ABO-Group Environment NV

Earnings Release • Sep 14, 2023

ABO-GROUP - Half-year results 2023

Ghent, 14 September 2023 – 6:30 p.m. – Press Release/Regulatory Information

Highlights first half of 2023

• o ABO-Group continues on its growth path and sees its total sales rise by another 10% to 40.4 million euros, amongst others due to strong organic growth of 14% in Belgium and the integration of the recent acquisitions of SEGED and DynaOpt in France
• o Operating margins and net result were under pressure due to challenging (construction) market conditions in both France and the Netherlands, as well as the impact of rising interest rates
• o Robust debt and solvency ratios provide a strong basis for further expansion of the acitvities

Outlook

• o Well-filled order book for the second half of the year – further development of the European mining sector expected to support geotechnical activities
• o Integration of the two French and two Belgian acquisitions will further strengthen cross-fertilisation within the Group
• o Continued focus on M&A for additional support of organic growth
• o Current trend brings the "100 million euro turnover by the end of 2025" mark into sharper focus

Frank De Palmenaer, CEO ABO-GROUP Environment: "I am proud to see how ABO-Group has managed to continue its growth curve in the first half of 2023 despite challenging conditions, once again setting record sales. We were able to realize this thanks to the recent acquisitions of SEGED and DynaOpt and the increasing demand for PFAS studies in Belgium. Although increased personnel costs and further indexation of the broader cost base put pressure on our margins, our

business again delivered solid operating cash flow in the first six months.

Moreover, the second half of the year looks positive: our well-filled order books, combined with the acquisitions of the innovative surveying company MEET HET and the Tienen based soil remediation expert Rimeco that were already announced in July, give us a solid foundation for the following months. Both in our environmental division and in our geotech business, the acquired French and Belgian entities provide an additional boost through the combined range of services we can offer our customers. We are confident that this will allow us to respond to the increasing demand for services in the context of climate change, energy transition and general improvement of our environment."

000€	1H2023	1H2022	% change
Sales	39 886	36 354	9,7%
Total operating income	40 353	36 758	9,8%
EBITDA1	4 619	5 418	-14,8%
Depreciation, amortisation and provisions	-3 024	-3 299	-8,3%
Operating profit	1 595	2 120	-24,8%
Financial result	- 493	- 346	42,2%
Profit before taxes	1 102	1 773	-37,9%
Net profit	666	1 242	-46,4%
Comprehensive result	668	1 252	-46,6%
Earnings per share for shareholders	0,06	0,12	-46,6%
Net cash flow from operating activities	794	- 84	-
x 1,000€	1H2023	FY2022	% change
Total equity	22 428	21 760	3,1%
Net financial debt	14 642	10 639	37,6%
Balance sheet total	72 115	70 761	1,9%

¹ EBITDA is defined as operating profit before depreciation, amortisation and provisions

HY 2023 highlights

Combination of solid organic growth and external expansion again results in a 10% increase in revenue

The acquisitions of DynaOpt and SEGED each contributed 6 and 4.5 months, respectively, to ABO-GROUP's results, accounting for 1.7 million euros in sales. Together with the previously unconsolidated parts of the Geo-Supporting and Colsen operations acquired in 2022, the acquisitions contributed 5.2% growth over the first half of 2022. Additionally, the existing entities also managed to expand their operations by 4.2%, bringing ABO-GROUP's total operating income to 40.4 million euros in the first six months of 2023. This constitutes a 10% growth on the result of the previous year.

In both the Dutch and French markets, Geotechnics was under pressure. Thanks to the acquisition of DynaOpt and the residual impact of Geo-Supporting, this branch managed to achieve another 3% growth with a total of €21.5 million (€20.9 million in 1H 2022). However, after adjusting for the effect of the aforementioned

acquisitions, the geotechnical business experienced negative growth of -0.5%. The acquisition of SEGED and the last months of Colsen accounted for an 11% revenue increase in the Environment business. In addition, the strong organic growth of 7% in this segment allowed the environmental business to close the first half of the year with a 18.8 million euros of sales total, 18% higher than 1H 2022 at 15.9 million euros. This increased the environmental division's share from 43% to 47%.

