3BY3 Brunel International NV

Brunel Q4 and FY 2023 results: continued revenue growth; ready for the next level

Amsterdam, 23 February 2024 – Brunel International N.V. (Brunel; BRNL), a global provider of flexible workforce solutions and expertise today announced its fourth quarter and full year 2023 results.

Key points Q4 2023

• Revenue of EUR 344 million, up 9% (14% organically)
• Underlying EBIT of EUR 15.5, down 13% (up 3% organically) 

Key points full year 2023

• Revenue of EUR 1.3 billion, up 13% (18% organically)
• Underlying EBIT of EUR 61.1, 0% year-on-year (10% organically)
• Net cash position at EUR 31.8 million
• Earnings per share of EUR 0.63, up 9% year-on-year
• Proposed dividend of EUR 0.55 (pay-out: 87%)

Jilko Andringa, CEO of Brunel International N.V.:“In 2023 we celebrated many highlights. Based on the strong first nine months, we continued high single digit growth in the year while we attracted many new clients. We strengthened our leadership team through internal promotions, had a high engagement score from candidates and colleagues, and attracted many new talents.

In the last quarter, we experienced some unexpected headwinds. While our revenues continued to grow, the impact of high interest rates and inflation on the offshore wind industry caused sudden project stops and reconsiderations of projects in the pipeline. This hit our perm business at Taylor Hopkinson quite hard.

At the same time, the German market slowed down across all industries. We responded fast, rightsizing our organisation and adjusting our cost levels where needed and made a step up in executing our entrepreneurial sales approach. Through these actions, we are well positioned to weather these circumstances.

During our Capital Markets Day in November, we showed how we executed our strategy over the last 3 years. We now have a well-diversified portfolio of markets and capabilities. Our conversion ratio has grown significantly, and we are on track to reach our long-term goals. We presented data on the expected capital investments in our focus markets, underlining our high confidence that our clients need us more and more in the quarters and years to come. That's why we reconfirmed our growth ambitions, while new tooling, smarter processes and more leverage of our infrastructure will drive conversion and profitability even more.

In this year we also made important steps in executing our ESG strategy. We trained many colleagues on reducing unconscious bias, continued to work with autism organizations around the world to bring talent with an identification in this spectrum, closer to job-opportunities and our foundation enlarged our Brunel Foundation Forrest, organized 'Offshore Wind for Kids' events and Trash and Trace events with clients, candidates and internal colleagues.

With our unique infrastructure of more than 12,000 Brunellers in over 45 countries serving more than 1,000 clients, we are strongly positioned to benefit from the energy and digital transformation. Through our high integrity standards, our entrepreneurial spirit, our result driven mindset and our passion for people we are ready for all business challenges and can turn them into opportunities.”

GROUP PERFORMANCE

Brunel International (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	344.2	316.3	9%	14%		1,330.5	1,181.8	13%	18%
Gross Profit	66.2	65.7	1%	6%		273.6	252.1	9%	13%
Gross margin	19.2%	20.8%				20.6%	21.3%
Operating costs	51.5	46.9	10%	12%		211.6	187.0	13%	16%
Operating result	14.7	18.8	-22%	-7%		62.0	65.1	-5%	5%
Earn out related share based payments*	-0.8	1.0	-180%	-180%		0.9	4.2	-79%	-79%
Underlying EBIT	15.5	17.8	-13%	3%		61.1	60.9	0%	10%
EBIT % (underlying)	4.5%	5.6%				4.6%	5.2%
One-off costs**	4.8	-				4.8	-
EBIT (after one-off)	10.7	17.8	-40%	-24%		56.3	60.9	-7%	1%
Average directs	11,041	11,148	-1%	-1%		11,138	11,187	0%	0%
Average indirects	1,610	1,478	9%	9%		1,574	1,452	8%	8%
Ratio direct / Indirect	6.9	7.5				7.1	7.7
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days
*Relates to the acquisition related expenses for Taylor Hopkinson
**Relates to one-off costs, mainly restructuring costs

Fourth quarter developments

RevenueOrganic revenue was up 14% YoY in Q4 2023. Reported revenue was up 9% YoY, with a negative impact from working days of 2% and a negative effect of FX of 3%.

Gross profitOrganic gross profit was up 6.5% YoY in Q4 2023. Reported gross profit was up 0.8% YoY, of which working days had a negative impact of 3.7% while FX had a negative effect of 2%. The gross margin decreased mainly as a result of a change in the mix due to stronger growth in regions with a relatively lower gross margin.

