q3 2021 trading update - media.fugro.com

Q3 2021 trading update

28 October 2021

Q3 2021 trading update2

▪ Revenue increased by modest 3.7%

▪ Renewables generated 30% of revenue in Q3, up from 23% in H1

▪ EBIT margin of 7.6%; results continue to be impacted by pandemic, more than anticipated at start of the year

▪ Free cash flow of EUR 77.4 million as result of good operational cash flow and working capital performance

▪ 12-month backlog up 8.9%, supported by all business lines

▪ Outlook full-year 2021 reconfirmed: revenue growth, modest margin improvement & around break-even free cash flow

▪ Timing of mid-term targets redefined to 2023-2024

Q3 2021: Continued growth in renewables; good cash flow and solid backlog


Renewables account for 30% of Q3 2021 revenue

Contributing to energy transition, climate change adaptation and sustainable infrastructure

Site

investigations for

offshore wind in

Germany, US,

South Korea,

Taiwan

Research into

subsidence on

former peat

extraction site in

the Netherlands

Partnership with

IOC-UNESCO to

improve access

to ocean science

data

Positioning

awards for

damage

assessments in

aftermath of

Hurricane Ida

Go to insert header and footer under

1 15

68

9

1212

1419

21

27

2020 2021 2022

Global growth in offshore

wind

▪ Continued strong growth in offshore wind investments expected. Key involvement

of Fugro’s site characterisation solutions 2-5 years before installation

▪ Current offshore wind installed capacity of 26 GW expected to grow to 164 in

2030. Strongest growth in the UK, the US, Germany, Netherlands and Taiwan1

• E&P companies announced ramp up of clean energy investments to 20-25% of

capex budgets by 2025

• Biden administration calls for expansion capacity to 30GW by 2030

• EU Green Deal and imbalance of energy demand & supply can boost investments

Renewables


Offshore wind capex (x EUR bn)1

+21%

1. Excluding China. Source: 4COffshore October 2021

Unlocking Geo-data insights to support

planning, designing, building and

operation of offshore wind farms

Number new turbines1

170505

73268 277 211

265

474

478

574 446401

514

845

574

844723

630

949

1824

1125

2020 2021 2022 2023 2024 2025


137 12

24

1923

37

26

39

4

12

1978

64

93

2020 2021 2022

Supply-demand imbalance

▪ Post Covid economic recovery results in oil and gas supply-demand imbalance

• Unprecedented effects on energy prices, labor and production costs

▪ 2021 offshore O&G services spend up in Europe, still declining in APAC and MEI

▪ Asset integrity spending increasing, while site characterisation projects are delayed

▪ Number of Final Investment Decisions (FID) expected to grow strongly in 2022

Oil & Gas


0

1

2

3

4

5

6

7

0

20

40

60

80

100

Q1

20

Q2

20

Q3

20

Q4

20

Q1

21

Q2

21

Q3

21

Brent oil Natural gas

Offshore O&G services spend2Oil and gas prices1

$/bbl $/MMBtu

Number of offshore

projects FIDs $/bn

52

33

56

32

52

31

61

30

55

33

63

34

Americas APAC E&A MEI

1 – Brent oil and natural gas prices up to 26.10.21. Source: investing.com

2 – Number of offshore projects FIDs, Global offshore OFS (oilfield services) spend. Source: Rystad Energy (October 2021)

Support energy companies with Geo-

data insights to enable safe and

sustainable operations$/bn


68 76 83

159181

197

227

257280

2020 2021 2022

Refurbishment Repair & Maintenance

122 128 140

127 144 157

175201

218

124147

162548

620676

2020 2021 2022

Americas APAC Europe & Africa MEI

Positive outlook

▪ Post-covid governments’ programs support positive market outlook

• Biden’s proposed $ 600 billion infrastructure bill expected to commence in 2022

▪ Growing repair & maintenance and refurbishment budgets to renovate and

upgrade existing infrastructure result in asset integrity and monitoring projects

Infrastructure


Infrastructure asset integrity &

monitoring spend (x $ bn)

Infrastructure spend

(capex + opex) (x $ bn)1

+11%+11%

1 - Source: Global Data Construction Intelligence Centre (October 2021), Capex/opex for construction services in oil & gas,

electricity & power, rail, road and other infrastructure, excl. China.

Ground risk management support and

infrastructure monitoring to support safe

construction and operation


▪ Water management is crucial for supporting urban and infrastructure

developments

▪ Extreme weather events drive the need for more inland water infrastructure and

coastal resilience projects e.g. in the US, Indonesia, NL

▪ Increasing need for mapping of coastal zones and oceans

• Coastal zone mapping projects in e.g. Australia, the US, Ireland, Maldives

• UN Decade of Ocean Science for Sustainable Development

▪ Increasing maritime activity drives the need for safe navigation and positioning

26 28 30

22 25 26

3135

38

2226

28102

114123

2020 2021 2022

Growth driven by climate

change adaptation projects

Water


$/bn

Water infrastructure spend1 (x $ bn)

1 - Source: Global Data Construction Intelligence Centre (October 2021), Capex/opex for construction services in Water and

Marine & Inland Water infrastructure, excl. China.

