Seche Environnement ((FR:SCHP)) has held its Q2 earnings call. Read on for the main highlights of the call.
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During the recent earnings call, Séché Environnement conveyed a mixed sentiment. The company celebrated robust revenue growth and the successful integration of recent acquisitions, yet faced challenges such as declining energy prices affecting margins and underperformance in certain regions, notably Spain.
Dynamic Growth in H1 2025
Séché Environnement reported a dynamic growth in the first half of 2025, with a 14.8% increase in contributed revenue, reaching EUR 580.1 million. This growth was driven by a 7.5% organic increase, showcasing the company’s strong market position and effective strategies.
Successful Integration of ECO
The acquisition of ECO proved to be a strategic success, contributing EUR 37.1 million to the company’s revenue. This integration significantly boosted the international margin, achieving an impressive 43% EBITDA margin, highlighting the acquisition’s positive impact on the company’s financial health.
Strong Performance in France
France demonstrated resilience with a 7% organic growth, despite facing several challenges. The operating margin improved from 7.2% to 9.2%, reflecting the company’s robust performance in its home market.
Strong Cash Flow Generation
Séché Environnement generated strong operating free cash flow of EUR 63.2 million, with a conversion rate of 53%. This financial strength enabled a reduction in net financial debt to EUR 813.7 million, underscoring the company’s effective cash management strategies.
Impact of Declining Energy Prices
The sharp decline in energy prices posed a significant challenge, negatively impacting EBITDA by approximately EUR 15 million. This development is expected to lead to a reduction in anticipated EBITDA margins, presenting a hurdle for the company’s financial outlook.
Underperformance in Spain
The Spanish market underperformed due to reduced volumes in purification and regeneration activities, adversely affecting margins. This regional challenge highlights the need for strategic adjustments to enhance performance in Spain.
Delayed Ramp-up of Carbon Soot Incinerator
The anticipated ramp-up of the carbon soot incinerator was delayed from the first half to the second half of the year, impacting ECO’s revenue growth. This delay underscores the operational challenges the company faces in executing its growth plans.
Forward-looking Guidance
Looking ahead, Séché Environnement outlined its guidance for the second half of 2025 and beyond. Despite dynamic growth, the company anticipates a limited increase in EBITDA margins due to declining energy prices, expected to impact earnings by EUR 15 million in H2. The planned acquisition of Groupe Flamme is a strategic focus, expected to enhance market share in hazardous waste management in France. The company maintains a revenue target of EUR 1.280 billion for 2025, with an anticipated EBITDA range of EUR 250 million to EUR 260 million, and expects improved performance in international segments, particularly in Latin America and Southern Africa.
In conclusion, Séché Environnement’s earnings call reflected a mixed sentiment, balancing strong revenue growth and successful acquisitions with challenges such as declining energy prices and regional underperformance. The company’s strategic focus on acquisitions and market expansion positions it for future growth, despite the hurdles it faces.