Fugro Nv · EURONEXT:FUR

Fugro Nv — H1 2015 Earnings Presentation

30 slides from Fugro Nv's earnings presentation, Aug 6, 2015

  1. Slide 1: Half-year results 2015

    Half-year results 2015 Amsterdam, 6 August 2015

  2. Slide 2: General highlights: Improved results under continued challenging market circumstances

    General highlights: Improved results under continued challenging market circumstances Good progress implementation management agenda  Improved profitability  Positive cash flow  Strengthened balance sheet General downturn oil and gas market, resulting in continued pressure on work volumes and pri

  3. Slide 3: Financial highlights HY15

    Financial highlights HY15  Y-on-Y revenue decline of 7.3% on currency comparable basis  EBITDA (excl exceptional items) up by 34% to EUR 198 million  EBIT margin (excl exceptional items) increased to 5.7% from 2.1% in HY14, mainly driven by Seabed and to lesser extent by Survey and offshore Geote

  4. Slide 4: Progress portfolio changes in line with rebalanced strategic priorities

    Progress portfolio changes in line with rebalanced strategic priorities Planned portfolio changes Status Divestment multi-client data library Finalised in HY 15 Reduction of Fugro’s stake in Seabed Geosolutions Given current market conditions, these processes are taking more time than anticipated Pa

  5. Slide 5: Cost reduction and performance improvement measures on track

    Cost reduction and performance improvement measures on track EBIT margin1 Actions EBIT Gross margin 1 headcount reduction of 755 employees (around 6% for total Fugro); 616 net reduction  Vessel fleet reduction on track  Geotechnical: reduction by 1 to 10 in HY15; further reduction to 7 at YE 15 

  6. Slide 6: Additional cost reduction and performance improvement measures

    Additional cost reduction and performance improvement measures Further headcount reductions Reduction of 200 employees in the coming half year, in particular in Subsea Services and Geotechnical divisions 18.1 18.8 11.8 Fleet management  Expedited transition of remaining 30% of Fugro’s vessels to ce

  7. Slide 7: Market developments

    MARKET DEVELOPMENTS 7 www.fugro.com

  8. Slide 8: Oil and gas market (78% of Fugro revenue) under pressure

    Oil and gas market (78% of Fugro revenue) under pressure  No oil price recovery expected for some time to come  Significant reduction in E&P spending  NOCs in Middle East continue to invest  Significant restructuring in oil field service companies  Standardisation and simplified solutions offer

  9. Slide 9: Infrastructure market regional differences

    Infrastructure market regional differences Infrastructure and building (12%)  Market flat in Western Europe; Middle East and Far East continued to be strong  Infrastructure under pressure in oil and gas producing countries (Africa)  Significant efforts required to rebuild USA roads & bridges  Ri

  10. Slide 10: Regional overview

    Regional overview Europe  Significant slow down in the North Sea; back to seasonal volatility  High level of offshore windfarm activities  Infrastructure spending flat but growing European economies should support Americas increased spending Asia Pacific  New exploration areas (Mexico, Central A

  11. Slide 11: Key project wins

    Key project wins Site investigation for Fehmarnbelt Link tunnel between Three year extension of construction support services Denmark and Germany contract with McDermott in Middle East Investigation wind farm sites Borssele, The Netherlands Hydrocarbon seep study for BG International in Honduras 11

  12. Slide 12: Financials

    FINANCIALS 12 www.fugro.com

  13. Slide 13: Nominal revenue growth; revenue decline at constant currencies

    Nominal revenue growth; revenue decline at constant currencies Reported growth Currency comparable growth Revenue X EUR million + 4.3% -7.3% 81 -16 1,238 138 1,238 16 -4 -26 1,187 1,187 -29 -50 -57 49 1,100 HY14 Geotech Survey Subsea Geo- Geoscience HY15 HY14 Geotech Survey Subsea Geoscience HY15 Cu

  14. Slide 14: EBIT improvement mainly driven by Seabed

    EBIT improvement mainly driven by Seabed EBIT excl. exceptional items X EUR million 62 70 25 -13 2 -6 HY14 Geotech Survey Subsea Geoscience HY15 Seabed 100% 14 www.fugro.com

  15. Slide 15: Cost reduction and performance improvement measures on track

    Cost reduction and performance improvement measures on track Compared to YE14 annualised savings (x EUR million) FTE Geotech - 182 13 Survey - 206 14 Subsea - 159 17 Seabed / other - 69 9 - 616 53 Vessels* Geotech -2 30 Survey -4 28 Subsea -1 23 81 Total annualised cost reduction 134  Lower personn

  16. Slide 16: Improved profitability in challenging market

    Improved profitability in challenging market X EUR million Revenue EBIT (margin) Capital employed ROCE* excluding exceptional items excluding exceptional items 1,238 1,187 2,492 2,219 5.7% 4.7% 2.1% 1.8% HY14 HY15 HY14 HY15 HY14 HY15 HY14 HY15 Rev. Reported growth 4.3% or – 7.3% currency comparable

