Ghent, 29 March 2019 – 17.00 CET – Press release / regulated information
ABO-Group, the engineering office focussing on construction, environment and energy, has today announced its consolidated financial figures for 2018.
Review of 2018
- 5.5% organic growth in geotechnics
- Double-digit growth in the Netherlands, slight growth in Belgium, stabilisation after a year of strong growth in France
- Operational profitability has been affected by internal and external factors
- 3.7 million euro investment in the expansion of the machinery
- Strong operational cash flow and solid balance sheet
Outlook for 2019
- Discontinuation of loss-making international environment and waste division
- Putting the new, sustainable offices in Marseille into use
- Objective of 50 million euro turnover with a double-digit EBITDA margin
| 2017 in € 000 | 2018 in € 000 | Change in € 000 | Change in % | Per share In € | |
| Turnover | 44,127 | 44,393 | 266 | 0.60% | |
| Total operating income | 45,393 | 45,432 | 39 | 0.09% | |
| Operating profit before depreciation | 5,454 | 4,039 | -1,415 | -25.94% | 0.38 |
| Depreciation | 2,471 | 2,663 | 192 | 7.77% | |
| Operating profit | 2,983 | 1,376 | -1,607 | -53.87% | |
| Financial result1 | -487 | -430 | 57 | -11.70% | |
| Profit before tax | 2,496 | 946 | -1,550 | -62.10% | |
| Net profit | 1,093 | 553 | -540 | -49.41% | 0.05 |
| Total result (group share) | 1,187 | 1,552 | 365 | 30.75% | 0.15 |
| Total equity | 13,725 | 15,124 | 1,399 | 10.19% | 1.43 |
| Net cash flow from operations | 1,751 | 3,291 | 1,540 | 87.95% | |
| Balance sheet total | 40,801 | 42,928 | 2,127 | 5.21% |
5.5% organic growth in geotechnics
ABO-Group’s turnover stabilised at 44.4 million euro in 2018. A very solid underlying organic growth of 5.5% was achieved, however, in the geotechnical departments. Geotechnics was already designated in 2017 as the strategic growth engine for the group for the coming years. In addition, the asbestos department also achieved excellent results, with an 18% growth. Although still limited in total turnover (6%), further growth can also be expected here. The “Soil and Environment” department recorded a slight decline, because less use was made of external capacity on the one hand, and due to a slightly lower productivity on the other. A part of the work volume could not be realised as a result of the (temporary) outage of machines and workforce.
| 2017 in € 000 | 2018 in € 000 | Change in € 000 | Change in % | % of Turnover | |
| Geotechnics | 20,500 | 21,624 | 1,124 | 5.48% | 48.7% |
| Soil & Environment | 19,822 | 19,394 | -427 | -2.16% | 43.7% |
| Asbestos & Energy | 2,124 | 2,518 | 393 | 18.54% | 5.7% |
| Others | 1,681 | 856 | -825 | -49.07% | 1.9% |
| Turnover | 44,127 | 44,393 | 266 | 0.60% | 100% |
Double-digit growth in the Netherlands, slight growth in Belgium, stabilisation after a year of strong growth in France
The Group achieved a double-digit increase in turnover in the Netherlands. The momentum is still very positive, but the growth is gradually decreasing in strength. The main cause of the deceleration seems to be the fact that the demand for materials and qualified personnel cannot be met on time. In France, the Group was confronted with the loss of turnover from “Le Grand Paris”, on the one hand, and the planning difficulties caused by numerous protest campaigns and social unrest on the other. This stabilisation follows a previous year of very pronounced growth (+16% in 2017), however. The asbestos laboratory activities (Translab) and the geotechnical fieldwork (Geosonda) in Belgium recorded a very strong expansion. The decrease in the ‘International’ segment is explained by the discontinuation of the major international contract in Uganda (1.1 million turnover in 2017), which was not extended in 2018.
| 2017 in € 000 | 2018 in € 000 | Change in € 000 | Change in % | % of Turnover | |
| France | 19,205 | 18,868 | -337 | -1.75% | 42.5% |
| Belgium | 15,152 | 15,437 | 285 | 1.88% | 34.8% |
| The Netherlands | 8,380 | 9,272 | 892 | 10.64% | 20.9% |
| International | 1,390 | 815 | -575 | -41.37% | 1.8% |
| Turnover | 44,127 | 44,393 | 266 | 0.60% | 100% |
Operational profitability has been affected by internal and external factors
Given the growth ambition of the Group, additional employees were recruited in 2018 (+13 FTEs, from 351 to 364 employees). This additional capacity could not be translated into additional turnover and added value, however. This can be explained, on the one hand, by internal factors (machine downtime, turnover of staff, long-term illness, etc.), and by external influences (mainly the social unrest in France), which considerably disrupted the optimal planning, on the other. Higher remunerations (+8%, from 18.8 to 20.3 million euro) had a direct impact on the operating profit.
The operating profit before depreciation amounts to 4.04 million euro (0.38 euro/share), a decrease of 26%. The Dutch operations made a significantly higher contribution (+389k euro), but there was a substantial decline in Belgium (ABO / E20) and France (ERG Géotechnique). The absence of new orders in the international department also led to an additional decline.
Depreciations increased from 2.47 million to 2.67 million euro as a result of further investments in tangible fixed assets. Additional new equipment for an amount of 3 million euro was purchased in 2018. Operating profit decreased from 3 to 1.4 million euro.
