Q3 2020: Strong profitability and cash flow driven by operational
discipline
Amsterdam, 30 October 2020
Key points Q3 2020
- EBIT showed strong increase to EUR 10 million as costs savings
(24%) exceeded gross profit decline (-15%)
- Continued cost savings and operational discipline prove agility
and adaptability of business model
- Revenue down 16% yoy excluding fx impact
- Strong cash flow generation leads to cash position of EUR 130
million
Key points YTD
2020
- EBIT of EUR 19 million
- Revenue decrease ongoing business 7% (yoy) to EUR 690
million
- Continued strong free cash flow of EUR 38 million
Jilko Andringa, CEO of Brunel International
N.V.: “While the impact of COVID-19 in Q2 was less severe than
expected, we experienced more pressure on our revenues in Q3. In
today’s challenging environment, we continued to perform strongly
through operational discipline and cost savings. Brunel colleagues
around the world showed a unique combination of discipline and
entrepreneurship delivering high quality creative solutions to
clients while operating with increased cost awareness. This
resulted in a good profitability and cash flow generation.
We have adjusted our organization in every
region and aligned it to the current activity level. We still see
growth in segments like Renewable Energy and Life Science, but
Automotive and Oil & Gas are hit by the global crisis. Although
the duration of the pandemic is unknown, our current organization
and healthy pipeline of projects makes me very comfortable that we
will experience accelerated profitable growth, once travel
restrictions ease and our core markets in Europe start to
recover.
In the past quarter, we celebrated our 45 years’
anniversary. Ever since Jan Brand started Brunel 45 years ago,
Brunellers around the world live by our values Integrity, Passion
for People, Results Driven and Entrepreneurship, making Brunel a
unique company. In every downturn we have managed to find new
opportunities while we achieved new records in the following
upturn, giving me great confidence in the future.”
Brunel International (unaudited) |
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
209.6 |
259.7 |
-19% |
a |
|
690.8 |
784.0 |
-12% |
b |
Gross
Profit |
47.1 |
55.8 |
-15% |
|
|
143.1 |
161.9 |
-12% |
|
Gross
margin |
22.5% |
21.5% |
|
|
|
20.7% |
20.7% |
|
|
Operating
costs |
37.0 |
48.5 |
-24% |
c |
|
124.2 |
143.0 |
-13% |
d |
EBIT |
10.1 |
7.3 |
37% |
|
|
18.9 |
18.9 |
0% |
|
EBIT % |
4.8% |
2.8% |
|
|
|
2.7% |
2.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
9,599 |
11,225 |
-14% |
|
|
10,464 |
12,273 |
-15% |
|
Average
indirects |
1,395 |
1,651 |
-16% |
|
|
1,481 |
1,637 |
-10% |
|
Ratio direct /
Indirect |
6.9 |
6.8 |
|
|
|
7.1 |
7.5 |
|
|
|
|
|
|
|
|
|
|
|
|
a
-16 % like-for-like |
|
|
b
-11 % like-for-like |
|
|
c
-22 % like-for-like |
|
|
d
-12 % like-for-like |
|
|
Like-for-like is measured excluding the impact of currencies and
acquisitions |
Q3 2020 results by
division P&L amounts in EUR million
Summary:
Revenue |
Q3 2020 |
Q3 2019 |
Δ% |
|
YTD 2020 |
YTD 2019 |
Δ% |
|
|
|
|
|
|
|
|
DACH
region |
54.6 |
74.5 |
-27% |
|
177.0 |
