Fugro A Convincing Path to 2H Recovery & Deep Discount Opportunity

We revisited our case following the recent profit warning but recognise 2Q25 already showed a remarkable q/q improvement in profitability to be continued in 2H25. The cheap valuation, strong balance sheet (1.2x EBITDA leverage and no debt maturities prior to 2029) next to the optionality in the future capex spend make that Fugro can weather further storms should they occur. At the speculative front with the mid and long term fundamentals intact potential renewed ownership interest by cash rich dredgers or maritime investors further puts a floor on valuation. Exactly timing the earnings recovery is hard. We had a bumpy ride down south the past year and last April the FY25 guidance was even pulled only 6 weeks after being issued. We think this time is different and the guided 2H25 recovery will materialise. At an average EV/EBITDA25-26-27E of 3x and an average FCF-yield25-26-27 of 9% this is not the time to stay on the sideline. The current share price is an interesting entry point for the cold blooded investor.