Full year 2021 earnings & Q1 2022 revenue
Operational performance reflected our changing
geographic mix and the rapid ramp-up of telecoms and energy in
Europe
- 2021 revenue: €874.0 million
- Adjusted EBITDA: €82.4 million
- Cash net of debt: €52.3 million
Q1 2022 revenue:
€222.7 million
Confirmation of long-term outlook
- Profitable growth for 2022 confirmed and set to accelerate in
the second half of the year
- With fundamentals and an organizational structure that are
stronger than ever, we are ready for a new phase of dynamic and
sustainable growth
Solutions 30 SE today published its
consolidated results for the year ended December 31, 2021, as
well as its revenue figures for Q1 2022, ending March 31,
2022, prepared in accordance with IFRS.
The supervisory board of Solutions 30 met
on April 27th and examined and approved the results for the year,
as approved by the company’s management board. The audit has been
carried out and the audit report relating to the certification of
the accounts is available on Solutions 30’s website. The audit
procedures are detailed at the end of the press release.
Gianbeppi Fortis, Chairman of the Management
Board of Solutions 30, states:
“After the disruptions of the pandemic and of
successive lockdowns in 2020 that helped to drive our telecoms
activity in France, 2021 saw a return to more normative levels of
growth in this mature market segment for France, as well as supply
chain difficulties and strong growth in the Benelux and Italy.
France and Spain were some of the first European
countries to roll out ultra-fast Internet networks. Today, other
countries are also beginning to deploy their fiber-optic networks.
In such a context, the group will take advantage of these growth
opportunities everywhere it operates. This can already be seen in
the first contracts signed in Italy and in the Benelux in 2021.
We have thus begun to duplicate the
success of our model in France.
Over the coming months, the most important
challenge will be to seize these growth opportunities throughout
Europe and to put the tools, processes, and teams in place to
ensure that this growth takes place in the right conditions, just
as we did in France between 2015 and 2020.
While the negotiation and implementation phases
of these new major contracts are having periodic negative effects
on profitability, with our experience, our expertise, and our solid
financial structure, we will make it through this learning curve
and scale up our processes to quickly bring our margins up into the
double digits.
At the same time, in both France and Spain, we
will need to consolidate our position in the more mature telecoms
roll-out market and to increase our market share in fiber-optic
network maintenance, electric mobility, energy savings, and
renewable energy. This requires updating our tools and services, as
we did in 2021, and will continue to do throughout 2022.
The group is on the verge of a new period of
growth, which should begin to show more clearly in the second half
of 2022.
All our teams are ready, composed, and
confident going into this new growth phase, thanks to the
work we’ve done to improve governance, compliance, and risk
management, and our proven know-how.”
Key figures – Consolidated
data
In millions of euros |
12/31/2021 |
12/31/2020 |
Change |
Revenue |
874.0 |
819.3 |
6.7% |
Operating margin (Adjusted EBITDA) |
82.4 |
106.5 |
-22.7% |
As a % of
revenue |
9.4% |
13.0% |
|
Adjusted EBIT(1) |
40,8 |
60.9 |
-32.9% |
As a % of
revenue |
4.7% |
7.4% |
|
Operating income (EBIT) |
12,9 |
48.3 |
-73% |
As a % of
revenue |
1.5% |
5.9% |
|
Consolidated net income |
22.5 |
35.8 |
-37.3% |
As a % of
revenue |
2.6% |
4.4% |
|
Net income, group share |
21.5 |
34.5 |
-37.7% |
As a % of
revenue |
2.5% |
4.2% |
|
Free cash
flow(1) |
32.4 |
124.8 |
- 92.4 |
Financial structure figures |
12/31/2021 |
12/31/2020 |
Change |
Equity |
191.6 |
170.0 |
+21.5 |
Net
debt |
33.1 |
28.9 |
+4.1 |
Net bank
debt(1) |
- 52.3 |
- 59.2 |
+6.9 |
(1) See glossary at the end of this document
Activity
For 2021, Solutions 30 posted revenue of
€874.0 million compared to €819.3 million for 2020,
representing growth of +6.7% (+3.6% organic growth) compared to
2020 and +26.4% compared to 2019, before the pandemic.
