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ABO Group: ABO GROUP – Half-year results 2024

Posted on by darion

Ghent, September 19, 2024 – 18:30 CET – Press release / regulated information

The most important events in the first half of 2024

  • ABO-GROUP can once again present double-digit growth – 14.3% growth thanks to the integration of Belgian acquisitions from the second half of 2023, the acquisition of Eau & Perspectives in France in early 2024 and organic growth of 4.2%
  • Operating margins on par with the first half of last year as strong geotechnical performance in Belgium and the Netherlands is partially offset by challenges in geotechnical and monitoring operations in France
  • A strong balance sheet and cash flow support ABO-GROUP’s continued expansion

Perspectives

  • The integration of the French acquisitions of Odace and Soltech, the Belgian Demey INFRAbureau and the Dutch Eco Reest will contribute to the continuous expansion of specializations within the group
  • The second half of the year presents positive prospects with an expected revival in geotechnical and mining activities

ABO-GROUP remains on track to achieve revenues of 95 to 100 million euros this year

Frank De Palmenaer, CEO of ABO-GROUP Environment: “Acquisitions in 2023, the recovery of the geotechnical market in the Netherlands and the further development of our environmental activities mean that we can again record strong growth, despite the falling demand for geotechnical research and monitoring in France in the middle of this year. Thus, we continue to focus on acquiring specialist knowledge and experience, with the aim of becoming a technical leader on the market. Through targeted acquisitions, we want to create a climate of interaction in our group of companies, rich in mutual inspiration, mutual inspiration and bold innovations.
Continuing with this strategy, we have already acquired five companies this year. The integration of these companies will contribute to the continuous expansion of our knowledge and experience. For example, Demey INFRAbureau will actively continue to further develop our digital infrastructure services in partnership with MEET HET, which we acquired last year. Taking all these aspects into account, we are fully confident in our ever-increasing ability to provide solutions tailored to increasingly complex market requirements.

HY 2024 highlights

14% increase in revenues thanks to a combination of strong participation of new entities and continued organic expansion
Acquisitions in 2023, i.e. Rimeco, MEET HET, SWBO and SEGED (6 months each except SEGED, which contributed an additional 1.5 months compared to the first six months of 2023) together with the new Eau & Perspectives, constituted Revenue amounting to EUR 4.0 million, an increase of 10.1% compared to the first six months of 2023. Despite challenges in several submarkets, existing entities also managed to achieve growth of 4%, increasing ABO-GROUP’s total revenues to 45, EUR 6 million in the first half of 2024, an increase of 14% compared to the first half of 2023.
Geotechnical activities in France are under pressure. Due to project delays and unscheduled machinery maintenance, mining operations faced a temporary decline in revenue. However, thanks to the good results in Belgium and the Netherlands, the geotechnical industry can still record first-class growth of 4%, achieving revenues of EUR 21.6 million, representing 47% of ABO-GROUP’s total revenues (EUR 20.7 million in H1 2023 r.). The impact of the acquisitions of SEGED and Rimeco in 2023 and Eau & Perspectives in 2024 provided a significant increase of EUR 2.3 million for environmental activities. In addition, this segment also recorded strong organic growth of 4%, and environmental revenues increased by a total of EUR 3.1 million to EUR 21.7 million, an increase of 17% compared to EUR 18.6 million in the first half of the year 2023. As a result, the share of the environmental industry increased again to 48%. Monitoring and infrastructure services contributed €2.3 million to revenues in the first half of the year, of which €1.7 million came from new entities MEET HET and SWBO, representing 5% of total revenues.

Geographically, the Belgian business saw a significant increase in revenue from €12.6 million to €16.1 million, an increase of no less than 27%. The acquisitions of SWBO, Rimeco and MEET HET represent an increase of EUR 3.1 million, or an increase of 25%. Geosonda’s geotechnical business in Belgium also recorded a pleasant increase in revenues, thanks to the further development of innovative support services in the area of ​​preliminary research and soil modeling. However, this was partially offset by a decline in demand for asbestos-related laboratory services at Translab, resulting in organic growth in Belgium reaching 2%. The result is a total increase in revenues from EUR 12.6 million in the first half of 2023 to EUR 16.1 million in the first half of 2024, which represents a 35% share in the total revenues of the ABO GROUP.

The part of SEGED that was not previously consolidated and the contribution from the newly acquired Eau & Perspectives led to a 4% increase in revenues in France. However, the above-mentioned slowdown in mining activity at Geosonic, as well as the decline in demand for DynaOpt monitoring services in the Paris region following the end of the Games, ensured that the French business remained organically stable compared to the first half of 2023. As a result, French revenues after the first 6 months of 2024 will amount to EUR 22.1 million. Due to the strong development of the Belgian branch, this means that the share of the French business decreases from 53% to 48% of the Group’s total revenues.

The Dutch entities ended the first half of the year with strong revenues of €7.5 million, a fully organic increase of 25% compared to €6.0 million in the first half of 2023, driven by cost increases and the nitrogen issue. Geomet’s consulting department and Geosonda Nederland’s geotechnical research took full advantage of the boom in the construction market. Thanks to targeted investments in the expansion of teams and machines, ABO-Milieuconsult and Sialtech were also able to further develop their consulting and field work activities.

