ABO-GROUP - Half Year Results 2024

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Highlights of the first half of 2024

• ABO-GROUP can once again present a double-digit growth - 14.3% growth due to the integration of the Belgian acquisitions from the second half of 2023, the acquisition of Eau & Perspectives in France in early 2024 and an organic growth of 4.2%
• Operating margins in line with the first half of last year as strong performance of the geotechnical activities in Belgium and the Netherlands is partly offset by challenges in the geotechnical and monitoring activities in France
• A strong balance sheet and cash flow support the further expansion of ABO-GROUP

Outlook

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

ABO-GROUP remains on track to achieve revenues ranging between €95 and €100 million this year

Frank De Palmenaer, CEO of ABO-GROUP Environment: “The acquisitions from 2023, the recovery of the geotechnical market in the Netherlands and the further development of our environmental activities ensure that we can again report strong growth, despite the declining demand for geotechnical surveying and monitoring in France halfway through this year. We thereby continue to focus on acquiring specialised knowledge and expertise, with a view to gaining a technical leadership position within the market. By means of targeted acquisitions, we aim to create a climate of interaction within our group of companies that is rich in cross-fertilisation, mutual inspiration and bold innovation.
Building further on 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 expertise. For example, Demey INFRAbureau will actively pursue the further development of our digital infrastructure services in collaboration with MEET HET, which was acquired last year. Based on all these aspects, we are fully confident in our continuously growing capacity to provide tailor-made solutions to the increasingly complex demands from the market.”

HY 2024 highlights

14% revenue growth due to the combination of the strong contribution from new entities and continued organic expansion
The acquisitions in 2023, i.e., Rimeco, MEET HET, SWBO and SEGED (6 months each, except for SEGED, which contributed an additional 1.5 months compared to the first six months of 2023), together with the new Eau & Perspectives, accounted for €4.0 million in revenue, a growth of 10.1% compared to the first six months of 2023. Despite the challenges in several sub-markets, existing entities also managed to grow by 4%, increasing the total revenues of ABO-GROUP to €45.6 million in the first six months of 2024, an increase of 14% compared to the first half of 2023.
Geotechnical activities in France came under pressure. Due to project delays and unscheduled machine maintenance, the mining operations faced a temporary decline in revenue. Thanks to the strong performance in Belgium and the Netherlands, however, the geotechnical branch can still record a first-rate growth of 4%, with a revenue of €21.6 million, representing 47% of the total revenue of ABO-GROUP (€20.7 million in 1H 2023). The impact of the acquisitions of SEGED and Rimeco in 2023 and Eau & Perspectives in 2024 ensured a strong increase of €2.3 million for environmental activities. In addition, a strong organic growth of 4% was also recorded in this segment, with the environmental activities increasing their revenue by a total of €3.1 million, to €21.7 million, which represents an increase of 17% compared to the €18.6 million in the first half of 2023. As a result, the share of the environmental branch further increased to 48%. Monitoring and infrastructure services contributed €2.3 million to the revenue in 1H24, of which €1.7 million originated from the new entities MEET HET and SWBO, accounting for 5% of the total revenue.

Geographically, the Belgian operations made a strong leap 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 €3.1 million, or a growth of 25%. The geotechnical activities of Geosonda in Belgium also recorded a pleasing increase in revenue, thanks to the further expansion of its innovative supporting services in the area of preliminary studies and soil modelling. This was partially offset, however, by the decline in demand for asbestos-related lab services at Translab, resulting in the organic growth in Belgium settling at 2%. The result is a total growth in revenue, from €12.6 million in the first semester of 2023 to €16.1 million in the first half of 2024, which represents a 35% share of the total ABO-GROUP revenue.

The part of SEGED not previously consolidated and the contribution of the newly-acquired Eau & Perspectives led to a 4% increase in revenue in France. The above-mentioned slowdown in mining activities at Geosonic, however, as well as a decline in demand for DynaOpt's monitoring services in the Paris region after the end of the Olympics ensured that the French business remained organically stable compared to the first half of 2023. As a result, the French revenue amounts to €22.1 million after the first 6 months of 2024. Due to the strong growth of the Belgian branch, this means that the contribution of the French activities falls from 53% to 48% of total Group revenue.

