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* |
|
|
|
|
|
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 |
* 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:
-
Dealing with the implications of the past
irregularities
-
Implementing a stable financing structure
-
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 |
|
|
|
|
|
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 other investments |
-0.3 |
|
|
12.2 |
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 |
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 |
|
|
|
|
|
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 |
|
|
|
|
|
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 debt) |
31.4 |
|
|
31.4 |
Amortisation capitalised cost |
- |
|
|
-18.3 |
|
16.9 |
|
|
-56.4 |
|
|
|
|
|
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* |
|
|
|
|
|
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 ventures and other investments |
12.2 |
-8.7 |
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 |
* 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 operations |
-19.89 |
-280.43 |
|
|
Diluted result per share from continuing operations |
-19.89 |
-280.43 |
|
|
|
|
|
|
|
Basic result per share |
-22.75 |
-301.08 |
|
|
Diluted result per share |
-22.75 |
-301.08 |
Capital employed
in € million |
31 Dec 2014 |
30 Sep 2014 |
31 Dec 2013* |
|
|
|
|
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 rationalisation |
70.9 |
9.4 |
30.9 |
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 |
* 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 remaining legacy items) |
-47.0 |
45.6 |
-58.3 |
As % of LTM revenue |
-1.2% |
1.2% |
-1.4% |
* 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 |
|
|
|
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 |
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 |
* 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* |
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 |
* 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
Director Corporate Communication & CSR
T: +31 182 54 35 53
E: dorien.wietsma@imtech.com
www.imtech.com |
Jeroen Leenaers
Director Investor Relations
T: +31 182 54 35 04
E: jeroen.leenaers@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
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Imtech via Globenewswire
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