Grontmij financial press release first quarter 2014

Grontmij reports encouraging start of the year, showing improved operating results

De Bilt, 30 April 2014 - Grontmij N.V. a listed consulting & engineering company with strong European presence, today announces its first quarter 2014 results. Most markets across Europe showed some signs of recovery, aided by a mild winter. On the other hand, price pressure and difficult economic environments particularly in France remain. Grontmij's results on Group level provided for an encouraging start of the year, with slightly lower total revenue (€ 186.6 million versus € 192.0 million last year), while EBITA excluding exceptional items improved from € 2.6 million in the first quarter of 2013 to € 7.0 million this year. At the end of February 2014, Grontmij presented its rebalanced strategy with an additional restructuring programme and extended and reconfirmed its margin target for 2016. Additionally, a new trade working capital target was set of 13% by 2016. Grontmij also announced the strengthening of the balance sheet with € 40 million new equity accompanied by a more flexible financing arrangement with an adjusted covenant schedule. The refinancing allows Grontmij to fully focus on the business, continuing the operational excellence programme and to make progress on the path towards profitable organic growth.

Key points first quarter 2014

Total revenue Q1 2014 € 186.6 million (Q1 2013: € 192.0 million), with organic decline of 1.8%. Net revenue Q1 2014 was stable at € 160.3 million (Q1 2013: € 161.3 million), with modest organic growth of 0.4%. EBITA excluding exceptional items for Q1 2014 improved to € 7.0 million (Q1 2013: € 2.6 million), also impacted by a strong improvement in Sweden; EBITA margin excluding exceptional items improved from 1.3% (Q1 2013) to 3.8% in the first quarter of this year; Exceptional items of - € 3.1 million, mainly resulting from the additional restructuring measures.Net result from continuing operations in the first quarter of 2014 (- € 2.3 million) lower than last year (Q1 2013: - € 0.6 million), also due to a one-off tax gain in Q1 2013 (€ 2.7 million).Trade working capital (TWC) at the end of Q1 2014 was 18.2% (Q1 2013: 16.8% ) mainly explained by higher work in progress (WIP) in France and lower payables across the Group.Net debt per 31 March 2014 of € 63.6 million (FY 2013: € 54.1 million), impacted by the equity issue (€ 20.5 million) and the seasonal increase of TWC.

Highlights Rebalanced 'Back on Track' strategy 2014 - 2016:

Restructuring:

Cost savings as part of the additional cost reduction programme have started well. Measures taken in the first quarter represent an annual run rate of € 4.1 million against the 2013 actual cost base.OPEX improvements: in the first quarter, Grontmij continued to embed the five processes in all operating countries. Audits were performed in the Netherlands and Denmark, leading to an improved implementation rate of respectively 60 to 80% (NL) and 80 to 88% (DK). Portfolio optimisation: Grontmij will initiate a divestment process of the French activities, either as a whole or in parts, following carefully evaluating the strategic options. Grontmij will continue to develop opportunities in Light Rail in the Paris region using its broad European expertise.Accelerate improvements NL: Implementation of the strategic plan to reduce costs, improve OPEX and grow the Dutch top and bottom line in a sustainable matter is developing according to plan.

Realising profitable growth
Grontmij's strategy is aimed at restructuring the business and realising profitable growth, focusing on  Five Group Growth Segments: Energy, Water, Highways & Roads, Sustainable Buildings and Light Rail. Within these segments, a number of projects have been won in the first quarter of 2014:

In the Energy segment, Grontmij Netherlands is part of a consortium with Stedin and TU Delft to develop a new strategy to replace the existing gas infrastructure in the West of the Netherlands. In Germany, Grontmij won several projects to expand the national energy grid. Hundreds of kilometres of high-voltage lines will have to be established to connect the renewable power plants in the north with consumers in the south for main clients Amprion and Westnetz.In the Water segment, Grontmij drafted a Master Plan Coastal Protection, that was offered by the Dutch Minister of Infrastructure and Environment to the Indonesian Government in March. And working alongside with colleagues from the UK, Grontmij Denmark won an asset management contract with HOFOR, the largest utility company in Denmark. In the Highways & Roads segment, Grontmij is to act in a joint venture with AECOM as lead designers on the construction of a 10 km relief road linking the A6 to Manchester Airport in the United Kingdom. In the Sustainable Buildings segment, Grontmij was proud to be awarded by BREEAM's prestigious Assessor Company of the Year Award 2014, in recognition of the uppermost BREEAM ratings for their projects across a variety of building sectors over the last twelve months.

Michiel Jaski, CEO Grontmij N.V: 'We are pleased to report an encouraging start of the year with an increase of our margin from 1.3% to 3.8%. In most of our major operating countries results improved, showing a  continuation of  the trend that started in Q4 2013. We see a modest increase in the planning activities and preparation of new projects across our Group Growth Segments with both existing and new customers, indicating that European markets are starting to move in the right direction. At the end of February we announced to step up a gear to get back on track and deliver on our long term strategic targets. With a strong and stable financial framework supported by our shareholders, Grontmij can now fully focus on its rebalanced strategy. Given our strategic priorities and available resources, we have started the process to consider the divestment opportunities for our French activities. The return to a healthy profit margin for the Group is our most important long term strategic target, we are therefore encouraged by the results in the first months of 2014.'


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For more information please contact:
Grontmij N.V., Michele Negen, Investor Relations Manager, T +31 30 220 78 31

www.grontmij.com
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Note to editors
Grontmij is a leading European company in the Consulting & Engineering industry with world class expertise in the fields of energy, highways & roads, light rail, sustainable buildings and water. Our leading principle is Sustainability by Design. This enables our professionals to support clients in developing the built and natural environment. Established in 1915, Grontmij is listed on the NYSE Euronext stock exchange.

Grontmij financial press release first quarter 2014


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Source: GRONTMIJ N.V. via Globenewswire
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