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Imtech's growth continues: EBITA +6%, net profit +11%, order book +8%
- Organic EBITA growth of 5% and an order book worth 5.2 billion euro (+8%) instil confidence for the second half of 2010
- Imtech excels in the European energy and environment markets and achieves an excellent performance in Germany & Eastern-Europe and in the Nordic region
- The Nordic region: a large acquisition strengthens the foundations for a strong market position
- Maintaining the outlook for the whole of 2010: a further EBITA increase through organic growth and acquisitions
- Maintaining longterm growth targets: a revenue level of 5 billion euro in 2012, while maintaining the target of achieving an operational EBITA margin of 6%
René van der Bruggen, CEO of the European technical services provider Imtech N.V.: 'Imtech can look back on a good first half of 2010. The overall EBITA growth is 6% and organic EBITA growth amounts to 5%. Net profit is up by 11%. This is an excellent performance, especially as the market conditions in many countries and markets remained challenging. Imtech performs excellent in Germany & Eastern-Europe and in the Nordic region. Imtech also achieves a solid performance in the UK, Ireland and Spain, despite difficult market conditions. In the Benelux, however, the results fell back. Growth is achieved in the European ICT market and the European traffic market. In contrast there is a slowdown in the order intake on the global marine market.'
'Imtech stands out by achieving an excellent performance in the European energy and environment markets where it is one of the frontrunners. Partly thanks to this the order book, for the first time, passes the 5 billion euro milestone and amounts to 5.2 million euro - an increase of 8%. The quality of this order book is nearly comparable to that of last year. This is indicative of Imtech's strength and instils confidence for the second half of 2010. At the same time, thanks to a large acquisition in Sweden (nearly 2,200 employees, revenue of around 2.5 billion Swedish Kroner, consolidated as of July 2010) the foundations have been strengthened for the structural development of a strong market position in the Nordic region (Sweden, Norway and Finland). This also instils confidence in the company's future growth.'
'For the whole year 2010 - as stated earlier - Imtech expects further EBITA increase through organic growth and acquisitions. Imtech is also maintaining its longterm target of achieving a revenue of 5 billion euro in 2012, while maintaining an operational EBITA margin target of 6%. Meanwhile Imtech started the update for its strategic plan 2010 - 2015.'
Good performance in the first half of 2010
Imtech looks back on a good first half of 2010. Although market conditions remain challenging, net profit, EBITA, order book and operational EBITA margin all develop positively and revenue remains on level. This reflects Imtech's focus on profitability. Virtually all the growth is organic. In a nutshell, and also taking into account the still challenging market conditions, Imtech's overall performance was good. Imtech excels in Germany & Eastern-Europe and in the Nordic region. The Benelux lags behind. In the UK, Ireland & Spain Imtech is able, despite difficult market conditions, to put in a good performance. Further growth is achieved in the European ICT market, especially in Germany, Austria and Belgium. In the European traffic market Imtech very clearly succeeds in benefiting from the growing demand for hightech solutions. In the global marine market Imtech, despite its long list of potential projects, is not immune to the negative impact of drawnout decisionmaking processes of customers. Imtech's performance in the European energy and environment markets is excellent.
The EBITA rises by 6% to 107.5 million euro. Organic EBITA growth amounts to 5%. Net profit rises by 11% to 57.0 million euro. Revenue remains virtually the same at just over 2 billion euro (2,025 million euro). This proves that the strategic focus on yield and increasing higher operational EBITA margins is successful even in economically difficult times. As a result, the operational EBITA margin for the comparable period rises from 5.4% to 5.7%. Half way through 2010 the order book was 8% higher than 12 months previously, which means, for the first time ever, it is over 5 billion euro and reaches a level of 5.2 billion euro. The quality of this order book is nearly comparable to that of last year. This instils confidence in the second half of 2010. Earnings per share (before amortisation) rise by 10% to 0.88 euro.
Drivers for (future) growth
The following growth drivers are relevant for Imtech now and also in the future:
A broad portfolio with strong market positions and substantial scale
Technology is increasingly playing a role in solving economic and social issues. Imtech, with its unique multidisciplinary technical proposition, has for many years proven its ability to respond to this fundamental trend. One of Imtech's strengths in this respect is its broad portfolio with strong market positions in large areas of Europe and in the global marine market with around 21,000 customers in a wide variety of market segments.