217.7 |
-19% |
The
Netherlands |
45.5 |
49.4 |
-8% |
|
142.7 |
155.7 |
-8% |
Australasia |
26.7 |
31.1 |
-14% |
|
85.0 |
88.4 |
-4% |
Middle East
& India |
25.0 |
29.5 |
-15% |
|
88.7 |
85.1 |
4% |
Americas |
18.4 |
28.1 |
-35% |
|
70.0 |
76.2 |
-8% |
Rest of
world |
39.4 |
44.7 |
-12% |
|
126.6 |
120.9 |
5% |
|
|
|
|
|
|
|
|
Subtotal |
209.6 |
257.3 |
-19% |
|
690.0 |
744.0 |
-7% |
|
|
|
|
|
|
|
|
BIS |
0.0 |
2.4 |
-101% |
|
0.8 |
40.0 |
-98% |
|
|
|
|
|
|
|
|
Total |
209.6 |
259.7 |
-19% |
|
690.8 |
784.0 |
-12% |
EBIT |
Q3 2020 |
Q3 2019 |
Δ% |
|
YTD 2020 |
YTD 2019 |
Δ% |
|
|
|
|
|
|
|
|
DACH
region |
6.8 |
10.7 |
-36% |
|
10.2 |
23.5 |
-57% |
The
Netherlands |
3.0 |
2.7 |
12% |
|
7.8 |
7.0 |
11% |
Australasia |
0.1 |
-0.3 |
154% |
|
-0.2 |
-1.2 |
87% |
Middle East
& India |
2.0 |
2.6 |
-21% |
|
7.1 |
7.7 |
-8% |
Americas |
-0.5 |
-0.8 |
37% |
|
-1.9 |
-0.5 |
-308% |
Rest of
world |
1.1 |
0.5 |
119% |
|
3.0 |
-0.1 |
|
Unallocated |
-2.0 |
-1.4 |
-40% |
|
-6.4 |
-5.7 |
-13% |
|
|
|
|
|
|
|
|
Subtotal |
10.5 |
13.9 |
-25% |
|
19.6 |
30.8 |
-36% |
|
|
|
|
|
|
|
|
BIS |
-0.3 |
-6.5 |
94% |
|
-0.7 |
-11.8 |
94% |
|
|
|
|
|
|
|
|
Total |
10.2 |
7.3 |
37% |
|
19.0 |
18.9 |
0% |
The decrease in revenue compared to Q2 was slightly
higher than expected due to the weakening of the US-dollar. The fx
impact on gross profit and EBIT is minimal, since cost of sales and
operating cost have a similar impact as revenue.
The productivity in DACH and the Netherlands of our specialists
was at a normal level and thus higher than expected under the
current circumstances. As a result, EBIT for Q3 was significantly
higher than in Q2.
DACH region (unaudited) |
|
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
54.6 |
74.5 |
-27% |
|
|
177.0 |
217.7 |
-19% |
|
Gross
Profit |
19.6 |
27.1 |
-28% |
|
|
55.2 |
72.5 |
-24% |
|
Gross
margin |
35.8% |
36.3% |
|
|
|
31.2% |
33.3% |
|
|
Operating
costs |
12.8 |
16.4 |
-22% |
|
|
45.0 |
49.0 |
-8% |
|
EBIT |
6.8 |
10.7 |
-36% |
|
|
10.2 |
23.5 |
-57% |
|
EBIT % |
12.4% |
14.3% |
|
|
|
5.8% |
10.8% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
2,019 |
2,717 |
-26% |
|
|
2,200 |
2,713 |
-19% |
|
Average
indirects |
432 |
518 |
-16% |
|
|
475 |
512 |
-7% |
|
Ratio direct /
Indirect |
4.7 |
5.2 |
|
|
|
4.6 |
5.3 |
|
|
RevenueAs announced in our Q2 results, we do not
yet see a recovery in the DACH region yet. Our headcount and
revenue development remained stable. In August, the German
government announced the extension until the end of 2021 of the
short-time working scheme (Kurzarbeit). At the moment, we are still
applying the short-time working scheme for 200 of our
specialists.Headcount as of September 30th was 2,007 (2019:
2,735)Working days Germany:
|
Q1 |
Q2 |
Q3 |
Q4 |
FY |
2020 |
64 |
59 |
66 |
65 |
254 |
2019 |
63 |
59 |
66 |
62 |
250 |
Gross profitDue to the extension of the
short-time working scheme and less holidays being taken by our
specialists, our productivity remained strong and stable. The gross
margin in Q3 was slightly down by 0.5 ppt, mainly due to severance
cost. The YTD gross margin adjusted for working days was 30.9%
(2019: 33.3%).
