Sword Group (SWP) H1 2024 earnings summary

Executive summary

• H1 2024 consolidated revenue reached €156.9m, with organic growth of 15.7% year-over-year at constant perimeter and exchange rates.

• EBITDA margin for H1 2024 stood at 12.0%, with net profit after tax of €11.2m, representing a 7.1% net margin.

• Strategic Vision 2028 targets sector specialization, digital platform expansion, and international growth, aiming for €705.2m revenue and over €1bn market cap by 2028.

• Key acquisitions include AAA Group Ltd (AI focus) and IACS Consulting Ltd (cybersecurity), strengthening positions in AI and digital security.

• The group operates globally in IT services, focusing on large clients, international organizations, and government entities.

Financial highlights

• H1 2024 revenue: €156.9m; EBITDA: €18.9m (12.0% margin); EBIT: €15.9m (10.1% margin); net profit after tax: €11.2m.

• Net cash position declined to €4.8m as of 30/06/2024 from €32.6m at 31/12/2023, mainly due to dividend payments, share deals, and increased working capital.

• Backlog (AAA excluded) increased to €560.8m (21.6 months) as of 30/06/2024.

• Dividend of €1.70/share paid, totaling €16.0m.

• Top 10 clients accounted for 36.7% of H1 2024 revenue; largest client contributed 9.1%.

Outlook and guidance

• Organic growth targeted at 15% per year through 2028, maintaining EBITDA margin above 12%.

• 2028 business plan projects €705.2m revenue, €84.7m EBITDA, and over €1bn market capitalization.

• M&A strategy to add €140m+ revenue and €17m+ EBITDA by 2028, with 1,200+ new employees.

• Continued focus on acquisitions to consolidate competitive position; micro-acquisitions possible.

• Dividend policy to continue with regular payouts, with super dividends only in exceptional years; focus remains on increasing share value.