Provisional results for H1 2020/21 results: EBIT margin of 7.7% – Annual objectives: revenue of more than EUR 400m, double-digit operating profitability

  • December 1, 2020Regulated information

The Management Board has authorized the publication of Wavestone's provisional results for H1 2020/21. This financial data is currently being reviewed by the Statutory Auditors and the company's Supervisory Board has been convened for December 7, 2020 in order to approve the half-year consolidated financial statements to September 30, 2020, which are summarized below.


Consolidated data (in €m)
Estimated data for H1 2020/21
H1 2020/21
(6 months)
H1 2019/20
(6 months)
Change   2019/20
(12 months)
Revenue 186.8 194.5 -4%   422.0
EBIT margin
Amortization of client relationships
Other operating income and expenses
Operating income
Cost of financial debt
Other financial income and expenses
Income tax expenses
Group share of net income
Net margin


Downturn in revenue less pronounced in H1 2020/21

Over H1 of the 2020/21 fiscal year, Wavestone generated revenue of €186.8m, a decline of -4%.

At constant scope and exchange rates, excluding WGroup, the firm recorded a contraction of -7% over the six-month period.


Pressure on prices; recovery in consultant utilization rate over H1

Impacted by the public-health crisis and falling demand, the period saw a marked pressure on sales prices. Average daily rate stood at €850 in H1 2020/21: a decline of -3%, compared with the ADR of €878 recorded over 2019/20.

The company continues to expect prices to be -3% to -5% lower for the whole of this fiscal year, compared with the last.

Against the backdrop of a public-health crisis, the consultant utilization rate was 65% in H1, compared with 71% over the previous fiscal year. Q2 saw the start of an upturn in the utilization rate; it rose to 68%, compared with 63% in Q1, as a result of the firm implementing its battle plan and more intense business development activity.

Over the whole of H1, the use of furlough measures affected about 6% of fee-earning employees. At present, the company is making minimal use of such measures: furlough arrangements now apply only to its UK operations.


Progressive resumption of recruitment since September

At September 30, 2020, Wavestone had 3,324 employees, compared with 3,498 at the end of March (the end of the 2019/20 fiscal year): a decrease of -5%.

As a result of greater visibility on future projects, the firm has progressively resumed recruitment activity since September.

The staff turnover rate stood at 13% at September 30, 2020 (on a rolling-12-month basis), compared with 14% in 2019/20.


EBIT margin of 7.7% in H1 2020/21

Despite an expected 12%-decline of the consulting market in Europe in 2020 (data from Source Global Research), the firm's EBIT margin proved relatively robust during the six-month period, with an outturn of 7.7%, compared with 10.6% in H1 2019/20. The use of furlough measures contributed 2.8 percentage points to this operational profitability.

EBIT stood at €14.3m in H1 2020/21, compared with €20.7m a year earlier.

Measures to reduce the firm's cost, aimed at streamlining operations in the face of the difficult economic climate, have already resulted in savings of nearly €11m during the six-month period. Over the fiscal year as a whole, the performance plan will generate economies of about €16.5m – more than the €15m initially targeted; this figure excludes the effects of furlough measures and assumes no adjustments to the workforce.

After amortization of client relationships, and in the near absence of other operating income and expenses, operating income stood at €13.5m.

The cost of financial debt fell slightly, while other financial income and expenses totaled -€0.6m, including forex effects and the cost of hedging instruments.

After taking into account taxes, reduced from the exceptionally high level seen at September 30, 2019, group share of net income stands at €7.0m, a decline of -25%. Net margin for H1 was 3.7%, compared with 4.8% a year earlier.


Cash flow from business activities of €18.8m in H1 2020/21

Thanks, in particular, to the reduction in working capital requirements, Wavestone generated a cash flow of €18.8m from business activities – an increase of 48% over the period.

In the absence of M&A operations, investment activity consumed only €0.5m during H1.

Cash flows related to financing amounted to €38.7m, which includes -€34.1m in net loan repayments and -€4.1m in lease-liability repayments (under IFRS 16).


Net financial debt reduced to €15.6m at the end of September 2020, compared with €29.1m at March 31, 2020

At September 30, 2020, Wavestone's consolidated equity was €184.7m.

