Revenue growth of 19.2% on comparable basis, driven by Fugro’s key markets oil and gas, offshore wind and infrastructure. All divisions showed growth, in particular Marine.
EBIT turned positive thanks to significantly improved profitability of the early cyclical marine site characterisation activities.
Seabed results impacted by specific project execution issues in the fourth quarter.
Break-even cash flow excluding the impact of higher working capital given the strong revenue growth.
Net debt/EBITDA of 2.2, well within covenant requirement.
Double digit year-on-year comparable backlog growth thanks to strong order intake in the fourth quarter.
Outlook 2019: Continued revenue growth, further improvement of EBIT margin and positive cash flow from operating activities after investments.
To implement ‘Path to Profitable Growth’ strategy, Fugro will simplify its top management structure.
Mark Heine, CEO: “The year 2018 marks a turning point in our results. With our market leading positions, we have benefited from the gradual recovery of the oil and gas market and the ongoing expansion of offshore wind, which were the key drivers behind the sharp growth and improving prices in early cyclical marine site characterisation activities. This resulted in a strong increase in revenue and profitability, partly offset by disappointing results in Seabed and lagging profitability of our late cyclical marine asset integrity services. Our updated strategy ‘Path to Profitable Growth’ is the basis for further improvement of our profitability by capturing the upturn in energy and infrastructure, differentiating by integrated digital solutions and leveraging our core expertise in new growth markets. We continue to look for divestment opportunities of our non-core assets. To accelerate strategy implementation and further increase efficiencies we have decided to simplify the top structure by introducing a regional model with four regions, directly reporting to the Board of Management. In addition, an executive leadership team will be established which comprises, besides the Board of Management, the Regional Group Directors and several functional directors. This enhances alignment in our organisation and creates more focus on our strategic and operational priorities.”
Since the launch in November 2018, Fugro has been making good progress with the implementation of the ‘Path to Profitable Growth’ strategy. The upturn in the offshore energy market is already visible in Fugro’s 2018 results. The digitalisation initiatives are progressing as planned and are already generating return. The recent award of the California Waterfix contract illustrates Fugro’s ability to leverage its core capabilities in new growth markets.
To create more focus on strategic and operational priorities and as a logical next step in Fugro’s drive towards offering integrated solutions, Fugro will simplify its top-management structure. The Land and Marine divisions will be integrated at the top-level. Instead of two divisions represented in five regions there will be four integrated regions, effectively removing a management layer. Within the regions, the current business line structure will be maintained: marine site characterisation, marine asset integrity, land site characterisation and land asset integrity.
In addition to the Board of Management, an executive leadership team will be established. This team will consist of the four Regional Group Directors, a Group Director Digital Transformation & Innovation, the Group Director Human Resources and the General Counsel. The Board of Management will continue to consist of three members. As CEO, Mark Heine will be the chairman of both the executive leadership team and the Board of Management. Brice Bouffard, currently Director Land, will become Chief Development Officer with a dedicated focus on the portfolio of services, the global business lines, sales & marketing and operational excellence. Paul Verhagen will continue in his position as CFO, responsible for finance, IT and procurement.
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De Midcap 775,06 +5,29 +0,69% Fugro EUR 10,195 +34,5ct vol. 339.000