Econocom climbed double-digits in Q1 driven by acquisition spree
The group’s services business dipped slightly while other segments enjoyed healthy growth
European digital services provider Econocom has published a double-digit uptick in first quarter 2023 revenues and other lines of business.
The VAR said its development was driven by organic growth in technology management & financing and external growth in products & solutions.
Its products & solutions arm was up 11.1 per cent to earn revenues of €312m, driven by the acquisitions made over the past 18 months.
On an organic basis the segment posted a slight increase of 1.5 per cent in comparison with Q1 2022, which Econocom said was a period of sharp growth.
Technology management & financing continued to grow with revenues of €197m, a spike of 17.6 per cent including 13.6 per cent organic growth.
Performance was boosted by the completion of a number of significant deals during the first quarter, whereas in 2022 they were mostly recognised in the second quarter.
In May Econocom told CRN it was on the brink of closing multiple M&A deals in Europe following its Trams buyout, as it looks to achieve its goal of doubling its turnover over the next three years.
Meanwhile, the group's services arm saw revenues topple slightly by one per cent to €127m, owing to the postponement of several projects and hiring issues.
Moreover, the group noted its sale of the products & solutions business during Q1 to Altice, in France and the US.
It explained the business was classified as a discontinued operation in 2022. This disposal, which has no material impact on the Econocom's 2023 net profit, has a positive cash impact of around €20m.
Econocom confirms outlook
The VAR set its annual revenue growth target of five per cent, as well as its target of increasing full-year net profit versus the previous year.
However, Econocom expects growth to slow by the end of June 2023, which it says is down to "seasonal discrepancies" between 2022 and 2023, and the challenging market environments.
Likewise, net profit for the first half of 2023 is expected to be down compared to H1 2022.