Net financial debt (excluding lease liabilities) had been reduced to €15.6m at the end of September 2020, compared with €29.1m at the end of March 2020, and €61.7m at the end of September 2019. It should be noted that the figure benefits from the firm's decision to postpone employee profit-sharing payments in France from July to December 2020 – representing a sum of €6.3m. Available cash and cash equivalents amounted to €44.6m at the end of the semester.

As a reminder, the firm has not benefited from the financial support measures put in place by the French government to address the Covid-19 epidemic; nor has it refinanced its trade receivables position.


Consolidated data (in €m)
Estimated data for H1 2020/21
09/30/2020 03/31/2020   Consolidated data (in €m)
Estimated data for H1 2020/21
09/30/2020 03/31/2020
Non-current assets 224.1 232.8   Shareholders' equity 184.7 177.1
of which goodwill 161.2 166.5  
including rights to use leased assets 27.5 30.6   Financial liabilities
of which less than one year
Current assets 137.3 151.7   Lease liabilities 33.8 37.7
of which trade receivables 115.1 128.4  
Cash and cash equivalents 44.6 65.1   Non-financial liabilities 127.2 140.5
Total 406.0 449.6   Total 406.0 449.6


A continued rise in consultant utilization rate in Q3, despite the return to lockdown

Despite a difficult business climate, Wavestone proved its resilience over H1 2020/21.

Order intake in Q2 did not reflect the slowdown feared before the summer, which resulted in the order book being maintained at 3.7 months of work at September 30, 2020 – a level similar to that of June 30, 2020.

The recent worsening of the public-health situation, and the tighter preventive measures it has triggered, have had a very limited direct impact on the company's operations.

This evolution is unlikely to destabilize the continued rise in the consultant utilization rate in Q3. Over this quarter, the firm is now targeting a utilization rate of more than 72% in the current quarter, higher than the 70% figure previously envisaged, and a significant increase on the 65% recorded in H1.


Renewed vigilance for the start of 2021

The outlook for 2021 now appears in a less favorable light than it did at the beginning of the autumn. The early months of the year could see a degree of slowdown, as a result of clients taking a cautious approach in the face of renewed economic uncertainty.

Against this backdrop, Wavestone is being increasingly vigilant and actively preparing for the start of the year, with a view to minimizing potential disruption to workflows.

The battle plan initiated in H1 continues, with intense business development activity and new stimulus actions being targeted at practices and offices that are lagging on performance recovery.


A progressively more bullish stance despite the uncertainties

Despite the more uncertain economic climate, the company has been adopting a progressively more bullish stance since September.

As well as almost ceasing the use of furlough measures since October 1, Wavestone is gradually expanding its recruitment activities into new offices and practices while ensuring this doesn't compromise the rising consultant utilization rate.

The firm has set itself the objective of more than 400 gross hires in the 2020/21 fiscal year; this includes a target of 300 new starters before the end of March 2021.

Given a limited decrease in staff-turnover, Wavestone expects employee numbers not to change significantly over H2 compared with the headcount at September 30, 2020 (3,324 employees). The reduction in headcount should therefore remain close to -5% over the entire 2020/21 fiscal year.

Wavestone is also resuming its external-growth activity, with priority being given to international acquisitions, without refraining from tactical operations in France.


2020/21 targets: revenue of more than €400m and a double-digit EBIT margin

Despite the continued rise in consultant utilization rate, the reduced level of revenue in Q3 is expected to be of the same order as that seen in H1 (as a reminder: -4%), given the expected evolution of the firm's workforce and prices.

The company is now in a position to set annual objectives.

Over the entire 2020/21 fiscal year, Wavestone is targeting a revenue for 2020/21 of over €400m and a double-digit EBIT margin.


Next event: Q3 2020/21 revenue: Thursday, January 28, 2021, after Euronext market closing.


About Wavestone
In a world where knowing how to drive transformation is the key to success, Wavestone's mission is to inform and guide large companies and organizations in their most critical transformations, with the ambition of a positive outcome for all stakeholders. That's what we call "The Positive Way.”
Wavestone draws on over 3,000 employees across 8 countries. It is a leading independent player in European consulting.
Wavestone is listed on Euronext Paris and recognized as a Great Place to Work®.

Pascal Imbert
Tel.: +33 (0)1 49 03 20 00
Sarah Lamigeon
Communications Director
Tel.: +33 (0)1 49 03 20 00
Mathieu Omnes
Investor and Analyst Relations
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Nicolas Bouchez
Press relations
Tel.: +33 (0)1 53 67 36 74

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Regulated information

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