Connections has achieved a revenue growth compared to H1 2023 and a record net profit of 4.6 million RON, surpassing the estimated budget by 200%

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Connections Consult (CC), a digitalization company listed on the BVB, AeRo market, announces significant improvements of the financial performance for the first half of 2024.

Net profit has exceeded the budgeted growth for this year by 200%, reaching 4.67 million RON, which is a 29% increase compared to the same period in 2023. The company’s revenues are also on an upward trend, showing a 15% increase from the first semester of the previous year and a dynamic business line performance that ensures balanced development.

“Early in 2024, at Connections, we aimed to focus on improving business efficiency, and the first six months demonstrate that we are achieving this goal successfully: profitability is rising across all indicators, including both gross and net results, as well as profit margins—an achievement all the more relevant given the ongoing challenges and consistent declines in the IT market quarter after quarter. The results we are reporting today confirm that effective management generates enhanced value, and CC is a pillar of stability for our shareholders“, says Bogdan Florea, Founder and Co-CEO of the company.

 The negative effects of the market context have only impacted the company’s results at the level of initial expectations—actual figures versus budgeted ones. However, Connections reports double-digit growth compared to the previous year in key indicators, including a reduction in debt levels, and continues to anticipate an even better second half of the year.

“The first half of the year was, overall, a period during which local market players were cautious about launching new digitalization projects, focusing instead on a thorough analysis of IT providers’ capabilities. Our advanced level of expertise is one of our strong points, so Connections is well-positioned to achieve significant growth and relevant projects in the second half of the year. We thank the entire team, as their talent and capabilities are the major differentiators”, says Radu Marcu, Co-CEO of the company.

 In addition to achieving revenues 15% higher than the first semester of 2023 (47.1 million RON), Connections Consult also experienced increases in expenses, primarily related to higher salary costs. During the same period, the company also internally launched the Stock Option Plan (SOP), through which the first 50 employees have become shareholders, in order to, as Bogdan Florea specifies, “clearly show the team that Connections’ success is directly linked to their performance“.

In parallel with enhancing business efficiency, Connections is strengthening its governance by developing a new resource management and workflow system, which is currently being operationalized to ensure a solid foundation for medium- and long-term development.

“We are making steady progress toward a clear multi-year vision“, says the company’s founder, “and in the second half of the year, we will extend our efforts to securing funding for research in cybersecurity and artificial intelligence. We likely have some of the most educated and skilled colleagues in the market in the area of artificial intelligence, with experience and proven experimental results over the past two years, well ahead of the global market surge“.

The company will also intensify its efforts to secure foreign territories and projects, which generated 30% of revenues in the first semester, and is also focusing on accelerating digitalization projects funded through the National Recovery and Resilience Plan (PNRR) and other European funds.

The financial results report for the first half of 2024  is available for consultation at the following link.

Connections decides to distribute dividends for 2023 and announces financial projections for 2024

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Connections (CC), a digital transformation company listed on the AeRO market of the Bucharest Stock Exchange, recently published the budget for the year 2024 and the priorities for the current year. The company has decided to allocate dividends for the fiscal year ended and has initiated internal preparations for transitioning to the regulated market of the exchange.

For 2024, Connections estimates total revenues of 122 million lei, representing an accelerated growth of 49% compared to the budgeted amount for 2023, and a net profit of 8.8 million lei (a 57% increase compared to the budgeted amount for 2023), with a focus on EBITDA growth.

“2023 was the best year in the company’s history, with significant surpassing of all initially estimated results. Triple-digit growth has brought us large-scale projects, which we currently have in progress, and have confirmed Connections’ capabilities and relevance in the public sector digitization category in Romania. We continue to grow at a sustainable pace to ensure healthy and balanced development, with a focus in 2024 on the development of our software development and technology integration line. The main contributors to this year’s revenue are the Service Delivery and Software Development & Outsourcing divisions, with estimated revenues of 35 million lei and 87 million lei, respectively,” says Bogdan Florea, Founder & Co-CEO of Connections.

The organization is banking on revenue growth in the Software Development division, driven both by the development of substantial projects in the public sector and by expanding its portfolio of specialized solutions. The division is expected to achieve an estimated average compound growth of 60%, while the Service Delivery line is projected to see a 3% growth, remaining a significant source of revenue and a strategic pillar for Connections.

