(News Bulletin 247) – The Luxembourg company specializing in technical services for new technologies recorded a sharp decline in its revenues in the third quarter, penalized by degraded activity in France and a halt in the deployment of fiber in Belgium .

Solutions 30 is in trouble. The specialist in technical services for new technologies revealed a sharp decline in activity in the third quarter, in line with an already deteriorating trend in the second quarter, a period during which it had recorded a 4.5% drop in revenue.

On the Paris Stock Exchange, this poor dynamic in Solutions 30’s activity is fueling sell-offs in the stock. Its stock shows one of the biggest declines on the Parisian market, and lost another 5.4% around 2:20 p.m. after having dropped almost 14% in the morning.

The Benelux stalls

Between July and the end of September, Solutions 30 saw its turnover contract by 10.1% to 225.4 million euros. The group was once again penalized by France, whose activity fell by 16.9% due to the stronger than expected effects of the termination of certain contracts identified as “insufficiently profitable” in the country. Solutions 30 has also terminated contracts in Spain.

The Benelux, the region which brings together Belgium, the Netherlands and Luxembourg, which had for a time driven the growth of Solutions 30, also weighs. Activity in this key geographical area for the group fell by 8.3% in the third quarter to 82.1 million euros.

Solutions 30 was penalized by “temporarily reduced fiber activity in Belgium”, due to ongoing negotiations between Belgian telecommunications service providers aimed at rationalizing the deployment of fiber nationally. Solutions 30 explains that these negotiations lead to delays in activity, which should be amplified in the fourth quarter by the merger between two clients of the group, namely Proximus and Fiberklaar.

“The decline in France is greater than our estimates and uncertainties persist in Belgium,” notes TP ICAP Midcap, which also cites Germany as a “point of satisfaction” for the publication. The activity of Solutions 30 in the country jumped by 33.2% over one year, thanks to an “exceptional” activity dynamic in the telecoms sector with a continued rise in the strength of the activities of optical fiber. In Poland, the group’s growth is also solid at 24.2%, for turnover reaching 14.5 million euros in the third quarter.

“By activity, we note the progression of the Energy segment (+28%) which now reaches 14% of the group’s turnover”, also notes TP ICAP Midcap.

Perspectives renewed

In terms of prospects, Solutions 30 is renewing its objectives which were lowered last July. The group still expects a decrease in its turnover compared to the 1.06 billion euros generated in 2023.

TP ICAP Midcap, for its part, is adjusting its turnover forecast downwards (from -2% to -4%) “in line with the (turnover, Editor’s note) achieved in France”.

Solutions30 is also maintaining its course towards profitability. The company is targeting an improvement in its adjusted operating margin resulting in an increase in value-adjusted gross operating income (Ebitda).

“The level of adjusted Ebitda should increase in rate and value (77 million euros estimated or 7.6% of turnover compared to 7.1% in 2023)”, estimates the research office, which however, again, lowered its forecasts.

The company is taking advantage of this point of activity to renew its objectives for 2026 communicated during its investor day organized at the end of September. On this horizon, the group is targeting, among other things, an adjusted Ebitda margin above 10% in Benelux, France and Germany, its three major areas of operation. Solutions 30 also expects its turnover in Germany to triple to reach 150 million to 200 million euros.

“The price remains penalized by the disappointment in 2024 growth announced last July,” recalls TP ICAP Midcap. Since this summer disappointment, the Solutions 30 stock has lost more than 30%, bringing its decline to 57% over the whole of 2024.

“The improvement is not yet completely real but the upside (upside potential) is attractive” judges the research office, which renews its buying opinion on the file, but adjusts slightly downwards its target price at 2.5 euros, compared to 2.6 euros previously.