12th edition of the Panorama Top 250 of French software publishers
For the 12th year running, Numeum and EY present the results of the Top 250 French software publishers, the industry’s benchmark panorama.
This year, 294 companies took part in the survey and confided in us about their economic situation and ambitions. With sales of €19.4 billion in 2021 – compared with €17.6 billion in 2020 and €16.1 billion in 2019 – French software publishers represent a constantly growing sector. Today, the industry remains extremely successful, and is equipping itself to nurture new ambitions in terms of CSR, growth, innovation and internationalization.
Software publishing, a sector that continues to accelerate, achieving double-digit growth, whatever the size of the company.
Sustained growth, driven by all the software publishers on the panel: despite an uncertain environment, sales for the 294 software publishers included in the panorama in 2021 will reach 19.4 billion euros, representing year-on-year growth of 10.2%. Unlike the previous edition, when the panel’s Top 3 – Dassault Systèmes, Ubisoft and Criteo – contributed strongly to sales growth, the growth observed in 2021 is driven by all the panel’s publishers. Excluding the Top 3, observed sales growth in 2021 is 15%, compared with only 6% in 2020.
Publishers with sales of over €100 million account for 77% of the panel’s sales, even though they represent only 9% of the panel’s publishers. Contrary to 2020, publishers with sales of less than €100 million are the best performers, with double-digit growth. .
A high value-added business model that is maturing to the benefit of all: Proof of the resilience of the sector and the business model of software publishers despite the Covid-19 crisis, 79% of them reported an operating profit. On the other hand, there has been a major change among start-ups (companies less than 10 years old) who, after having favored a business model favoring massive investment in R&D and marketing, are now seeing the fruits of their labor. As a result, 61% of start-ups made an operating profit, compared with 49% in 2020.
In a context marked by the Russo-Ukrainian conflict, only 22% of the software publishers on the panel say they have been impacted: the main problems encountered by software publishers impacted by the conflict are: loss of customers (48%), R&D resources (30%), with French software publishers having to use R&D subcontractors in Ukraine, and cybercrime (20%).
Software publishers are taking concrete action to make CSR a new axis of transformation: CSR (Corporate Social Responsibility) has become a priority issue for 71% of the software publishers on the panel, and 62% of them have initiated a structured CSR approach.
A proportion of software publishers with a strong presence abroad will be stable in terms of internationalization in 2021: sales generated abroad have remained relatively stable over the past 5 years, at 58%. It can be seen that the level of internationalization of French software publishers depends on sales. Publishers with sales of over €100 million generate 65% of their sales abroad, while companies with sales of less than €50 million tend to concentrate on the French market.
Publishers continue to have strong ambitions for external growth: 56% of them plan to carry out an operation in the future, an increase of 6 points compared to the 2021 study. Publishers are keen to expand their international footprint, with 49% of the panel targeting foreign markets for future external growth operations .
Financing remains a key issue, with self-financing still very much in evidence: 89% of French software publishers are self-financing, a sign of the sector’s sound financial health. The second lever used by French software publishers is debt, with 70% declaring that they use it to finance their development. These financing levers are stable. The strong momentum of private equity is also noteworthy, with 47% of software publishers having recourse to private equity, up 4 points on 2020.
A genuine change of business model, with SaaS becoming the new market standard : French publishers continue to accelerate their move towards the Software as a Service model, which now accounts for 45% of panel sales…
Recruitment and talent management, an imperative to sustain growth : After a moderate slowdown in 2020, the workforce of French software publishers returned to significant growth in 2021: +9% growth in 2021 compared to +5% in 2020. This momentum is set to continue, with 88% of software publishers planning to increase their workforce in 2022. However, recruitment difficulties, which have been reported for several years, persist, and are being felt by 89% of French software publishers. Developer profiles remain the most sought-after. Achieving parity is also a major challenge for software publishers over the next few years.
Innovation is a key success factor: for example, 19% of sales generated by software publishers are invested in research and development, representing 33% of the total workforce. This figure is rising, which means that most of the major recruitments seen in recent years have been for developers, in order to guarantee the innovation of the solutions offered by software publishers.
Cybersecurity is a constant threat for software publishers:49% of them say they have faced several intrusion attempts on their IT systems since January 1, 2021 (versus 39% in 2020)… External datacenters or cloud providers are widely used, with a cumulative percentage of 78%: publishers prefer to entrust data hosting to specialists who are in a position, in particular, to protect them against the risk of cyber-attacks.
Jean-Christophe Pernet
EY
EY partner in charge of the study
Jean-Christophe Pernet, EY partner in charge of the study, comments: “Against a backdrop of recovery from the health crisis, French software publishers have seen their growth accelerate to over 10%. The indicators analyzed as part of our study suggest that the sector will continue to perform well in 2022, with hiring forecasts and external growth ambitions on the rise. The uncertain economic climate and rising interest rates do not appear to be having a significant impact on the sector’s performance at this stage, despite falling valuations. Software publishers are capitalizing on their strengths, in particular the recurring nature of their business thanks to SaaS, and the profitability of their business model. Among the new challenges facing the sector, CSR is a subject that software publishers have been quick to grasp, with the vast majority of players initiating a structured approach. Software publishers also have a role to play in promoting the energy transition for businesses, as their solutions very often help to reduce their customers’ greenhouse gas emissions”.
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Stanislas de Rémur
Numeum
Chairman of Numeum's Publishers and Platforms College
“The uncertainties linked to the end of the health crisis have not been an obstacle to the dynamism and performance of our industry, which has been able to adapt and bounce back with strength, declares Stanislas de Rémur, President of Numeum’s Publishers and Platforms College. Even though we are currently facing major new challenges, whether in terms of recruitment, the success of our CSR transformation, or the current economic and geopolitical uncertainties, software publishers are once again providing all the guarantees needed to build confidence in the future. With more than 6,800 net jobs created by 2021 among pure-play software publishers, powerful innovation and fast-growing sales, the industry is one of the pillars on which the success of the French economy as a whole will rest.”
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