At the level of French operations, the revenue contribution of SEGED and DynaOpt represented an increase of 8%, based on a 3% autonomous increase. Meanwhile, the consulting services of ABO-Innogeo and ABO-Geo+ Environment, among

others, recorded good growth and a strong performance. The fieldwork and drilling divisions of Geosonic and ABO-ERG Géotechnique suffered from price pressure and a number of project-related changes in timing. Combined, this resulted in a healthy 12% increase in sales.

Thanks to the continued demand for support in the context of the PFAS case files and the boost in the market for asbestos surveys as a result of the tightened regulations, the environmental divisions of both ABO NV and Translab saw sales increase by as much as 16%. Also in the geotechnical field, Geosonda managed to expand its acitivities, resulting in a solid 7% growth. Together, this results in an overall growth of 14% in the Belgian operations, amounting to a sales total of 12.8 million euros in the first six months of 2023 (compared with 11.2 million euros in the first half of the previous financial year).

Also in the Netherlands, the environmental services of ABO Milieuconsult and Sialtech benefited from solid demand for (guidance on) soil surveys. The challenges in residential

construction due to the increase in building materials and interest rates, in combination with the nitrogen problem, put pressure on the consulting division and the geotechnical surveys in the first half of the year. Despite the contribution of previously unconsolidated results from the Colsen and Geo-Supporting acquisitions (achieving 3% growth), total Dutch sales fell from 6.4 million euros to 6.1 million euros, down 5% from 2022 (8% organic).

Operating margins and net result under pressure

Due to the highly competitive geotechnical market in France and the weaker Dutch housing market, the increase in labour cost and broader cost indexations could not be fully recharged to our customers. This has depressed the operating margins. Over the first six months of 2023, EBITDA comes in at 4.6 million euros, which is 15% below the 5.4 million euros in the same period last year. Depreciation and provisions decreased slightly from 3.3 to 3.0 million euros, mainly due to a specific provision of 0.5 million euros related to a legal dispute of ABO Logistics in the first half of the previous financial year.

ABO-GROUP actively managed to reduce its financial debts by 3.0 million euros. On top of that, the financial result still increased from 0.3 million euros to 0.5 million euros due to the sharp increase in interest rates. As a result of all these factors combined, ABO-GROUP saw its net profit fall from 1.2 million euros (0.12 euros per share) to 0.8 million euros (0.07 euros per share).

Cash-flow generation and debt position under control despite margin pressure

Despite the above-mentioned margin pressure, the Group managed to achieve a robust 0.7 million euro operating cash-flow (versus -84 thousand euros in the first half of 2022), thanks in part to controlling the annual seasonal increase in working capital at a level of 3.0 million euros (5.0 million in the first semester of 2022).

As a result of ABO-GROUP's investments, both the acquisitions of SEGED and DynaOpt, financed with the Company's internal cash funds and further accrual of working capital and fixed assets, net financial debt closed at 14.6 million euros, up from 10.6 million euros at the closing date of 2022. The annualised debt ratio increased to 1.6x to EBITDA (1.1x at the end of 2022). This remained healthy, giving the Group room to further invest in assets and/or acquisitions.

At the end of June 2023, the balance sheet total was 72.3 million euros, up 2% from 70.8 million euros at yearend 2022. On the asset side, this mainly reflects the recent acquisitions, as well as the aforementioned growth in working capital. However, this is largely offset by the decrease in the cash position. On the liability side, noncurrent debt and trade payables increased, partially mitigated by the decrease in current debt. Total equity amounts to 22.4 million euros, an increase of 0.7 million euros of result realised over the first part of 2023. The equity ratio at the closing date stood at 31.1% (versus 30.8% in the previous financial year).

The complete consolidated income statement and balance sheet, statement of movements in equity and consolidated cash flow table are set out below consecutively.

Outlook

Positive outlook for the second half of the year, and confirmation of 2025 plan

Thanks to ABO-GROUP's diversified product offerings and a number of large framework contracts, most entities' order books are well filled for the coming months. In particular, further developments in the European mining sector are expected to support the resumption of geotechnical activities. On this basis, management expects to maintain revenue growth in the second half of this financial year. In addition, the Company will focus on internal efficiency and cost optimisation with renewed effort in order to alleviate margin pressure within the operating entities. However, the Company will in any case continue to invest, both in people, assets and external acquisitions in order to achieve sustainable growth.

