Good evening to all of you, and thank you for joining Solutions 30 Q2 2024 Revenue Conference call. We will hold this conference in English, as usual. A transcript will be available on our website. Amaury, our Group General Secretary, and Jonathan, our CFO, are by my side to comment on the Q2 2024 revenue. And as usual, we will answer your questions from the chat at the end of this presentation. Starting with the key points of this Q2 , our revenue in Q2 was EUR 252 million, which represents a minus 4.5% decrease compared to Q2 last year. Over the entire first semester, our revenue remained broadly flat at EUR 517 million. In Q2, we reduced our exposure to some telecom contracts in France and Spain and prioritized margins over revenue, in line with the strategy we previously outlined.
We therefore reduced volumes of interventions on certain contracts where margins were lagging behind group standards and chose not to seek renewal of some of them at all costs. Market conditions had pushed us to be much more proactive than anticipated, but discipline should prevail. In Benelux, we experienced delays in the ramp-up of certain fiber activities because Belgian operators are holding some deployments while negotiating a possible mutualization of their investments with the Belgian regulator. These are just delays, and the outlook for the Belgian fiber market remains excellent, as evidenced by our strong commercial pipeline, which is currently above EUR 300 million. On the other hand, our drivers of profitable growth are robust. In particular, our successful diversification into energy activities continued, with a 29.5% increase in Q2 at group level and a +56% in France.
Also, the ramp-up of fiber activities in Germany has started more gradually than in Benelux last year, and our growth in this country accelerated to 36% in Q2. Over the medium and long term, there is absolutely no doubt that our markets are attractive and that we can deliver profitable growth consistently. In the very short term, however, given the contrasted backdrop and our priority on improving margins, we are providing a more cautious revenue outlook for the full year while confirming the improvement of group margins. I will elaborate on that at the end of the presentation. Let's now break down the evolution of our revenues in Q2. Group revenue decreased organically by 4.7%.
Benelux was slightly down by 1.1% against a very high comparison basis, as we grew 88% in Benelux in Q2 last year, which means that activity remains at a high level despite the delays I just mentioned. France was down organically by 7.8%, and other countries decreased by 5.4%, as strong growth in Germany and Poland was offset by declines in Spain, Italy, and the UK. In addition, we had a EUR 0.6 million positive contribution from the consolidation of ELEC ENR, a French company that we bought to enrich our offering in photovoltaic installation. On this slide, you see another breakdown of Q2 revenue evolution, highlighting the main building blocks. The connectivity business in France was down by EUR 9.5 million, and this is due to the deliberate reduction of our exposure to telecom contracts where profitability conditions were lagging behind group standards. Maintenance activities did grow, but not enough to offset.
Same occurred in Spain, where the telecom market is also mature. Revenue in Spain decreased by EUR 3.9 million, as we let go some business where profitability conditions had also worsened. In these two mature markets, selectivity is key, and we will continue to prioritize margins over revenue. The connectivity business in Benelux was down EUR 2.8 million due to the delays in the Belgian fiber deployments, as I just mentioned. Initially, telecom operators planned to build their own fiber network, but they are now negotiating with the regulator for possible mutualization of investment and infrastructure sharing, similar to the French model. For us, it does not change the outlook, which remains excellent, but it is causing delays in the ramp-up of deployment work. Also, the comparison basis was particularly demanding, as our connectivity revenue in Benelux doubled in Q2 last year. Therefore, this activity continues to deliver at a fast pace.
Italy remained a drag, similar to Q1. This was anticipated, and we have good news here. Our negotiation with our main client found a positive outcome, and we now expect to resume normal activity during Q3 at better economic conditions. On the one hand, we are increasing selectivity on mature markets. On the other hand, we are prioritizing our development and focusing our M&A investments on activities that growth and margins prospects are attractive. This is the case of Germany, where, as I said, the ramp-up of fiber activity started in Q2, resulting in a revenue increase of EUR 5.3 million, or 36%. This is also the case with energy activities, which I will now comment a little bit more. Our diversification in energy activities is continuing full steam. Growth remained very strong in Q2, with a 29.5% increase at group level and a remarkable 56% increase in France.
