Press Release Q2 and HY 2017 results

Key points Q2 2017

• Revenue down by 18% to EUR 189 million
• EBIT down to EUR -1 million

Key points H1 2017

• Revenue down by 18% to EUR 385 million
• EBIT down to EUR 5 million

a -19 % at constant currencies
b -19 % at constant currencies
c 2 % at constant currencies
d 4 % at constant currencies

H1 2017 results by division

a -33 % at constant currencies
b -36 % at constant currencies
c- 12 % at constant currencies
d -12 % at constant currencies

• Revenue down by 32% to EUR 81 million
• Gross margin 11.4%, up from 11.1% last year
• EBIT down by 446% to EUR -2 million

Key points H1 2017

• Revenue down by 34% to EUR 163 million
• Gross margin 11.5%, up from 11.1% last year
• EBIT down by 270% to EUR -4 million

Revenue
Revenue in Q2 decreased by 32% year on year, and 1% compared to Q1. The regions Americas, Middle East and Russia achieved growth compared to Q1, offset by a decline in Australia and South East Asia. In Australia and South East Asia, significant projects were largely completed in the course of Q2. We are working on several initiatives to speed up our diversification. We expect that some of these initiatives will start contributing in the second half of the year. 

Gross profit
The gross margin increased slightly as a result of a change in the mix, both across the globe and between activities. 

Operating costs
Cost savings in our existing business are partly offset by investments in new initiatives, as a result operating costs in Q2 decreased by 11%.

Key points Q2 2017

• Revenue down by 3% to EUR 108 million
• Gross margin 28.2%, down from 30.9% last year
• EBIT down by 67% to EUR 3 million

Key points H1 2017

• Revenue up by 1 million to 222 million
• Gross margin 30.7%, down from 30.9% last year
• EBIT down by 30% to EUR 13 million

Revenue
On 1 April, the new law came into effect and to comply we had to renew our union trade agreement. Some of our customers have suspended us as supplier until we had our new union trade agreement in place, what caused a temporary hiccup in the growth. We finalized the renewal at the end of July. This renewed agreement offers us a strong competitive advantage. Revenue per working day increased by 3%. Headcount at 30 June 2017 is 3% above last year’s headcount.

Gross Profit
Gross margin adjusted for working days is 34.8% (2016: 35.7%). Additional price pressure is mainly due to volumetric customers. 

Operating costs
Operating costs in H1 increased with 11% mainly driven by strengthening the commercial organization to facilitate further growth.

Revenue
The revenue development is a mix of a decline in freelancers (impact -10%) and growth in own employees (impact +5%). Q2 2017 had one less working day compared to last year. Revenue per working day decreased by 4%. The growth in Engineering and Legal is more than offset by the decline in the other business lines. Headcount at 30 June 2017 is 2% above last year’s headcount. 

Working days

Gross Profit
The gross margin adjusted for working days is 27.5% (2016: 27.3%). The increase in gross margin due to the change in mix is largely offset by a lower productivity. 

Operating costs
The operating costs increased due to continuous investment in sales force and technology.

Effective tax rate

The effective tax rate in the first half year of 2017 is 75.6%. Due to the seasonality in Europe our tax rate is higher in the first half of the year. For the full year, we project the effective tax rate to come down significantly. 

Risk profile

Reference is made to our 2016 Annual Report (pages 57 – 75). Reassessment of our earlier identified risks and the potential impact on occurrence has not resulted in required changes in our internal risk management and control systems. 

Cash position

Brunel’s cash position decreased to EUR 127 million, due to the seasonality and the dividend payment in June. 

Outlook for 2017

The Netherlands will return to revenue growth from Q3 onwards, and Germany will continue to grow. For Global Business we expect revenue to remain flat for the next couple of months until the impact of our initiatives becomes visible. There is some uncertainty around the timing of the first revenues from these initiatives, but we expect to achieve an EBIT of at least EUR 15 million for the full year.

Jan Arie van Barneveld, CEO of Brunel International N.V.: “We knew the first half year would be tough, but we have reached the bottom of the trough sooner than expected. Our actual performance has been improving day by day. With Europe on a growth track, and all the initiatives in Global Business, I’m confident that we will return to sustainable growth pretty quickly” .

Statement of the Board of Directors