Fugro Nv · EURONEXT:FUR
Fugro Nv — Investor Presentation (May 2017)
49 slides from Fugro Nv's investor presentation, May 2017
Slide 1: Investor presentation
Investor presentation May 2017
Slide 2: General Profile
GENERAL PROFILE 2 www.fugro.com
Slide 3: Global trends drive demand for Fugro services
Global trends drive demand for Fugro services Over the coming decades, population growth, urbanisation and climate change will increase demand for energy, water, natural resources, buildings and infrastructure. Our purpose is to provide geo-intelligence and asset integrity solutions to contribute to
Slide 4: Collecting essential data for sustainable construction
Collecting essential data for sustainable construction Geo- and asset integrity data are essential for sustainable development and management of large constructions, infrastructure and natural resources. Fugro is one of the world’s largest inspection & consulting engineering companies and collects t
Slide 5: Geo-intelligence and asset integrity solutions
Geo-intelligence and asset integrity solutions We are an independent service provider with local presence backed by global expertise. We are involved in all phases from planning to decommissioning in both land and marine environments. Acquisition Comprehensive range of specialist data acquisition te
Slide 6: Multi-market exposure
Multi-market exposure Oil & gas Building & infrastructure Revenues by market segment Building & infrastructure 21% 2016 9% Power 66% 2% Mining 2% Other Oil & gas Power Mining Revenues by client type Governments Major oil companies 17% 16% Independent Other oil 7% companies 12% 2016 21% 17% Contracto
Slide 7: Fugro's activities across life cycle of offshore oil & gas fields
Fugro’s activities across life cycle of offshore oil & gas fields Final investment decision Exploration Development Field Production Decom- & appraisal planning development & maintenance missioning Geotechnical investigation Geophysical survey Construction Construction support support Positioning Mo
Slide 8: Fugro's activities across life cycle of offshore wind farm
Fugro’s activities across life cycle of offshore wind farm Final investment decision Design & Decom- Site appraisal Construction Operation & maintenance contracting missioning Geotechnical investigation Geophysical survey Construction Construction support support Positioning Monitoring and forecasti
Slide 9: Fugro's activities across life cycle of major building & infrastructure project
Fugro’s activities across life cycle of major building & infrastructure project (onshore) Final investment decision Site Design & Decom- Construction Operation & maintenance appraisal contracting missioning Drilling services Cone penetration testing Geophysical surveys Construction support Testing a
Slide 10: Market leading positions
Market leading positions Clear market leadership in several market segments. Capability to deliver complete suite of services from data acquisition, analysis (processing, interpretation, visualisation and hosting) through to advice. Independent position, which assures clients of impartial data
Slide 11: Strategy
STRATEGY 11 www.fugro.com
Slide 12: Building on Strength strategy
Building on Strength strategy Solidify client focus and market leadership Build customer centric, effective and efficient organisation Strengthen technology leadership and innovation Implement portfolio changes Multi-market exposure 12 Algemene Vergadering van Aandeelhouders, 2 mei 2017 www.fugro.co
Slide 13: Solidify client focus and market leadership: new divisional structure
Solidify client focus and market leadership: new divisional structure • Clients increasingly seek integrated services. • Fugro has regrouped its geotechnical, survey and subsea services activities into Marine and Land divisions, with each division having two business lines: Site Characterisation and
Slide 14: Fugro's two business lines
Fugro’s two business lines Site characterisation services: Asset integrity services: support new developments support management of existing structures Determine ground and environmental Determine the condition of existing conditions of building sites and includes structures and infrastructure,
Slide 15: Organisational structure as of 2017
Organisational structure as of 2017 Fugro NV Land Marine Geoscience 5 regions 5 regions Seabed Geosolutions Site Asset Site Asset Characterisation Integrity Characterisation Integrity Innovation & Technology Shared service centers for HR, finance, QHSSE, IT, legal 15 Annual results 2016 www.fugro.co
Slide 16: Building customer centric, effective and efficient organisation
Building customer centric, effective and efficient organisation Merge operating companies into country organisations. Expand number of shared services centres. Finalise implementation of central fleet management in 2017. 16 Annual results 2016 www.fugro.com
Slide 17: Actions to implement portfolio changes not yet successful
