- Sales increase to EUR 54 million (+3 per cent compared to prior-year period)
- Adjusted operating income (excluding goodwill write-downs and restructuring expenses) of EUR 4 million (-17 per cent compared to prior-year period), corresponding to an operating EBIT margin of over 7 per cent
- German Core market: Sales of EUR 43 million (+6 per cent compared to prior-year period) and an EBIT margin of 9 per cent after adjusting for restructuring expenses
- UK and US markets: Sales of EUR 6 million (-15 per cent compared to prior-year period) and an adjusted EBIT margin of 10 per cent
- Poland: Sales of EUR 5 million (0 per cent change compared to prior-year period) and an EBIT margin of 17 per cent
- Goodwill write-downs of EUR 4.2 million
- Restructuring and transformation costs of around EUR 0.5 million
- Confirmation of forecast for the full year 2023: Sales growth in the low single-digit percentage range, with an EBIT margin in a range between 5 and 7 per cent before goodwill write-downs
The SYZYGY GROUP’s core business, particularly the digital transformation of marketing and sales, digital marketing and IT services, continues to perform well. The Group increased its sales by 3 per cent to EUR 54.4 million in the first nine months (January to September) of the 2023 financial year. It generated operating income of EUR 4 million, adjusted for goodwill write-downs and restructuring expenses, corresponding to an EBIT margin of 7.2 per cent.
The SYZYGY GROUP’s core market, Germany, remains robust. The ongoing shift of marketing budgets to digital channels and continuing investment in the digital transformation of marketing and sales processes are both factors that have created a favourable backdrop for the Group. A combination of strong business from existing clients and the acquisition of new clients drove sales up 6 per cent to EUR 43.4 million, with operating profitability of 9 per cent. This means that around 81 per cent of total sales are attributable to the Group’s home market.
In the UK and US markets, some existing clients were reluctant to invest compared with the prior-year period due to the economic situation in those regions. This led to a drop in sales of 15 per cent to EUR 6.3 million. Profitability nevertheless remained on track, with an operating EBIT margin of 10 per cent.
The Polish market held up well compared to the prior-year period. Sales remained at EUR 4.7 million, with a high EBIT margin of 17 per cent.
Particularly during the second quarter of 2023, the consulting business around product and service innovation posted weaker performance than originally planned. The main reasons for this were the reluctance on the part of several existing clients to invest, the resulting budget cuts and the generally recessionary market environment. As announced in July, this led to a goodwill write-down of EUR 4.2 million in the period covered by the report. In addition, restructuring costs of EUR 0.5 million were incurred in the third quarter.
Financial income was negative by EUR 1.2 million in the first nine months of the year, meaning that total net income after taxes for the period January to September is around EUR -2.6 million. Earnings per share are EUR -0.20.
Based on the information available to date, the SYZYGY GROUP is confirming its forecast for the year announced in July 2023. It expects sales growth in the lower single-digit percentage range in the current financial year, with an operating EBIT margin of between 5 and 7 per cent, including restructuring expenses and before goodwill write-downs. Around 1.5 percentage points of the decline in EBIT margin is attributable to restructuring the consulting business and to reducing rental space.
A comprehensive digital customer journey has become essential for companies and brands. To achieve this, customer acquisition, customer service and sales need to be digitally transformed and closely interlinked. A compelling digital experience makes all the difference here, creating sustainable added value and boosting competitiveness. That is precisely what the SYZYGY GROUP’s services focus on, enabling it to maintain its above-average growth rate in its core German market.
Franziska von Lewinski (CEO)