Fugro Nv · EURONEXT:FUR
Fugro Nv — Investor Presentation (March 2021)
56 slides from Fugro Nv's investor presentation, March 2021
Slide 1: Investor presentation March 2021
Investor presentation March 2021
Slide 2: Contents
Contents Profile & strategy Key investment 2020 results Outlook highlights 2 Fugro investor presentation - March 2021
Slide 3: 1. Profile and strategy
1. Profile and strategy
Slide 4: Our planet is a complex system
Our planet is a complex system 4 Fugro investor presentation - March 2021
Slide 5: The earth's surface is even more complex
The earth’s surface is even more complex 5 Fugro investor presentation - March 2021
Slide 6: We unlock insights from Geo-data
We unlock insights from Geo-data Using our ‘triple A’ approach we provide our clients with insights about the characterisation of a site as well as the integrity of their assets Acquisition Analysis Advice 6 Fugro investor presentation - March 2021
Slide 7: Fugro at a glance
Fugro at a glance ▪ World’s leading Geo-data specialist, collecting and Excellent diversification of business lines & market segments analysing Geo-data for designing, building and 2020 revenue by business line 2020 revenue by market segment operating any asset on this planet 7% 8% 3% ▪ Widest bread
Slide 8: Marine services address the full lifecycle of offshore assets
Marine services address the full lifecycle of offshore assets Uniquely capable in both site characterisation and asset integrity services operation & site appraisal design & contracting construction decommissioning maintenance Final investment decision Marine site characterisation services Seep surv
Slide 9: Land services address the full lifecycle of onshore assets
Land services address the full lifecycle of onshore assets Uniquely capable in both site characterisation and asset integrity services site design & operation & construction decommissioning appraisal contracting maintenance Final investment decision Land site characterisation services Geotechnical i
Slide 10: Path to Profitable Growth strategy
Path to Profitable Growth strategy With three clear strategic objectives in our business model Purpose: Together we create a safe and liveable world Vision: Be the world’s leading Geo-data specialist Unlocking valuable insights from Geo-data to help our clients design, build and operate their assets
Slide 11: Capture growth in energy & infrastructure
# 1 Capture growth in energy & infrastructure 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
Slide 12: Differentiate with integrated digital solutions
# 2 Differentiate with integrated digital solutions Pohokura remote operations Hydrographic contract in US • Real-time interaction between on site team • First task order in Florida under new and facility onshore, through live streaming multi-year contract for NOAA of ROV and diver interactions • Us
Slide 13: 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 14: 2. Key investment Highlights
2. Key investment Highlights
Slide 15: Key investment highlights
Key investment highlights 1 World’s leading global Geo-data specialist 2 Critical and leading solutions provider in energy transition growth areas 3 Active in climate change adaptation and sustainable infrastructure growth areas 4 Diversified and long-standing client base with limited concentration
Slide 16: World's leading global Geo-data specialist
1 World’s leading global Geo-data specialist Widest breadth of services amongst companies active in both site characterisation and asset integrity services Fugro’s competitive position1 Marine market landscape1 Marine Maintained strong market leadership in MSC Maintained strong market leadership in
Slide 17: Critical and leading solutions provider in energy transition growth areas
2 Critical and leading solutions provider in energy transition growth areas Fugro is well positioned to capture growth Offshore oil & gas market spend1 +7% Key growth drivers (US$bn) 201 207 186 171 173 Strong survivor given Covid-19 rebound Technology macro headwinds 2019 2020 2021F 2022F 2023F Off
Slide 18: Critical and leading solutions provider in energy transition growth areas
2 Critical and leading solutions provider in energy transition growth areas Increasingly diversified and substantially grown in non-oil & gas end markets Share of revenue key market segments1,2 Actions to diversify across multiple end markets Oil & Gas Infrastructure ▪ Divested non-core businesses e