The primary target for the current year is private sector companies, aiming to ensure a balanced portfolio of clients and profitability growth that generates increased value for investors.

“Our plans for 2024 focus on four essential pillars: strategic technological partnerships, digital marketing to increase visibility, consultative sales to understand customer needs, and the development of innovative solutions for the public sector. We are confident that this year’s results will strengthen our market position and allow us, as planned, to distribute dividends each year, correlated with the financial realities of the moment,” mentions Radu Marcu, Co-CEO of Connections.

In addition to development initiatives, the company aims to internally focus on consolidating the corporate governance structure and kick-start preparations for transitioning to the primary market. The first planned step is to expand the Board of Directors by two seats, a measure that will bring diversified expertise to the board and improve decision-making processes within the company.

“Today, we have a corporate governance that is vastly superior to the time of listing, with processes and procedures maturing and requiring a much more rigorous business conduct over the next 3-5 years. In order to access the main market of the Bucharest Stock Exchange and prepare for the transition to IFRS reporting, we are determined to align ourselves with the highest standards and develop a transparent financial image. Our focus will be on long-term sustainability and constant value generation, both for shareholders through business results and for clients through the high quality of projects we deliver,” adds Bogdan Florea, Founder & Co-CEO of Connections.

Based on previous financial performances, Connections recently decided to distribute dividends totaling 3,300,000 lei from the net profit of the company for the financial years 2022 and 2023, to be benefited by shareholders registered in the shareholders’ register on the date of 26.04.2024, proportionally to their shareholding in the paid-up share capital. The gross dividend value is 0.2522 lei per share, and the dividend payment date through the Central Depository is 21.05.2024.

Connections’ dividend policy aims at consistent distribution of benefits to shareholders, based on the availability and cash needs of each year, correlated with profit growth.

The year 2023 marked exceptional growth, with the company standing out through impressive financial results and solidifying its position as a market leader in complex digitization projects. Key financial achievements include a 203% increase in turnover, reaching 177 million lei, and a 162% increase in net profit, reaching 11 million lei.

The complete report on audited financial results for 2023 and the budget for 2024 can be consulted here.

Connections Group increases its net profit by 273% in the first half of 2023 and passes 40 million lei turnover

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Connections Consult (CC), a digital transformation company listed on the BVB-market AeRo, increased its net profit by 273% in the first half of this year, reaching 3.6 million lei, (37% above budgeted figures), while turnover increased by 62% compared to the same period in 2022, reaching 40.9 million lei. The results include the activity of all companies in which Connections has control, and the largest contribution to growth was made by Software Development services in the first half of this year. 

In 2023, the company’s activity was largely focused on winning new customers and high-profile contracts, i.e. strengthening corporate governance and carrying out the 1:10 bonus share capital increase, completed in August. The company’s development strategy focused both on short-term results and on consolidating its position as a market leader in complex digitalization projects in the medium and long term.

 “Connections achieved a number of notable improvements in the first half. We have strengthened our competencies in bidding and delivering complex projects for public institutions; we are continuously developing our corporate governance towards budget discipline and predictability; we are emphasizing assessment processes and career plans for our internal team, and our portfolio is diversified (public-private; software-infrastructure-business process management-technology integration). We have solid foundations and a business construction able to cope with potential imbalances and contractions due to external factors, so that we can bring further benefits to our shareholders and employees, and all these successes are reflected in the figures obtained”, says Bogdan Florea, Connections co-CEO.

During the reporting period, the company’s gross profit showed a significant favorable variance (46%) compared to the estimate, both due to higher-than-expected revenues (unbudgeted projects) and cost savings. Compared to the same period in 2022, however, the evolution was remarkable, up 216%, on the back of growth in activity overall and in the Software sector in particular.

“2022 was a key year in which Connections continued the major commitments made at the end of 2021 in the Software Development service line and won a number of significant projects in this area, the benefits of which partially materialized at the end of 2022 and continued to be realized in the first 6 months of 2023. Commitments involved careful preparation of capacity to deliver new projects by engaging highly skilled resources. As a result, the gross margin of the whole group improved in H1 2023 both compared to the same period last year and compared to what we had originally estimated for the current year. Attracting highly qualified staff is an ongoing concern and is already making a difference”, says Radu Marcu, Connections co-CEO.

Semester 2 perspectives

The company expects the second half of 2023 to continue to deliver earnings growth, at least in line with the management team’s original budgeted estimates.

