Royal Imtech publishes fourth quarter and full year 2014 results
(Thomson Reuters ONE) -
Ready for operational focus
Quarterly highlights:
* Order intake in Q4 at a satisfactory level of ?912 million
* Revenue in Q4 ?1,030 million, in line with expectations
* Operational EBITDA in Q4 improved to break-even level
* Non-operational costs in the quarter amount to ?127 million, predominantly
from restructuring measures announced in 2014
* Net finance result in the quarter normalising, benefiting from the
significant debt reduction and related interest rate reset
* Net interest-bearing debt and working capital targets achieved
Full year highlights:
* Revenue down 8% to ?3,922 million, mainly due to Germany & Eastern Europe
and UK & Ireland
* Operational EBITDA loss of ?32 million, significantly improving from ?78
million loss in 2013
* Net loss of ?559 million mainly as a result of previously announced one-off
restructuring costs, finance charges, the loss on discontinued operations
and the goodwill impairment in Germany & Eastern Europe
* Reconfirmation of the achievability of our medium term targets
* Positive operational EBITDA expected in 2015
Key figures
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
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1,030.1 1,061.9 Revenue and other income 3,922.3 4,248.4
-1.4 -11.2 Operational EBITDA -31.9 -78.3
-127.0 -245.9 Non-operational costs -221.8 -375.3
-128.4 -257.1 EBITDA -253.7 -453.6
-174.7 -308.2 Operating result (EBIT) -340.6 -562.2
-182.1 -330.7 Result from continuing operations -488.8 -648.5
-0.7 -39.3 Result from discontinued operations -70.5 -48.1
-182.8 -370.0 Net result -559.3 -696.6
911.7 919.7 Order intake 3,729.1 3,948.2
-47.0 -58.3 Operational working capital -47.0 -58.3
334.3 737.0 Net interest-bearing debt 334.3 737.0
Margins
-0.1% -1.1% Operational EBITDA margin -0.8% -1.8%
-12.5% -24,2% EBITDA margin -6.5% -10.6%
22,193 23,788 Number of employees (in FTE) 22,193 23,788
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(*) Restated, see note 3 to the Financial Statements 2014.
Gerard van de Aast, CEO: "2014 was a year in which Imtech normalised its
financial situation and dealt with substantial one-off costs. We continued to
improve our operational performance, which is the third pillar of our recovery
plan. Working capital performance, an important indicator, has significantly
improved and the volume and quality of the order intake developed
satisfactorily. Operational results are improving as well and with the large
restructuring actions behind us, we can now focus to further restore overall
profitability. We are well aware of the challenges still ahead on our road to
recovery, but progress to date has been steady."
Progress on Recovery Plan
Since February 2013 the focus of the new Boards of Imtech has been on three
priorities:
1. Dealing with the implications of the past irregularities
2. Implementing a stable financing structure
3. Improving operational performance
To deal with the first priority, we have implemented a robust set of Governance,
Risk and Compliance (GRC) policies and have replaced most of the senior
management teams across the group to allow for a new playing field going
forward. We believe that our current GRC system is an appropriate safeguard
against the events from the past reoccurring.
Unfortunately, issues or allegations from the past might continue to come up.
That is a reality that Imtech has to deal with. It is our firm commitment to
properly deal with these legacy issues. See the separate chapter 'Update on GRC
issues' in this press release for a current update.
With the completion of the rights issue in October 2014, the sale of the ICT
division and the resulting adjustments to our financing terms, we have
adequately addressed the second priority. This now gives us the time and
flexibility to fully focus on our third priority - the recovery of operational
performance. The progress to date has been steady, but we are well aware of
challenges still ahead, in particular for Germany & Eastern Europe.
Recovery of operational performance
We have defined four key drivers to manage our operational recovery: quality and
volume of order intake, improved project execution resulting in a higher gross
margin, reduction of indirect costs, and reduction of operational working
capital.
The group's order intake for the year of ?3,729 million was satisfactory and in
line with revenue, though with differences per division. UK & Ireland had a good
order intake. Order intake in Germany & Eastern Europe was lower than revenue,
which is related to our decision to prioritise margin over volume. See below for
a separate and detailed update on developments in Germany & Eastern Europe.
The results on projects were unsatisfactorily, amongst others caused by old and
legacy projects, insufficient operational discipline on several projects and the
turmoil surrounding the company in 2014. Although the cultural change needed for
improvement of project results obviously will take time, we expect improvements
to become visible in 2015 already by replacing loss making projects with new
projects at healthier margins. Further improvements will come from
standardisation of processes, increased efforts in training, planning and scope
change management, and a more professional approach to procurement.
In 2014, indirect cost reductions of ?100 million have been achieved. Half of
this reduction is savings and the remaining relates to reduced volumes. Further
savings will be realised through standardisation and integration of back office
processes, rationalisation of real estate portfolios (mainly in the Netherlands
and Germany), prudent spending (e.g. sponsoring, car leasing) and a reduction of
external support.
To achieve our overall medium term target EBITDA margin of 4% to 6%, we focus on
improving our gross margin to a range of 18% to 22% (2014: 16%) and reducing our
indirect costs as percentage of revenue to a range of 12% to 16% (2014: 17%).