Slide 19: Critical and leading solutions provider in energy transition growth areas
2 Critical and leading solutions provider in energy transition growth areas Providing a wide range of services for the development and Assisting clients with the safe, efficient and responsible construction of offshore wind farms development of (still vital) fossil fuels ▪ Strong, global growth in r
Slide 20: Active in climate change adaptation and sustainable infrastructure growth areas
3 Active in climate change adaptation and sustainable infrastructure growth areas Sea floor mapping and other site characterisation services Sustainable development & operation of clients’ infrastructure related to flood and coastal protection ▪ Comprehensive mapping/ hydrography solutions, to prote
Slide 21: Diversified and long-standing client base with limited concentration
4 Diversified and long-standing client base with limited concentration Diversified client base and long-standing client relationships, offering low concentration Revenue by segment Revenue by client type Client concentration 4% 4% 3% 3% 5% 2% 4% 2% 8% 11% 15% IOCs - Majors Oil & Gas 2% Infrastructur
Slide 22: Global player with local presence
5 Global player with local presence Operations in 61 countries with office locations predominantly staffed by local personnel enabling Fugro to directly respond to clients’ needs with local content ▪ Standardisation enables Fugro to deliver the same quality of integrated service packages to clients
Slide 23: Best in class, market agnostic asset base and strong safety culture
6 Best in class, market agnostic asset base coupled with specialist workforce and strong safety culture Highly skilled specialists Modern and flexible assets1 Number of vessels 25 Average age 12 years • Fleet is among the youngest in the industry Useful life 35 - 40 years (around 12 years vs. a usef
Slide 24: Best in class, market agnostic asset base and strong safety culture
6 Best in class, market agnostic asset base coupled with specialist workforce and strong safety culture Same assets, expertise and solutions used to serve clients across market segments and geographies to optimise utilisation and pricing Vessel Illustrative recent projects Fugro Galaxy Oil & Gas Nau
Slide 25: Differentiation through innovation and digitalisation
7 Differentiation through innovation and digitalisation By addressing the industry technology gap, Fugro further enhances its AAA approach Substantial digital evolution in oil & gas lying ahead State-of-the-art technologies Digital maturity Tourism Quickvision Wavescan Buoy In-house ROV Telco Media
Slide 26: Differentiation through innovation and digitalisation
7 Differentiation through innovation and digitalisation Strategic building blocks accelerates Fugro’s Integrated Digital Solutions Remote Operations & Support Services (ROSS) Analytics & Cloud Automation Services (ACAS) AI Remote QA Analytics & Cloud automation Analytics & Cloud automation Services
Slide 27: Resilient operating model with flexibility to respond to market environment
8 Resilient operating model with flexibility to respond to market environment Initiatives undertaken to reduce earnings volatility enabled by adopting a resilient operating model Revenue by segment Revenue growth Q3 2020 Oil & Gas ▪ Increased activities in offshore wind and infrastructure (%) Infras
Slide 28: 3. 2020 results
3. 2020 results
Slide 29: Highlights 2020 results
Highlights 2020 results ■ Revenue decline of 12.4% due to Covid-19 and downturn oil & gas market, partly offset by strong growth in offshore wind ■ Continued diversification; in H2, 59% of revenue was from renewables, infrastructure, nautical and other non-oil & gas markets ■ Decisive response to pa
Slide 30: Limited y-o-y EBIT decline with recovery in H2
Limited y-o-y EBIT decline with recovery in H2 Revenue Adjusted EBIT2 (margin) X EUR million -12.4% 1,631 1,386 4.2% 3.5% FY 68 48 2019 2020 2019 2020 - 14.4% 797 834 5.4% 6.5% 707 679 HY 2.9% 45 44 23 0.6% 4 2019 2020 2019 2020 H1 H2 H1 H2 H1 H2 H1 H2 1 growth percentages corrected for currency eff
Slide 31: Diversified revenue with increased exposure to offshore wind
Diversified revenue with increased exposure to offshore wind Share of revenue key market segments1,2 Revenue growth % 20203 5% 7% 8% 7% 9% 4% 12% 7% 11% 16% 14% 18% -23 21% 21% 24% 24% 24% 23% 23% -14 23% 24% 78% 74% 66% 28 57% 54% 52% 48% 45% 41% 4 2014 2015 2016 2017 2018 2019 2020 H1 2020 H2 2020
