Strategic Sourcing Europe

cc-hubwoo. IBX. No need to present those 2 European companies, focused on the same topic (eSourcing and eProcurement) but not yet really on the same geography. Those 2 companies are without any doubt leading the European eProcurement market – at least with revenues hitting EUR 30+ millions a year. Following a similar move (acquisition) lately – though not in the same professional sector – and their progressive development in similar countries, we can expect a growing hand-to-hand competition between those 2 leading players (in UK and Germany first hand…). In order to appreciate this ‘frontal shock of the future’ to its right extent, what about a quantitative and financial overview to start from? I would have been more than happy to bring Quadrem and Perfect in the picture, but unfortunatly I don’t have – yet – the necessary figures. Nevetheless, I’ll start small.

First, let’s compare some operational metrics (available on both companies websites):

Then, let’s have a look at their financials:

What can we say about the graph above?

• IBX and cc-Hubwoo are definitly comparable in terms of business and size. However, they are far from being similar.
• IBX reached a positive EBITDA faster than cc-Hubwoo and moreover with twice less operational losses (~11M€ against 24M€) for a same range revenue in 2006 (27M€ versus 32M€). Amazingly enough, IBX’s staff is much bigger than cc-hubwoo’s.
• IBX growth is smoother than cc-hubwoo’s one and looks consequently more robust. Knowing both company histories, i.e. the IBX’s organic growth and the ‘acquisition growth’ from cc-Hubwoo (Avisium, cc-chemplorer, trade-ranger, InterSources…), it makes total sense: acquiring a company is clearly more disruptive and more difficult to ‘digest’ than any similar organic growth.
• for IBX, 2007 will allow to confirm (or not) its robust growth and financial sustainability; for cc-Hubwoo, although I can see much confidence from its management in reaching its goals declined with transparency in this document, I would say that cc-hubwoo has still to prove their capability to digest their last acquisitions (Trade-Ranger and Intersources) and to grow organically.
• IBX has already an impressive eSourcing activity (15.000 events per year for 15Beur purchasing value!) while cc-hubwoo didn’t start yet.

IBX and cc-hubwoo have reached the break-even point almost the same year but with a different path and strategy. One has been initially successfully industrious in a non-competitive region (Nordic) when the other one was keeping its leading position thanks to an impressive but expensive acquisition strategy, comparable to what Perfect did on the other side of the Atlantic. Undoubtly, IBX and cc-Hubwoo will come to know each other better…for the best and for the worse…

For the ones willing to know more, you can read here Jason Busch’s point of view about Hubwoo’s name…and much more, of course!

By the way, Perfect has been quiet for quite some time by now…