Fugro Nv · EURONEXT:FUR
Fugro Nv — FY2004 Earnings Presentation
55 slides from Fugro Nv's earnings presentation, Mar 11, 2005
Slide 1: 11 March 2005
11 March 2005 - 1 www.fugro.com 11 March 2005 1
Slide 2: Fugro N.V. Annual Figures 2004
FUGRO N.V. ANNUAL FIGURES 2004 G-J. Kramer K.S. Wester A. Jonkman 11 March 2005 - 2 www.fugro.com 11 March 2005 2
Slide 3: Contents
CONTENTS • General • Divisions • Financial results • Outlook 11 March 2005 - 3 www.fugro.com 11 March 2005 3
Slide 4: Major developments
MAJOR DEVELOPMENTS • Swift, successful integration of Fugro-TGS • Record turnover € 1,022 million (2003: € 830 million): - autonomous growth +10.2% - acquisitions/divestments +15.6% - currency effects –2.7% • Net result* +48%: € 66.7 million (2003: € 45.1 million); • Net profit margin* increased to
Slide 5: Developments 2004
DEVELOPMENTS 2004 • Development EUR/USD • Investments in oil and gas industry increased • Regional improvement economic situation 11 March 2005 - 5 www.fugro.com 11 March 2005 5
Slide 6: Business development 2004
BUSINESS DEVELOPMENT 2004 • Integration Fugro-TGS in Survey-division (full effect cost savings will become visible in 2005) • Overall good performance Geotechnical and Geoscience division; Survey not yet fully satisfactory • Airborne survey: excellent • All business units contributed to net result •
Slide 7: General
• General • Divisions • Financial results • Outlook 11 March 2005 - 7 www.fugro.com 11 March 2005 7
Slide 8: Turnover per division
TURNOVER PER DIVISION (in € million) Geoscience Survey Geotechnical 1100 1000 900 800 700 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 11 March 2005 - 8 www.fugro.com (in € million) 2004 2003 2002 2001 2000 Geotechnical 278 280 323 309 281 Survey 478 346 371 392 314 Geoscience 266 204 252 209
Slide 9: Turnover per business unit
TURNOVER PER BUSINESS UNIT 6% (6%) 16% (22%) Onshore geotechnical 20% Offshore geotechnical (19%) Offshore survey 11% (12%) Onshore survey 2% (3%) Positioning 4% (6%) Development & Production Airborne survey 41% (32%) ( ) = 2003 11 March 2005 - 9 www.fugro.com (in € million) 2004 2003 2002 2001 2000
Slide 10: Turnover by region
TURNOVER BY REGION 10% 9% Netherlands (7%) (13%) Rest of Europe 14% (16%) North America and Canada Asia and Australia 37% (37%) Near and Middle East/Africa 30% (27%) ( ) = 2003 Turnover allocation is based on the place of business of the company that executes the project Example: project in Africa e
Slide 11: Backlog January
BACKLOG 1 JANUARY Certain orders Probable orders 700 600 in € million 500 400 300 200 100 0 2001 2002 2003 2004 2005 • Backlog gives an indication of the turnover for the respective year. Awarded turnover for future years is not included • Certain orders: awarde projects not yet started and unfinish
Slide 12: Division Geotechnical Services
DIVISION GEOTECHNICAL SERVICES Investigation of and advise on the physical characteristics of the soil, foundation design and construction materials Projects: • Geotechnical activities for bridge in Hong Kong • Fugro’s ship Bavenit in action for Promess (PROfiles across Mediterranean Sedimentary Sys
Slide 13: Geotechnical Services
GEOTECHNICAL SERVICES (in € million) 2004 2003 2002 2001 2000 Turnover onshore Geotechnical 167 182 205 205 189 Turnover offshore Geotechnical 111 98 118 104 92 Total 278 280 323 309 281 Operating result* 32 30 35 26 30 Invested capital 163 160 153 109 90 Depreciation of tangible fixed assets 12 13
Slide 14: Development Onshore Geotechnical services 2004
GEOTECHNICAL SERVICES Development Onshore Geotechnical services 2004 • Development in Europe slightly improved - UK business developed well - In the Netherlands prices under pressure - Clear improvement in France • USA better than in 2003 • Further decrease volume of work in Far East • Development i
Slide 15: Development Offshore Geotechnical services 2004