EBITOrganic EBIT was up 3.1% YoY in Q4 2023. Reported EBIT was down 12.8% YoY, of which working days had a negative impact of 13.5% while FX had a negative effect of 2.4%.

Gross profit (net fees) per vertical

The breakdown of gross profit per vertical is as follows:

	2023		2022			Δ%
Global verticals
Conventional Energy	67.9	25%	62.0	25%		10%
Renewable Energy	38.8	14%	29.6	12%		31%
Future Mobility	33.4	12%	25.3	10%		32%
Mining	21.1	8%	12.4	5%		70%
Infrastructure	11.6	4%	12.1	5%		-4%
Local verticals
Industrials & Technology	40.3	15%	43.2	17%		-7%
Public Sector	20.0	6%	19.0	7%		5%
Life Sciences	17.8	7%	10.7	4%		66%
Financial Services	15.4	6%	14.5	6%		6%
Other	7.3	3%	23.3	9%		-69%
Total	273.6	100%	252.1	100%		9%

To provide further insights into the underlying performance, Brunel has updated the verticals, with Engineering split into Industrials & Technology and Life Sciences, and Financial Services and Public Sector excluded from Other and reported separately.

We managed to achieve growth in all our global markets, supported by high levels of capital investments in those markets. Renewable energy additionally benefitted from the synergies of Taylor Hopkinson’s expertise in offshore wind with Brunel’s global infrastructure and contracting capabilities and managed to achieve significant growth despite the headwind in Q4.

Headline performance by regionSummary (amounts in EUR million):

Revenue	Q4 2023	Q4 2022	Δ%	Organic Δ%	FY 2023	FY 2022	Δ%	Organic Δ%
DACH region	59.3	57.0	4%	5%	249.3	229.2	9%	9%
The Netherlands	55.8	50.3	11%	13%	213.2	190.3	12%	12%
Australasia	54.0	45.1	20%	29%	192.9	161.9	19%	27%
Middle East & India	44.0	39.8	10%	18%	160.7	143.3	12%	17%
Americas	43.3	40.4	7%	13%	177.8	146.6	21%	26%
Asia	46.4	46.7	-1%	6%	182.2	161.1	13%	20%
Rest of world	50.8	44.8	13%	16%	188.0	177.0	6%	20%
Eliminations	-9.4	-8.0	-18%	-18%	-33.7	-27.5	-23%	-23%
Total	344.2	316.3	9%	14%	1330.5	1181.8	13%	18%

Gross Profit	Q4 2023	Q4 2022	Δ%	Organic Δ%	FY 2023	FY 2022	Δ%	Organic Δ%
DACH region	18.7	19.1	-2%	3%	85.8	81.0	6%	8%
The Netherlands	14.5	14.7	-2%	4%	56.6	55.7	2%	3%
Australasia	5.5	4.7	15%	24%	20.4	16.2	26%	34%
Middle East & India	6.1	7.2	-15%	-10%	22.6	23.9	-6%	-2%
Americas	6.2	5.6	12%	18%	24.8	19.9	25%	29%
Asia	8.5	7.2	18%	26%	30.8	23.6	31%	39%
Rest of world	6.8	7.2	-5%	21%	32.6	31.8	2%	31%
Total	66.2	65.7	1%	6%	273.6	252.1	9%	13%

EBIT (underlying)	Q4 2023	Q4 2022	Δ%	Organic Δ%	FY 2023	FY 2022	Δ%	Organic Δ%
DACH region	4.0	5.6	-29%	-12%	23.6	24.4	-3%	5%
The Netherlands	4.5	4.9	-8%	10%	16.5	16.7	-1%	4%
Australasia	1.7	1.2	38%	53%	5.3	3.3	62%	72%
Middle East & India	3.6	4.6	-22%	-16%	12.3	14.3	-14%	-10%
Americas	1.5	1.0	52%	62%	4.5	2.6	76%	84%
Asia	3.5	3.2	9%	20%	11.9	9.4	27%	36%
Rest of world	-0.5	-0.5	6%	17%	0.2	1.4	-86%	-12%
Unallocated	-2.7	-2.2	-25%	-25%	-13.2	-11.0	-20%	-20%
Total	15.5	17.8	-13%	3%	61.1	60.9	0%	10%