In just a few years, we have built solid positions in energy-related services across Europe, and our business model is proving highly effective in this sector. We are increasingly recognized as a key partner by our clients. We have entered a new market segment in Belgium, where we were awarded a contract by Fluvius. We modernized over 1,000 kilometers of low-voltage power network. This upgrade is notably aimed at adapting the infrastructure to new usage requirements driven by the energy transition. In France, our client CEPAL renewed this confidence by awarding to us the second phase of a program to install photovoltaic power units on agricultural and industrial premises. And lastly, in Germany, we received an award at the Zolar Partner Forum for achieving the lowest error rate per photovoltaic installation in the country.
This highlights the quality of our services and the value we provide to our customers in the solar sector. Revenue in Q2 reached EUR 36 million. While this remains a relatively modest contribution to our total revenues, it is growing rapidly and is set to become a significant part of our activity mix in the medium term. In total, for the first six months of the year, group revenue was broadly stable at EUR 517 million. Benelux achieved revenue of EUR 196.8 million in H1, up 9.4%. France's revenue was EUR 188.6 million, down 5.4%, and other countries posted revenues of EUR 131.6 million, down 5.8%. I will now hand over to Jonathan and Amaury for further details by geography.
Jonathan?
I'm sorry. Yeah. Thank you, Gianbeppi, and good evening to all of you. I will start with Benelux, the largest contributor with 38% of group revenue in Q2. Revenue was EUR 96 million in Q2, a slight year-on-year decrease of 1.1%. This was driven by connectivity, where revenue decreased by 3.7% against a very high comparison basis, as we had a record growth of 108% in connectivity in Q2 last year. As Gianbeppi explained, we were impacted by delays in fiber deployment ramp-up. This does not change our outlook in this region, as we are much more focused on the Home Connect business, where the work plan would remain broadly the same, whatever the outcome. This is only causing delays that impacted our revenue by a few million EUR in Q2 because some customers are slowing down on deployment operations while they negotiate.
Despite this, the business remains on a solid footing, with a strong commercial pipeline representing a total value of around EUR 330 million. As anticipated in our previous communication, the impact of federal elections held in June was minimal thanks to efficient planning, and we should be able to achieve similar results with the municipal elections coming up in October, as these ones have, in theory, a greater impact. In energy activities, revenue grew 9.2% to EUR 15.9 million, driven by the continued rollout of digital meters in Flanders. We are also successfully diversifying in power grid services with the Fluvius contract already mentioned. This growth highlights our expertise in the energy sector and our ability to deliver solutions that meet the evolving needs of our clients. I will now pass it on to Amaury for a comment on France.
Thank you, Jonathan, and good evening, everyone. Revenue in France was EUR 90.7 million in Q2, down 7.2% year-on-year. Connectivity revenue was EUR 60.2 million, down 13.6%. The decrease in this segment was actually stronger than expected as we applied a stricter selectivity in a mature fiber market where demand for home connect interventions recently slowed down. Our approach in such market dynamics is to strictly prioritize margins over volumes. This led us to reduce our exposure to some telecom contracts where margins were lagging behind group standards, resulting in lower revenue in Q2 and going forward, but benefiting to profitability. This is totally in line with our value creation strategy and allocation of cash and will not generate meaningful restructuring costs. On a full-year basis, so for 2025, we estimate the revenue impact around EUR 30 million.
Maintenance activities continued their progress in Q2, but not enough to offset the overall decrease. Our relationships with the main telecom operators are still very strong, and we remain among their preferred partners. Actually, we are now working with all four of them, which was not the case before, but we want our services to yield the right levels of margins. Regarding our energy activities, this segment continued to grow very fast in Q2 at +56%, with strong momentum in photovoltaic. We are quickly becoming a key player for many clients in this field as we have built strong capabilities and quality of service. We are, for example, a reference to build floating solar farms. We are complementing such capabilities with acquisitions.
