A portfolio of Exclusive Exploration Permits
(geothermal and geothermal lithium) totalling a global acreage that
increases from 171 square km to 2,852 square km1
A strong financial structure with the
successful IPO on Euronext Paris (September 2023)
Upgrading of the industrial tool,
strengthened team with key skills
Gross business volume2 of €11.9 million
(+9%)
OUTLOOK
Restating 2027 and 2030 ambitions in
geothermal energy and geothermal lithium
Increase of the drilling rig fleet
Gross business volume to reach between €16
million and €18 million at the end of 2024, +35% to +50%
growth
Regulatory News:
Arverne Group (Paris:ARVEN), a French industrial company
specialized in the production of underground resources, publishes
its 2023 annual results:
- Increase of the Exclusive Exploration Permit portfolio
(geothermal energy and geothermal lithium), raising the secured
acreage from 171 km² to 2,852 km²;
- A strong financial position with net cash amounting to €131.5
million at year end;
- 9% increase in gross business volume to €11.9 million,
including €1.8 million generated by the shallow drilling activities
of DrillHeat, an unconsolidated subsidiary operated by Arverne
Group which owns a 50% share;
- Consolidated revenues reaching €10.1 million;
- A key year of structuring, with total headcount increasing to
142 employees (160 including 18 within DrillHeat) at end of 2023, +
70% compared to the end of 2022 in order to support the Group’s
2030 targets.
“We are very pleased with the operational milestones reached in
2023. Arverne Group has grown significantly and strengthened its
operational and financial performance capacity, enabling the Group
to mobilize the resources needed to achieve its ambitious goals by
2030, and to become one of the major players in European geothermal
energy and geothermal lithium. The teams are very proud to be part
of a mission-driven company and developing energy transition
solutions,” says Pierre Brossollet, Founder, Chairman and CEO of
Arverne Group.
The Company’s key achievements over the past year:
- two major financial operations including a successful IPO on
Euronext Paris (gross amount of around €185 million raised) with
strategic financial and industrial partners;
- increase in the number of Exclusive Exploration Permits
(geothermal energy and geothermal lithium), bringing the portfolio
to eight PER and the total acreage from 171km² to 2,852km², in
particular by completing the acquisition of GéoRhin, renamed
2gré;
- the deployment of approximately €50 million of CapEx mainly to
accelerate the expansion of the drilling rig fleet;
- the ongoing testing and trials in partnership with the
Norwegian group Equinor in order to select the most suitable Direct
Lithium Extraction technique (DLE) for Alsace’s brines in 2024;
- the signature with Renault Group of a contract for the sale of
battery-grade lithium, with the first lithium production planned
for 2027;
- the implementation of Arverne Group’s mission, as a
mission-driven company, with the setup of 10 operational targets
and extra-financial commitments regarding climate and environment,
employees’ well-being and the development of the local communities
where the Group operates.
Arverne Group’s mission and the definition of extra-financial
targets
2023 was the year of the implementation of Arverne Group’s
mission. By deciding to become a mission-driven company voluntarily
in 2022, the Group confirmed its engagement to deeply anchor CSR in
its business model. Arverne Group is determined to play an active
part in the ecological transition, while ensuring that it benefits
as many people as possible, in particular its employees and the
regions in which it operates.
After including its raison d'être in its articles of association
in 2022, the Group set up its Mission Committee in 2023 (composed
of 2 external members and 2 employees) and defined 10 operational
targets. These extra-financial commitments are based on three
pillars to which Arverne Group is committed to reinforce its
actions: the climate and the environment, the well-being of its
employees and the development of the regions in which the Group
operates.
The implementation of Arverne Group’s mission and the deployment
of its operational targets in 2023 have been audited by an
independent third-party. In its audit report, which will be
appended to the Group’s annual report, the auditor concluded that
all the social and environmental objectives had been met.
Furthermore, in addition to implementing its roadmap as a
mission-driven company, the Group has included CSR criteria in the
variable part of the corporate officers’ compensation for 2024,
taking into account:
- a safety target;
- a carbon assessment, followed by the definition of targets for
limiting greenhouse gas emissions;
- actions aimed at promoting diversity, and
- training programs for the employees.
