ABO-Group announces annual results for 2014

ABO-Group announces annual results for 2014  

Ghent, 31 March 2015 - 18.00 CET - Press release / Regulated information

ABO-Group, a unity of integrated engineering and testing businesses active in the areas of the soil, the environment, geotechnology, energy and waste, has today announced its consolidated financial figures for 2014.

REBITDA*: recurring earnings before interest, taxes, depreciation and amortisation

Highlights 2014

• Strong autonomous sales growth of 6.6%
• The expansion of the group will have a temporary impact on operational profitability
• Strong balance sheet and financial position, ready for the next step
• Listing of ABO-Group on Euronext Brussels via reverse takeover of Thenergo - capital increase of € 527k realised in December

Outlook 2015

• Formal confirmation that the takeover of Thenergo complies with legitimate economic needs
• Ambitious growth and investment plan for 2015 and the coming years

             
Strong autonomous sales growth of 6%

In spite of a difficult macro-economic context, where the budgets of clients such as the construction industry and the government remain under pressure, ABO-Group succeeded in achieving strong sale figures in 2014. Growth was mainly driven by France.

	2013 in € 000	2014 in € 000	Change in € 000	Growth %
France	13,652	15,862	+2,210	16.2%
Belgium	12,421	12,084	-337	-2.7%
The Netherlands	1,299	1,069	-230	-17.7%
Total sales	27,372	29,015	+1,643	6.0%

Organisation and expansion of the group will have a temporary impact on operational profitability

Numerous new initiatives were taken within ABO-Group in 2014, on the one hand to simplify the internal structure, and on the other to make growth possible in the coming years. ABO therefore invested in its growth, which placed pressure on its operational profitability. 2014 can therefore be deemed a transitional year, towards a new growth phase.

The operating profit fell from € 950k to € 342k. This decrease can be explained by:

• a substantial structural and organisational modification of the internal operations:
  • more rapid integration of the consultancy companies ABO and Ecorem
  • consolidation and integration of all IT processes
  • growing and expanding the corporate office (legal, M&A, HR & IT).
     
• the reverse takeover of Thenergo NV, which gave ABO-Group a stock market listing for a limited non-recurring cost calculated at € 291,000.
   
• higher depreciation (+ € 288k), in line with the decision - despite the recession - to keep on investing in new equipment and safety, and indirectly in people and training.

Strong balance sheet and financial position, ready for the next step

The reverse takeover of Thenergo not only gave ABO-Group a stock market listing, but also significantly strengthened its balance sheet. In addition, at the end of December, the group achieved a capital increase of € 527k in exchange for issue of one new share (the 'relution' transaction). This increased the company's shareholder equity from 8.3 to 10.4 million euros. The financial debts were significantly reduced in 2014. The company's net debt fell from 5.1 to 3.7 million euros. All this means that the group is ready to continue on its path of growth.

The full set of figures (consolidated profit and loss account, consolidated balance sheet and cash flow overview) is included as an annex to this press release.

Confirmation that the takeover of Thenergo complies with legitimate economic needs

ABO-Group recently received formal confirmation that the takeover of Thenergo complies with legitimate economic needs. This allows the group to maintain Thenergo's tax position. The liquidation of Thenergo F+L NV has, however, already generated a significant amount in tax losses for the group in 2014. Of these, only a small part has been recognised as a deferred tax asset (€ 1.3 million) until today, as a result of the allocation of the purchase price of the reverse takeover (PPA, purchase price allocation). A new analysis will be carried out every year based on the profitability. Given the results for 2014, we have opted for a conservative approach.

Ambitious growth and investment plan

ABO-Group wishes to expand its environmental and energy consultancy, engineering and testing activities further by tapping into new growth markets (Central and South-East Asia, Africa and the former East Bloc countries). The group positions itself as a European player with international ambitions. ABO-Group will attempt to bring this about by relying on internal organic growth, by recruiting experts, on the one hand for international projects, and on the other hand by setting up and expanding new activities. In addition, the group also wishes to further develop its acquisition strategy in its home countries of Belgium, the Netherlands and France.

Overview of 2014 / prospects for 2015

France

ABO-ERG, the French department of ABO-Group, is known as one of the top-performing French businesses in geotechnology and the environment, as a result of which it has broad access to the major national French projects concerning energy transport, industrial projects, nuclear power stations and contaminated sites. In spite of the negative business climate in France, ABO-ERG achieved very significant sales growth of 16% in 2014. This growth can be mainly explained by higher sales to major geotechnical sites. In addition, commercial actions, in particular the expansion of our offices in Lille and Lyon, have also made a contribution. Lastly, ABO-ERG is reaping the harvest of the important major investments in machinery and laboratory equipment, training, quality and safety. The environmental department has been able to hold onto its position in a very difficult market, mainly thanks to major new framework contracts. The 'MASE' certification has brought in new customers within industry and property development. ABO-ERG is diversifying further into related activities, such as water and sediment studies. In this way it was able to continue its growth in 2015 as well in France.

