ABO-Group Environment NV

Earnings Release • Sep 30, 2016

ABO-Group - Half Year Results 2016

Ghent, 30 September 2016 - 5.00 p.m. - Press Release / Regulated information

ABO-Group Environment, a cluster of integrated engineering and testing companies operating in the areas of soil, environment, geotechnics, energy and waste, announces today the 2016 consolidated financial half-year results.

Highlights of the first half of 2016

• Double-digit growth of revenue and EBITDA
• Increased operational profitability, despite the decline in the international division
• Solid balance sheet and financial position

Forecast 2016

• Takeover of Geomet successfully completed
• Strong order book
• Continuation of growth and investment plan

	H1 2015 In € 000	H1 2016 In € 000	Change In € 000	Change In %	Per share In €
Revenue	15,457	17,119	1,662	+10.8
Total operating income	15,938	17,408	1,470	+9.2
EBITDA	949	1,101	152	+16.0	0.10
Amortisation/depreciation	789	891	102	+12.9
Operating profit	160	210	50	+31.3	0.02
Financial result	0	-76	-76
Profit before tax	160	134	-26	-16.3
Net profit	52	6	-46	-88.5
Net profit (group share)	32	114	82	+256.3	0.01

Highlights of the first half of 2016

Double-digit growth of revenue and EBITDA

France

After continuous growth in recent years, the first six months of 2016 were a transition period. The finalisation of a large geotechnical project was replaced by smaller contracts, however the division was confronted with a minor time lag. The environmental division performed exceptionally well, driven, amongst other, by a change in the legislative framework.

Belgium

Belgium reported an organic growth of 5%, mainly by expanding the range of products. ABO is strongly committed to diversification, such as archaeology and BREEAM. In addition to the main activity of environmental remediation, increasingly more consulting and engineering services are being provided according to a one-stop-shop principle. With the 'ABO Environment' concept, ABO is aiming at customers who need a total package of soil, permits, asbestos surveys, probing, sustainability, BREEAM, archaeology, water studies, etc. Therefore, more services were provided within the existing customer base, which ensured considerable growth.

The Netherlands

ABO-Group achieved more than 20% organic growth in the Netherlands. Especially the geotechnical division forged ahead. The consolidation of the environmental testing activities (Sialtech) explains the further growth during this period.

Total revenue	15,457	17,119	1,662	10.8
The Netherlands	578	2,160	1,582	273.7
Belgium	6,584	6,918	334	5.1
France	8,295	8,041	-254	-3.1
	H1 2015 In € 000	H1 2016 In € 000	Change In € 000	Change In %

Total group revenues improved by 10.8%.

Increased operational profitability, despite the decline in the international division

The revenue growth resulted in a considerable growth in operating profit before amortisation/ depreciation (EBITDA), by 16% from € 949k to € 1,101k (€ 0.10 per share). The operating profit increased from € 160k to € 210k, in spite of considerably higher depreciation (+13%, from € 789k to € 891k). In addition, the group is still confronted with the negative effects of the loss of export subsidies for its international activities. In the meantime, a number of interesting new projects have been awarded (e.g. Bangladesh, where a solid waste management project is further executed and an additional waste to energy project (biogas generator) has been acquired, and Vietnam and the Maldive Islands), although their positive effect is still not clearly noticeable in the first six months.

The net profit (group share) rose from € 32k to € 114k.

Solid balance sheet and financial position

The total equity of the group amounts to € 11.1 million, whereas the total balance sheet amounts to € 32.4 million. The financial liabilities were further reduced over the first six months. The net debt declined from € 4.2 m at the end of 2015 to € 3.9 m mid-2016. The group is ready to further develop the growth path.

Forecast 2016

Takeover of Geomet successfully completed

On the 16th of June 2016, ABO-Group announced the takeover of Geomet, a company which is active in the Dutch market with both geotechnical consultancy and testing activities. Geomet achieved consolidated revenue in 2015 of € 2.6 million and an operating cash flow of € 380k. The takeover was successfully completed in the beginning of July. Geomet will be consolidated in the second half of the year, which will lead to considerable growth in revenue and result.

Strong order book

The order book is well-filled in each of the markets. This strengthens the outlook for the second half of the year, based on the qualitative execution. The group was again able to win a very large longterm geotechnical contract in France, which will have a positive effect on the prospects for the coming months and years. In the meantime, the Dutch geotechnical market continues to grow strongly. The addition of Geomet to the group portfolio will ensure additional synergy and economies of scale with existing activities.

