Grontmij N.V. Analyst presentation Financial results Q1 2014 30 April 2014
Encouraging start of the year for Grontmij Highlights Q1 2014 2 Total revenue shows modest decline, net revenue is stable compared to last year EBITA excluding exceptional items improved to 7.0 million (Q1 2013: 2.6 million), also impacted by a strong performance in Sweden Net debt at 63.6 million (FY 2013: 54.1 million), explained by the additional equity as part of the refinancing and the seasonal increase of trade working capital Review strategic options France: Grontmij will initiate a divestment process of the French activities, either as a whole or in parts
Contents 3 Strategy and business update Michiel Jaski Financial results Q1 2014 Frits Vervoort
Grontmij 2014 2016 Back on Track strategy and financial targets 4 1 Restructuring a b c d Cost reduction Operational excellence improvements Portfolio optimisation Accelerate improvements Netherlands 2 Realising profitable growth e f Continue to build Europe Focus on five selected growth segments Target EBITA margin 6-8% of TR 1 in 2016 3 5% TR 1 organic growth from 2015 onwards Target TWC 2 of 13% of TR by 2016 Note: 1. TR = Total Revenue; 2. TWC = Trade Working Capital
million million Cost reduction Cost reduction programme according to plan 5 Targeted cost savings Status Q1 2014 Cost reductions Cost reduction programme is progressing according to plan Cost reductions 15 One-off cash 13.0 Annual run rate of 4.1m (excl. 2015 2016 inflation) 4 One-off cash out impact of 0.2m Target 2016 Run rate Q1 2014 (excl. inflation 15-16) Expected 2014-2015 0.2 Realised to date
Operational Excellence (OPE) improvements What is OPE? 6 OPE programme: Pipeline Management Bid Decision Management Project Budgeting and Follow-Up Project Changes and Additional Work Client Satisfaction Surveys
OPE scores per country OPE Topics 0 20 40 60 80 100 Business processes and tools designed and released Business processes and tools implemented Update as per End Q1 2014
Portfolio optimisation 8 France Review strategic options: A divestment process of the French activities either as a whole or in parts will be initiated Consideration given towards continued presence in France to bid for large projects in Light Rail in Paris region Committed to clients and employees Non-core assets Golf course Naarderbos: Closing of announced sale of Naarderbos golf course delayed due to delay on buyers side Grontmij has taken legal actions Court ruled on 25 April 2014 in favour of Grontmij s legal claim and ordered buyer to fulfil its obligations under the SPA
Accelerate improvements Netherlands Grontmij Netherlands improvement program 9 Focus on large projects and clients Clients Leading European Consulting & Engineering company, top 3 position in the Netherlands Differentiated profile in attractive market segments Growth segments Solid and predictable growth of operational profitability Professionalisation and cost savings
Our Group Growth Segments 10 Komenvoir Energy Highways & Roads Light Rail Sustainable Buildings Ronesans Water
Group Growth Segment Energy Consortium with Grontmij, TU Delft and Stedin 11 Issue: 15% of the Dutch gas network will reach its technical lifetime withinthe next 10 years Our role: Develop new strategy to replace existing gas infrastructure in the West of the Netherlands
Group Growth Segment Energy 12 Issue: Connect consumers in the South of Germany with renewable power plants in the North Our role: Perform risk analyses and carry out environmental planning for 100 s of high-voltage energy lines VDE I FNN/Übertragungsnetzbetreiber Main clients: Amprion and Westnetz
Group Growth Segment Water 13 Issue: Inhabitants of North Jakarta need protection from water flooding Our role: Draft a master plan that offers long-term solution to flooding
John Sturrock Group Growth Segment Sustainable Buildings Grontmij awarded BREEAM Assessor Company of the Year John Sturrock Issue: Clients want to reduce energy consumption in new and existing buildings, aiming for buildings with high indoor-comfort and low exploitation-costs across the life cycle
Group Growth Segments Q1 2014 Process update per country and segment 15 Energy Water Highways & Roads Light Rail Sustainable Buildings NL DK SE BE FR UK GE PL TU CH Total On target Below target, expected to reach target Below target, expected to stay below target
Order book development per Q1 2014 16 Netherlands Denmark Sweden Belgium Trend (6 months) Increasing Declining Declining Stable Comments T&M increasing, P&D and W&E stabilising Some recovery experienced in last months Ramping up of large projects, but good market opportunities in coming months High in all business lines France Stable Slight recovery in Buildings UK Declining W&E impacted by AMP6 tendering Germany Other countries Increasing Stable High in all business lines Increasing in Turkey and China, decreasing in Poland
Contents 17 Strategy and business update Michiel Jaski Financial results Q1 2014 Frits Vervoort
Key financials Q1 2014 18 million, unless otherw ise indicated Q1 2014 Q1 2013 % change % organic grow th Total revenue 186.6 192.0-2.8% -1.8% Net revenue 160.3 161.3-0.6% 0.4% EBITA 3.9 2.0 95.7% 89.0% Exceptional items -3.1-0.6 EBITA excluding exceptional items 7.0 2.6 174.6% 165.9% Net result from continuing operations -2.3-0.6 Net result from discontinued operations 0.0 1.8 Net result -2.3 1.2 EBITA margin 2.1% 1.0% EBITA margin excluding exceptional items 3.8% 1.3% # employees (average FTE) 6,791 7,099-4.3% Special items ( millions) Q1 2014 Q1 2013 Net result from continuing operations -2.3-0.6 Interest rate sw ap (charge in Q1 2014) 1.1 Income tax (benefit in Q1 2013) -2.7-1.2-3.3 Total revenues 186.6m (Q1 2013: 192.0), with organic decline of 1.8%; net revenue stable with modest organic growth of 0.4% EBITA excl. exceptional items improved to 7.0m (Q1 2013 2.6m), also impacted by strong performance in Sweden EBITA excl. exceptional items margin improved from 1.3% in Q1 2013 to 3.8% this year Exceptional items are higher than last year, relating to the additional cost saving programme
EBITA excluding exceptional items bridge Q1 2014 versus Q1 2013 EBITA excl bridge per country EBITA excl bridge P&L items 7.0 7.0 0.7-0.9 1.1 0.1 3.5 4.1 2.6 2.6 1.2-1.0 Q1 13 SE DK BE Other countries Q1 14 Q1 13 NR Direct costs* Indirect costs* Other Q1 14 * Adjusted for 2.0 million reclassification of expenses between direct and indirect costs
Key balance sheet items Q1 2014 20 Trade working capital TWC increased to 137.8m (Q1 2013: 130.8m) TWC as % of total revenue increased to 18.2% at the end of Q1 2014 (Q1 2013: 16.8%), due to higher WIP and lower payables Net debt Total net debt of 63.6m (FY 2013: 54.1m) Main movements equity issue ( 20.5m) and seasonal increase of TWC requirements Financial covenants Net debt/ebitda ratio was 2.0x per end Q1 2014 (covenant: <3.5x) Interest cover ratio per end Q1 2014 was 4.2x (covenant: >2.5x)
Encouraging start of the year for Grontmij Highlights Q1 2014 21 Total revenue shows modest decline, net revenue is stable compared to last year EBITA excluding exceptional items improved to 7.0 million (Q1 2013: 2.6 million), also impacted by a strong performance in Sweden Net debt at 63.6 million (FY 2013: 54.1 million), explained by the additional equity as part of the refinancing and the seasonal increase of trade working capital Review strategic options France: Grontmij will initiate a divestment process of the French activities, either as a whole or in parts
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