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Netherlands – Brunel International performs well in challenging market

01 November 2013

Dutch recruitment firm Brunel International (BRNL: NL) reported revenue for the third quarter ending 30 September 2013 of €343 million, an increase of +6% (+10% in constant currency) compared with €322.3 million a year ago.

Gross profit for the period rose by +8%, year-on-year, increasing from €58.1 million in Q3 2012 to €62.6 million this year. Total overhead costs during the third quarter amounted to €40 million, an increase of +4% compared with last year. 

Brunel International slightly exceeded analysts’ depressed estimates as the company continues to take action to attempt to refine cost structures while also driving improved revenue, but turnaround remains extremely challenging and progress continues to be slow. 

Jan Arie van Barnevel, CEO of Brunel International, commented: “We are happy to see a continued revenue growth of +6% in Q3 year-on-year. In Q3 all [of] Brunel’s business lines showed continued growth, except the Projects business line, which develops as expected.”

In its home market of the Netherlands, Brunel International reported revenue of €39 million, an increase of +1% compared with revenue of €38.7 million. Gross profit, however, recorded a -5% decline, year-on-year, from €12.9 million to €12.2 million. Gross margin for the Netherlands fell from 33.3% in Q3 2012 to 31.2% in Q3 2013.  

In Germany revenue increased to €53 million, up by +9% compared with €48.7 million a year ago. Gross profit rose by +10% during the third quarter to €20.6 million from €18.8 million in Q3 2012. Gross margin for Germany remained static, year-on-year, at 38.6%. 

Across the rest of Europe, Brunel reported revenue growth of +3%, rising to €98.8 million from €95.8 million, year-on-year. Gross profit for the region grew by +2% to €34.4 million from €33.6 million in Q3 2012. Gross margin for Europe fell slightly from 35.1% in 2012 to 34.8% in 2013. 

Segmentally, Brunel Oil & Gas remains the company’s most profitable business. Revenue during Q3 2013 rose by +8% to €244.2 million compared with €226.6 million for the same period a year ago. Gross profit for the business rose by +15% to €28.2 million, up from €24.5 million last year. Gross margin for the Oil & Gas business increased from 10.8% in Q3 2012 to 11.5% in Q3 2013.

Brunel Energy reported a +32% increase in revenue during the third quarter. In Q3 2012 revenue was €155 million rising to €204.4 million in 2013. Gross profit also reported a significant increase, rising from €18.1 million last year to €24.1 million this year, equating to growth of +33%. Gross margin for the Energy business increased marginally to 11.8% from 11.7%, year-on-year. 

Brunel Projects reported fallen revenue and fallen gross profit during Q3 2013 when compared with the same period last year. Revenue dropped by -44% to €39.8 million from €71.6 million. Revenue was heavily impacted as a result of the completion of the Kipper Tuna and Domgas projects during the first quarter of the year. Gross profit declined by -36% to €4.1 million from €6.4 million. Gross margin, however, reported an increase from 8.9% in Q3 2012 to 10.3% in Q3 2013.

Looking forward, the company is confident that the outlook for 2013 remains positive. The company therefore reiterated the outlook as presented in the Q2 2013 trading update: Brunel total revenue and EBIT for 2013 will be in line with 2012. Due to a lower effective tax rate, this outlook results in an increase in net result of approximately +10%.

Brunel International, one of the world’s largest staffing firms, is a provider of staffing and placement services for specialists in a range of fields. The Company provides staffing, project management, recruitment and consultancy services. It concentrates its activities on industry segments; such as geoscience, drilling and completion, automotive, shipbuilding, electronics, aerospace, building and construction, and rail, among others. The Company has an international network of 97 branch offices in 34 countries, including Germany, the Netherlands, Belgium, Austria and Poland, among others.

In trading today, the company’s share price rose by +1% to €44.33, an increase of +21.1% compared with a year ago. Based on its current share price, the company has a market value of €1.08 billion.  

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