After solid initial growth of 20.9% in the first
half of the year, the second half of the year stood in sharp
contrast:
- A mature market in France, which is returning to normal after a
highly unusual 2020, with growth drivers (energy transition, 5G)
scaling up less quickly than forecasted due to supply chain
issues.
- The end-of-year impact of high rates of quarantine-related
absences due to more contagious variants, despite the continued use
of prevention measures and procedures to protect the health of our
employees and our customers.
- Strong sales momentum in other countries where we operate, with
higher and higher growth rates masking the effects of supply chain
disruptions. There are new opportunities cropping up everywhere,
driven by unprecedented recovery plans. The Benelux and other
countries are now driving the group’s growth, with revenue up 17.7%
and 28.7% respectively.
Profitability
Adjusted EBITDA was
€82.4 million at the end of December 2021, down 23% compared
to 2020.
Operating costs increased by
+4.1 percentage points compared to 2020 and represented 81.3%
of revenue, compared to 77.2% a year earlier, while the burden of
structural costs fell to 9.3% of revenue compared with 9.8% in
2020.
The operating margin stood at 9.4% of revenue,
compared to 13.0% one year earlier.
Besides less absorption of fixed costs due to
falling revenue in France and a changing geographic mix to focus on
activities that have yet to reach a critical size, this decrease
can be explained by:
- Effects from the COVID-19 pandemic and supply chain disruptions
for €4 million
- Evolving business needs and the operational transition needed
to adapt and to develop new activities in France for
€6.7 million
- Ongoing and upcoming ramp-up initiatives, especially for new
businesses and countries that have not reached their critical size
for €9.8 million
Removing these factors, the EBITDA margin
amounts to 11.8%, a decrease of only 120 basis points.
The start-up phases of important contracts—which
is currently the case in the Benelux and Italy—require the creation
of new organizational structures and more robust processes, the
adoption of new IT tools, and new trainings for on-site teams.
Solutions 30 is making the most of the expertise it has built
up in France to shorten this investment phase, although it is an
essential step for improving profitability before the industrial
phase begins.
After accounting for €16.2 million in
impairments and operational provisions, and after amortizing the
usage rights for leased assets (IFRS 16), worth
€25.3 million, adjusted EBIT stood at
€40.8 million, a 32.9% decrease compared to the previous
year.
2021 saw €13.3 million in non-current
operating expenses, including €7.1 million in group spending
to combat an aggressive smear campaign. The remaining balance came
from restructuring operations to adapt our organizational structure
to changes in the market, especially in Germany and France.
Customer relationship amortization amounted to
€14.7 million in 2021, compared to €13.0 million a year
earlier.
Financial income rose to
€4.2 million in profit, from the (downward) adjustment of
contingent consideration (earnout) values for €6.4 million,
compared to an expense of €4.1 million in 2020.
After including tax income of €5.4 million
due to loss carryforwards, compared to an expense of
€8.4 million a year earlier, the group share of net
income amounted to €21.5 million, compared to
€34.5 million in 2020.
Financial structure
At December 31, 2021, the group had
€191.6 million in equity, compared to €170.0 million at
December 31, 2020. The group had €129.8 million in gross
cash, compared to €159.3 million at the end of December 2020.
Gross bank debt stood at €77.5 million, compared to
€100.0 million on December 31, 2020, due to scheduled debt
repayments. The group had €52.3 million in cash net of debt at
the end of December 2021, compared to €59.2 million at the end
of December 2020.
Including €66.6 million in leasing
liabilities (IFRS 16) and €18.8 million in potential
financial debt on future call options and earnouts, the group has a
total net debt of €33.1 million, compared to €28.9 a year
earlier. The group maintains a solid financial structure, with a
net debt/EBITDA ratio of 40% and a net debt-to-equity ratio of
17.3%.
Outstanding receivables under the group’s
non-recourse factoring program amounted to €92.3 million on
December 31, 2021, compared to €94 million on December 31,
2020. This program finances working capital requirements from
recurring activities that are fully developed.
