2024 First Half Results
- MODERATE ORGANIC GROWTH: + 0.9%
- OPERATING MARGIN ON ACTIVITY: 8.4% OF REVENUE
ACTIVITY AT THE END OF JUNE : + 2.9%
Activity growth stands at 2.9% : 5.7% in France, 1.6% outside France. On a like-for-like basis and at constant exchange rates, growth is 0.9% (5.7% in France and -1.4% outside France). The Defense & Security, Civil Aeronautics, Automotive, and Railway sectors continued to grow.
France and Southern Europe achieved satisfactory organic growth. Asia and North America remained stable. Germany, Northern and Eastern Europe, as well as the United Kingdom, are in decline, negatively impacting the Group’s activity.
OPERATING MARGIN ON ACTIVITY: 8.4% OF REVENUE
Operating Profit on Activity totalled €177.2 M (8.4% of revenue compared to 9.2% in June 2023).
The operating margin was adversely affected by a lower number of working days and a lower activity rate compared to last year. The operating margin is nevertheless improving in France (5.7% in 2024 versus 5.6% in 2023). It is decreasing internationally (9.7% in 2024 versus 10.9% in 2023) due to the integration of less profitable companies and significant economic difficulties in Germany and the UK.
OPERATING PROFIT: 7.6% OF REVENUE
Operating Profit totalled €159.8 M. It includes €9.8 M in share-based payments and €7.6 M in non-recurring costs (primarily costs related to acquisitions and restructurings).
NET PROFIT, GROUP SHARE: 5.6% OF REVENUE
Financial income totalled €2.0 M. After taking into account tax expenses of €43.7 M, net profit, Group share came out to €118.2 M, an increase of 6.4% compared to June 2023.
NET CASH POSITION: €267.2 M / GEARING: – 12.6%
Cash flow (excluding the impact of IFRS 16) totalled €177.9 M, i.e., 8.4% of revenue, in line with OPA. Working Capital Requirement increased by €24.3 M, primarily due to seasonal increase in Days Sales Outstanding (DSO) by 1 day. Capex remained low (€9.3 M, i.e 0.4% of revenue) and the tax paid amounts to €46.4 M. Consequently, the free cash flow stands at €98.0 M, showing a significant increase compared to June 2023. After taking into account net cash flows from investing activities (-€78.8 M), dividends paid (-€52.1 M) and other financial investments (€3.1 M), ALTEN’s net cash position stood at €267.2 M at the end of June 2024.
ALTEN has sef-financed its growth, particularly external growth, and has significant investment capacity.
EXTERNAL GROWTH:
2 acquisitions overseas
- In Asia (Vietnam/Japan): a company specialising in software development (€20m revenue, 950 consultants)
- In Poland: a company specialising in IT services (€18m revenue, 250 consultants)
Exclusive negotiations to acquire Worldgrid
ALTEN has entered into exclusive negotiations with Atos for the acquisition of Worldgrid, a European leader specialising in Energy and Utilities solutions in France, Germany and Spain, particularly in the Nuclear sector. The transaction, which is subject to the usual regulatory approvals, is expected to be completed by the end of 2024 (2023 revenue: €170m; 1,100 employees).
OUTLOOK FOR 2024
As anticipated, the first half of 2024 continued in the same vein as the first quarter. Except for the USA, where some positive signals are emerging, project delays and postponements are increasing in Europe. Consequently, activity will continue to slow down in the second half. ALTEN now expects to achieve an organic growth rate between 0.5% and 1% in 2024.
The operating margin will therefore be impacted by the macroeconomic context. Due to seasonality, it will exceed 9% in the second half. It is expected to be between 8.7% and 8.9% for the entire year.
Next publication: October 24th after market close: Q3 2024 Results