Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- SPIE SA (STU:4SP, Financial) reported a strong organic growth of 4.4% over the first nine months of 2024, reflecting the strength of its business and market position.
- The company revised its 2024 EBITA margin guidance upwards to at least 7.1%, indicating a minimum 40 basis points improvement.
- SPIE SA's bolt-on acquisitions contributed significantly to revenue growth, adding 9.4% to total revenue, aligning with its growth strategy.
- The company achieved a record revenue of EUR 7.1 billion for the first nine months of 2024, representing a 13.9% increase.
- SPIE SA's Global Energy Services reported a strong 19.7% organic growth, driven by exceptional shutdown operations and the acquisition of Correll Group.
Negative Points
- Organic growth in Central Europe was weak at minus 1.6% over the nine months, impacted by unfavorable contract phasing and a high comparison base in Switzerland.
- The company experienced a slowdown in fiber activities in France, which continued to impact growth in Q3.
- SPIE SA faced challenges in Poland due to unfavorable phasing effects in transmission line projects, affecting revenue growth.
- There is political uncertainty in France, which has led to some slowdown in decision-making by customers.
- The company noted a deceleration in Q3 compared to Q2, attributed to contract delays and price normalization.
Q & A Highlights
Q: How much of the Q3 deceleration is due to contract delays versus price normalization, and what are the expectations for Q4?
A: Gauthier Louette, CEO, explained that the deceleration was partly due to lower inflation impacts. Some postponed contracts have started, which should improve Q4 results. The trends for electrification and energy savings remain strong, particularly in the Netherlands and Germany.
Q: Can you explain the factors behind the EBITA margin guidance upgrade?
A: Louette stated that the upgrade is due to improved execution quality, strong pricing power, and the accretive effects of recent acquisitions. The company focuses on high selectivity and mission-critical services, which enhance margins.
Q: What caused the phasing effects in Poland, and how does it impact the business?
A: Louette noted that phasing effects in Poland are due to delays in obtaining permits and real estate negotiations, not SPIE's mobilization capabilities. These delays do not significantly impact margins as costs are managed and sometimes compensated by customers.
Q: What is the outlook for the Transmission and Distribution (T&D) activities in Germany?
A: Louette highlighted double-digit growth in T&D in Germany, driven by the need to connect distribution grids to new trunk lines. This growth is expected to continue as the energy transition progresses.
Q: How is the integration of ROBUR and ICG progressing?
A: Louette reported that the integration is on track, with legal structure simplification and alignment of financial KPIs. The focus is on commercial synergies and maintaining safety and financial standards.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