PERFORMANCE BY REGION

DACH region (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	59.3	57.0	4%	5%		249.3	229.2	9%	9%
Gross Profit	18.7	19.1	-2%	3%		85.8	81.0	6%	8%
Gross margin	31.6%	33.5%				34.4%	35.3%
Operating costs	14.7	13.5	9%	9%		62.2	56.6	10%	10%
EBIT	4.0	5.6	-29%	-12%		23.6	24.4	-3%	5%
EBIT %	6.7%	9.8%				9.5%	10.6%
Average directs	2,025	2,114	-4%			2,062	2,042	1%
Average indirects	445	414	8%			435	405	7%
Ratio direct / Indirect	4.6	5.1				4.7	5.0
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

The DACH region includes Germany, Switzerland, Austria and Czech Republic

Despite the weaker market conditions, specifically in the German market, we achieved growth per working day in revenue and gross profit. The decrease in headcount and the lower productivity were offset by higher rates. The productivity was lower in Q4 due to more vacation taken and slightly higher bench and illness. Gross margin adjusted for working days was 32.6% in Q4 2023 (Q4 2022: 33.5%). The year-on-year decrease in gross margin is the result of the lower productivity.

The drop at the change of the year was in line with last year, and as a result our headcount in the beginning of 2024 was slightly down year-on-year.

Operating cost increased in Q4, amongst others as a result of inflation. As a result, EBIT in Q4 decreased compared to Q4 2022, also when adjusted for one less working day. We have taken actions in Q4 to adjust our organisation to the current activity level in order to return to EBIT growth in the course of 2024.

The headcount development in 2023 is as follows:

Headcount as of 31 December 2023 was 2,008 (2022: 2,133).

Working days:

	Q1	Q2	Q3	Q4	FY
2024	63	61	66	62	252
2023	65	60	65	61	251
2022	64	61	66	62	253

Brunel Netherlands (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	55.8	50.3	11%	13%		213.2	190.3	12%	12%
Gross Profit	14.5	14.7	-2%	4%		56.6	55.7	2%	3%
Gross margin	25.9%	29.3%				26.5%	29.3%
Operating costs	10.0	9.8	2%	1%		40.1	39.0	3%	3%
EBIT	4.5	4.9	-8%	10%		16.5	16.7	-1%	4%
EBIT %	8.1%	9.7%				7.7%	8.7%
Average directs	1,752	1,687	4%			1,726	1,667	4%
Average indirects	272	282	-3%			270	279	-3%
Ratio direct / Indirect	6.4	6.0				6.4	6.0
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

Revenue increased as a result of higher headcount and rates, slightly offset by a lower productivity due to a higher bench. Gross margin decreased as a result of the ongoing inflation on the compensation of our specialists, which we can only partly pass on. The gross margin adjusted for working days is 26.7% in Q4 2023 (Q4 2022: 29.3%).

Operating cost remain under control. The decrease in EBIT compared to Q4 2022 is the result of the one less working day (impact EUR 0.6 million).

The start in 2024 shows a continuation of the trend of Q4 2023.

The headcount development in 2023 is as follows:

Headcount as of 31 December 2023 was 1,753 (2022: 1,718).

Working days:

	Q1	Q2	Q3	Q4	FY
2024	64	62	66	64	256
2023	65	61	65	63	254
2022	64	61	66	64	255

Australasia (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	54.0	45.1	20%	29%		192.9	161.9	19%	27%
Gross Profit	5.5	4.7	15%	24%		20.4	16.2	26%	34%
Gross margin	10.1%	10.5%				10.6%	10.0%
Operating costs	3.8	3.5	9%	14%		15.1	12.9	17%	25%
EBIT	1.7	1.2	38%	53%		5.3	3.3	62%	72%
EBIT %	3.1%	2.7%				2.7%	2.0%
Average directs	1,670	1,479	13%			1,575	1,375	15%
Average indirects	129	109	18%			124	107	16%
Ratio direct / Indirect	12.9	13.5				12.7	12.9
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

Australasia includes Australia and Papua New Guinea.

The strong performance continued in Australasia, especially in mining and conventional energy. Leveraging the growth is resulting in an increased conversion and increased profitability.

We have joined forces with the small expert team of Advance Careers, a boutique agency specialized in energy and sustainability recruitment. Advance Careers’ existing staff, clients and contracts are incorporated into Brunel from January 2024.