Strong commercial momentum driven by shallow drilling that
confirms the Group’s execution capacities
In thousands of euros
12/31/2023
12/31/2022
Change
Deep drilling (Arverne Drilling
Services)
9,835
10,403
-6%
Other
258
313
-17%
Consolidated revenues
10,092
10,717
-6%
Shallow drilling (DrillHeat)
1,835
220
x8.3
Gross business volume
11,927
10,937
+9%
The gross business volume shows a +9% increase to reach €11.9
million. A key indicator, this activity performance that aggregates
all the billings of each subsidiary and restated for the
consolidation effects, confirms the Group’s abilities to realize
the coming drilling operations both internally and for external
customers in accordance with its development plan.
This performance includes the business generated by DrillHeat
for €1.8 million. Operated by Arverne Group which owns a 50% share,
DrillHeat’s full year 2023 turnover (€3.7 million) is not
recognised in the consolidated revenues for the 2023 financial
year, but clearly shows the Group’s step up in the drilling
segment. DrillHeat drilled more than 33,000 meters, laid 196
geothermal probes, and operated 3 drilling machines.
Consolidated revenues at the end of 2023 totalled €10.1 million,
down 6% compared to the previous financial year. This is explained
by the temporary suspension of a well maintenance campaign. The
revenues were generated by supplying drilling equipment and skilled
labour.
The subsidiaries Lithium de France (62.6% owned by Arverne
Group) and 2gré (a 100% company acquired in March 2023) are
continuing their investments, with the aim of producing geothermal
heat for the first time in 2025 for 2gré, and geothermal lithium
for the first time in 2027 for Lithium de France.
Operating income in line with the Group’s structuring
strategy, non-cash items related to the merger with the SPAC
Transition that impact the net income
The Company strengthened its teams with a total headcount (FTE)
increasing from 86 to 142 employees between the end of 2022 and the
end of 2023, resulting in an increase in personnel expenses to
€13.1 million (x2.3 compared to 2022). This underscores firstly the
increase in the drilling order book, and secondly the strengthening
of the skills required for the investment program announced by the
Group. Personnel expenses include a €2.3 million expense for the
allocation of free shares to all employees.
In thousands of
euros
12/31/2023
12/31/2022
Revenues
10,092
10,717
Purchasing and subcontracting
-11,410
-6,268
Personnel expenses
-13,110
-5,786
Taxes and duties
-292
-207
Other income and expenses
2,791
846
Current EBITDA3 (excl.
exceptional items)
-11,928
-699
Depreciation and provisions
-1,898
-1,968
Current operating
income
-13,826
-2,667
After taking into account this scheduled investment phase, in
order to strengthen the Company’s headcount, the current EBITDA
(excluding exceptional items) amounts to -€11,9 million. The net
income stands at -€53.8 million mainly because of a -€54.1 million
non-cash impact that relates to the listing costs incurred with the
SPAC merger with Transition4. Excluding this non-cash impact, the
net income would have been close to breakeven.
Strong growth in assets
Total assets rose sharply in 2023, from €20.7 million to €219.5
million.
This change mainly reflects:
- the investments made over the period (total fixed assets
increasing from €11.2 million to €58.6 million) in particular
the acquisition of new Exclusive Exploration Permits (PER) for
geothermal projects by 2gré, the development of projects combining
geothermal energy and geothermal lithium production (Lithium de
France), as well as the acquisition of a deep drilling rig (€10.3
million);
- the successful completion of two major financial operations
(gross cash flow which increases from €3.2 million to €143.2
million), which secured the required financial flexibility to
pursue the investments announced by the Company:
- a series B funding round of €44 million, with the following
participants:
- Equinor Ventures for €7 million (the investment subsidiary of
the first Scandinavian energy group that had already invested in
2022 as part of a series A round);
- Norsk Hydro as a new shareholder for €17 million (a global
Norwegian player with strong presence in aluminium, energy and
metal recycling sectors);
- Arverne Group for €20 million.
- €162 million raised from financial and industrial investors in
the context of the IPO on Euronext Paris
A robust financial structure
The shareholders’ equity increased sharply to €178.4 million at
the close of the financial year (-€4.9 million on December 31,
2022). The main explanation is the €162 million raised by Arverne
Group.
With a low indebtedness of €11.8 million, mainly resulting from
the financial liabilities (€7.5 million) taken over with the
GéoRhin acquisition, the net cash position shows a large surplus
of €131.5 million, allowing the Group to execute its investment
program.
Targets for 2024
Arverne Group’s financial targets and operational structuring
milestones for 2024 are:
- a gross business volume of between €16 million and €18
million, i.e. growth of between +35% and +50% compared to 2023.
