Earnings Call: Q3 2025

Oct 31, 2025

Welcome to the SPIE 9 Months Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing #5 on their telephone keypad. Now, I will hand the conference over to Gauthier Louette, Chairman and CEO, and Jérôme Vanhove, Group CFO. Please go ahead. Good morning, everyone. Thank you for joining us today for our Q3 conference call. We did record a solid performance over the first 9 months. It does illustrate the strength and agility of our model across a well-balanced vertical and geographical footprint. We do fully confirm our outlook for 2025. Our long-term trajectory is supported by deep-rooted structural demand in energy transition and digital transformation. To begin, I would like to share a few recent contract examples that reflect this positive momentum. Talking about mission-critical services, this example pertains to a museum in Berlin. After more than two decades of providing technical facility management services for the German Historical Museum in Berlin, SPIE has been commissioned by the Institute for Federal Real Estate, the IMA, to continue for another five years. A key requirement is to ensure optimal indoor climate conditions across more than 23,000 square meters of exhibition space to preserve the museum's sensitive collections. This is a good illustration of SPIE's know-how in delivering reliable, sustainable facility management solutions for complex and culturally significant buildings. In France, SPIE Nuclear has been awarded the national contract to provide temporary cryogenic sealing services across all the piping systems of the nuclear power plants. By isolating circuits through freezing, this advanced technique eliminates the need for full plant shutdowns, and it does allow maintenance operations to proceed without interruption. This contract showcases SPIE's position as a trusted partner delivering innovative, safe, and efficient solutions for the nuclear industry. In the Netherlands, the acquisition of Woods & Donkers is strengthening SPIE's expertise in industrial cooling installation, air treatment systems, heat pump, industrial automation, and the engineering of process equipment. This business, generating €30 million in annual revenue and employing 69 people, enhances SPIE's footprint in key growth sectors such as the food pharmaceutical industries, where energy efficiency and process reliability are critical. In Austria, SPIE has been awarded a contract by the Austrian highway operator, ASFINAG, to supervise its motorway network of more than 2,200 kilometers through a centralized monitoring and control system. This new platform will enable efficient management of tunnel systems, emergency call networks, traffic signs, lighting controls, and monitoring equipment. It integrates over 33,000 connected traffic units and approximately 6 million interacting data points, allowing the system to issue immediate warnings in case of an accident. It can instantly propose a diversion route if necessary. This project highlights SPIE's strong expertise in intelligent transport infrastructure and large-scale digital integration. Last example, SPIE has been selected to carry out the termination and testing of inter-array cables for an offshore wind project located approximately 20 kilometers off the coast of Taiwan. Execution of works began in August 2025, with completion scheduled in 2026. Once operational, this project is expected to generate 1,000 gigawatt-hours of renewable electricity annually. This is enough to power approximately 200,017 households and to reduce CO2 emissions by over 400,000 metric tons each year. This is a concrete demonstration of SPIE's offshore wind expertise and our commitment to contributing to the energy transition. Now, moving to our key takeaways. Over the first 9 months, revenue has increased by 4.4%, including a solid 2.2% organic growth, with 5% in Germany and 6.5% in Northwestern Europe. This reflects our strong fundamentals and sustained market demand. Our active bolt-on M&A contributed 3.6% to revenue growth. It represents an additional €255 million of revenue from the 2025 acquisition and the carryover from 2024. We are firmly on track to meet our 2025 targets, which we fully confirm today. Moving to our financial highlights on page 10. I already mentioned the solid 9-month revenue growth to reach €7.5 billion. Q3 2025 revenue was up 4.7%, including 1.8% organic growth. In high-voltage activities, underlying trends remain highly positive, supported by strong order intake and excellent backlog. Following exceptional growth in H1, projects in Germany and the Netherlands progressed as planned at a more measured pace. France was very resilient in a muted domestic macroeconomic backdrop. Central Europe confirmed the anticipated positive inflection driven by the progressive conversion of the substantial high-voltage backlog into revenue. Our bolt-on M&A strategy remained active, supported by a healthy pipeline of opportunities. We signed five acquisitions to date. It represents €133 million in annual revenue across attractive markets in Poland, Switzerland, the Netherlands, and Austria. On page 11, at constant exchange rate, revenue grew by 5.5% over the first 9 months, driven by two segments. Germany, which continued to deliver a very high growth of 