These improvements will result on the medium term in an increase of our gross
margin of at least ?75 million and a decrease of our overhead costs of at least
?50 million.
Operational working capital, an important health indicator, ended at ?47 million
negative (-1.2% of revenue), well ahead of our target of 0% of revenue. The
medium term target bandwidth for operational working capital remains at -3% to
0% of revenue, allowing for normal seasonal fluctuations customary in our
industry.
In general, Imtech Nordic and Imtech Traffic & Infra have kept a stable
operational performance in 2014. Although Imtech UK & Ireland saw its
performance drop in 2014, the outlook is solid given the market and the present
UK & Ireland organisation. Imtech Spain has shown a recovery in the second half
of 2014, while Imtech Marine has ended 2014 with a full year positive
operational EBITDA clearly demonstrating the effects of a well-executed
turnaround. The recovery of Imtech Benelux is showing some mixed signals but
with the steps taken in 2014, this division should be on track again in 2015.
For the overall recovery of Imtech the turnaround of the Germany & Eastern
Europe division is of significant importance.
Recovery of operational performance in Germany & Eastern Europe
The 'Neue Imtech' programme in Germany & Eastern Europe is based on the same
four key drivers as stated above. Moving forward this programme is constantly
adapted to provide the optimal approach for the turnaround under changing
circumstances.
1. Quality and volume order intake
New stringent tender procedures, which prioritises margin over volume, have
been in place since mid 2013. The net effect, as planned, is a significant
smaller business. Eastern Europe represents around ?30 million of revenue
with mainly projects serving German automotive customers, primarily in
Poland. Recurring stable service revenue amounts to approximately ?225
million. Next to recurring services, the business is balanced with a
project portfolio with, although significantly smaller in size, better pre-
calculated margins and better understood risk profiles.
2. Improved project execution
A key task in Germany & Eastern Europe has been to work through legacy
projects acquired in the past. By now, the bulk of those have been dealt
with, with only a few legacy projects remaining. Execution of new projects
shows an encouraging improvement. Further improvement by enhancing and
standardising basic processes and reducing subcontractor dependency will be
the key focus in 2015.
3. Reduction of indirect costs
Significant progress has been made in reducing the indirect cost run rate
through headcount reductions, termination of sponsor contracts and
reduction of external consultancy costs. Three key items to further improve
operational efficiency are shared service centres, footprint
rationalisation and significant reduction of real estate costs. These items
should contribute to a further EBITDA margin improvement of 2% to 3%.
4. Operational working capital
Operational working capital development in Germany & Eastern Europe has
been trailing those elsewhere in the group. This is caused to a large
extent by supply chain turmoil that existed for most of 2014. Further
operational deficiencies caused delay in timely settlement of contract
balance sheet positions. Going forward we expect operational working
capital performance to gradually become in line with the group's medium
term target bandwidth of -3% to 0% of revenue.
The aim of the 'Neue Imtech' programme is to rebuild our business and
organisation in Germany & Eastern Europe to a profitable and cash generative
company. As a result of this total reset, the goodwill for the division of ?27.5
million is fully impaired in Q4 2014.
One-off costs drive negative result of ?183 million in Q4
The net loss for the fourth quarter of ?183 million includes significant non-
operational costs of ?127 million and a goodwill impairment relating to Germany
& Eastern Europe of ?28 million.
For the full year, the net loss of ?559 million includes an operational EBITDA
loss of ?32 million, non-operational costs of ?222 million, net finance charges
of ?179 million and a loss on discontinued operations of ?71 million.
in ? million Q4 2014 Full year 2014
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Operational EBITDA -1.4 -31.9
Non-operational costs -127.0 -221.8
--------- ---------------
EBITDA -128.4 -253.7
Depreciation -13.4 -35.6
Amortisation & impairment -32.9 -51.3
--------- ---------------
Operating result (EBIT) -174.7 -340.6
Net finance result -13.2 -178.7
Share of results of associates, joint ventures and -0.3 12.2
other investments
Income tax benefit 6.1 18.3
--------- ---------------
Result from continuing operations -182.1 -488.8
Result from discontinued operations -0.7 -70.5
--------- ---------------
Net result -182.8 -559.3
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Specification of non-operational costs:
in ? million Q4 2014 Full year 2014
--------------------------------------------------------------------
Non-operational costs
Restructuring costs 56.2 86.4
Rationalisation of real estate 30.5 30.5
Advisory cost 7.8 41.6
Other non-operational items 32.5 63.3
----------- -----------------
127.0 221.8
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In Q4, the restructuring costs of ?56 million and the cost for rationalisation
of real estate of ?31 million mainly relate to the earlier announced plans for
the Netherlands, Germany and Marine. The remaining cash outflow for these plans
amounts to approximately ?55 million in 2015.
In 2015, restructuring costs are expected to reduce significantly to an amount
of approximately ?15 million, mainly relating to smaller restructurings in our
Nordic division. A potential further restructuring in Germany & Eastern Europe
may however result in additional restructuring costs as part of the on-going
process to calibrate cost structure to the new size of the business.