Operating costsIn Q3 the operating costs
decreased by 22% mainly due to cost saving initiatives and
restructuring initiatives implemented in Q2. Throughout the
quarter, we also applied the short-time working scheme for a small
group of our internal employees. We have ended this at the end of
Q3.
Brunel Netherlands (unaudited) |
|
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
45.5 |
49.4 |
-8% |
|
|
142.7 |
155.7 |
-8% |
|
Gross
Profit |
12.4 |
13.8 |
-10% |
|
|
37.9 |
42.1 |
-10% |
|
Gross
margin |
27.2% |
27.9% |
|
|
|
26.6% |
27.0% |
|
|
Operating
costs |
9.4 |
11.1 |
-15% |
|
|
30.1 |
35.1 |
-14% |
|
EBIT |
3.0 |
2.7 |
12% |
|
|
7.8 |
7.0 |
11% |
|
EBIT % |
6.5% |
5.4% |
|
|
|
5.5% |
4.5% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
1,844 |
2,172 |
-15% |
|
|
1,919 |
2,277 |
-16% |
|
Average
indirects |
327 |
405 |
-19% |
|
|
346 |
417 |
-17% |
|
Ratio direct /
Indirect |
5.6 |
5.4 |
|
|
|
5.6 |
5.5 |
|
|
RevenueThe revenue trend remained stable in Q3,
as a result of a decrease in the number of specialists, partly
offset by higher rates. The decline was across all business lines
except for Legal, in which we continued to achieve growth.
Headcount as of September 30th was 1,835 (2019:
2,155)
Working days per Q 2020 / 2019:
|
Q1 |
Q2 |
Q3 |
Q4 |
FY |
2020 |
64 |
60 |
66 |
65 |
255 |
2019 |
63 |
62 |
66 |
64 |
255 |
Gross ProfitThe gross margin was down 0.7 ppt in
Q3. This is the result of an increase in the proportion of
freelancers, who have a lower margin compared to own employees. The
YTD gross margin adjusted for working days decreased by 0.1 ppt to
26.9%.
Operating costsIn Q3 the operating costs
decreased by EUR 1.7 million, as a result of cost saving
initiatives, including a reduction of indirect headcount executed
in Q2.
Australasia (unaudited) |
|
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
26.7 |
31.1 |
-14% |
a |
|
85.0 |
88.4 |
-4% |
b |
Gross
Profit |
2.4 |
2.6 |
-6% |
|
|
7.2 |
7.3 |
-1% |
|
Gross
margin |
9.0% |
8.3% |
|
|
|
8.4% |
8.2% |
|
|
Operating
costs |
2.3 |
2.9 |
-21% |
c |
|
7.4 |
8.5 |
-13% |
d |
EBIT |
0.1 |
-0.3 |
154% |
|
|
-0.2 |
-1.2 |
87% |
|
EBIT % |
0.5% |
-0.8% |
|
|
|
-0.2% |
-1.4% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
936 |
906 |
3% |
|
|
1,012 |
907 |
12% |
|
Average
indirects |
80 |
86 |
-7% |
|
|
82 |
85 |
-4% |
|
Ratio direct /
Indirect |
11.7 |
10.5 |
|
|
|
12.4 |
10.7 |
|
|
|
|
|
|
|
|
|
|
|
|
a
-12 % like-for-like |
|
|
|
|
|
|
b
-0 % like-for-like |
|
|
|
|
|
|
c
-19 % like-for-like |
|
|
|
|
|
|
d
-11 % like-for-like |
|
|
|
|
|
|
Like-for-like is measured excluding the impact of currencies and
acquisitions |
|
RevenueFollowing a stable Q2, Australasia, which
includes Australia and Papua New Guinea, has seen some impact of
COVID-19 in Q3. Clients terminate contracts, are looking for salary
reductions and a reduction of working hours (overtime) to achieve
cost savings. Our activities in PNG continue to be hindered by the
travel restrictions.
