Interview Patrice Demay Member of The Management Board SII.
Annual Earnings and perspectives 2018
Web TV www.labourseetlavie.com : Patrice Demay, Welcome.
Patrice Demay – Member Of The Management Board SII : ‘Thank you’
Web TV www.labourseetlavie.com : We’re going to discuss your perspective on the current financial year 2017-2018 performance. We’d like to discuss engineering consulting services with you. Has the company achieved growth in this domain?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Yes, exactly. More than 25% for the group and 15% for the French market. It should be underlined that Syntec has announced 3.6% for the sector. So, effectively we have smashed market expectations as we achieved almost five times the growth of the sector. That’s to say that without doubt, our performance exceeded expectations.
Web TV www.labourseetlavie.com: There’s an acquisition we should discuss, Feel Europe which is in the banking sector, insurance and other areas. Has this acquisition met your expectations?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Yes, it’s been almost 18 months since we acquired Feel Europe. Feel Europe has contributed an additional 54 million to total turnover. It should be underlined that (SII) made a little over 100. So, Feel Europe has contributed to approximately half our growth. The rest was organic. So, at present we have integrated the Feel Europe brand throughout our sectors. We have four sectors: defence – military (embedded and space technologies), telecoms and the energy and banking sectors in which Feel Europe with its ‘Make or Buy’ approach has added to. It is a new item for our business unit strategy unit and we have now completed the consolidation for Feel Europe which will be integrated more globally at a French level, with the integration of the Paris based operations in the following months and year to come.
Web TV www.labourseetlavie.com : Do you have some particular thoughts on the margin which is a little weaker?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: The explication which was known a year ago, is that it is quite simply linked to the calendar. There are five less days. So, when we talk about an average of 218 working days, five less days, if my calculations are correct, is roughly the equivalent of 2.3. So, 2.3% less, when we know that 80% of the costs are related to salary costs, means that it is completely normal to have a lower margin. In fact, intrinsically, the final margin, is less impacted, if I remember correctly as it is only down by 0.7%
Web TV www.labourseetlavie.com : From the international perspective you mentioned, today in France and internationally, the demand remains strong.
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Yes, very strong. It is very strong everywhere. When we talk about the digitalisation of the economy, the impact of digitalisation on the economy, it is no coincidence. Today, whether you take a taxi, set your alarm, your plane, car, applications on your iPhone or other media, digitisation impacts everything. So, the digitalisation of the economy is in full swing. Furthermore, we are going to publish in the next few days, and I don’t have any numbers yet, for Syntec for whom I am also Vice-President, regarding the incredible growth in this sector. So, growth can be found both in France and internationally.
Web TV www.labourseetlavie.com: We are always concerned by the thought that this is not infinite. When we look closely at your projects, what are the key impact of everything that is happening, including the digital revolution?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Yes, you are right. Earlier on, you mentioned real estate. Effectively, we had thought that there was a bubble, which today is not a bubble. We lived through the 2000 s with the internet bubble It’s true, that it was immaterial. Today the focus is on industries which are real, tangible and factual. So, I don’t think for a minute that we are in a bubble, to the contrary, we are at the beginning of a cycle and a cycle which is still strong, with the exception of some macro-economic factors which could cloud this cycle. The demand is there, the investment is there, and the expectations are there, numerous, transversal as well as multi-sectorial. Therefore, there are strong indications that this will continue for some years at least.
Web TV www.labourseetlavie.com : At the same time, we could also say that the strong demand is increasing the competition. How to position oneself? How are you positioning yourselves, appropriately, given this competitive market?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII : Do you mean to say in regard to our competitors?
Web TV www.labourseetlavie.com : Yes
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: How can we do better? This is what it’s about. How can we do better? I feel that there are several aspects. Firstly, we do not sell products, we sell services. So, the men and women who make up our company, who are at the heart of SII, are the first reason for our success. The second is structural. This is linked to our internal structure which has a very delegative style, with a strong focus on delivery, and less hierarchical levels which allows us to make rapid decisions. These decisions are not questioned and are approved by the management team. So, it is therefore much easier to move forward. The last point is our cash flow. We are not a company with many debts, we have the means to finance our decisions. So, when you add clear objectives, a clear direction, an ambitious and strong workforce, this naturally allows us to more forward quicker.
Web TV www.labourseetlavie.com : As for my myself, I am very present on social media, I regularly see consulting companies which recruit in Paris, but also across the French regions. There is however, strong competition to attract the talent.
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Exactly. There is strong competition and I feel that today, the trend, certainly is linked to the company data sheet with its size, ok, but also to its objectives, its values, its projects and what these bring. I feel that at SII, in relation to diversity, in relation to the plurality of our profiles, the plurality of our objectives, these values are well supported and entrenched.
Web TV www.labourseetlavie.com : So, if we discuss external growth. Today we have been able to discuss SII in relation to the last few years, shall we now move on quickly to external growth. What is the strategy?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: So, what is needed? I’m not sure. Finally, we have a growth of 15% when the market varies between 3 and 4. I believe it is a growth which is very reasonable. We have made four times the market growth, if not five. But, if we’ve only done four times, is there an actual need to do five times, six times, seven times, eight times or ten for external growth? The answer is no. We cover all the segments which we wish to, we are referenced where we wish to be, I think that after this, it becomes more egotistical ambitions, and this is not at all how our business works.
Web TV www.labourseetlavie.com : So, on the other hand, could this make you a target for other groups who have an alternative approach, who are further ahead than you?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: You are aware that our shareholder base is very stable. Moreover, we have shareholder agreements and an historic founder, Bernard HUVET, who created the company in 1979. I can give you his mobile number after this interview and you can confirm for yourself that it is not for sale, either technically or voluntarily.
Web TV www.labourseetlavie.com : So, when we talk about financial perspectives, what are your thoughts about the global market in the future months?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Very clearly, we are going to follow our ambition to generate a group turnover of between 630 and 645 million euros, this is a target which we are comfortable with. So, a financial perspective of growth of 15 points.
Web TV www.labourseetlavie.com : There is also reason for concern for the month of May with the impact of both the strikes and the bank holidays. Was there any particular impact for you?
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Actually, this was indeed expected. Effectively, there is an impact because there were some long bank holiday periods. But, for the moment, the numbers which have been reported by our accounting department, from management are very good and in line with other months and preceding trimesters.
Web TV www.labourseetlavie.com : Patrice DEMAY, thank you for having addressed these points with us today
Patrice Demay – Member of the Management Board – Director of Commercial Development France SII: Thank you very much