Slide 32: Trends in Fugro's markets
Trends in Fugro’s markets ▪ Population growth, urbanisation, climate change and technology are the key global developments shaping our world -29% ▪ These result in the following industry trends in Fugro’s markets: energy transition, climate change adaptation, sustainable infrastructure and digitalis
Slide 33: Energy transition: high growth renewables
Energy transition: high growth renewables ▪ Global drive for renewable energy; expected economic Offshore wind capex (EUR bn)1 recovery in 2021 supports renewables investments +24% 40 30 ▪ Oil majors’ investment budgets increasingly directed 24 18 21 towards renewable sources ▪ In 2022, renewabl
Slide 34: Solutions to support energy transition
Solutions to support energy transition Positioning support for installation of world’s first semi- submersible floating wind park, WindFloat Atlantic in Portugal ▪ In support of Bourbon’s towing, positioning and installation activities ▪ Customised remote positioning system powered by solar and wind
Slide 35: Sustainable infrastructure: important growth driver
Sustainable infrastructure: important growth driver Construction Project Momentum Index1 ▪ Urbanisation and population growth drive infrastructure development ▪ Increasing awareness of aging infrastructure risks ▪ Quick recovery of sentiment after initial Covid-19 impact ▪ Governmental support to pl
Slide 36: Solutions to support sustainable infrastructure
Solutions to support sustainable infrastructure Innovative monitoring of Amsterdam’s bridges and quay walls ▪ Using Fugro’s innovative TotaLite images, taken from permanently fixed compact cameras to measure deformation ▪ In addition, mobile laser scanning of bridges and quays from the water ▪ Resul
Slide 37: Climate change adaptation requires massive investments
Climate change adaptation requires massive investments ▪ Natural disasters due to extreme weather resulted in 475,000 deaths and USD 2.6 trillion damages in past 2 decades ▪ USD 140-300 billion of annual adaptation investments required in developing countries by 20301 ▪ New Biden administration laun
Slide 38: Solutions to support climate change adaptation
Solutions to support climate change adaptation Geo-data acquisition for flood hazard and risk maps in Romania ▪ Fugro will provide digital terrain models, surface models and ortho- imagery and will survey around 13,300 cross sections plus 3,500 bridges and hydrotechnical infrastructures. Projects in
Slide 39: Carbon neutral by 2035
Carbon neutral by Our ambition is to support the transition towards carbon 2035 neutrality, sustainable infrastructure and climate resilience ▪ 80% of Fugro’s carbon footprint comes from vessel CO2 emissions Achieving sustainable impact for ▪ Reduction programs underway, targeting significant lower
Slide 40: 2020 key messages
2020 key messages ▪ Modest y-o-y EBIT decline with recovery in H2 ▪ Decisive cost measures, growth in offshore wind and improvements in Land drive EBIT improvement in H2 ▪ Actions taken to address underperforming land business are yielding results ▪ Strong working capital performance and cash collec
Slide 41: On track to realise EUR 130 mn cost savings, in excess of previous target
On track to realise EUR 130 mn cost savings, in excess of previous target annualised P&L impact P&L impact savings 2020 2021 (x EUR (x EUR (x EUR million) million) million) ▪ Reduce workforce by up to 10% ~60 ~40 ~20 ▪ Reduce overhead costs ▪ Implement hiring and salary freeze ▪ Cut on executive pay
Slide 42: Despite double digit revenue decrease, modest FY EBIT decline with recovery in H2
Despite double digit revenue decrease, modest FY EBIT decline with recovery in H2 Revenue Adjusted EBIT excl. specific items - 12.4%1 1,631 -178 4.2% FY 3.5% -25 -33 1,386 13 -42 68 48 2019 Marine Land FX effect 2020 2019 Marine Land 2020 - 14.4%1 835 6.5% 5.4% -122 HY 1 -19 18 -35 679 45 44 H2 2019
Slide 43: Europe-Africa: y-o-y EBIT decline with improved margin in H2
Europe-Africa: y-o-y EBIT decline with improved margin in H2 Revenue - 11.1%1 ▪ Revenue decline in all business lines, particularly in marine asset integrity, which is most exposed to oil & gas market 682 ▪ FY EBIT margin reduced y-o-y however H2 EBIT margin -11 595 improved to 12.8% compared to 10.
