• Result weakened by high PPP tendering costs and loss at Construction & Property on older projects
• Strong performance at Strukton Rail and Strukton Civil
• Strukton Worksphere makes significant contribution to PPP strategy
• Further increase in PPP concessions: Strukton recently appointed preferred bidder for two of the three Dutch projects tendered for at the end of 2007
UTRECHT, 12 March 2008 - Strukton, a full-service provider of infrastructure and accommodation solutions, increased its revenue by 20% to EUR 1.1 billion in 2007 (2006: EUR 955 million). The increase was attributable principally to strong organic growth at Strukton Construction & Property and Strukton Civil Infrastructure and to the contribution from Strukton Worksphere, which was included in revenue for a full year in 2007. Strukton Rail achieved slightly higher revenue in 2007. Lower revenue in the Dutch rail market as a result of under-investment was offset by higher revenue in other European countries.
Strukton Integrated Projects also grew strongly and was involved in a total of 12 PPP projects in 2007.
Operating revenue (EBITDA) in 2007 was EUR 7.7 million lower at EUR 50.6 million (2006: EUR 58.3 million). The operating results of all operating companies improved in comparison with 2006 but in contrast to that year there was no non-recurring revenue in 2007 (2006: EUR 5.3 million). The lower result was the outcome of high tendering costs (EUR 10 million) for PPP concession projects. At the beginning of 2008 Strukton was designated appointed preferred bidder for two of the three PPP concession projects it had tendered for at the end of 2007. The costs incurred for these tenders will therefore be recouped. The net result for the year came to EUR 15.3 million (2006: EUR 30.6 million).
Strukton again made good progress refocusing its operations on service-related activities. The proportion of non-project-related revenue increased to 27.3% (2006: 25.8%). The order book ended the year at the historically high level of EUR 1.2 billion. Strukton generated a strong cash flow from operating activities of EUR 58.4 million in 2007 (2006: EUR 24.3 million).
Further growth and consolidation
Strukton further implemented its strategy in 2007 and took important steps to consolidate its position through acquisitions, extending and widening its position in the supply chain and international growth.
Strukton Integrated Projects was involved in five six Dutch PPP projects in the tendering phase, three in the execution phase and three PPP activities in tenders abroad(the United Kingdom, Belgium and Sweden). The number of PPP projects and accordingly grew strongly in 2007. In early 2008 Strukton was designated appointed preferred bidder in the European tendering procedures for PPP projects in the Netherlands to build a new detention centre in Rotterdam and office accommodation for the Information Management Group and the Tax Administration in Groningen.
Strukton Rail was faced with under-investment in the Dutch market but at European level it enjoyed growth and growing interest in its concepts and innovations. By acquiring Georg Reisse, Strukton Rail gained a strong position in the German rail market. In Scandinavia, it further strengthened its position by increasing its interest in Jernbaneservice AS – one of the four railway construction and maintenance companies in Norway – from 65% to 100% and by acquiring Betonmast Bane. The latter transaction was completed at the end of January 2008. Strukton Rail now expects to become the market leader in the Norwegian rail market. In Sweden, Strukton increased its interest in Svensk Banproduktion, the second largest market operator in Sweden, from 60% to 100%.
Strukton Civil can look back on a good year with strong organic growth and a strengthening of its activities. Revenue increased organically by 20%, with the result advancing at the same rate. All Strukton Civil's business units contributed to the growth. Strukton Civil took steps to achieving its goal of being a leader in renewing the infrastructure by winning projects under new contract forms, such as the alliance contracts for the Holland Bridge on the A1/A6 motorway and the Museum car park in Rotterdam. Through the acquisition of parts of Duik Combinatie Nederland (DCN) in 2007, Strukton Civil broadened its position in the supply chain with specialised underwater techniques and soil injection techniques. On the international stage, Strukton Civil was engaged in tunnel projects in Busan (South Korea) and Limerick (Ireland) and put itself on the map as a world leaderstrengthened its leadership in immersion techniques.
Strukton Construction & Property increased its volume by 30%. This organic growth was attributable chiefly to several major new projects. The maintenance market was also firm. Nevertheless, a loss was incurred, chiefly on account of setbacks on projects dating from 2005 on which Strukton Construction & Property could not pass on sharp increases in the cost of subcontracting and materials. Strukton Construction & Property established a productive relationship with Strukton Worksphere in 2007. The cooperation is generating definite synergy benefits for clients and the two companies are jointly providing both building and technical maintenance services for a growing number of them.
At Strukton Worksphere both new orders and revenue were higher than in 2006, with a marked increase in long-term projects. The synergy benefits Strukton sought from the acquisition of Worksphere made a very valuable contribution to PPP tendering procedures and the know-how and skills provided by Strukton Worksphere are enabling Strukton to take an integrated comprehensive lifecycle approach to accommodation projects.
Outlook
Strukton expects further organic growth in revenue in 2008. Being designated appointed preferred bidder for two major PPP accommodation projects will also make a significant contribution to revenue growth. Future PPP tendering costs are expected willto be financed chiefly from open – successful – tenders. In line with its strategy, Strukton is also seeking further growth from selective acquisitions. Financing arrangements are already in place for growth. Strukton has a committed facility of EUR 325 million and thus sufficient funding to continue its growth strategy. Barring exceptional circumstances, Strukton expects a sharp increase in the net result.
About Strukton
Strukton offers solutions in the fields of infrastructure and accommodation. As an operational partner, Strukton supervises the entire chain, from draft design to implementation phase.
By pooling the five operating companies’ specific knowledge and experience, it enables end users to travel easily and live, work, study and relax in comfortable accommodation.
Dutch version Annual report 2007