Satisfying performance continuing operations first six months 2008; Technical Services continuously strong
5 August 2008CEO Sjoerd Vollebregt: "After the acquisition by the consortium led by Candover in January 2008 Stork has entered a new and exciting phase. The transformation process from a publicly quoted company to a private equity environment is well underway. We are happy that Stork is in calmer waters again and that we can get back to focusing on the business. Candover proves to be a committed shareholder and is willing to invest in the future of various activities. As part of the transaction Stork Food Systems was sold to Marel Food Systems in May 2008.
As from that moment Stork consists of two groups: Technical Services and Aerospace, providing jobs for in total 16,000 people worldwide.
Overall our activities performed reasonably well: turnover and order book both showed substantial growth as expected. Technical Services, and more specifically Industry Specialists, performed well. Whilst Stork will not be immune to the deteriorating economic climate, the impact on our result is still limited, and the results are underpinned by favourable market conditions in the Technical Services division and strong Aerospace order book."
Operational developments
Technical Services
|
Key financials (in € million) |
|
HY
2008 |
|
HY
2007 |
|
% |
|
|
|
|
|
|
|
|
|
Net turnover |
|
577 |
|
494 |
|
17% |
|
|
|
|
|
|
|
|
|
Order book (next two years only) |
|
507 |
|
266 |
|
91% |
The long-term strategy of Technical Services to expand on the oil, gas & power market proves increasingly successful. The global market is booming and provides ample opportunities to grow the business. In line with this development and as a result of our strong market position NAM B.V. has awarded Stork Industry Services, together with Jacobs Nederland, Visser & Smit Hanab en Yokogawa Europe, the contract for the redevelopment of the Schoonebeek oilfield in The Netherlands.
Also on a global basis our business is growing. Last years' acquisition of Mecánicos Asociados S.A. in Colombia is an example of our efforts to take advantage of opportunities in the oil, gas & power market.
The activities in Power and Thermal & Inspection Services continue to grow substantially, in particular the Cooperheat activities in the Middle East.
To enhance our specialist capabilities and to expand our product portfolio the following companies were acquired in the first half-year: Garwood Laboratories Inc. (USA), Subspection (UK) and Heat Application Ltd. (UK).
Aerospace
|
Key financials (in € million) |
|
HY
2008 |
|
HY
2007 |
|
% |
|
|
|
|
|
|
|
|
|
Net turnover |
|
273 |
|
271 |
|
1% |
|
|
|
|
|
|
|
|
|
Order book (next two years only) |
|
821 |
|
805 |
|
2% |
The current developments in the aerospace industry reflect increasing demand for fuel-efficient aircraft. The aerospace programmes in which Stork is involved such as the Airbus A380 and various business jet programmes match these requirements. The composite technology of Stork and the product Glare contribute to the reduction of weight, and thus to fuel-efficiency.
The demand for business jets remains strong as demonstrated by the launch of the Gulfstream 650 programme, in which Stork plays a significant role.
Also the military programmes show good opportunities for growth. Based on our unique design technology Fokker Elmo has been selected as the prime supplier of wiring systems for the F-35 Lightning II (Joint Strike Fighter).
In order to enhance the cost competitiveness the Fokker Elmo manufacturing site in China has been expanded and a new site in Turkey will start operations later this year.
For the airlines it is a challenge to cope with the increased fuel prices and slowdown of economic growth. This could have a knock on effect on our service activities. However, Fokker Services' position as the component maintenance supplier for the Fokker fleet remains strong, especially as an increasing interest for turbo prop aircraft is noticeable. This development provides an opportunity for the Fokker fleet as well as the Bombardier Dash 8 aircraft, both supported by Fokker Services.
The activities for Maintenance, Repair and Overhaul at the Woensdrecht site in the Netherlands are being re-aligned to restore profitability.
Stork PWV (land based vehicles), part of the Aerospace group, has been sold to one of the consortium partners in the Boxer programme; The Rheinmetall Group in Germany.
Financial position
The financial position of Stork has changed due to the acquisition by the consortium led by Candover. The transaction was financed by a significant portion of shareholder funds and the remainder by long term debt instruments. Stork obtained a so-called company family rating of B1 by Moody's Investors Service early June 2008.
Prospects
The economic environment is slowing down, but Stork's diversified portfolio of businesses, combined with the significant exposure to the growing oil & gas market and strong order books, provides good protection against material downside effects.
Press information:
Stork B.V.
Carine Brouwers
+31 (0) 35 695 75 79