Brunel Q3 2016 results

Friday, November 4, 2016

Europe on track, Energy still in decline

 

Key points Q3 2016

  • Revenue down by 30% to EUR 205 million
  • Gross profit down by 23% to EUR 45 million
  • Gross margin at 22.1% from 20.2%
  • Operational costs down by 15% to EUR 37 million
  • EBIT down 46% to EUR 8 million

 

Brunel International (unaudited)

 

 

 

 

 

P&L amounts in EUR million

 

Q3 2016

Q3 2015

Change %

YtD 2016

YtD 2015

Change %

Revenue

204.7

290.9

-30% a

674.3

941.7

-28% b

Gross Profit

45.3

58.8

-23%

140.9

172.4

-18%

Gross margin

22.1%

20.2%

20.9%

18.3%

Operating costs

37.2

43.8

-15% c

116.2

133.9

-13% d

EBIT

8.1

15.0

-46%

24.7

38.5

-36%

EBIT %

4.0%

5.1%

3.7%

4.1%

 

Average directs

8,931

10,806

-17%

9,398

11,041

-15%

Average indirects

1,456

1,601

-9%

1,494

1,632

-8%

Ratio direct / Indirect

6.1

6.8

6.3

6.8

 

a -29% at constant currencies

b -28% at constant currencies

c -15% at constant currencies

d -12% at constant currencies

 

The Group’s revenue decreased by 30% mainly due to the decrease in Energy. The gross margin improved as a result of the increased share of our European activities. As a result of the revenue drop, partly offset by cost savings, Q3 EBIT decreased to EUR 8 million.

Revenue in The Netherlands decreased by 4% compared to the third quarter of 2015. This is mainly a result of the implementation of the new legislation for freelancers. All business lines are affected by this change and the number of freelancers has decreased significantly. Gross margin decreased from 30.2% to 29.3% due to price pressure and a lower productivity. Productivity is mainly impacted by additional training initiatives.

In Germany our workforce continued to grow during the third quarter. As a result revenue increased by 7% compared to the third quarter of 2015. Increased price pressure, partly offset by a higher productivity has resulted in a slightly lower gross margin.

The developments in the Oil & Gas market continued as expected. No major projects were terminated in this quarter, but some projects are nearing completion. As a result Energy revenue in Q3 decreased by 47% compared to the same quarter last year and decreased by 18 % compared to the previous quarter this year. The impact of price pressure on our gross margin is increasing. The decrease compared to Q3 2015 is also affected by foreign exchange results. Adjusted for this, gross margin decreased from 11.8% in Q3 2015 to 11.0% in the last quarter.

Outlook for 2016

As expected, our growth in The Netherlands has been temporarily affected by the reduction in freelancers. We have seen a strong decline in headcount in June and July, followed by limited growth in the following months.

Germany will continue to grow in the remainder of the year. The negative trend in Energy will continue, as well as our initiatives to reduce operating costs.

The outlook for the full year remains unchanged, we expect revenue between EUR 850 million and EUR 900 million and EBIT, excluding restructuring cost, between EUR 30 million and EUR 35 million. The effective tax rate will probably be impacted by a further review of our current deferred tax position, and end up around 45%.

Jan Arie van Barneveld, CEO of Brunel International N.V.: “We are implementing the changes in our Energy organisation in order to be ready before the beginning of the new year. I don’t expect recovery in the Oil & Gas market soon, but we will become more successful in other markets. Our strong performance in Europe makes me more optimistic for next year”.