SOLUTIONS 30 : Excellent operational performance during the 1st half 2018
- Sales: +51% à EUR 176.7 million
- Adjusted EBITDA(1): +53% to EUR 16.3 million, or 9.2% of sales
- Net income (group share): +77% to EUR 8.6 million, or 4.9% of sales
The Supervisory Board of SOLUTIONS 30, the European leader in Solutions for New Technologies and Connected Objects, meeting on September 24, reviewed and approved the financial results for the
1st half of 2018, as prepared by the Executive Board.
|In millions of euros||30/06/2018||30/06/2017||Change|
|As % of sales||9.2%||9.0%|
|As % of sales||8.1%||7.8%|
|Adjusted net income (group share)(3)||13.1||7.8||+69%|
|As % of sales||7.4%||6.6%|
|Net income (group share)||8.6||4.9||+77%|
|As % of sales||4.9%||4.2%|
|Financial structure data||30/06/2018||31/12/2017||Change|
|Equity||74.1||66.5||+ €7.6 M|
|Net debt||2.2||20.8||- €18.6 M|
|Interest Coverage Ratio(4)||34x||8x||-|
(1) Recurring operating income(*) before depreciation, amortization and provisions, net of reversals
(2) Recurring operating income(*) before amortization of intangible assets, including customer relationships.
(3) Net income Group share of recurring operations(*) before amortization of goodwill and customer relationships
(4) EBIT over net financial expense - ratio of net financial expense covered by EBIT
(*) Non-recurring transactions are defined as income and expenses that have the characteristics of being significant as to amount, unusual in nature and infrequent.
Gianbeppi Fortis, Chairman of the Board declares:
"Solutions 30 has enjoyed another semester of strong growth, while keeping its operating margins stable. This performance is supported by a market position that has been further reinforced over the last few years, making our Group a leading player in local services dedicated to spreading digital technologies. Our business model is strengthening thanks to the densification of our network of technicians, allowing us to consolidate our market more and more easily. We therefore continue to have lofty ambitions and several options to achieve the next phase of our development over the coming years. "
Karim Rachedi, Chief Operating Officer and Board Member:
"Our activities in France are supported by the acceleration of the deployment of fibre optic and by the installation of smart meters. We are replicating our French model across Europe. As our half year results show, the ramp-up associated with major contracts signed in 2017 is being handled without problems. In the second half we have begun the integration of our new Belgian subsidiary, Unit-T, which is unfolding as expected. Reaching a critical mass in Benelux and subsequently in other European countries will allow us to improve our operational effectiveness in the coming months and years. "
Year-over-year 1st half 2018 revenue growth of 51%
Consolidated revenue of the Group was of EUR 176.7 million in the 1st half 2018, an increase of 51% compared to the same period of 2017 (+37% on a comparable basis).
In France Solutions 30's revenue grew by 55% to EUR 116.3 million during the 1st half (+47% on a comparable basis). While all of the Group's activities contributed to this strong performance, growth was particularly high in energy and especially in fibre optic.
Internationally, the Group's growth strategy is bearing fruit, and the French model continues to be replicated. With revenues of EUR 60.4 million during the semester, the Group's international units saw growth of 43% (+20% on a comparable basis) compared to the same period of 2017. This momentum is particularly strong in Germany thanks to contracts signed in 2017, but also in Benelux, where the Group carried out a major operation by creating Unit-T, a company 70% owned by Solutions 30 and 30% owned by a Belgian cable provider, Telenet.
Growth of 53% in adjusted EBITDA and 56% in adjusted EBIT
Adjusted EBITDA amounted to EUR 16.3 million, up 53% compared with H1 2017. This represents 9.2% of revenue, up 20 basis points year-on-year, due to good control of the costs of the central organization.
These costs accounted for 10.8% of sales in 1st half 2018, compared to 11.4% a year earlier, and reflect the rigorous management policy at SOLUTIONS 30. Consistent with the change in sales, direct operating costs increased by 51% and represented nearly 80% of revenue, stable compared to the same period last year.
Adjusted EBIT amounted to €14.3 million, up 56%. It includes EUR 2 million of operating depreciation. Amortization of the customer relationships amounted to EUR (1.9) million at June 30, 2018, compared to EUR (1.1) million at the end of the first half of the year 2017.
Financial income, mainly consisting of financial expenses, represents a charge of EUR 0.4 million, compared to EUR 0.8 million in the 1st half 2017, which included EUR 0.2 million in non-recurring costs related to a structured financing.
Tax expense amounted to EUR 0.4 million compared to EUR 0.1 million as of June 30, 2017. Non-recurring items of EUR 1.5 million versus EUR 1 million a year earlier mainly consist of costs related to reorganization of the subsidiaries, relocation of the French and German headquarters and integration of recent acquisitions.
Net income of the consolidated companies thus amounted to EUR 10.1 million, compared to
EUR 6.2 million recorded the previous year. The consolidated result, which includes EUR 1.1 million in amortization of goodwill, amounted to EUR 9 million, up 68%. Net income (group share) reached
EUR 8.6 million, up 77% compared to the same period of 2017. Adjusted net income (group share) amounted to EUR 13.1 million, or 7.4% of revenue.