Advisory costs of ?8 million were incurred in Q4. Given the implemented debt
reduction programme, we expect advisory costs to decrease in 2015.
Other non-operational items in Q4 of ?32 million mainly result from the closure
of our businesses in Russia and Austria (?4 million), a valuation allowance on a
large multi-year project in Marine (?5 million) and write-downs on legacy items
(?12 million).
Specification of net finance result:
in ? million Q4 2014 Full year 2014
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Net finance result
Net interest expense -32.1 -159.5
Cost of guarantees -5.2 -14.2
Other finance expenses 24.1 -5.0
--------- -----------------
-13.2 -178.7
One-off items within Net finance result
Cash amendment fee (cash) -5.4 -19.0
Make whole amount (cash) -6.8 -6.8
Paid-in-Kind amendment fee (added to debt) -2.3 -11.8
Make whole amount (added to debt) - -31.9
Book gain debt buy-back programme (deducted from 31.4 31.4
debt)
Amortisation capitalised cost - -18.3
--------- -----------------
16.9 -56.4
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The one-off items within net finance result in 2014 amounted to ?56 million. All
one-off items relate to the implementation of the financial restructurings in
March and October 2014, including the ?31 million book gain from the debt buy-
back programme.
On 27 October 2014, the revised interest agreements became effective. The
revolving credit facility has a margin on euribor of 3.75% and the senior notes
have an interest of around 7%. Guarantee fees range from 1.9%-2.25%. Going
forward, all interest and guarantee costs will be in cash. For 2015, we expect a
net finance result of approximately ?60 million negative (2014: ?179 million
negative), predominantly relating to interest costs, guarantee fees and employee
benefits.
Medium term targets
With focus on operational recovery, we have refined our medium term targets to a
gross margin of 18% to 22% and overhead costs of 12% to 16% of revenue resulting
in an overall EBITDA margin of 4% to 6%. Working capital should be between minus
3% and 0% of revenue with net debt targeted below 2x EBITDA.
Outlook
With solid order intake, Imtech's main focus is now on operational improvements
in 2015 as the main driver for profit recovery. Our UK & Ireland, Nordic, Spain
and Traffic & Infra divisions are expected to further improve operational
results. The Benelux and Marine divisions have recovered from past operational
issues and are much better positioned. The German & Eastern Europe division also
expects further operational improvement. We do not expect any major
restructuring in 2015, although we will continue with the implementation of
operational efficiencies across the group and in particular in Germany & Eastern
Europe. We expect a positive operational EBITDA in 2015.
Composition of the Supervisory Board
During the Annual General Meeting of shareholders (AGM) on 12 May 2015, Mrs.
Christine Wolff will be nominated for appointment as member of the Supervisory
Board for four years. Mrs. Wolff is a German national and more than 20 years of
experience in international engineering consulting firms. In her last position
she was Managing Director for Europe & Middle East at URS Corporation (now
AECOM), a global and NYSE listed US based provider of engineering, construction
and technical services, with 55,000 employees and US$ 11 billion annual revenue
(2012). She currently serves on the supervisory board of Hochtief AG, Berliner
Wasserbetriebe A.ö.R and KSBG Kommunale Verwaltungsgesellschaft GmbH and is a
member of the advisory board of Wessling GmbH & Co. KG, J. Heinr. Kramer Holding
GmbH and The Aspen Institute Germany. The Supervisory Board considers the
specific knowledge and experience of Mrs. Wolff on project organisations and
technical services providers, such as Imtech, as a welcome addition to the
existing knowledge and experience within the Supervisory Board.
Mrs. Ruth van Andel will be nominated for reappointment for her second term of
four years. Directly after the AGM, Mr. Kees van Lede, chairman of the
Supervisory Board, will retire according to the scheduled retirement. The
Supervisory Board intends to appoint Mr. Frans Cremers as chairman, as
previously announced.
Deloitte Accountants nominated as external auditor
Imtech proposes the appointment of Deloitte Accountants as the company's auditor
for an initial three year period with effect from the financial year 2016. This
nomination will be presented to the Annual General Meeting on 12 May 2015.
The nomination of Deloitte is the result of a thorough selection process,
overseen by the audit committee of the Supervisory Board. Under Dutch
legislation for listed companies, Imtech is required to change its auditor as of
January 2016.
The current auditor KPMG Accountants N.V. will remain in place until the
conclusion of the audit for the financial year 2015.
Update on GRC issues
Improving GRC framework and culture
During 2014, we substantially completed the implementation of Imtech's new
Governance Risk and Compliance framework (GRC framework). We also continued to
make progress in the transformation of Imtech's culture, into one that values
integrity, loyalty and critical thinking. These values are clearly reflected and
articulated in the Group's new Code of Conduct. Behavioural training programmes
for management and employees were continued; also in 2015 substantial attention
will be paid to culture and behaviour.