11.8%, was well-balanced between organic growth at 5% and the contribution from acquisitions at 6.8%. Northwestern Europe also performed strongly, with revenue of 7%, driven by a 6.5% organic growth. Meanwhile, France continued to demonstrate strong resilience, with revenue down by only 0.6%. Central Europe grew by 9.6%, with acquisitions contributing 9.4%. As anticipated, organic growth returned to positive territory, with a sharp acceleration in Q3 of about 10%. Global services energy decline reflected the exceptionally high comparison basis, as H1 2024 has benefited from a one-off shutdown maintenance operation in West Africa. Overall, this performance underscores the strength and balance of our multi-local, multi-technical model. Looking at segments and starting with Germany, Germany is our number one revenue contributor. It continues to show a strong momentum, with an 11.8% revenue growth over the first 9 months. Underlying trends remain highly positive across the board. After delivering exceptional growth in H1, high-voltage activities progressed at a more measured pace in Q3, in line with project scheduling. City networks and grid performance was well supported by overall sustained demand from the DSOs, while weighed down in Q3 by the uneven pace of fiber deployment. Technical facility management and building solutions maintain strong momentum, as illustrated by the example provided in the introduction. In a more challenging environment, industry services held up well, supported by working maintenance activities and energy projects, particularly in LNG and hydrogen. Finally, acquisitions delivered a strong 6.8% uplift, driven by the full-year impact of 2024 transactions. Moving to France on page 13. In France, revenue was broadly stable over the first 9 months, demonstrating strong resilience against the subdued domestic macroeconomic environment. Softness remained contained to building solutions and to city networks due to the gradual wind down of mature fiber optic rollout programs. Technical facility management capitalized on its stream of recurring revenues and long-standing client relationships. Industry and ICS both confirmed their resilience thanks to diversified sector exposure, extensive technical capabilities, and the mission-critical nature of their operations. Nuclear services delivered a solid performance over the first 9 months, supported by healthy maintenance activities. Northwestern Europe, on page 14. Northwestern Europe recorded a 7% revenue growth, driven by a strong 6.5% organic growth. The 0.5% perimeter effect reflects a positive 1.8% contribution from acquisitions, partially offset by the disposal of Belgium's subscale IT support activities. The Netherlands delivered a strong performance despite the demanding comparison base in high-voltage services and phasing effects in Q3. The backlog continued to build up, fueled by strong social demand. Other activities continue to benefit from our leadership position in energy efficiency, solutions, data center services, and our exposure to high-growth sectors such as food, pharmaceutical, energy storage, and advanced technologies. In Belgium, high-voltage services remained a key growth driver, with a step-up in grid investment and booming demand for battery energy storage systems. Building solutions and technical facility management also contributed meaningfully to the performance. In Central Europe, revenue rose by 10.5% over the first 9 months of 2025, fueled by the 9.4% contribution from bolt-on acquisition and reflecting the sustained M&A activity in Poland since the start of the year. Currency tailwind reflects the appreciation of the Polish złoty and the Swiss franc against the euro. In Q3 2025, revenues surged by 30.4%, making a clear turning point, with organic growth close to 10%. In particular, Poland and Slovakia confirmed the anticipated positive inflection, with a sharp organic growth acceleration driven by high-voltage activities. The substantial backlog is beginning to convert into revenue. Austria maintained a high level of activity, building on strong momentum in transport infrastructure and transmission and distribution services. Global services energy maintained a selective approach to contract acquisition to ensure healthy margin levels across geographies. Over the first 9 months, revenue declined by 7.8%, including minus 4.6% organic growth. This minus 3.2% currency impact is mainly due to the weakening of the U.S. dollar across the euro. The organic trend reflects a particularly high comparison base in H1 2024, leading to an exceptional shutdown maintenance operation and a nearly flat Q3 contribution. Oil and gas maintenance activities were resilient in a currently low barrel price environment. Offshore wind activities continued to gain traction following the successful integration of Koren Group. A word to our employee shareholding program. Again, this year, we launched our share-for-you program during the third quarter of the year. It was the ninth edition, and it proved once again to be a great success. Indeed, it was a record success. Around 25,000 employees participated, including 6,000 first-time investors. 