ABO-Group Annual Results for 2017

Ghent, 30 March 2018 - 17.00 CET - Press release / regulated information

The ABO-Group, an engineering office focussing on construction, environment and energy, has today announced its consolidated financial figures for 2017.

2017 highlights
             

  • 20% sales growth to 44 million euro
  • Operating profit increases by 80% to 3 million euro
  • Expansion of machine capacity and drilling techniques

Outlook for 2018

  • Increase in turnover and profitability
  • Development of geotechnology as growth engine for the group
  • The "Soil Decree" approved in Wallonia
  • Development of the "Vision 2022" strategic plan
  2016

in € 000
2017

in € 000
Change

in € 000
Change

in %
Per share

In €
Sales 36,779 44,127 7,348 +20.0%  
Total operating income 37,820 45,393 7,573 +20.0%  
Operating profit before depreciation 3,587 5,454 1,867 +52.0% 0.52
Depreciation 1,929 2,471 542 +28.1%  
Operating profit 1,658 2,983 1,325 +80.0%  
Financial result[1] -208 -487 -279 +134.1%  
Profit before tax 1,449 2,496 1,047 +72.3%  
Net profit 792 1,093 301 +38.0% 0.10

20% sales growth

ABO-GROUP achieved a sales growth of 20% in 2017. 6.5% of this came from acquisitions (twelve months integration of Geomet/Geosonda in the Netherlands in 2017 versus 6 months in 2016, full consolidation of Enviromania/Translab in Belgium as from 1/01/2017). The organic growth was a very strong 13.5%.

This growth was broadly based, as sales increased by double digits in France, the Netherlands and Belgium. The construction and infrastructure market is picking up everywhere, and many new projects are being launched. The strongest growth was recorded in the geotechnical activities, both in the home markets (Geosonda in Belgium and the Netherlands, ERG Géotechnique in France) and at an international level (via Ecorem, Uganda project).

In the Belgian consultancy activities (ABO), the growth was mainly in the asbestos and archaeology sectors. The energy department, Energy to zero (E20) could also record very strong growth figures, thanks to the smooth implementation of several large framework contracts.

The sales distribution is broken down as follows:

  2016

in € 000
2017

in € 000
Change

in € 000
Change

in %
% of

Sales
France 16,545 19,205 2,660 +16.1% 43.5%
Belgium 14,354 16,542 2,188 +15.2% 37.5%
The Netherlands 5,880 8,380 2,500 +42.5% 19.0%
Sales 36,779 44,127 7,348 +20.0% 100%

80% increase in operating profit

The higher activity level translates into increasing operating costs (38% increase in project-related purchases, 19% increase in services and various goods). Personnel costs, the largest cost item in a consultancy firm, increased by 11%.

Operating profit before depreciation amounts to 5.45 million euro (0.52 euro/share), an increase of 52%. The strong improvement is due to improved operational performance in Belgium and France. In France, the geotechnical department in particular generated profit growth. In Belgium, Enviromania/Translab and E20 could translate their sales growth into a significantly increased profitability. The losses in the international department were further reduced. The Netherlands firmly opted for recruitment and expansion, resulting in an increase in operating profit. This compensated for the disappearance of non-recurring elements, which meant that the year-on-year contribution remained the same.

As a result of the group's continuous investment programme for the replacement and expansion of the machine park in recent years, depreciations have increased significantly (+542k euro to 2.47 million euro, +28.1%). In 2017, new equipment worth more than 2 million euro was purchased for the fieldwork companies. The group is investing in capacity expansion, but also in new techniques. The park of multifunctional machines, in combination with a variety of drilling techniques, ensures the provision of a unique product range for the customer.

The operating profit increased by 1.3 million euro, from 1.7 million euro to 3 million euro (+80%).

The financial result decreased, mainly due to the inclusion of the financing expenses for Enviromania/Translab, as well as exchange rate losses on the dollar. The acquisition of Esher (47.6% stake, with the option of purchasing the remaining shares), which was announced at the end of last year, made a small positive contribution of 28k euro. The shareholding in Binergy Meer was sold at the end of 2017, which resulted in a one-off profit of 98k euro.

The corporate tax reform in Belgium (the so-called "summer agreement") had a very significant, one-off negative impact on the deferred tax assets that were built up in the past. The lower rates are, of course, favourable with regard to the future, but are currently causing an impairment of already anticipated and booked recoverable losses. In addition, the Board has opted for a conservative approach in its assessment. The reform has a positive impact on deferred tax liabilities. This is not absorbed in the profit and loss account, however, but in the consolidated full period result.