Incident reporting
In the year 2014, 91 incident reports of whistle-blowers were received, compared
to 29 in 2013 and 3 in 2012. Since the beginning of 2015, 5 incident reports of
whistle-blowers were received. This increase demonstrates the strong development
in our new culture in which people are encouraged to speak up and report any
incidents they observe via our whistle blower's procedure. Most of the reports
refer to alleged inappropriate behaviour that took place prior to 2013. The
majority of the reports have been investigated and dealt with. Approximately
40% of total reported incidents were either unfounded or backed by insufficient
information to follow up. In cases where a violation of the Code of Conduct was
detected, a number of actions were taken, which included dismissal, disciplinary
actions or specific process modifications. The remaining 26 reports are under
investigation and are being dealt with appropriately. These on-going
investigations include the 'legacy' items relating to Germany and Poland.
United Arab Emirates: no material findings
On 13 January 2015, Imtech informed the market that it had initiated an
investigation into certain sales activities by an Imtech Marine unit in the
United Arab Emirates in relation to potential violations of applicable export
controls and sanctions regulations. The internal investigation, which was
conducted with the support of external counsel and experts, concluded that
possible violations may have taken place, but that these were relatively small
in size and number and that the potential financial impact is therefore likely
to be not material. Imtech will continue to cooperate fully with the appropriate
authorities to resolve and settle this issue. The Imtech Marine entity in the
United Arab Emirates has annual revenues of around ?15 million.
Broadening scope competition law investigation in Germany
On 4 February 2015, Imtech informed the market that German authorities are
conducting a broader investigation into the overall technical services industry
in Germany, which includes Imtech. As part of this investigation the German
authorities have served warrants to obtain information from Imtech and other
companies. Following the investigations by the authorities, Imtech has broadened
the scope of its own investigations as well. So far, this broadened internal
investigation, with regard to Imtech, did not confirm that competition laws were
violated.
Berlin Brandenburg Airport
On 26 February 2015 a German newspaper published unconfirmed allegations of
bribery towards former Imtech management in connection with the new airport
Berlin Brandenburg in the period prior to 2013. Imtech had already informed the
authorities and the Compliance Department of the Berlin Brandenburg Airport of
the unconfirmed allegations well before 26 February 2015. So far, internal
investigations did not prove the allegations.
Financial performance
Profit and loss account
Quarters in ? million Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
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1,030.1 1,061.9 Revenue and other income 3,922.3 4,248.4
-1.4 -11.2 Operational EBITDA -31.9 -78.3
-127.0 -245.9 Non-operational costs -221.8 -375.3
-------------------- ----------------
-128.4 -257.1 EBITDA -253.7 -453.6
-13.4 -9.6 Depreciation -35.6 -35.1
-32.9 -41.5 Amortisation & impairment -51.3 -73.5
-------------------- ----------------
-174.7 -308.2 Operating result (EBIT) -340.6 -562.2
-13.2 -21.2 Net finance result -178.7 -101.1
-0.3 -3.6 Share of results of associates. joint 12.2 -8.7
ventures and other investments
6.1 2.3 Income tax benefit 18.3 23.5
-------------------- ----------------
-182.1 -330.7 Result from continuing operations -488.8 -648.5
-0.7 -39.3 Result from discontinued operations -70.5 -48.1
-------------------- ----------------
-182.8 -370.0 Net result -559.3 -696.6
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(*) Restated, see note 3 to the Financial Statements 2014.
Fourth quarter 2014
In Q4 2014, revenue came in 3% lower at ?1,030 million compared with Q4 2013,
mainly due to weak market conditions in the Netherlands, the UK and Finland.
Marine was an exception with an increase of revenue.
The operational EBITDA in Q4 2014 was around breakeven level and amounted to ?1
million negative, which is a good improvement compared to the loss of ?11
million in Q4 2013. Nordic, Benelux and Traffic & Infra were the main
contributors to this positive development. Germany & Eastern Europe continued to
report a loss. UK & Ireland ended up with an operational EBITDA loss as a result
of project losses and work being deferred into 2015.
The effective tax rate for Q4 2014 amounted to 3.2%. The effective annual and
quarterly tax rate is impacted by losses made in various jurisdictions where no
compensation or offset is expected to exist and as a result will continue to
fluctuate for some time. We anticipate an income tax expense for 2015 of around
?10 million.
Full year 2014
Revenue for the full year came in 8% lower at ?3,922 million, mainly due to the
weak market conditions in the Netherlands, the UK, Spain and Finland, and in
Germany & Eastern Europe mainly due to the continued impact of our decision to
prioritise margin over volume, as well as the financial distressed situation and
a reputation under pressure. Marine is an exception with an increase of revenue.
Currency impact based on constant currencies was very limited, though with
differences between divisions.
The operational EBITDA for the year resulted in a loss of ?32 million (2013: ?78
million loss). Germany & Eastern Europe and Benelux reported a loss and UK &
Ireland reported a sharp decrease of its result. Marine returned to a positive
result and Nordic reported a good improvement of its result. Currency impact
based on constant currencies was 1% negative.