70 countries were involved. Upon completion, the estimated share of employee shareholders would account for around 8% of SPIE's capital. As you know, involving our employees in the SPIE entrepreneurial adventure is very important to us, and it is a key factor to our success. The final results of this plan will be announced in December, and the group plans to renew its anti-deficit share-buy program early 2026. Now we'll hand over to Jérôme, our CFO. Thank you, Gauthier, and good morning, everyone. I'll start with our revenue bridge, which provides for a breakdown of our 5.4% total revenue growth over the first 9 months. As already pointed out, revenue reached €7.5 billion, with a solid 2.2% organic growth driven mainly by Germany and Northwestern Europe. External growth contributed 3.6%, representing €255 million additional revenue. This was mainly attributable to the full-year impact of the 2024 acquisitions, notably ROBUR, ITSEGA, and OTTO in Germany. The bulk of the 2025 acquisitions contribution came from Electromontage in Poland and SD Fiber in Switzerland. The disposal of our Belgian IT support activities at the end of 2024 had a limited minus 0.2% impact. Finally, currency effects were broadly neutral at group level, with a slight positive contribution from the appreciation of the Polish złoty and the Swiss franc against euro, offset by a negative impact from the weakening of the U.S. dollar over the same period. Moving to acquisitions, our bolt-on M&A activity remained dynamic over the period, fully aligned with our strategy to reinforce leadership in attractive markets. Since January, we have announced five new acquisitions, representing about €133 million of annual revenue. These deals further strengthen our position in Poland, Switzerland, the Netherlands, and Austria. In Q3, particularly, we announced two acquisitions. Woods & Donkers in the Netherlands, completed in August, adds around €30 million in revenue and in the domain of specialized industrial services. EcoExperts Automation in Austria is adding €7 million revenue and expands our expertise in tunnel traffic engineering. The closing is expected later in Q4. Meanwhile, the integration of all 2024 acquisitions is progressing smoothly. As we look ahead, our disciplined approach and healthy pipeline of bolt-on acquisition give us confidence in sustaining external growth momentum across highly fragmented markets. With this, I hand over back to you. Thank you, Jérôme. Based on these solid results, we confirm our full-year outlook. We expect strong total growth, pushing revenue well above the €10 billion mark, including further organic growth and active bolt-on M&A. We expect a continued expansion of our EBITDA margin to at least 7.6%. By the way, the quality of this margin will be, as usual, reflected in our strong cash generation. Finally, as every year, we intend to maintain a dividend payout of around 40% of adjusted net income. Thank you for your attention this morning. In case you would have forgotten, let me repeat: it's a good time to be an electrical engineer. Now, with Jérôme, we are now ready to take your questions. Thank you. If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. The next question comes from Simona Sarli from BOFA. Please go ahead. Yes, good morning, and thanks for taking my questions. In your prepared remarks, you mentioned that high-voltage projects in Germany and Netherlands, they are progressing at a more measured pace, and that it was also, by the way, Germany impacted by an even pace of fiber deployment. The first question is: is this a temporary trend, and do you expect to pick up again in activity in Q4 and 2026, or how should we think about it? Also, if you consider that there is talent scarcity for qualified technicians and engineers, I assume that currently you are pricing above inflation, which potentially would imply negative volume progression. Can you elaborate and give an update on the competitive landscape, specifically for Germany and Northwestern Europe, and distinguish between high-voltage distribution and technical facility management? Thank you. Thank you, Simona. As you know, our high-voltage project, be it transmission lines or substations, they are fairly chunky, and that's going to create some lumps in the revenue. We have a different timing of starting this project, and then the comparison with the same quarter last year due to this timing impact might vary. It does create volatility in the top line. I think it's not the first time it does happen. What's really important to keep in mind is that this is altogether a growing business, and our backlog keeps expanding very significantly in this area, be it in the Netherlands or in Germany or in Belgium or in Poland. As we have seen in Poland, we had some phasing effect in the first half of the year, and then we have a positive inflow in the second half of the year. It's not that the market is slowing down; it is just the impact on the revenue top line with this volatility impact, but it is a very strong, very good market with expanding backlog, and not only is the backlog expanding in revenue, it is also expanding in pricing, as you just mentioned. We should remain extremely positive on these markets. Fiber is other moving parts. It's really linked with the somewhat hazard decisions of the customers. It's more stop-and-go; we've seen that in the past in the Netherlands. We've