BRNL Brunel International NV

Q4 and FY 2022 results: Brunel’s strong execution in chosen and fast growing markets drives a strong performance in 2022

Amsterdam, 17 February 2023 – Brunel International N.V. (Brunel; BRNL), a global provider of flexible workforce solutions and expertise, today announced its fourth quarter and full year 2022 results.

Key points Q4 2022

• Gross profit and EBIT increased by 11% and 13% respectively, despite 2 working days less (impact of EUR 4.6 million)
• Revenue up 29% (20% like-for-like) at EUR 316.3 million (up 33% per working day)

Key points full year 2022

• EBIT increased 28% (reported and like-for-like) to EUR 60.9 million to highest level in the last 8 years
• Revenue up 31% (19% like-for-like) to EUR 1.2 billion
• Strong net cash position maintained at EUR 77.8 million
• Earnings per share of EUR 0.58
• Proposed dividend of EUR 0.55 (pay-out: 95%), up 22% year-on-year

Jilko Andringa, CEO of Brunel International N.V.: “We ended the year with another quarter of high growth. In Q4, revenue per working day increased by 33% and despite two less working days on average, we managed to increase our EBIT by 13%. Over the full year 2022, EBIT was up 28% at EUR 60.9 million, the highest level in the past 8 years. Our performance demonstrates Brunel’s unique position in fast growing market segments, the success of our strategy and our ability to take advantage of the megatrends towards a more sustainable world.

Yet, 2022 has also been a turbulent year. Many global events impacted our clients, internal teams and our specialists. The war in Ukraine led to the discontinuation of our operations in Russia in Q2 which impacted our results and footprint. The recent disaster in Turkey and Syria has deep impact on those effected. We are relieved that no Brunel colleague was harmed by the earthquake and we don't expect any business impact. Our thoughts and sympathy are with everybody involved.

At the same time, the high commodity prices and the increased need for LNG and renewable energy installations, have been accelerating our growth. The integration of our renewable energy recruitment specialist brand Taylor Hopkinson has been very successful and contributed to our growth in renewable energy well beyond expectations; 12% of our gross profit is now generated in renewable energy, up from 4% last year. With energy transition and circularity as big global themes, we also expect strong growth in the renewables sector to continue in the years to come. Lastly, the integration of ICE, the Singapore-based commissioning company we acquired in Q3, is well underway. Their capabilities provide a great addition to our skill set and portfolio of services and will be contributing to our growth and profitability in 2023.

Our Brunellers continued to connect more specialists to client’s pioneering projects across the world. We are impressed with and grateful for their dedication and hard work which have led to both highly engaged clients and specialists as well as a high level of recruitment services delivery and strong group performance.

In 2022, we have also continued to reduce our already downsized carbon footprint. As a result Brunel has become carbon neutral, taking into account that for certain elements that cannot be reduced such as contractors traveling to project locations, we are compensating emissions in the form of high-quality and certified carbon credits. We are proud to have achieved this milestone as it underpins our ambition and commitment to contribute to a better and greener planet. We are now 2 years down the road of our ambitious strategic 5-year plan and we are well on track. Our outlook remains positive. We expect to continue to grow our revenue, gross margin and EBIT as we will connect more and more specialists to pioneering projects supporting our clients in their energy and digital transitions.”

ESG strategy

Q4 2022 marked by the 10th anniversary of the Brunel Foundation in December. Starting in the Netherlands in 2012 as a voluntary initiative, the Foundation went global in 2019, with a clear sight on two focal points: people and planet. Together with its community members, the Brunel Foundation works towards a better future for professionals and a better planet for future professionals. As part of the festivities the Brunel Foundation organized Brunel’s first internal auction, raising money for Seven Clean Seas, whose mission is to preserve the marine environment by ridding the ocean of plastic for good. All Brunellers were invited to donate an item or their time to benefit from their talent or passion, or to bid on the items.

