Fugro Nv · EURONEXT:FUR
Fugro Nv — FY2013 Earnings Presentation
43 slides from Fugro Nv's earnings presentation, Mar 7, 2014
Slide 1: Mixed performance 2013
Mixed performance 2013 Traction with growth and performance improvement under the ‘Growth through Leadership’ strategy
Slide 2: General highlights
General highlights Mixed performance divisions 2013 Geotechnical division: EBIT margin improvement, limited growth revenue (corrected for currency effects) Survey division: strong growth, reduction EBIT margin Subsea Services division: improving EBIT margin Geoscience division: start-up loss
Slide 3: Presentation of results 2013
Presentation of results 2013 Geoscience activities that were divested per 31 January 2013, are reported as discontinued. Multi-client seismic library was retained by Fugro, but related revenue (EUR 13 million in January 2013, EUR 235 million in 2012 and EUR 156 million in 2011) was reported as d
Slide 4: Financial highlights 1/2
Financial highlights 1/2 Reported revenue of EUR 2,424 million (2012: EUR 2,165 million) Revenue including multi-client + 1.5% to EUR 2,437 million (2012: EUR 2,400 million) + 6.1% excluding negative currency effects EBITDA 1.7% lower at EUR 457.4 million (2012: EUR 465.4 million) EBIT 12.9%
Slide 5: Financial highlights 2/2
Financial highlights 2/2 Proposed dividend 2013 of EUR 1.50 per share Backlog EUR 1,801 million, up 19% (+26% corrected for currency effects) Solid financial position: net debt/ EBITDA of 1.53 5 www.fugro.com
Slide 6: Revenue analysis including currency effects (x EUR million)
Revenue analysis including currency effects (x EUR million) Strong growth Survey and contribution Seabed partly offset by lower multi-client sales and currency effects +1.5% 50 -132 120 -110 109 2,437 7 2,400 2012 incl. Geotech Survey Subsea Geoscience Geoscience Currency effects 2013 incl. multi-cl
Slide 7: EBIT analysis (x EUR million)
EBIT analysis (x EUR million) 37 -11 -55 8 -19 307 267 2012 Geotech Survey Subsea Geoscience Geoscience 2013 excl. Seabed Seabed 100% 7 www.fugro.com
Slide 8: Notable effects on 2013 results (x EUR million)
Notable effects on 2013 results (x EUR million) EBIT operations amount division Loss Seabed Geosolutions (55.0) Geoscience (100%) Start-up losses trenching (10.0) Subsea Services EBIT special items Sale of technology licenses 18.5 Geoscience Advisory costs (10.0) Allocated over divisions Other (6.3)
Slide 9: Market developments oil and gas 2013
Market developments oil and gas 2013 Oil and gas market (≈75% of revenue) Oil price remained stable around USD 110 per barrel (Brent) E&P growth around 7% (Barclays) driven by growing oil demand and accelerating decline of existing fields Deepwater and frontier markets continued to be strong;
Slide 10: Market developments other markets 2013
Market developments other markets 2013 Infrastructure and building (≈ 22%) Steady overall growth Cyclical, but not at same pace globally Pressure on markets dependent on governmental spending in Western economies Substantial investments in sustainable energy resources like offshore wind farm
Slide 11: Strategy Implementation
STRATEGY IMPLEMENTATION Hae -"
Slide 12: Updated strategy as announced in September 2013
Updated strategy as announced in September 2013 Growth through Leadership What: Focused portfolio How: Team Fugro Maintain leadership in Offshore Better Geotech & grow selected positions in leverage our scale Onshore Refocus Subsea Services Improve on profitability collaboration Accelerate growth in
Slide 13: Team Fugro: Setting up for growth
Team Fugro: Setting up for growth Strengthen our regional organisation Better leverage Target and win bigger and more complex projects our scale Better serve global clients globally Strengthen and leverage the regional organisation Improve Add value from the centre through support functions collabor
Slide 14: 2016 mid term financial targets
2016 mid term financial targets Key strategic performance indicators Revenue Average annual growth >10%, resulting in EUR 3.3 - 3.7 billion in 2016 EBIT margin Around 15% ROCE Around 14% Targets exclude multi-client 14 www.fugro.com