+10%

Delivering Geo-data insights for water

management and ocean science to

support climate change adaptation

Modest growth and margin of 7.6%

8

▪ Business operations still impacted by the pandemic, mainly in

▪ Asia Pacific: operational complexities of cross border projects

▪ MEI: low oil & gas activity levels

▪ Lower margin in Europe-Africa, compared to a strong Q3 2020

Europe-Africa

-30%

14%

Fugro

8%

Americas

-17%-21%

Asia Pacific Middle East & India

4%

-7%

25%

0%

13%9%

-24%

23%

-28%

-3%

Revenue growth per quarter1

Q1 Q2 Q3

-22 -15

26 3240

29

Q1 ‘20 Q1 ‘21Q2 ‘20 Q2 ‘21 Q3 ‘21Q3 ‘20

EBIT (margin) per quarter2

- 6.0%

7.4%

- 5.3%

8.1% 7.6%

11.2%

X EUR million

1 Currency corrected

2 Adjusted for specific items, with a total impact on EBIT of EUR 5.8 million YTD 2021



Marine up; land marginally downMarine X EUR million

Q3 20 Americas

256

276

Europe-

Africa

Asia

Pacific

Middle

East &

India

FX effect Q3 21

6.7%1

1 Currency corrected; 2020 numbers and revenue growth corrected for reclassification of nearshore infrastructure services in Europe-Africa from Land to Marine

Middle

East &

India

Europe-

Africa

105

Q3 20 Americas Asia

Pacific

Q3 21FX effect

102

- 3.7%1

Land

Marine ▪ Revenue up 6.7% led by asset integrity, in all regions. Site characterisation increased only in Asia Pacific

▪ Vessel utilisation of 76% compared to 74% in Q3 2020

Land ▪ 3.7% revenue decline fully related to site characterisation, where double-digit growth in Americas was

offset by a decline in the other regions, in particular Middle East & India


Good cash flow supported by lower working capital

Working capital (% of last 12 months revenue)Days of revenue outstanding

98 96 9894

86

97

92

86

Q2 19Q1 19 Q1 20

8887

Q4 19Q3 19 Q2 20 Q3 20

83

Q4 20 Q1 21 Q2 21 Q3 21

▪ In a typically busy Q3, free cash flow of EUR 77.4 million

as result of good activity levels and lower working capital

▪ Net debt of EUR 306.6 million compared to EUR 368.4

million at June 2021 and EUR 295.8 million at year-end

2020

Free cash flow1

204244 263

154 182 185 178112

153218

178

Q1 19 Q3 21

12.9%15.1%

Q2 19

16.1%

Q3 19

12.3%

9.5%

16.1%

Q4 19

11.2%

Q1 20

11.6%

Q2 20

12.0%

Q3 20

8.1%

Q4 20* Q2 21Q1 21

13.0%

77.4

Q3 2020

36.7

Q3 2021

1 Free cash flow includes cash flow from discontinued operations

* Favourably impacted by EUR 20 million deferred taxes from Covid related government support

X EUR million


▪ Ongoing growth in renewables, infrastructure

and nautical markets, despite ongoing pandemic

challenges

▪ Expected modest recovery of oil & gas related

revenue has not yet materialised

Resulting in

▪ Revenue growth

▪ Modest margin improvement

▪ Around break-even free cash flow

Outlook 2021

12

Mid-term targets 2023-2024

Free cash flow1: 4-7% of revenue

EBIT margin: 8-12%

ROCE3: 10-15%

1. FCF after lease payments

2. Including EUR 50 million proceeds from divestment of Global Marine

3. NOPAT over the last 12 months, including discontinued operations, divided by 3 points average capital employed adjusted for impairments of PP&E, right-of-use assets, goodwill and

intangibles in the current year

2020 2023-20242021 2022

2020 2021 2022 2023-2024

2020 2021 2023-20242022

4.6%

3.5%8%

12%

4%

7%

15%

10%

4.2%

Drivers

Volume In particular driven by renewables, infrastructure and water

Price Value-based pricing; integrated digital solutions

Productivity Disciplined cost management; operational excellence;

digital transformation to increase efficiency

Cost inflation Personnel and supply chain

Assumptions

Revenue EUR 1.6 – 2.0 billion

Capex EUR 80-110 million per year; shift towards lower capital

intensity through smaller and increasingly autonomous

assets

Note Assuming no material impacts from additional Covid-19

developments

2


Q&A

13

q3 2021 trading update - media.fugro.com

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