GEOTECHNICAL SERVICES Development Offshore Geotechnical services 2004 • Performance improved • Development new oil and gas fields and LNG-projects • New initiatives related to changing market demand in North Sea pays off • Some increase in regional competition 11 March 2005 - 15 www.fugro.com 11 Mar
Slide 16: Geotechnical Services backlog
GEOTECHNICAL SERVICES Backlog 180 160 140 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 Onshore certain Onshore probable Offshore certain Offshore probable 11 March 2005 - 16 www.fugro.com Backlog Geotechnical (in € m illion) per 1 January for the next 12 m onths 2001 2002 2003 2004 2005 Onshore ce
Slide 17: Survey
SURVEY Precise positioning services, geological advise, topographic, hydrographic and geological mapping and support services for construction projects and data management Projects: • Positioning of 26 seabed locations for the development of a large oil field offshore Nigeria • For the Dutch waterbo
Slide 18: Survey
SURVEY (in € million) 2004 2003 2002 2001 2000 Turnover offshore Survey 408 274 276 309 242 Turnover onshore Survey 45 47 65 53 46 Turnover Positioning 25 25 30 30 26 Total 478 346 371 392 314 Operating result* 49 33 50 65 41 Invested capital 233 182 111 110 87 Depreciation of tangible fixed assets
Slide 19: Development Offshore Survey 2004
SURVEY Development Offshore Survey 2004 • Leading position following integration Fugro-TGS • Gulf of Mexico: good • Caspian Sea, India and Middle East: good • Latin America: not satisfactory • China develops well • Sakhalin II project Russia extended by one year • Second AUV West Africa in operation
Slide 20: Development Onshore Survey 2004
SURVEY Develoment Onshore Survey 2004 • Australia and the Netherlands: difficult year • Field survey activities for oil and gas industry in Middle East, USA and Canada: remain positive • Invested in ‘fixed wing’ LiDAR-system 11 March 2005 - 20 www.fugro.com 11 March 2005 20
Slide 21: Development Positioning in 2004
SURVEY Development Positioning in 2004 • Good year • Strong recovery agriculture sector • Increase subscriptions OmniSTAR-HP slow • Strenghtening market position through integration Fugro-TGS • Leading player in market for high-precision positioning 11 March 2005 - 21 www.fugro.com 11 March 2005 21
Slide 22: Survey backlog
SURVEY Backlog 350 300 250 200 150 100 50 0 2001 2002 2003 2004 2005 Offshore certain Offshore probable Onshore certain Onshore probable Positioning certain Positioning probable 11 March 2005 - 22 www.fugro.com Backlog Survey (in € m illion) per 1 January for the next 12 m onths 2001 2002 2003 2004
Slide 23: Geoscience
GEOSCIENCE Gathering and interpreting geophysical and geological data, quantitive and qualitative estimation of oil, gas, mineral and water resources and the optimisation of their production High quality, long offset acquisition Objective: superior depth imaging below salt Salt Sub-salt sediments im
Slide 24: Geoscience
GEOSCIENCE (in € million) 2004 2003 2002 2001 2000 Turnover Development & Production 206 158 184 139 74 Turnover Airborne Survey 60 46 68 70 44 Totaal 266 204 252 209 118 Operating result* 29 13 27 7 3 Invested capital 261 233 251 250 74 Depreciation of tangible fixed assets 17 13 14 8 13 Investment
Slide 25: Development & Production in 2004
GEOSCIENCE Development & Production in 2004 • Substantial improvement compared to 2003 • Optimisation Development & Production • Benefits of cooperation and synergy • Deep Focus Gulf of Mexico Multi-client Programme • Improvement reservoir modelling activities • Improvement investment climate explor
Slide 26: Development Airborne survey in 2004
GEOSCIENCE Development Airborne survey in 2004 • Canada, Australia and Africa: increase survey activities • Strong improvement mining industry • ‘Georanger I’ (unmanned airborne vehicle) in operation 11 March 2005 - 26 www.fugro.com 11 March 2005 26
Slide 27: Geoscience backlog
GEOSCIENCE Backlog 180 160 140 120 100 80 60 40 20 0 2001 2002 2003 2004 2005 D&P certain D&P probable Airborne Survey certain Airborne Survey probable 11 March 2005 - 27 www.fugro.com Backlog Geoscience (in € m illion) per 1 January for the next 12 m onths 2001 2002 2003 2004 2005 D&P certain 11,5