This performance will be again mainly driven by the drilling
activity, which already includes strong growth secured by the
signature of commercial contracts;
- CapEx deployment of around €50 million;
- a pre-feasibility study (PFS), a key step that will
enable to update the technical and financial assumptions relating
to geothermal lithium production, and to select the type of
battery-grade lithium (hydroxide or carbonate).
- 3 new filings for drilling permits, preliminary step to
sell geothermal heat;
The Group also reminds that, on the first quarter of 2024, it
has been awarded a new lithium permit (Les Poteries Minérales), and
announced a capitalistic partnership with Herrenknecht AG to
accelerate the acquisition of drilling machines in order to meet
both its own drilling needs and external customer demands.
Restatement of the 2030 ambitions
Arverne Group confirms its ambitions for 2030:
- 2024-2030: deployment of a total gross investment
program of €2,400 million, including:
- €6005 million by 2gré (sale of 1.8 TWh of
geothermal heat per year) and,
- €1,8006 million by Lithium de France (sale
of 3 TWh of geothermal heat per year, sale of 30 kt of
battery-grade lithium7 per year).
- 2025: first geothermal heat production,
- 2027: first geothermal lithium production, revenues to
reach between €200million and €350 million8 with an EBITDA margin
target of around 60%,
- 2030: revenues to reach between €800 million and €1.15
billion9 with an EBITDA margin target of around 70%.
Next publication:
half-year 2024 results, 25 September 2024 (after trading)
Consolidated income statement
In thousands of euros
2023.12
2022.12
12 months
12 months
Revenues
10,092
10,717
Other operating income
1,241
45
Capitalised production
2,841
961
Purchases consumed
-574
-774
External expenses
-10,836
-5,494
Personnel expenses
-13,110
-5,786
Taxes and duties
-292
-207
Other operating expenses
-1,291
-160
Current EBITDA (excl.
exceptional items)
-11,928
-699
Depreciation and amortisation
-1,898
-1,968
Current operating
income
-13,826
-2,667
Other non-current operating
income
13,435
-
Other non-recurring operating
expenses
-60,939
0
Operating income
-61,330
-2,667
Income from cash and cash
equivalents
4,933
-
Cost of gross financial debt
-807
-125
Cost of net financial
debt
4,118
-125
Other financial income
2,691
954
Other financial expenses
-272
-18
Income before tax
-54,784
-1,856
Income tax
968
-19
Income after tax
-53,816
-1,875
Share of net income of
equity-accounted companies
0
0
Total net income
-53,816
-1,875
Group share
-52,035
-1,646
Share of non-controlling
interests
-1,782
-228
Earnings per share
-2.34
-0.11
Diluted earnings per share
-2.34
-0.11
Consolidated balance sheet assets
In thousands of euros
2023.12
2022.12
12 months
12 months
Intangible assets
39,192
4,475
Tangible assets
19,445
6,685
Financial assets
-
20
Deferred tax assets
3,448
0
Non-current assets
62,085
11,180
Inventories
413
-
Trade receivables and others
15,275
1,109
Other financial assets
1,096
72
Cash and cash equivalents
143,229
3,165
Current assets
160,012
4,346
Assets held for sale
-
5,175
Total Assets
222,097
20,701
Consolidated balance sheet liabilities
In thousands of euros
2023.12
2022.12
12 months
12 months
Capital and share premium
194,301
1,157
Other reserves
21,621
-7,005
Accumulated results
-51,832
204
Non-controlling interests
14,346
748
Total shareholders’
equity
178,438
-4,896
Shareholders’ equity - Group
share
164,092
-5,644
Borrowings and financial debt
9,904
2,242
Other provisions
1,632
44
Other non-current liabilities
3,437
-
Deferred tax liabilities
5,465
3
Total non-current
liabilities
20,438
2,290
Borrowings and financial debt -
current
1,856
2,934
Other provisions
992
-
Other current liabilities
20,371
12,972
Total current
liabilities
23,221
15,906
Liabilities associated with
assets held for sale
7,401
Total Liabilities
222,097
20,701
Cash flow statement
in thousands of euros,
IFRS
2023
2022
Net income
-53,816
-1,875
Depreciation, amortisation and
provisions net of reversals
2,262
1,966
Other changes
40,591
-667
Cash flow from
operations
-10,964
-576
Changes in trade and other
receivables
2,053
353
Change in trade and other
payables
2,121
-503
Change in other current
receivables / payables
-8,690
-307
Tax paid
130
-28
Net cash flow from operating
activities
-15,349
-1,061
Acquisition of fixed assets
-15,590
-1,170
Capitalised development
expenditure
-5,914
-3,978
Other changes
1,060
962
Net cash flow from investing
activities
-20,444
-4,187
Capital increases
114,599
4,368
Debt issues
15,499
2,100
Loan repayments
-7,730
-130
Other changes
53,487
-892
Net cash flow from financing
activities
175,856
5,446
Change in cash, and cash
equivalents
140,063
197
Cash and cash equivalents as of
January 1
3,165
2,654
Cash and cash equivalents as of
December 31
143,227
2,851
Cash and cash equivalents
associated with assets held for sale
313
Cash and cash equivalents as
of December 31
143,227
3,165
About Arverne Group
Arverne Group specialises in harnessing underground resources to
transform them into environmentally friendly, local and renewable
energy, contributing to the prosperity of local communities. As an
integrated industrial player, Arverne Group spans the entire
underground value chain, from exploration to drilling and
production to sales to end-users. Arverne Group aims to become the
French leader in geothermal energy and its by-products, including
low-carbon geothermal lithium.
