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Published: 07:00 CET 03-02-2014 /GlobeNewswire /Source: Imtech /XAMS: IM /ISIN: NL0006055329
Imtech: Sound operational performance in the fourth quarter 2013, significant valuation allowances in Germany
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· Revenue and order intake solid in 2013
· Good improvement operational EBITDA margin in Q4 2013, excluding Germany
· Good cash collection leads to debt reduction of 91 million euro in Q4 to 745 million euro
· Detailed action plan to resolve German legacy issues, valuation allowances of 200-230 million euro, contributing to a substantial loss for 2013.
Royal Imtech provides a preliminary view of its performance for the fourth quarter 2013 based on unaudited figures. Final audited annual figures 2013 are scheduled for publication on March 18, 2014.
Gerard van de Aast, CEO of Royal Imtech: "The performance of our business, excluding Germany, has improved markedly in the fourth quarter with good improvement of operational EBITDA margin and good cash collection leading to a substantial debt reduction. Our German business has not yet improved in the fourth quarter but with the "Neue Imtech" program and accelerated closure of legacy issues we have taken important steps in our recovery."
Sound operational improvement Q4 2013
Revenue and order intake in Q4 2013 was solid. For the year as a whole, Imtech expects revenue, excluding our divested Turkish business, to be around 4.9 billion euro and order intake to be around 100% of revenue. The good improvement of operational EBITDA margin, excluding Germany, in the quarter was positively helped by the impact of management upgrades and the completed headcount reduction programs. The net interest-bearing debt by year-end amounted to 745 million euro down from 836 million euro at the end of the third quarter. Headcount and financial restructuring related cash-out for the quarter amounted to 55 million euro. The good net debt reduction is the result of focus on cash collection from work in progress and trade receivables. All businesses, including Germany, contributed to this good result.
German recovery program "Neue Imtech"
The German recovery program "Neue Imtech" is in full progress and prioritizes healthy project margins over volume and focusses on efficiencies in staffing, project control and purchasing. During the last quarter, this program has put special emphasis on cost savings and cash generation. The headcount reduction program 2013 in both Germany and Eastern Europe is completed. The improvement and acceleration of the invoicing and cash collection processes resulted in a significant and encouraging contribution to the reduction of the group's net interest-bearing debt at year-end. Revenue in Germany & Eastern Europe in 2013 will amount to approximately 960 million euro, with new order intake around 820 million euro. The operational EBITDA margin in Germany did not yet improve in the fourth quarter 2013, compared to the first nine months, but will benefit from the cost savings and the "Neue Imtech" program going forward. Market conditions in Germany remain favourable and our market position based on our strong technical competences continues to be solid. Full details on the "Neue Imtech" program will be presented at the annual results publication on March 18th 2014.
Detailed action plan to conclude legacy issues in execution
As announced on 20 December 2013, "Neue Imtech" also contains a detailed action plan to accelerate the conclusion of legacy issues. Further assessment by new management in Germany, based on a different approach by prioritising closure of these issues and cash-in, lead to progressive insight. These legacy issues represent mainly unresolved historic issues with customers that were previously reported in overdue trade receivables or work in progress. Typically these legacy issues relate to projects that were contracted before 2013, are by now or soon will be completed, but not yet settled with the customers. Resolution of these legacy issues will deliver cash-in, but will also result in a non-cash valuation allowance when full book value is not recoverable. Non-cash valuation allowances of 200-230 million euro will be included in the results 2013. Of this amount, circa 20 million euro originates outside Germany. At year-end the remaining total amount of legacy issues on the balance sheet will amount to a range of 65-95 million euro. A dedicated team at Imtech will resolve these legacy issues in a pragmatic and optimized manner. The vast majority of these legacy issues does not have a direct relation to current operations. The company will report separately on these legacy issues going forward.
Restructuring update 2013
The headcount reduction program 2013 as announced on November 7th 2013, has been finalised. Total headcount reduction for 2013 amounted to 2,300 FTE at a total costs of 105 million euro. Previous indication was a reduction of 1,950 FTE for 90 million euro. The increased number and amount is mainly related to Germany. Excluding Turkey, total headcount will amount to approximately 26,000 FTE at the end of 2013. For 2014, the earlier announced extra headcount reduction in Germany of 300 FTE will be implemented in the first half of 2014 for approximately 15 million euro. The financial restructuring charges in 2013 amounted to 110 million euro, as previously announced.
Analysts' conference call 3 February 2014, live transmission via Internet (webcast)
From 9.30 hrs. (CET) an analysts' conference call will be held. This analysts' call will be transmitted live via the Internet (www.imtech.com) from 9.30 hrs. (CET) and after this time will also be available on the website.