2023 HY Earnings Report
Dynamic growth and improved EBITDA
margin compared to the second half
of 2022
- Revenue for the first six months of 2023 up +16.8% to
€519.1 million
- EBITDA margin up 1.6 points compared to the second half
of 2022
- Solid financial structure with minimal debt
Strong long-term outlook
confirmed
- Structurally promising drivers of growth: the digital
transformation and the energy transition
- Margins in France are gradually improving, the business model
is being adjusted, and the transition to new activities is
underway
- Continued strong growth in the Benelux and other countries
where new markets are opening up
- Confirmation of 2023 objectives: over €1 billion in
revenue and further improvement of margins
Solutions30 SE today announces its
consolidated earnings for the first half of the year ended
June 30, 2023, prepared in accordance with IFRS.
The consolidated financial statements of the
Solutions30 group for the period from January 1 to
June 30, 2023 were reviewed by the Supervisory Board on
September 21, 2023. The review of the half-yearly financial
information by the authorized auditor has been completed and their
report has been published on the website. The half-yearly financial
report, including the consolidated financial statements (condensed
interim financial statements and notes) reviewed by the auditor, is
available on the Solutions30 website, www.solutions30.com, in the
“Investors Relations” section.
Key figures
In millions of euros |
H1 2023 |
H2 2022 |
H1 2022 |
Revenue |
519.1 |
460.3 |
444.3 |
Adjusted EBITDA |
27.5 |
17.1 |
29.6 |
As a % of revenue (EBITDA margin) |
5.3% |
3.7% |
6.7% |
Adjusted EBIT |
5.0 |
(7.0) |
6.7 |
As a % of revenue |
1.0% |
(1.5%) |
1.5% |
EBIT |
(6.4) |
(17.6) |
(8.9) |
As a % of revenue |
(1.2%) |
(3.8%) |
(2.0%) |
Net income. group share |
(14.4) |
(37.8) |
(12.3) |
As a % of revenue |
(2.8%) |
(8.2%) |
(2.8%) |
Free cash flow |
(32.4) |
54.1 |
(16.9) |
|
|
|
|
Financial structure data In millions of euros |
06/30/2023 |
12/31/2022 |
|
Equity |
131.8 |
145.3 |
|
Net
debt |
95.3 |
38.9 |
|
Net bank debt |
10.3 |
(54.0) |
|
Consolidated revenue
Solutions30’s consolidated half-year revenue
for 2023 amounted to €519.1 million, up 16.8% (reported
and organic growth).
After a solid first quarter with organic
growth of 14.5%, strong business momentum continued to build in the
second quarter of 2023, with consolidated revenue of
€263.9 million growing organically by 18.9% compared to
the same period in 2022.
This excellent performance was driven by
particularly robust growth in the Benelux, Poland, and the United
Kingdom. This puts the group on target to exceed the milestone of
€1 billion in revenue before the end of 2023.
Profitability
Figures by geographical area are detailed
below:
|
H1 2023 |
H2 2022 |
H1 2022 |
France |
|
|
|
Revenue |
199.4 |
204.0 |
221.9 |
Adjusted EBITDA |
15.8 |
2.0 |
18.8 |
EBITDA
margin % |
7.9% |
1.0% |
8.5% |
Benelux |
|
|
|
Revenue |
180.0 |
123.5 |
98.4 |
Adjusted EBITDA |
17.5 |
14.7 |
13.7 |
EBITDA
margin % |
9.7% |
11.8% |
13.9% |
Other countries |
|
|
|
Revenue |
139.7 |
132.8 |
124.0 |
Adjusted EBITDA |
(0.8) |
4.7 |
2.4 |
EBITDA
margin % |
(0.5%) |
3.5% |
2.0 % |
In France, revenue reached
€199.4 million in the first half of 2023. Business
continued to be negatively impacted by the transformation of the
telecom sector and the transition into new activities in the energy
sector. The telecom market, however, is showing signs of
stabilizing in the second quarter, and the group has been very
successful in the energy sector, as illustrated by the recent
solar-power contract signed with Q Energy. Growth
opportunities are gradually falling into place, while Amaury
Boilot, recently named CEO of the group’s French entities, is
transforming its organization. Adapting the business model and
readjusting the corporate structure to new market conditions have
led to a significant recovery of the EBITDA margin compared to the
second half of 2022. It rose to 7.9%, a level close to
the first half of 2022 and a clear recovery from the 1.0% in the
second half of 2022.