seen that today in Germany. Projects that start, it's much more difficult to predict when projects are going to start and what is the amount of investment customers decide to launch. Again, Germany is much less advanced than other European countries in terms of optic fiber deployment. It is a good market to be if you look at the big picture. Again, on the finance, the government, there is a focus on accelerating the deployment of optic fiber. Thank you. Can I please just ask for a follow-up? Specifically for transmission and distribution, can you remind us how much do they contribute in terms of revenues in Germany and Northwestern Europe and the growth trends in Q3 versus H1? Secondly, how much of your transmission and distribution exposure is recurring versus new build? If you notice a significant slowdown in new build activity? Thank you. Germany, it's roughly transmission and distribution; it accounts for roughly 30% of our revenue. In Central Europe, it's probably above, around 40%. We have two different things. In transmission, it is mainly new build or. Total revamping of existing lines. We have lines where you have to hire the pylons and replace the cabling, so at least you don't have to negotiate a new right-of-way. Basically, new build on existing right-of-way. On the transmission. Distribution, sorry, we have a framework agreement. It's usually in existing networks which need to be very significantly reshuffled, and sometimes you also have to create additional substations. Thank you. There was the point on differentiating a little bit the growth trends between the two segments. If you have seen also a slowdown over the last year, clearly what has started with the energy transition and the energy vendor in Germany and what's happening in the Netherlands as well. New projects have been launched and need to be built for transmission. It's for the line, it is for the substation, and then it has an impact on the distribution because you need to connect the distribution network to this new trunk line, let's say. The main impact on distribution is yet to come. Thank you. The next question comes from Alexander Petersie from Bernstein. Please go ahead. Yes, good morning, and thank you for taking my question. I'd just like to understand whether we should see more of these high-voltage phasing effects that affect Q3 in Germany and in Northwestern Europe. Is it going to persist for longer, particularly against a very high basis of comparison in the year-ago quarter in Q4, where you had Northwest Europe, which was up 12% last year? Against that backdrop, should we expect more of a bit of a subdued growth rate in this area? In a similar vein, Central and Eastern Europe bouncing back very strongly as those Slovakia and Poland contracts come on stream, should we extrapolate relatively strong growth for this geography over the next couple of quarters, or is it just a one-quarter high growth? Thank you. I think we have to differentiate between phasing and comparable basis. Clearly, the Netherlands, yeah, it is a very high comparison basis for the last quarter of the year. We have the phasing effects we mentioned, for instance, in Poland, that we had anticipated. We think as a rule, high-voltage activity will remain on a high level. Again, we have also a very high backlog to work at in the years to come. Again, the quarterly growth of this activity. Is much more difficult to forecast. Okay. For Central and Eastern Europe, is growth going to continue over the next couple of quarters? I think we have a good backlog to work at in Central Europe for high-voltage. We have also other activities in Central Europe, and we'll see how they behave in the quarters to come. We do think at country levels that while the comparison basis is very strong in the Netherlands, as you mentioned, we're talking double-digit growth at the same time as in Q4 last year. We expect a more positive development in Germany for Q4 altogether. Great. Thanks very much. The next question comes from Rémi Grenoux from Morgan Stanley. Please go ahead. Morning, Gauthier. Morning, Jérôme. Two questions on my side. The first one is on France. I mean, I'm not after quantified guidance, but just wanted to have your view on qualitative thinking on the outlook for 2026. I mean, if we put together potentially the tough political environment continuing in the country, the municipal election happening in March, and yeah, wondering what could be the impact on you guys, but then the potential for growth in nuclear, which might be a little bit better. If you integrate all of these elements, I just wanted to have your view and mindset on outlook for France for next year. That would be the first question. The second one is anything that you can tell us on early discussions or thinking around labor cost inflation going into 2026, I guess probably tempering a bit, but equally, you are in dense markets where it's difficult to find labor. Your thinking as well on labor cost inflation going into next year. Obviously, we are working on our budgets for France for next year. As you know, at SPIE, it is a bottom-up exercise with a lot of conversation from all our project managers and site managers with a customer to try and see what are the intentions for next year. This is an ongoing