The Dutch entities ended the first half of the year with a strong revenue of €7.5 million, a fully organic growth of 25% compared to the €6.0 million in 1H 2023 which was impacted by cost increases and the nitrogen issue. Geomet's consultancy division and Geosonda Nederland's geotechnical survey took full advantage of the upturn in the construction market. Thanks to targeted investments in the expansion of their teams and machinery, ABO-Milieuconsult and Sialtech were also able to further develop their consulting and fieldwork activities.

Investments and delays affected the operating margins
In the first half of 2024, several entities within ABO-GROUP were committed to expanding their teams to enable further growth in the future. In addition, further investments were made in the expansion of the geotechnical laboratory activities at Translab in Belgium. Together with the temporary delays at GeoSonic and the decline in the demand at DynaOpt, this had an impact on the operating margins. The settlement of the legal dispute at ABO Logistics further impacted the EBITDA for the first six months of 2024, whereby the provision of €0.5 million (below EBITDA) was converted into a non-recurring cost of €0.5 million (above EBITDA). Adjusted for this effect, the EBITDA in the first half of 2024 amounts to €5.3 million, representing a margin of 11.4% and up 14% from the €4.6 million in the same period one year earlier.

Due to the reversal of the ABO Logistics provision, depreciation and provisions increased slightly to €3.1 million (€3.6 million when adjusted for this effect). This resulted in an increase in operating profit to €1.7 million (compared to €1.6 million in 1H 2023).

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

Robust cash-flow generation and debt position
ABO-GROUP succeeded in achieving a solid operating cash flow of €1.9 million (compared to €0.8 million in the first half of 2023) for the first half of the year. In the first half of the year, efforts were again made to limit the annual seasonal increase in working capital (€3.0 million, as in the first 6 months of 2023), which partially absorbed the lower margins.

As a result of investments in working capital and fixed assets, and the Eau & Perspectives acquisition, which was financed with own cash resources, the net financial debt increased from €16.2 million at the end of 2023 to €21.9 million at the end of June 2024. The annualised debt ratio thereby increased to 1.9x relative to the EBITDA (1.5x at the end of 2023), and thereby remains healthy.

The balance sheet total at the end of June 2024 amounted to €83.2 million, a decrease of 3.5% from €86.3 million at year-end 2023. On the assets side, this was mainly the result of the decrease in the cash position, which more than offsets the increase in fixed assets. On the liabilities side, this arose from the decrease in trade and tax liabilities. Total equity amounts to €26.4 million, up €0.6 million over the first semester of 2024. The equity ratio settled at 31.7% (compared to 29.9% at the end of last year).

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

Outlook

A positive outlook for the second half of the year

Based on the order books and project planning at ABO-GROUP entities, the second half of the year is expected to be positive. Whereas the Belgian and Dutch companies active in the geotechnical and environmental markets can build further on their strong first half of the year, the French geotechnical and mining services are expected to recover thanks to the resumption of a number of large contracts. Moreover, with the integration of the French acquisitions Odace and Soltech, the Belgian Demey INFRA agency and the Dutch Eco Reest, ABO-GROUP aims to give an additional boost to internal commercial cooperation and development of new services to support the Group's further growth.

Thanks to the recent acquisitions and robust underlying organic growth, ABO-GROUP remains on track to achieve revenues between €95m and €100m this year, one year ahead of its 2025 plan.

Financial calendar

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

Statement regarding the fair presentation of the interim condensed consolidated financial information and the fair overview of the interim report

Frank De Palmenaer, CEO, declares that, to his knowledge, the interim condensed consolidated financial information for the six-month period ending 30 June 2024, which was prepared in accordance with IAS 34 “Interim Financial Reporting” as approved by the European Union, gives a true and fair view of the assets, the financial position and the results of the company and the companies included in the consolidation. The interim report gives a fair overview of the most significant events and key transactions with associated parties that have taken place 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 major risks and uncertainties for the remaining months of the financial year.

About ABO-GROUP

ABO-GROUP is a specialised, listed engineering company focused on geotechnical engineering, the environment and soil remediation. Through its consultancy and testing & monitoring departments, ABO-GROUP operates in Belgium, the Netherlands and France, as well as internationally. ABO-GROUP guarantees its customers a sustainable solution. For a more detailed description of the operations of the group, please consult the ABO-GROUP website (www.abo-group.eu).

For more information:

Frank De Palmenaer
CEO 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

Attachment

• ABO-GROUP HY Results 2024 - Press release - EN