TELCO DEVELOPPEMENT : revenue, balance sheet and financial ratios

In 2023, TELCO DEVELOPPEMENT achieves revenue of 1.2 M€. Over the period 2016-2023, the company shows strong growth with a CAGR (compound annual growth rate) of +26.5%. Vs 2022, growth of +13% (1.1 M€ -> 1.2 M€). After deducting consumption (0 €), gross margin stands at 1.2 M€, i.e. a rate of 100%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 441 k€, representing 35.4% of revenue. Positive scissor effect: EBITDA margin improves by +5.7 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 1.7 M€, i.e. 134.0% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 6%. 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 91%. 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 7.7 years of cash flow to repay all financial debt. Beyond 7 years, banks generally consider credit risk as high. Cash flow represents 58.6% 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 341.43. 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 33.8x. 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: 240 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 150 days. The gap of 90 days means the company finances its customers for over a month before being paid relative to supplier payments. This weighs on cash flow. Overall, WCR represents 2214 days of revenue, i.e. 7.7 M€ to permanently finance. Over 2016-2023, WCR increased by +34031%, requiring additional financing.

Based on 66 transactions of similar company sales in 2023, the value of TELCO DEVELOPPEMENT is estimated at 3 432 462 € (range 1 411 689€ - 7 647 731€). With an EBITDA of 441 382€, the sector multiple of 4.0x is applied. The price/revenue ratio is 0.63x (in line with sector norms). 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.
Medium reliability: estimate to be confirmed with in-depth analysis.