NEO SYSTEMS : revenue, balance sheet and financial ratios

In 2024, NEO SYSTEMS achieves revenue of 6.5 M€. Over the period 2016-2024, the company shows strong growth with a CAGR (compound annual growth rate) of +20.7%. Vs 2023, growth of +12% (5.8 M€ -> 6.5 M€). After deducting consumption (844 k€), gross margin stands at 5.7 M€, i.e. a rate of 87%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 893 k€, representing 13.7% of revenue. Positive scissor effect: EBITDA margin improves by +4.0 pts, sign of improved operational efficiency. This level of operating margin is satisfactory for the sector. Ultimately, net income (= EBIT +/- financial result +/- exceptional - corporate tax) amounts to 455 k€, i.e. 7.0% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 20%. This very low level reflects a solid financial structure, offering significant room for future investments or acquisitions. Financial autonomy (= Equity / Total assets x 100) reaches 42%. 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 0.4 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 11.1% 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 84.91. 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 0.8x. 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: 20 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 75 days. Excellent situation: suppliers finance 55 days of the operating cycle (retail model). Inventory turnover is 18 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 14 days of revenue, i.e. 252 k€ to permanently finance. Over 2016-2024, WCR increased by +33%, requiring additional financing.

Based on 215 transactions of similar company sales (all years), the value of NEO SYSTEMS is estimated at 884 430 € (range 391 180€ - 2 895 413€). With an EBITDA of 893 336€, the sector multiple of 1.0x is applied. The price/revenue ratio is 0.16x (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.