VolkerWessels reports a net result of € 137 million and a record high order book of € 8.9 billion
Amersfoort, 28 February 2019 – Koninklijke VolkerWessels N.V. reports a net result attributable to shareholders of € 137 million and an all-time high order book of € 8.9 billion. All segments contributed to our EBITDA with strong growth recorded in our Dutch Construction & Real Estate Development segment, our Energy & Telecoms Infrastructure segment as well as our UK operations. These results are underpinned by a solid underlying operational cash flow.
Highlights
- EBITDA including OpenIJ provision of € 251 million (-5.3%), in line with latest outlook
- Net result attributable to shareholders of € 137 million (-2.1%)
- Net cash position improved by € 69 million to € 366 million
- Order book at historical high of € 8,924 million (+10.3%)
- ROCE of 20.1% (from 21.8%) and solvency ratio of 32.5% (from 31.5%)
- Revenue increased to € 5,924 million (+3.7%)
- Proposed final dividend of € 0.77 per share (total dividend of € 1.05 per share)
- 2019 EBITDA to increase, on track to meet medium term objectives
Jan de Ruiter, Chairman of the Management Board
‘All our divisions contributed to the 2018 EBITDA of € 251 million which is in line with the outlook from our nine months trading update. Excluding the additional provision taken in 2018 for OpenIJ, EBITDA increased to € 290 million. We recorded strong results in our Construction & Real Estate Development segment, our Energy & Telecoms Infrastructure segment and our UK operations. North America recorded a reduced contribution which was predominantly caused by unusual weather conditions, our German operations contributed in line with last year whilst our Dutch Infrastructure segment’s result decreased due to the additional 2018 provision for the OpenIJ project as well as the ongoing repositioning of this segment.
The construction of the world’s largest sea lock at IJmuiden (the OpenIJ project) is progressing well and yet still challenging. During the year, two significant milestones were achieved: Volker Staal en Funderingen successfully immersed the first lock head and in December 2018 the three lock doors arrived safely in the port of Rotterdam.During 2018 we increased the loss provision for the project by € 39 million which brings the total VolkerWessels’ share of the provision to € 107 million. OpenIJ finalised the discussion with its banking syndicate regarding the rescheduling of the financing of OpenIJ on 21 February 2019. OpenIJ can resume drawing from its banking facilities in line with the agreed new schedule with immediate effect.
Rijkswaterstaat (‘RWS’ the single largest client in the Dutch Infrastructure sector) is currently in consultation with the Infrastructure sector with the goal to review its tendering and procurement processes. VolkerWessels is actively participating in these discussions. We aim for an outcome which combines innovation and sustainability goals with a more balanced division of risk between client and contractor (which can amongst others be done by choosing appropriate contract forms for integrated complex projects). Other important outcomes must be shorter tender processes and reduced tender costs as this currently represents a significant waste of man hours in a sector where skilled labor is scarce and difficult to come by.
Our focus remains on controlled profitable growth, strong cash conversion and strategic bolt-on acquisitions. We are very pleased with our strong cash conversion, which resulted in a significantly higher net cash position at the year-end, despite funding OpenIJ with € 98 million from our own funds. Our net cash position increased to € 366 million, up € 69 million from the same period in 2017 and our focus on reducing strategic working capital is clearly bearing fruit. During 2018 we made two bolt-on acquisitions: Joulz Energy Solutions (now a stand-alone subsidiary of Visser & Smit Hanab) in the Netherlands and PJ Davidson, a slip form concrete contractor in the UK. Both acquisitions further strengthen our local leadership positions and will positively contribute to our future results. Both acquisitions bring in additional specialist capabilities and will enhance our overall offering as well as our results.
Our revenue of over € 5.9 billion is once again the result of the delivery of a vast number of projects throughout 2018. We are particularly proud of the construction of the new head office and distribution centre for Eosta (the organic fruit importer and distributor), the Prinses Maxima Centrum in Utrecht (a Children’s hospital specialised in cancer treatment), the finalization of the North South Metro line in Amsterdam and the successful delivery of the DBFM N18 project. Significant progress was also made on our pilot for low temperature geothermal energy in the Netherlands. In the UK we completed the 3rd phase of the North Western Electrification Project and made good progress on our West Anglia Mainline project. We are also very pleased with the successful re-tender for Service area 24 in British Columbia.
We continue to focus on innovation, digitalisation and sustainability, three topics which will become more and more inter-related over the next few years. More ambitious goals with respect to our CO2 footprint and the reduction of primary resources require ongoing focus and different ways of doing business. In 2018 we formulated six KPI’s to measure our progress on delivery of our sustainability objectives, making our efforts in this respect both tangible and measurable.
We propose to pay a final dividend of € 0.77 per share, which, together with the interim dividend paid in November 2018 of € 0.28 per share, brings the total dividend to € 1.05 in line with the 2017 dividend.’