Trash ‘n Trace and the Brunel Foundation Forest

In Q4, Brunellers around the world continued rolling up their sleeves to pick litter. The numbers in our Global Trash 'n Trace Challenge with Litterati grew to 382,000 pieces of litter picked and registered in our challenge. In addition, we brought the size of our Brunel Foundation Forest to a total of 17,000 trees worldwide. In line with our ESG strategy, we're supporting this initiative of reforestation by our trusted partner EcoMatcher, taking part in long-lasting climate action, contributing to making earth a greener planet.

Brunel International (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	316.3	245.4	29%	a		1,181.8	899.7	31%	d
Gross profit	65.7	59.4	11%			252.1	210.6	20%
Gross margin	20.8%	24.2%				21.3%	23.4%
Operating costs	46.9	43.7	7%	b		187.0	162.9	15%	e
Operating result	18.8	15.7	19%			65.1	47.7	37%
Earn out related share based payments*	1.0	-				4.2	-
EBIT	17.8	15.7	13%	c		60.9	47.7	28%	f
EBIT %	5.6%	6.4%				5.2%	5.3%
Average directs	11,148	10,728	4%			11,187	9,909	13%
Average indirects	1,478	1,344	10%			1,452	1,313	11%
Ratio direct / Indirect	7.5	8.0				7.7	7.5
a 20 % like-for-like	d 19 % like-for-like
b -2 % like-for-like	e 5 % like-for-like
c 20 % like-for-like	f 28 % like-for-like
Like-for-like is measured excluding the impact of currencies, acquisitions and divestments
*Relates to the acquisition related expenses for Taylor Hopkinson

In Q4 2022, revenue increased by 29% or EUR 70.9 million year-on-year, while revenue per working day grew by 33%. Almost all regions achieved double digit revenue growth per working day. Gross profit and EBIT increased by 11% and 13% respectively.

On average, Q4 2022 had 2 less working days compared to Q4 2021, which had the largest impact on our activity levels in the DACH region and the Netherlands. The total negative impact on gross profit and EBIT amounted to EUR 4.6 million. Adjusted for this effect, EBIT-margin for Q4 would be at 6.9%, and hence higher than Q4 2021, despite certain mix changes.

For FY 2022, EBIT came in 28% higher at EUR 60.9 million. Due to the acquisition related expenses, Taylor Hopkinson did not yet contribute to EBIT. EBIT % ended at 5.2%. Hence, we remain ahead of our plan to achieve an EBIT % of higher than 6% as of 2025.

Gross profit (net fees) per vertical

The breakdown of gross profit per vertical is as follows:

	2022		2021
Conventional Energy	62.0	25%	50.1	24%
Renewable Energy	29.6	12%	7.5	4%
Future Mobility	25.3	10%	23.7	11%
Mining	12.4	5%	7.2	3%
Infrastructure	12.1	5%	13.7	6%
Engineering	43.2	17%	44.9	21%
Life Sciences	10.7	4%	11.5	5%
Other	56.8	23%	52.1	25%
Total	252.1	100%	210.6	100%

We managed to achieve growth in all our markets. Renewable energy benefitted from the acquisition of Taylor Hopkinson in December 2021. Growth in this vertical was further supported by high levels of capital investments causing a strong uptick in demand for our specialists. Other mainly covers our services in the public sector and financial service industry in The Netherlands.

