(BFM Bourse) – The accounts of the Luxembourg company specializing in technical services for new technologies fell into the red in 2022. The deterioration of the French market is mainly at the origin of this slippage in the accounts.
The weekend is complicated for Solutions 30. The title of the specialist in the installation of fiber optics and electricity meters Linky still dropped 6.8% on Friday afternoon after announcing annual results that were worse than expected by the market.
The news of the day interrupts the beautiful momentum initiated by the action since the beginning of the year. After losing more than 75% of its value in 2022, Solutions 30 was in full seduction and had begun to convince investors of its recovery. Last January, the company reported a more dynamic end to the year 2022 than expected.
However, the operators had not yet taken note of the rest of the income statement for this financial year even if Solutions 30 had nevertheless warned that the year 2022 was going to be a transition year and that the accounts associated with this year were going to highlight an Ebitda margin still temporarily under pressure.
A deterioration of market conditions in France
But market conditions have deteriorated more than anticipated by the company. And the results too. Still a beneficiary of 21.5 million euros in 2021, Solutions 30 has therefore seen its accounts turn red to the tune of 50 million euros. The net loss group share posted by the company is higher than the estimate of TP ICAP Midcap which anticipated a negative net result of 14.5 million euros.
Several factors explain this shift in accounts into negative territory. Adjusted gross operating surplus (Ebitda) fell by 43.3% to 46.7 million euros in 2022. Solutions 30 explains this deterioration in this indicator by a 16% drop in France’s contribution. The operating margin in France fell to 4.9% in 2022, compared to 13.1% in 2021.
The company had to deal with the coming of age of the FTTH network deployment and construction markets, and above all the return to normal of the subscriber connection market after the exceptionally high peak in activity that occurred during the health crisis. Also, the scheduled end of smart meter deployments could not be offset by the ramp-up of activities related to the energy transition given the shortages of components.
“The operational transition that was expected in France took place in a very disturbed environment and was more brutal than expected”, explains Solutions 30 in its press release. TP ICAP Midcap notes in parallel the good progress of Benelux (+38% despite a margin rate down to 12.8% against 14.3% in 2021) and other countries (+24%) whose cumulative contributions now exceed that of France.
Exceptional items also weigh on Solutions 30’s accounts. million euros of non-recurring items.
2023 forecasts renewed
“The outlook is reassuring, the start of the year seems favorable”, adds Christel Cleme in charge of the coverage of the title. For 2023, Solutions 30 indeed reiterates its forecasts “of double-digit growth to cross the bar of one billion euros in turnover”. This level of growth would show growth of more than 10% “with an EBITDA margin in recovery – anticipated at 8.5% – driven by the dynamism of Benelux, the ongoing relay from other countries (notably Germany) and the normalization in France”, recalls TP ICAP Midcap.
Within 5 years, the company also confirms its objective of a turnover of around 2.5 billion euros, with an EBITDA rate of 15%, “in accordance with the potential of the Solutions 30 markets. in Europe”, continues TP ICAP Midcap.
“After a very disappointing 2022 financial year, the scenario of a gradual return to normal in the group’s performance should materialize in 2023 and allow a lasting rebound in the title” indicates Christel Cleme. The analyst adjusted his sights on Solutions 30 to 4.4 euros (compared to 4.8 previously) a target price which nevertheless shows a potential upside of more than 125% at current prices.
Sabrina Sadgui – ©2023 BFM Bourse
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