In the Benelux, revenue for the
first half of 2023 grew +82.9% compared to the first half
of 2022 to reach €180.0 million driven by fiber-optic
roll-outs across the country and the group’s ability to keep up
with faster than anticipated installation schedules and consolidate
its position as a market leader. This phase of hyper-growth and the
fast pace of large-scale ramp-ups required to fulfill orders are
temporarily impacting the EBITDA margin, which stood at 9.7%
compared to 13.9% in the first half of 2022 and 11.8% in
the second half of 2022.
In other countries, revenue is
up +12.7% compared to the first half of 2022. It reached
€139.7 million,whereas it was €124.0 million a year
earlier. In Italy, the conditions under which ultra-fast broadband
infrastructure is being deployed have deteriorated in recent months
due to the national service provider’s recurring operational
difficulties. The entire sector has been affected, and Solutions30
decided to slow down the pace of call-outs until the situation
returns to normal and a more efficient way of operating has been
found, in agreement with our various partners. This situation is
negatively impacting the segment’s EBITDA margin. Elsewhere,
margins are relatively stable but still below the group’s normative
levels. In the United Kingdom and Germany, Solutions30 is preparing
to absorb the expected growth in the fiber sector, whereas it is
focusing on the business activities that are the most profitable in
the mature Spanish market. Meanwhile, business in Poland remains
dynamic, driven by market share gains. The EBITDA margin for the
“Other countries” segment was -0.5% compared with 2.0% for the
first half of 2022 and 3.5% for the second half
of 2022.
As a result, adjusted EBITDA
for the entire group amounted to €27.5 million at the end of
June 2023 (5.3% of revenue) compared to €29.6 million a
year earlier (6.7% of revenue) and €17.1 million in the
second half of 2022 (3.7% of revenue).
Operating costs increased by +18.9% compared
with the first half of 2022 and by 10.9% compared with the second
half of 2022. They amounted to €444.4 million, representing
85.6% of revenue. Structural costs increased by 15.6%
compared with the first half of 2022 and by 10.5% compared with the
second half of 2022. They amounted to €47.2 million,
representing 9.1% of revenue.
After accounting for €8.9 million in
impairments and operational provisions and after amortizing
€13.6 million in usage rights for leased assets
(IFRS 16), adjusted EBIT stood at
€5.0 million at June 30, 2023, compared to
€6.7 million a year earlier. This figure is clearly recovering
compared to the second half of 2022.
The first half of 2023 includes
€4.3 million in non-current operating expenses, which mainly
consist of restructuring costs, compared to €10.3 million a
year earlier.
Customer relationship amortization amounted to
€7.1 million at June 30, 2023 stable compared to the
same period of the previous fiscal year.
Net financial income
represented an expense of €2.9 million in the first half
of 2023 compared to an expense of €5.3 million a year
earlier. This change is due to an increase in financial income,
resulting from foreign exchange gains and a fair value adjustment,
while expenses remained stable.
After including a tax expense of
€1.3 million compared to €3.0 million a year earlier and
accounting for €3.7 million in minority interests, the
group share of net income amounted to
-€14.4 million compared to -€12.3 million for the same
period in 2022, and -€37.8 million for the second half of
2022.
Financial structure
At June 30, 2023, the group had
€131.8 million in equity compared to €145.3 million at
December 31, 2022. The group’s gross cash amounted to
€73.4 million, compared to €124.4 million at the end of
December 2022 and €85.0 million at June 30, 2022,
reflecting the usual seasonality of the working capital
requirements.
