(News Bulletin 247) – The specialized distributor saw its revenues fall by 17% for its 2022-2023 financial year ended last March, while its gross operating margin plunged by 6 points and its profit was divided by thirty.

Like several companies whose activity was sustained during the pandemic, the post-Covid period is not easy to negotiate for LDLC. During the health crisis, confinements and the generalization of telework logically led to strong demand for the group’s products. But soaring inflation has weighed ever since.

Witness the results for the 2022-2023 financial year ending at the end of March, which were unveiled on Thursday evening. Already published, revenues fell 17.2% year on year to 567.4 million euros.

“The activity was penalized by a demanding base effect in the 1st half of the year as well as by a still high rate of new equipment for households and businesses, after the numerous high-tech purchases made during the Covid period”, underlines the society.

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Expense reports

“The economic context also weighed heavily on sales, with households and professionals preferring to postpone their discretionary spending and their investments in the face of price increases, in particular energy,” she also explains.

The gross operating surplus was divided by four to 14.3 million euros while the corresponding margin melted, representing 2.5% of turnover against 8.5% over the previous year.

The company explains that it launched a cycle of winning customers with a national television campaign and the expansion of its network of stores, with 20 new LDLC stores. “These elements, which represent more than 5.5 million euros of investment, explain the strong increase of +22.3% in purchases and other external expenses”, adds the group.

Net profit was divided by thirty, to 1.2 million euros against 36.1 million euros in 2021-2022.

LDLC also burned cash (0.9 million euros) due in particular to an increase in its working capital requirement due to the acquisition of ACTI MAC, a small network of 5 branches including 3 shops. Apple Reseller.

Results below expectations

Regarding its outlook, the company forecasts a gross margin rate of between 21% and 22% in 2023-2024, compared to 20.8% in 2022-2023.

On the Paris Stock Exchange, the LDLC share fell, losing 6.5% around 10:15 a.m. “The group’s annual results are below our expectations,” laments TP ICAP Midcap, which was expecting current operating profit of 9.4 million euros, whereas it stood at 5.3 million euros.

“We estimate that the recovery should be timid and thus remain cautious on the file maintaining our recommendation to “keep” as well as our price target at 23 euros”, adds the research office.