Result for the period, result per share
Quarters in ? million, per share in ? Full year
Q4 2014 Q4 2013 2014 2013
-------------------------------------------------------------------------------
-182.8 -370.0 Net result -559.3 -696.6
0.3 1.1 Non-controlling interests 1.3 4.6
----------------- ---------------
-183.1 -371.1 Net result for shareholders -560.6 -701.2
32.9 41.5 Amortisation & impairment 51.3 73.5
----------------- ---------------
-150.2 -329.6 Adjusted net result for shareholders -509.3 -627.7
Basic result per share from continuing -19.89 -280.43
operations
Diluted result per share from continuing -19.89 -280.43
operations
Basic result per share -22.75 -301.08
Diluted result per share -22.75 -301.08
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Capital employed
in ? million 31 Dec 2014 30 Sep 2014 31 Dec 2013(*)
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Property, plant and equipment 118.7 131.9 161.0
Goodwill 766.9 809.9 1,032.8
Other intangible assets 88.2 94.5 149.0
Other non-current assets 71.7 51.9 42.0
---------------------------------------
Non-current assets 1,045.5 1,088.2 1,384.8
Working capital -16.4 89.2 -15.2
Assets held for sale - 427.2 79.9
---------------------------------------
Capital employed 1,029.1 1,604.6 1,449.5
Total equity 282.5 -101.2 313.3
Net interest-bearing debt 334.3 1,157.4 737.0
Other non-current liabilities 30.7 40.7 11.8
Restructuring provisions & real estate 70.9 9.4 30.9
rationalisation
Other liabilities 310.7 316.6 296.7
Liabilities held for sale - 181.7 59.8
---------------------------------------
Funding 1,029.1 1,604.6 1,449.5
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(*) Restated, see note 3 to the Financial Statements 2014.
Fourth quarter 2014
In Q4 2014, capital employed decreased by ?576 million to ?1,029 million as a
result of the sale of the ICT division and the normal seasonal working capital
trends.
Equity increased in Q4 by ?384 million as a result of the proceeds of the rights
issue in October, partially offset by the net loss in the quarter. Net interest-
bearing debt decreased by ?823 million, mainly due to the net proceeds of the
rights issue and the sale of ICT for a total amount of ?777 million.
Furthermore, the decrease is impacted by the seasonal working capital inflow of
?93 million, offset by cash restructuring costs of ?26 million, cash advisory
costs of ?8 million and net-cash interest of ?55 million. Liabilities held for
sale decreased by ?182 million due to the sale of the ICT division. Other
liabilities include employee benefits (?253 million) and other provisions.
Goodwill
Imtech has assessed whether goodwill needed to be impaired as at 31 December
2014. For Germany & Eastern Europe this assessment has resulted in a goodwill
impairment of ?28 million. For the other divisions, the result of this
assessment is that there is no reason to impair goodwill. Our operational
improvement programme remains the main driver for the recovery of the
performance. However, headroom is limited for our Nordic, Spain and Marine
divisions and amounts to ?69 million for these divisions (H1 2014: ?46 million
and 2013: ?234 million). Adverse changes in the cost of capital, business
performance or continuing uncertainty among stakeholders could have an impact
going forward.
Operational working capital
in ? million, unless otherwise
indicated 31 Dec 2014 30 Sep 2014 31 Dec 2013(*)
-------------------------------------------------------------------------------
Work in progress (net) 109.1 149.6 178.8
Trade receivables 609.9 616.4 868.1
Other current assets 177.0 207.4 221.2
---------------------------------------
896.0 973.4 1,268.1
Trade payables 528.3 502.5 773.8
Other current liabilities 384.1 381.7 509.5
---------------------------------------
912.4 884.2 1,283.3
Working capital -16.4 89.2 -15.2
As % of LTM revenue -0.4% 2.4% -0.4%
Legacy items 30.6 43.6 75.7
Correction for discontinued operations - - -32.5
Operational working capital (excluding -47.0 45.6 -58.3
remaining legacy items)
As % of LTM revenue -1.2% 1.2% -1.4%
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(*) Restated, see note 3 to the Financial Statements 2014.
Operational working capital development in the quarter is in line with the
normal seasonal pattern and below the target bandwidth of 0% to 3% of revenue.
For the medium term, the new target bandwidth for working capital is -3% to 0%
of revenue. In Q4 2014, days of sales outstanding in trade receivables amounted
to 57 days. Days of payables outstanding in trade payables amounted to 72 days.
Other current assets include inventories, prepaid operating expenses, purchase
bonuses and rebates from suppliers, VAT receivables, income tax receivables and
various other receivables.
Other current liabilities at year-end 2014 include accrued personnel expenses
(?167 million), VAT payables (?41 million), income tax payables (?7 million) and
various other accrued liabilities (?168 million, including accruals for direct
and indirect costs).
Legacy items
The movement in legacy items in working capital is as follows:
in ? million Q4 Full year
----------------------------------------
Beginning balance 43.6 75.7
Collections -0.8 -32.3
Write downs -12.2 -12.8
--------------------
Ending balance 30.6 30.6
----------------------------------------
During the year all remaining legacy items in Benelux, Spain and Marine were
resolved. Also, progress was made in Germany & Eastern Europe. The year-end
balance mainly relates to outstanding receivables and 21 projects in Germany &
Eastern Europe.