Founded in Pau in 2018, Arverne Group has structured its
business activities around several subsidiaries, notably 2gré (sale
of geothermal heat), Lithium de France (geothermal heat and
extraction and sale of geothermal lithium) and Arverne Drilling
Services (drilling operations).
A mission-driven company, Arverne Group is listed on
the professional segment of Euronext
Paris and is part of the Tech Leaders segment of Euronext
Paris (ISIN FR001400JWR8, mnemonic ARVEN).
www.arverne.earth
Disclaimer
This press release contains certain forward-looking statements
that should not be regarded as historical
facts. These statements are not guaranteeing of the
Company’s future performance. These forward-looking statements
relate to the Company’s future prospects, developments and
marketing strategy and are based on
expectations and estimates of amounts not yet determinable.
Forward-looking statements are subject to a variety of risks and
uncertainties, in particular those described in the merger prospectus approved by the Autorité des Marchés
Financiers on July 27, 2023 under number 23-331, as they
relate to future events and are dependent on circumstances that may
or may not materialise in the future. In particular, the Company’s
actual financial position, results and cash flow, as well as the
trends in the sector in which the Company operates, may differ
materially from those proposed or reflected in the forward-looking
statements contained in this press release. Even if the Company’s
financial position, results, cash-flows and developments in the
sector in which the Company operates were to conform to the
forward-looking statements contained in this press release, such
results or developments cannot be construed as a reliable
indication of the Company’s future results or developments.
The Company provides the information
contained in this press release as of March 27, 2024, and disclaims
any intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Certain figures and numbers in this press release have been
rounded, therefore, the totals and percentages shown in the tables
do not necessarily equal the sum of the figures, amounts or
percentages rounded individually. The audit procedures have been
carried-out and the statutory auditors’ report on the financial
statements should be released end of April 2024.
The audit procedures have been carried-out and the statutory
auditors’ report on the financial statements should be released end
of April 2024
______________________
1 Total acreage of the permits (PER) of which 2.530km² coming
from the acquisition of Géorhin and in a renewal process
2 Includes 50% of the turnover of DrillHeat (1.8M€),
unconsolidated subsidiary operated by Arverne Group who owns a 50%
share
3 Corresponds to the current operating income before
depreciation
4 Immediate recognition as expenses of all the preference shares
not taking into account the reaching of the minimum threshold for
each category of them to be converted
5 Before subsidies
6 Before subsidies and 62% to be borne by Arverne Group
7 LCE lithium carbonate equivalent
8 Company’s assumptions: €65/MWh (heat price for 2gré), €45/MWh
(heat price for Lithium de France), before consolidation impact and
depending on the PFS results
9 Company’s assumption: €25k/t LHM +/-20%, €65/MWh (heat price
for 2gré), €45/MWh (heat price for Lithium de France), before
consolidation impact and depending on the PFS results
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240327829020/en/
Media Relations: communication@arverne.earth
arvernegroup@image7.fr
Investor Relations: investor.relations@arverne.earth
SEITOSEI.ACTIFIN - Mathilde Guillemot
mathilde.guillemot@seitosei-actifin.com
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