Recurring business: a basis for longterm continuity
Around 55% of Imtech's activities involve recurring business and, despite the challenging market conditions, the thousands of maintenance contracts Imtech has been awarded in many market segments provide a good basis for longterm continuity.
Imtech excels in the energy and environment markets
The energy and environment markets (energy, environment, fine particles and water) are the most important 'driver' for Imtech's future growth. Imtech is one of Europe's strongest players in this segment and has positioned itself extremely well. By integrating energy solutions into its total approach Imtech delivers extra addedvalue. This is recognised by the market and in many (sub)segments Imtech has been able to develop a preferred supplier position. Examples include:
- energy management: multiyear responsibility for an optimum energy supply;
- increased efficiency: the 'fine tuning' of energy usage in relation to customers' primary and secondary processes;
- energy savings: metering, consultancy, implementation;
energy plants and decentralised energy facilities, hightech cogeneration plants (combined heat & power);
- thermal energy, solar energy, bioenergy and innovative energy storage;
- differentiating solutions in the field of hightension and energy technology;
- 'Zero emission' ships, dieselelectric propulsion and energy reduction on board of ships.
Differentiating technological expertise
In a number of market segments the differentiating technological expertise Imtech has at its disposal is the reason why customers involve Imtech in virtually every project (renovation, upgrading, extension). Examples include: specific test technology for the automotive industry, hightech data centre technology, cleanroom technology and technology for laboratories. This virtually unique competitive position supports the continuity of Imtech's business model.
Benelux: in a transition phase
In the Benelux revenue and profit fell for the first time in many years. Revenue fell by 14% and the EBITA by 21%. As a result the operational EBITA margin drops from 3.6% to 3.3%. The order book remains stable at 1.4 billion euro. The number of employees fell by 8% to 6,959 partly due to the divestment of noncore activities in the field of fire extinguisher products and systems and efficiency improvements.
An analysis of the reduction in profit generates a mixed picture. A major cause is the nearly two months period of severe frost at the beginning of the year. Especially in the infrastructure market this has a negative impact on the results. Besides this, market conditions in the Benelux remained challenging, partly due to the lack of smaller orders. The effects of the economic crisis also worsened in a number of regions and segments. On top there is fierce competition from local competitors as well as from technical services providers out of Southern and Central Europe. When it comes to larger investments the customer's decisionmaking process is exceptionally long.
Imtech expects these market conditions to continue in the near future and has decided to accelerate its focus on markets such as energy, sustainability, environment, data centres, care & cure and security. These are markets in which Imtech's differentiating technological profile really comes into its own. Imtech is also willing to further strengthen its position in the maintenance market. As a result Imtech is in a transition phase in the Benelux. The objective is to achieve a substantial increase of addedvalue in the market segments mentioned above. Imtech will focus on providing total technological services and intensive cooperation relationships with customers.
Progress in the energy market
Imtech has made good progress in this transition. There are numerous examples of newly acquired longterm orders, such as the order - including the technical maintenance - from the Dutch province of Limburg for two sustainable energy plants based on cogeneration (combined heat and power), sun, wind, biomass and water power in Venlo and Maastricht. In Venlo Imtech was also responsible for the sustainable energy supply for a large multidisciplinary project and in the Eemshaven Imtech Netherlands, in cooperation with Imtech Deutschland, is responsible for a new highyield 800 MW energy plant fired by both coal and biomass. Amsterdam Airport Schiphol has chosen Imtech to be its technology partner in theGROUNDS project - a platform for the achievement of a sustainable airport. Schiphol's aim is to be CO2 neutral in 2012 and by 2020 to be generating 20% of its energy requirement sustainable. To this end innovative sustainable technologies, such cogeneration, biomass and an ITbased 'smart grid' for targeted energy distribution and electricity transportation, are being used. Here too Imtech will realise a sustainable energy plant based on cogeneration, sun, wind and biomass. Other energy examples include a sustainable bioenergy plant in Eindhoven and innovative CSR nurseries that grow flowers, plants, vegetables and fruit with minimal CO2 emissions and on an extremely small surface.