Gross bank debt stood at €83.6 million
compared to €70.4 million six months earlier. This increase is
due to additional drawdowns on the “acquisitions” envelope of the
financing secured on November 29, 2022. These drawdowns were
made to pay earnouts to minority shareholders of group subsidiaries
in the first half of the year. The group had
€10.3 million in net bank debt at the end of June 2023
compared to €54.0 million in cash net of debt at the end of
December 2022. Including €72.8 million in leasing
liabilities (IFRS 16) and €12.2 million in potential
financial debt on future call options and earnouts, the total net
debt amounts to €95.3 million.
The group maintains a solid financial structure,
with a net debt/EBITDA ratio of 1.7 and a net debt-to-equity ratio
of 72.3%.
Outstanding receivables under the group’s
non-recourse factoring program amounted to €85.9 million at
the end of June 2023, compared with €77.3 million at
December 31, 2022, reflecting the increase in activity. The
increase in mobilized receivables is due to ramp-ups in new
contracts for which the factoring program is being implemented.
Factoring can finance working capital from recurring activities
that have fully developed, at a cost of less than 1% of the amount
of assigned receivables. This program, combined with a solid
financial structure, provides Solutions30 with the resources it
needs to finance its growth strategy.
Operating cash flow amounted to
€22.9 million for the first half of 2023, compared to
€19.6 million in the first half of 2022. Though working
capital increased by €39.1 million, it remained negative at
-€25.6 million. This increase reflects strong growth over the
half-year, particularly in the Benelux during the second quarter,
and preparation for a new phase of growth in Other Countries.
Measures have been put in place to optimize working capital by the
end of the year. Cash flow from operating activities for the first
half of 2023 was a negative €22.0 million, compared with
negative cash flow of €6.5 million a year earlier.
Net investments amounted to €10.5 million,
at a normative level of 2.0% of revenue, compared with 2.4% a year
earlier. Overall, this means there was -€32.4 million in free
cash flow, compared to -€16.9 million at the end of
June 2022.
Outlook
At the end of this first half-year, the group
remains confident in achieving its goal of double-digit growth in
2023, putting it on track to exceed €1 billion in revenue this
year. Over the last six months, the group has seen growth paired
with a steady increase in margins experienced. This improvement is
due to ongoing adaptations in France and rapid expansion throughout
the rest of Europe.
In France, operational and organizational
efforts to restore margins and improve conditions for telecom
contracts are bearing fruit. With the replacement of smart meter
deployment activities accelerating and the return to normal in the
telecoms market, revenue should begin to stabilize. The
photovoltaic business is experiencing significant growth, fueled by
Europe’s shift towards greener energy solutions and the goal of
achieving energy independence. Notably, the backlog of orders has
doubled compared to the same period last year. Through its
subsidiaries, Solutions30 Sud-Ouest and Elec-EnR, the group is
consolidating its position as one of the top 5 leaders in the
renewable energy installation market in France. Solutions30 is now
involved in major projects, including the construction of Europe’s
largest floating solar park. Leveraging its wide-ranging expertise
and advanced electrical know-how acquired from years of experience
with fiber and smart meter deployments, Solutions30 is well
positioned to undertake this significant initiative.
In the Benelux, the group should continue to
experience sustained growth, and profitability should be back above
10% in the second half of the year since most of the ramp-ups had
already occurred in the first six months.
In other countries, growth is expected to
continue, carried by encouraging trends in the United Kingdom,
while efforts to restore profitability in Italy should start to pay
off soon. Giovanni Ragusa, Chief Operations Officer of Solutions30
Italy since 2008, has been appointed Chief Executive Officer for
this country.
The group aims to maintain its leadership in its
existing markets and to scale to a critical size everywhere it
operates, all while working to improve profitability. The group
will leverage the structural trends that are carrying its markets,
returning to dynamic and profitable growth over the long term.
