- Sales increase to EUR 36 million (+5 per cent compared to first half of previous year)
- Operating income of EUR 2.2 million before goodwill write-downs (-28 per cent on first half of previous year), corresponding to an operating EBIT margin of around 6 per cent
- Core German market: Sales of EUR 29 million (+7 per cent on first half of previous year) and an EBIT margin of 8 per cent
- UK and US markets: Sales of EUR 4.2 million (-13 per cent on first half of previous year) and an EBIT margin of 7 per cent
- Poland: Sales of EUR 2.8 million (-8 per cent on first half of previous year) and an EBIT margin of 16 per cent
- Goodwill write-downs of EUR 4.2 million due to restructuring expenditure
- Outlook: 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 overall. The Group generated sales of EUR 36 million in the first half of the 2023 financial year (January to June), representing growth of 5 per cent. Operating profitability before goodwill write-downs (EBIT margin) was around 6 per cent, with operating income of EUR 2.2 million being achieved.
In the Germany segment, the SYZYGY GROUP was once again able to significantly increase its sales, which were up 7 per cent at EUR 29 million, with operating profitability of 8 per cent. This means that around 82 per cent of total sales are attributable to this core market.
Business with existing clients handled by the international companies trended downwards compared to the same six-month period of the previous year. Sales in the UK and US fell by 13 per cent to EUR 2.2 million (EBIT margin: 7 per cent). Sales in Poland were down 8 per cent at EUR 2.8 million, albeit with a high EBIT margin of 16 per cent.
Financial income was negative EUR 0.9 million, meaning that total net income in the first half-year, after goodwill write-downs – which are non-cash items – and after taxes, is around EUR -3.2 million. Earnings per share are EUR -0.24.
While some industries, such as automotive and construction, are reluctant to invest in the face of the economic slowdown, other sectors, like aviation and tourism, are seeing greater investment. As a result, our core business in marketing, sales, digital marketing and IT services is experiencing ongoing strong demand overall. Digital transformation is continuing unabated and remains a key competitive advantage.
Franziska von Lewinski (CEO)
During the second quarter of 2023, the SYZYGY GROUP’s consulting business around product and service innovation posted weaker performance than originally expected. The main reasons for this are the reluctance on the part of several existing clients to invest, the resulting budget cuts and the generally recessionary market environment. In contrast, demand for consulting services relating to brands, transformation and sustainability continues to increase.
In response to this situation, restructuring and re-focusing measures were introduced in the consulting division, which are set to be completed in the third quarter. The resulting expenditure will push the EBIT margin down by around 1.5 percentage points. In addition, a goodwill write-down of around EUR 4.2 million was recorded at the end of the half year.
Forecast for the ongoing 2023 financial year
As already announced on July 4, 2023, on the basis of the information currently available the SYZYGY GROUP expects sales growth in the low single-digit percentage range in 2023, with an EBIT margin in a range between 5 and 7 per cent before goodwill write-downs.