'Green' technology in industry and laboratories
Imtech's 'green' technology also enables it to stand out from the competition in the industry market. Imtech was responsible for an innovative solution that converts the emissions released by Shell Moerdijk into electricity. In the (animal) feed industry Imtech acts a partner in Living Lab - a hightech, sustainable facility in which new energyefficient products and production methods for the animal feed market are developed. For the automotive producer Citroën Imtech is realising several sustainable solutions. Good progress has also been achieved in the laboratory market, for example with the technological equipment for an advanced laboratory at the Leiden University Medical Centre (LUMC). Imtech is responsible for the technology for underground gas storage for Nuon. More 'traditional' orders include multiyear maintenance contracts for Neste, Vopak and the ETA Tank terminal.
Focus on care & cure successful
Technology is becoming increasingly important in the care & cure market. Imtech focuses on technological solutions that meet the most stringent hygiene and safety standards. Large orders were received from the Erasmus Medical Centre in Rotterdam, the AMC (Academic Medical Centre) in Amsterdam and the OCMW, Openbaar Centrum voor Maatschappelijk Welzijn (Public Centre for Social Health) in Genk. 'Green value maintenance', a new, sustainable maintenance concept was launched successfully.
Advances in the infrastructure market
Imtech is making clear progression in the infrastructure market. The large orders acquired included hightech security technology for various train routes and for metro routes in Rotterdam. A maintenance contract for the tunnels along the Betuweroute is also obtained. Imtech realizes via WiFi the opportunity for wireless highspeed Internet in the high speed Thalys trains. Growth is achieved in the market for sustainable ('green') LED lighting (Innolumnis®).
Germany & Eastern-Europe: an excellent growth performance
In Germany & Eastern-Europe, where it is one of the leading technical services providers, Imtech achieves an excellent organic growth performance in a market in which some segments are showing an upward trend. The EBITA shows a substantial 41% growth, the EBITA margin rises to 7.2% and both the revenue (+14%) and order book (+16%) increase considerably. The number of employees rises by 8% to 4,743.
In Germany & Eastern-Europe Imtech has become the leading implementation partner in the growing energy market. Thanks to this, and additional technological competencies such as test engineering for the automotive industry, building automation, stadium, data centre and cleanroom technology as well as hightech fire protection and care & cure solutions, Imtech is excelling. There is an extensive longlist of potential projects in markets such as energy, 'green' revitalisation, airports, care & cure, data centres, stadiums, pharmaceuticals and the automotive industry. Imtech also offers professional technological maintenance concepts. The combination of these factors enables a high organic growth to be achieved and, at the same time, the margin further increases. Although the consequences of the economic crisis were more apparent in Eastern-Europe, here too Imtech achieves growth, partly thanks to large orders related to the 2012 European Football Championship in Poland.
Large, ongoing energy projects form the basis for growth
Imtech is involved in large projects such as the 'green' revitalisation of the two 155 metre high towers of the Deutsche Bank's head office in Frankfurt, the extension of the energyefficient office building for Victoria Versicherungen in Düsseldorf, hightech energy plants in Hamm in Germany and the Eemshaven in the Netherlands, the construction of a sustainable energy plant for the Bundesnachrichtendienst (the Federal German Intelligence Service) in Berlin, the energy technology in the new head office of the media group and publisher Spiegel in Hamburg and the hightech technology (including an innovative energyrecoverysystem) for the new Berlin Brandenburg International airport - Germany's third airport. These orders prove that in Germany and to a certain extent also in other European countries, Imtech has developed into a leading energy partner.
'Green' technology for the automotive industry
The automotive industry is, and will remain, an important engine for the German economy. Imtech occupies a strong position in this market with activities that include advanced test technology with which new and economical models of cars with low CO2 emissions can be developed. Imtech supplied the world's most uptodate automotive test centre - the BMW Group's new Aerodynamic Test Centre (ATC) in Munich - as well as other worldwide exported hightech endtoline solutions and test facilities for bodywork tests. From this strong German position Imtech has increased its activities related to energyefficient manufacturing processes throughout Europe. Imtech was responsible for the energyefficient technology in a new paint shop for Porsche and the total, optimally energyefficient, technical infrastructure in a new bodywork manufacturing hall for Audi. In Hungary Imtech is the implementation partner in a comparable order for a new assembly hall for Daimler.