Upcoming event
2023 Q3 Revenue
Report
November 8, 2023
About Solutions30
SE
Solutions30 provides consumers and businesses
with access to the key technological advancements that are shaping
our everyday lives, especially those driving the digital
transformation and energy transition. With its network of more than
15,000 technicians, Solutions30 has completed over
65 million call-outs since its inception and led over 500
renewable energy projects with a combined maximum output surpassing
1,000 MWp. In pursuing its vision of a more connected and
sustainable world, Solutions30 has become an industry leader in
Europe with operations in 10 countries: France, Italy,
Germany, the Netherlands, Belgium, Luxembourg, Spain, Portugal, the
United Kingdom, and Poland. The capital of Solutions30 SE
consists of 107,127,984 shares, equal to the number of
theoretical votes that can be exercised. Solutions30 SE is
listed on the Euronext Paris exchange (ISIN FR0013379484- code
S30). Indexes: MSCI Europe ex-UK Small Cap | SBF 120 | CAC Mid
60 | NEXT 150 | CAC Technology | CAC PME. Visit our website for
more information: www.solutions30.com
Contact
Individual Shareholders:Investor Relations -
Tel: +33 1 86 86 00 63 - shareholders@solutions30.com
Analysts/Investors:Nathalie Boumendil - Tel: +33
6 85 82 41 95 - nathalie.boumendil@solutions30.com
Press - Image 7:Charlotte Le Barbier - Tel:
+33 6 78 37 27 60 - clebarbier@image7.frLeslie Jung - Tel: +33 6 78
70 05 55 - ljung@image7.fr
Financial indicators not defined by IFRS
The group uses financial indicators not defined
by IFRS:
- Profitability indicators and their components are key
operational performance indicators used by the group to monitor and
evaluate its overall operating results and results by country.
- Cash flow indicators are used by the group to implement its
investment and resource allocation strategy.
The non-IFRS financial indicators used are
calculated as follows:
Organic growth includes the
organic growth of acquired companies after they had bien are
acquired, which Solutions30 assumes they would not have experienced
had they remained independent. In 2023, the group’s organic growth
includes only the internal growth of its long-standing
subsidiaries.
Adjusted EBITDA is the
“operating margin” as reported in the group’s financial
statements.
EBITDA margin corresponds to
“adjusted EBITDA” divided by revenue.
Free cash flow corresponds to
the net cash flows from operating activities minus the acquisitions
of fixed assets net of disposals.
Calculation of free cash flow
In
thousands of euros |
H1 2023 |
H22022 |
H1 2022 |
Net cash flow from operating
activities |
(21,959) |
64,642 |
(6,459) |
Acquisition of fixed assets |
(10,901) |
(10,643) |
(10,503) |
Disposal of non-current assets after
tax |
436 |
115 |
55 |
Free cash flow |
(32,425) |
54,114 |
(16,907) |
Cash net of debt corresponds to
“Cash and cash equivalents” as it appears in the group’s financial
statements from which is deducted “Loans from credit institutions,
long-term” and “Short-term loans from credit institutions, lines of
credit, and bank overdrafts” as they appear in note 10.2 of the
group’s annual financial statements.
EBIT corresponds to earnings
before interest and taxes as reported in the group’s financial
statements.
Adjusted EBIT corresponds to
operating income as shown in the group’s financial statements, to
which are added “Customer relationship amortization,” “Income from
the sale of holdings,” “Other non-current operating expenses” and
from which are deducted “Other non-current operating income.”
Reconciliation between operating income and
adjusted EBIT
In
thousands of euros |
H1 2023 |
H22022 |
H1 2022 |
Operating income |
(6,385) |
(17,590) |
(8,880) |
Customer relationship amortization |
7,076 |
7,291 |
7,134 |
Other non-current operating income |
— |
— |
(1,850) |
Other non-current operating
expenses |
4,259 |
3,347 |
10,266 |
Adjusted EBIT |
4,950 |
(6,953) |
6,670 |
As a % of revenue |
1.0% |
(1.5%) |
1.5% |
Non-current transactions
include other income and expenses that are significant in their
amount, unusual, and infrequent.
Net debt corresponds to “Debt,
long-term,” “Debt, short-term,” and long- and short-term “Lease
liabilities” as they appear in the group’s financial statements
from which “Cash and cash equivalents” as they appear in the
group’s financial statements are deducted.