Cash flow analysis
The condensed cash flow statement is as follows:
in ? million Q4 Full year
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Operational EBITDA -1.4 -31.9
Change in operational working capital 92.9 -11.3
Net capex -11.9 -18.5
Cash out of restructuring -26.4 -76.4
Advisory costs -7.9 -41.6
Net interest paid -54.6 -108.6
Cash tax 6.7 -2.0
Other 49.0 24.8
----------------
Free cash flow before disposal of discontinued operations 46.4 -265.5
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Fourth quarter
Change in operational working capital in the quarter of ?93 million relates to
normal seasonal cash inflow. Advisory costs of ?8 million mainly relate to the
implementation of the debt reduction programme. Net interest paid of ?55 million
includes interest and guarantee fees plus one-offs for amendment fee (?5
million) and make whole amounts (?7 million) in relation to the debt reduction
programme.
Full year
Change in operational working capital for the year of ?11 million negative is
mainly due to Germany & Eastern Europe, the rest of the group delivered good
performance. Net interest paid of ?109 million includes also one-offs for
amendment fees (?19 million) and make whole amounts (?7 million).
Performance by division
Benelux
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
--------------------------------------------------------------------------
189.4 200.7 Revenue 654.2 709.1
8.1 1.3 Operational EBITDA -11.3 -17.6
4.3% 0.6% Operational EBITDA margin -1.7% -2.5%
-27.1 -8.8 EBITDA -50.2 -63.4
133.6 126.0 Order intake 673.1 625.5
-2.0 -0.2 Operational working capital -2.0 -0.2
3,761 4,120 Number of employees 3,761 4,120
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(*) Restated, see note 3 to the Financial Statements 2014.
Market conditions are challenging in Benelux, especially in the Netherlands due
to the relapse of the industrial market. Revenue in Q4 decreased by 6% to ?189
million. Operational EBITDA increased by ?7 million to ?8 million due to good
performance in Belgium and as a result of cost savings, despite weak project
results in the Netherlands and low productivity in the Dutch industrial
business. Order intake increased by 6% to ?134 million. An interesting new
contract awarded is the design, build and 15 year maintenance contract for the
new food technology centre at Royal Cosun. Operational working capital amounted
to ?2 million negative. In Q4, the decrease of the number of employees with 182
FTEs was the result of earlier announced restructurings.
For the full year, revenue decreased by 8% to ?654 million. Operational EBITDA
increased by ?6 million, though still a loss of ?11 million. Order intake for
the year increased to ?673 million. Operational working capital improved to ?2
million negative. In the year, the number of employees reduced with 359 FTEs to
3,761 FTEs, reflecting the restructuring programmes as executed in 2014.
Germany & Eastern Europe
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
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196.7 186.2 Revenue 859.5 969.0
-21.1 -32.8 Operational EBITDA -44.7 -107.7
-10.7% -17.6% Operational EBITDA margin -5.2% -11.1%
-76.0 -239.7 EBITDA -125.9 -327.7
156.2 161.6 Order intake 625.5 800.6
-0.9 -81.7 Operational working capital -0.9 -81.7
4,210 4,740 Number of employees 4,210 4,740
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(*) Restated, see note 3 to the Financial Statements 2014.
Market conditions in Germany are difficult but stable, however our German
business had to deal with the financial distress and with a reputation under
pressure. Q4 2014 revenue amounted to ?197 million. Operational EBITDA improved
by ?12 million to a loss of ?21 million. The loss mainly relates to losses on
projects awarded before 2014 and a high cost structure. The services &
maintenance business continued its good performance. Order intake of ?156
million was below revenue mainly as a result of our decision to prioritise
margin over volume. An interesting new contract awarded is a large contract for
a new Volkswagen production site in Poland. Operational working capital amounted
to ?1 million negative. The number of employees reduced in Q4 by 124 FTEs to
4,210 FTEs.
For the total year, revenue decreased by 11% to ?860 million, mainly due to our
decision to reduce our size by prioritising margin over volume, as well as the
financial distressed situation and a reputation under pressure. Operational
EBITDA loss of ?45 million is the result of a high cost structure and losses on
projects particularly awarded before 2014. Order intake of ?626 million is at
the lower end of the new revenue equilibrium of ?600 million to ?700 million.
Operational working capital increased with ?81 million to ?1 million negative
due to delayed closure of projects and worsened payment conditions caused by the
financial distress and pressured reputation of Imtech Germany. The number of
employees decreased by 530 FTEs to 4,210 FTEs. As a result of rightsizing and a
rebuild of the business and organisation, the goodwill for the division of ?27.5
million is fully impaired.
UK & Ireland
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
--------------------------------------------------------------------------
160.3 174.2 Revenue 634.6 735.4
-2.8 7.9 Operational EBITDA 5.0 33.2
-1.7% 4.5% Operational EBITDA margin 0.8% 4.5%
-4.0 7.0 EBITDA -2.0 30.7
181.1 207.0 Order intake 710.4 673.7
-7.9 -13.7 Operational working capital -7.9 -13.7
2,856 3,396 Number of employees 2,856 3,396
--------------------------------------------------------------------------
(*) Restated, see note 3 to the Financial Statements 2014.
In the UK, the market conditions at the end of 2014 are showing recovery.