Slide 28: Financial results
• General • Divisions • Financial results • Outlook 11 March 2005 - 28 www.fugro.com 11 March 2005 28
Slide 29: Key figures
KEY FIGURES (Dutch GAAP) change (in € million) 31-dec-04 (%) 31-dec-03 Net result before amoritisation of goodwill 66.7 47.9% 45.1 Net result after amoritisation of goodwill 49.5 52.8% 32.4 Turnover 1,021.6 23.1% 830.1 Cash flow 132.1 39.6% 94.6 Investments 113.1 -7.5% 122.3 Net result margin (%)* 6
Slide 30: Turnover development
TURNOVER DEVELOPMENT Turnover Autonomous Acquisitions Divestments Exchange Total Average growth (%) rate $ rate differences 2004 10.2% 16,2% -0,6% -2,7% 12,9% € 0,81 2003 -7,7% 4,9% -9,4% -12,2% € 0,88 2002 3,4% 4,0% -3,4% 4,0% € 1,06 2001 18,4% 8,6% 0,6% 27,6% € 1,13 2000 10,9% 8,9% 10,6% 30,4% € 1
Slide 31: Consolidated balance sheet
CONSOLIDATED BALANCE SHEET Balance sheet (Dutch GAAP) (in € million) 31-dec-04 31-dec-03 Fixed assets Intangible fixed assets 302.1 291.9 Tangible fixed assets 232.1 236.7 Financial fixed assets 9.3 24.5 543.5 553.0 Current assets Consumables and work in progress 94.7 72.1 Receivables 305.9 339.5 Li
Slide 32: Income statement
INCOME STATEMENT Income Statement (Dutch GAAP) (in € million) 2004 2003 Total turnover 1.021,6 830,1 Third party costs -375,2 -286,5 Staff costs -333,7 -300,2 Depreciation -65,4 -49,5 Other operating expenses -136,3 -117,6 -910,6 -753,8 Operational result* 111,0 76,3 Amoritisation of goodwill -17,2
Slide 33: Currency rates
CURRENCY RATES Turnover per currency US$ 28% US$ related (27%) GBP EUR and other 50% (50%) 14% (9%) 8% ( ) = 2003 (14%) The effect of a change of USD 0.05 in the euro/dollar rate: approximately € 2.5 million on the net result 11 March 2005 - 33 www.fugro.com 11 March 2005 33
Slide 34: IFRS
IFRS 11 March 2005 - 34 www.fugro.com 11 March 2005 34
Slide 35: IFRS
IFRS • A lot of work has been done • Unqualified audit opinion • Start date: 1 January 2003 • More detailed information in the annual report • Implementation IFRS has no effect on operational activities and strategy • Historical view on Fugro does not materially change 11 March 2005 - 35 www.fugro.c
Slide 36: IFRS long term effects on the income statement
IFRS Long term effects on the income statement Estimated effect on net result as reported under Dutch GAAP (€ 4 million - € 7 million) -Costs option plan approx € 3 million -Effect from recognising deferred tax approx € 2 million -Effect pension directly in equity -Effect fair value interest on conv
Slide 37: Income statement Dutch GAAP to IFRS
INCOME STATEMENT (After amortisation goodwill) 2004 2003 Dutch GAAP 49.5 32.4 Capitalisation of software 4.4 4.6 Software depreciation -7.1 -6.8 Reversal of amortisation goodwill 17.2 12.7 Reversal restructuring provision -5.2 -17.5 Costs option plan -3.5 -1.9 Interest convertible notes -2.6 -2.5 Ot
Slide 38: IFRS – Dutch GAAP
IFRS – DUTCH GAAP 2004 2003 IFRS Dutch GAAP IFRS Dutch GAAP Turnover 1,008.0 1,021.6 822.4 830.1 Net revenue own services 643.4 646.4 549.0 543.5 Operational result 104.2 111.0 63.3 76.3 Net result after amortisation intangible fixed assets 49.3 49.5 18.9 32.4 Balance sheet total 983.4 970.4 1,056.0
Slide 39: Major changes IFRS
MAJOR CHANGES IFRS Compared to Dutch GAAP: • Goodwill no longer amortised • Deferred tax assets recognised on balance sheet • Future pension liabilities reduced with expected fair value of investments on balance sheet • Maintenance provisions no longer used • Financial instruments at fair value • Co
Slide 40: Equity
EQUITY Equity 31/12/04 Dutch GAAP € 260.1 million Equity 31/12/04 IFRS 223.9 million Change (lower equity under IFRS) € 36.2 million Difference is built up as follows: 01/01/03 € 11.8 million 2003 17.8 million 2004 6.6 million € 36.2 million 11 March 2005 - 40 www.fugro.com 11 March 2005 40
Slide 41: Effects