And like ENR, for example, a specialist in photovoltaic installation based in the north of France, is being successfully integrated to the group, and commercial synergies with Sotec, in which we acquired a minority stake in May, are already emerging. The plan is to gradually increase our stake in Sotec and therefore consolidate approximately EUR 20 million of revenue from this company in 2025. The fragmentation of the market offers real opportunities here, and we want to stay in a position to save them. Lastly, technology revenue was EUR 15.3 million, down 16.6% due to continued low volumes in IT support services. The Paris Olympics should support growth in Q3 as we are involved in technical support for IT and payment systems at several Olympic sites. Back to you, Jonathan.
Thank you, Amaury. A quick focus on Germany now, where the fiber market started to deliver on its promises. Our revenue growth accelerated in Q2 to 36.4% compared to 12% in Q1. The ramp-up of fiber activities has begun. For example, we started deploying in the city of Iserlohn, near Dortmund, in Q2, as well as in some nearby villages, and we are starting in two more cities this quarter. Although there have been minor delays there too, growth is set to continue at a high pace throughout the year. We invested in our capabilities in Germany in Q2 with the acquisition of the operations and assets of Gaertner, a small company specialized in Home Connect and maintenance. This acquisition will enable us to manage Turnkey Fiber Deployment Projects and to increase our presence with Deutsche Telekom.
Germany is clearly a strong growth driver for the group and is expected to become, in the medium term, our third pillar in Europe in terms of contribution to the PNL. In total, including Germany, other countries turned in revenue of EUR 65.1 million in Q2, down 5.4%. As already mentioned, we voluntarily reduced our fiber activity in Italy in Q3 last year due to poor organization and planning from our main clients. On this, we have some good news. The negotiations have found a positive outcome, and therefore we expect to resume normal operations at better economic conditions during Q3. In Poland, we continue to roll out our business successfully, and revenue in the country was up 15% in Q2 at EUR 13.9 million. In Spain, revenue decreased 27% to EUR 10.4 million. In the mature Spanish fiber market, we applied strict selectivity measures just like in France.
Priority given to profitability led us to sharply reduce our exposure to some contracts where margins were insufficient. On a full-year basis, so for 2025, the revenue shortfall is estimated around EUR 20 million. Lastly, in the U.K., revenue was down 30.7%, also reflecting increased selectivity and focus on margins improvement. With that, I will hand over to Gianbeppi for the outlook.
Thank you, Jonathan and Amaury. Here is what we expect for the rest of the year. In Benelux, the ramp-up of fiber deployment should remain slow as long as the discussions between operators continue. Regarding the local elections coming up in October, we expect to keep their impact limited thanks to efficient planning with municipalities and customers, as previously indicated. In France, the selectivity measures taken in Q2 should result in further revenue decrease in connectivity. As mentioned by Amaury, the total full-year revenue we exited is around EUR 30 million. So obviously, the impact in 2024 will be lower, and the remaining will impact 2025. On the other hand, we expect the strong momentum in our energy activities to continue. In other countries, Germany is expected to grow significantly as the ramp-up of fiber activities continues. In Italy, normal activity should resume during Q3.
In Spain, revenue should continue to decline due to the selectivity measures taken in Q2, and on a full-year basis, the revenue impact would be around EUR 20 million. Here again, the impact in 2024 will be lower. So altogether, for the full year, this will result in a slight decrease in revenue compared to last year. Group EBITDA margin is expected to improve compared to 2023, as previously indicated, translating into an increase of our Adjusted EBITDA in value, thus demonstrating the benefit of such selectivity strategy in terms of value creation. This year again, we are navigating a somewhat mixed environment in which we are committed to strict discipline, meaning that without compromising with our strategy, we will manage our activities like a portfolio and will be ready to reduce activities that are not profitable enough in a very disciplined way.
But as I said in the introduction, there is absolutely no doubt that our markets are attractive and that we can keep delivering profitable growth in a sustainable way in the medium and long term. Lastly, before turning to your questions, we would like to remind you that we will hold a Capital Markets Day on September 26 in Paris. And just before, on September 18, we will publish our full financials for the first half of 2024. In light of this year's development, the Capital Markets Day will provide an excellent opportunity to discuss in detail the outlook for our markets, our business model, our strategy, and all the components that will shape the future of our group. Thank you very much for your attention, and we are now ready to take your questions from the chat. Okay, first question.