The use of factoring frees up the cash generated
by these receivables to finance the group’s growth strategy,
specifically the ramp-up of new contracts, at a cost of less than
1% of the amount of assigned receivables. This program, combined
with a solid financial structure, provides Solutions 30 with
the resources it needs to finance its ambitious growth
strategy.
Operating cash flow amounted to
€60.8 million, compared to €89.0 million in 2020. The
ramp-up of contracts and the return to more normal payment terms
than in 2020 resulted in a €13.3 million increase in working
capital requirements, which are negative at €25.0 million.
Cash flow from business activities stood at
€47.5 million in 2021, compared to €136.8 million a year
earlier, and net investments reached €15.1 million, or 1.7% of
revenue, compared to 1.4% a year earlier. This falls within a
normal range, generally considered to be between 1.5% and 4% of
revenue, and goes mostly to investing in the group’s IT
infrastructure and technical equipment. Overall, this means
there was €32.4 million in free cash flow, compared to
€124.8 million in 2020.
Data by segment
|
2021 |
2020 |
Change |
France |
|
|
|
Revenue |
507.3 |
522.7 |
-2.9% |
EBITDA |
66.4 |
86.6 |
-23.3% |
% |
13.1% |
16.6% |
|
Benelux |
|
|
|
Revenue |
160.4 |
136.3 |
17.7% |
EBITDA |
22.9 |
21.4 |
7.0% |
% |
14.3% |
15.7% |
|
Other countries |
|
|
|
Revenue |
206.3 |
160.2 |
28.8% |
EBITDA |
2.2 |
7.6 |
-71.1% |
% |
1.1% |
4.8% |
|
In France, revenue came to
€507.3 million at December 31, 2021, compared to
€522.7 million a year earlier. After peaking in the second
half of 2020 and the first half of 2021, the telecom business
returned to normal levels in this more mature ultra-fast Internet
market. By the end of December 2021, 29.7 million locations
were eligible for a fiber connection, for a total coverage rate of
70%, and the country already has 14.5 million fiber
subscribers, i.e. 48% of eligible households or 34% of all
locations. At the same time that the roll-out of smart electricity
meters is winding down, the growth of other market segments
connected to the energy transition has slowed due to periodic
disruptions in the supply chain. A decrease in revenue in the
second half of the year ate into profits in France, which will need
to adapt to this new context. For these reasons, adjusted EBITDA
reached €66.45 million, for a margin of 13.1%, compared to
16.6% a year earlier. Changing activity levels and preparations for
launching new businesses reduced EBITDA by €6.7 million, while
supply chain delays decreased it by another €1.1 million.
In the Benelux, revenue reached
€160.4 million, up +17.7% (+14.3% organic growth). The group
is entering a high-growth phase in Belgium and the Netherlands, in
both its telecoms and energy businesses. The installation of smart
meters for the energy company Fluvius began at the start of the
year and is continuing at a rapid pace. As for telecoms, previously
signed contracts for rolling out ultra-fast Internet are now
entering the production phase. As explained above, such ramp-up
phases may periodically impact group profitability. Thus, adjusted
EBITDA was €22.9 million, for a margin of 14.3%, compared to
15.7% a year earlier.
In other countries,
Solutions 30’s revenue stood at €206.3 million for 2021,
an increase of 28.7% (+15.6% organic growth).
- In Germany, 2021 revenue amounted to €63.3 million
compared to €67.2 million the previous year.
- In Italy, revenue grew by 70% (55% like-for-like) in 2021,
reaching €46.8 million, and will continue to be driven by the
contract we signed with TIM at the beginning of the year.
- In Spain, the group generated revenue of €53.1 million,
with purely organic growth of 36.0%.
- In Poland, revenue remained stable, at €24.9 million.
- Finally, in the United Kingdom, Solutions 30 generated
€18.2 million in revenue for 2021.
Adjusted EBITDA was €2.2 million,
equivalent to 1.1% of revenue, compared with 4.8% a year earlier.
This reflects the start-up of a contract signed in Italy, the
integration of acquisitions made in the United Kingdom, and the
reorganization initiative in Germany to make the most of expected
growth in the telecoms sector in the second half of 2022.
