Soco1

Overview Key strengths Key risks A leading position in asset integrity markets with a strong track record of revenue growth (including an expected 15% compound annual growth rate [CAGR] over 2016-2023) and adjusted EBITDA margin expansion (to 16.1% in 2022 from 6.2% in 2017). High S&P Global Ratings-adjusted leverage, expected at 6.5x at year-end 2023 due to an active acquisition policy funded by debt and a yearly dividend taken by the owners. Supportive trends helping end markets grow at a CAGR of about 4% per year, underlined by massive investment plans in renovating infrastructure for safety reasons and energy efficiency. Moderate size (with €1.3 billion expected revenue and €221 million expected S&P Global Ratings-adjusted EBITDA in 2023) and limited activity

...We expect Soco1's (Socotec's) solid revenue growth in 2023 to continue in 2024, fueled by supportive end markets, market share gains, and further bolt-on acquisitions. We forecast Socotec's revenue will grow by 13% in 2024, bringing it close to 1.5 billion for the year. We anticipate that about 5 percentage points (ppts) of growth will be organic whereas 8 ppts will come from the full-year consolidation impact of acquisitions in 2023 and further bolt-ons in 2024. We assume about two-thirds of organic growth will come from higher volumes thanks to Socotec's business positioning on high-growth subsegments of the favorably oriented asset integrity markets. The other third will come from price increases. We do not expect low construction activity to significantly affect the company's revenue because its total revenue exposure is below 10%. Socotec continues to benefit from strong underlying trends, such as massive government investments in infrastructure in Europe and the U.S., and significant...

Full Report