ABO Asia Bond Dist

ABO-Group - Half Year Results 2017

Ghent, 15 September 2017 - 6.00 p.m. - Press Release / Regulated Information

ABO-Group, an engineering firm specializing in construction, environment and energy, today announces its 2017 consolidated financial half-year results.

Highlights of the first half of 2017

• Revenue growth of 24%, of which 13% organic
• EBITDA +128%
• Increase in machinery

Outlook 2017

• Ambition of further organic and acquisitive growth
• Increase of stake in Translab to 74%
• Revenue in 2017 projected to exceed €42 million

             
Highlights of the first half of 2017

Revenue growth of 24%, of which 13% organic

France

The geotechnical division, which accounts for 85% of revenue generated in France, reported an organic growth of 27%, driven by the start-up of several large projects. In order to maintain internal flexibility, external personnel was hired to realize this growth. The environmental division reported a downturn in business, with certain customers adopting a wait-and-see attitude.

Belgium

Belgium reported an organic growth of 7%, fuelled by strong growth at ABO (archaeology, BREEAM), Energy to Zero (energy consulting) and Geosonda (geotechnical fieldwork). Environmental fieldwork and the international division recorded a year-on-year decline. The activities of Translab asbestos laboratory were consolidated for the first time, resulting in an additional 6% revenue growth.

The Netherlands

The strong growth in the Netherlands (+84%) is largely attributable to the consolidation of Geomet (consulting and fieldwork) (+€1.5 million). An organic growth of 14% was realized. All divisions (soil, environmental and geotechnical fieldwork) are feeling the effect of a recovery of the Dutch construction market. The group invested more than €1 million in its Dutch fieldwork activities during the first six months.

The group reported an overall 24% revenue growth, of which 13% organic.

EBITDA + 128%
             
The solid revenue growth resulted in a more than twofold increase in operating profit before amortisation/depreciation (EBITDA) from €1,101k to €2,509k (€0.24 per share). The investment programme of the past few months and years is bearing fruit. This is also borne out by the higher depreciation (+ €385k, from €891k to €1,276k). The operating profit increased sixfold from €210k to €1,233k. The reversal of provisions that had been set aside for disputes had a positive non-recurring impact of €350k. However, the group is still confronted with the negative effects of the loss of export subsidies for its international activities. As those two elements offset each other, a substantial underlying operational improvement can be observed.

The higher financial costs are attributable to the consolidation of Geomet and to additional finance costs connected with the increase in machinery. The consolidation of Translab shifts the profit contribution of this activity from the financial to the operating result.

The net profit (group share) rose from €114k to €617k.

Solid financial position

The total equity of the group amounts to €13 million, with a balance sheet total of €39 million. The net financial debt increased from €5.6 million at year-end 2016 to €7.5 million at mid-2017 as a result of the acquisition and lease of new machines (+ €1 million), the consolidation of the debts of Translab (+ €0.76 million), and the financing of the increased working capital requirement.

The full set of figures (consolidated income statement, consolidated balance sheet and cash flow statement) is attached to this press release.

Outlook 2017

Ambition of further organic and acquisitive growth

ABO-Group continues its growth strategy, focusing on the organic expansion of its product offering (towards infrastructure, stability, urban development, etc), machinery (sonic drilling techniques), and tapping into new growth markets (Scandinavia, United Kingdom). It also seeks to strengthen the group's market position in the home countries Belgium, the Netherlands and France through acquisitions. To expand the French environmental division, the group invests in the acquisition of a new multipurpose and green building near the high-speed rail link and the airport of Marseille (Vitrolles). Completion is due at the end of 2018.

ABO-Group won several major new contracts in the past few months for both consultancy and fieldwork assignments. The order book is well-filled in each of the markets. This strengthens the outlook for the second half of the year, based on the qualitative execution.

For 2017, the group has set itself the target of €42 million revenue and an EBITDA of at least €4 million.

Increase of stake in Translab to 74%

ABO-Group strongly focuses on asbestos, offering consultancy services (asbestos inventory, advice to policymakers, etc) and building site monitoring (air measurements, analysis of materials). In July, the group increased its stake in Translab from 53.3% to 74.4% through a capital increase. It is also actively investigating opportunities to expand the laboratory activities in Belgium and France (ABO Research).

The group is looking to further streamline its legal structure and operational management.

Impact of Vlarel

According to Article 53 of VLAREL, Flemish law requires that soil experts must be independent of their clients. There is a presumption that ABO is not independent of the Flemish government, based on the supposed shareholding of a former Thenergo shareholder which is linked to the Flemish government. The Council of State has stated that it is possible to request an exemption in this regard from the minister, who will then determine that ABO does in fact carry out its assignments independently. ABO scrupulously follows this procedure each time to obtain the ministerial exemption.

Financial calendar

30/03/2018: 2017 annual figures
30/05/2018: 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, and Johan Reybroeck, CFO, declare that, to their knowledge, the interim condensed consolidated financial information for the six-month period ending 30 June 2017, 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 related parties that have taken place during the first six months of the financial year and their effect on the interim condensed financial information, as well as a description of the most significant risks and uncertainties for the remaining months of the financial year.

About ABO-Group

ABO-Group is a company listed on Euronext Brussels, specializing in consultancy & engineering, testing & monitoring in the areas of construction, environment and energy. ABO-Group is active in its three home countries (Belgium, the Netherlands and France) as well as on the international market, and offers its customers a sustainable solution. A more detailed description of the group can be found on the website of ABO-Group (www.abo-group.eu).

For more information, please contact:

Johan Reybroeck                                          
CFO ABO-Group Environment NV                                       
johan.reybroeck@abo-group.eu
T +32 9 242 88 88
Maaltecenter Blok G, Derbystraat 255,
B-9051 Ghent (SDW), Belgium

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

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