- Restructuring provision charged to 2003: EUR 13.5 million
- Sale of interest in Q-Park: sale proceeds EUR 27 million; profit EUR 6 million
- 2003 full-year profit projection in line with forecast given in interim report: net result (excluding exceptional income and expenses) down 40-45% on 2002
Grontmij is engaged in an extensive restructuring of its operations. The accelerated reduction in the number of temporary staff employed by Grontmij in the Netherlands is proceeding according to plan. The goal of reducing the number of temporary staff by around 250 compared with year-end 2002 (out of a total workforce of 4,447) will have been achieved by the end of 2003.
Restructuring
Cost reduction
The cost of holding company operations is being reduced by lowering staffing levels in support functions, involving the loss of around 35 jobs at head office. A process has been initiated within the consultancy and engineering units to reduce the number of indirect employees by at least 100 by the end of 2004.
Structural changes
To generate more profit from consultancy and engineering services, the two business units which address the Dutch market for these services, Advies & Techniek and Bouw & Installaties, are being integrated. The number of locations in the Netherlands will be cut from 30 to around 20 and there will be a substantial reduction in the number of managers and staff in support services, which will be cut by at least 100.
This restructuring will increase the effectiveness of technical and commercial management within the local companies, which provide a full range of building, infrastructure and environmental services. The various locations in the Netherlands will be grouped into 6ââ¬"8 operational units, each with a workforce of 250ââ¬"500. These units will report directly to the Board of Directors , which will significantly shorten the lines of communication. The plans will be implemented in 2004 and 2005.
Financial consequences
These measures to restore profitability will result in a reduction of 235 in the total number of indirect jobs, in addition to the reduction of 250 in the number of temporary staff. This exercise aims to bring about a structural reduction in costs of EUR 15ââ¬"20 million a year from 2005 onwards. The saving in 2004 should be around half this figure.
A provision of EUR 13.5 million before tax, charged to the 2003 result, will be formed for the measures described above.
Sale of interest in Q-Park
Grontmij acquired a 20% interest in Q-Park N.V in 1998. Q-Park, which develops, finances, operates and manages parking facilities in conjunction with public-sector and private-sector clients, is involved in over 300 parking facilities in Europe.
Grontmijââ¬â¢s stake in the company has been progressively diluted by a series of share issues in recent years. Since it does not intend to increase its investment in Q-Park and in the light of Q-Parkââ¬â¢s growth plans, Grontmij has decided to sell its stake in the company and has reached agreement with its fellow-shareholders to dispose of its current 5.94% holding in Q-Park N.V. with retroactive effect from 1 January 2003.
The sales proceeds of EUR 27 million will be used to reduce Grontmijââ¬â¢s interest-bearing debt. The transaction will yield a tax-free profit of EUR 6 million.
Outlook
In preparation for the new strategic course on which it will embark in the coming years, Grontmij is reviewing the composition of its portfolio. This review will be completed in early 2004.
On the basis of current market trends and taking into account the effect of the measures implemented in May 2003, Grontmijââ¬â¢s projection for the full year is in line with the forecast given in the interim report of a 40-45% decrease in the net result (excluding exceptional income and expenses) compared with last year (2002: EUR 13.9 million).
Grontmij seeks to pursue a consistent dividend policy and in principle distributes around 40% of its net result (excluding exceptional income and expenses). The restructuring