Q1 2022 revenue:
In millions of euros |
Q1 2022 |
Q1 2021 |
% change |
Total |
222.7 |
225.2 |
-1.1% |
From France |
116.7 |
142.1 |
-17.9% |
From Benelux |
46.7 |
37.0 |
+26.3% |
From other countries |
59.3 |
46.1 |
+28.5% |
Solutions 30’s consolidated revenue for the
first quarter of 2022 amounted to €222.7 million, down
slightly (1.1%) compared to the same period in 2021 (down (3.0%)
organically).
The first quarter is a continuation of the last
quarter 2021 with:
- On the one hand, activity in France penalized by the triple
effect of maturing markets, supply chain difficulties, and the high
rate of quarantined technicians, especially at the beginning of the
year, due to the pandemic.
- On the other hand, business is growing strongly in the rest of
the countries and this positive trend is masking supply chain
disruptions and the impact of the pandemic.
In France, revenue for the
first quarter of 2022 amounted to €116.7 million compared to
€142.1 million a year ago.
With €84.5 million in revenue, the telecom
business is down by 18% compared to the first quarter of 2021. The
market is in the midst of an operational transition as fiber
roll-out has peaked and the market for new subscriber connections
is under consolidation after being driven by widespread remote
working and measures to limit social interactions. These two market
conditions are still only partially compensated by maintenance
activities.
For the energy business, revenue stood at
€15.9 million, compared to €23.3 million the previous
year, a decrease of 32%. The business has been strongly impacted by
the end of smart electricity meter roll-outs in France, revenue
from which is down by 60%. Other activities, related to electric
mobility and renewable energies, are not yet compensating for this
decrease in revenue. They are growing by 8%, but their ramp-up
remains delayed by current supply chain problems.
The IT business posted revenue of
€11.9 million, up 8% for the quarter, while the security and
payments business generated €4.4 million in revenue, compared
to €4.6 million a year earlier.
In the Benelux, revenue in the
first quarter of 2022 amounted to €46.7 million compared to
€37.0 million a year earlier, up 26.3% (26.6% organic
growth).
The telecoms business, which grew organically by
14%, generated quarterly revenue of €33.0 million. Sales
activity remains strong and the first roll-outs began with the
start-up of contracts signed with Fiberklaar and Open Dutch Fiber
in the second half of 2021.
Revenue for the energy business amounted to
€9.6 million, compared with €3.9 million a year earlier,
representing purely organic growth of 145%. The deployment of smart
meters in Flanders on behalf of Fluvius began during the first
quarter of 2021 and is now fully developed.
Revenue from the IT business remained stable at
€2.3 million, compared with €2.4 million a year earlier.
Quarterly revenue from the retail and security businesses was
€1.9 million compared to €1.7 million for the first
quarter of 2021.
In all other countries, the
group posted annual revenue of €59.3 million, an increase of
29% (19% organic growth) compared to the same period in 2021.
In Germany, revenue amounted to
€14.4 million compared to €16.2 million the previous
year. The return to growth is expected in the second half of 2022,
when the efforts made by the group to adapt its organization should
begin to bear fruit.
In Italy, revenue grew by 67% in the first
quarter of 2022 to €14.6 million, driven by the contract
signed at the beginning of the year with TIM to deploy its
ultra-fast infrastructure in Piedmont and the Aosta Valley.
In Spain, revenue grew organically by 24% to
€14.5 million, thanks to strong momentum in the telecoms
business (fiber and 5G mobile networks).
In Poland, the group confirmed its return to
growth and posted revenue of €6.7 million, representing
organic growth of 19%.
Finally, in the United Kingdom,
Solutions 30 posted quarterly revenue of €9.0 million, up
131% (23% organic growth), thanks to the excellent momentum in the
telecoms sector and the start-up of new ultra-fast Internet and 5G
deployment programs.
Outlook
In 2021, Solutions 30 announced that it would be
accelerating the improvement plan it began in 2019, which has
already seen concrete progress, including the adoption of IFRS in
2019, the transfer of company shares to a regulated exchange, and
enhanced governance. As part of these actions to support its strong
growth, Solutions 30 created a transformation plan with the
goal of improving and harmonizing governance, risk management, and
compliance procedures.