Investments and delays have impacted operating margins
In the first half of 2024, several entities within ABO-GROUP engaged in expanding their teams to enable further development in the future. In addition, further investments were made in the development of the geotechnical laboratory activities at Translab in Belgium. Combined with temporary delays at GeoSonic and a decline in demand at DynaOpt, this had an impact on operating margins. The resolution of the legal dispute at ABO Logistics had a further impact on EBITDA for the first six months of 2024, as a result of which a provision of EUR 0.5 million (below EBITDA) was converted into a one-off cost of EUR 0.5 million (above EBITDA). After taking this effect into account, EBITDA in the first half of 2024 will amount to EUR 5.3 million, which means a margin of 11.4% and an increase of 14% compared to EUR 4.6 million in the same period a year earlier.

Due to the release of the ABO Logistics reserve, depreciation and provisions increased slightly to EUR 3.1 million (EUR 3.6 million after taking this effect into account). This resulted in an increase in operating profit to EUR 1.7 million (compared to EUR 1.6 million in the first half of 2023).

As a result of M&A financing from the second half of 2023 and interest rate increases, ABO-GROUP faced an increase in negative financial result from EUR 0.5 million to EUR 0.8 million. This reduces the net profit of ABO-GROUP from EUR 0.7 million (EUR 0.06 per share) to EUR 0.5 million (EUR 0.05 per share).

Solid cash flow generation and debt position
ABO-GROUP managed to achieve solid operating cash flow of EUR 1.9 million (compared to EUR 0.8 million in the first half of 2023) for the first half of the year. In the first half of the year, actions were again taken to limit the annual seasonal increase in working capital (EUR 3.0 million, similarly to the first half of 2023), which was partially absorbed by lower margins.

As a result of investments in working capital and fixed assets and the acquisition of Eau & Perspectives, which was financed from own funds, net financial debt increased from EUR 16.2 million at the end of 2023 to EUR 21.9 million at the end of June 2024. Annual debt ratio thus increased to 1.9x in relation to EBITDA (1.5x at the end of 2023) and therefore remains at a good level.

The balance sheet total at the end of June 2024 amounted to EUR 83.2 million, which means a decrease of 3.5% compared to EUR 86.3 million at the end of 2023. On the asset side, this was mainly the result of a decline in cash, which, due to the surplus is compensated by the increase in fixed assets. On the liabilities side, this resulted from a decrease in trade and tax liabilities. Total equity is EUR 26.4 million, which means an increase of EUR 0.6 million compared to the first half of 2024. The equity ratio was 31.7% (compared to 29.9% at the end of last year ).

The full consolidated income statement and balance sheet, statement of changes in equity and consolidated cash flow statement are presented below.

Perspectives

Positive prospects for the second half of the year

Based on order books and project plans in ABO-GROUP companies, the second half of the year should be positive. While Belgian and Dutch companies operating in the geotechnical and environmental markets can continue to grow after a strong first half of the year, French geotechnical and mining services are expected to recover thanks to the resumption of a number of large contracts. Moreover, through the integration of the French acquisitions Odace and Soltech, the Belgian agency Demey INFRA and the Dutch Eco Reest, ABO-GROUP aims to provide an additional impetus to internal commercial cooperation and the development of new services to support the further development of the Group.

Thanks to recent acquisitions and solid organic growth, ABO-GROUP remains on track to achieve revenues of between €95 million and €100 million this year, one year ahead of its 2025 target.

Financial calendar

27/03/2025: Annual data for 2024
28/05/2025: General Meeting

Statement regarding the fair presentation of the interim condensed consolidated financial information and the fair review of the semi-annual report

Frank De Palmenaer, Chief Executive Officer, declares that to the best of his knowledge the interim condensed consolidated financial information for the six months ended June 30, 2024, prepared in accordance with IAS 34 “Interim Financial Reporting”, as approved by the European Union, gives a true and a reliable picture of the assets, financial situation and results of the company and companies subject to consolidation. The semi-annual report contains a reliable review of the most important events and key transactions with related parties that occurred during the first six months of the financial year and their impact on the interim condensed financial information, as well as a description of the main risks and uncertainties regarding the remaining months of the financial year.

ABOUT ABO GROUP

ABO-GROUP is a specialized, listed engineering company dealing with geotechnical engineering, environmental protection and land reclamation. Through its consulting, testing and monitoring departments, ABO-GROUP operates in Belgium, the Netherlands and France, as well as internationally. ABO-GROUP guarantees its customers a sustainable solution. A more detailed description of the group’s activities can be found on the ABO-GROUP website (www.abo-group.eu).

For more information:

Frank De Palmenaer
CEO of ABO-Group Environment NV
[email protected]
T +32 496 59 88 88

Derbystraat 255, Maaltecenter Block G, B-9051 Ghent (SDW), Belgium

This press release is available on our website www.abo-group.eu