Belgium

The consultancy activity in Belgium, which is active under the trading names of ABO and Ecorem, was faced with fewer orders in 2014, mainly with regard to government clients. The expected improvement in the second half of the year did not materialise. For both the Flemish and Walloon environmental consultancy market, there was a decline in sales from public procurement as a result of falling market prices. ABO achieved lower demand for services than expected within a number of specific framework contracts.

Continuing pressure is expected in the industry in 2015. ABO is banking heavily on diversification, such as archaeology and BREEAM. Therefore, more consultancy and engineering services are being supplied in addition to the historical main activity of environmental decontamination, based on the one-stop-shop principle. With its 'ABO Environment' concept, ABO is focusing more on clients who need a total package: soil, permits, asbestos surveys, sampling, sustainability, BREEAM, archaeology, water studies, etc.

For a limited part of the sales, estimated at 3% of group sales, ABO-Group expects, in addition to the administrative red tape, a delay in the contract award, implementation and payment. According to the Flemish legislation, a soil expert must be independent of his client (Vlarel Article 53). There is a presumption that ABO-Group is not independent of the Flemish government, because of the supposed shareholding of an ex-Thenergo shareholder who is associated with the Flemish government. The Council of State stated in its decree on 12 January 2015 that it is possible to request a derogation in this regard from the minister, who will then determine that ABO-Group does in fact perform these contracts independently. In the meanwhile a ministerial derogation was obtained for a number of these files.

Geosonda, which is active in the areas of geotechnology, environmental drilling and sampling, achieved strong sales growth in 2014, given that more and more customers are availing themselves of the knowledge, quality and good implementation of Geosonda. The sales increase mainly took place in the second half of the year and also translated into greatly increased profitability. This positive development is the result of a renewal policy, which started earlier, and a few large projects, among other things for infrastructure works and wind energy. 2015 started strongly for Geosonda with a very good utilisation rate and order book.

The Netherlands

The Dutch market remains difficult. The ABO companies are fighting back with continuous cost controls which ensure a cash break-even situation. The second half of the year provided the first positive signals, with sales growth in the geotechnology division and net profitability.

This tendency has continued further at the start of 2015. In spite of this difficult market, we are still actively looking to reinforce our market position.

Financial calendar

27/05/2015: general shareholders' meeting                            30/09/2015: six-monthly figures 2015

About ABO-Group

ABO-Group is a unity of integrated engineering and testing businesses active in the areas of the soil, the environment, geotechnology, energy, groundwater management and waste. ABO-Group has the ambition to increase its sales via internal growth and acquisitions and broadening the range of its activities within and outside Europe. For a more detailed description of the group's risks and activities please refer to the listing document of ABO-Group, released on 31 July, available on the ABO-Group website (www.abo-group.eu).

For more information, please contact:

Johan Reybroeck                                          
CFO ABO-Group NV                                    
johan.reybroeck@abo-group.eu
T +32 (0)496 59 88 99 
Derbystraat 255, Maaltecenter Blok G, B-9051 Gent (SDW), Belgium

This press release is available on our website  www.thenergo.eu

Report of the auditor

The auditor of ABO-Group Environment NV, BDO Bedrijfsrevisoren Burg. Ven. CVBA, represented by Veerle Catry, confirmed that its audit review has basically been completed, and that no meaningful corrections have come to its attention that would require an adjustment to the consolidated figures for the group for 2014 included in this press release.

ANNEX: CONSOLIDATED FINANCIAL FIGURES

Consolidated profit and loss account

					For the year ending on 31 December
					2014		2013		Growth
					In thousands of €
	Sales				29,015		27,372		6.0%
	Other operating income				932		721		29.3%
	Total operating income				29,947		28,093		6.6%
	Purchases				-2,992		-3,586		-16.6%
	Services and other goods				-10,319		-8,541		20.8%
	Employee benefit obligations				-13,987		-12,998		7.6%
	Depreciation				-1,544		-1,256		22.9%
	Other operating expenses				-763		-762		0.1%
	Operating profit				342		950		-64.0%
	Financial charges				-274		-356
	Financial income				103		82
	Share in the profit of associates				35		72
	Pre-tax profit from continuing operations				206		748		-72.5%
	Taxes				-168		-392
	Net profit from continuing operations				38		356		-89.3%
	Profit from discontinued operations, after tax				161		994
	Net profit				199		1,350		-85.3%
	Net profit (loss) attributable to the
	Shareholders of the group				219		1,344
	Minority interests of third parties				-20		6

				For the year ending 31 December
				2014		2013
Profit (loss) per share for the shareholders
Basic and diluted				€ 0.02		€ 0.13
Profit (loss) per share (continuing operations)
Basic and diluted				€ 0.00		€ 0.04
Profit (loss) per share (discontinued operations)
Basic and diluted				€ 0.02		€ 0.10
Weighted average shares (in € 000)				10,425		9,959
Weighted average shares with impact from dilution (in € 000)				10,425		9,959

