- Margin improvement in second half and solid cash flow. Successful refinancing provides flexibility to deliver on Path to Profitable Growth strategy.
19 Feb 2021 07:00 CET
Leidschendam, the Netherlands
Revenue declined by 12.4% in the full year and by 14.4% in the second half, due to the impact of Covid-19 and the downturn in oil and gas, partly offset by strong growth in offshore wind.
Continued diversification in Fugro’s business: in the second half of 2020, 59% of revenue was generated in renewables, infrastructure, nautical and other non-oil and gas related markets.
Growth in offshore wind and cost reductions supported margin recovery to 6.5% in the second half-year compared to 0.6% in the first half of 2020.
Strong free cash flow of EUR 105.4 million thanks to exceptionally strong working capital performance, resilient EBITDA and proceeds from the sale of Global Marine.
Net result including discontinued operations impacted by specific items, including non-cash impairments (mainly Seabed), restructuring costs and currency revaluation losses.
Refinancing strengthened balance sheet, resulting in net leverage of 2.1 (or 1.6 excluding IFRS-16).
Solid 12-month backlog of EUR 866.2 million, an 8.0% decrease compared to a pre-Covid backlog at the end of 2019.
In 2021, continued focus on managing costs and cash flow, and on operational and commercial excellence, with the aim of improving the margins.
Key figures (x EUR million) from continuing operations unless otherwise indicated 2020 2019 H2 2020 H2 2019
Revenue 1,386.3 1,631.3 678.9 834.5
comparable growth1 (12.4%) 2.7% (14.4%) 0.0%
Adjusted EBITDA2 162.0 184.9 100.7 101.6
Adjusted EBIT2 48.2 68.0 43.9 44.7
Adjusted EBIT margin2 3.5% 4.2% 6.5% 5.4%
EBIT 19.8 25.6 30.5 8.8
Net result3 (74.0) (39.6) (22.4) (22.0)
Net result incl. discontinued operations3 (173.8) (108.5) (60.7) (22.5)
Backlog next 12 months 866.2 1,011.1 866.2 1,011.1
comparable growth1 (8.0%) 9.9% (8.0%) 9.9%
Cash flow operating activities after investing 105.4 58.3 87.2 92.7
Cash flow operating activities after investing incl. disc. ops. 88.4 22.8 72.9 81.7
Net leverage4 2.1 4.0 2.1 4.0
1 Corrected for currency effect
2 Adjusted for specific items: onerous contract provisions, restructuring cost, impairment losses, and certain advisor/ other costs
3 Attributable to the owners of the company
4 Total debt (incl. subordinated debt) minus cash on balance sheet divided by last 12 months adjusted consolidated EBITDA for covenant purposes, including IFRS-16; 2019 numbers provided for information only as the definition was changed after the Q4 2020 refinancing
Mark Heine, CEO: “In 2020, the Covid-19 virus took hold around the world and affected all of us. Fugro’s results reflect our resilient operating model, which enabled us to quickly respond to the impact of the pandemic and to continue to benefit from very strong growth in offshore wind. Despite the operational complexities and in close cooperation with clients, we have been able to continue working on the majority of our projects, while maintaining health and safety as a first priority. To protect our profitability and liquidity, we have acted decisively by promptly implementing a comprehensive cost reduction programme. In combination with the strong growth in offshore wind, this resulted in recovery of margins in the second half of the year, despite significantly lower revenue.
Our recent refinancing provides us with the financial flexibility to deliver on our Path to Profitable Growth strategy. Our ambition is to support the transition towards carbon neutrality, sustainable infrastructure and climate resilience. Based on our technical innovations, digital solutions and strong reputation, we are well positioned to benefit from these industry trends. For example, recently we have been involved in site investigations for the Hai Long offshore wind farm in Taiwan, a coastal zone management project in Sint Maarten, flood risk mapping in Romania and consultancy services for the construction of Germany’s largest energy infrastructure project, the Suedlink power line. With almost 60% of our revenue coming from offshore wind, infrastructure, nautical and other non-oil and gas markets in the second half of the year, the diversification of our portfolio is well underway.
We expect to return to more normal market conditions in the second half of the year. Our management agenda is: to manage our cost base and cash flow; to complete the turnaround of the land business; to further strengthen operational and commercial excellence; to enhance our service delivery with new market leading digital solutions; to divest Seabed Geosolutions and to accelerate our ESG roadmap. For Fugro’s own operations, our target is to be carbon neutral by 2035.”
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Fugro EUR 8,50 -73ct vol. 1,9 miljoen.