Q4 2022 and FY 2022 results by divisionP&L amounts in EUR million

Summary:

Revenue	Q4 2022	Q4 2021	Δ%		FY 2022	FY 2021	Δ%
DACH region	57.0	53.9	6%		229.2	218.6	5%
The Netherlands	50.3	49.6	2%		190.3	186.1	2%
Australasia	45.1	31.4	44%		161.9	109.0	48%
Middle East & India	39.8	31.8	25%		143.3	107.6	33%
Americas	40.4	27.6	47%		146.6	96.8	51%
Rest of world	83.6	51.2	63%		310.6	181.5	71%
Total	316.3	245.4	29%		1181.8	899.7	31%

Gross Profit	Q4 2022	Q4 2021	Δ%		FY 2022	FY 2021	Δ%
DACH region	19.1	20.9	-8%		81.0	79.0	2%
The Netherlands	14.7	16.8	-12%		55.7	57.1	-2%
Australasia	4.7	3.0	56%		16.2	10.9	48%
Middle East & India	7.2	5.5	30%		23.9	17.8	34%
Americas	5.6	3.8	45%		19.9	12.9	54%
Rest of world	14.4	9.4	53%		55.4	32.8	69%
Total	65.7	59.4	11%		252.1	210.6	20%

EBIT	Q4 2022	Q4 2021	Δ%		FY 2022	FY 2021	Δ%
DACH region	5.6	7.4	-25%		24.4	24.2	1%
The Netherlands	4.9	6.1	-19%		16.7	17.7	-6%
Australasia	1.2	0.2	478%		3.3	0.7	358%
Middle East & India	4.6	3.1	49%		14.3	9.8	45%
Americas	1.0	0.2	333%		2.6	0.5	419%
Rest of world	2.7	1.9	40%		10.7	7.0	54%
Unallocated	-2.2	-3.3	33%		-11.0	-12.3	11%
Total	17.8	15.7	13%		60.9	47.7	28%

BREAKDOWN BY REGION

DACH region (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	57.0	53.9	6%			229.2	218.6	5%
Gross Profit	19.1	20.9	-8%			81.0	79.0	2%
Gross margin	33.5%	38.7%				35.3%	36.2%
Operating costs	13.5	13.5	0%			56.6	54.8	3%
EBIT	5.6	7.4	-25%			24.4	24.2	1%
EBIT %	9.8%	13.8%				10.6%	11.1%
Average directs	2,114	1,997	6%			2,042	1,951	5%
Average indirects	414	391	6%			405	381	6%
Ratio direct / Indirect	5.1	5.1				5.0	5.1

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

Revenue per working day increased by 10% in Q4 2022 as the result of headcount growth and higher rates, offset by a lower productivity. The demand for specialists at our clients remained at a high level, with our growth determined by our success to attract the right professionals. Productivity was lower due to a high illness of on average 7% in Q4.

Gross margin adjusted for working days stood at 36.2% in Q4 2022 (Q4 2021: 38.7%). The year-on-year decrease in gross margin is caused by the lower productivity.

Operating cost remained at the same level. The decrease in EBIT compared to Q4 2021 is primarily the result of the three less working days (impact EUR 2.4 million).

Headcount as of December 31st 2022, was 2,133 (2021: 2,001).

Working days:

	Q1	Q2	Q3	Q4	FY
2023	65	60	65	61	251
2022	63	61	66	62	252
2021	63	60	66	65	254

Brunel Netherlands (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	50.3	49.6	2%			190.3	186.1	2%
Gross Profit	14.7	16.8	-12%			55.7	57.1	-2%
Gross margin	29.3%	33.8%				29.3%	30.7%
Operating costs	9.8	10.7	-8%			39.0	39.4	-1%
EBIT	4.9	6.1	-19%			16.7	17.7	-6%
EBIT %	9.7%	12.2%				8.7%	9.5%
Average directs	1,687	1,740	-3%			1,667	1,720	-3%
Average indirects	282	276	2%			279	281	-1%
Ratio direct / Indirect	6.0	6.3				6.0	6.1

Revenue per working day increased by 4% as the decline in headcount was more than offset by higher rates. The start in 2023 is promising, with the headcount being on the same level as in 2022.

The gross margin adjusted for working days is 30.8% in Q4 2022 (Q4 2021: 33.8%). The year-on-year decrease in gross margin is caused by a lower productivity: illness, bench and holidays were at a higher level than in Q4 2021.

