VERONNE CONSTRUCTION : revenue, balance sheet and financial ratios

In 2021, VERONNE CONSTRUCTION achieves revenue of 660 k€. Over the period 2018-2021, the company shows strong growth with a CAGR (compound annual growth rate) of +11.1%. Vs 2020, growth of +28% (517 k€ -> 660 k€). After deducting consumption (180 k€), gross margin stands at 481 k€, i.e. a rate of 73%. This ratio measures the ability to generate value from commercial activity. EBITDA (= Gross margin - Personnel expenses - Taxes) reaches 54 k€, representing 8.2% of revenue. Warning negative scissor effect: despite revenue change (+28%), EBITDA varies by -20%, reducing margin by 4.9 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 40 k€, i.e. 6.0% of revenue. This profit can be retained or distributed to shareholders.

The debt ratio (= Financial debt / Equity x 100) stands at 98%. Debt level is high: negotiating margin with banks is reduced. Financial autonomy (= Equity / Total assets x 100) reaches 34%. The balance between equity and debt is satisfactory. Debt repayment capacity (= Financial debt / Cash flow) indicates it would take 2.7 years of cash flow to repay all financial debt. This short period demonstrates excellent debt sustainability. Cash flow represents 7.9% 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 281.65. 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 1.5x. Coverage is limited: any activity downturn would jeopardize interest payments.

Working capital requirement (WCR) measures the cash timing gap between customer collections and supplier/inventory payments. Average customer payment term: 115 days (formula: Customer receivables / Revenue incl. VAT x 360). Supplier term: 65 days. The gap of 50 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 25 days (= Average inventory / Cost of goods x 360). Fast turnover, sign of good inventory management. Overall, WCR represents 127 days of revenue, i.e. 233 k€ to permanently finance. Over 2018-2021, WCR increased by +315%, requiring additional financing.

Indicative estimate only : the number of comparable transactions in this sector is limited (28 transactions). This range of 45 824€ to 184 279€ is provided for information purposes only and requires in-depth analysis to be confirmed.