Net debt/EBITDA ratio
corresponds to “net debt” divided by annualized EBITDA.
Net debt-to-equity ratio
corresponds to “net debt” divided by equity.
Net debt
In
thousands of euros |
06/30/2023 |
12/31/2022 |
Bank debt |
83,628 |
70,368 |
Lease liabilities |
72,844 |
67,370 |
Liabilities from earnouts and put
options |
12,230 |
25,516 |
Cash and cash equivalents |
(73,373) |
(124,387) |
Net debt |
95,330 |
38,868 |
|
|
|
Equity |
131,807 |
145,345 |
% of net debt |
72.3% |
26.7% |
Net bank debt corresponds to
“Long-term loans from credit institutions” and “Short-term loans
from credit institutions, lines of credit, and bank overdrafts” as
they appear in note 10.2 of the group’s annual financial statements
from which are deducted “Cash and cash equivalents” as they appear
in the group’s financial statements.
Net bank debt
In
thousands of euros |
06/30/2023 |
12/31/2022 |
Loans from credit institutions,
long-term |
65,401 |
56,769 |
Short-term loans from credit
institutions, lines of credit, and bank overdrafts |
18,227 |
13,599 |
Cash and cash equivalents |
(73,373) |
(124,387) |
Net bank debt |
10,256 |
(54,019) |
Gross bank debt corresponds to
“Loans from credit institutions, long-term” and “Short-term loans
from credit institutions, lines of credit, and bank overdrafts” as
they appear in note 10.2 of the group’s annual financial
statements.
Operating margin corresponds to
the “operating margin” as reported in the group’s financial
statements.
Net
investments correspond to the sum of the lines
“Acquisition of current assets,” “Acquisition of non-current
financial assets,” and “Disposal of non-current assets after tax”
as they appear in the consolidated statement of cash flows.
Net investments:
In
thousands of euros |
06/30/2023 |
06/30/2022 |
Acquisition of fixed assets assets |
(10,901) |
(10,503) |
Disposal of fixed assets assets after
tax |
436 |
55 |
Net investments |
(10,465) |
(10,448) |
Operating costs correspond to
costs incurred for the group’s operations, included in the
“operating margin” (excluding structural costs).
Structural costs correspond to
costs incurred by the group’s head office functions in various
countries, included in the “operating margin” (excluding operating
costs).
Working capital corresponds to
“current assets” as reported in the group’s financial statements
(excluding “Cash and cash equivalents” and “Current derivative
assets”) less “current liabilities” (excluding “Debt, short-term,”
“Current provisions,” and “Lease liabilities” adjusted for non-cash
items).
Working capital:
In
thousands of euros |
06/30/2023 |
12/31/2022 |
Inventory and work in progress |
26,908 |
25,427 |
Trade receivables and related
accounts |
196,265 |
192,966 |
Current contract assets |
980 |
970 |
Other receivables |
68,815 |
58,465 |
Prepaid expenses |
4,454 |
1,466 |
|
|
|
Trade payables |
(191,358) |
(210,846) |
Tax and social security
liabilities |
(110,937) |
(112,287) |
Other current liabilities |
(13,242) |
(13,384) |
Deferred income |
(7,444) |
(7,480) |
Working capital |
(25,559) |
(64,703) |
|
|
|
Change in working capital |
39,144 |
(39,707) |
Non-monetary items |
5,669 |
12,581 |
Change in working capital adjusted for non-monetary
items. |
44,813 |
(27,126) |
Disclaimer
This document may contain certain forecasts,
projections and forward-looking statements, i.e. statements
relating to future and not past events in connection with or with
respect to the financial position, operations or activities of
Solutions30 SE. Such statements imply risks and uncertainties
because they relate to future events and circumstances. Many
factors could cause actual results or developments to differ
materially from those expressed or implied by such forward-looking
statements, including, but not limited to, political, economic,
commercial, competitive or reputational factors. Nothing in this
document should be construed as a profit estimate or forecast.
Solutions30 SE makes no commitment to update or revise any
forward-looking statement to reflect any change in circumstances or
expectations.
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