Royal Imtech has announced a one-time provision of in total around 50 million euro related to redundancies involving around 900 employees in the Benelux, Spain and the Marine division.
This will address the imbalanced result development due to, on the one hand, healthy growth and good financial performances in Germany and Eastern Europe, the UK and Ireland, Nordic, Turkey, ICT and Traffic, and, on the other hand, structurally disappointing results from the Benelux and Spain as well as a temporary relapse in the Marine division.
EBITA Still Expected to Grow
Excluding this one-time provision further EBITA growth is expected in 2012 compared to 2011. On balance, the expected EBITA 2012 will decrease. Furthermore, given the state of the Spanish economy, Imtech has decided to record a goodwill impairment at the Spanish assets of around 20 million euro. Imtech will however maintain its long-term strategic growth plan 2015 of achieving a revenue of 8 billion euro with an operational EBITA margin between six and seven per cent. Despite a decrease in the Benelux and Spain, the Q3 2012 order book rose to 6.4 billion euro (Q3 2011: 5.7 billion euro), an indication for further growth in 2013.
Loss of 900 Jobs
René van der Bruggen, CEO Imtech: 'It is a known fact that since 2010 our result development has been increasingly imbalanced. On balance our overall EBITA growth has been robust, but the Benelux and Spain have not contributed sufficiently, despite remedial measures that have been implemented. Also, a further worsening of these markets is expected in 2013. In relation to well performing activities in all our other countries and our European and partly global activities in ICT and Traffic, this is unacceptable. Our Marine division has been experiencing the consequences of a temporary relatively low order intake in preceding years, making a limited reorganisation necessary. The Marine order book is, however, recovering, which means this division is well positioned for the future. Unfortunately the reorganisation will result in the loss of 900 jobs in the Benelux, Spain and the Marine division.'
Imbalanced Result Development
The Q3 2012 order book shows growth, both organic and through acquisitions. Healthy growth of the order book is particularly clear in Germany and Eastern Europe, the UK and Ireland, Turkey and Nordic. The order book also developed well in the European ICT market and the global marine market. The position in the European traffic market has remained stable. The activities outside Europe are, slowly but surely, increasing further. In the Benelux and Spain, however, the markets are structurally challenging. Since 2010 obtaining of profitable orders here has been under extreme pressure and this has led to low levels of production, underutilisation and a too low EBITA contribution. This despite (strategic) reorientations, cost reductions and efficiency measures implemented since the first half of 2010. On top of this, the building markets in the Netherlands, Belgium and Spain are expected to worsen yet again in 2013. In 2012 Marine experienced the consequences of a temporary relatively low order intake in the preceding years.
Most Jobs Lost in the Netherlands
The majority of the redundancies will be in the Benelux, in particular in the Building Services business units. The planned “flex pool” for around 200 employees of the Building Services business unit in the Netherlands will be cancelled and these employees will be part of the reorganisation. A number of jobs will also be lost in the Infra division in the Netherlands. As a result of these measures, and because the Benelux business units active in the industrial market, in the field of industrial export and in Luxembourg are developing well, in 2013 the Benelux will show an upwards trend. There will also be job losses in Spain and the Marine division. Some of these reorganisations already took place during the first three quarters of 2012. Agreements regarding various social plans will be discussed with the involved works councils and trade unions.
Increasing Activities outside Europe
Imtech's activities outside Europe increase further. Export from the Netherlands, Germany and Ireland is increasing and Imtech is also achieving robust growth in Turkey and various emerging markets. In Russia Imtech is increasingly active on a project basis. In the traffic market, activities outside Europe are expanding and the extensive marine activities outside of Europe are showing healthy growth.
