connected on the web conference. So six weeks ago, we had already discussed our strong growth numbers with sales of 47% at 620 million. And we are happy to confirm today that this growth was profitable and significantly more so than the previous year. That should not be a complete surprise, as we had provided precise guidance four months ago at the Capital Markets Day. You remember, probably, we had given an EBITDA range of 53 to 60 million, a 9 to 10% margin range, and we end up close to 59 million at 9.4% EBITDA margin, and a significant increase in net result. However, when we promised at the beginning of last year that we would increase significantly our profitability in 22, we didn't know we would suffer during most of the year the combined headwinds of supply chain tensions, the worst commodity shock of the decade, and the increase of the dollar, all combined. So we are all the happier today. to be with you confirming this performance in such a difficult context. 2002 has been a very good test of our resilience and of the relevance of our strategy and business model. I will now let Thierry take you through the detailed numbers.

Thank you, Thierry. So it's my pleasure tonight to present the full year 2022 financial performance of ACS Emerita Group. And as Thierry said, these results really confirmed the quality of our business model since we were able to face major headwinds and deliver a significant performance improvement. Despite the very detrimental fluoride impact, especially in H2 and higher component costs, we succeeded in almost stabilizing the variable cost margin rate. And since we could control the OPEX, which now represents only 11.7% of the revenues versus 14% in 2021, we could grow the EBITDA margin by two points at 9.4% of the sales, which means grow the EBITDA in value by 81% at 58.6 million euros. We even reached, over the second half of 2022, a 10% EBITDA margin. And finally, we also multiply by nine the net income, which now stands at 18.7 million euros. So on the following slide, you will see the major impact of the two headwinds that we previously highlighted, the first one being, of course, the forex impact and the euro-dollar exchange rate. As you can see on the graph, the deterioration of the euro-dollar exchange rate has been brutal, especially in H2. 100% of our records are denominated in dollars. And even though we succeeded in invoicing almost 50% of our revenues in dollars, this had, of course, a very detrimental impact in our 2022 accounts. It cost us approximately four point margins, which means that if we had kept the same exchange rate in 2021 and 2022, our VCM rates would have been four points higher. Hopefully, as you can see, the trend is now improving, early Q1 2023, and this should pave the way if the trend remains, of course, to a better performance in 2025. Second headwind on the following slide, this is what Thierry previously highlighted as well, which is the components cost increase. This cost increased continuously over 2021 and 2022, which was actually not the trend before 2020 and the COVID-19. And despite this cost increase and the forest inspect, I remember that we could almost stabilize the margin. Good news here too, as we had expected, we now see that the purchasing costs are decreasing again, and this should benefit our production costs in 2023. On the following slide, It seems to be now a usual trend that you might get used to, which is the OPEX ratio. And you see that this OPEX ratio is decreasing. It's represented a bit less than 12%, 11.7% precisely in 2022, versus 14% in 2021. And this is, of course, essentially due to the higher revenue growth, but also a good control of our op-eds, which are essentially consisting of HR costs. This puts, of course, the company in good shape to be able to deliver the 10% op-ed ratio that we have set as an ambition for 2027. So finally, on the following slide in the EBITDA, you see as a summary that the significant growth supported the EBITDA increase. And the increase in profitability of our value-added solution, which is something which is nice to remind, plus the pricing power translating into selling price increases that we place to customers could almost offset the negative impact resulting from the Forex and the higher cards.