Our client, a telecommunications and IT services operator for businesses, has for several years set up a quarterly financial benchmark, which enables it to have a regular overview of the financial performance and strategic orientations of its competitors.
This tool allows our client's strategic management to position itself compared to its competitors in the major areas of the BtoB telco sector (IoT, security, etc.).
He called upon our experts in strategy and financial analysis to:
- Analyze the financial performance of 26 players: quarterly and annual revenue and profitability studies.
- Studying the main strategic moves: mergers, acquisitions, asset disposals, partnerships, and investments in new growth levers.
- Studying the impact of COVID on the business and short- and medium-term prospects.
Planning and analysis at the heart of our approach
To carry out this study, our experts first established a production schedule based on the dates of publication of the financial results posted by the firms subject to this study.
In fact, the financial communication of companies listed on the stock exchange is highly regulated. In France, it is regulated by the AMF (Autorité des Marchés Financiers). Companies must draft in advance a financial communication calendar specifying at least the dates of the various regular information publications and the particular reasons (linked to the company or the business sector) that justify the adoption of this calendar. This calendar must be reviewed annually and must appear in the company's annual report and on its website in a clearly identified section relating to the calendar of its financial1 communications.
The development of this schedule allowed us to produce the analyses and deliver the elements to the client on a regular basis.
Our experts in market intelligence and analysis relied on several data sources to elaborate their analysis:
1/ Primary source data, published by companies:
- Annual reports and data books2: analysis of the main indicators (revenue and operating margin) and study of the breakdown of revenues by business area, using a historical approach highlighting major developments.
- Transcripts of meetings on financial information: a mandatory exercise for listed companies. This document includes a question and answer section that provides additional insight into the reading of the results.
2/ Specialized analysts' reports (PAC3, TBR4, etc.), which provide an external viewpoint on the company under study and allow for the cross-referencing of several analysis axes.
3/ Specialized press articles to provide a critical view.
They have also enriched the deliverable compared to previous benchmarking exercises:
- On the form: addition of graphics, improvement of the readability
- On the content:
- Addition of COVID impacts on the sector,
- Study of new growth levers: acceleration of the digital transition (cloud/cybersecurity, etc.),
- Review of growth prospects and margin trends.
Results
The final deliverable created by Sofrecom's analysts is a summary file including:
- A history of financial data for the 26 players.
- A record of player files, summarizing the quarterly, half-yearly and annual results and highlighting the important evolutions.
- A summary file with several key messages: prospects, growth levers, strategic movements, basic trends in the sector and impacts of the health crisis, as well as a mapping of the players according to their revenues and EBITDA.
[1] Source AMF : Guide de l’information périodique des sociétés cotées
[2] Databook: financial results in an excel file
[3] PAC: Pierre Audoin Consulting
[4] TBR: Technology Business Research
