Soco1

Overview Key strengths Key risks A leading position in asset integrity markets with a strong track record of revenue growth (including an expected 13% compound annual growth rate [CAGR] over 2018-2024) and adjusted EBITDA margin expansion (to an estimated 17.5% in 2024 from 7.9% in 2018). High S&P Global Ratings-adjusted leverage, expected to be 7.6x by year-end 2024 (or 6.5x pro forma for acquisitions closed during the year), 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 €1.45 billion expected revenue

...Soco1's (Socotec) revenue growth will continue to be boosted by market tailwinds and bolt- on acquisitions. In the first nine months of 2024 organic growth was 5.6%, despite a slowdown in price increases that contributed about 2.5% to organic growth. Organic growth was driven largely by France and Italy, while the U.S. experienced softness in its advisory business and underwent internal reorganization, and Germany and the Netherlands suffered from unfavorable weather conditions and resource scarcity. We forecast mid-single-digit organic growth to continue in 2025, underpinned by market tailwinds such as improvements in building energy efficiency, governmental investments in infrastructure, and increasing regulation. Organic growth will be complemented by the integration of past acquisitions and new bolt-ons, leading to our expectation of 20% revenue growth in 2025. We forecast that Socotec will continue to generate more than 100 million of free operating cash flow (FOCF) per year. We project...

Full Report