Slide 44: Americas: y-o-y stable margin, land restructuring ongoing
Americas: y-o-y stable margin, land restructuring ongoing Revenue ▪ Revenue down in all business lines due to Covid-related - 12.6%1 postponements/ cancellations and oil & gas downturn. Limited decline in MSC thanks to offshore wind activities 412 -20 ▪ EBIT up from 5.9% loss in H1 to 0.5% in H2, dr
Slide 45: Asia Pacific: ongoing margin recovery
Asia Pacific: ongoing margin recovery Revenue - 10.0%1 ▪ Revenue in MSC declined as result of Covid restrictions and projects being deferred; growth in other business lines 331 ▪ EBIT improved mainly because of better performance in -7 LSC, stringent cost measures and positive transaction 291 result
Slide 46: Middle East & India: challenging H2
Middle East & India: challenging H2 Revenue - 20.4%1 ▪ Significant y-o-y revenue decline in marine due to large O&G exposure. LSC up, particularly in UAE 206 ▪ Y-o-y EBIT decline fully driven by H2 due to very significant -5 marine revenue decline 160 ▪ Land EBIT improved thanks to increased revenue
Slide 47: Seabed Geosolutions: results severely impacted by Covid-19
Seabed Geosolutions: results severely impacted by Covid-19 Revenue ▪ Activity levels severely affected by Covid-19, including sudden -52.7%1 termination of S-79 project and delay of project in Brazil ▪ Work force reduced by around 60%. Restructuring costs 136 amounted to EUR 4.1 million 63 ▪ Specifi
Slide 48: Results impacted by various specific items
Results impacted by various specific items 2020 2019 x EUR million ▪ Specific items: Adjusted EBIT 48.2 68.0 ▪ restructuring costs (EUR 17.6 million) Specific items (28.4) (42.4) ▪ impairments (EUR 5.9 million) EBIT 19.8 25.6 ▪ certain other costs (EUR 4.9 million) Finance income 2.2 3.9 ▪ increased
Slide 49: Year-on-year working capital improvement
Year-on-year working capital improvement Working capital (as % of revenue) from continuing operations ▪ Strong cash collection, resulting in DRO 15.2% 14.9% 15.1% of 83 400 12.6% 13.0% 11.0% 12.0% 10.9% 300 9.5% ▪ End of June and Dec 2020, working 8.1% 200 capital favourably impacted by around 309 1
Slide 50: Strong free cash flow
Strong free cash flow 2020 Free cash flow 2019 Free cash flow X EUR million, from continued operations X EUR million, from continued operations 50 -81 53 105 47 -3 86 81 -83 58 13 operating changes divestment capex other free cash operating changes capex other free cash CF before working proceeds in
Slide 51: Refinancing completed in December 2020
Refinancing completed in December 2020 ■ After EUR 82 million sub-10 equity issue in Q1, Fugro Maturity profile after refinancing (YE 2020) 450 raised EUR 250 million in new equity in Q4 2020 250 ■ EUR 575 million RCF was refinanced with new EUR 250 million RCF and EUR 200 million term loan 59 200 1
Slide 52: 4. Outlook and management agenda
4. Outlook and management agenda
Slide 53: Solid 12-month backlog
Solid 12-month backlog 8% y-o-y decrease compared to pre-Covid backlog at YE 2019 with growth in Europe-Africa and decline in other regions X EUR million, from continued operations -8.0%1 1,011 902 920 934 856 890 866 845 843 386 297 367 378 318 348 356 340 383 285 272 270 251 243 244 223 237 214 21
Slide 54: Outlook 2021
Outlook 2021 ▪ Covid-19 pandemic is expected to continue to impact societies and thus economic activity in the coming quarters, although Fugro anticipates a return to more normal market conditions in H2 ▪ Offshore wind is anticipated to show continued growth. Growth in infrastructure markets is expe
Slide 55: Mid-term financial guidance
Mid-term financial guidance(1) Targets Revenue EBIT margin ROCE2 Free cash Capex ~EUR 1.6-2.0 bn 8-12 % 10-15 % flow3 ~EUR 80-110 mn 4-7 % excl. Seabed4 Source: Company information. Note: Financials are excluding Seabed, unless stated otherwise. 1. The use of "mid-term“ should not be read as an indi
Slide 56: Management agenda
Management agenda Manage cost base and cash flow Further strengthen operational and commercial excellence Complete turnaround of land business Enhance service delivery with new market leading digital solutions Divest non-core interest in Seabed Geosolutions Accelerate ESG roadmap 56 Fugro investor p