This project has led to (i) a review of the
existing group policies and procedures, (ii) gap analysis against
applicable laws and regulations, (iii) interviews with the
management teams of Solutions 30 and its subsidiaries, and
(iv) consolidation and analysis of the information gathered in the
above-mentioned steps to define areas for improving governance,
risk management, and compliance. Six workstreams have been
identified
- Uniform third parties’ due diligence processes
- Uniform risk mitigation procedures and enhanced internal
control
- Revised code of conduct
- Improve whistleblower processes
- Training
- Definition of disciplinary actions
New procedures and policies were defined and
harmonized throughout 2021 and the beginning of 2022. They are
being implemented gradually over the first half of 2022.
Solutions 30 is thus opening a new chapter
in its growth in markets that, no matter their maturity, have
significant potential for growth and are supported by unprecedented
stimulus plans that are channeling public investment into the
digital transformation and energy transition.
With a solid financial structure and a business
model that allows it to self-fund its growth, Solutions 30’s
priority this year will be increasing its market share. We are
therefore expecting a new period of dynamic growth starting in the
second half of the year, while the first half of the year will more
closely resemble the second half of 2021. The group should also be
able to return to a more active acquisitions policy than over the
last two years, helping to drive growth.
Audit procedures
Considering that the previous auditor was unable
to express an opinion on Solutions 30’s consolidated financial
statements at 12/31/2020, the group’s new auditor, PKF Audit &
Conseil, carried out in-depth due diligence on the opening balance
sheet at January 1, 2021, in accordance with professional
standards.
This work included:
- A detailed review and analysis of the findings of independent
investigations conducted by Deloitte and Didier Kling Expertises
& Conseil in the first half of 2021.
- A review of the various items in the opening balance sheet and
the performance of additional due diligence if deemed
necessary.
- A review of measures Solutions 30 put into place in 2021,
especially in terms of risk management and internal control.
The analysis of the opening balance
sheet did not reveal any anomalies.
As the previous auditor was unable to express an
opinion on the group’s annual consolidated financial statements at
12/31/2020, PKF’s audit opinion on the consolidated financial
statements of the group for the year ended December 31, 2021
includes, in accordance with IAS 710, a technical reservation
relating to the comparability of the figures in the consolidated
statement of comprehensive income with the corresponding figures of
the previous year.Subject to this qualification, upon completion of
the audit of the 2021 annual accounts, PKF Audit & Conseil
confirms that the consolidated financial statements present fairly,
in all material respects, the financial position of the group at
December 31, 2021, and its consolidated financial performance and
its consolidated cash flows for the year then ended, in accordance
with International Financial Reporting Standards (IFRS) as adopted
by the European Union.
Upcoming event
HY1 2022 revenue
July 27, 2022
About Solutions 30
SE
The Solutions 30 group is the European
leader in solutions for new technologies. Its mission is to make
the technological developments that are transforming our daily
lives accessible to everyone, individuals and businesses alike.
Yesterday, it was computers and the Internet. Today, it’s digital
technology. Tomorrow, it will be technologies that make the world
even more interconnected in real time. With more than
50 million call-outs carried out since it was founded and a
network of more than 15,000 local technicians, Solutions 30
currently covers all of France, Italy, Germany, the Netherlands,
Belgium, Luxembourg, the Iberian Peninsula, the United Kingdom, and
Poland. The share capital of Solutions 30 SE consists of
107,127,984 shares, equal to the number of theoretical votes
that can be exercised.Solutions 30 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:Leslie Jung - Tel: +44 7818
641803 - ljung@image7.frCharlotte Le Barbier - Tel: +33 6 78
37 27 60 - clebarbier@image7.fr
Glossary
Organic
growth
Organic growth includes the organic growth of acquired companies
after they are acquired, which Solutions 30 assumes they would
not have experienced had they remained independent.
