Econocom - 2019 Universal registration document

05 management report

roup's financial position and highlights

as announced at the beginning of the • year, the Group has initiated a major transformation plan calling for Econocom to strengthen its legacy profession, TMF, refocusing on high-potential activities in its Digital Services & Solutions division and closing subsidiaries deemed sub-critical and disposing of some business operations. It also involves a major plan to make its processes and cost-cutting drives more efficient; the Group also redeemed the issue • premium in the amount of €0.12 per share, identical to that of the previous year, paid to shareholders on 31 ژ July 2019. Changes in the scope 1.1. for the year DISPOSALS 1.1.1. In connection with the implementation of its transformation plan, Econocom carried out two disposal transactions during the year: Jade: in July ژ 2019, Econocom sold to the managers of the company the 85% held in Jade Solutions, a company established in the United Kingdom specialising in “crowd wi-fi” and professional mobility solutions for major companies, particularly in the Retail and Logistics fields. Rayonnance: in ژ December ژ 2019, Econocom sold to Apax Partners Development a majority share in its satellite but continues to hold part of the capital. The conclusion of a business and marketing partnership agreement at the time of the sale is aimed at extending the relationship developed over the past few years. In particular, Rayonnance will continue to rely on financing and distribution offers for digital solutions of Econocom group.

The Group's net financial debt was €252.2 ژ million as at 31 ژ December 2019, equal to the figure at year-end 2018 (€251.7 ژ million). The Net Debt to EBITDA ratio was 1.4 versus 1.6 ژ last year. This net financial debt includes €238.5 million in self-driven TMF contracts. On the one hand, this change reflects sound operating cash flow generation, the cash inflows received from the partial sale of Rayonnance in ژ December, as well as the decline working capital requirements for EDFL and, on the other hand, the cash outflows in the year related to the acquisition of non-controlling interests in Satellites, to the redemption of the issue premium and to share buybacks. 2019 was also shaped by several important events: starting in January, the Group's Executive • Committee was expanded with the incorporation of the Executives of the major operating entities. As at 31 ژ December, it is composed of the following members: Jean-Louis Bouchard, Bruno Grossi, Angel Benguigui, Laurent Roudil, Eric Bazile, Laurent Caparros, Chantal De Vrieze, Philippe Goullioud, and Eric Lucas; on 25 ژ June 2019, the Group Management • was notified that the Italian authorities were conducting an investigation into possible fraudulent activities that allegedly targeted Econocom in Italy. The Company is actively cooperating with the local authorities. In addition, steps were taken immediately to protect the interests of the Group's companies, their customers and their employees, namely: all the persons allegedly involved have ▶ been suspended from their positions at Econocom in Italy, a new management team has been ▶ appointed, all relationships with any third parties ▶ potentially involved in the matter have been terminated.

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2019 annual report