Fugro Q trading update. 19 October 2016

Transcription

1 Fugro Q trading update 19 October 2016

2 Q3 trading update brought forward The publication of this Q3 trading update, originally planned for 31 October, has been brought forward to support the launch of a convertible bond (reference is made to separate press release), providing the market with full disclosure on ongoing trading conditions 2

3 Highlights Q Coping with tough oil & gas market circumstances Continuous adjusting of cost base and capacity to market reality Realising positive cash flow and reduced net debt Executing on strategy Successful in strengthening market leadership positions Building a customer centric and more efficient organisation 3 Q trading update

4 Financial highlights Q3 2016: Mid single digit margin and good cash flow Mid-single digit EBIT margin achieved in challenging oil & gas market Year-on-year revenue decline of 22.4% or 20.4% on currency comparable basis Good cash flow from operating activities after investments, reducing net debt by EUR 42 million in the quarter to EUR 425 million Launch of subordinated convertible bond of Tangible approximately action EUR being 150 taken million across with an the increase board to improve EBIT margin option of up to EUR 40 million Net debt/ebitda of 1.8 compared to covenant requirement of below 3.0. Pro forma net debt/ebitda of 1.2 including assumed proceeds of EUR 150 million 4 Q trading update

5 Cost reductions ahead of schedule Fugro continues to implement measures as required by market conditions Headcount reduction year-to-date: 1,120 Third party expenses down 27.1% or 24.5% on currency comparable basis Fleet: Compared to YE2015, reduction by 5 vessels More reductions will be made as needed Capex Tangible limited action to EUR being 65 million taken across year-to-date the board to improve EBIT margin Days of revenue outstanding down to 98 days compared to 102 days at YE Q trading update

6 Regrouping of activities to meet clients demand for integrated services To better position ourselves for capturing market opportunities, enhance client focus and improve service delivery and efficiency Concept & feasability Preliminary siting & routing Permitting & consent Design Construction Operation & maintenance Decommis sioning Marine site characterisation Marine asset integrity Land site characterisation Land asset integrity 6

7 Regrouping of activities - change in reporting structure as of 2017 Reporting in new structure as of 2017 Further details and restated 2015 and 2016 financials will be provided well in advance of the publication of Q trading update 7 Q trading update

8 Subordinated convertible bond offering - launched this morning Proceeds are expected to be used for early repayment of part of the United States Private Placement notes (USPP), resulting in reduced interest expense Will create additional headroom under the financial covenants as the related bond and interest costs will be excluded from the covenant ratios Will create increased financial flexibility Key indicative terms Issue Size Offering Maturity Approx. EUR 150 million, with an increase option of up to EUR 40 million Subordinated unsecured convertible bonds October 2021 (5 years) Issue/Redemption price 100% / 100% Coupon Conversion premium % per annum 25.0% 32.5% over VWAP 8 Q trading update

9 Backlog (x EUR million) 12 month backlog Currency comparable growth 3Q15 2Q16 3Q16 Y-on-Y Q-on-Q onshore Geotechnical % 4.0% offshore Geotechnical (26.5%) (15.7%) Geotechnical (0.2%) (1.2%) Survey (21.8%) (4.9%) Subsea Services (3.6%) 8.9% Geoscience (Seabed) (69.3%) 22.6% Total 1,342 1,065 1,055 (19.8%) 0.7% % definite orders 68% 67% 63% 9 Q trading update

10 Outlook FY 2016 reconfirmed General trends Spending by oil and gas companies for 2016 will decline by around 25% and expected to bottom out in 2017 Increasing evidence that balance between oil supply and demand will be restored in the course of next year Price reductions and efficiency gains achieved in the supply chain are significantly lowering the oil price required to justify investments Good opportunities in several regions in building, infrastructure and power markets Outlook Outlook for 2016 reconfirmed although somewhat better than previously expected Positive cash flow from operating activities after investments Ongoing reduction of cost base to market reality and to realise further efficiencies Negative low single digit EBIT margin (excluding exceptional items) Capital expenditure around EUR 100 million Key focus areas unchanged: cash flow generation, deleveraging of the balance sheet, strengthening our market leading positions 10 Q trading update

11 Questions?