Thanks to the sound organic and external growth, combined with the positive outlook for the coming period, ABO-GROUP is perfectly on track in its plan to reach the 100 million euros revenue milestone by the end of 2025 at the latest.

Financial calendar

28/03/2024 Annual figures 2023 29/05/2024 General Meeting of Shareholders

Statement concerning the true and fair view of the interim condensed consolidated information and the true and fair view of the interim report

Frank De Palmenaer, Chief Executive Officer, declares that, to the best of his knowledge, the interim condensed consolidated information for the six-month period closed on 30 June 2023, which has been prepared in accordance with IAS 34 "Interim Reporting" as adopted by the European Union, gives a true and fair view of the assets, liabilities, financial position and results of the Company and its consolidated entities; and the interim report gives a true and fair view of the principal events and principal transactions with related parties that have occurred in the first six months of the financial year and their impact on the interim condensed financial information, as well as a description of the principal risks and uncertainties for the remaining months of the financial year.

About ABO-GROUP

ABO-GROUP is a specialised, publicly traded engineering firm focused on geotechnical and environmental services and soil remediation. Through its consulting and testing & monitoring departments, ABO-GROUP is established in Belgium, the Netherlands and France, and active internationally. ABO-GROUP guarantees its customers a sustainable solution. For a more detailed description of the Group's activities, please visit the ABO-GROUP website (www.abo-Group.eu).

For more information:

Frank De Palmenaer CEO ABO-GROUP Environment NV frank.depalmenaer@abo-group.eu T +32 496 59 88 88

Derbystraat 255, Maaltecenter Block G, B-9051 Ghent (SDW), Belgium

This press release is available on our website www.abo-group.eu

Consolidated interim income statement (not audited)

		For the first 6 months closed on 30 June
x 1,000€	2023	2022
Sales	39 886	36 354
Other operating income	467	404
Total operating income	40 353	36 758
Purchases of goods and services for resale	-5 212	-4 704
Services and miscellaneous goods	-12 712	-11 066
Employee Benefits	-17 456	-15 035
Depreciation	-3 064	-2 789
Other operating expenses	-314	-1 044
Operating profit	1 595	2 120
Financial charges	-508	-349
Financial income	15	2
Profit before taxes	1 102	1 773
Taxes	-436	-531
Net profit	666	1 242
Net profit (loss) attributable to the
shareholders of the parent company	668	1 252
third-party interests in the Company	-2	-10
Earnings per share for shareholders
Ordinary and diluted	0,06	0,12

Interim segment split (not audited)

		For the first 6 months closed on 30 June
Geographic - x €1,000	2023	2022
Belgium	12 791	11,228
% total	31,7%	30.5%
The Netherlands	6 068	6,404
% total	15,0%	17.4%
France	21 494	19,126
% total	53,3%	52.0%
Total	40 353	36,758

	For the first 6 months closed on 30 June
Activity - x €1,000	2023	2022
Geotech	21 527	20,863
% total	53,3%	56.8%
Environment	18 826	15,896
% total	46,7%	43.2%
Total	40 353	36,758

Consolidated interim comprehensive income (not audited)

	For the first 6 months closed on 30 June
x 1,000€	2023	2022
Net profit	666	1 242
Other comprehensive income - transferable to the income statement
Movement in fair value of financial assets with fair value adjustments through other comprehensive income	1	-5
Other comprehensive income, after tax	1	-5
Comprehensive result after tax	667	1 237
Comprehensive result attributable to the
shareholders of the parent company	669	1 247
third-party interests in the Company	-2	-10

Consolidated interim balance sheet (not audited)

x 1,000€	30 June 2023	31 December 2022
Non-current assets
Goodwill	985	979
Intangible fixed assets	3 448	2 262
Property, plant and equipment	23 542	23 466
Participations in associated companies	170	−
Deferred tax assets	732	759
Financial assets with fair value adjustments through other comprehensive income	16	25
Other financial assets	596	588
Total non-current assets	29 489	28 079
Current assets
Stock	1 283	1 266
Trade receivables	16 955	14 035
Contract assets	12 547	9 539
Other current assets	1 041	1 095
Cash and cash equivalents	10 799	16 747
Total current assets	42 625	42 682
Total assets	72 114	70 761