Connections has recently signed 2 new contracts with significant financial relevance. The first, signed in August 2023, is worth 26 million lei, with an expected gross margin of 8%, and is with a public institution in Romania. The contract provides for the design and implementation of a hardware and software infrastructure for the management system of the Romanian justice system.

The second recent contract, dated September 2023, amounts to 56.48 million lei, with an expected gross margin of 4%, and the beneficiary is a public institution/government agency in Romania. The contract involves the delivery and implementation of a cyber security infrastructure – hardware and software elements.

The Connections Group expects the second half of this year to continue the upward curve in terms of results and the focus of the operational team is to ensure a high standard of delivery.

More information about the results of the first half of the year can be found here.

Connections Consult exceeded financial estimates for 2022. Consolidated revenues of 58,46 million lei in 2022 and a gross profit of 5,11 million lei

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Bucharest, March 27, 2023 – Connections Consult (CC), a group of digital transformation companies, listed on the AeRO Market of the Bucharest Stock Exchange, reported consolidated revenues of 58,46 million lei in 2022 and a gross profit of 5,11 million lei, with an increase of 48% compared to 2021.

In the reporting period, Connections recorded a 29% increase in revenues compared to last year on the back of new projects carried out within the lines of software and RPA services, as well as the increase in the volume of software consulting and outsourcing services offered within Outsourcing Support Services SRL and Brusch Services SRL.

Gross profit increased by 48% compared to 2021, and also during this period, the technology verticals saw a consolidation of the contribution to the total revenues of the group.
In this regard, the line of software development services (“software development”) reached a 36% revenue contribution rate, and hyperautomation services (RPA) represent, at the end of 2022, 6% of total revenues.

Furthermore, the Group exceeded the financial estimates for 2022, mentioned in the memorandum from the private placement and in the one from the technical listing of September 2021, both in terms of revenues (18% increase compared to estimates), but also gross profit (an increase of 20,31% against estimates).

Connections delivered on its commitment to its stakeholders and continued to invest resources in developing high-potential service lines to maximize the Group’s net asset value.

“In an extremely volatile market context, internationally and locally, with many uncertainties and difficult to manage: the war in Ukraine, inflation, the potential food crisis, the energy crisis and that of the supply chains, therefore, in a landscape complex, we maintain our energy, perseverance, and positive estimates for 2023. The financial information presented in the Report aligns with the strategy announced by Connections regarding the development of the business and is proof of the ability and commitment to increasing the value of its assets”, said Radu Marcu, co- CEO Connections Consult.

At the date of publication of the current financial report for 2022, Connections has already included on the agenda of the General Shareholders’ Meeting of 24.04.2023 the voting of the Employee Stock Options (ESOP) program and the distribution of dividends related to the group’s profit obtained in 2021. The founder and majority shareholder, Bogdan Florea, will not be part of the ESOP program.

“The year 2022 meant for Connections Consult the continuation of strengthening the financial position in the Balance Sheet. The company recorded an increase in the value of assets easily convertible into cash, as shown by the comparative balance sheet 2021 versus 2022. The increase in current assets is mainly due to the increase in the balance of receivables on December 31, 2022 compared to 2021, correlated with a decrease in the balance of cash. This is due to the use of cash for business growth”, stated Bogdan Florea, co-CEO of Connections Consult.

At the end of 2022, the issuer recorded a balance of Current Assets in the amount of 22.009.821 lei, 11,25% more than on 31.12.2021, of which 4,5 million lei represented cash availability.

According to the budget for 2022, Connections proposes a consolidated turnover of 83 million lei and an EBITDA of 7,75 million lei. These estimates include the results generated by all the group companies in which Connections Consult S.A. owns more than 51%, including Brusch Services – the company acquired by the Group in 2021.

“The group’s exceptional results, reflected in the indicators mentioned above, are the effect of the perseverance, creativity, and energy demonstrated by the Connections team, to whom we thank for a remarkable 2022! We thank our investors who showed patience, trust and moral support through their open attitude and honest approach in relation to the company!”, added Bogdan Florea, co-CEO of Connections Consult.

