Amersfoort, 16 May 2019 – Koninklijke VolkerWessels N.V. reconfirms its outlook; we expect our 2019 EBITDA to increase and we confirm that we are on track to meet our medium-term objectives.
- EBITDA Q1 2019 € 19 million (including € 16 million IFRS 16 restatement; Q1 2018 € 8 million)
- Revenue Q1 2019 € 1,374 million (Q1 2018 € 1,230 million)
- Order book 31 March 2019 € 9.5 billion (31 December 2018 € 8.9 billion)
- Confirmation of outlook: 2019 EBITDA to increase, on track to meet medium-term objectives
All EBITDA numbers exclude share incentive charge
Jan de Ruiter, Chairman of the Management Board
“We are pleased to report a record high order book at € 9.5 billion, which is an increase of c.€ 600 million as compared to the end of 2018 (c. € 1 billion compared to March 31 2018). The increase relates mainly to the order books of Construction & Real Estate Development (C&RED), Infrastructure NL and North America. Production volumes in the UK and Germany slightly outpaced new order intake in those segments.
On February 27 2019 we announced that our North America segment has won 3 seven year maintenance contracts in the province of Alberta in excess of C$ 300 million with the potential to increase to C$ 450 million. Our current orderbook only recognizes the initial contract period, valued at c. C$ 300 million (c.€ 200 million). In relation with these contracts we will invest significantly in new equipment which will increase the 2019 capex with c. € 35 million.
Our EBITDA in the first quarter was € 19 million. This result includes the impact of IFRS 16 – adopted on January 1 2019 – for an amount of € 16 million as well as an addition to the OpenIJ loss provision of € 4 million.
Revenue increased by almost 12% to € 1,374 million. Half of our revenue growth is attributed to C&RED. The number of new homes sold in Q1 2019 increased to 650 from 389 in the same period in 2018. Strong growth was also witnessed in the UK, Germany and Energy &Telecoms Infrastructure NL whilst Infrastructure NL was flat. North America showed a slight decline when compared to the first quarter of 2018.
The markets in which we operate continue to develop positively. We see increasing demand for our products and services and we expect this trend to continue. The development in the first quarter is in line with the normal seasonality pattern that is a characteristic of our company. Due to the company’s strong seasonality, our Q1 numbers are not indicative of our full year results.
The repositioning of our Infrastructure NL segment is nearly finalised and developing according to plan. We expect to fill the remaining senior management positions (including a new CEO) before year end. Despite the changes in this segment, the order book of Infrastructure NL increased by almost 10% during the quarter.
The construction of the world’s largest sea lock at IJmuiden (the OpenIJ project) is progressing well, the main challenge remaining is the immersion of the second caisson which is expected to be finalised in the second half of 2019. During the first quarter of 2019 we increased the loss provision for the project by € 4 million which brings VolkerWessels’ share of the total provision to € 111 million. OpenIJ finalised the discussion with its banking syndicate regarding the rescheduling of its financing on February 21 2019. OpenIJ resumed drawing from its banking facilities in line with the agreed new schedule with immediate effect. VolkerWessels’ share in the cash outflow of the project in Q1 2019 is € 8 million. At the end of Q1 2019, the project was 68% complete.
We confirm our latest outlook that our current expectations are for our 2019 EBITDA to increase and we confirm that we are on track to meet our medium-term objectives.”
IFRS 16 transition
VolkerWessels adopted IFRS 16 with effect from January 1 2019. We have applied the simplified transition approach and have not restated comparative amounts for the year prior to first adoption. As a result of these new accounting standards we expect, based on apreliminary assessment,an increase in EBITDA in 2019 of approximately € 60 - € 65 million. The impact on our net result for 2019 is expected to be very limited. We will recognise right-of-use assets and lease liabilities of approximately € 220 - € 240 million on January 1 2019. The afore-mentioned figures are estimates and the actual impacts of adopting the standard as from January 1 2019 may yet change as the calculations are refined.