The financial result improved considerably, primarily because of the elimination of exchange rate losses on the dollar. The minority stake in Esher was sold, thereby eliminating the share in the profit of associated companies. The lower profit before tax resulted in considerably lower taxes. In addition, a one-off exceptional charge of 844k euro was booked in 2017 following the summer agreement.
Net profit decreased from 1.1 million euro to 0.6 million euro (0.05 euro per share). The total result (group share) increased, however, from 1.18 to 1.55 million euro. The actualisation of the value of the real estate in France, as well as of the French pension obligations, are not incorporated through the profit and loss account, but directly through the equity of the Group.
3.7 million euro investment in the expansion of the machinery
The Group has made considerable investments in recent years, in both the expansion of its machinery and the expansion of its drilling techniques. Among other equipment, a sonic drill was purchased for the Belgian market in 2018. The Netherlands resolutely opted for expansion and replacement, in particular within the geotechnical department. The Group Management believes that the quality of the machinery is currently excellent, and that virtually any market demand can be met. The activities within the geotechnical laboratory in Belgium were launched recently. Depending on the speed and success of the roll-out of these products, follow-on investments can be provided.
Strong operational cash flow and solid balance sheet
The net cash flow from operating activities improved strongly, from 1.75 to 3.3 million euro. Intensive monitoring of the working capital made it possible to considerably reduce outstanding trade receivables.
The balance sheet total increased from 40.8 to 42.9 million euro. On the asset side, the main changes are the increase in tangible fixed assets (investment programme) and the conversion of trade receivables to liquid assets. On the liabilities side, the revaluation of the buildings in France led to a significant increase of the non-realised results. The financial debts are increasing, mainly due to the lease of new equipment. Total shareholders’ equity increased to 15.1 million euro, resulting in an equity ratio of 35.2%.
The full set of figures (consolidated profit and loss account, balance sheet, cash flow statement and changes in equity statement) is included as an annex to this publication.
Outlook for 2019
Discontinuation of loss-making international environment and waste division
Under its brand name ‘Ecorem’, the Group has endeavoured to attract international orders for environmental and waste consultation since 2014. The long decision periods and the unpredictability in the winning of orders has caused a very volatile turnover and result evolution in recent years. The realisation that significant additional financial efforts were required, as well as the recurrent loss-making nature of this department, convinced the management to divest this department. The trading fund was sold as of 1 March 2019. Ecorem accounted for barely 2% of the group turnover and less than 1% of the workforce in 2018, but its contribution to the group result was very negative (-351k euro).
ABO-Group remains fully active on the international market, with geotechnics, soil investigation, energy, archaeology and asbestos.
Putting the new, sustainable offices in Marseille into use
The new offices in Marseille / Vitrolles will be completed at the beginning of April. They are situated in a sustainable building that can be used as an example and a reference for the Group. In addition, the building has a strategic location, within walking distance of the airport of Marignane and in the vicinity of the railway and TGV station. The investment cost amounts to 2.8 million euro. The use of the building will provide a saving in excess of 150,000 euro in rental costs on an annual basis.
Objective of 50 million euro turnover with a double-digit EBITDA margin
ABO-Group aims to further expand its environmental and energy consultation, as well as its monitoring and testing operations in Belgium, the Netherlands and France. The group reconfirms its strategy and positioning as a European player with international ambitions. ABO-Group focuses on internal organic growth by recruiting experts for setting up and developing new operations. Several new operations were launched in 2018 (asbestos in the Netherlands and a geotechnical laboratory in Belgium), and new offices were opened (in Roeselare). We anticipate that these initiatives will support the turnover and profitability in 2019.
In addition, the group seeks to further strengthen its position in the home countries through acquisitions. An additional 9.3% share stake in Sialtech was acquired in 2018. The Group will continue to actively monitor the acquisition market and will seek to capitalise on several opportunities in 2019. A number of case files are currently pending in each of the home countries, but no guarantee for an effective transaction can currently be provided.
The Group adheres to its objective of double-digit growth through a mix of organic and acquisitive growth. For 2019, this means an objective of 50 million euro turnover, with an anticipated operating margin for depreciation above 10%.
Financial calendar
26/04/2019: Publication of the 2018 annual report and invitation to the General Meeting
29/05/2019: General Meeting
13/09/2019: Figures for the first half of 2019
Statement of the statutory auditor
The auditor of ABO-Group Environment nv, EY Bedrijfsrevisoren cvba, represented by Marnix Van Dooren, confirmed that his audit review, which was thoroughly completed, has not revealed any significant corrections that would require an adjustment to the 2018 consolidated figures for the Group that are included in this press release.
About ABO-Group
ABO-Group is a specialised engineering office focussing on construction, environment and energy. Through its Consultancy and Testing & Monitoring departments, ABO-Group operates in Belgium, the Netherlands and France, as well as on the international market. ABO-Group guarantees its customers a sustainable solution. For a more detailed description of the activities of the Group, please consult the ABO-Group website (www.abo-group.eu).
For more information:
Frank De Palmenaer Johan Reybroeck
CEO ABO-Group Environment nv CFO ABO-Group Environment nv
frank.depalmenaer@abo-group.eu johan.reybroeck@abo-group.eu
T +32 (0)9 242 88 32
Derbystraat 255, Maaltecenter Blok G, B-9051 Ghent (SDW), Belgium
This press release is available on our website www.abo-group.eu
1 Including the share in the profit of associated companies
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