• Revenue: EUR9.9 billion, up 13.7% with 4.3% organic growth.
• EBITA: EUR712 million, a 22% increase, with a margin of 7.2% (up 50 basis points).
• Free Cash Flow: EUR570 million, with a cash conversion rate of 122%.
• Adjusted Net Income: EUR420 million, up 22%.
• Dividend: EUR1 per share, a 20.5% increase.
• Leverage Ratio: 1.6 times.
• Bolt-on Acquisitions: Eight acquisitions totaling EUR457 million in annual revenue.
• Germany Revenue Growth: 33%, with a 6.3% organic growth.
• EBITA Margin by Segment: Germany at 7.5%, France at 7.1%, North-Western Europe at 6.3%, Central Europe at 5.2%, Global Services Energy at 10.1%.
• Employee Shareholding: 9.6% of shares held by employees.

• Warning! GuruFocus has detected 5 Warning Sign with SPIWF.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• SPIE SA (SPIWF) achieved a record-breaking year in 2024 with revenue growth of nearly 14%, highlighting strong market positioning and successful acquisition strategies.
• EBITA reached a new high of EUR712 million, marking a 22% increase year-on-year, with a notable 50 basis point improvement in margins.
• Free cash flow was exceptional at EUR570 million, supported by a remarkable 122% cash conversion rate.
• The company confirmed its sustainability leadership with 49% of revenue aligned with EU taxonomy, positioning it as a leader within the SBF 120 index.
• SPIE SA (SPIWF) successfully executed eight acquisitions in 2024, contributing EUR457 million in annual revenue, showcasing effective bolt-on M&A strategies.

Negative Points

• Central Europe experienced a slight organic revenue decline due to contract phasing impacts, indicating regional challenges.
• The company's net debt increased by EUR469 million year-over-year, driven by significant M&A activity, which could pose financial risks.
• The organic growth in France was modest at 1.4%, suggesting potential market saturation or competitive pressures.
• The company faces potential impacts from the new corporate tax law in France, which could affect future profitability.
• There are concerns about the sustainability of double-digit margins in the Global Services Energy division, given the normalization of revenue trends after a strong first half.

Q & A Highlights

Q: In Central Europe, there was a catch-up in high voltage activities in Q4. Should we expect this to continue into the current quarter? Also, will the high comparison base in Switzerland affect future growth? A: We anticipate positive growth in Q1 2025 for Eastern Europe, particularly in transmission and distribution activities. The high comparison base in Switzerland is behind us, and we expect more normalized levels moving forward. For Global Services Energy, while there was a strong Q1 last year due to shutdowns, the business remains well-oriented, and we expect a strong year despite quarterly variations.

Q: How will the German government's decision to increase infrastructure spending impact SPIE? Also, can you provide insights into the backlog and supply chain constraints in the TND activity? A: The increased infrastructure spending in Germany is positive for SPIE, supporting future growth. The TND backlog spans several years, and while there are some supply chain constraints, we expect good organic growth, particularly in distribution networks. The overall outlook for 2025 is positive, with expected growth in Germany and other regions.

Q: Can you provide details on the margin expansion in Germany and the impact of recent acquisitions? Also, how is SPIE positioned in the German market overall? A: Margin expansion in Germany was significant, with acquisitions contributing about half of the improvement. Transmission and distribution activities, which have higher margins, are growing faster than average. SPIE's strategy in Germany is to cover the entire economy spectrum, and recent acquisitions have strengthened our position, particularly in industrial services and optic fiber.

Q: How does the current M&A pipeline compare to last year, and are you comfortable with the multiples being paid? A: The M&A pipeline remains robust, similar to last year, with a high level of market fragmentation providing opportunities. We maintain a disciplined approach to valuations, typically paying mid to high single-digit multiples, ensuring value creation. If sellers have unrealistic expectations, we do not pursue those opportunities.

Q: Can you provide an update on the integration of ICG and the steps moving forward? A: ICG's integration involves two parts: mobile telecom and optic fiber. We are coordinating efforts in optic fiber, which aligns with our existing activities in Germany, optimizing workforce allocation. The mobile telecom segment is being integrated as a standalone operation, given its unique market position.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.