Fugro Nv · EURONEXT:FUR
Fugro Nv — H1 2020 Earnings Presentation
30 slides from Fugro Nv's earnings presentation, 2020
Slide 1: H1 2020 results
H1 2020 results
Slide 2: 1. Introduction
1. Introduction
Slide 3: Results reflect quick response to Covid-19
Results reflect quick response to Covid-19 Revenue 12-month backlog Adjusted EBIT (margin) - 19.3%1 +1.1%1 9.0% 441 7.4% 356 358 349 856 845 40 -4.6% -6.0% 26 Q1 Q2 Q1 Q2 2019 2020 -16 -22 H1 19 H1 20 Q1 Q2 Q1 Q2 2019 2020 ▪ Q2 revenue down 19.3% due to Covid and oil & gas downturn, partly offset by
Slide 4: Quick response with comprehensive cost reduction plan
Quick response with comprehensive cost reduction plan annualised P&L impact P&L impact savings H1 2020 H2 2020 [x EUR [x EUR million] [x EUR million] million] ▪ Reduce workforce by up to 10% ~60 ▪ Reduce overhead costs ▪ Implement hiring and salary freeze ▪ Cut on executive pay ▪ Minimise use of sho
Slide 5: #1 Capture growth in energy & infra
# 1 Capture growth in energy & infra Site characterisation for Maldives bridge • Multidisciplinary project for Greater Male’ connectivity bridge in midst of global pandemic and local lockdown • Acquisition of Geo-data in challenging metocean conditions • Data delivery platform enabling the client an
Slide 6: #2 Differentiate by integrated digital solutions
# 2 Differentiate by integrated digital solutions Pohokura remote operations Hydrographic contract in US • Real-time interaction between on site • First task order, in Florida, under new team and facility onshore, through live multi-year contract for NOAA streaming of ROV and diver interactions • Us
Slide 7: #3 Leverage core expertise in new growth markets
# 3 Leverage core expertise in new growth markets Nautical charting in Bermuda • Both onshore and offshore, including reef structures • Using Fugro’s easily mobilised airborne lidar bathymetric system • Data for coastal defense modelling, in relation to rising sea levels Telecom cable route survey 2
Slide 8: Further diversification through strong growth in renewables
Further diversification through strong growth in renewables revenue by segment Q2 2020 revenue growth%1 Q2 2020 4% -29% 8% -29 42% -25% -25 24% 41% 40 oil & gas nautical 22% -16% infrastructure other -16 renewables ▪ Offshore wind continues to grow, in line with strategy to further diversify into ne
Slide 9: 2. H1 2020 results
2. H1 2020 results
Slide 10: H1 2020 key messages
H1 2020 key messages ▪ Revenue strongly impacted by Covid-19 and lower oil price, partly countered by strong growth in renewables ▪ Decisive and immediate cost reductions contribute to 7.4% margin in Q2 despite revenue decline ▪ Significant margin decline in Europe-Africa due to steep revenue declin
Slide 11: Strong cost reductions mitigate revenue decline
Strong cost reductions mitigate revenue decline X EUR million, excl. specific items 23 3 4 5 10 -90 50 3 EBIT H1 19 revenue other income 3rd party costs personnel other expenses D&A EBIT H1 20 decline expenses 11 H1 2020 results
Slide 12: EBIT impacted in both marine and land
EBIT impacted in both marine and land Adjusted EBIT Marine Adjusted EBIT Land X EUR million, excl specific items X EUR million, excl. specific items 3.6% 1.4% 20 1.2% 3 - 0.9% 6 -2 H1 19 Europe- Americas Asia Middle H1 20 Africa Pacific East & India H1 19 Europe- Americas Asia Middle H1 20 Africa Pa
Slide 13: Europe-Africa: significant margin decline; recovery Q2
Europe-Africa: significant margin decline; recovery Q2 Revenue - 12.7%1 ▪ Marine margin impacted by storms in Q1, Covid-19 and O&G decline, partly compensated by growth offshore wind 339 ▪ Land margin stable despite Covid-19 challenges -6 290 ▪ After weak Q1, strong recovery in Q2 driven by cost H1
Slide 14: Americas: margin in marine up, ongoing Land restructuring
Americas: margin in marine up, ongoing Land restructuring Revenue ▪ Revenue decline in all business lines except MSC due to Covid- - 10.2%1 related project postponements and cancellations, and portfolio rationalisation 194 ▪ Growth MSC thanks to high offshore wind activity levels -2 172 ▪ Improved m
Slide 15: Asia Pacific: ongoing margin recovery
Asia Pacific: ongoing margin recovery Revenue - 6.3%1 ▪ After strong increase in Q1, Q2 revenue was down as result of Covid restrictions and projects being deferred, specifically impacting marine 158 -1 ▪ Margin improved as result of stringent cost management 147 measures and government support H1 1
Slide 16: Middle East & India: margin up slightly
