Fugro : Value opportunity or value trap ?

Fugro Key take-aways FY24 analyst call

This morning Fugro published good 4Q numbers. Adjusted EBIT landed at €315m well above our (€296m) and CSS (€297m) estimates. Resulting margin is at 13.8% (vs. 13% E). Full year revenues were mainly derived from Oil&Gas (37%, +1% y/y) and Renewables (38%, +10% y/y). Margin strength is remarkable especially in the US where FY EBIT margins were flat at 10% even when revenues fell 10%. Company guides for EBIT in the 11-15% mid term range with full year revenue growth being back-end loaded given spe...

Fugro : Q4 earnings beat, but 2025 margins more vulnerable

Fugro : Consensus expectations for 2025 still optimistic

Fugro : Improved terms for € 400m financing package

Fugro/Outlook for 2025 strong/BUY

With 3Q24 revenues lower than estimated, the market turned quite negative on Fugro's outlook and the share price came under significant pressure. Although uncertainty has increased on the short-term outlook, including the possible impact of the Trump presidency, we believe the long term view has not changed. Renewables continue to grow whereas FID in oil and gas might be postponed but not cancelled. In our view, FY27 guidance of €3.0-3.5bn and 11-15% EBITA margin target are not under pressure. A...

Fugro Announcing €50m SBB

Fugro announced it will implement a share buyback programme for an amount of € 50m. The programme will result in a reduction of the company's share capital by cancelling all shares acquired through the repurchase programme, also offsetting dilution from the recently matured convertible bonds. A welcome announcement following the unwarranted sell off in the name. Buy and €28.5 TP reiterated.

Fugro Earnings miss and sentiment triggered unwarranted sell off

After spoiling the markets with 8 quarters of appealing topline growth, Fugro disappointed with stalling revenues over 3Q24. The silver lining was that Fugro managed to post margins exceeding expectations and that the backlog discounted 16.8% growth. In our view, the conservative guidance and consecutive earnings beats over the past quarters led to some ambitious estimates in the market ultimately resulting in a (sizeable) earnings miss. Combined with the uncertainty over the US elections and im...

Fugro : Taking profit after 4 years of outperformance

>Feedback analyst conference call - Fugro’s Q3 conference call was hosted by CEO Mark Heine and CFO Barbara Geelen. Below you can find the key topics discussed:Outlook 2024. Fugro guides for mid single digit revenue growth in 2024 (9M 4.2%; Q3 -0.7%) and EBIT margin of 13%. CEO indicates he expects top-line growth to be back in Q4, this after Q3 of -0.7% and this although Q4 backlog is flat y-o-y. Hard data thus more hinting towards low single digit growth than m...

Fugro Feedback 3Q conf call

This morning Fugro published results which came in below our expectations especially at the topline level (see our FRN earlier today). BB/Refinitiv did not provide reliable quarterly CSS forecasts nor did the company collect one. We heard about 3Q24 EBITDA forecasts north of €160m well above our €145m estimate. Clearly the topline evolution -as main driver of profit growth- was disappointing but the company was still able to post nice margins even when the Americas (-20.9%) and Middle-East&India...

Fugro : Now also affected by US & Middle East tensions

>Q3 revenues 12% below expectation, EBIT 23% below - Revenues in 24Q3 have come in 2.9% lower than a year ago at € 596.5m (comparable down 0.7%), and just slightly higher than Q2 (€ 587.9m), where the market and us were expecting the usual q-o-q +5-10%, implying revenues were 12% lower than our expectation. Marine was comparable still up 0.3% up to € 472.1m, but Land down 4.2% to € 124.3m, both missing our forecasts by 12%.Regional markets. Key explaining factors...

Fugro 3Q earnings miss triggered by Middle-East and US activities

Fugro posted a somewhat disappointing set of 3Q24 figures showing overall comparable revenue falling -0.7% to €597m arguably on strong comps but well below our €664m forecast. EBIT landed at €99m below our €103m estimate. No reliable quarterly consensus was available. The order backlog landed at €1686m discounting 16.8% comparable growth. Good revenue growth in Europe (+9.4%) and APAC (+37.6%) was offset by the America's (-20.9%) and Middle-East (-41.8%).

