Majorel Group Luxembourg S.A. : Majorel Reports Strong Results for 2021 and Positive Outlook for 2022March 17, 2022
DGAP-Ad-hoc: Majorel Group Luxembourg S.A. : Majorel Reports Strong Results for 2021 and Positive Outlook for 2022
Majorel Group Luxembourg S.A. / Key word(s): Annual Results/Annual Results
THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014.
Majorel Reports Strong Results for 2021 and Positive Outlook for 2022
Commenting on the strong results, Thomas Mackenbrock, CEO of Majorel, said: "I am pleased to report that we delivered a strong performance in 2021, with double-digit revenue and profitability growth, and have successfully executed our strategy in all areas. Our existing clients have extended their business with us, adding new service lines, new locations, and new solutions while at the same time we have won more than 40 new logos. I'd like to thank our clients for their trust in us and our 69,000 team members worldwide for their passion and commitment. We are also proud of our debut as a public company and I'd like to thank our anchor shareholders and our new shareholders for their confidence and vision. Our success in 2021 is a strong foundation for 2022, and our current outlook is positive."
Otmane Serraj, CFSO of Majorel, said: "I am very proud that Majorel has overachieved on its financial targets for 2021. Total net revenues of €1,752 million for the year represent a +31% increase over 2020, and Operating EBITDA is up +61% to €316 million. This development is supported by strong net revenue retention, which has grown to 116%. In addition, Majorel generated free cash flow of €118 million and the net cash position at the end of the year was €79 million, allowing us strategic flexibility for inorganic growth. Based on our current assessment, Majorel expects for 2022 its net revenue to be in the range of €1,850 million and €1,950 million with an Operating EBITDA margin to be in the range of 16.0-17.0%."
1. FINANCIAL OVERVIEW
CONTINUED STRONG TOP-LINE GROWTH IN ALL SEGMENTS AND BUSINESS AREAS
Net revenue for 2021 amounted to €1,752 million, representing an increase of +31% compared to the previous year's net revenue of €1,340 million. This development was driven by the strong growth in net revenue generated with existing clients, mainly in the target verticals Global Internet and BFSI. Net revenue in 2021 was impacted by special effects from the COVID-19 related business6 (€102 million) and the first-time consolidation of the China business, contributing €98 million to the Company's net revenue. The China operations became part of the Majorel Group as of January 1, 2021. Excluding the two aforementioned special effects, like-for-like net revenue7 growth was +16%.
Net revenue and net revenue by business Segment
*Q4 results are unaudited, not reviewed and are based on management reporting.
EASA Segment: Europe, Africa and South America
GEMS Segment: Global English, Middle East and South East Asia
CEA Segment: China and East Asia
The CEA Segment reported net revenue of €98 million for 2021 - in line with the Company's guidance that the CEA segment would contribute 5-7% of group net revenue. The positive contribution from this Segment has been driven by further expansion of the footprint in China, the continuing growth of digital consumer engagement services, and the focus on consumer products and digital clients.
CONTINUED STRONG PROFITABILITY IN ALL BUSINESS SEGMENTS
With an Operating EBITDA of €316 million, Majorel exceeded its latest, increased guidance from November 4, 2021 (€290-€310 million) and grew by +61% compared to 2020 (€196 million). The main drivers of this development were: overall business growth; operational excellence; more complex, value-added services; client portfolio management; improved global delivery mix; COVID-19 related services; the continued high work from home (WFH) rate of 63%; and the first time consolidation of China. Majorel's Operating EBITDA margin expanded by 340bps to 18.0%, compared to 14.6% in 2020.
EBIT amounted to €105 million for the year ended December 31, 2021, corresponding to a decline of -10% compared to the 2020 results of €116 million. This was due to the negative impact from special effects in connection with Majorel's private placement and listing in September 2021, of €128 million. Group Profit amounted to €80 million for 2021, representing a year over year decrease versus €86 million generated in 2020. Earnings per share (EPS)8 was €0.8. Free cash flow9 was €118 million (2020: €150 million).
The net cash position at the end of the year was €79 million, together with its unused credit facilities allowing the Company strategic flexibility for inorganic growth.
A potential dividend payment will be proposed at the AGM scheduled for June 20, 2022.
Operating EBITDA and Operating EBITDA by Segment
EASA Segment: Europe, Africa and South America
Operating EBITDA for the EASA Segment amounted to €223 million for 2021, a strong increase compared to 2020 Operating EBITDA of €153 million. The Operating EBITDA margin increased accordingly from 14.1% in 2020 to 17.3% in 2021. The margin improvement is driven by Majorel's main profitability drivers, especially: overall business growth, continued operational excellence; more complex, value added services; client portfolio management; continued high work from home rates; further expansion of Tech & Expert Services; and an increasing share of offshore delivery. The COVID-19 related businesses also contributed to the Operating EBITDA growth in EASA in 2021.
Operating EBITDA for the GEMS Segment amounted to €75 million for 2021, increasing by +69% from €44 million in 2020. The Operating EBITDA margin increased from 17.5% in 2020 to 20.6% in 2021. Margin improvement in GEMS has been similarly driven by Majorel's main profitability drivers.