Gross ProfitThe increased gross margin is the
result of a change in the mix due to the lower revenue at Oil &
Gas clients.
Operating costsIn Q3, the operating costs
decreased by 21% as a result of continued cost saving initiatives.
These cost savings helped us achieve a positive result for the
quarter.
Middle East & India (unaudited) |
|
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
25.0 |
29.5 |
-15% |
a |
|
88.7 |
85.1 |
4% |
b |
Gross
Profit |
4.1 |
5.1 |
-20% |
|
|
14.5 |
15.0 |
-4% |
|
Gross
margin |
16.2% |
17.2% |
|
|
|
16.3% |
17.7% |
|
|
Operating
costs |
2.1 |
2.5 |
-16% |
c |
|
7.4 |
7.3 |
1% |
d |
EBIT |
2.0 |
2.6 |
-21% |
|
|
7.1 |
7.7 |
-8% |
|
EBIT % |
8.0% |
8.6% |
|
|
|
8.0% |
9.1% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
2,089 |
2,605 |
-20% |
|
|
2,435 |
3,411 |
-29% |
|
Average
indirects |
130 |
142 |
-9% |
|
|
139 |
136 |
2% |
|
Ratio direct /
Indirect |
16.1 |
18.3 |
|
|
|
17.5 |
25.0 |
|
|
|
|
|
|
|
|
|
|
|
|
a
-8 % like-for-like |
|
|
|
|
|
|
b
6 % like-for-like |
|
|
|
|
|
|
c
-12 % like-for-like |
|
|
|
|
|
|
d
2 % like-for-like |
|
|
|
|
|
|
Like-for-like is measured excluding the impact of currencies and
acquisitions |
|
RevenueFollowing a positive development in Q2,
the revenues in the Middle East & India were impacted by the
weakening of the US dollar. Our strong development is hampered by
our ability to mobilize specialists for new projects due to travel
restrictions, whilst some of the existing projects are finalized.
This resulted in a decrease in headcount and revenue for the
period. Our pipeline continues to be healthy.
Gross ProfitThe gross margin reduced somewhat
due to a change in the mix of clients and some margin pressure.
Operating costsEven though we still experienced
growth in Q2, we started adapting the organisation in Middle East
& India, anticipating the impact of the travel restrictions.
Further cost measures lead to a decrease in operating costs of
16%.
Americas (unaudited) |
|
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
18.4 |
28.1 |
-35% |
a |
|
70.0 |
76.2 |
-8% |
b |
Gross Profit |
2.2 |
3.6 |
-38% |
|
|
7.9 |
9.4 |
-16% |
|
Gross margin |
12.1% |
12.7% |
|
|
|
11.3% |
12.4% |
|
|
Operating
costs |
2.7 |
4.4 |
-39% |
c |
|
9.8 |
9.9 |
-1% |
d |
EBIT |
-0.5 |
-0.8 |
37% |
|
|
-1.9 |
-0.5 |
-308% |
|
EBIT % |
-2.7% |
-2.8% |
|
|
|
-2.8% |
-0.6% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
689 |
886 |
-22% |
|
|
771 |
846 |
-9% |
|
Average
indirects |
103 |
131 |
-21% |
|
|
109 |
128 |
-15% |
|
Ratio direct /
Indirect |
6.7 |
6.8 |
|
|
|
7.1 |
6.6 |
|
|
|
|
|
|
|
|
|
|
|
|
a -26
% like-for-like |
|
|
|
|
|
|
b -4
% like-for-like |
|
|
|
|
|
|
c -31
% like-for-like |
|
|
|
|
|
|
d 3 %
like-for-like |
|
|
|
|
|
|
Like-for-like is measured excluding the impact of currencies and
acquisitions |
|
RevenueOur activities in the US continue to be
the most impacted by COVID-19 within our group, following a
significant number of terminations at our clients. The devaluation
of the US Dollar and Brazilian Real significantly impacted the
revenue development in the region.