Actions to implement portfolio changes not yet successful Subsea Services Divestment or partnering for installation and construction activities have not yet succeeded. Inspection, repair and maintenance services are being integrated in Asset Integrity business line in the Marine division. Seabed
Slide 18: Strengthen technology leadership - 2016 innovations
Strengthen technology leadership - 2016 innovations Novel XRF-CPT technology to GeoWing for detection of evaluate recoverable ore in unexploded ordnance mining NorthStarTM to monitor 3Direct to support monopile integrity and safety of floating and jacket installations assets 18 Annual results 2016 w
Slide 19: Relevance for external stakeholders of Fugro
Sustainability Fugro is committed to conducting its business ethically and contributing to a safe and liveable world. • In 2016, Fugro identified the key sustainability topics for the company and its stakeholders. • In 2017, Fugro will further develop its sustainability policies and related reportin
Slide 20: Multi-market exposure
Multi-market exposure Fugro is actively targeting a better balance across multiple Revenues by market segment 2015 markets by increasing its non-oil & gas business to Building & 16% infrastructure Create a more balanced exposure as market cycles 6% Power generally differ. 2015 Mining 2% 74% 2% Oth
Slide 21: Market Developments
MARKET DEVELOPMENTS 21 www.fugro.com
Slide 22: Oil & gas - solid medium fundamentals due to continued energy demand
Oil & gas - solid medium fundamentals due to continued energy demand Oil demand now exceeding supply, due to reduced investments by oil companies and OPEC discipline. Both shale and offshore oil and gas are essential to fill future supply gap; investment in North American shale is projected to l
Slide 23: Building and infrastructure - continued growth
Building and infrastructure - continued growth Ample opportunities driven by overall growth of population and world economy. Asia Pacific investments mainly in India, Indonesia, Vietnam and the Philippines. Slowing investments in China. European building market shows only modest recovery, part
Slide 24: Power - transition to renewables gaining momentum
Power - transition to renewables gaining momentum Shift in investment towards renewable sources of electricity generation gaining momentum. Investment in power transmission and distribution strong to cope with new demand, upgrades and integration of renewable sources. Record low bids for offsh
Slide 25: Mining - commodity prices on upward trend
Mining - commodity prices on upward trend 2016 has seen strong recovery of commodity prices. Demand for base metals is gaining strength; demand for precious metals remains challenged. Strong demand for fertilizer is driving growth in potash and phosphates mining. Productivity improvement rem
Slide 26: FY 2016 Results
FY 2016 RESULTS 26 www.fugro.com
Slide 27: Ongoing decline oil and gas market continues to impact results
Ongoing decline oil and gas market continues to impact results Relentless focus on cash flow and strengthening of market leading positions Dealing decisively with third successive While executing ‘Building on Strength’ year of oil & gas market downturn strategy Continued to adjust capacity and cos
Slide 28: Financial highlights - Substantial cash flow in challenging oil and gas market
Financial highlights - Substantial cash flow in continuing challenging oil and gas market Revenue decline in line with market Operational result under pressure Revenue - 22.7% currency comparable EBIT (before exceptional items) 2,363 1,776 FY2015 FY2016 4.8% 12-month backlog - 11.6% currency compara
Slide 29: Delivery on cost reduction measures
Delivery on cost reduction measures Personnel Ongoing restructuring ahead of plan with reduction of 1,430 employees in 2016. Since YE 2014, staff has been reduced by 3,007 i.e. 22% of total staff count. Third party expenses Reduced by 27.0% or 24.2% on currency comparable basis; larger than re
Slide 30: Financial key take aways FY2016 results
Financial key take aways FY2016 results EUR 186 million cash flow from operating activities after investments. Cash flow H1 2016 EUR 67 million and H2 2016 EUR 119 million. EBITDA* H1 2016 EUR 99 million and H2 2016 EUR 91 million. Working capital decrease of EUR 89 million. Days revenue out
Slide 31: Substantial cash flow despite difficult oil and gas market
Substantial cash flow despite difficult oil and gas market Revenue EBIT (margin) Capital employed ROCE* Cash flow excluding exceptional items excluding exceptional items 2,363 4.8% X EUR million 1,690 315 1,776 1,341 113 186 3.9% 0.5% 9 2015 2016 2015 2016 YE 2015 YE2016 -0.7% 2015 2016 2015 2016 Re
Slide 32: Double digit revenue decline in all divisions
Double digit revenue decline in all divisions Reported Currency comparable Revenue X EUR million - 24.8% -22.7% 2,363 2,363 -100 -81 -181 -197 -84 -100 1,826 1,776 -171 1,776 -19 -171 -19 -50 -11% -22% -20% -50% 2015 Geotech Survey Subsea Seabed Other 2016 2015 Geotech Survey Subsea Seabed Other 201
Slide 33: Continued strong cost reductions, yet not sufficient to compensate for revenue decline