Differentiating proposition for energy issues in the care & cure market
The German care & cure market is an important growth market for Imtech. Imtech focuses on a broad package of energy services and is in a position to accept total multiyear responsibility for the supply, maintenance and management of all energy facilities. Imtech also uses innovative technology to integrate the complete energy process in complex business and care production processes. This approach is successful. The LVR Clinic in Bonn extended an energysavings contract. In part thanks to its energy competence Imtech is involved in the upgrading of a large number of medical clinics, for example in Stuttgart, Kaiserslautern, Aachen and Kirchheim-Nürtingen.
Growth in the energyrelated data centre market
Imtech is a specialist in the energy and technological (re)equipping and upgrading of data centres. A sharp increase in digital payment traffic volume and information stream bandwidth means that financial data providers, insurance companies and the retail and automotive industries opt to renovate and/or expand existing data centres. This capacity increase results in heat emissions reaching a critical level, which makes energy savings, cooling and heat dispersal necessary. Imtech's hightech solutions offer optimum possibilities for energy savings and fit seamlessly with customers' primary and secondary processes. Various orders are acquired and many prospects are upcoming.
Other energyrelated growth segments
The combination of energy technology and specific expertise in the field of cleanroom technology and stadium technology has led to Imtech excelling in other sectors. The development of 'green' stadiums is an outstanding example. In the Imtech Arena, the home stadium of the German premier football club HSV (Hamburger Sport Verein), Imtech has taken the first steps towards achieving considerable energy savings and reduced CO2. 'Green' stadium technology is an interesting future growth market both in Europe and further abroad. Imtech is also making good progress with energyrelated orders in education and the market for the technology in research centres and laboratories. Finally, Imtech is excelling in the market for biomass energy plants with a large number of orders and prospects.
Further growth in Eastern Europe thanks to EURO 2012 in Poland
The strength of Imtech's total proposition and its strong market position in Poland has led to large orders for the 2012 European Football Championship. Imtech is responsible for the technology in all three stadiums for this Championship: the National Stadium in Warsaw (55,000 spectators), the PGE Baltic Arena in Gdansk (44,000 spectators) and the stadium in Wroclaw (44,000 spectators). Partly due to these successes Imtech has also acquired the order for the technology in the new stadium of the Polish football club Bialystok (22,500 spectators). Imtech established itself in an excellent position in Poland where it offers customers the highest achievable quality of technology, for example in the Jewish Museum in Warsaw and the film academy in Lodz. Despite difficult market conditions in Romania, Arconi, which was acquired in 2009, developed well.
UK, Ireland & Spain: a solid performance in difficult market conditions
As a result of the economic crisis market conditions in the UK, Ireland & Spain range from difficult to extremely difficult. Market volumes fell dramatically, especially in Ireland. Despite this Imtech produces a solid performance. Revenue and EBITA fell by 1% and 2% respectively. As a result the operational EBITA margin fell from 6.5% to the, still very respectable, level of 6.4%. By contrast the order book rises by 2% to over 0.5 billion euro. In part due to acquisitions at the end of 2009 the number of employees rises by 8% to 3,641.
UK: The Olympic Games, energy and water compensate for the drop in real estate
In the UK large projects connected to the 2012 Olympic Games offset the drop in the real estate sector, which was especially noticeable in the London region. Imtech is involved in various Olympic projects including the energyefficient air and climate technology in the new Olympic Stadium and Olympic Velodrome as well as a large number of technical solutions in the participants' and officials' accommodation. Imtech is also responsible for the energyefficient air and climate technology in the enormous (150,000 m²) Olympic shopping centre 'Westfield Stratford City'. Other major projects in London are the technology for the extension of the BBC's head office and the multidisciplinary Bridges Wharf project in Battersea, which includes an energyefficient biomass energy plant.
Thanks to its technological expertise in both energy and water Imtech is developing into one of the strongest players in the waste and sewage water management processing market. Imtech is responsible for upgrading the technology of the sewage water management systems in Crossness and Beckton in London, which together serve a total of four million residents. The upgrade means considerably more waste water can be processed. This will reduce the volume of contaminated water that, due to capacity problems, flows into the Thames after heavy rainfall - a major step towards improving the quality of the river's water. Wind turbines are being installed that generate the energy required for the primary process.