Is there a change in your strategy where you won't see growth as much as in the past but prioritize margins? I wouldn't say that we change our strategy. We believe that it's important to have a certain size in the geography, so that remains unchanged. But on the other hand, with an activity that is now worth EUR 1 billion and being present in 10 different countries on three different types of activities, it's normal that we consider the whole group as a portfolio of activities, and therefore we just apply common sense, and we do not stay exposed to activities that have low margins. So basically, we are just applying common sense while keeping our strategy intact. But indeed, for the near future, our focus will be on margins and cash. Other questions? What is the expected profit for 2024? We are seven months down the year.
Well, we do not give a guidance now on short term, so I'm sorry, but we will publish the first half profit on the 18th of September. When did you plan to reach a positive net result to create value for shareholders? Can you pay for the acquisition of companies and shares instead of cash? So as we said, we are committed to improve our margins, and you will see that it's going to be the case when we will publish our results on the 18th of September. And then to the second question, paying in shares instead of cash.
Well, yes, of course we can, but paying in shares implies a dilution for the shareholders, so we are not sure that this will be in the best interest of our shareholders, and we prefer to use cash when we have cash, and we have the possibility to finance it through bank debt, so it's a much cheaper way to finance external growth. Other question. What could be the consequences of a material increase in French minimum wage, for example, +10% for your top-line margins, and how are you capable to absorb such inflation? Amaury, you want to take this one?
Yes. Well, first of all, we consider that this is very unlikely to occur or to be a significant increase in the minimum wage, but keep in mind that we have in all our wages a variable part. So we could have some room there if the fixed minimum wage was to increase. We could use this variable part to absorb a part of this increase. And obviously, if this scenario materialized, we would go and talk with our customers since it would be something to take into consideration for everyone on the market.
Another question is, has your relationship with French telecom operators changed? No, not really. Not really. The relationship is the same, but now we are just more selective, so we do not seek renewal of contracts at all costs. If prices are not good enough or if operational processes are not good enough, we just say thanks, but no thanks. And of course, we stay polite, and I think the clients in the end respect that even more when they see that we are not ready to accept whatever conditions. Other question. Do you still expect good growth in the Belgian market? Yes. The answer is yes. What Belgium is doing now is what France did back in 2017, 2018. In France, the country was divided in three zones: high density, mid density, and low density. In high density, all operators could build their own infrastructure.
In medium density zones, they had to share. In low density zones, there was some contribution from local authorities to deploy the network. In Belgium, it's going to be the same. They are talking about zone A, B, C, and it will take a little bit to define the rules, but at the end of the day, the fiber plan of the country is still there, and we are expecting still strong growth for the years to come once these negotiations have finished. Other question. Do you think that your 2024 revenues will stay above EUR 1 billion? Well, as we said, we expect a stable/little decline, so indeed, we are not seeing revenues go below EUR 1 billion in 2024. Is there a grouping of the shares of the table for this year?
As you have seen, we did not have the quorum to pass this resolution, and in retrospective, I think it was a good thing because, as you have seen, given the current environment in France, volumes in the French stock exchange have dropped, and we therefore fear that an increase of price, yes, would decrease volatility, but would decrease also volumes, and as an outcome, then would have a negative impact on the price of our shares. So at the moment, we say, wait and see. Let's see how the macroeconomic situation in France evolves, and then when it will be stable, we will put again the project on the table. So not at the moment. What happened to the French contracts for you to decide to exit? Lack of price negotiation. Amaury, you want to?
Yeah. Well, currently, telecom operators are trying to limit the increase of their selling price, and so they put pressure on costs and therefore to their suppliers. So in some situations, we have positive discussions, and we can adjust pricing. In other situations, we are not just accepting further decreases in our prices, but keep in mind that we have multiple contracts for a given client, so with different levels of margins, and we operate in different regions. So when we apply this selectivity, this exit of contract only applies at a very granular level. Okay? That makes the change.