Continued strong cost reductions, yet not sufficient to compensate for revenue decline EBIT excl. exceptional items variances at 2015 currencies X EUR million 113 +50 +4 9 +56 +95 +228 -537 EBIT revenue third party costs personnel depreciation and other income FX EBIT 2015 expenses amorisation and e
Slide 34: Substantial cost savings from additional measures in 2016
Substantial cost savings from additional measures in 2016 Actions in 2016 annualised savings (x EUR million) FTE Geotechnical - 494 29 Survey - 594 40 Subsea Services - 267 22 Seabed Geosolutions and other - 75 9 - 1,430 100 Vessel capacity reduction Survey - 3 5 Subsea Services - 2 35 -5 40 Total 1
Slide 35: Continued challenging market conditions led to non-cash impairments
Continued challenging market conditions led to non-cash impairments x EUR million Geotechnical Survey Subsea Geoscience Total Services Of which Of which Seabed other Onerous contract provision - (1) (1) 8 8 - 6 Restructuring costs (7) (9) (3) (3) (3) - (22) Other (4) (1) (1) (12) - (12) (18) EBITDA
Slide 36: Higher net finance costs despite lower interest expense
Higher net finance costs despite lower interest expense (x EUR million) 2016 2015 Interest expenses Finance income 9 18 Y-o-y increase of EUR 17.8 million for Interest expenses (65) (62) large part related to accelerated amortisation of capitalised transaction Net change in fair value of financial
Slide 37: Reduced tax expenses
Reduced tax expenses (x EUR million) 2016 2015 Profit before tax (292) (289) Tax excl exceptional items (13) (83) Tax on exceptional items 4 13 Total tax (9) (70) Despite losses, effective tax rate of 3% due to: Limited recognition of further deferred tax assets for losses incurred. Partial writ
Slide 38: Strong improvement in working capital management
Strong improvement in working capital management Working capital Working capital improvement Working capital as percentage of revenue (x EUR million) 2016 2015 improved to 10.9%. Working capital 193 282 DRO reduced to 92 days mainly due to good of which inventories 22 29 year-end collection, des
Slide 39: Substantial cash flow due to cost savings and asset sales
Substantial cash flow due to cost savings, improved cash collection, curtailed capex and proceeds from asset sales X EUR million 195 13 186 111 8 -101 -69 29 Operating CF Receivables Payables Inventories Capex Proceeds Other CF from Cash flow from before sale investing operating changes in CGG loan
Slide 40: Good balance sheet ratios and strong liquidity
Good balance sheet ratios and strong liquidity Fixed charge cover Debt maturity profile per Dec 2016 (X millions, euro equivalents) 273 > 1.8x 245 private placement loans covenant revolving credit facility 3.1 3.1 subordinated convertible bond 190 * 2.9 2.9 2.8 2.8 2.6 2.5 2.4 57 83 27 15 4Q14 1Q15
Slide 41: Q1 2017 Trading Update
Q1 2017 TRADING UPDATE 41 Algemene Vergadering van Aandeelhouders, 2 mei 2017 www.fugro.com
Slide 42: Highlights Q1 2017
Highlights Q1 2017 As anticipated, coping with continued tough offshore oil and gas market Adjusting cost base and capacity to market reality. Primary focus is positive cash flow. Executing on strategy Completing implementation of new divisional structure to improve client focus and capture op
Slide 43: Financial highlights Q1 2017
Financial highlights Q1 2017 Year-on-year revenue decline of 16.3% on currency comparable basis reflecting continued underinvestment in offshore oil and gas. growing revenue in building and infrastructure markets. YoY revenue decline less than last year. Tangible high-single Negative actio
Slide 44: Outlook
OUTLOOK 44 www.fugro.com
Slide 45: Back-up slide: 12 month backlog has stabilised since mid-2016
Back-up slide: 12 month backlog has stabilised since mid-2016 12 month backlog Currency comparable growth (x EUR million) 1Q16 4Q16 1Q17 Y-on-Y Q-on-Q Site characterisation Marine 221 231 240 6.2% 3.2% Asset integrity Marine 506 489 415 (20.1%) (15.1%) Marine 727 720 655 (12.1%) (9.3%) Site characte
Slide 46: 12 month backlog has stabilised since mid-2016
12 month backlog has stabilised since mid-2016 - 3.2%* 1,610 1,507 233 208 1,342 1,323 213 155 1,176 1,170 418 1,065 1,055 1.052 382 81 93 334 371 54 65 56 368 357 335 343 341 959 917 795 797 727 720 676 647 655 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Geoscience Land Marine *: Currency comparab
Slide 47: Outlook - general trends
Outlook - general trends During first half of 2017, market for offshore related oil and gas services is expected to show another significant decline, but less than in 2016. Market is expected to bottom out towards latter part of the year as oil and gas companies move from cost savings mode to ca
Slide 48: Outlook - 2017
Outlook – 2017 First half of the year: Significant decline in revenue, however less severe than in 2016. Negative low-single digit EBIT margin. Towards latter part of year, bottoming out of revenue decline, supported by stabilisation of backlog since mid-2016. Ongoing adjustment of cost ba
Slide 49: Questions? Contact Catrien van Buttingha, Director IR
QUESTIONS? CONTACT CATRIEN VAN BUTTINGHA, DIRECTOR IR: C.VANBUTTINGHA@FUGRO.COM