Net profit increased by 38% from 792k euro to 1.1 million euro (0.10 euro per share).

The balance sheet total increased from 37.3 to 40.8 million euro. On the asset side, the main changes are the increase in goodwill and intangible fixed assets (as a direct result of the full consolidation of Enviromania/Translab and the associated allocation of the purchase price), trade receivables (as a result of the increased activity) and the realisation of the assets held for sale (through the sale of Binergy Meer). On the liabilities side, the financial debts increase, mainly as a result of the leasing of new equipment, the inclusion of financing for the working capital and the debt related to Enviromania/Translab following the full consolidation. The total shareholders' equity increased to 13.7 million euro, resulting in an equity ratio of 33.6%.

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 2018

Increase in turnover and profitability

ABO-Group aims to further expand its environmental and energy consultation, and its engineering and testing activities both in the three home countries (Belgium, the Netherlands, France), and in a number of specific international growth markets (with a strong emphasis on Southeast Asia and Africa). The group is continuing its strategy and positioning as a European player with international ambitions. The ABO-Group focuses on internal organic growth by recruiting experts for setting up and developing new operations. Various new activities, as well as new offices, were launched in 2017. We anticipate that these initiatives will support the turnover and profitability in 2018.

In addition, the group also seeks to further strengthen its position in the home countries through acquisitions. In 2017, the participation in Enviromania/Translab was raised to 74.4%. A 47.6% stake in the Ghent engineering office Esher was procured at the end of 2017. The positive effect of the transactions that were realised in recent years is clearly noticeable. The group aims to continue this process, and will also actively monitor the acquisition market and seek to capitalise on several opportunities in 2018. In addition to the dossiers in progress in the home countries, the geographical expansion within Europe is also envisaged.

The group adheres to its objective of double-digit growth through a mix of organic and acquisitive growth. For 2018, this means in concrete terms an objective of 50 million euro turnover, with an anticipated operating margin for depreciation above 10%.

Development of geotechnology as growth engine for the group

Geotechnology represents the largest activity of the group. Active investments are being made in order to be able to optimally benefit from the cross-fertilisation between the different geotechnical departments (fieldwork and consultancy). The exchange of knowledge and equipment between the home countries is encouraged. Contacts are established with international customers, in order to be able to provide them with similar high-quality services in different markets. The group is actively looking forward to the launch of geotechnical laboratory activities in Belgium, inspired by the knowledge and experience built up in France. In Belgium, Geosonda won several larger framework contracts that support the further expansion of the geotechnical activities.

The "Soil Decree" approved in Wallonia

The Walloon Parliament approved a new legislative framework for soil management ("Décret sols") on 28 February 2018. As a result, an adapted legislative framework for the development, use and remediation of the soil is being implemented in Wallonia. ABO expects that this will generate an upward momentum for the sector. The decree will take effect at the latest on 1 January 2019.

Development of the "Vision 2022" strategic plan

The Board of Directors of the group is reviewing the development of a strategic 5-year plan, in consultation with the management. It is expected that this will take concrete shape before the summer of 2018. ABO-GROUP continues to resolutely opt for further growth, through the expansion of the product range and the opening of additional offices, as well as the active monitoring of acquisition files.

The mandates of all the directors and the statutory auditor will expire at the General Meeting this year. Based on the advice of the Audit Committee, the Board proposes to reappoint EY as the statutory auditor for the group for a period of 3 years. The full agenda and convocation to the meeting will be sent out at the end of April.

Financial calendar

27/04/2018: Publication of the 2017 annual report and convocation to the General Meeting

30/05/2018: General Meeting               

14/09/2018: Figures for the first half of 2018


 

Statement of the statutory auditor

The auditor of ABO-Group Environment NV, EY Bedrijfsrevisoren BCVBA, represented by Marnix Van Dooren, has confirmed that his audit review, which was thoroughly completed, has not revealed any significant corrections that would require an adjustment to the 2017 consolidated figures for the Group, which are included in this press release.

About the ABO-Group

The ABO-Group is a listed company specialising in consultancy, testing & engineering, and focussing specifically on construction, environment and energy. The ABO-Group operates in its three home markets (Belgium, the Netherlands and France), as well as in the international market, and guarantees a sustainable solution to its customers. 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 22 

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

ABO-Group 2017 EN



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Source: ABO-Group via Globenewswire