Greece’s Epsilon Net registers 92% increase in pre-tax profits in 9 months

A 60% increase in Turnover and 92% in Profits before Taxes was announced by the EPSILON NET group of companies for the nine months of 2022.

As the group states in his announcement, the continuous development course and financial results (despite the special international geopolitical conditions and the effects on the Greek economy) confirm in the current period the Group’s strategic choices for:

• high rates of organic growth based on recurring revenues and the utilization of existing clientele
• integrated utilization of the digital transformation of Greek businesses
• continuous development of the product portfolio with the aim of providing an “all in one solution” for each activity sector
• dynamic plan of targeted acquisitions, to further strengthen the customer base and penetrate vertical markets.

Read also – National Bank of Greece: New strategic partnership with EPSILON NET

The main financial figures of the EPSILON NET Group for the nine months of 2022 are as follows:

Acquisitions

The high percentages of increase in economic figures with a total increase of 60.08% in the Turnover, an increase of 75.17% in EBITDA and an increase of 92.19% in Profits before Taxes are the result of both the dynamic organic growth of the company (55% on of total nine-month revenue growth), as well as the contribution to sales and profitability of the targeted acquisitions that the Group implemented in 2020-2021 and continued consistently in 2022.

The significantly improved financial results of Q3 2022 include for the first time the results of Hotel Availabilities and BookOnLineNow (from 01/08/2022 to 30/09/2022) and HotelonCloud results for just one month (from 08/09/2022 to 30/09/2022).

Liquidity

The liquidity of the Group continues to move at particularly satisfactory levels (Cash and Equivalent 21.49 million euros), despite the important acquisitions that have been fully paid off during the nine months of 2022, (CSA, DIGITAL 4U, TAXHEAVEN, Hotel Availabilities, BookOnlineNow, HotelonCloud) providing the Group’s Management with the opportunity to seamlessly continue the expansion program through acquisitions and the implementation of new business initiatives. Furthermore, during the nine months of 2022, the Group’s Equity increased significantly (+40%) which amounted to 49.70 million euros.

The Group has a negative net debt of 0.18 million euros. An amount of 2.89 million euros, which has been invested in fixed income securities, has not been included in the calculation of negative borrowing.

Assessment of potential impacts due to rising interest rates, inflation and rising energy costs

The EPSILON NET Group maintains a healthy financial structure (negative net borrowing) with the result that the rise in interest rates does not have significant effects on its business activity and the implementation of the investment plan. It is emphasized that most of the loan obligations have been concluded on favorable terms, as a result of the very good financial situation and the prospects of the Group.

The Group has already adjusted its operation to ensure to the maximum extent that the increase in the cost of energy and raw materials will not significantly affect its financial results, since due to the nature of the business sector of its companies, the specific costs do not participate to a substantial degree in production costs, in the development of new information systems and in the provision of services.

At the same time, the continuous increase in sales of Greek companies in the 3rd quarter of 2022, supports the expansion of investments in the field of digital transformation, which are expected to intensify due to the provision of incentives through financial programs (from the RECOVERY FUND for the private sector, which is already underway and the new NSRF 2021-2027 and is expected to start at the end of 2022). The Group’s management estimates that the demand for technological products and services will continue to  at high levels, with the result that the inflationary pressures observed in the general economy in Europe and Greece (and especially in consumption) will not be a factor hindering the Group’s goal for the increase of the Work Cycle for 2022.

The cooperation with the National Bank

Special reference is made to the conclusion of a strategic cooperation agreement with the National Bank, through the signing of a memorandum of understanding (MoU). The implementation of the strategic agreement, it is pointed out in the announcement, will lead to the creation of a unique “technological ecosystem” for Greek data, which will provide, through the Group’s tools, the possibility of integrated services to the end customer, regardless of its size.

At the operational and financial level, the strategic cooperation will enable the EPSILON NET Group to:

leverage and utilize the existing clientele of the two groups attracting new customers
creation of new revenue lines, “on top” of existing categories of revenue from Business Software products

The goals

The management of the Group, after the significant increase in the financial figures of the nine months, confirms its assessment of a +50% increase in the Group’s annual revenues for 2022 compared to 2021 and the achievement of an EBITDA margin on an annual basis, higher than 30%.