A solid financial structure
As of June 30, 2018, Group shareholders' equity amounted to EUR 74.1 million compared to
EUR 66.5 million as of December 31, 2017. Gross financial debt amounted to EUR 54.8 million, compared to EUR 49.1 million at December 31, 2017, while cash on the balance sheet amounted to EUR 52.6 million, compared with EUR 28.3 million at the end of December 2017, representing a net debt of EUR 2.2 million against EUR 20.8 million at the previous closing date. The implementation of the new factoring program to all of the subsidiaries of the Group has allowed the company to reduce the working capital by EUR 17,6 million, the total amount of trade receivables sold to the factor, and therefore deconsolidated, amounted to EUR 36 million at the end of June.
With a gearing (net debt to equity) close to 0 and net interest covered by adjusted EBIT of 34x, the Group has the necessary room for manoeuvre to pursue its growth strategy.
A stable and structured governance
In its session held on September 24, the Supervisory Board noted the resignation of Mr. Jean-Marie Descarpentries from his position as Chairman of the Board, and expressed its gratitude to him for his work with the Group since July 24, 2009. The members of the Board then appointed Mr. Alexander Sator as Chairman, and offered Mr. Descarpentries a position as Special Advisor, which he accepted, in order to ensure a smooth handover. Alexander Sator, 48, is a German national, and is a member of the Supervisory Board of Solutions 30 since May 15, 2015. Solutions 30 therefore benefits from a Supervisory Board composed of experienced and well-known members capable to support it through its strong growth to achieve its ambitious goals.
During the same session, the Board noted that the objectives of the pluriannual plan set for the Group's management in 2016 have been achieved.
The objectives consisted of combining revenue in excess of EUR 300 million over two consecutive semesters with a doubling of the firm's market capitalisation. With cumulative revenue of EUR 334 million and a market capitalisation that has more than doubled since 2016, these goals were reached by the end of the 1st half 2018. The Executive Board will therefore proceed in October 2018 to grant to 14 Executives of Solutions 30, 2 304 536 stock options, of which 1 834 536 can be immediately exercised, leading to the issuance of the same number of shares.
A very large majority of these shares are to be retained, which will strengthen the management's stake in the Group's capital. The sales which could occur, mainly for tax reasons, would not exceed a maximum of 5% of the new shares, i.e. less than 0.4% of the Group's capital.
"Solutions 30 is one of the great European success stories from the past few years. I am delighted to take responsibly of Solutions 30 as the Chairman of the Supervisory Board to assist the management to continue this unique performance. As a serial entrepreneur, I am fully aware of the level of involvement of the operational management that is required on to achieve this performance. The stock option plan aims to retain the key members of the Group including, other than the members of the Board, the Country and Business Unit heads. Their unfailing commitment shapes daily the success of the Group: created only 15 years ago, with more than 4000 employees in Europe, and valued at more than a billion Euros. Solutions 30 continues to benefit from sustained growth prospects" - Alexander Sator, Chairman of the Supervisory Board.
Ambitious prospects in the short and mid-term
Solutions 30 will likely continue to enjoy a dynamic and profitable growth during the 2nd half of 2018. Added to the continued positive performance of its existing activities will come the activities of its subsidiary Unit-T, the integration of which is proceeding as planned, as well as that of CPCP, fully consolidated since 1 August 2018 as Solutions 30 has become its majority shareholder.
In the longer term, the Group enjoys a foundation of solid expertise in a diverse set of sectors as well as strong leadership. These important assets will allow it to capitalise on the growth of the digital economy, position itself as a natural consolidator of its markets, and continue its dynamic development. In parallel, and in order to pursue a value-creation strategy combining growth and profitability, the Group is strengthening its business model and operations while carefully managing costs.
25 September 2018 10:00: investor conference call (in English)
14:30: investors' meeting (in French)
6 November 2018(*) 2018 3rd quarter revenue
(*) Published at 20:00, after the close of Euronext Growth and XETRA markets.
The Solutions 30 Group is the European leader in solutions for new technologies. Its mission is to make the technological changes that are transforming our daily lives accessible to everyone, whether individuals or companies. Yesterday, it was information technology and the Internet; today, it is digital technology; and tomorrow, it will be technologies that will make the world more interconnected in real time. With more than 10 million call-outs carried out since it was founded, and organised around a network of more than 6,000 local technicians, Solutions 30 currently covers all of France, Italy, Germany, the Netherlands, Belgium, Luxembourg and Spain. Share capital of Solutions 30 S.E. is composed of 24,179,812 shares, equal to the number of theoretical votes that can be exercised.
Solutions 30 S.E. is listed on Euronext Growth (ISIN FR0013188844 - code ALS30) as well as the Frankfurt Stock Exchange on the XETRA e-listing system (ISIN FR0013188844 - code 30L2)
Indexes: MSCI Europe Small Cap | Tech40 | CAC PME.
For more information, visit our website: www.solutions30.com
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