In the water treatment industry the extension of the framework contract with Welsh Water to cover the period 2010-2015 means Imtech will continue to act as the technology partner for the maintenance, upgrading and improvement of all the water and waste water assets in Wales. Here too the protection of the water quality as a consequence of storms and floods plays a major role. To this end various improvements will be implemented including the use of ultraviolet light. One of the focal points is the provision of sustainable energy facilities and a reduction of the carbon footprint.
Education is another important market for Imtech. Orders are received for new R&D and education facilities for 'The Physics of Medicine' in Cambridge - part of Cambridge University's worldfamous Cavendish Laboratory. Imtech is also responsible for the hightech technology that will be used to conserve millions of (copies of) scientific books and publications held by Oxford University's Bodleian Library in Swindon.
Ireland: a focus on technology export
In Ireland there is a substantial reduction in investment in technology. This had a negative impact on both revenue and profit. Imtech has virtually unique technological competencies in the field of electrical engineering and instrumentation (E&I) at its disposal. The focus is on exporting this technological expertise both within Europe and abroad. The first results of this reinvigorating focus strategy are apparent: Imtech is selected as the E&I partner for a new baby food factory in Saudi Arabia.
Spain: a good performance in a difficult market
Although market conditions were also very difficult in Spain, Imtech was able to reap the benefits of recent strategic choices. Imtech specialises in industrial maintenance, industrial shutdowns, technical upgrading, renovation and industrial services in various sectors including the oil & gas industry, the (petro)chemical industry and the steel industry. This strategic focus is now paying off. Imtech's position in the industrial maintenance market was always strong, but this position in mechanical services has - both organically and through acquisitions in 2008 and 2009 - been expanded to include electrical services. New multidisciplinary technical maintenance orders have been received from Repsol in Puertollano and Bayer in Tarragona.
Recently a maintenance position has been built up in the buildings market and here too Imtech acts as a multidisciplinary technical maintenance partner. Imtech has proven that there is a need for a professional technological maintenance company with technical maintenance and management as a core activity. Step by step the number of customers and contracts is increasing to a substantial level. Imtech provides its services 24/7 with virtual nationwide coverage in both the profit and nonprofit sectors. New multiyear multidisciplinary maintenance orders have been received for, among others, the 'Torre de Cristal' (Crystal Tower) in Madrid (at 250 metres the highest skyscraper in Spain), 637 offices and various data centres of telecoms company Telefónica, dozens of care & cure centres in the Seville North and Aljarafe areas of Andalusia and the large (115,000 m²) 'Màgic' shopping centre in Badalona in Barcelona.
Nordic: the first signs of a market recovery, robust growth in order book
In the Nordic region (Sweden, Norway and Finland) the market has begun a recovery. Imtech made optimum use of the opportunities and achieves an increase in both revenue (+15%) and EBITA (+18%). The operational EBITA margin rose from 6.4% to 6.6%. Partly due to the increasing average project size the order book rises by a very substantial 43% to nearly 300 million euro. Overall the Nordic region achieves an excellent performance, most of which was generated organically. The number of employees rises by 2% to 2,331.
A broad market scope leads to growth, focus on energy, care & cure, education and research
The combination of a wide geographical spread (nearly 100 offices), a broad market scope, an extensive spectrum of technological competencies, a focus on mediumsized projects, and a strong position in the maintenance market are bearing fruit as market conditions improve.
Energy is also an important theme in the Nordic region where Imtech is involved in the development of energyefficient concepts for housing associations and managers and with a number of energy projects in Stockholm. Care & cure remains important for Imtech and, as a spinoff from the multiyear involvement with the Göteborg University Hospital (Sahlgrenska Universitetssjukhuset), the order for an energyefficient extension is acquired. Imtech is responsible for a unique solar energy project incorporating not only heating and energy storage but also innovative cooling for Härnösand hospital. Imtech is also carrying out the technological upgrading of the Ekbacken Lammhult health centre, including the technical equipment for various medical facilities. In the education sector Imtech is involved with a hightech pilot project in Oslo and is responsible not only for the energyefficient climate technology but also the innovative building automation. Imtech supplies all the technology for a hightech automatic warehouse for the Norwegian Post Office. Imtech was already involved with technology solutions in the Swedish national football stadium 'Swedbank Arena', but will now also supply some of the (energy) technology for the 'Kalmar Arena'. More and more often Imtech is being selected as the implementation partner for R&D facilities, for example a hightech research facility for the Swedish University of Agricultural Science. Experience with ensuring technological solutions work, and continue to work, under extremely cold weather conditions means Imtech is more and more frequently being involved in exceptional technological projects such as the technical infrastructure for the largest sauna in the world and the technology for hightech research facilities in polar regions.
