Brunel - Growth in Germany
Brunel - Growth in Germany, results Energy as expected, delayed upturn in The NetherlandsBrunel International realised a turnover in the first half year of 335 million, down 9% compared to the same period last year (13% at equal rates). Turnover in the second quarter was up 1 million compared to the first quarter despite fewer working days in The Netherlands and Germany. The gross profit in H1 2010 amounted to 70 million compared to 76 million in the same period last year. Gross margin remained at 21%. The Ebit amounted to 16 million compared to 23 million in H1 2009.Overall turnover in Q2 2010 is down 8% compared to the same period in 2009. Key elements contributing to this decrease are the completion of high volume Energy projects per the end of 2009 and the economic downturn in The Netherlands and Germany. The effect of the economic downturn has been severe for Brunel Germany but recovery started in the second quarter of this year. In The Netherlands the period of stabilisation continued in the second quarter of 2010 but the late cyclical nature of the Dutch economy has not yet allowed recovery of the market.For both Brunel Germany and Brunel The Netherlands turnover realised in the second quarter is, despite the lower number of working days in the second quarter, almost equal to turnover in first quarter.Gross margin H1 2010 is in line with previous year and as a result of our policy to remain focused on the quality of our organisation, overhead costs remained at 2009 level. A decrease in the overhead costs in Germany is offset by an increase in the Energy division resulting from investments in the organisation to support future growth.The lower turnover in combination with an almost equal level of overhead costs has resulted in an Ebit H1 2010 of 4.8%.Jan Arie van Barneveld, CEO of Brunel International: The expected turnaround in The Netherlands in our market segment is delayed but looking at the impressive growth we are currently experiencing in Germany we are confident that the upturn of the activity level in The Netherlands will follow. The Energy division has performed in line with expectations and sustainable growth is expected from projects starting in the 4th quarter of 2010.Brunel NetherlandsIn The Netherlands turnover level for the first half of 2010 is 64 million, down 11% compared to the same period last year. Gross profit decreased by 16% to 21 million.Turnover in the second quarter decreased by 7% compared to the same period in 2009. The same comparison for the first quarter year-on-year resulted in a 15% decrease. The Dutch economy seems to have bottomed out but, also due to the late cyclical nature of the Dutch economy, recovery did not materialise in the first half of 2010.The gross margin declined compared to previous year as a result of a relative increase in the deployment of freelance personnel. The positive effect of this relative increase is that the risk of idle time is mitigated. The overhead costs, although monitored closely, remain fairly stable. As a result of the lower gross margin and stable overhead costs Ebit as a percentage of turnover decreased from 11.6% in H1 2009 to 6.6% in H1 2010.Brunel GermanyIn Germany turnover level for the first half of 2010 is 50 million, down 10% compared to the same period last year. The gross profit increased by 5% to 19 million.The decrease in turnover in the second quarter, compared to the same period in 2009, is 2%. This decrease is less than the decrease over the first quarter (16%). Comparing the revenue levels of the months, June 2010 noted a higher turnover than June 2009.Brunel Germany is clearly recovering from the effects of the economic downturn. Additionally, a major improvement was made in reducing the idle time over the last six months. This explains largely the improvement of the gross margin from 32% in 2009 to 37% in the first half of 2010. The second quarter gross margin was 35% which was negatively influenced by the lower number of working days in comparison to the first quarter of this year. In addition to the improved gross margin, the reduction in overhead costs has added to the improvement of the Ebit, as a percentage of revenue, from 0.4% in H1 2009 to the 8.6% in the first half of this year. The reduction of the overhead costs is the result of measures taken to streamline the organisation.Brunel EnergyBrunel Energy turnover level for the first half of 2010 is 210 million, down 8% compared to the same period last year. The gross profit decreased by 11% to 27 million.In line with expectations, turnover in both Q2 and H1 2010 are lower than in 2009. In 2009 two major contracts, Pluto and Woodside, were completed. These projects generated a turnover of more than 40 million in H1 2009.Furthermore, as a result of the decreasing value of the Euro, especially compared to the Australian dollar, turnover increased by 15 million. Excluding the effects of the completed projects and the exchange rate development, a turnover increase of 4% was realised compared to H1 2009.The gross margin, both in the quarter as well as in H1 2010, is in line with previous year.As a result of investments made in the Energy organisation, preparing for the future growth, overhead costs increased resulting in an Ebit in the second quarter of 4%. This Ebit level is below that required for Brunel Energy but the investments in overhead have prepared us well to facilitate the execution of the new contracts, which will start generating turnover growth in the fourth quarter.Brunel BelgiumIn Belgium turnover level for the first half of 2010 is 10.7 million, down 4% compared to the same period last year. Gross profit decreased by 5% to 2.1 million.Overhead costs are slightly higher compared to the same period last year, resulting in an Ebit of 0.3 million (H1 2009: 0.5 million).