ID Scanner: Over 10,000 working hours saved by the ID card data scanning application

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Bucharest, March 22, 2023 – Connections Consult SA, the leader of the digital transformation market in Romania, listed on the AeRO market of the Bucharest Stock Exchange (BSE) under the symbol CC, estimates an increase in the number of companies that will use smart solutions in their digital transformation path. Such an application, ID Scanner, developed by Connections, which automatically extracts data from the ID card, has saved so far over 10,000 hours of the employee’s time from the companies that have already implemented the application.

Onboarding processes play a key role in building databases and employers assign them increased importance. At the same time, they can consume important resources, and companies in various industries, such as banking, telecommunications, insurance, and others, are increasingly looking for solutions to streamline and make these processes faster. Lately, Connections Consult SA has registered an increased wave of applications for ID Scanner, an application that has already been successfully implemented in various fields and which has shortened the time wasted by employees with the entry of data from identity cards into the system.

“In many companies, digital simplification and transformation projects are underway, so that work processes and repetitive tasks are no longer a chore for employees. On this trend, the interest in intelligent solutions, such as our application, has increased. There are customers from different industries, and to support them we have launched a website with more information about ID Scanner, on which they can also test our solution.

The application is easy to use and adapt to other standard formats. Basically, through a simple picture, you can automatically extract, digitally, the data from an identity card. We are talking here about the Romanian identity cards, because most of the solutions that existed before on the market were not compatible and involved additional investments”, said George Radu, Product Manager ID Scanner.

With the help of ID Scanner, various operations can be performed, such as the enrollment of customers (individuals), the automatic filling of contracts, the updating of personal data, the registration of visitors, but also many other operations.

When integrating external technologies, the flexibility and security of the system are essential for most companies. The ID Scanner app can be easily integrated into IT ecosystems that implement complex business process flows. The solution can be hosted in the cloud or on premises, and is now also offered as a SaaS (software as a service) solution.

Accessible from the new www.idscanner.ro website, the application is easy to use, in just three steps, explained by a demonstration video. ID Scanner-type solutions are constantly growing in a digital transformation market estimated to increase its value 3-4 times globally by the end of this decade, respectively to exceed the value of $ 6 trillion, according to the latest studies.

Connections Consult appoints Radu Marcu as co-CEO

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Bogdan Florea remains in the management of the companies

Bucharest, January 12, 2023 – Connections Consult SA, listed on the AERO market of BVB and the leader of the digital transformation market in Romania, announces the appointment of Radu Marcu as Executive Director (co-CEO) starting from 03.01.2023.

Radu Marcu will lead the company alongside the founder of Connections Consult, Bogdan Florea, who remains the leader of the company.

Radu Marcu joined Connections Consult in November 2021 and held the position of Software Chief Operating Officer. Until now he led the bidding, delivery, and post-implementation operations of the software development team and was part of the Management Board of the Connections group. He has over 15 years of experience in managing software development activities, within TotalSoft, but also within other companies, where he managed integrated projects for clients from Romania and other markets, complex products, and led extensive software development teams and products.

“Ever since I joined the Connections team I have shared the same vision and I am excited to step forward in this company that pursues operational excellence and the delivery of value-added products and services. We will continue to work together, innovate and develop new products”, said Radu Marcu, co-CEO of Connections Consult.

Bogdan Florea will remain the President of the Board of Directors and co-CEO and will continue to implement the strategy of expanding the portfolio of complex digital transformation projects both in the local market and in other regions.

“Connections Consult continues to grow and needs more pillars to follow our expansion strategy. Radu Marcu already knows everything about Connections projects and is the right person to collaborate on Connections’ mission to accelerate the digital transformation of the public and private business environment. I am sure that together we will be able to take Connections Consult even further. Collective leadership ensures a considerably higher level of governance and allows us to be sufficiently flexible and agile in decision-making, in the perspective of a turbulent and constantly changing economic environment. Consolidation of the managerial act in Connections will continue in the coming months. We are already working on a new organizational chart and attracting future colleagues with significant exposure in various areas of specialization, both in the management team and on the Board of Directors. This step is the second stage in the creation of solid and resilient governance mechanisms, after the founding of the Advisory Council, carried out in 2022,” said Bogdan Florea, founder, and co-CEO of Connections Consult.

 

Experts with over 20 years in technology are joining Connections Consult and form the new Advisory Board

Connections Consult improves access to justice by implementing the electronic file

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Experts with over 20 years in technology are joining Connections Consult and form the new Advisory Board

Bucharest, November XX 2022 – Connections Consult SA, listed on the AERO market of BVB and the leader of the digital transformation market in Romania, signed a new significant contract with the Ministry of Justice for the implementation of the ECRIS management system, which facilitates access to justice and implements the electronic file.

