Fugro FY 2015: Strong cash flow in continuing challenging oil and gas market

Strong cash flow and debt reduction

Leidschendam, The Netherlands
26 Feb 2016

Highlights full year

  • EUR 314.7 million cash flow from operating activities after investments driven by improved EBIT margin, curtailed investments, lower working capital, sale of multi-client data library, and sale and lease back of a vessel.
  • EBIT margin (before exceptional items) increased from 3.2% to 4.8% due to strong improvement in Seabed Geosolutions.
  • Significant net debt reduction leading to net debt/EBITDA of 1.6 versus covenant requirement of below 3.0.
  • Year-on-year revenue decline of 8.1% or 17.3% on a currency comparable basis in a strongly deteriorating oil and gas market.
  • Cost reduction and performance improvement programme stepped up and progressing ahead of schedule.
  • Backlog for the next 12 months down by 20.4% on currency comparable basis compared to a year ago, and by 3.7% compared to the previous quarter.
  • Outlook 2016: positive cash flow and further reduction of cost base in a challenging oil and gas market with continuing pressure on margins.

Highlights second half year

  • Revenue decreased by 25.9% on a currency comparable basis. Revenue of all divisions declined, in particular of Subsea Services, offshore geotechnical and the multi-client data library, the latter mainly due to the divestment in June.
  • EBIT margin (before exceptional items) of 3.8% compared to 4.1% in the second half of 2014.
  • Due to deteriorated market outlook, non-cash impairments of EUR 321.5 million, mostly related to Subsea Services.
  • Long-term financing secured with new 5-year credit facility.
  • Sale and lease back of two geotechnical vessels with net proceeds of EUR 97 million (of which 50% received at the end of 2015 and 50% at the beginning of 2016).

 

Key figures (x EUR million) Full year 2015 Full year 2014
Revenue 2,363.0 2,572.2
currency comparable growth (%) (17.3%) 5.9%
EBITDA excluding exceptional items1 353.0 372.7
EBIT excluding exceptional items1 113.1 81.4
EBIT margin excluding exceptional items (%)1 4.8% 3.2%
Net result (372.5) (458.9)
Backlog next 12 months 1,323.4 1,575.5
currency comparable growth (%) (20.4%) (14.8%)
Cash flow from operating activities after investments 314.7 42.4
Net debt/EBITDA 1.6 2.2

1 Impairments, onerous contract charges and restructuring costs of EUR 363.0 million in 2015 compared to EUR 630.0 million in 2014

Paul van Riel, CEO:

We are dealing with an unprecedented downturn in our largest market: oil and gas services. We are reducing capacity, operating costs and investments, as well as divesting non-core assets. At the same time, we are fully focused on winning work, strengthening our market leadership positions and executing well on our projects. As a result, we delivered strong cash flow and reduced net debt significantly.

The year 2016 will be another challenging year for the oil and gas industry based on indications that the present over-supply conditions will continue. In our building, infrastructure and power markets, we see good opportunities in several regions. We will continue to manage through the downturn by proactively adjusting our cost and asset base in line with activity levels. Generating positive cash flow continues to be our number one priority.”

 

For more information

Media

Rob Luijnenburg
media@fugro.com
+31 70 31 11 129

Investors

Catrien van Buttingha Wichers
c.vanbuttingha@fugro.com
+31 70 31 15 335

 

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