Operating cost decreased due to lower bonus and marketing cost. The decrease in EBIT compared to Q4 2021 is the result of the two less working days (impact EUR 1.1 million).

Headcount as of December 31st 2022 was 1,718 (2021: 1,764).

Working days:

	Q1	Q2	Q3	Q4	FY
2023	65	61	65	63	254
2022	64	61	66	64	255
2021	63	61	66	66	256

Australasia (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	45.1	31.4	44%	a		161.9	109.0	48%	d
Gross profit	4.7	3.0	56%			16.2	10.9	48%
Gross margin	10.5%	9.7%				10.0%	10.0%
Operating costs	3.5	2.8	25%	b		12.9	10.2	26%	e
EBIT	1.2	0.2	478%	c		3.3	0.7	358%	f
EBIT %	2.7%	0.7%				2.0%	0.7%
Average directs	1,479	1,119	32%			1,375	991	39%
Average indirects	109	100	10%			107	91	17%
Ratio direct / Indirect	13.5	11.2				12.9	10.9
a 39 % like-for-like	d 40 % like-for-like
b 23 % like-for-like	e 21 % like-for-like
c 424 % like-for-like	f 303 % like-for-like
Like-for-like is measured excluding the impact of currencies, acquisitions and divestments

Australasia includes Australia and Papua New Guinea.

Our key markets in Australasia are conventional energy and mining, but we also achieved significant growth in renewable energy, infrastructure and IT. As a result of the growth and the efficiency of our organization, profitability has increased significantly both for Q4 and FY 2022, and we are slightly ahead of our plan to achieve our EBIT % target of 4% for 2025 for this region.

In Australia we see a lot of activities in all our main markets, so we expect the growth to continue in the foreseeable future.

Middle East & India (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	39.8	31.8	25%	a		143.3	107.6	33%	d
Gross profit	7.2	5.5	30%			23.9	17.8	34%
Gross margin	18.0%	17.4%				16.7%	16.5%
Operating costs	2.6	2.4	8%	b		9.6	8.0	20%	e
EBIT	4.6	3.1	49%	c		14.3	9.8	45%	f
EBIT %	11.6%	9.8%				9.9%	9.1%
Average directs	2,281	2,307	-1%			2,235	2,119	5%
Average indirects	153	127	20%			139	125	11%
Ratio direct / Indirect	14.9	18.2				16.0	16.9
a 15 % like-for-like	d 20 % like-for-like
b -2 % like-for-like	e 11 % like-for-like
c 35 % like-for-like	f 29 % like-for-like
Like-for-like is measured excluding the impact of currencies, acquisitions and divestments

Middle East & India includes Qatar, Kuwait, U.A.E., Saudi, Oman, Kurdistan, Iraq and India.

Revenue in Q4 2022 increased as a result of the extension of infrastructure and conventional energy projects in Qatar and conventional energy project in India. Due to the World Cup event in Qatar, we were not able to do any shutdown projects, which are typical for Q4.

Like in the last couple of years, Qatar has been the biggest contributor to our results, with LNG and Infrastructure as main markets. In 2022, we also achieved strong growth in India in a diverse portfolio of conventional energy projects and clients, and Dubai, as a result of the increased activities on the yards for construction.

Our team in the Middle East managed the growth with only limited investments in our internal organization. This operational leverage, at stable gross margins, resulted in a strong EBIT margin of 10% for FY 2022.

Americas (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	40.4	27.6	47%	a		146.6	96.8	51%	d
Gross profit	5.6	3.8	45%			19.9	12.9	54%
Gross margin	13.8%	13.9%				13.6%	13.4%
Operating costs	4.6	3.6	28%	b		17.3	12.4	40%	e
EBIT	1.0	0.2	333%	c		2.6	0.5	419%	f
EBIT %	2.4%	0.8%				1.8%	0.5%
Average directs	1,012	832	22%			929	809	15%
Average indirects	137	106	29%			125	103	21%
Ratio direct / Indirect	7.4	7.8				7.4	7.8
a 34 % like-for-like	d 36 % like-for-like
b 16 % like-for-like	e 26 % like-for-like
c 266 % like-for-like	f 335 % like-for-like
Like-for-like is measured excluding the impact of currencies, acquisitions and divestments

The Americas include Canada, United States, Mexico, Guyana and Brazil.

