LMS FRANCE - WORLD WATER TREATMENT : revenue, balance sheet and financial ratios

In 2022, LMS FRANCE - WORLD WATER TREATMENT achieves revenue of 430 k€. Over the period 2017-2022, the company shows strong growth with a CAGR (compound annual growth rate) of +16.0%. Significant drop of -14% vs 2021. After deducting consumption (64 k€), gross margin stands at 366 k€, i.e. a rate of 85%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 135 k€, representing 31.3% of revenue. Positive scissor effect: EBITDA margin improves by +26.5 pts, sign of improved operational efficiency. This high EBITDA margin provides strong self-financing capacity and resilience to uncertainties. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 41 k€, i.e. 9.4% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 69%. Debt remains under control: the company retains capacity to raise new debt if needed. Financial autonomy (= Equity / Total assets x 100) reaches 13%. Low autonomy: the company heavily depends on external financing (banks, suppliers). Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 3.9 years of cash flow to repay all financial debt. This ratio remains within usual banking standards. Cash flow represents 10.2% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment. This high level provides strong self-financing capacity.

The liquidity ratio (= Current assets / Current liabilities) stands at 369.80. Concretely, the company has €2 of liquid assets for every €1 of short-term debt: no cash risk within 12 months. The interest coverage ratio (= EBIT / Interest expenses) is 0.5x. Danger: operating income does not cover interest charges, unsustainable situation.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 1079 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 539 days. The gap of 540 days means the company finances its customers for over a month before being paid relative to supplier payments. This weighs on cash flow. Inventory turnover is 67 days (= Average inventory / Cost of goods x 360). Overall, WCR represents 667 days of revenue, i.e. 796 k€ to permanently finance. Over 2017-2022, WCR increased by +136%, requiring additional financing.

Indicative estimate only : the number of comparable transactions in this sector is limited (37 transactions). This range of 66 751€ to 276 974€ is provided for information purposes only and requires in-depth analysis to be confirmed.