- Revenue increased by 9.3% mainly in offshore wind and oil and gas markets.
- In a seasonally weak first quarter, EBIT margin was mid-single digit negative and below last year. Improved results in marine site characterisation were offset by lower results in marine asset integrity and Seabed Geosolutions.
- Net debt/EBITDA was 2.8 and is expected to improve in the course of this year, to a level at year-end below that of December 2018.
- Marine site characterisation and land asset integrity backlog grew, whilst it declined in marine asset integrity and land site characterisation. Overall, the quality of the backlog improved.
- Outlook 2019 unchanged: continued revenue growth, further improvement of EBIT margin and positive cash flow from operating activities after investments.
As per 1 January 2019, Fugro applies the new lease accounting standard IFRS 16. An indication of the consequences is given at the end of this press release.
|Key figures (in EUR million) unaudited
|Backlog remainder of the year
|Backlog next 12 months
| 1 Corrected for currency effect.
Mark Heine, CEO: ‘We realised further growth in our site characterisation services for offshore wind developments and oil and gas projects. We are also benefiting from higher revenue in new growth markets whilst in our Land business the asset integrity services are picking up. Despite the continued growth of revenues, EBIT in the quarter was below expectations, mainly due to Seabed Geosolutions which still suffered from previously reported challenges at two projects, and deferred vessel maintenance after a busy fourth quarter of 2018.
Nevertheless, I am positive about the remainder of this year. Our site characterisation activities in offshore wind and in oil and gas will continue to grow and moreover, prices are improving. In line with our Path to Profitable Growth strategy, we are increasingly focusing on activities with better margins, improving the quality of the backlog. For our marine asset integrity activities we will benefit from restructuring in selected areas, while the market conditions are gradually improving. Seabed Geosolutions should benefit from improved market conditions and more favourable contracts in the second half of the year. We are committed to achieve a year-on-year margin improvement for all our activities for the full year 2019. Similarly, we remain committed to generating positive cash flow amongst others by strict working capital management.
As announced, we will simplify the top-management structure from the first of May with clear targets aimed at capitalising on our position as the world’s leading Geo-Data specialist.’
Application of new lease accounting standard IFRS 16
As per 1 January 2019, Fugro applies the new accounting standard IFRS 16, which prescribes that leases have to be accounted for on the balance sheet. Fugro applies the ‘modified retrospective approach’, which means that it will not restate its comparative 2018 figures. In order to allow comparison of the 2019 numbers with previous years, key financial indicators will also be provided on a pre-IFRS 16 basis.
The implementation of IFRS 16 is expected to have an upward impact for 2019 of EUR 35-40 million on EBITDA, EUR 5-8 million on EBIT, EUR 30-35 million on cash flow from operating activities after investments and EUR 175 million on lease liabilities (per 31 March 2019). These amounts are subject to changes in the leased vessel fleet in particular.