  17. Slide 17: Negative exceptional items partially offset by positive exceptionals

    Negative exceptional items partially offset by positive exceptionals (x EUR million) Geotechnical Survey Subsea Geoscience Total Services Of which Of which Seabed multi-client Onerous contract provision (2.0) 8.9 16.7 16.7 23.6 Loss on sale multi-client library (1.4) (1.4) (1.4) Restructuring costs

  18. Slide 18: Geotechnical: onshore weak, offshore improved

    Geotechnical H1 onshore weak, offshore improved X EUR million Revenue EBIT (margin) Capital employed excluding exceptional items 7.4% 789 382 754 366 offshore 139 147 3.6% 27 onshore 219 244 14 HY14 HY15 HY14 HY15 HY14 HY15 Rev.  Onshore decline of 2.2% (currency comparable)  Offshore decline of 1

  19. Slide 19: Survey marginally improved in difficult market

    Survey marginally improved in difficult market X EUR million Revenue EBIT (margin) Capital employed excluding exceptional items 697 424 420 11.8% 12.5% 584 50 52 HY14 HY15 HY14 HY15 HY14 HY15 Rev.  Currency comparable revenue decline of 11.9%  Lower oil and gas related revenue partly compensated b

  20. Slide 20: Subsea Services steep revenue decline and high operational leverage result in losses

    Subsea Services steep revenue decline and high operational leverage result in losses X EUR million Revenue EBIT (margin) Capital employed excluding exceptional items -1.4% -3.9% 577 598 265 239 -3.7 -9.4 HY14 HY15 HY14 HY15 HY14 HY15 Rev.  Currency comparable revenue decline of 21.4% in line with b

  21. Slide 21: Geoscience: turnaround Seabed results in strong result improvement

    Geoscience: turnaround Seabed results in strong result improvement X EUR million Revenue EBIT (margin) Capital employed excluding exceptional items 14 197 577 19 15 4 -5 -1 133 244 35 178 -47 other 245 135 97 multi-client Seabed 144 88 -48 -10 1 HY14 HY15 HY14 HY15 HY14 HY15 Rev.  66.3% currency co

  22. Slide 22: Increased interest and tax expenses

    Increased interest and tax expenses Net finance costs Tax expense (x EUR million) HY15 HY14 (x EUR million) HY15 HY14 Finance income 5 7 Tax before exceptional items (36) (7) Interest expenses (26) (14) Tax on exceptional items 11 58 Net change in fair value of (0) (7) Total tax (25) 51 financial as

  23. Slide 23: Working capital reduction initiative delivers ahead of plan

    Working capital reduction initiative delivers ahead of plan Working capital Reduction trade receivables (x EUR million) HY15 HY14  Working capital reduction program with focus on reduction of receivables and work in Working capital 401 446 progress is delivering results of which inventories 37 34 

  24. Slide 24: Capex strongly curtailed

    Capex strongly curtailed Capital expenditure (x EUR million) HY15 HY14 Maintenance capex 34 50 Capex major assets (incl assets 54 84 under construction) Total 88 134 FY 15 capex will be just below the mid-term guided range of EUR 175 - 225 million Vessel delivery schedule Division (Expected) start o

  25. Slide 25: Positive cash flow despite challenging market circumstances

    Positive cash flow despite challenging market circumstances 71 - 68 102 -9 9 131 122 -1 - 88 115 Operating Receivables Payables Inventories Capex Proceeds Other CF from Cash flow Cash flow Net cash CF before Sale investing from from financing changes multi-client operating in working activities afte

  26. Slide 26: Balance sheet strengthened

    Balance sheet strengthened All covenants met Debt maturity profile* 470 FY14 HY15 HY15 realisation realisation adjusted covenant Fixed charge 2.9 2.8 > 2.0 cover 320 Net debt / 2.2 2.0 < 3.0 EBITDA Solvency 43% 44% > 33.3% 155 30 2015 2016 2017 2018 2019 2020 2021+ * Revolving credit facility and pr

  27. Slide 27: Outlook

    OUTLOOK 27 www.fugro.com

  28. Slide 28: Backlog next 12 months: decline in line with market developments

    Backlog next 12 months: decline in line with market developments 12 month backlog Currency comparable growth (x EUR million) HY14 1Q15 HY15 Y-on-Y Q-on-Q onshore Geotech 264 345 312 + 5.2% - 7.8% offshore Geotech 235 143 144 - 45.3% +2.7% Geotech total 499 488 456 -18.6% - 4.7% Survey 640 589 566 -1

  29. Slide 29: Outlook 2015

    Outlook 2015  Oil services market expected to remain weak for foreseeable future  Lower EBIT in 2HY15, compared to 2HY14 (excl exceptional items), mainly related to Subsea Services, which is confronted with significant backlog decline and high operational leverage  For Seabed Geosolutions, we exp

  30. Slide 30: Thank you

    Courtesy of French Ministry Of Culture and Communication / Immadras THANK YOU

Fugro — H1 2015 Earnings Presentation on 6ix