Middle East & India (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	44.0	39.8	10%	18%		160.7	143.3	12%	17%
Gross Profit	6.1	7.2	-15%	-10%		22.6	23.9	-6%	-2%
Gross margin	13.8%	18.0%				14.1%	16.7%
Operating costs	2.5	2.6	-4%	1%		10.3	9.6	7%	11%
EBIT	3.6	4.6	-22%	-16%		12.3	14.3	-14%	-10%
EBIT %	8.2%	11.6%				7.6%	9.9%
Average directs	1,982	2,281	-13%			2,103	2,235	-6%
Average indirects	173	153	13%			167	139	20%
Ratio direct / Indirect	11.5	14.9				12.6	16.0
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

Middle East & India includes Qatar, Dubai, Kuwait, Iraq and India.

Our activities on yards for construction in Dubai were the main driver of the growth in Q4, and the outlook for the region remains very promising. The project in which we experienced a delay earlier in 2023, started in 2024. Gross margin decreased as a result of a change in the project mix, and the completion of a higher margin project in Q3. The region continues to deliver an outstanding conversion and strong profitability.

Americas (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	43.3	40.4	7%	13%		177.8	146.6	21%	26%
Gross Profit	6.2	5.6	12%	18%		24.8	19.9	25%	29%
Gross margin	14.4%	13.8%				14.0%	13.6%
Operating costs	4.7	4.6	2%	8%		20.3	17.3	17%	21%
EBIT	1.5	1.0	52%	62%		4.5	2.6	76%	84%
EBIT %	3.4%	2.4%				2.6%	1.8%
Average directs	990	1,012	-2%			1,028	929	11%
Average indirects	144	137	5%			147	125	18%
Ratio direct / Indirect	6.9	7.4				7.0	7.4
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

The Americas includes Brazil, Canada, USA, Guyana and Suriname.

Most of the countries achieved strong growth, in our main markets conventional energy, renewable energy and mining. Supported by the growth, in combination with cost control, our conversion and profitability is improving.

Asia (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	46.4	46.7	-1%	6%		182.2	161.1	13%	20%
Gross Profit	8.5	7.2	18%	26%		30.8	23.6	31%	39%
Gross margin	18.3%	15.4%				16.9%	14.6%
Operating costs	5.0	4.0	25%	32%		18.9	14.2	33%	40%
EBIT	3.5	3.2	9%	20%		11.9	9.4	27%	36%
EBIT %	7.6%	6.9%				6.5%	5.8%
Average directs	1,375	1,524	-10%			1,424	1,481	-4%
Average indirects	167	135	24%			156	132	18%
Ratio direct / Indirect	8.2	11.3				9.1	11.2
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

Asia includes Singapore, China, Hong Kong, South Korea, Taiwan, Japan, Indonesia, Thailand and Malaysia.

The strong trend in mining in Indonesia and at fabrication yards in China continued, resulting in increased gross margins, conversion and profitability. This region is benefitting significantly from our position in renewable energy and achieving fast growth in yard construction projects in this vertical.

Rest of world (unaudited)
P&L amounts in EUR million
	Q4 2023	Q4 2022	Δ%	Organic Δ%		FY 2023	FY 2022	Δ%	Organic Δ%
Revenue	50.8	44.8	13%	16%		188.0	177.0	6%	20%
Gross Profit	6.8	7.2	-5%	-4%		32.6	31.8	2%	14%
Gross margin	13.3%	16.0%				17.3%	18.0%
Operating costs	8.1	6.7	21%	21%		31.5	26.2	20%	31%
Operating result	-1.3	0.5	-390%	-355%		1.1	5.6	-81%	-71%
Earn out related share based payments	-0.8	1.0	-180%	-180%		0.9	4.2	-79%	-79%
EBIT	-0.5	-0.5	6%	17%		0.2	1.4	-86%	-12%
EBIT %	-1.0%	-1.2%				0.1%	0.8%
Average directs	1,246	1,051	19%			1,219	1,459	-16%
Average indirects	214	188	14%			213	205	3%
Ratio direct / Indirect	5.8	5.6				5.7	7.1
Organic change is measured by excluding the impact of currencies, acquisitions, disposals and by adjusting for working days

Rest of World includes Taylor Hopkinson, Belgium and our other energy activities in Europe. Until June 2022, this region also included Russia which activities were divested.