The project, one of the most complex in recent years in the field of digital transformation in the public sector, was won by a consortium of partners whose leader is Connections Consult SA. The total amount of services delivered will be over 39.4 million lei plus VAT, and the value of the activities carried out individually by Connections Consult SA will be 23,138,159 lei plus VAT.

“Connections continues to implement the strategy of expanding the portfolio of significant digitalization projects. We are pleased to announce the signing of a new contract with the Ministry of Justice for the delivery of services for the development, testing, and commissioning of the new ECRIS V case management system and related staff training services. The new digital architecture will significantly contribute to increasing the degree of digitization of the judicial system, among the major functionalities brought is the electronic file, which will allow the beneficiaries full electronic management of the documents in the files – at the level of courts and prosecutor’s offices”, said Bogdan Florea, founder and CEO Connections Consult.

Implementing the new ECRIS V electronic case management system also requires interconnection with other existing IT systems, including implementing a unified data standard. In addition, ECRIS Courts will be integrated with the ECRIS Portal Courts application, which will become the key component for the digitization of the judicial system and can be used by interested parties (parties to a case, lawyers and others) about the courts as a single point of online interaction – submitting documents online, consulting the contents of a file online, etc. Also, a similar portal for prosecutors will be created – ECRIS Portal Prosecutors.

The estimated deadline for the delivery of the solution to the Ministry of Justice is July 2024.

 

Connections Consult, revenues up 24% in 2021

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connection consult revenue increase RPA service line

Bucharest, 2nd May 2022 – Connections Consult (CC), a group of digital transformation companies listed on the main market of the Bucharest Stock Exchange, reported consolidated revenues of 45.32 million lei in 2021 and a gross profit of 3.46 million lei, an increase by 25% compared to 2020.

During the reporting period, the Connections Group recorded a 24% increase in revenue compared to the previous year, amid new projects under the software and RPA service lines, as well as the increase in the volume of software consulting and outsourcing services offered together with Outsourcing Support Services SRL and Brusch Services SRL. Gross profit increased by 25% compared to 2020, and, at the same time, there was a change in the composition of the main contributors to the group’s revenue structure. Thus, the line of services that represents software development reached a share of contribution in revenues of 22%, and hyper-automation services (RPA) represented, in 2021, 6 per cent of total revenues.

At the same time, Connections Consult exceeded the financial estimation for 2021, mentioned in the memorandum of private placement and in the September 2021 technical listing memorandum, in terms of revenues (21% increase compared to the estimated figures) and gross profit (9 per cent increase compared to the estimated figures).

As a result, the Connections Group maintained its commitment to its investors and continued to invest resources in developing potential service lines to maximize the value of the group’s net assets. At the time of publication of the 2021 Annual Financial Report, Connections already reached another important goal in the strategy presented to investors at the time of the private placement: the creation of the US subsidiary, Connections Consult LLC. Considering the division of shares (10:1 ratio) and the budget of revenues and expenses above the initial estimates from July 2021 (at the date of the private placement), the Group is optimistic about the year 2022.
In a highly volatile international and local market context, with many uncertainties and difficulties to manage: the war in Ukraine, inflation, the potential food crisis, the energy crisis and the supply chain crisis, therefore, in a complex landscape, the Connections Group maintains its energy, perseverance and positive estimations for 2022.

The financial information presented in the annual financial report is in line with Connections’ business development strategy, which is proof that the Group has the ability and takes commitment to increase the value of its assets.
The year 2021 was meant for the company Connections Consult SA the strengthening the financial position on the Balance Sheet. The company recorded an increase in the value of easily convertible assets in cash, as shown in the comparative balance sheet 2020 versus 2021. The increase in current assets is mainly generated by two important factors: capital inflow as a result of listing on the AeRO market and careful management of working capital.
At the end of 2021, the issuer registered a balance of Current Assets in the amount of 19,775,687 lei, of which 7,9 million lei was represented by cash.

According to the budget for 2022, Connections SA aims to achieve a consolidated turnover of 59 million lei and an EBITDA of 5,64 million lei. This estimation includes the results generated by all group companies, including Brusch Services – a company acquired by the Group in 2021.
Annual Report 2021 – PDF