Acquisition of NEA, structurally strong market position in the Nordic region
At the end of June 2010 Imtech strengthened its top-3 position in the Nordic region quite considerably with the acquisition of NEA. NEA, the second largest player in the Swedish electrical services market, is consolidated as of July 2010.
NEA serves around 1,000 customers from its nearly 70 offices in Sweden. The fact that less than 10% of these customers are top-10 customers implies that NEA has a very diverse order and customer base, which makes a significant contribution towards continuity. In 2010 NEA, with around 2,200 employees, is expected to achieve revenue of around 2.5 billion SEK (Swedish kroner), an EBITA of around 150 million SEK and an EBITA margin of 5.9%. Around 50% of NEA's revenue is generated from the industry sector (including energy, nuclear energy, steel, timber and mining) and the remainder from the business sector, care & cure and the government and municipal sector. NEA also holds a 38% interest in Elajo, another electrical services provider with activities that, to a great extent, complement those of NEA. Elajo is active in both Sweden and Norway, has around 1,000 employees and achieved revenue of nearly 1 billion SEK in 2009.
Strategically NEA fits extremely well with NVS (the current Imtech Nordic). NEA specialises in electrical services, NVS in mechanical services. Clustering both companies will - totally inline with the Imtech strategy - enable technical total solutions to be offered in the Nordic region. This will created substantial growth and strengthens the basis for a structurally strong position in this region. In other European countries (Germany, the UK and Spain) Imtech has proven that this approach has lead to accelerated growth. The expectation is that in 2010 the NVS/NEA combination with around 4,500 employees and 170 offices will achieve an annual revenue of around 5.9 billion SEK, an EBITA of around 412 million SEK and an EBITA margin of 7.0%. In addition to NEA two smaller Nordic companies were acquired.
ICT, Traffic & Marine: a mixed picture
In this cluster that operates at a European and to an extent global level the picture is mixed. In the European ICT market and the European traffic market modest growth is achieved. By contrast, in the global marine market there is a slight slowdown in the order intake. Although the overall revenue level is maintained, the EBITA fell by 9% and this reduces the operational EBITA margin from 6.3% to 5.8%. The order book, however, increases by 1% to over 1 billion euro. The number of employees fell by 2% to 4,965.
ICT: growth despite the impact of the economic crisis
The economic crisis in Europe had a negative effect on revenue and profit in the ICT market. Increasing competition puts pressure on margins. Despite this Imtech performed well. Lower results in the Netherlands and the UK were more than offset by the good business progress achieved in Germany, Austria and Belgium. In Germany the business sectors increasing export activities led to challenging ICT demands which Imtech could answer. Imtech was, for example, responsible for the entire ICT 'collaboration' for communication between Lotus Notes and Blackberry for the pharmaceutical company Merck and for the renovation of the total IT storage capacity of agricultural machinery manufacturer Michael Weinig. Imtech's customers in the cement industry, for which it offers specific ERPbased hightech solutions (VAS®), included cement manufacturers Nostra Cement and Lafarge. In Germany and Switzerland Imtech achieved good results with software solutions for financial services to the public sector. The municipality of Wittenberge joined Imtech's list of customers. In Austria Imtech performed very well, for example with hightech SAP tailormade software and logistic IT solutions for various European postal services. To further strengthen the activities Sapphir, a SAP consultancy specialist with offices in both Austria and Romania, was acquired early July. In Belgium Imtech's virtually unique combination of software development, performance solutions and managed services enabled it to achieve excellent results, especially in the field of IT infrastructure. In the Netherlands Imtech lost ground slightly due to market pressure. Good results were achieved in the markets for ICT infrastructure and performance solutions for the care & cure sector, for example for Alysis. Imtech was responsible for a virtual desktop organisation for the Amsterdam RAI exhibition centre. More and more often the various Imtech ICT companies in the Netherlands work together to offer customers total solutions. The UK also declined slightly. A large UK order came from the British satellite company Avanti.
