Second half year better than expected; restructuring measures accelerated due to challenging market
▪ Fugro to focus on its core geotechnical and survey activities.
▪ Restructuring Seabed Geosolutions in progress and Fugro actively seeking options to reduce its stake.
▪ Process underway to find a partner to create a strong subsea services player. Options include a divestment of (part of) the subsea business.
▪ The results in 2014 were poor due to the strong deterioration of the oil and gas market and performance issues.
▪ Due to the poor results and to strengthen the balance sheet, Fugro will not pay a dividend for the year 2014.
▪ Performance improvement measures have been accelerated and are on track.
▪ 2nd half year EBIT margin (excluding impairments and write-offs) of 9.3% for the Geotechnical, Survey and Subsea divisions combined, compared to guidance of mid-single digit.
▪ Impairments and write-offs in the second half year of EUR 283.4 million versus guidance of EUR 200 – 250 million. Total impairments and write-offs for the year of EUR 630.0 million.
▪ Net debt to EBITDA at year end of 2.2 compared to requirement of below 3.5.
▪ Backlog of the Geotechnical and Survey divisions decreased 7.9% on a currency comparable basis, in line with market developments.

Key figures (x EUR million) 2014 2013
Revenue 2,572.2 2,424.0
currency comparable growth 5.9%
EBITDA1 excluding impairments and write-offs 372.7 545.5
EBIT excluding impairments and write-offs 81.4 267.0
EBIT margin excluding impairments and write-offs (%) 3.2% 11.0%
Net result 2 (457.6) 224.2
Backlog next 12 months 1,575.5 1,723.5
Cash flow from operating activities 336.7 365.4

1 EBITDA is EBIT before depreciation, amortisation (including amortisation on multi-client library), impairments related to goodwill, intangible assets, property, plant and equipment
2 attributable to owners of the company (from continued operations)

Paul van Riel, CEO: “Today we present important portfolio changes, as part of the updated strategy ’Building on strength’ presented in October. Clearly, the way forward for Fugro is to fully focus on its survey and geotechnical activities. We have been able to build our global market leading Geotechnical and Survey divisions into pillars of strength on the foundation of being an independent service provider. We will continue to build Fugro on the strength of these activities. We are actively seeking options to reduce our share in Seabed Geosolutions and the process is underway to find a partner for Subsea Services; options include a divestment of (part of) the subsea business.

To address the current challenging environment, we initiated a series of measures throughout the company, starting in the second quarter of 2014 to restore margins, improve cash flow and return on capital employed. These have been expedited and are on track. Our second half year results in our Geotechnical, Survey and Subsea Services divisions were satisfactory considering the market circumstances.

We anticipate a weak oil and gas market for some time to come, while the infrastructure and windfarm markets continue to provide good opportunities. Our plan for 2015 is clear: focus on profitability, cash flow and strengthening the balance sheet by implementing restructuring measures. Strategically, our main objective is to implement the announced portfolio changes to strengthen the company, simplify and reduce the cost of the organisation and improve operational performance. This will position the company well to benefit from recovery in the oil and gas market when the demand-supply balance is restored.”


Changes to Board of Management
At the end of the upcoming Annual General Meeting of shareholders (AGM) on 30 April 2015, the four-year term of Scott Rainey, Director of the Geotechnical division, will expire. He has indicated that he is not available for re-appointment, as after 34 years at Fugro, he has decided to retire from the Board of Management. During his long lasting involvement with Fugro, he has greatly contributed to the development of the company and especially the geotechnical activities and Fugro's business in the United States. He will continue with his activities regarding the turn-around of the Seabed Geosolutions joint venture and the implementation of the strategic options for this unit.

Also at the upcoming AGM, Mark Heine (41) will be nominated for appointment to the Board of Management. He is member of the Executive Committee and Director of the Survey division since May 2013. Mark Heine joined Fugro in 2000 and served, amongst others, as Managing Director of Fugro Survey B.V. and as Regional Manager Europe-Africa for the Survey division. He holds a MSc in Geodetic Engineering from Delft University of Technology.

tijd 09.03
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