Slide 15: Strengthening of regional organisation: progress 1/2
Strengthening of regional organisation: progress 1/2 Main elements in place; implementation largely complete by year-end 2014 Regional directors full P&L responsibility within division to develop consistent regional strategies, aligned with overall strategy to steer collaboration across divi
Slide 16: Strengthening of central organisation: progress 2/2
Strengthening of central organisation: progress 2/- During 2013 corporate functions have been set up or strengthened Finance team Strengthening QHSSE team Formation global HR-team and start implementation of single, unified HR-system Investor Relations Corporate Communications and Strategy
Slide 17: Performance on 2013 key strategic performance indicators
Performance on 2013 key strategic performance indicators (x EUR million) 2013 2012 Revenue 2,307 2,165 2013 revenue corrected for 2,417 2,165 currency effects EBIT margin 10.5% 11.7% ROCE 9.0% 11.1% Excludes multi-client revenue and results. Therefore numbers deviate from reports on continued basi
Slide 18: Investments required to realise growth strategy
Investments required to realise growth strategy Investment commitments under anticipated growth scenario expected of around EUR 425 million annually: EUR 100 million for maintenance EUR 225 million for vessels, including the required equipment Geotechnical division: mostly replacement new
Slide 19: Divisions
DIVISIONS
Slide 20: Geotechnical division
Geotechnical division EBIT margin improvement, limited growth (x EUR million) 2013 2012 revenue corrected for exchange rate effects Revenue Onshore 421 423 Around EUR 30 million of revenue booked as revenue in Subsea due to use of subsea vessels Revenue Offshore 282 300 Total 703 723 Continued
Slide 21: Survey division
Survey division Strong growth, reduction in EBIT margin (x EUR million) 2013 2012 Revenue 900 835 Steady growth in Africa, Middle East and Caspian EBIT 166 185 Strong performance global positioning signal business EBIT margin (%) 18.5 22.1 High demand new survey vessels Depreciation 59 55
Slide 22: Subsea Services division
Subsea Services division EBIT margin improving (x EUR million) 2013 2012 Restructuring and profit improvement plan Revenue 574 554 defined; implementation started Fugro RUE (Norway) office closed, vessel and EBIT 13 (24)1 activities moved to Aberdeen EBIT margin (%) 2.3 (4.3)1 Improving perf
Slide 23: Geoscience division
Geoscience division Seabed Geosolutions (x EUR million) 2013 2012 Start-up losses due to low utilisation of OBC / SW Revenue 248 53 activities and one-off operational incident on a project of which Seabed 1) 120 - Revenue (including multi-client) 261 288 of which Seabed 120 - Lumpy contracts, ne
Slide 24: Acquisitions in 2013 (and early 2014)
Acquisitions in 2013 (and early 2014) Geotechnical division Advanced Geomechanics, Perth Subsea division DCN Global LLC, Abu Dhabi Geoscience division Seabed Geosolutions (Fugro share 60%), The Netherlands FAZ Research (Fugro share 90%), Dublin Revenue 2013 of acquisitions EUR 88.6 million C
Slide 25: Financials
FINANCIALS ———
Slide 26: Effects divestment majority of Geoscience
Effects divestment majority of Geoscience Profit from discontinued operations (x EUR million) 2013 Net gain on sale of majority of Geoscience 205.1 Loss discontinued operations (1.0) Profit from discontinued operations 204.1 Received cash of EUR 793 million (including EUR 112.5 million repayment
Slide 27: Revenue
Revenue (x EUR million) 13 116 235 156 2,308 2,424 2,165 1,858 2011 2012 2013 multi-client continued multi-client discontinued revenue reported 27 www.fugro.com
Slide 28: Revenue growth
Revenue growth (In %) Organic Acquisi- Disposals Exchange Total tions rate 2013 2.9 3.2 - (4.6) 1.5 2012 5.3 4.9 - 6.3 16.5 2011 * 7.6 8.8 (0.2) (3.2) 13.0 2010 * 6.0 0.4 - 4.7 11.1 2009 * (5.6) 1.1 - (0.2) (4.7) Average 2004- 2013 10.3 5.3 (0.2) (1.0) 14.4 * Continued and discontinued 28 www.fugro.
