A slight slowdown for SII in Q3 FY19

/ February 13, 2019/ France, Poland, SII

SII’s growth in Q3 FY19 slowed down a bit: revenues were up 11.8% yoy and up 12.3% yoy at CC/CS (H1: +14.5% at CC/CS). The relative slowdown came from international operations (+16.6% at CC/CS in Q3, vs. H1: +21.2%), while France was stable at +9.0% in Q3 (H1: 9.1%).

The disappointment came from Germany, which slowed down from positive mid-single-digit growth in H1 to a revenue decline in Q3. Spain also slowed down to +3% in Q3.

The good news was, however, that Poland continued to be strong (+32% at CC/CS in Q3, vs; +35% in H1). Poland is an important country for SII and has become its largest international operations, working for the local market, and targeting Sweden as a nearshore location.

Is this slight slowdown temporary or SII entering a new phase of slowing organic revenue growth? SII did not clarify the matter and maintained its guidance for the full FY19 of revenues in the range of EUR 625m-EUR 640m. The guidance implies a reported revenue growth ranging from 6% to 16%, and, therefore, provided little visibility on Q4.

The stock of SII was flat on the day after its revenue announcement, suggesting that investors are comfortable with SII’s performance in Q4.

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