	30 June	31 December
x 1,000€	2023	2022
Total equity
Capital	4 857	4 857
Consolidated reserves	15 066	14 315
Other comprehensive income	2 408	2 490
Equity attributable to Group shareholders	22 331	21 662
Third-party interests in the Company	97	98
Total equity	22 428	21 760
Non-current liabilities
Financial liabilities	10 671	11 110
Deferred tax liabilities	1 644	1 353
Provisions	1 163	1 112
Other non-current liabilities	969	914
Total non-current liabilities	14 447	14 489
Current liabilities
Financial liabilities	14 769	16 276
Trade payables	9 371	7 770
Tax liabilities	1 326	1 330
Other current liabilities	9 773	9 136
Total current liabilities	35 239	34 512
Total equity and liabilities	72 114	70 761

Consolidated statement of movement in equity (not audited)

	Attributable to parent company shareholders
x 1,000€	Capital	Consolidated reserves	Other comprehensi ve income	Total	Third-party interests in the Company	Total equity
On 1 January 2022	4 857	12 563	2 196	19 616	880	20 496
Net profit	−	1 252	−	1 252	-10	1 242
Other comprehensive income	−	−	-5	-5	−	-5
Comprehensive Result	−	1 252	-5	1 247	-10	1 237
Acquisition of third-party interest Geosonda	−	-302	−	-302	-258	-560
Put option third-party interest Geosonda	−	-363	−	-363	-515	-878
Transfer depreciation of property, plant and equipment	−	96	-96	−	−	−
On 30 June 2022	4 857	13 246	2 094	20 197	97	20 294
On 1 January 2023	4 857	14 315	2 490	21 662	98	21 760
Net profit	−	668	−	668	-2	666
Other comprehensive income	−	−	1	1	−	1
Comprehensive Result		668	1	669	-2	667
Transfer depreciation of property, plant and equipment	−	82	-82	−	−	-
On 30 June 2023	4 857	15 066	2 408	22 331	97	22 428

Consolidated cash flow table (not audited)

	For the first 6 months closed on 30 June
x 1,000€	2023	2022
Net profit	666	1 242
Non-cash expenses and operational adjustments
Depreciation of property, plant and equipment	2 804	2 579
Amortisation of intangible fixed assets	260	210
Loss (gain) on sale of property, plant and equipment	-62	-33
Fair value adjustments	-68	−
Movement in provisions	-141	435
Movement in customer impairments	101	239
Financial income	-15	-2
Financial charges	507	349
Deferred tax expense (income)	-48	4
Tax cost	484	527
Fair value adjustment of recoverable amount on acquisition	53	-107
Other	-1	−
Working capital adjustments
Decrease (increase) in other financial fixed assets, trade receivables and other
current assets	-4 922	-7 980
Decrease (increase) in stock	112	6
Increase (decrease) in trade and other payables	1 713	2 823
Cash flow from operating activities before interest and taxes	1 443	292
Interest received	14	2
Taxes paid	-663	-378
Net cash flow from operating activities	794	-84

		For the first 6 months closed on 30 June
x 1,000€	2023	2022
Investment activities
Investments in property, plant and equipment	-1 746	-2 212
Investments in intangible fixed assets	-14	−
Sale of property, plant and equipment	55	66
Acquisition of subsidiary company	-1 490	-641
Acquisition of third-party interest	−	-560
Income on financial assets	15	−
Payment deferred compensation	-14	−
Net cash flow (used in) from investing activities	-3 194	-3 347
Financing activities
Repayments received on loans	2 293	1 291
Repayments paid on loans	-4 151	-1 948
Repayments paid on lease debts	-1 225	-1 222
Interest paid	-290	-224
Other financial income (expenses)	-175	-124
Net cash flow from financing activities	-3 548	-2 227
Net increase in cash and cash equivalents	-5 948	-5 658
Cash and cash equivalents at the opening date	16 747	16 172
Cash and cash equivalents at the closing date	10 799	10 514