process. We are fairly confident in the fact that we should not see too much movement compared to where we are this year. Our activity is very resilient. We are involved in a lot of maintenance. We have very diverse activities. There are areas in France which are doing well, like data centers. You mentioned nuclear, which is in a good position. Altogether, not too worried about 2026, and especially not worried about our ability to maintain the margins. Again, France has proven in the past to be extremely resilient, and we've been through a number of fluctuations, be it economical or political in France. Not worried at all. Again, absolutely confident to maintain our margin level. With regard to inflation, it is debating. I would say that in January, we are back into normal territory and the usual range of between 1% and 2%. Inflation, sorry, inflation depending on the countries. It's not really a cause for concern. I think we have amply demonstrated in the past our ability to pass inflation to customers. Great, thank you very much. The next question comes from Eric Lemarier from CIC. Please go ahead. Yes, good morning. Thanks for taking my question. I got two. If I miss the first one on M&A, do you expect a bit more contribution from M&A in 2026 in view of your current pipeline compared to 2025 contribution? Could you tell us maybe some words about the deal multiples today? Is there any changes in terms of deal multiples? The last point on M&A, I understand you are currently particularly focused on integration. Does it mean that you are less focused on looking for new targets? My second question is on competition. What about new views on competition intensity? Do you see any new players trying to enter your key markets, trying to grab some market shares? Thank you. Maybe I'll start with competition. I know it is not different from what we've seen so far. Changes here. I think it's worth mentioning that we have seen over the last year a good improvement in terms of pricing discipline amongst the major players. That's really something that we don't see, no loose cannons anymore. That's very good for the market generally. With regard to integration, yes, we have quite a bit of work for integration to be done. This is done by the operational teams in their respective areas. It doesn't prevent us from sourcing more acquisition, which is done by the M&A teams in the various countries and also centrally with the support of the regional managers. We wanted to mention that we had quite a number of acquisitions to integrate and with high volume and to stress the fact that this is going well. I think our teams are now well-versed in integration processes and we have a very successful look at what we are doing right now. Maybe, Jérôme, if you want to complement on your acquisition pipeline. Yeah, it stays definitely pretty rich. We have all, as Gauthier Louette mentioned, our M&A team across the various countries where we are active, pretty active and working on several opportunities. Likely a few more to come before year-end. With respect to 2026, it's a bit early to say what could be the magnitude. I would just remind you that as part of our 2028 guidance, our aim is to deliver on average across that period of time, €400 million to €500 million of annual turnover being acquired. This is bearing in mind that talking about M&A, and especially because we stay heavily selective, it's not necessarily something linearized months over months. Do remember that the year 2024 was an excellent millésima with more than €450 million of annual turnover acquired and more than €800 million of total contribution from M&A. To that effect, it could move a bit from one year to another. No reason to believe that 2026 will be a bad year in that respect, on the contrary. Thank you. As a reminder, if you wish to ask a question, please dial Pound Key 5 on your telephone keypad. The next question comes from Rory McKenzie from UBS. Please go ahead. Morning. Yes, Rory here with two questions, please. Firstly, I'm sorry to come back on the project phasing topic, and I'm sorry for my French, but there's a certain sense of déjà vu from Q3 last year where organic growth also slowed with lots of mentions of project phasing. At that time, I think you said you had visibility on some of that work landing in October, and so you were a bit more explicit about expecting a stronger Q4. Can you say the same thing this year, or is it just too hard for you to forecast at this stage? Secondly, a few of the comments around your industry businesses sounded just a little bit weaker, perhaps. Can you remind us of your exposure to different kind of end industries within that and just maybe talk through the strategic positioning and what you're trying to do within what, of course, is a somewhat pressured European industrial base? Thank you. Thank you, Rory. I understand your déjà vu feeling. For instance, in Central Europe, we did mention project phasing, and as you see at some stage, it goes the other way. Project phasing is not only on the negative. We also have positive project phasing. Again, I'd like to stress that what we look at for Q4 is France stabilizing, and we look at a more positive outlook for Q4 in Germany, definitely. Less so in the Netherlands because of the very high