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GRONTMIJ N.V.: Financial press release - Grontmij improves operating margin in first half 2014; Cost reductions and French divestment process progressing well

2014-08-04 07:02:00
Ticker Giełda ISIC Kraj Miasto

De Bilt, 4 August 2014 - Grontmij N.V. a listed consulting & engineering company

with strong European presence, today announces its results for the second

quarter and first half of 2014. In the second quarter, markets across Europe on

average developed moderately positive, thereby continuing the first signs of

recovery reported in the first quarter. EBITA margin excluding exceptional items

improved in the first half of 2014 to 3.5% (HY 2013: 2.4%), despite a slightly

lower operating margin in the second quarter. Margin increase is mainly driven

by improved performance in the Netherlands and cost savings. Good progress is

made on the divestment process of the French activities, with interest from both

financial and strategic parties. In the second quarter,  ? 19.5 million of

convertible cumulative preference shares ('Cumprefs') were issued, further

strengthening Grontmij's financial position.

Key points Q2 2014 & HY 2014 (1)

* Total revenue Q2 2014 ? 168.5 million (Q2 2013: ? 180.7 million), with

organic decline of 5.7%. Net revenue Q2 2014 below last year at ? 140.5

million (Q2 2013: ? 147.4 million), with organic decline of 3.6%, impacted

as expected by the decline in the Dutch market and less working days. For HY

2014, organic decline on net revenue was modest at 1.3%

* EBITA excluding exceptional items Q2 2014 ? 4.7 million (Q2 2013: ? 5.7

million). Good developments in a number of countries, and in particular in

the Netherlands, were offset by lower results in Denmark and Sweden; EBITA

margin excluding exceptional items was 2.8% in Q2 2014, compared to 3.1%

last year; For HY 2014, the EBITA margin improvement was primarily driven by

cost reductions and developed in line with internal expectations, from 2.4%

in 2013 to 3.5% this year

* Exceptional items in the second quarter of - ? 5.1 million, increased

compared to last year (Q2 2013: - ? 0.5 million) resulting mainly from the

additional restructuring measures

* Net result from continuing operations (2)  in Q2 2014 was - ? 10.0 million

(Q2 2013:  - ? 1.3 million), impacted by increased exceptional items (? 5.1

million) and an increase in finance expenses as a result of the IFRS

treatment of the (non-cash) fair value fluctuations of the convertible

cumulative preference shares of ? 5.0 million. Net result from continuing

and discontinued operations in Q2 2014 was  - ? 14.6 million (Q2 2013:  - ?

1.7 million) including the result in France (- ? 4.6 million)

* Trade working capital (TWC) at the end of Q2 2014 was 17.1% (Q2

2013: 16.4%) due to higher TWC levels in Belgium and Germany

* Net debt (2) based on continuing operations per 30 June 2014 was ? 67.4

million (Q2 2013: ? 138.5 million)

Highlights Rebalanced 'Back on Track' strategy 2014 - 2016:


* Cost reduction programme is proceeding well. Measures taken in the first

half year represent an annual run rate of ? 11 million against the 2013

actual cost base (excluding 2015 - 2016 inflation)

* OPEX improvements: in the second quarter, Grontmij continued to embed the

five processes in all operating countries. Internal audits have been

performed in Sweden, Turkey and Poland

* Portfolio optimisation: The divestment process of the French activities is

progressing according to schedule: an Information Memorandum has been sent

out to interested parties, both financial and strategic. Grontmij has

terminated the sale agreement for the Naarderbos Golfcourse and is seeking

discussions with other interested parties

* Accelerate improvements NL: Good progress is being made in the Netherlands,

with implementation of the strategic plan to reduce costs, improve OPEX and

grow the Dutch business in a sustainable manner. In the first half of 2014,

EBITA margin excluding exceptional items in the Netherlands improved from

3.3% to 4.9%

Realising profitable growth

Grontmij's strategy is aimed at restructuring the business and realising

profitable growth, focusing on five Group Growth Segments: Energy, Water,

Highways & Roads, Sustainable Buildings and Light Rail.

Within these segments, a notable number of projects have been won in the second

quarter of 2014 such as three major wind farm assignments in Denmark, Belgium

and the Netherlands (Energy), the Alliance contract with Anglian Water that was

signed in the UK as part of AMP6 (Water), the management contract for the Niels

Bohr Building (Sustainable Buildings), and the design for the International

Financial & Technology Centre in Wuhan, China (Sustainable Buildings).

Michiel Jaski, CEO Grontmij N.V.: 'With the improvement of our profit margin as

Grontmij's most important long term strategic target, we are pleased to report

on the trend in the first half of 2014. Excluding exceptional items our EBITA-

margin of 3.5%, compared to 2.4% in the first six months last year, indicates

Grontmij is making progress to get back on track. Although the margin in Q2 was

slightly lower than last year, continued operations were in line with our

internal expectations. The decisions announced earlier this year to implement an

additional round of restructuring and to start the process to divest our

remaining French activities strongly influenced net income in Q2. The good news

is that the restructuring and strategic turn-around of the Netherlands is

showing its early results. The divestment process in France is running on

schedule with interest from both strategic and financial parties. We are pleased

with the interest for our French activities and look forward to bring the

divestment process to a positive closure.'

(1)  As per 30 June 2014, the French Engineering & Consultancy business is

classified as asset held for sale and is qualified as discontinued operations,

in accordance with the requirements of IFRS 5. For more details please refer to

Note 6 of the interim financial statements 2014.

(2)  Under IFRS, the convertible cumulative preference shares ('Cumprefs') are

classified as a liability. Under Dutch law and for the covenant calculations the

Cumprefs are classified as equity. For more details please refer to the

Refinancing paragraph in this press release.

To the full financial press release including the Interim Financial Statements

on our website.

For more information please contact:

Grontmij N.V., Mich?le Negen, Investor Relations Manager, T +31 30 220 78 31



Note to editors

Grontmij is a leading European company in the Consulting & Engineering industry

with world-class expertise in the fields of energy, highways & roads, light

rail, sustainable buildings and water. Our leading principle is Sustainability

by Design. This enables our professionals to support clients in developing the

built and natural environment. Established in 1915, Grontmij is listed on the

NYSE Euronext stock exchange.

Financial press release Q2 2014 - excl. Interim Financial Statements:


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