ING Benelux Favourites/ASM, ASR, D'Ieteren, EVS, Fugro, Randstad, SBM ...

We refresh our ING Benelux Favourites list. We still apply a fundamental bottom up approach in which we select stocks that provide the best (relative) upside within our Benelux coverage universe and these stocks need clear catalysts. Besides this, we screen our ING Benelux coverage universe on some key investment themes that are topical and which could affect earnings potential and thus a stock's share price performance: (1) interest rate/refinancing opportunity in a lower rates environment; (2)...

Fugro/No pause in earnings growth/BUY

Strong margin development in 2Q24 was not followed by a positive share price reaction. However, we expect a continuation of Fugro's earnings growth in the years ahead on the back of double-digit revenue growth, with earnings margins comfortably in the 11-15% target range. For investors the story should be clear - the company has worldwide no.1 positions in attractive and fast-growing markets and its operational performance is improving. Its multiples are undemanding at an average of 4.5x EV/EBIT...

Fugro : Further revaluation just a matter of time

Today we publish a new Action Note on Fugro, to reconfirm our Outperform recommendation and to lift our TP to € 35 from € 32, offering 50+% upside. With Renewables growth >30% y-o-y and now representing 40% of revenues, with its EBIT margin back up to 13% and its ROCE to > 18%, Fugro in our view is fully back as a FCF powerhouse but still not valued like it should. Foreseeing an even stronger H2 than H1, and cash collection expected to be great again in Q4, a further revaluation ...

Fugro : High season working capital signals an even stronger H2

>Analyst meeting highlights - Strength Renewables. Strong H1 results almost fully attributable to strong Renewables performance Europe. In this way Fugro already now comes close to beating its > € 1bn revenue target for Renewables by 2027, Renewables turnover was up 33% y-o-y and now represents 40% of revenues. Oil & Gas was down 8% y-o-y primarily caused by Biden's temporary LNG export ban for the USA, and therefore now back to 35% of revenues. Infrastructure revenue...

Fugro 1H24 analyst call: key take-aways

This morning Fugro published 1H24 results which were well above expectations as detailed in this morning's FRN. Below are the key take-aways of the analyst call and Q&A with management. Buy reconfirmed.

Fugro : Strong H1 earnings beat, and margin guidance raised

>EBITDA 10% ahead of consensus, EBIT 15%, net earnings 20% - Revenues in 24H1 were up a comparable 7.1% y-o-y to € 1,091m (consensus € 1,118m) with Marine up 10.9% to € 831.9m (consensus € 853.5m) and Land down 3.5% to € 259.2m (consensus € 264.7m). For the first time, Renewables at 40% of revenues is larger than Oil & Gas (35%).Adjusted EBITDA is up 24% y-o-y to € 224.1m (consensus € 204.0m, AAOB € 216.9m) with Marine up 48% to € 197.2m (consensus € 176.9m) and ...

Fugro 1H24 shows nice margins & backlog, FY guidance calls for margin ...

Fugro just published 1H24 results. Consolidated revenue landed at €1091m discounting 7.1% comparable growth. This compares to our revenue of € 1101m and CSS of € 1118m. . Adjusted EBIT landed at € 143.6m well above our (€122m) and CSS (€124m) estimates. Resulting margin is at 13.2% (vs. 11.1% E). Net result was €112.5m vs. our €90mE and CSS €93mE. Backlog stands at € 1521.7 (+16.6% comp g y/y). FY24 guidance calls for cont'd rev growth (unchanged) but now specifically targets a ca. 13% EBIT marg...

Fugro : Reaching mid-point margin target range should be possible

>H1 results will be published on 1 August - Fugro will publish its H1 results on Thursday 1 August at 7.00h CET. An analyst meeting hosted by CEO Mark Heine and CFO Barbara Geelen will take place in Amsterdam as from 12.00h. Outlook 2024. “In line with the new strategy Towards Full Potential and related mid-term guidance, Fugro expects: (1) Continued revenue growth, primarily driven by the energy markets; (2) an EBIT margin within the mid-term target range of 11-...