Continuation of growth and investment plan

ABO-Group continues to grow and is focusing on the organic expansion of the product offering, its machinery and will tap into new growth markets (Central and South-East Asia, Africa and Eastern Europe). In addition, the group's market share will be reinforced via acquisitions in our home countries Belgium, the Netherlands and France.

Geotechnics has in the meantime expanded to become the group's largest division in terms of revenue. The group is continuing its investment programme in machinery. In Belgium, during the fourth quarter, we are expecting the delivery of a new probing truck, equipped with the most modern technology.

The group is looking at further streamlining its legal structure.

Impact of Vlarel

According to Article 53 of VLAREL, the Flemish regulation concerning recognition in the field of the environment, soil experts must be independent of their clients. There is a presumption that ABO is not independent of the Flemish Government, based on the limited shareholding of a former Thenergo shareholder which is linked to the Flemish Government. The Council of State has stated that it is possible to request an exemption in this regard from the minister, who will then determine that ABO does in fact carry out their assignments independently. ABO is following this procedure closely and has obtained the ministerial exemption in virtually all cases.

Financial calendar

31/03/2017: 2016 annual figures 31/05/2017: General Meeting

Statement regarding the fair presentation of the interim condensed consolidated financial information and the fair overview of the interim report

Frank De Palmenaer, CEO, and Johan Reybroeck, CFO, declare that, to their knowledge, the interim condensed consolidated financial information for the six months period ending 30 June 2016, which was prepared in accordance with IAS 34 "Interim Financial Reporting" as applied by the European Union, gives a true and fair view of the assets, the financial position and the results of the company and the companies included in the consolidation. The interim report gives a fair overview of the most significant events and key transactions with related parties that have taken place during the first six months of the financial year and their effect on the interim condensed financial information, as well as a description of the most significant risks and uncertainties for the remaining months of the financial year.

About ABO-Group

ABO-Group is a cluster of integrated engineering and testing companies, operating in the areas of soil, environment, geotechnics, energy and waste. ABO-Group aims to increase its revenue by achieving internal growth and acquisitions, and to expand its range of operations within and outside Europe. For a more detailed description of the risks and the activities of the group, reference is made to the listing document of ABO-Group, available on the website in the "Investors" section (www.abogroup.eu).

For more information, please contact:

Frank De Palmenaer Johan Reybroeck CEO ABO-Group Environment NV CFO ABO-Group Environment NV frank.depalmenaer@abo-group.eu johan.reybroeck@abo-group.eu

T +32 (0)496 59 88 99

Derbystraat 255, Maaltecenter Blok G, B-9051 Gent (SDW), Belgium

This press release is available on our website www.abo-group.eu, as well as the full version of the non-audited interim consolidated financial statements for the period of six months ending 30 June 2016.

Consolidated interim profit and loss account (non-audited)

	For the six months ending on 30 June 2016
	2016	2015
	In € 000
Revenue	17,119	15,457
Other operating income	289	481
Total operating income	17,408	15,938
Purchases	-2,022	-1,911
Services and other goods	-5,378	-5,045
Employee benefit obligations	-8,568	-7,701
Depreciation	-891	-789
Other operating expenses	-339	-332
Operating profit	210	160
Financial charges	-155	-125
Financial proceeds	33	34
Share in the net profits of associates	46	91
Profit before taxes from continued operations	134	160
Taxes	-124	-101
Net profit from continued operations	10	59
Loss from discontinued operations, after tax	-4	-7
Net profit	6	52
Net profit (loss) attributable to the
parent company's shareholders	114	32
minority interests	-108	20
Earnings per share for the shareholders
Basic and diluted	€ 0.011	€ 0.003
Earnings per share (continued operations)
Basic and diluted	€ 0.001	€ 0.006
Earnings (loss) per share (discontinued operations)
Basic and diluted	€ -0.000	€ -0.001
Weighted number of shares (basic earnings per share)	10,569	10,569
Weighted number of shares with impact of dilution	10,569	10,569

Consolidated interim total result (non-audited)