Middle East & India: margin up slightly Revenue - 9.2%1 ▪ Revenue down due to low vessel utilisation in MSC and restructuring of diving services in MAI 107 ▪ Lower marine EBIT due to lower activity in MSC, partially 2 98 compensated by improved MAI performance as result of cost cutting and portfolio
Slide 17: Seabed Geosolutions: EBIT impacted by impairment and S-79 termination
Seabed Geosolutions: EBIT impacted by impairment and S-79 termination Revenue ▪ Activity levels severely affected by Covid-19, including sudden termination of S-79 project and delay of project in Brazil -18.8%1 ▪ Work force reduced by around 50%. Restructuring costs amounted to EUR 4.2 million 73 61
Slide 18: Results impacted by specific items
Results impacted by specific items H1 2020 H1 2019 x EUR million ▪ Specific items: Adjusted EBIT 4.3 23.3 ▪ restructuring costs (EUR 8.2 million) Specific items (15.0) (6.5) ▪ impairment (EUR 3.4 million) EBIT (10.7) 16.8 ▪ certain other costs (EUR 3.4 million). Finance income 0.3 2.2 Interest expen
Slide 19: Year-on-year working capital improvement
Year-on-year working capital improvement Working capital (as % of revenue) from continuing operations 15.2% 14.9% 15.1% 400 ▪ End of June 2020, working capital 12.6% 13.0% 12.0% 300 10.9% 11.0% favourably impacted by around EUR 20 9.5% million deferred tax payments as a result 200 309 244 government
Slide 20: Positive free cash flow
Positive free cash flow H1 2020 Free cash flow H1 2019 Free cash flow X EUR million, from continued operations X EUR million, from continued operations 50 -45 35 24 -9 18 -2 -40 operating changes divestment capex other free cash CF before working proceeds investing CF flow changes capital Global -40
Slide 21: All covenants met
All covenants met Net debt/EBITDA Solvency ≤3.0 latest covenant 40,9% 39,1% 38,5% 37,5% 34,9% 35,3% 34,7% 34,4% 33,5% 2,9x 2,8x 2,8x 31,5% 32,8% 31,7% 31,8% 2,5x 2,5x 2,5x 29,3% 2,2x 2,2x 2,2x 1,9x 1,9x 1,7x 1,7x 1,3x ≥27.5% latest covenant 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19
Slide 22: Debt maturity profile, RCF extended to Sep 2021
Debt maturity profile, RCF extended to Sep 2021 Maturity profile 575 ▪ Maturity revolving credit facility extended to Sept RCF 2021, enabling increased refinancing flexibility 2021 convertible 151 100 2024 convertible ▪ Liquidity is good with EUR 370 million in cash and 0 0 0 0 available facilities
Slide 23: 3. Outlook and management agenda
3. Outlook and management agenda
Slide 24: Oil & gas: enduring impact of Covid-19 demand disruption
Oil & gas: enduring impact of Covid-19 demand disruption Global oil and gas market Growth drivers ▪ Brent oil has recovered to $40 since April; partial Final investment ▪ Rystad expect gradual recovery in 2021-23 decisions (FID) rebound of price and demand in recent months ▪ OPEC+ has reduced supply
Slide 25: Offshore wind: continued strong outlook, some delays
Offshore wind: continued strong outlook, some delays Global offshore wind market Growth drivers ▪ Global drive for renewable energy supports outlook ▪ GDP outlook impacts short term energy demand ▪ Europe remains main market Economic growth ▪ Economic recovery in 2021 can stimulate ▪ Accelerating gr
Slide 26: Sustainable growth in infrastructure markets
Sustainable growth in infrastructure markets Global infrastructure market Growth drivers ▪ Expenditure for construction services continues to grow in medium/longer term ▪ Negative GDP growth 2020, with strong Economic growth recovery in 2021 ▪ Slightly reduced growth outlook in 2020, no prolonged im
Slide 27: Growth 12-month backlog
Growth 12-month backlog Backlog increase in Europe-Africa and Asia Pacific X EUR million, from continued operations +1.1%1 1,011 902 920 934 856 890 845 386 297 367 378 318 348 356 285 272 270 251 243 244 223 Europe-Africa 217 220 211 Americas 179 166 199 175 APAC 103 104 98 106 133 118 91 Middle Ea
Slide 28: Outlook
Outlook ▪ Visibility has improved, even though it is impossible to forecast magnitude and duration of the pandemic ▪ Offshore wind anticipated to show continued growth ▪ Infrastructure and nautical markets strongly dependent on governmental budgets; expected to benefit from numerous incentive progra
Slide 29: Management agenda
Management agenda Preserve health and wellbeing of our employees and other stakeholders Ongoing implementation of cost & capex reduction program to protect liquidity and profitability Complete turnaround of underperforming land business Ensure refinancing Divest non-core interest in Seabed Geosoluti
Slide 30: Q&A
Q&A 30