ALGAM : revenue, balance sheet and financial ratios

In 2024, ALGAM achieves revenue of 148.5 M€. Over the period 2016-2024, the company shows strong growth with a CAGR (compound annual growth rate) of +6.1%. Slight decline of -6% vs 2023. After deducting consumption (112.9 M€), gross margin stands at 35.6 M€, i.e. a rate of 24%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 2.2 M€, representing 1.5% of revenue. Warning negative scissor effect: despite revenue change (-6%), EBITDA varies by -81%, reducing margin by 5.6 pts. This reflects costs rising faster than revenue. The operating margin remains fragile, requiring cost vigilance. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 1.8 M€, i.e. 1.2% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 71%. Debt level is high: negotiating margin with banks is reduced. Financial autonomy (= Equity / Total assets x 100) reaches 50%. This high autonomy means the company finances most of its assets through equity, a sign of strength. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 33.2 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 0.9% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment.

The liquidity ratio (= Current assets / Current liabilities) stands at 638.44. 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 121.0x. Operating income very largely covers interest expenses: high safety margin.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 33 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 29 days. The company must finance 4 days of gap between collections and payments. Inventory turnover is 123 days (= Average inventory / Cost of goods x 360). This high level ties up cash and potentially creates obsolescence risk. Overall, WCR represents 226 days of revenue, i.e. 93.4 M€ to permanently finance. Over 2016-2024, WCR increased by +92%, requiring additional financing.

Based on 145 transactions of similar company sales (all years), the value of ALGAM is estimated at 12 559 501 € (range 6 066 275€ - 31 825 801€). With an EBITDA of 2 162 000€, the sector multiple of 2.6x is applied. The price/revenue ratio is 0.19x (conservative valuation). This multiples method compares the actual sale price of similar companies to their financial indicators (Revenue, EBITDA, Net Income). It provides a market-based indicative estimate.