	For the six months ending on 30 June 2016
	2016	2015
	In € 000
Net profit	6	52
Unrealised profit
Transferable to the income statement
Change in fair value of financial assets held for sale	61	0
Impact of taxes	0	0
Non-transferable to the income statement
Revaluation of net pension commitments	-133	0
Impact of taxes	45	0
Unrealised earnings, after tax	-27	0
Total result, after tax	-21	52
Total result attributable to the
parent company's shareholders	87	32
minority interests	-108	20

Consolidated interim balance sheet (non-audited)

	30 June	31 December
	2016	2015
	In € 000
Assets
Fixed assets
Goodwill	154	154
Intangible fixed assets	325	322
Tangible fixed assets	10,504	10,759
Investments in associated companies	130	84
Deferred tax assets	2,033	2,000
Financial assets held for sale	236	175
Other financial assets	352	336
	13,734	13,830
Short-term assets
Stocks	426	418
Trade receivables	12,787	12,053
Other current assets	1,776	2,571
Cash and cash equivalents	2,479	2,405
	17,468	17,447
Assets held for sale	1,229	1,259
Total assets	32,431	32,536

	30 June	31 December, 2015
	2016
	In € 000
Equity and liabilities
Net equity
Capital	4,857	4,857
Consolidated reserves	4,193	4,032
Unrealised profit	1,602	1,676
Equity attributable to the shareholders of the parent company	10,652	10,565
Minority interests	443	551
Total equity	11,095	11,116
Long-term liabilities
Financial debts	1,540	1,675
Deferred tax liabilities	1,237	1,262
Provisions	755	1,108
	3,532	4,045
Current liabilities
Financial debts	4,904	4,956
Trade debts	4,743	4,412
Tax liabilities	112	143
Other current liabilities	6,746	6,568
	16,505	16,079
Debts related to assets held for sale	1,299	1,296
Total equity and liabilities	32,431	32,536

Consolidated interim overview of changes in equity

	Capital	Consolidated reserves	Unrealised profit	Total	Minority interests	Total equity
	In € 000
On 1 January 2015	4,857	3,773	1,694	10,324	107	10,431
Net profit		32		32	20	52
Unrealised profit			0	0		0
Total result	0	32	0	32	20	52
Transfer depreciation of tangible fixed assets	0	42	-42	0	0	0
On 30 June 2015	4,857	3,847	1,652	10,356	127	10,483
On 1 January 2016	4,857	4,032	1,676	10,565	551	11,116
Net profit		114		114	-108	6
Unrealised profit			-27	-27		-27
Total result	0	114	-27	87	-108	-21
						0
Transfer depreciation of tangible fixed assets	0	47	-47	0	0	0
On 30 June 2016	4,857	4,193	1,602	10,652	443	11,095

Consolidated interim overview of cash flows

	For the six months ending on 30 June 2016
	2016	2015
	In € 000
Operating activities
Net profit	6	52
Non-cash costs and operational adjustments
Depreciation of tangible fixed assets	863	757
Depreciation of intangible fixed assets	28	32
Loss (profit) on sale of tangible fixed assets	-8	-15
Changes in provisions	-487	21
Changes in impairment losses on clients	21	0
Financial proceeds	-33	-34
Financial charges	155	125
Share in the profits of associates	-46	-91
Deferred taxation	-12	-56
Tax charges	136	157
Adjustments to working capital
Increase in other financial assets, trade receivables and other current assets	24	-298
Decrease in stocks	-8	11
Increase in trade debts and other debts	512	571
	1,151	1,232
Interest received	32	24
Tax paid	-167	0
Net cash flow from operating activities	1,016	1,256

	For the six months ending on 30 June 2016
	2016	2015
	In € 000
Investment activities
Investments in tangible fixed assets	-559	-667
Investments in intangible fixed assets	-31	-10
Sales of tangible fixed assets	28	15
Loan provided to associated enterprise	0	-70
Net cash flow from (used in) investment activities	-562	-732
Financing activities
Receipts from loans	1,539	733
Repayments of loans and leasing debts	-1,795	-1,287
Interest paid	-84	-123
Other financial income (charges)	-71	8
Net cash flow from financing activities	-411	-669
Net increase in cash and cash equivalents	43	-145
Cash and cash equivalents at the start of the year	2,499	3,433
Cash and cash equivalents at the end of the period	2,542	3,288
Other non-cash transactions
Finance leases	-69	-21