Fugro shows margin resilience despite continued Covid-impact. Growth expected to resume in the course of the second quarter.
- Slightly improved EBIT margin in a seasonally weak quarter
- Revenue decline of 17.2% in the quarter, fully driven by the impact of Covid and a strong related decline in oil & gas activities, partly offset by revenue growth in other market segments
- Cost reduction programme, initiated last year, fully implemented by now, resulting in annualised savings of around EUR 130 million
- Divestment Seabed Geosolutions announced; transaction expected to be completed by mid-2021
- Good order intake results in EUR 875.7 million backlog, in line with first quarter of 2020, and with an increasing share from renewables, infrastructure and nautical activities
- Outlook 2021: revenue growth is expected to resume in the course of the second quarter. For the full-year, Fugro expects a modest margin improvement
Mark Heine, CEO: “This quarter, our revenue was again strongly affected by the pandemic and the related decline in oil and gas activity levels. This is evident in comparison with the first quarter of 2020, when the initial Covid impact became visible only towards the end of the quarter. At the same time, our results demonstrate once again our resilient operating model and increasingly diversified portfolio, with an increasing revenue share from renewables, infrastructure and nautical activities. We were able to slightly improve our margin in the seasonally weak first quarter. This was largely due to the comprehensive cost reduction programme which was initiated immediately after the outbreak of the pandemic and which is now fully effective.
Based on the good order intake this quarter, we anticipate that revenue will start to grow again in the second quarter. Furthermore we expect a modest margin improvement for the full year.
Backed by the knowledge, experience and commitment of our staff, the innovative solutions we provide and our increasingly diversified customer base, we will make our way back to our Path to Profitable Growth. In line with our 2021 management agenda, we have recently announced the divestment of Seabed Geosolutions and we expect to complete this transaction mid-2021. Furthermore, we are determined to deliver: ongoing focus on costs and cash flow generation; completion of the turnaround of the land business; further strengthening of operational and commercial excellence and employee engagement; enhancing our service delivery with new market leading digital and remote solutions; and implementing our ambition to achieve net-zero emissions in 2035.
Barbara Geelen is scheduled to start as our new CFO after approval from the EGM on 12 May, securing a smooth handover from Paul Verhagen.”