comparison basis. I think it is more than 10%, maybe 11%. Comparison basis for Northwestern Europe, or even 12% for Q4 last year. Obviously, this creates a very tough comparable. Again, Central Europe, we have a more positive outlook for the end of the year. That's broadly what we are looking at right now. Project phasing is project phasing for the reasons I mentioned: unpure projects, sometimes hesitant days of starting for various administrative reasons, etc. The backlog in high voltage keeps piling up, both in volume and in margin. We are in a very strong position in this regard, and it has never been stronger. It bodes well for the future in the countries I mentioned, including Belgium, by the way. Now, for end industries, it's an interesting question because obviously we see a lot happening in the industry sector at the moment. We have areas like petrochemical industries, which are in a tough spot, clearly, with both the effect of higher energy prices and the strong competition of Chinese products which are not sold in the U.S. for the moment, and so tend to flood the European market. This is for petrochemical industry. For more specialized industry like pharmaceutical or food, it's going decently. It's worth mentioning that for these sectors and generally for the industry, there's a stronger focus on energy, so moving from gas to electricity and implementing energy-saving processes. It does help to maintain a very decent level of order intake and activity in this area. Great. Thanks, Gauthier. The next question comes from David Serden from Keppler. Please go ahead. Yeah. Good morning, gentlemen. Thank you for your answer. Maybe if you could please clarify what you expect for Q4. Basically, do you expect Q4 to be better than the 1.8% reported in Q3? The second question is regarding France: do you think that you will come back to something close to zero, maybe in Q4 or 2026? Thank you. We are not giving this kind of precise guidance for organic growth per segment. I'm sorry about that. We do not do it because it's difficult to forecast, and there are so many moving parts which I've just described that I'm afraid I cannot be more accurate today. Again, we will have resilience in France. I'm not worried. We anticipate a better profile in Q4 in Germany, and I will not repeat what I've said towards. Northwestern Europe. Okay. Just for the margins, you have not changed your objective of at least 7.6%. Do you think that you could do a little bit better than at least 7.6%? Thank you for asking a question about the margin, by the way, because it remains the main focus of SPIE. It is margin over volume, and we want the margin to be reflected in cash generation. This is the model. We have given a guidance for the year. It is a guidance for the year. I won't say more today. We are very confident in meeting the guidance. Okay. That's clear. Thank you. The next question comes from Eric Lemarier from CIC. Please go ahead. Yes. Thank you. I've got a follow-up one on margin. In terms of margin, you should be finally very close to your 2028 guidance of at least 7.7%. You mentioned again this target in 2025 of at least 7.6%. How should we see this? Is there a ceiling in terms of profitability? On the contrary, could you lift your 2028 guidance in advance because you will probably reach this guidance in advance? Thank you. We'll focus first, obviously, on delivering on 2025. Then we'll have a look at what our budget 2026 looks like. Because yes, we are very close to the 2028 guidance, I think at some stage we have to revisit a bit our trajectory going forward. We're not saying there is a ceiling. We've been looking every year very hard on moving the margin of course. We have an impact also from acquisition, which can be diluted or which can be relative from the mixed effect, etc. We do not consider that the 7.7% are intangible. We'll revisit this trajectory. Once we're revisited. Okay. Thank you. May I ask a follow-up one? On data center, could you tell us your exposure today in data center and in terms of growth, what you got? Our data center exposure, as it be installation or maintenance, it's about 3% of our activity. It's a market which is moving well. First, we do concentrate on renewing our maintenance contracts for data centers. As you know, they are very demanding customers because maintenance of data centers is mission-critical. It's really important to satisfy the customer and have confidence in our ability to maintain the data center. We are fairly successful in that. We renew these maintenance contracts. There's quite a number of data center projects happening in all our geographies. For various reasons, including artificial intelligence, but not only. We are a significant player in that. It's a project which has a really good profile in terms of margin and cash generation. Very clear. Thank you. There are no more questions at this time. I hand the conference back to the speakers for any closing remarks. Thank you very much for your attention today. Thank you for the interest you take in SPIE. We're going to work very hard on delivering on our guidance for the year. We are in a very good market with very interesting long-term trends. More than ever, it's a good time to be an electrical engineer. Thanks a lot. Have a good day.