Gross ProfitJust like in the previous quarter,
the gross margin and gross profit were impacted by a lower
recruitment revenue. Adjusted for the impact of the lower
recruitment revenue, the gross margin was at the same level as in
Q3 2019.
Operating costsThe operating costs further
decreased and are now 14% lower than in Q2, while we had also seen
a 20% decline in Q2 compared to the previous quarter. This is
largely the result of the full effect of the cost saving measures
taken in that quarter.
Rest of world (unaudited) |
|
P&L amounts in EUR million |
|
|
|
|
|
|
|
|
|
Q3 2020 |
Q3 2019 |
Δ% |
|
|
YTD 2020 |
YTD 2019 |
Δ% |
|
Revenue |
39.4 |
44.7 |
-12% |
a |
|
126.6 |
120.9 |
5% |
b |
Gross
Profit |
6.5 |
7.4 |
-12% |
|
|
20.5 |
19.1 |
7% |
|
Gross
margin |
16.6% |
16.6% |
|
|
|
16.2% |
15.8% |
|
|
Operating
costs |
5.4 |
6.9 |
-22% |
c |
|
17.5 |
19.2 |
-9% |
d |
EBIT |
1.1 |
0.5 |
119% |
|
|
3.0 |
-0.1 |
2356% |
|
EBIT % |
2.7% |
1.1% |
|
|
|
2.4% |
-0.1% |
|
|
|
|
|
|
|
|
|
|
|
|
Average
directs |
2,022 |
1,803 |
12% |
|
|
2,107 |
1,813 |
16% |
|
Average
indirects |
261 |
288 |
-9% |
|
|
267 |
285 |
-6% |
|
Ratio direct /
Indirect |
7.7 |
6.3 |
|
|
|
7.9 |
6.4 |
|
|
|
|
|
|
|
|
|
|
|
|
a
-6 % like-for-like |
|
|
|
|
|
|
b
7 % like-for-like |
|
|
|
|
|
|
c
-17 % like-for-like |
|
|
|
|
|
|
d
-7 % like-for-like |
|
|
|
|
|
|
Like-for-like is measured excluding the impact of currencies,
acquisitions and discontinued operations |
|
RevenueRest of World includes Russia &
Caspian, Belgium and Asia. We still managed to achieve growth in
China, but saw a decline in the other regions. The pipeline for
Asia and Russia remains very healthy, but again this will only
materialize once travel restrictions ease.
Gross ProfitThe gross margin in the region in Q3
was in line with Q3 2019.
Operating costsThe operating costs in the rest
of world decreased as a result of government relief plans in Asia
and cost saving initiatives throughout the regions. As a result,
EBIT for the quarter increased to EUR 1.1 million.
Cash positionIn the first nine
months of this year, we achieved a strong free cash flow of EUR
38 million. This results in a cash position of EUR 130 million
(30 September 2019: EUR 82 million).
Outlook for 2020At the moment,
the headcount in DACH and the Netherlands is pretty stable, and we
expect the normal seasonal pattern in the remainder of Q4.
For all other regions, we are still hindered by
travel restrictions. With the increasing number of COVID-19 cases
in many regions, we do not expect these to ease significantly in
the remainder of the year. Although we have a healthy pipeline,
this will delay the start and the contribution of new projects we
have secured.
In line with our normal seasonality, revenue and
profitability in Q4 will be lower than in Q3.
Attachment
Brunel Press Release Q3
Brunel International NV (EU:BRNL)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024
Brunel International NV (EU:BRNL)
Graphique Historique de l'Action
De Mai 2023 à Mai 2024