Traffic: strong demand led to growth
In the Netherlands, the UK and some parts of Eastern Europe and the Nordic region Imtech is well positioned in the fastgrowing mobility and innovative traffic solutions market. This increasing demand enabled Imtech to achieve further growth. Major new orders from the Dutch Department of Waterways and Public Works involve realising dynamic traffic signalling and enforcement along the Rotterdam ring road and the technological renovation of the traffic control centre for the Northwest of the Netherlands. Imtech is also responsible for a Dynamic Passenger Information System (DRIS) in the Dutch province of Overijssel that enables passengers waiting at stations and stops to see realtime information regarding arrival and departure times. In the UK the Highways Agency (manager of the motorways around London) gave Imtech the responsibility for realising a hightech communications network along the nearly 64 kilometre long M6 motorway. Although the level of investment dropped in Eastern-Europe this was offset by the good business progress achieved in the Nordic region. To strengthen Imtech's position in this region, at the end of July YSP - a leading traffic control specialist in Finland - was acquired. Imtech introduced a new generation of energyefficient traffic lights (Supreme®) to the market and also launched Park and Recharge®, globally available Imtech technology for the recharging of electrical cars in parking garages.
Marine: a reticent market, long list of potential projects
Imtech occupies a firm market position in the global marine market (global top-5) with a broad portfolio of activities in all shipping segments and a sharp focus on service, maintenance and management. Although the economic crisis led to reticence in the marine market in Europe and the United States, in some markets this reticence is slowly but surely turning into new initiatives and Imtech has many prospects, although the final customers' decisions have yet to be made. There is a substantial decline in the European container and cargo vessel market. The European cruise liner remains at virtually the same level, but there is a decline in the global market for luxury yachts with the exception of the top segment. By contrast, the market for special ships for the oil and gas industry rises sharply and larger definite orders are expected during the second half of 2010. The market for naval vessels is very promising. As, from a global perspective, there were fewer ship movements the market for service, maintenance and management came under pressure. The marine economic climate in China and Singapore, however, improved. In this region, which has developed into a major centre for the global shipping industry, Imtech is in a good position for further growth with offices in Hong Kong, Shanghai and Singapore and six branch offices in other marine centres and good contacts with a large number of Chinese wharves.
Overall Imtech's performance worsened slightly, despite the long list of potential projects. Imtech suffers the negative effect of long decisionmaking processes by customers. This means a lower order intake which, in turn, has a negative effect on revenue and result.
In the container and cargo vessel market new orders were received for technical solutions on board a Boskalis stonesorter, an Acergy 'heavy lift' crane ship/pipe layer, a Drydocks World Singapore offshore support ship and various coastal tugs. Ongoing naval programmes ensure a substantial stock of work in the naval vessel market including the technology onboard new German F-125 frigates and the air and climate technology on board two Royal Navy aircraft carriers in the UK. New orders were received for the supply of spare parts to the South Korean navy, integrated platform management systems for mine sweepers for the Singapore Navy and navigation and communication systems for the navy in Alaska. In the cruise line market Imtech is involved with the energyefficient climate technology on the cruise liner 'Disney'. In the luxury yacht market Imtech is working on the 141 metre long superyacht 'Swift 141' and the technology on board two hightech 'Porsche Design' catamarans in Vietnam as well as various smaller yachts being built at European wharves. The demand for 'green' technology is rising and Imtech is in an ideal position to answer this demand.
Acquisitions: an accelerator for future growth
Thus far in 2010 Imtech has acquired the following companies:
in the Nordic division:
- NEA: the second largest player in the Swedish electrical services provision market. Revenue around 2.5 billion SEK, 2,200 employees;
- FCC Sprinkler & Service, a hightech sprinkler technology company in Sweden. Revenue 8 million euro, 60 staff;
- Spitsbergen VVS, one of the 'greenest' technical services providers in Norway, located in the north of the Arctic Circle. Revenue 4 million euro, 20 permanent employees;
in the European ICT market:
- Sapphir, an Austrian SAP consultancy specialist. Revenue over 2.5 million euro, 20 employees;
in the European traffic market:
- YSP, a Finnish hightech traffic control specialist. Revenue 3 million euro, 25 employees.