However, revenue in the quarter was down 8% to ?160 million mainly due to the
temporary lower activities in our water business as a result of the shift into
the new five year cycle (AMP6) and to the wind down of the Kazakhstan joint
venture. Currency impact on revenue was 3% positive. Operational EBITDA ended up
with a loss of ?3 million due to margin pressure in UK engineering services and
losses on a number of projects. Order intake amounted to ?181 million,
reflecting a slow recovery of the market. A noteworthy new contract awarded is
the design and installation of mechanical and electrical infrastructure for the
expansion of the Anfield Stadium of Liverpool FC. Operational working capital
amounted to ?8 million negative. The reduction of 236 FTEs in the last quarter
to 2,856 FTEs is the result of streamlining the business.
Revenue for the year decreased by 14% to ?635 million due to challenging market
conditions in UK, the lower production of our water business and the wind down
of the Kazakhstan joint venture. Revenue was positively influenced by 4%
currency impact. Operational EBITDA declined by ?28 million due to ?5 million,
including a positive currency impact of 2%. Order intake increased by 5% to ?710
million. Operational working capital amounted to ?8 million negative. The
reduction of 540 FTEs in the year to 2,856 FTEs is the result of the wind down
of the Kazakhstan joint venture and streamlining the business.
Nordic
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013 2014 2013
-------------------------------------------------------------------------------
218.9 238.7 Revenue 808.9 892.7
11.1 7.5 Operational EBITDA 32.7 29.8
5.1% 3.1% Operational EBITDA margin 4.0% 3.3%
6.5 7.1 EBITDA 19.2 25.0
140.7 217.9 Order intake 750.4 888.1
-32.9 -12.0 Operational working capital -32.9 -12.0
5,045 5,406 Number of employees 5,045 5,406
-------------------------------------------------------------------------------
Market conditions overall are stable, however with differences between regions.
Revenue in Q4 decreased by 8% to ?219 million, including a negative currency
impact of 2%, based on constant currencies. Operational EBITDA increased by 48%
(including negative currency impact of 2%) to ?11 million due to first benefits
of the integration programmes, closure of loss making branches and the
significant loss at the NKS project in Q4 2013. Order intake was 35% lower at
?141 million (including a ?34 million adjustment of previous quarters). A
noteworthy new contract awarded is for the piping installations in the new bio
power heating plant for Tranås Energi. Operational working capital amounted to
?33 million negative. The reduction of 192 FTEs in the last quarter to 5,045
FTEs is the result of integration of past acquisitions and closure of loss
making branches.
Revenue for the twelve months decreased by 9% to ?809 million, including a
negative currency impact of 5%. Operational EBITDA improved with 10% to ?33
million as a result of integration benefits, closure of loss making branches and
the significant loss at the NKS project in 2013, offset by a negative currency
impact of 6%. Order intake decreased by 16% to ?750 million, amongst others
impacted by closure of several branches. Operational working capital improved to
?33 million negative. The number of employees decreased with 361 FTEs to 5,045
FTEs.
Spain
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
--------------------------------------------------------------------------
35.3 38.8 Revenue 110.5 132.9
0.8 -0.2 Operational EBITDA -2.7 -2.0
2.3% -0.5% Operational EBITDA margin -2.4% -1.5%
-0.7 -0.6 EBITDA -13.5 -2.7
67.0 59.8 Order intake 127.2 122.6
6.3 17.8 Operational working capital 6.3 17.8
1,676 1,560 Number of employees 1,676 1,560
--------------------------------------------------------------------------
(*) Restated, see note 3 to the Financial Statements 2014.
The Spanish market shows the first signs of a slow recovery, though price levels
continued to be under pressure. In Q4, revenue came in 9% lower at ?35 million,
due to delays in projects. Operational EBITDA returned to a positive ?1 million
due to higher production levels within the industry and the first effects of
restructurings. Order intake was 12% up to ?67 million. An interesting new
contract awarded is for the Cepsa refinery in Cadiz to improve the energy
efficiency in the boiler. Operational working capital amounted to ?6 million.
The number of employees decreased by 62 FTEs to 1,676 FTEs.
For the full year, revenue amounted to ?111 million, a decrease of 17% mainly
due to challenging market conditions. Operational EBITDA amounted to a loss of
?3 million. Order intake was up 4% to ?127 million. Operational working capital
improved significantly to ?6 million, mainly due to increased focus on working
capital management.
Traffic & Infra
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
--------------------------------------------------------------------------
107.4 115.9 Revenue 387.4 402.7
6.8 5.9 Operational EBITDA 11.1 12.2
6.3% 5.1% Operational EBITDA margin 2.9% 3.0%
6.2 5.0 EBITDA 10.0 -8.2
93.1 75.6 Order intake 341.3 361.5
-5.4 7.9 Operational working capital -5.4 7.9
2,083 2,072 Number of employees 2,083 2,072
--------------------------------------------------------------------------
(*) Restated, see note 3 to the Financial Statements 2014.
Overall, market conditions are stable, except for the weak conditions within the
Dutch infra market. Q4 revenue decreased by 7% to ?107 million. Operational
EBITDA was 15% up to ?7 million as a result of benefits of earlier implemented
improvement programmes. Order intake increased by 23% to ?93 million.
