Fugro Nv · EURONEXT:FUR
Fugro Nv — Investor Day (November 2018)
21 slides from Fugro Nv's investor day presentation, Nov 14, 2018
Slide 1: Financial update
2. Financial update by Paul Verhagen 1
Slide 2: Financial key takeaways
Financial key takeaways 1. Improved results and marginally positive EBIT margin in 2018 2. Capital allocation: priority to organic growth and deleveraging 3. Significant improvements in EBIT, ROCE and cash flow in the mid-term (2021-2023): ▪ Return On Capital Employed 10-15% ▪ EBIT margin 8-12% ▪ Fr
Slide 3: Financial update
2. Financial update A. YTD performance B. Mid-term outlook C. IFRS 16 update 3
Slide 4: YTD 2018 – third quarter of revenue growth after quarters of decline
YTD 2018 – third quarter of revenue growth after 12 quarters of decline Strong year-on-year revenue growth1 Revenue growth in all divisions Revenue growth (%) Revenue (X EUR million) 40 +20.6%1 30% 30 194 11 16 1,359 29% 1,232 1,138 20 - 127 11% 13% 10 3% 0% -2% -3% 0 -1% -12% -13% -10 -16% -22% -23
Slide 5: YTD 2018 – EBIT improvement driven by early cyclical MSC whilst late cyclical MAI is lagging
YTD 2018 – EBIT improvement driven by early cyclical MSC whilst late cyclical MAI is lagging Improved EBIT mainly due to marine division EBIT recovery in MSC, not yet in MAI EBIT1 (excl. exceptional items) Normalised EBIT 100 1H16 2H16 1H17 2H17 1H18 2H18 Marine Site Characterisation (MSC) YTD 2017
Slide 6: Q3 2018 – Strong growth in order intake and backlog
Q3 2018 – Strong growth in order intake and backlog Order intake1 Backlog (in-hand next 12 months) (next 12 months) X EUR million X EUR million +31.7%2 +8.9%2 1,052 458 971 440 964 943 928 917 867 382 362 365 348 655 318 285 606 545 588 578 556 263 508 227 232 245 232 151 105 341 299 280 274 272 274
Slide 7: Financial update
2. Financial update A. YTD performance B. Mid-term outlook C. IFRS 16 update 7
Slide 8: Mid to high single digit comparable revenue growth
Mid to high single digit comparable revenue growth Group revenue Divisional revenue Revenue (X EUR billion) Marine revenue (X EUR million) +7-12% CAGR +5-10% CAGR 1,431 1,096 947 2015 2016 2017 2018 2021-2023 2.4 YTD Sep 1.8 Land revenue (X EUR million) 1.5 +3-7% CAGR 569 507 476 2015 2016 2017 2018
Slide 9: Revenue growth in all market segments
Revenue growth in all market segments Revenue per market segment Revenue (X EUR billion) Oil & Gas share (%) ▪ Revenue growth in all market segments 78% 68% 57% 62% 2.6 B EUR ▪ Share of O&G expected to increase, 2.0-2.5 B EUR although it will remain well below pre- Non-Oil & Gas Oil & Gas downturn l
Slide 10: EBIT margin targeted to improve to 8-12% of revenue
EBIT margin targeted to improve to 8-12% of revenue Minimum improvement required to achieve EBIT (excl. exceptional items X EUR million) EBIT (%) low-end of EBIT margin range 12% 8% EBIT margin impact (pp1) Per year By 2021 4-5 Volume Mid single digit volume growth 1-2 2015 2016 2017 2018 2021-2023
Slide 11: Drivers of margin improvement
Drivers of margin improvement Drivers Estimated annual EBIT Impact1 Proof points and actions (in EUR million) Vessel based volume: +1% ▪ Revenue growth with disciplined cost management ▪ Owned vessels utilisation 4 benefiting from operating leverage ▪ Chartered vessels 2 ▪ Reduction of personnel, de
Slide 12: Free cash flow 4-7% of revenue by 2021-2023
Free cash flow 4-7% of revenue by 2021-2023 ▪ Gradual improvement of EBIT margin to 8 -12% ▪ Less capital intensive business model with average annual CAPEX of EUR 100 to 130 million ▪ Maintenance EUR 50-60 million Drivers of free cash ▪ Project, innovation and growth EUR 50-70 million flow improvem
Slide 13: Resulting in further deleveraging
Resulting in further deleveraging Net debt / EBITDA Debt maturity per June 2018 ≤ 3.0 covenant X EUR million 430 2.5 2.5 2.5 1.9 1.6 1.5 190 1.1 100 2015 2016 2017 2018 2018 2018 2021- 2018 2019 2020 2021 2022 2023 2024 1Q 2Q 3Q 2023 Revolving credit facility Subordinated convertible bond 2016 Subor
Slide 14: Benefits expected from significant Deferred Tax Assets (DTA)
Benefits expected from significant Deferred Tax Assets (DTA) Significant DTAs with limited expiration.. ..expected to result in substantial tax benefits ▪ DTA at year-end 2017: ▪ In 2017, EUR 1 million tax benefit realised from DTA ▪ Recognised EUR 39 million ▪ In subsequent years increased DTA real
Slide 15: ROCE to improve to 10-15%
ROCE to improve to 10-15% (%) 25 ROCE1 (%) ▪ ROCE of 10-15% will require an EBIT margin of ROCE1 target (%) 8-12% 20 EBIT excl. exceptional items (%) 15 ▪ We will operate a more asset light business 15% model, resulting in lower CAPEX in the coming 10 10% years 5 ▪ Average annual CAPEX 0 ▪ 2008-2014
Slide 16: Capital allocation: priority to organic growth and deleveraging
Capital allocation: priority to organic growth and deleveraging 1 Capital Support profitable organic growth through EUR 100 -130 million Expenditure maintenance, project and innovation related CAPEX per year on average 2 Targeting mid-term net Balance Sheet Further strengthen balance sheet debt/EBIT
Slide 17: Updated mid-term targets (2021-2023)
Updated mid-term targets (2021-2023) ROCE EBIT FCF1 Group 10 – 15 % 8 – 12 % 4–7% Marine >10 % 10 - 13 % Land >10 % 6-9% Seabed >10 % 8 - 12 % 1. As % of revenue Note: All figures in this presentation are pre-IFRS 16, unless stated otherwise 17
Slide 18: Financial key takeaways
Financial key takeaways 1. Improved results and marginally positive EBIT margin in 2018 2. Capital allocation: priority to organic growth and deleveraging 3. Significant improvements in EBIT, ROCE and cash flow in the mid-term (2021-2023): ▪ Return On Capital Employed 10-15% ▪ EBIT margin 8-12% ▪ Fr
Slide 19: Financial update
2. Financial update A. YTD performance B. Mid-term outlook C. IFRS 16 update 19
Slide 20: Long-term operating lease commitments on balance sheet as of 2019
Long-term operating lease commitments on balance sheet as of 2019 Actual situation 2019 (IFRS 16) As per year end 2017 Current estimate Off balance sheet Short term leases lease commitments EUR 320 million Short term leases Balance sheet: assets/liabilities Long term leases EUR 200-225 million* * di
Slide 21: Long-term operating lease commitments on balance sheet as of 2019
Long-term operating lease commitments on balance sheet as of 2019 2019 excluding 2019 impact IFRS 16 impact IFRS 16 Current estimate Revenue €€€ €€€ EUR 35-45 million Operating costs - EUR 35-45 million lease expenses EBITDA + EUR 35-45 million Depreciation Recognised as + EUR 30-35 million deprecia