CEA Segment: China and East Asia
Operating EBITDA from the first time consolidation of the China business amounted to €15 million for 2021 with an Operating EBITDA margin of 15.4%. The CEA results benefited from the continuing growth of digital consumer engagement services, the growth of consumer products and digital clients, and the expansion of the footprint in China.
2. BUSINESS OVERVIEW - MAJOREL HAS DELIVERED ON ITS THREE GROWTH LEVERS
Growth with existing clients and adding new logos
Ongoing business expansion
3. CORPORATE RESPONSIBILITY (ESG)
We see Corporate Responsibility (CR) as a fundamental part of Majorel's DNA and a natural extension of the Company's core values - Creativity, Excellence and Respect. Our CR framework comprises five pillars: Diversity, Equity & Inclusion; Environment & Local Communities; Employee Rights & Fair Working Conditions; Wellbeing & Resiliency; and Corporate Citizenship.
The diversity of our workforce plays a crucial part in our success and we are also expanding our potential talent pool by offering opportunities through impact sourcing. This initiative is making an important difference, reaching people in disadvantaged circumstances (whether socially, economically or through disability) who are typically missed by traditional recruitment programs.
In the wider world, we are committed to making a positive impact, being an active contributor to our host communities, and treading as lightly as we can. We have also defined a roadmap with the destination of being a climate neutral enterprise by 2030.
4. SUBSEQUENT EVENTS
This outlook is based on Majorel's current assessment on the development of the business in 2022 and the general CX market, combined with economic and labor market conditions in the Company's geographic footprint. It remains to be seen how recent events in Ukraine, and the ongoing COVID-19 pandemic, may impact the business environment and world economy in this year.
Based on current visibility, Majorel continues to expect strong organic growth from existing clients, supplemented by new logo wins and the positive impact from the effects of the acquisition of Mayen and the expanded strategic partnership with Booking.com (subject to customary closing conditions). This would result in an increase of 12% to 18% compared to the net revenue without COVID-19 related services in 2021. The company anticipates some COVID-19 business will remain in 2022, but at a much smaller scale than 2021 - this would approximately offset the expected limited negative business impacts resulting from the Ukraine crisis.
Against this background, Majorel expects its net revenue in 2022 to again increase and to be in the range of
Please find below in the Appendix, the primary Consolidated Financial Statements: Profit and Loss; Comprehensive Income; Financial Position; Cash Flow; and Changes in Equity.
WEBCAST WITH ANALYSTS AND INVESTORS
Thursday, March 17, 2022 at 15:00hrs CET
If you want to participate in the conference call, please pre-register by clicking here and you will then receive the dial-in details: https://event-registration.arkadin.com/6220b33b820c352429f1f474
To follow the presentation, participants of the conference call can use the following link (only slides, no audio): https://www.webcast-eqs.com/majorel20220317/no-audio
If you just want to follow the presentation without participating in the conference call, you can follow the webcast via livestream and you will receive the audio via your Internet browser. No dial-in to the conference call is required. https://www.webcast-eqs.com/majorel20220317
A presentation of the 2021 results is currently available on the Investor Relations section of Majorel's website (www.majorel.com).
FINANCIAL CALENDAR (INDICATIVE)
Q1 2022 Trading Update: May 5, 2022
Capital Markets Day: June 9 - 10, 2022
Annual General Meeting: June 20, 2022
H1 2022 Results: August 30, 2022
Q3/9M Trading Update: November 3, 2022
We design, build and deliver next-generation end-to-end CX solutions for many of the world's most respected digital-native and vertical leading brands. Our comprehensive east-to-west global footprint in 35 countries10 across five continents, with around 69,000 team members11 and 60 languages, allows us to deliver flexible solutions that leverage our expertise in cultural nuance, which we believe to be essential for true excellence in CX. We have deep domain expertise in tech-augmented front to-back-office CX. Additionally, we offer Digital Consumer Engagement, CX Consulting, and an innovative suite of Proprietary Digital Solutions for industry verticals. We are a global leader in Content Services, Trust & Safety. We believe the 'Majorel difference' to be our culture of entrepreneurship.
Some of the financial and business information in this announcement is unaudited and not reviewed, and based on management reporting. It does not purport to contain all information required to evaluate the Company and/or its financial position. All forward-looking statements are based on the Company's present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed description of these factors and uncertainties, please refer to the "Risk Factors" section of our Prospectus, available at https://www.bourse.lu/issuer/MajorelGroupSA/105258. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements.
Consolidated statement of profit and loss
Consolidated statement of comprehensive income
Consolidated statement of financial position
a) As of December 31, 2021, the subscribed capital amounts to €1 million (December 31,2020: €404 thousand).
Consolidated Statement of Changes in Equity
a) As of December 31, 2021, the subscribed capital amounts to €1 million (December 31, 2020: €404 thousand).
|Company:||Majorel Group Luxembourg S.A.|
|43, boulevard Pierre Frieden|
|Phone:||+352 42 142 56 11|
|Listed:||Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt, Munich, Stuttgart; Amsterdam|
|EQS News ID:||1304895|
|End of Announcement||DGAP News Service|