Target Information

The SII Group, a specialist in engineering professions, has announced its annual results for the 2022/2023 fiscal year, as confirmed by the Executive Board on June 6, 2023. The results have not yet been audited. In this fiscal period, SII achieved a revenue exceeding €1 billion, marking a significant milestone in its development and affirming a return to a high level of performance. Eric Matteucci, President of the Executive Board, expressed gratitude to the teams for their commitment and to clients for their trust, emphasizing the need to build upon this foundation to develop a sustainable digital world together.

Industry Overview in France

For the fiscal year 2022/2023, the SII Group reported a revenue of €1,022.5 million, demonstrating a robust growth of 23.4% compared to the previous year. This performance was driven by strong dynamics across various sectors. Notably, the Aerospace-Defense sector achieved nearly 20% growth and now constitutes 21.1% of SII's total revenue. The Banking-Insurance-Mutual sector also showed commendable growth of 17.1%. All other sectors reported double-digit growth rates, with the exception of telecommunications.

In France, the group witnessed a revenue increase of 13.2%, reaching €434.1 million. The primary revenue contributors in this region include Aerospace-Defense, Banking-Insurance, and Telecommunications. On the international stage, SII's revenue grew by 31.5%, totaling €588.4 million, with Poland contributing more than half of the international revenue and achieving a growth rate of nearly 34%. Germany, the second-largest contributor, saw a growth of 36.9%, although Spain experienced a decline due to the cessation of several public sector activities.

Rationale Behind the Deal

The acquisition of RISA-IT, a company with over 50 employees specializing in IT, allows SII to broaden its offerings in the expanding IT market within the Netherlands. This strategic move is set to enhance the expertise of SII’s Dutch subsidiary and is projected to yield over €10 million in revenue for the upcoming fiscal year 2023/2024, beginning June 1, 2023. This acquisition not only strengthens SII's market position in the Netherlands but also aligns with its broader growth strategy across Europe.

Investor Information

The SII Group, established in 2014 in the Netherlands, has rapidly expanded its presence and capabilities. It currently employs 40 people in engineering activities. This progressive trajectory reflects SII's commitment to developing a strong foothold in various markets while enhancing its service offerings. The group plans to propose a dividend of €0.50 per share at the upcoming General Assembly on September 21, 2023, signaling its continuous growth and a commitment to returning value to shareholders.

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The recent acquisition of RISA-IT appears to be a strategically sound investment for the SII Group. This move not only diversifies SII's service offerings into IT but also enhances its competitive edge in a thriving market. With strong projected growth rates, the investment aligns well with SII’s overall strategic objectives and market positioning. The combined expertise of both companies should ideally lead to increased revenues and overall business synergies.

Moreover, SII’s financial results reflect a robust operational performance, with an operational margin exceeding 9% and a net result of €80.5 million. The group's solid financial foundation, coupled with its continuing ambitions in the digital industry, enhances investor confidence. SII’s proactive approach to talent acquisition, with nearly 4,200 new hires, indicates a strategic emphasis on growth and excellence.

Nevertheless, it’s important to consider the external economic factors that could impact future performance, such as labor shortages, inflation, and geopolitical uncertainties. Despite these challenges, SII’s anticipated organic growth of 8-12% in the first half of 2023/2024 reflects its resilience and the positive outlook for the industry.

In conclusion, SII's investment in RISA-IT is likely to bolster its market position and operational efficiency, making it a prudent investment that aligns with the group's long-term vision of scaling their digital services while maintaining a focus on sustainable growth.

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