HERIGE: RESULTS FOR THE FIRST HALF OF 2024

• Strongly deteriorating market situation impacted operating performance
• Significant strengthening of the financial structure
• Stronger management performance

HERIGE has published its results for the first half of 2024. The half-year consolidated financial statements for 2024 were reviewed by the Supervisory Board at its meeting on September 20, 2024.

Benoît Hennaut, Chairman of the Board of Directors of the HERIGE Group, commented on the Group’s results for the first half of 2024 as follows:: “As expected, the first half of 2024 was characterized by an unprecedented market environment in the construction sector, characterized by a nationwide collapse in building permits and a declining renovation market. This unfavorable economic climate, exacerbated by the decline in household purchasing power, impacted our business and operating performance.

We expect market conditions to remain challenging in the second half of 2024. However, we remain confident in our ability to adapt to market cycles by stepping up our management initiatives. Housing shortages in France have reached record levels, which, given structural needs, point to a medium to long-term recovery.”

Pressure to perform in the first half of the year due to crisis-hit construction industry

Comments on the income statement are based on the new Group structure, unless otherwise stated.

HERIGE recorded sales of EUR 215.6 million in the first half of 2024, a decrease of 13.5% compared to the same period in 2023. This downward trend reflects both a deteriorating new construction and renovation market (32.6% decline in single-family housing starts in the last 12 months^[6]) and the political crisis in France, which increased household uncertainty.

Despite declining volumes, HERIGE recorded a gross margin of €109.9 million, down €13.8 million from the same period in 2023. As a percentage of sales, the gross margin increased by 1.3 points to 51%. This increase is due in particular to purchasing synergies in the industrial joinery sector and a price increase, while the industrial concrete sector continues to suffer from competitive pressure and inflation in raw material costs.

As a result, EBITDA for the first half of 2024 amounted to EUR 12.1 million, a decrease of EUR 9.0 million, corresponding to an EBITDA margin of 5.6% and 2.8 points below the figure for the first half of 2023.

HERIGE’s operating result amounted to EUR 4.7 million (a decrease of EUR 9.2 million compared to the first half of 2023), representing an operating margin of 2.2% compared to 5.6% in the previous year.

Due to the acceleration of the remaining depreciation period in the concrete industry sector from the end of the 2023 financial year, an impairment loss of EUR 6.8 million was recorded on goodwill. In addition, the market downturn was more severe than expected, resulting in an additional impairment of EUR 5.0 million in the reporting period.

After taking into account net financial expenses of €0.8 million (compared to expenses of €1.3 million in the first half of 2023) and one-off income of €32.4 million, including a net capital gain from the sale of the building materials trading business (€33.0 million), net profit for the first half of 2024 amounted to €29.4 million.

Significantly strengthened financial structure

At the end of June 2024, investments made amounted to 6.7 million euros.

Through the sale of the building materials trading division, the Group’s net financial debt was significantly reduced to €23.0 million as of June 30, 2024, and equity was strengthened to €165.7 million. The net debt ratio was thus 13.9%.

Outlook and developments

HERIGE will continue to take targeted measures to improve its performance by adjusting its operating expenses and investments, thus enabling the company to preserve its economic fundamentals and maintain its competitiveness in this complex environment.

NEXT RELEASE: Q3 2024 sales on November 5, 2024 (after close of trading)

All our financial communications are available on our website: www.herige-industries.fr/de

About HERIGE

HERIGE Industries focuses on two sectors of the construction industry: the concrete industry and industrial joinery. HERIGE is a multi-regional group originating in Vendée, which employs nearly 2,000 people and is present in France, Canada and overseas.

HERIGE is listed on Euronext Growth
PEA/PME eligible
Indices: EURONEXT FAMILY BUSINESS, EURONEXT GROWTH ALL SHARE, ENTERNEXT©PEA-PME 150
ISIN FR0000066540, Ticker: ALHRG, Reuters ALHRG.PA

[1] The figures for 2023 have been adjusted to reflect the sale of the businesses sold to SAMSE on 01.05.2024 – the figures for 2024 do not include discontinued businesses

[2] Including proportionate disposals (4 months)

[3] EBITDA: Operating profit + net depreciation and amortization

[4] Before depreciation and impairment of goodwill

[5] Including a net capital gain of €33 million / contribution from the sold volume -€4.4 million

[6] Source: SDES, Sit@del2, estimates as of June 30, 2024

[7] Net financial debt in relation to equity