Biolectric demonstrates that farms have significant potential for energy generation with their biogas plants. This company, based in Temse, enables farmers to convert animal manure into usable energy. Since Ackermans & Van Haaren took a majority stake in 2019, Biolectric has grown significantly internationally, increasing both complexity and challenges. CFO Els Van Brussel emphasizes the importance of a balanced financial approach within a growing company.
The founding of Biolectric in 2009 by three Flemish engineers, including the current CEO Philippe Jans, marked the beginning of harnessing the energy potential of manure for biogas production. After two years of intensive development and testing, the first installation was commissioned. This technology was continuously improved, leading to the company’s international expansion from 2014, with sales of installations in France, Italy, and Poland. Ackermans & Van Haaren’s involvement in 2019 provided a significant boost to the company, resulting in an increase in turnover to 18 million euros and a team of nearly sixty employees.
A circular model
Biolectric aims to support farmers in making their operations more sustainable through technical solutions that enable local energy production for own use. With excess energy, farmers can feed the electricity grid and receive compensation. Biolectric manages nearly 300 installations in Europe, together accounting for a significant annual reduction in CO2 emissions.
Challenges in regulation
In Flanders, Biolectric’s home base, the company experiences the longest project lead times, partly due to complex permitting procedures. Despite recognition of Biolectric’s technology by universities as a solution for emissions, obtaining the necessary permits remains a challenge.
Balance between growth and profitability
The long lead times and complex legal frameworks directly impact financial decisions within the company. Finding a balance between investing in growth and maintaining profitability is a constant challenge for management.
Thoughtful decision-making
Els Van Brussel highlights the essential role of the finance department in ensuring ambition without losing control for the scale-up. The responsibility of the finance department lies in providing insight into the financial consequences of decisions and their value, and finding and maintaining a balance therein. “Reality does not always meet expectations, and unexpected factors, from pandemics to legal challenges, can arise. The finance department ensures decisions are thoughtfully made within a framework tailored to the specific situation per country, to experience as few barriers as possible.” Maintaining a healthy cash position is also part of this balance. “To strengthen our cash flow, we ensure that we receive advances from customers on time. Our billing system is set up so that we can invoice a significant portion of our production costs upfront. Production does not start until the first advance is received, and an installation does not leave our factory until the second advance is paid. These measures significantly improve our working capital position.” In short, invoicing flows play a crucial role in the operational management of the company.
Future perspectives
The entry of Ackermans & Van Haaren has provided Biolectric with new ambitions: their goal is now to increase production from 35 to 250 units per year. Last year, Biolectric registered a total of 138 orders. The CFO of the company believes the goal of 250 units is achievable in the short term. Crucial for realizing this growth is further strengthening the organization’s capacity. A significant advantage is that the product usually requires little customization per customer. The average revenue per installation is around 250,000 euros, a relatively modest amount compared to other investments that farmers make. For Biolectric, the production process is not particularly capital-intensive, and there is no need for large inventory levels. “We adopt a production strategy focused on order-driven production, rather than stockpiling. Customers now must first meet all practical, formal, and financial conditions before production begins. This was different in the past, which sometimes quickly affected our working capital position.” Currently, the financial director considers the production capacity adequate for existing orders. “Finding a balance between the number of installations to be delivered and the costs was previously a challenge. Now we have a better estimate and our working capital line is adequate. This was a tight situation up to two years ago, but our relationship with the bank, where we have a direct loan, is strong.”
Emphasis on added value
In her role as CFO, Els Van Brussel oversees more than just financial matters. With just four people on the financial team – two dedicated to general accounting, one to HR, and Els Van Brussel herself – the team is small given the international scope of the company and the required compliance with various regulations. This situation requires a high degree of flexibility from all team members, who successfully meet this challenge. This contributes to a positive work environment, despite the various challenges faced by the team. A specific focus for Van Brussel is the implementation of the ERP system, which she leads. The current ERP system is primarily focused on operational processes and offers limited integration with financial administration. Ideally, the CFO would see a system that provides full integration to manage financial data more effectively.
