Brunel International N.V. confirms growth decreasing, pressure on profitability
· Revenue up 2% to EUR 349 million and gross profit up by 2% to EUR 64 million
· Gross margin at 18.3% up from 18.2%
· Operational costs increased by 9% to EUR 44 million, mainly driven by increased staff and marketing costs
· Ebit down 11% to EUR 20 million
Brunel International (unaudited)
P&L amounts in EUR million
Ratio direct / Indirect
* 3% at constant currencies
** 13 % at constant currencies
Oil & Gas revenue increased in Q3 2014 compared to Q3 2013 by 1% to EUR 247 million. This increase is fully driven by the Projects division, which increased by 12% to EUR 44 million, as a result of the Wheatstone and Gorgon Projects. The Energy division’s revenue decreased by 1%.
The gross margin in the Oil & Gas division slightly increased to 11.7% in Q3.
Brunel Europe’s revenue increased by 3% to EUR 102 million in Q3 compared to the same period last year. Compared to Q2 2014 revenue in Europe increased by 4%. Gross margin dropped by 0.5ppt to 34.3%.
The growth in Europe in Q3 is driven by the growth in the Netherlands, where revenue grew in Q3 by 8%. Headcount levels reduced during the summer period, but picked up again in September and stayed well above 2013. Finance, ICT and Legal continued to show strong growth, but Engineering showed a decline. The change in the revenue mix, in combination with price pressure, caused the gross margin to drop by 1.7ppt.
Revenue in Germany is below the Q3 2013 revenue by 1% at EUR 53 million. The headcount picked up slightly after the drop in July, but stayed below the 2013 levels in Q3. Retention of account managers appears to improve slightly.
Total overhead costs increased by 9% over the quarter to EUR 44 million, largely driven by increased staff costs, as a result of our expanding sales organisation, and increased marketing costs.
Overall EBIT dropped by 11% to EUR 20 million, resulting in an EBIT margin of 5.7%, a drop of 0.9ppt compared to Q3 2013.
Due to the developments in Q3, mainly in Germany and Engineering in The Netherlands, we have adjusted our outlook downwards, from initially an increase in revenue and EBIT between 5% and 10%. We expect full year revenue to increase by just over 5% compared to 2013, and EBIT around the same amount as 2013.
Jan Arie van Barneveld, CEO of Brunel International N.V.: “Unfortunately we have seen our growth over the quarters diminishing. It’s especially disappointing that so far we do not see a return to growth for Germany and Engineering in The Netherlands. But looking at all the investments made in our sales force, we should be back on track in the course of 2015.”