Brunel Q4 and FY 2010 results 

Friday, March 4, 2011

Strong Q4 for Brunel with increase of turnover by 22% and Ebit by 30%. Proposed dividend € 0.80 per share (2009- € 0.80).

Brunel realised a Q4 2010 turnover of € 214 million, up 22% compared to the same period in 2009 and up 24% compared to the third quarter of 2010. The gross margin in the fourth quarter amounted to € 46 million versus € 37 million in the same period last year and up from € 37 million in the previous quarter. Ebit in Q4 2010 is € 13 million, an increase of 30% compared to the same period in 2009. The Q4 Ebit includes a cost of € 2 million reported as other income/expense which relates to the reversal of part of the 2008 reported book gain from the divestment of IMG in Germany.

Brunel International

 

 

 

 

 

 

X € 1 million

 

 

Q4 2010

Q4 2009

Change %

Full year 2010

Full year 2009

Change %

 

 

Turnover

214.0

175.8

22%

720.9

738.4

-2%*

Gross Profit

45.6

36.5

25%

152.0

151.8

0%

Gross margin

21.3%

20.8%

 

21.1%

20.6%

 

Other income/expense

-2.1

-

 

-2.1

-

 

Ebit

13.1

10.1

30%

37.3

45.1

-17%

Ebit %

6.1%

5.7%

 

5.2%

6.1%

 

* -8% at constant currency

Highlights 2010:

  • Full year turnover down 2%
  • Gross margin at 21%
  • Working capital up 15% to € 176 million
  • Brunel Netherlands: Full year turnover down 5%, Q4 up 7%
  • Brunel Germany: Full year turnover up 5%, Q4 up 28%
  • Brunel Belgium: Full year turnover up 3%, Q4 up 21%
  • Brunel Energy: Full year turnover down 4%, Q4 up 25%
  • Ebit Q4 negatively influenced by € 4 million one off costs, full year € 5 million vs € 3 million in 2009

Full year 2010, Brunel International realised a turnover of € 721 million; down 2% compared to 2009.

Gross profit is equal to prior year at € 152 million. Gross margin increased to 21.1% for the year compared to 20.6% in 2009. The Ebit decreased as a result of increased overhead costs by 17% to € 37 million compared to € 45 million in 2009. The company achieved a group net income of € 26 million compared to € 32 million in 2009.

Brunel’s core activities are secondment, project management and consultancy. The company performs these activities through the flexible deployment of highly skilled and experienced specialists in the fields of Engineering, Oil & Gas, Aerospace, Automotive, ICT, Finance, Legal, Insurance and Banking. Brunel offers its’ core activities globally from its’ own international network of 92 offices in 33 countries. Brunel Netherlands, Brunel Germany and Brunel Energy are the company’s largest business divisions. In 2010 these divisions accounted for respectively 18%, 15% and 63% of global turnover.

In 2010 all business regions started recovering from the global crisis. The professional staffing business in Europe started recovering in Germany early in the year and was followed by Belgium and towards the end of the year by The Netherlands. The Brunel Oil and Gas business in 2010 has a more challenging comparison base with the Pluto and Woodside projects completed in 2009. Compared to 2009 turnover decreased slightly, but with the start of some major projects in Australia in the fourth quarter, turnover is increasing.

We have continued our policy of investing in the quality of our organisation and are confident that this has put us in an excellent position to benefit from the positive developments in the market.

Brunel International continued to benefit from the strong balance sheet which is considered to be a sign of financial strength by both our customers and employees as well as our contractors. Solvency remains high at 69%, in line with 2009.

The goodwill at year end amounts to € 7 million representing just over 3% of shareholders’ equity.

At € 64 million, Brunel’s cash position as at December 31st 2010 is sound. Despite the decrease in net profit compared to 2009, we propose a dividend payout of € 0.80 per share, equal to last year.

The average workforce of Brunel worldwide decreased by 2% from 7,847 in 2009 to 7,656 in 2010.

Jan Arie van Barneveld, CEO Brunel International: “2010 was an exciting year. During the year we have seen growth gaining momentum. In the first quarter all business regions realised reduced turnover levels. However Germany and Belgium started growing again during the second quarter and although later than expected The Netherlands started recovering during the last four months. Additionally Energy experienced strong growth from the commencements of new projects and as a result we had a strong consolidated fourth quarter”.

  

Brunel Netherlands

In The Netherlands, Brunel recorded a net turnover of € 133 million, a 5% decrease compared to 2009. The gross profit decreased by 9% from € 51 million in 2009 to € 46 million in 2010.

The gross margin of 35% is a little less than the 36% realised in the previous year mainly as a result of a increase in the share of hired contractors in our workforce. The overhead costs in 2010 amount to € 34 million, resulting in an Ebit of € 12 million representing 9% of turnover.

Brunel Netherlands

 

 

 

 

 

 

X € 1 million

 

 

Q4 2010

Q4 2009

Change %

Full year 2010

Full year 2009

Change %

 

 

Turnover

38.0

35.6

7%

132.9

139.2

-5%

Gross Profit

14.0

13.5

4%

46.1

50.6

-9%

Gross margin

36.8%

37.8%

 

34.7%

36.3%

 

Ebit

5.3

3.8

39%

12.2

15.4

-21%

Ebit %

13.9%

10.6%

 

9.2%

11.1%

 

The development of the Dutch economy clearly demonstrated that it is of a late cyclical nature. While the German economy started the upturn in the first half of 2010, in The Netherlands it took until the third quarter. Brunel Netherlands’ business lines noted an earlier pick up of demand for specialists in the IT and the high tech sectors but the Legal and Finance business lines, who are more focussed on the service and banking industry, are showing a slower recovery.

