(News Bulletin 247) – The Lyon specialist in software for the dematerialization of administrative management documents recorded growth of 15% at constant exchange rates in the second quarter. Its order intake in France has picked up again.

Small and medium stocks have been struggling on the stock market since the start of the year, as we explained in a previous article. The Lyon ETI Esker is no exception to the trend, losing more than 4% since January 1.

However, the title is regaining a little momentum on the stock market on Wednesday, the action winning 9% around 2:50 p.m., at 148.4 euros, thanks to a good publication and an increase in outlook.

In the second quarter of the 2023 financial year, the company specializing in software for the dematerialization of administrative documents recorded growth of 15% at constant exchange rates, to reach 45.1 million euros. Over the first half as a whole, growth rose to 16% excluding currency effects and total revenues to 87.9 million euros. Both for the first quarter and for the first half, the company reached a new record in terms of turnover.

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Flash recovery of orders in France

“This performance is all the more remarkable in the current economic context as it is of quality with SaaS revenues (“software-as-a-service”, a licensing model where software is hosted by the supplier on remote servers via the cloud on the internet) up 18% (in the second quarter). It reflects the excellent level of order intake last year, as well as a certain rebound in volumes over the quarter”, comments Stifel in a note.

Still, the most notable point is probably at the level of order intake. These increased by 14% excluding currency effects to 4.6 million euros in the second quarter and by 18% in the first half to 9 million euros, marking respectively the second best quarter and the best half in the history of the group.

“The rate of signatures was extremely dynamic in Europe excluding France (+104%), with in particular a very good deal signed in the United Kingdom”, explained the company.

But above all, order intake is on the rise again in France with growth of 6% in the second quarter, which follows a plunge of 36% in the first three months of the year.

Esker benefited from the registration of the first contracts linked to the regulatory change on electronic invoicing. In the amending finance law for 2022, the government has undertaken to implement electronic invoicing for all businesses, which will thus be rolled out gradually from July 1, 2024.

“All companies, whatever their size, must, in order to fulfill their obligations, have chosen a dematerialization platform to exchange their electronic invoices and transmit their data to the administration”, explains the Ministry of Economy and Finance.

“This reform creates many great opportunities that will fuel French performance in the quarters to come,” boasts Esker.

A good omen for next year

As such, on May 1, the administration launched a registration service for partner dematerialization platforms, within the Directorate General of Public Finances (DGFiP). Esker has indicated that it has finalized its application for registration and has also formed a group of volunteer companies with the aim of participating in the pilot project organized by the DGFiP to carry out the first exchanges with the PPF (Portail Public de Invoicing) at the beginning of 2024.

“This pilot will make it possible to test in real conditions the proper functioning of the system from start to finish, involving all the players: public billing portal, partner platforms, user companies and software publishers”, explains Bercy.

The implementation of this reform should therefore accelerate Esker’s order intake in France. “These contracts should multiply over the next few quarters”, abounds Stifel who qualifies as “excellent news” the return to growth in France of order intake.

In light of this publication, Esker slightly raised its annual growth forecast, tightening its projection to a range of 14% to 15% like-for-like, against a range of 13% to 15% previously. The operating margin is expected to be between 12% and 14% of turnover.

Stifel confirmed its buy recommendation and its target price of 175 euros. However, the bank recognizes that it may well have to reassess its estimates for 2024 upwards. For the time being, due to the unclear economic context, Stifel expects an 11% increase in revenues for 2024.