EURODEF : revenue, balance sheet and financial ratios

In 2024, EURODEF achieves revenue of 1.6 M€. Over the period 2016-2024, the company shows strong growth with a CAGR (compound annual growth rate) of +40.9%. Significant drop of -21% vs 2023. After deducting consumption (397 k€), gross margin stands at 1.2 M€, i.e. a rate of 75%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 171 k€, representing 10.7% of revenue. Warning negative scissor effect: despite revenue change (-21%), EBITDA varies by -68%, reducing margin by 15.6 pts. This reflects costs rising faster than revenue. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 42 k€, i.e. 2.7% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 213%. Critical situation: debt significantly exceeds equity, severely limiting borrowing capacity and exposing the company to default risk. Financial autonomy (= Equity / Total assets x 100) reaches 26%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 5.0 years of cash flow to repay all financial debt. This ratio remains within usual banking standards. Cash flow represents 8.7% of revenue. Cash flow measures resources generated by operations, available for investment and debt repayment. Satisfactory level allowing partial financing of growth.

The liquidity ratio (= Current assets / Current liabilities) stands at 409.22. 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 10.6x. 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: 60 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 52 days. The company must finance 8 days of gap between collections and payments. Inventory turnover is 66 days (= Average inventory / Cost of goods x 360). Overall, WCR represents 135 days of revenue, i.e. 597 k€ to permanently finance. Over 2016-2024, WCR increased by +9230%, requiring additional financing.

Based on 228 transactions of similar company sales (all years), the value of EURODEF is estimated at 207 619 € (range 87 116€ - 557 716€). With an EBITDA of 170 521€, the sector multiple of 1.5x is applied. The price/revenue ratio is 0.13x (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.