First half business review

First half business review

On November 10, 2023, Derichebourg Group suffered a cyberattack that did not interrupt operations but disrupted progress. Our teams’ admirable responsiveness allowed us to restore our systems, improving them at the same time, and limit the consequences of this episode, which is luckily now behind us.

However, this cyberattack disrupted business operations due to the temporary unavailability of the main operating software, particularly in November and December 2023 and, to a lesser extent, January 2024.

As such, the lack of an appropriate operating management tool led to purchasing volume losses and delayed computer entry of flows. Furthermore, once the administrative delay was caught up, the margins generated in November and December 2023 were lower than usual. As a result, the financial impact of the cyberattack is greater than initially anticipated. It is estimated at between €15 million and €20 million.

In addition, like all other sector players, Derichebourg Group faced a deterioration in economic conditions in its markets during the first half (production of long steels in particular, where activity levels are closely linked to those of the building industry). As a result, purchases of metal waste in the Recycling business were down around 5% over the first six months. Meanwhile, the Group’s Public Sector Services business continued to grow.

Under these circumstances, Derichebourg expects to generate first half recurring EBITDA of between €140 million and €145 million, down €35 million to €40 million from last year. First half results will be released on the evening of Wednesday, May 29.

Financial targets revised

In view of these events and the aforementioned business environment, it is currently unlikely that the Group will be able to make up the first half EBITDA shortfall by the end of the financial year and achieve the minimum €350 million EBITDA target for 2024 announced upon publication of 2023 earnings. A full-year recurring EBITDA target of €300 million to €310 million appears more realistic under the present circumstances. Restated for the financial impact of the cyberattack, recurring EBITDA would amount to between €315 million and €330 million.

Group resilience and performance

In percentage terms, the decline in the Group’s first half recurring EBITDA will be less severe than that observed among our main listed competitors, and the Group is maintaining its performance trajectory in the face of an exceptional event combined with a challenging economic environment for the sector. The Group’s financial position remains solid and its financial covenants are in compliance as of March 31, 2024.

The Group remains fully confident in its resilience and business model.

ISIN code: FR 0000053381-DBG

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