Results of strategic review
revealed to managers at a summit meeting in Paris. Liz Bury
writes.
Go deeper with GlobalData
Econocom has reported strong
results for 2010, following the unveiling of its new structure.
Revenue grew by 33% to €1bn, and
operating profit was up 64% to €47m, in the year to 31 December.
Econocom completed the acquisition of ECS Group from Société
Générale last October.
The future shape of the combined
ECS and Econocom business was unveiled to managers in Paris in
January.
The financial result, combined with
the capital increase reserved for SG for the ECS acquisition,
raised shareholders’ equity to €140m. Total net debt, including the
ECS acquisition debt, was €40m, lower than forecast during the
acquisition process.
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By GlobalDataThe new business will be named
Econocom, except for systems servicing and maintenance, which keeps
the ECS moniker. A number of redundancies will be made in support
functions such as IT.
Chairman Jean-Louis Bouchard said:
“A normal attrition rate of about 15% a year means that a hiring
freeze would probably be enough to reduce the headcount by 100 to
150; we stopped hiring in summer 2010.
Integration has been easier in
countries where one or other business was stronger: for example in
Belgium, Econocom employs 500 people compared to ECS’ office of 35,
while in Italy, ECS has a team of 240 compared to Econocom’s
30.
Bouchard said: “By the end of 2011
it is going to be a brand new company. The IT market is changing
rapidly and leasing needs to adapt.
The restructure follows an intense
period of strategic review involving 10 workshops and 19 focus
groups across the group.
Econocom anticipated €1.4bn in
revenue and growth in operating profit of 4% in 2011, due to
implementation of commercial and cost synergies. The company
expects cost savings of €10m for 2011. Bouchard founded ECS in 1974
and 10 years later sold it to SG, before moving on to set up
Econocom.
See also: IT leasing goes back to the
future
