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Netherlands – Growth in Germany helps Brunel offset European revenue decline

16 August 2013

Dutch recruitment giant Brunel International (BRNL: NA) today reported a +1.3% rise in second quarter revenue, up to €305 million compared with €300.6 million a year ago. Gross profit rose by +2% to €52.1 million, up from €51.1 million for the second period of last year. Gross margin increased moderately from 17% in Q2 2012 to 17.1% in Q2 2013.

EBIT (Earnings Before Interest and Taxes) fell by -3.6% during the period, from €14 million last year to €13.5 million this year.

Jan Arie van Barneveld, CEO of Brunel, commented: “I am very happy to see that Brunel is on track in this transitional year and already in the second quarter has reached the levels of 2012. That gives great comfort for the rest of the year and 2014.”

Revenue in Germany grew +13.3% during the second quarter, rising to €49.3 million from €43.5 million last year. This growth is fully attributed by Brunel to the increase in the average number of direct employees. Gross profit jumped up +16.4% during the quarter, rising to €17 million from €14.6 million for the same period last year.

The challenging Dutch market is reflected in the fall in revenue during the second quarter of 2013. Revenue fell from €40 million during Q2 2012 to €38.5 million during Q2 2013. Gross profit for the period was €10.8 million, down from €12.8 million last year, equating to a drop of -15.6%. Decreased sales rates, decreased productivity, and a lower average number of fee earning employees negatively impacted revenue and profit for the quarter.

Revenue for the other European nations; including Belgium, Austria, Switzerland, and the Czech Republic, equated to €7.1 million, a fall of -14.5% compared with revenue of €8.3 million a year ago. Switzerland and the Czech Republic are still in the start-up phase and have not yet generated revenue. Belgium and Austria continue to face challenging conditions. Gross profit for the second quarter was €1.5 million, a fall of -11.8% compared with profit of €1.7 million last year. 

Looking at the results by business division, Brunel Oil & Gas reported increased second quarter revenue of +0.5%, rising to €210 million from €209.1 million during the second quarter of 2012. Gross profit for the period rose +3.6%, up from €22 million to €22.8 million year-on-year. Brunel Energy reported revenue of €183.3 million for Q2 2013, an increase of +26.9% compared with €144.4 million last year. Gross profit also rose during the period; rising to €20.2 million from €16.2 million last year, equating to an increase of +24.7%.

Brunel Projects performed poorly during the second quarter reporting revenue of €26.8%, down -58.6% compared with revenue of €64.7 million last year. Gross profit fell -55.2% year-on-year, from €5.8 million during Q2 2012 to €2.6 million for Q2 2013.

The company reports that the outlook remains positive, however,the activity level for offshore projects is expected to be significantly lower in 2013 than in 2012. It is expected the further growth in the Energy business will compensate for the anticipated decline in the Brunel Projects’ revenue. Single digit growth is predicted for the Oil & Gas division. Revenue for the Netherlands is expected to be slightly below 2012 levels, while German revenue growth is expected to be in the high single digits. Brunel predicts that results for the full year 2013 will be in-line with those of 2012.

In early trading, the company’s share price fell -2.23% to €36.60, an increase of +15.83% compared with a year ago. Based on its share price, the company has a current market value of €902.8 million.   

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