Thank you, Amaury. Another question. So the stock price is very low. Do you have some leverage to give back confidence to investors? I think that the best answer we can give is to improve the margins, improve the cash position, be positive bottom line. This is really what we are trying to do, and we believe we can do it in the short term, being very disciplined, and we believe that that will be the best way to give confidence to the stock exchange and our investors. So our focus is really on cash margins for the short term. Should we expect high restructuring costs in France this year because of your reduced exposure to telecom? I would say no, but I'll let Amaury to be more detailed.
No, no. There will be no significant impact related to the exit of contracts in France, and I would even say that at group level, exceptional items are expected to be significantly lower than in 2023.
Yeah. Thank you, Amaury. Now, we are lucky because we have the energy activities that are growing, so we can easily shift people from less profitable activities to more profitable activities. Another question. Do you expect lower growth in solar in France given the current political context? No. We were a little bit concerned with the windmills because we knew that some parties did not like them, but we are not exposed to that. We don't work on windmills. So no. Concerning solar panels, we are not expecting any decrease in growth. The growth drives are very powerful all across Europe. Last year, Germany has deployed 14 gigawatts of solar power, Spain 7, Italy 5, and France only 3.2. So France is not as exposed to solar as the other countries, and we do not see any reason why the countries should reduce investment in solar.
They do make a hell of a lot of sense. When do you expect Belgian negotiation to conclude? We do not know. We are not part of them, and we have some contrasted signals. Our teams are saying that after the summer, they are seeing the demand to increase, but I'm really not sure. This is why we prefer to discard this scenario and just remain very conservative and telling you we are seeing stable revenues this year. But we are not sure how long this is going to last. If we take France as a proxy, several months, less than one year, I would say. Yeah, I think that's the best we can say. We don't know more. What is the target EBITDA margin for the group, and is the trajectory respected? Amaury, you want to say a word on the margin and the trajectory?
Yes. Well, as you said earlier, all our focus is clearly on the margin, so we clearly confirm an improvement of the EBITDA margin in 2024. This should be visible when we will release the full financials of the first half, mid of September. And yes, we are in line with what we expected.
Thank you, Amaury. Another question. The German fiber business seems to have picked up. Shall we expect very high growth like in Benelux last year, or are there structural differences? No, there are not structural differences, but I would say that the German operators seem to be more structured and/or the German regulator more structured. So we are expecting strong growth, double-digit growth, definitely, but probably more coordinated than what we have seen in Belgium, where we have seen a huge growth, and now this stall because of the negotiations. So I think it should be a better environment for us, the German environment. What about the EUR 2 billion target revenue at midterm? That remains valid, but the short term is margins and cash. So the potential of the market is still there.
The addressable market that we see in all of our geographies is really big, so we definitely have the room to double the size of the company, but at the moment, we focus on margins and cash. Another question. Is there any major contracts in the pipeline? Please tell us more. Yeah, we have a big pipeline that is worth more than EUR 2 billion, EUR 2.2 billion, if I'm not mistaken. So definitely lots of activities. And indeed, we have several interesting negotiations with large utilities and telco operators, but we cannot give any details, but a very solid sales activity in the first half of this year. Should we expect some positive impact from the Olympic Games in France? Yes, indeed.
As Amaury said before, we are present on several Olympic sites because we provide IT assistance, and we provide also assistance on credit card readers, cash machines in several places. So indeed, we are expecting an increase of the technology activity in France because of the Olympic Games. Are there plans to lower the free float on the stock market and to attract institutional investors this year? So attract institutional investors, yes, technically. We have a plan of meetings with institutional investors. We did already several meetings last year. We will continue this year. But lowering the free float, that would mean buying shares back, and it's not our plan in the short term. In the short term, we want to concentrate our cash to develop the company and do whatever is needed to make sure the margins are good and the profitability is at the right level.
So we want to use our cash to develop the company as best we can. I don't see more questions. I think we are done. Thank you very much for being present this evening, and thank you for your confidence.
Good evening.
Good evening to all.
Good evening to all.
Bye-bye.