	CONSOLIDATED OVERVIEW OF THE FULL			For the year ending 31 December
	PERIOD RESULT			2014		2013
				In thousands of €
	Net profit			199		1,350
	Unrealised results   Transferable to the profit and loss account
	Change in fair value of available-for-sale financial assets			22		-33
	Tax effect			-7		11
	Not transferable to the profit and loss account
	Actuarial losses			-158		0
	Tax effect			52		0
	Unrealised results, after tax			-91		-22
	Total result, after tax			108		1,328
	Total result, attributable to the
	Shareholders of the group			128		1,322
	Minority interests of third parties			-20		6

Consolidated balance sheet

			For the year ending 31 December
			2014		2013
			In thousands of €
Assets
	Fixed assets
	Goodwill		154		154
	Intangible fixed assets		89		145
	Tangible fixed assets		9,310		9,310
	Investments in associates		183		98
	Deferred tax assets		1,648		292
	Available-for-sale financial assets		134		115
	Other financial assets		267		226
			11,785		10,340
	Short-term assets
	Stocks		275		299
	Trade receivables		12,657		12,076
	Other short-term assets		1,364		471
	Cash and cash equivalents		3,327		2,457
			17,623		15,303
	Assets held for sale		1,271		-
Total Assets			30,679		25,643

				For the year ending 31 December
				2014		2013
				In thousands of €
Shareholders' equity and payables
	Net shareholders' equity
	Capital			4,857		2,818
	Consolidated reserves			3,773		3,469
	Unrealised results			1,694		1,870
	Equity attributable to the shareholders of the group			10,324		8,157
	Minority interests			107		127
	Total equity			10,431		8,284
	Long-term liabilities
	Financial debts			2,022		2,682
	Deferred tax liabilities			921		984
	Provisions			481		369
				3,424		4,035
	Current liabilities
	Financial debts			5,030		4,853
	Trade payables			4,230		2,698
	Tax liabilities			85		227
	Other short-term debts			6,180		5,546
				15,525		13,324
	Payables related to assets held for sale			1,299		-
Total shareholders' equity and payables				30,679		25,643

                                                                                                                                                    

Consolidated statement of cash flows
				For the year ending 31 December
				2014		2013
				In thousands of €
Operating activities
Net profit				199		1,350
Non-cash costs and operational adjustments
	Depreciation of tangible fixed assets			1,407		1,175
	Depreciation of intangible assets			69		81
	Loss (profit) on disposal of tangible fixed assets			-4		-30
	Real changes in fair value of available-for-sale financial assets			0		-16
	Movements in provisions			-46		53
	Movements in impairments on customers			20		-82
	Financial income			-93		-82
	Financial charges			274		356
	Profit on disposal of Pangea			0		-991
	Share in the loss (profit) of associates			-35		-72
	Deferred tax charge (income)			-48		136
	Tax charge			216		256
	Other			2		0
Changes to working capital
	Decrease (increase) in other financial assets, trade receivables and other short-term assets			-900		-569
	Decrease (increase) in stocks			24		-23
	Increase (decrease) in trade payables and other payables			835		-20
				1,920		1,522
	Interest received			44		57
	Taxes paid			-360		-187
Net cash flow from (used in) operating activities				1,604		1,392
Investment activities
	Investments in tangible fixed assets			-774		-891
	Investments in intangible fixed assets			-13		-99
	Sales of tangible fixed assets			27		96
	Acquisition of subsidiary			585		0
	Sale of joint venture			462		0
	Investments in associates			-50		0
Net cash flow from (used in) investment activities				237		-894
Financing activities
	Income from loans			3,159		2,045
	Repayments of loans			-3,730		-1,923
	Repayments of leasing debts			-585		-434
	Capital increase in cash			527		0
	Directly attributable costs of capital increase			-11
	Interest paid			-259		-319
	Other financial income (costs)			34		-11
Net cash used in financing activities				-865		-642
Net increase in cash and cash equivalents				976		-144
	Cash and cash equivalents at beginning of the period			2,457		2,601
	Cash and cash equivalents at end of the period			3,433		2,457

		Attributable to shareholders of the group
		Capital		Consolidated reserves		Unrealised results		Total		Minority interest		Total equity
		In thousands of €
On 31 December 2012		2,818		2,040		1,977		6,835		29		6,864
Net profit				1,344				1,344		6		1,350
Unrealised results						-22		-22				-22
Total results		0		1,344		-22		1,322		6		1,328
												0
Transfer of depreciation of tangible fixed assets				85		-85		0				0
Sale of Pangea								0		92		92
On 31 December 2013		2,818		3,469		1,870		8,157		127		8,284
Net profit				219				219		-20		199
Unrealised results						-91		-91				-91
Total results		0		219		-91		128		-20		108
												0
Reverse acquisition of Thenergo		1,524						1,524				1,524
Capital increase in cash		526						526				526
Directly attributable costs of capital increase		-11						-11				-11
Transfer of depreciation of tangible fixed assets				85		-85		0				0
On 31 December 2014		4,857		3,773		1,694		10,324		107		10,431

Consolidated statement of changes in equity