The group’s growth is detailed in the table
below:
|
2020 |
|
2021 |
|
|
Total |
|
Organic growth of existing subsidiaries |
Organic growth from acquired companies |
Acquisitions |
Total |
|
|
|
Value |
% |
Value |
% |
Value |
% |
Value |
Change |
Total |
819.3 |
|
27.8 |
3.4% |
1.3 |
0.2% |
25.6 |
3.1% |
874.0 |
6.7% |
From France |
522.7 |
|
-15.4 |
-3.0% |
0.0 |
0.0% |
0.0 |
0.0% |
507.3 |
-3.0% |
From Benelux |
136.3 |
|
19.3 |
14.2% |
0.2 |
0.1% |
4.6 |
3.4% |
160.4 |
17.7% |
From
Other Countries |
160.3 |
|
23.9 |
14.9% |
1.1 |
0.7% |
21.0 |
13.1% |
206.3 |
28.7% |
These figures have been rounded and their sum may not perfectly
match the totals given.
EBITDA
Earnings before interest, taxes, depreciation, and amortization, as
well as non-recurring income and expenses. It corresponds to the
“operating margin” in the consolidated statement of comprehensive
income.
In
thousands of euros |
12/31/2021 |
12/31/2020 |
Operating income |
12,880 |
|
48,276 |
|
Depreciation of IFRS 16 rights of
use |
25,317
|
|
23,502 |
|
Increases in operational
provisions |
16,225
|
|
22,168 |
|
Customer relationship amortization |
14,705 |
|
12,996 |
|
Other non-current operating income |
-10 |
|
-464 |
|
Other non-current operating
expenses |
13,255 |
|
— |
|
Adjusted EBITDA |
82,372 |
|
106,528 |
|
Adjusted
EBIT
Operating income before amortization of intangible assets,
including customer relationships, and non-recurring income and
expenses.
In
thousands of euros |
12/31/2021 |
12/31/2020 |
Operating income |
12,880 |
|
48,276 |
|
Customer relationship amortization |
14,705 |
|
12,996 |
|
Earnings on sale of holdings |
0 |
|
49 |
|
Other non-recurring operating income,
including negative goodwill |
-10 |
|
-464 |
|
Other non-current operating
expenses |
13,255 |
|
0 |
|
Adjusted EBIT |
40,830 |
|
60,857 |
|
Non-recurring
transactions
Income and expenses that are infrequent, unusual, and significant
in amount are considered non-recurring transactions.
Customer
relationships
Intangible assets related to the fair value measurement of acquired
companies at the time of consolidation. The amortization period of
3 to 15 years is the estimated time for the consumption
of the majority of economic benefits flowing to the company.
Net
debt
Net debt includes loans from credit institutions, bank overdrafts,
lease liabilities, and future liabilities from earnouts and put
options, less cash and cash equivalents.
In
thousands of euros |
12/31/2021 |
12/31/2020 |
Bank debt |
77,534 |
100,045 |
Lease liabilities |
66,587 |
63,548 |
Future liabilities from earnouts and
put options |
18,785 |
24,618 |
Cash and cash equivalents |
-129,839 |
-159,279 |
Net debt |
33,066 |
28,933 |
Net bank
debt
Net bank debt includes loans from credit institutions and bank
overdrafts, less cash and cash equivalents. This represents net
debt excluding the impact of IFRS 16. Net bank debt is used as
a reference in calculating the covenants included in the group’s
debt contracts.
In
thousands of euros |
12/31/2021 |
12/31/2020 |
Loans from credit institutions,
long-term |
50,512 |
71,977 |
Loans from credit institutions,
short-term and lines of credit |
27,022 |
28,068 |
Cash and cash equivalents |
(129,839) |
(159,279) |
Net bank debt |
(52,305) |
(59,234) |
Free cash
flow
Free cash flow corresponds to the net cash flow from operating
activities minus the acquisitions of intangible assets and
property, plant and equipment net of disposals.
In
thousands of euros |
12/31/2021 |
12/31/2020 |
Net cash flow from operating
activities |
47,545 |
136,488 |
Acquisition of non-current assets |
(15,722) |
12,670 12,670,167.6398233 |
Disposal of non-current assets after
tax |
614 |
639 |
Free cash flow |
32,437 |
124,817 |
- S30-2021FYResults-22Q1Revenue
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