EFFECTS 31-12-04 2004 2003 01-01-03 Pension obligation -42.8 -4.1 2.8 -41.5 Recognition tax losses carried forward 6.8 -1.5 1.9 6.4 Taxation effect 15.5 3.1 -0.4 12.8 Release of provisions 3.2 -2.4 1.4 4.2 Reallocation goodwill/software 14.8 14.6 6.6 -6.4 Equity component convertible notes 0.7 -2.5
Slide 42: Outlook
• General • Divisions • Financial results • Outlook 11 March 2005 - 42 www.fugro.com 11 March 2005 42
Slide 43: Indication clients
INDICATION CLIENTS Revenue distribution 7% Oil & gas 5% (8%) (4%) Construction/infrastructure Mining Other 19% (21%) Largest client less than 4% of total turnover 69% (67%) ( ) = 2003 Olie- & gas activities can be split as follows: • Exploration, design and installation phase (geophysical, geotechni
Slide 44: Fugro
FUGRO • Oil & gas services supplier • High quality technology • Knowledge intensive • Worldwide presence 11 March 2005 - 44 www.fugro.com 11 March 2005 44
Slide 45: Developments 2005
DEVELOPMENTS 2005 Post balance sheet date events: • Divestment diving activities, Mexico • Divestment 40% share Chartco, United Kingdom • Divestment two laboratories, Wales • Acquisition BTW Ltd, New Zealand, offshore survey division • Acquisition onshore geotechnical company, China 11 March 2005 -
Slide 46: Outlook
OUTLOOK • Excellent strategic basis Fugro • Well-structured (financial) organisation • Synergy and cost savings by successful integration Fugro-TGS • Further improvement in leading market position • Increase investments oil and gas sector 6% • Positive developments in many regions and market segment
Slide 47: Future
FUTURE • Clients continue investments • Satisfactory backlog for 2005 • Target net profit margin before amortisation of goodwill of 7.5-8% for 2005 maintained • Continue growth strategy • Outlook full year 2005 at presentation of half-year report • October 2005: Mr. Wester succeeds Mr. Kramer as Pre
Slide 48: 11 March 2005
11 March 2005 - 48 www.fugro.com 11 March 2005 48
Slide 49: Appendices
APPENDICES 1. Shares 2. Shareholding 3. Development share price 4. Estimates 5. Agenda 6. Contact details 11 March 2005 - 49 www.fugro.com 11 March 2005 49
Slide 50: Shares
SHARES Number of issued shares 2004 per 1 January 15,165,912 dividend 381,977 per 31 December 15,547,889 held by Fugro for personnel option plan 410,401 max. issue convertible 1,557,390 average issued 14,839,730 Shares bought for option plan per 1 January 588,862 bought 15,219 used (193,680) per 31
Slide 51: Shareholding
SHAREHOLDING 16,000 12,000 * 1.000 8,000 4,000 0 end01 mid02 end02 mid03 end03 mid04 end04 Netherlands UK USA Luxemburg Belgium Germany Switzerland France Other Approximately 77% of the shares are owned by investors outside the Netherlands 11 March 2005 - 51 www.fugro.com end01 mid02 end02 mid03 end
Slide 52: Development share price
DEVELOPMENT SHARE PRICE EPS Fugro Brent $ EOSI $* 80 6 70 5 60 4 50 40 3 30 2 20 1 10 0 0 mrt-95 mrt-96 mrt-97 mrt-98 mrt-99 mrt-00 mrt-01 mrt-02 mrt-03 mrt-04 mrt-05 sep-95 sep-96 sep-97 sep-98 sep-99 sep-00 sep-01 sep-02 sep-03 sep-04 March 1995 – March 2005 Share price Fugro in € per 1st of the m
Slide 53: Estimates analysts
ESTIMATES ANALY ANALYSTS STS ANALYSTS 10-3-2005 EPS RECOMMENDATION Fugro - EPS (in EUR) mutation 2004 2005 2006 target Broker analyst date Before After Before After Before After recommendation price ABN AMRO Hovers 16-feb-2005 4,27 3,29 5,88 4,90 6,33 Buy 80 CAI Chevreux Smit 23-aug-2004 4,35 5,78 6
Slide 54: Agenda
AGENDA Thursday 19 May 2005 Annual General Meeting of Shareholders Friday 24 June 2005 Press release proceedings first half year 2005 Friday 12 August 2005 Results first half year 2005 press conference and analysts’meeting (both will be webcast) Friday 25 November 2005 Press release proceedings 2005
Slide 55: Contact details
CONTACT DETAILS Fugro N.V. Address Veurse Achterweg 10 P.O. Box 41 2260 AA Leidschendam The Netherlands Phone +31 70 31 11 107 +31 70 32 02 703 (fax) E-mail a.gerritzen@fugro.com Website www.fugro.com 11 March 2005 - 55 www.fugro.com 11 March 2005 55