Operational working capital improved to ?5 million negative. The number of
employees decreased with 33 FTEs to 2,083 FTEs.
For the full year, revenue came in 4% lower at ?387 million mainly due to the
weakness in the Dutch infra market, despite a 1% currency gain mainly due to the
business in the UK. Operational EBITDA decreased by 9% to ?11 million, despite a
positive currency impact of 3%. Order intake amounted to ?341 million.
Operational working capital improved to ?5 million negative.
Marine
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
--------------------------------------------------------------------------
124.6 113.5 Revenue 476.5 418.9
0.6 1.0 Operational EBITDA 1.5 -9.9
0.5% 0.9% Operational EBITDA margin 0.3% -2.4%
-15.3 -15.3 EBITDA -17.1 -61.5
140.0 71.8 Order intake 501.1 476.2
3.8 36.7 Operational working capital 3.8 36.7
2,475 2,410 Number of employees 2,475 2,410
--------------------------------------------------------------------------
(*) Restated, see note 3 to the Financial Statements 2014.
Revenue in Q4 increased by 10% to ?125 million due to high production levels.
Operational EBITDA was slightly lower than a year ago and amounted to ?1 million
due to several project losses. The previously announced audit by a defence
sector customer of a large multi-year contract is still on-going. In Q4, a
valuation allowance of ?5 million on that contract was recorded as non-
operational costs. The on-going audit could result in modifications of
contractual agreements and/or an additional non-operational write-off. Order
intake increased as a result of both refined contract estimates from previous
quarters and the timing and extent of new contracts. An interesting new contract
awarded is the design and installation to complete the electrical system,
including hybrid electrical propulsion system, battery systems and automation
system, for two hybrid ferries for Seaspan. Operational working capital amounted
to ?4 million, amongst others due to resolution of some old disputes. The number
of employees remained stable in Q4 at 2,475 FTEs.
Revenue in 2014 amounted to ?477 million. Operational EBITDA turned into a
positive ?2 million due to the benefits of the earlier announced restructuring
programme and the significant losses on projects in 2013. Order intake amounted
to ?501 million. Operational working capital improved to an extraordinary level
of ?4 million.
Group management / eliminations
Quarters in ? million, unless otherwise indicated Full year
Q4 2014 Q4 2013(*) 2014 2013(*)
--------------------------------------------------------------------------
-2.5 -6.1 Revenue -9.3 -12.3
-4.9 -1.8 Operational EBITDA -23.5 -16.3
-18.0 -11.8 EBITDA -74.2 -45.8
-8.0 -13.1 Operational working capital -8.0 -13.1
87 84 Number of employees 87 84
--------------------------------------------------------------------------
(*) Restated, see note 3 to the Financial Statements 2014.
Operational EBITDA Q4 amounted to ?5 million loss and includes mainly personnel
expenses, legal and audit fees. For the full year operational EBITDA was ?24
million negative due to similar items.
Board of Management Royal Imtech N.V.
Gouda, 18 March 2015
Financial calendar 2015
* 12 May 2015: Annual General Meeting of shareholders
* 12 May 2015: first quarter results 2015
* 25 August 2015: second quarter and half year results 2015
* 17 November 2015: third quarter results 2015
Press conference
Today at 9.00 hours (CET) Imtech will organise a press conference in Hotel
Mövenpick, Piet Heinkade 11 in Amsterdam.
Analyst meeting
Today at 11.00 hours (CET) Imtech will organise a sell-side analyst meeting in
Hotel Mövenpick, Piet Heinkade 11 in Amsterdam. This meeting will be transmitted
live via the internet (www.imtech.com) and will afterwards also be available on
the website as a replay.
More information
Media: Analysts & investors:
Dorien Wietsma Jeroen Leenaers
Director Corporate Communication & CSR Director Investor Relations
T: +31 182 54 35 53 T: +31 182 54 35 04
E: dorien.wietsma(at)imtech.com E: jeroen.leenaers(at)imtech.com
www.imtech.com www.imtech.com
Imtech profile
Royal Imtech N.V. is a European technical services provider in the fields of
electrical solutions, automation and mechanical solutions. With approximately
22,000 employees, Imtech holds attractive positions in the buildings and
industry markets in the Netherlands, Belgium, Luxembourg, Germany, Eastern
Europe, Sweden, Norway, Finland, the UK, Ireland and Spain, the European market
of Traffic as well as in the global marine market. Imtech offers integrated and
multidisciplinary total solutions that lead to better business processes and
more efficiency for customers and the customers they, in their turn, serve.
Imtech also offers solutions that contribute towards a sustainable society - for
example, in the areas of energy, the environment, water and traffic. Imtech
shares are listed on Euronext Amsterdam.
PDF: Press Release incl. appendix:
http://hugin.info/130755/R/1904307/677422.pdf
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Source: Imtech via GlobeNewswire
[HUG#1904307]
Unternehmensinformation / Kurzprofil:
Datum: 18.03.2015 - 06:58 Uhr
Sprache: Deutsch
News-ID 379275
Anzahl Zeichen: 62575
contact information:
Town:
Gouda
Kategorie:
Business News
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"Royal Imtech publishes fourth quarter and full year 2014 results"
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