Slide 29: EBITDA, EBIT and net result
EBITDA, EBIT and net result 600 550 500 450 400 350 300 250 200 150 100 2011 2012 2013 EBITDA EBIT Net result continued operations Net result including discontinued operations 29 www.fugro.com
Slide 30: Expenses as % of revenue
Expenses as % of revenue 45 35 25 15 5 2011 2012 2013 Third party costs Staff costs Other operating expenses 30 www.fugro.com
Slide 31: Net finance costs and tax rate
Net finance costs and tax rate Net finance costs Net finance costs 2013 2012 (x EUR million) Net interest charge 11.9 17.9 Net change fair value (0.5) (12.8) Rates of exchange (4.3) 10.1 Other (0.1) (0.1) Tot costs (gain) 7.0 15.1 Tax rate 2013: 19.3% (2012: 16.9%) 31 www.fugro.com
Slide 32: Committed and required capex
Committed and required capex Committed and 2013 20141 20151 20161 required to date (x EUR million) Maintenance capex 78.9 100 100 100 Capex major assets 41.1 65 25 25 Capex major assets 133.4 40 25 - under construction Total capex (cash 253.4 205 150 125 out) 1) Estimate Maintenance capex is not y
Slide 33: Vessel fleet
Vessel fleet Delivered in 2013 Division Fugro Helmert Survey Fugro Brasilis Survey Fugro Voyager Geotechnical Committed Division Expected delivery 2014 – 2016 Fugro Scout Geotechnical Q3 2014 Fugro Aquarius Subsea Q4 2014 Fugro Americas Survey Q2 2014 Fugro Proteus Survey Q3 2014 Fugro Pioneer Surve
Slide 34: Working capital
Working capital Working capital 2013 2012 variance (x EUR million) Inventories 27.6 21.3 6.3 Trade & other receivables 867.5 837.6 29.9 Trade & other payables (483.7) (389.6) (94.1) Net cash 72.1 (129.9) 202.0 Other (70.1) (75.0) 4.9 Working capital 413.4 264.5 148.9 Working capital net of cash 341.
Slide 35: Financing
Financing Repayment on long term loans from proceeds Geoscience transaction Covenants met, no issues with covenants on continued basis Gearing 31% (2012: 66%) Solvency 56% (2012: 47%) Net debt / EBITDA 1.53 (2012: 2.96) 35 www.fugro.com
Slide 36: Dividend
Dividend Dividend pay-out 2013 63% 61% 54% of net result from continuing operations 58% 54% 55% 52% 52% 50% (28% of net result including discontinued 54% operations and transaction result) 43% 43% 41% 41% 40% 40% 40% 39% Dividend policy €2.00 Pay-out of 35 to 55% €1.50 €1.50 €1.50 €1.50 €1.50
Slide 37: Strengthening of financial organisation: progress
Strengthening of financial organisation: progress Good progress with improvement process in finance organisation Implementation Hyperion Financial Management system planned for completion by YE 2014; includes regional support Several new hires have been made/ are underway Independent internal
Slide 38: Outlook
OUTLOOK
Slide 39: Backlog at beginning of the year for next 12 months
Backlog at beginning of the year for next 12 months Backlog at the start of 2014 is 19% higher than a year ago (26% corrected for currency rate effects) Most significant increase in Geoscience due to Seabed Geosolutions Excluding Geoscience, growth at constant exchange rates is solid 9% 1,800
Slide 40: Market developments going forward - oil and gas market
Market developments going forward - oil and gas market Oil & gas market E&P continues to grow but at slower rate than in the last super cycle Major IOCs are increasing focus on capital discipline and reduced E&P spending, expected to be partly compensated by NOCs and independents Deepwater fie
Slide 41: Market developments going forward - other markets
Market developments going forward - other markets Infrastructure Dependent on regional developments and government spending Continued slow market in Europe, improvement in USA Strong opportunities in emerging markets Sustainable energy Capital expenditure on wind farms in Europe largely flat
Slide 42: Outlook Fugro
Outlook Fugro Management is comfortable that the market outlook supports the “Growth through Leadership” strategy and related 2016 targets Key strategic performance indicators Revenue Average annual growth >10%, resulting in EUR 3.3 - 3.7 billion in 2016 EBIT margin Around 15% ROCE Around 14% Back
Slide 43: Thank you
THANK YOU