Main markets are conventional energy and mining. The biggest contributor to growth in Q4 and FY 2022 was the USA driven by the growth in our main markets. Canada and Brazil also contributed to growth, despite the finalization of large projects in these countries during the course of the year.

In 2022, we invested significantly in our organization in this region, to enable the continued growth at a very high pace. Despite the related increase in operating cost, we managed to significantly improve profitability.

Rest of world (unaudited)
P&L amounts in EUR million
	Q4 2022	Q4 2021	Δ%			FY 2022	FY 2021	Δ%
Revenue	83.6	51.2	63%	a		310.6	181.5	71%	d
Gross profit	14.4	9.4	53%			55.4	32.8	69%
Gross margin	17.2%	18.3%				17.8%	18.1%
Operating costs	10.7	7.5	43%	b		40.5	25.8	57%	e
Operating result	3.7	1.9				14.9	7.0
Earn out related share based payments*	1.0	-				4.2	-
EBIT	2.7	1.9	40%	c		10.7	7.0	54%	f
EBIT %	3.2%	3.8%				3.5%	3.8%
Average directs	2,575	2,734	-6%			2,939	2,320	27%
Average indirects	323	295	9%			338	274	24%
Ratio direct / Indirect	8.0	9.3				8.7	8.5
a 38 % like-for-like	d 32 % like-for-like
b -2 % like-for-like	e 6 % like-for-like
c 225 % like-for-like	f 114 % like-for-like
Like-for-like is measured excluding the impact of currencies, acquisitions and divestments
*Relates to the acquisition related expenses for Taylor Hopkinson

Rest of world includes Asia, Taylor Hopkinson, Russia & Caspian (up to May 22), Belgium and our energy activities in Europe & Africa.

Asia had a very strong Q4 2022, with high revenue and EBIT growth in almost all countries we are active in. Biggest contributor to the growth were the large construction projects for the energy market, but we are also making good progress in our diversification to life science and other industries.

Taylor Hopkinson had an overall very strong year, and managed to achieve steep growth. Based on their market leading position in the renewable sector, they were able to attract many senior professionals for our clients.

Our energy activities in Europe & Africa developed at pace with the strong market growth.

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.

Tax and net profitThe effective tax rate increased from 29.7% in 2021 to 35.2% in 2022. This is mainly due to the loss on the disposal of the activities in Russia, which is not tax deductible. Net profit came in at EUR 30.8 million (2021: EUR 33.0 million), down 7% and resulting in earnings per share of EUR 0.56 (2021: EUR 0.61).

DividendWe propose a cash dividend of EUR 0.55 per share over the 2022 financial year, which represents a pay-out ratio of 95%.

Cash positionThe net cash balance at 31 December is EUR 77.8 million (EUR 112.0 per 31 December 2021), of which EUR 15.5 million is restricted (EUR 18.3 per 31 December 2021). The decrease in net cash is mainly the result of the increase in working capital as a result of our high revenue growth. Cash collection has improved in 2022, with our total days outstanding decreasing by 7 days compared to 2021.

Outlook Q1 2023

We expect the current growth to continue in Q1 2023. Normally our revenue declines in Q1 due to seasonality in productivity and the drop in headcount at the change of the year. Our growth will make up for this, resulting in a revenue in Q1 2023 that will be at the same level as in Q4 2022. Operating cost will increase due to salary increases and continued investments in our organisation to support the high growth rate.

Attachment

• Press Release Q4 and FY 2022.pdf

Source: Brunel International NV