Based on our performance in the third and fourth quarters we are confident that growth in The Netherlands will continue.  

Brunel Germany

In 2010 Brunel Germany’s turnover increased, compared to 2009, by 5% to € 111 million. Gross profit increased in the same period by 16% to € 42 million and the gross margin increased from 34% to 38%,

In addition a cost of € 2 million has been reported as other income/expense. This relates to the reversal of part of the book gain from the divestment of IMG in 2008. Part of the selling price was based on an earn-out formula, that as a result of the economic situation, could not be achieved.

Overhead costs decreased in the year under review by € 3 million.

The Ebit for the year amounts to € 8 million, up 7 million compared to 2009.

Brunel Germany

 

 

 

 

 

 

X € 1 million

 

 

Q4 2010

Q4 2009

Change %

Full year 2010

Full year 2009

Change %

 

 

Turnover

31.6

24.6

28%

110.7

105.7

5%

Gross Profit

12.6

8.2

54%

42.3

36.3

17%

Gross margin

39.7%

33.4%

 

38.2%

34.3%

 

Other income/expense

-2.1

-

 

-2.1

-

 

Ebit

0.5

-0.4

 

8.2

1.4

486%

Ebit %

1.4%

-1.5%

 

7.4%

1.3%

 

Brunel Germany has made an impressive turnaround in 2010. The German economy, which is relying strongly on the automotive and production equipment industry, has driven part of the growth in 2010 but new management together with streamlining the commercial organisation has contributed considerably. During 2010 turnover increased each quarter and fourth quarter turnover exceeds same period turnover in 2009 by 28%.

The gross margin has improved from 34% in 2009 to 38% in 2010 as a result of improved productivity and increased commercial focus.

The overhead costs in 2010 amount to €32 million, 8% less than the costs in 2009. Included in fourth quarter’s overhead costs are one-off costs of € 2 million relating to social security costs for years before 2008. The lower overhead costs are the result of cost reduction programmes initiated at the end of 2009.

Brunel Belgium

Brunel Belgium generated a turnover of € 21 million, in line with 2009. Gross profit amounts to € 4.5 million, 10% up compared to 2009. The overhead costs have decreased slightly resulting in an Ebit of € 1.0 million (2009: € 0.5 million).

Brunel Belgium

 

 

 

 

 

 

X € 1 million

 

 

Q4 2010

Q4 2009

Change %

Full year 2010

Full year 2009

Change %

 

 

Turnover

5.8

4.8

21%

21.3

20.7

3%

Gross Profit

1.3

0.9

44%

4.5

4.1

10%

Gross margin

22.6%

18.8%

 

20.9%

19.8%

 

Ebit

0.4

0.0

-

1.0

0.5

100%

Ebit %

6.0%

-

 

4.5%

2.3%

 

Brunel Belgium has developed in line with Brunel Germany. Turnover is up 3% due to increasing demand for engineers. Continued focus on margins and productivity resulted in an improvement of the gross margin from 20% to 21%.

Improved cost awareness has resulted in a reduction of overhead cost of 2%. The Ebit improved as a result of the gross margin development from 2.3% to 4.5%.

Brunel Energy

Brunel Energy realised a turnover of € 454 million, down 4% compared to 2009. Turnover in Q4 was up 25% to € 138 million, a record high for Brunel Energy. Gross margin is stable at 12.9% and Ebit, as a result of higher costs resulting from the investments made in the organisation, was down from 6.3% in 2009 to 4.4% in 2010. Ebit in the fourth quarter is 6.2% supported by the higher turnover level.

Brunel Energy

 

 

 

 

 

 

X € 1 million

 

 

Q4 2010

Q4 2009

Change %

Full year 2010

Full year 2009

Change %

 

 

Turnover

138.0

110.7

25%

454.2

473.2

-4%

Gross Profit

17.6

13.9

27%

58.6

60.7

-3%

Gross margin

12.8%

12.5%

 

12.9%

12.8%

 

Ebit

8.5

6.9

23%

20.0

29.7

-33%

Ebit %

6.2%

6.3%

 

4.4%

6.3%

 

Brunel Energy was faced with a tough comparison base as turnover in 2009 included the turnover of the Pluto and Woodside projects which were both completed at the end of 2009.

As a result of the completion of these projects the turnover levels in 2010 were down compared to 2009 but with the work commencing at the start of Q4 2010 on KipperTuna and DevilsCreek in Australia turnover increased sharply.

Excluding the effect of above mentioned project revenue in 2009 and 2010, the underlying recurring turnover increased by 5%.

Gross margin in 2010 is in line with prior years which is to be considered positive, taking into account the lower gross margins on project turnover.

Overhead cost increased as, during the year, significant investments were made in the Energy organisation in both management and recruitment/commercial structure, setting a solid foundation for future growth.

Dividend proposal

Group net income of € 26 million is less than last year but as a result of the solid cash position as per the end of 2010 it is, in line with the previous year, proposed to maintain the dividend at € 0.80 per share. 

Risk profile

Reference is made to our 2009 Annual Report (pages 25 – 27). Reassessment of earlier identified risks and the potential impact on occurrence has not resulted in required changes in our Internal Risk management and Control systems.

Outlook for 2011

In Europe the economic outlook is positive. The German economy acts as the engine for Europe and although the Dutch economy is late cyclical we are confident that 2011 will show significant growth in The Netherlands as well.

In the Oil and Gas industry our outlook is also optimistic. We have secured additional contracts and the results of the last quarter of 2010 and the first two months of 2011, have confirmed our view.

However, we also recognise that the current instability in the North African and Middle East regions could have a negative effect on the development of the economy worldwide.

We currently expect net turnover to grow in 2011 by at least 15%.