Of these acquisitions only FCC Sprinkler & Service has been included in the consolidation as of June 2010. All the acquisitions were paid for in cash. The total revenue from these acquisitions amounts to around 270 million euro per annum with around 2,325 new employees. All the acquired companies have made an immediate contribution towards profit. Imtech emphasises that the objective of all acquistions is to achieve future strategic growth through integration or intensive cooperation with existing Imtech activities. In the second half of 2010 Imtech will keep on focussing on further strengthen its position by strategic acquistions.
Divestment of noncore activities fire extinguisher products and systems
Within the context of its 2012 strategic growth plan, Imtech has divested its noncore activities in the field of fire extinguisher products and systems. The activities affected were Saval (the Netherlands and Belgium) and Knowsley (UK). The total revenue from the companies amounts to around 36 million euro per annum with around 230 employees.
The number of employees decreases slightly
The number of employees on 30 June 2010 was 22,684, slightly lower than the 22,747 employees in the first half of 2009. This was partly due to acquisitions during the previous year, the consolidation of the acquisition of FCC Sprinkler & Service and the divestment of the activities in the field of fire extinguisher products and systems as well as efficiency improvements in the Benelux. Despite the effects of the economic crisis, which are visible on a number of fronts, the main concern for the future remains the availability of qualified and experienced employees. This is why Imtech will continue to invest in training programmes at both a management and a technical level. In addition, Imtech ensures it stands out from the competition through labour market recruitment campaigns and makes every effort to retain its existing employees.
Financial position and capital structure
Compared to 30 June 2009 total shareholders' equity has increased to 718 million euro. This increase was due to the net profit of 57 million euro achieved in the first half of 2010. In addition, the issuing of 8,324,850 new shares - in connection with the acquisition of NEA, other future acquisitions and the financing of the company's organic growth - generated 183 million euro after the deduction of costs. Of the total dividend over the previous financial year 22 million euro was paid out in cash (46% of the total dividend). The remaining 54% of the dividend was paid out in stock for which 1,161,507 new shares were issued and 1 million euro was charged to the share premium reserve. As at 30 June 2010 the issued share capital amounted to 91,573,840 shares.
Net debt amounted to 385 million euro on 30 June 2010 (30 June 2009: 466 million euro). The ratio of 'average net debt / EBITDA (last 12 months)' was 1.5 (30 June 2009: 1.8) well within the standards specified in the covenants agreed with banks. The decrease was the result of the share issue. Interest coverage, based on the past 12 months, amounted to 8.1 (as at 30 June 2009: 8.5).
The balance sheet total was 194 million euro higher than on 30 June 2009. Due to the share issue the solvency raised to 27% (31 December 2009: 19%). Net cash flow from operating activities was 95 million euro negative, primarily as a result of the increased capital employed. Net cash flow from investing activities amounted to 16 million euro negative mainly due to acquisitions and investments in property, plant and equipment and intangible assets. Net cash flow from financing activities was 137 million euro positive as a result of the share issue, the payment of dividend to shareholders and the purchase of own shares to cover the share and share option schemes. On balance net cash, cash equivalents and bank overdrafts rose by 36 million euro compared with 31 December 2009, which meant the balance on 30 June 2010 was 23 million euro negative.
Maintaining longterm targets
Imtech maintains its longterm target of achieving a revenue level of 5 billion euro in 2012, while maintaining the target of achieving an operational EBITA margin of 6%. Meanwhile Imtech started the update of its strategic plan 2010 - 2015.
Maintaining outlook for the whole of 2010
The outlook for the whole of 2010 expressed in February 2010 remains unchanged: according to its current views the Board of Management expects a further EBITA increase through organic growth and acquisitions.
Board of management declaration
The interim financial statements give a true and fair view of the assets, liabilities, financial position and results of Imtech N.V. and the companies included in the consolidation.
The interim financial statements give a true and fair view of the situation on the balance sheet date, the business development during the first half of the financial year and the anticipated business development of Imtech N.V. and its associated companies for which the information is recognised in the interim financial statements.
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