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Orchid Création #5

presented by October France

€730,000

5.5%

36 months

B

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location

Location

Paris, France

activity

Activity

Marketing surveys & consulting

Presentation of the company

Orchid Creation is the holding company of the group Orchid Création, set up in 2012 and active in the creative agency sector. The group, managed by Jallade Vivien, has 55 employees and is based in Paris 1. The group has 7 subsidiaries in Barcelona, London, New-York, Sao Paulo, Hong-Kong, Mumbai and Singapore. The historical one, both holding and operational company is the one in Paris.

The company’s main activity is the production of creative graphic presentation in every medias : 3D video, video, picture, powerpoint.

The company works with 40 companies all around the world such as Google, LVMH, Benefits, Coca-Cola.

The group works with the head office and the independant offices of its clients in each country. Each country has its own need of communication media for campaigns.

By being present in different continents, the group is very reactive. It has big creative skills that allows it to have famous clients.

Project Description

The company requests a loan of 730 000 € over 36 months to finance the recruitment in their existing offices and the invest in opening in Los Angeles to be closer of some clients. This project will be realised this quarter.

As a reminder, the October lending community supported Orchid Creation in 2015 with €300,000 to finance commercial and marketing development in France (€1,150,000 project) and internationally (€2,150,000 project). These two loans are repaid in advance before the project is put online. 

In 2016, October’s lending community also supported the company with €400,000 to finance the openings in Hong Kong and London and consolidate the New York office, and in 2017 with €103.000 to recruit a financial director and an artistic director.

The amount offered on the platform is limited to 357700€, which is in line with the regulatory limits.

Analyst’s Opinion

The borrower is both the holding and operationnal company whose revenues are derived from services invoiced to its subsidiaries. The financial analysis was carried out on consolidated financial statements established since 2017 and which reflect the group’s performance.

With a turnover of 7 902 000 € in 2018 and an experienced team, the company has a good track record combined with a two-digits operating margin.

The increase of the revenue and the profitability are driven by the development of each subsidiaries with more profitable projects. The forecast is based on the performance 2018.

The borrower has a good repayment capacity with a forecast FCCR (Fixed Charge Cover Ratio *) at 1,39 and a strong financial structure, with a forecast net debt / ebitda ratio of 1,9 and a net debt / shareholder equity of 274% taking into account the capital increasee of 500 000 €.

The analysis of the project leads to a credit rating of B and a 5,50% annual interest rate.

*The multiple of FCCR at 1,39 means that the company has a safety margin of 39% relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (External data provider). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.

Strong points:

  • Good historical performance based on diversified client base.
  • Good repayment ability with a forecasted FCCR of 1,39.
  • Significant acquisition of international clients and ability to work both globally and locally.

Points of caution:

  • Sector of activity dependent on economic cycles.

*The multiple of FCCR at 1,2 means that the company has a safety margin of 20 % relative to its ability to repay its credit maturities.

The expert opinion is given as an indication on the basis of the elements provided by the project holder and information from our databases (ModeFinance, Crif, Cerved). This opinion is only an element of reflection in the decision making of a lender to participate in the financing of a project.