Despite the challenging market circumstances, and perm revenues decreasing 26% year-on-year, Taylor Hopkinson continued to achieve revenue growth. We are seeing the first signs of a slow recovery in the perm market for Taylor Hopkinson. Due to the lower activity level, we have reduced the estimated liability related to the earn out for the remaining shares.

Our energy activities in Europe & Africa continued their strong performance in a strong market.

In Q2 2022 we sold our Russian activities to local management. Revenue and EBIT included in our 2022 results amounted to EUR 18 million and EUR 0.8 million respectively. After a slight adjustment of the payment plan, we have now received the first installments relating to the divestments of our activities in Russia.

Tax and net profitThe effective tax rate increased from 35.2% in 2022 to 35.8% in 2023. Net profit came in at EUR 32.2 million (2022: EUR 30.8 million), up 5% and resulting in earnings per share of EUR 0.63 (2022: EUR 0.58).

DividendWe propose a cash dividend of EUR 0.55 per share over the 2023 financial year (2022: EUR 0.55 per share), which represents a pay-out ratio of 87%.

Cash positionThe net cash balance at 31 December 2023 is EUR 31.8 million (EUR 77.8 per 31 December 2022), of which EUR 20.1 million is restricted (EUR 15.5 per 31 December 2022). The decrease in net cash is mainly the result of the increase in working capital as a result of our revenue growth, combined with a slight delay in collection.

Outlook Q1 2024

We started the year with high single digit revenue growth and expect the current trend to continue, whilst we start to see the first benefits of our cost saving initiatives.

Just Spee to step down from the Supervisory BoardDue to health reasons, Just Spee has decided to step down from the Supervisory Board as of the AGM in May this year.

New role Tom Hopkinson Founder of Taylor Hopkinson,Tom Hopkinson has successfully managed growth acceleration in our Renewables vertical, after the acquisition of Taylor Hopkinson by Brunel in December 2021. Combining Taylor Hopkinson’s expertise in offshore wind with Brunel’s global infrastructure and expertise in contracting, has resulted in many revenue synergies. Preparing for the next phase and level, we agreed that, from January 2024, Tom Hopkinson will move into a global advisory role. Tom will focus on sharing industry expertise across the entire business, extending professional networks and industry relationships and developing our brand as an industry partner and enabler to clients worldwide. With Tom’s extensive knowledge, expertise and network in renewables, he will continue to add significant value to the business and will be available for advice to the new leadership team upon their request. Considering the change in role and responsibilities, we have agreed to an earlier exercise of the put and call option on the shares in Taylor Hopkinson (20%) he still owns. This will be settled in Q1 2024, in stead of Q1 2025 as was initially agreed.

ESG update

Future professionalsThe Brunel Foundation and OffshoreWind4Kids had the opportunity to teach children from Weekendschool Eindhoven more about wind energy. The Weekendschool helps children develop their talents and gives them a glimpse into what their future job could look like. The kids were stimulated to imagine an exciting future in the field of wind energy. Trying on the mandatory clothing when building wind turbines at sea, made the day complete.

Autism AwarenessThe Brunel Foundation was invited by Taylor Hopkinson to organize a Lunch and Learn inspiration session about autism. As part of the session, we invited guest speaker Elise Cordaro. Elise gave a spotlight on what it is like to live with an ADHD and Autism diagnosis. She talked about how she navigates the workplace and provided hints and tips for working with and managing people with Autism.

Clean upsThe Delft colleagues rolled up their sleeves for a lunch break clean up this quarter. Besides, marketing colleagues from around the world joined a lunch break cleanup as part of their Global Marketing Summit in Amsterdam. Altogether they collected over 50 kg of litter. The numbers in our Global Trash 'n Trace Challenge with Litterati grew to over 493,000 pieces of litter picked and registered in our challenge.

Results callToday (February 23, 2024), at 10:30 AM CET, Brunel will be hosting a results call.

To join the conference call, use access code 544241 and dial, depending on your location. The dial-in number for the Netherlands is +31.85.888.7233Other locations – see www.brunelinternational.net

You can listen to the call through a real-time audio webcast. You can access the webcast and presentation at https://events.q4inc.com/attendee/654645681. A replay of the presentation and the Q&A will be available on our website by the end of the day.

Source: Brunel International NV

Attachment

• Press Release Q4 and FY 2023.pdf