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Imtech reaction to revised analyst report of ABN Amro

Added on: 13 December 2012


ABN Amro has today published a revision of its previous analyst report on Royal Imtech N.V. (IM-AE, technical services provider in and outside Europe), which was published on 20 November. It is not the practice of Imtech to respond to individual analyst reports. Imtech as a stock listed company respects emphatically the view of analysts. However, in this exceptional case and in the interest of all shareholders, other investors and media Imtech feels urged to give some guidance to this new report.

Making a correction on an analyst report within three weeks’ time is in itself a remarkable ‘turnaround’, which is exceptional. Imtech’s reaction is as follows:

  1. Since half year 2010, the market was already informed about changing working capital requirements in the business, in particular in the cluster Germany & Eastern Europe, and this continued to be at a relative high level afterwards.
  2. The original report of 20 November 2012 of ABN Amro was based on 13 assumptions that formed the basis  for an attempt to separate the balance sheet for the cluster Germany & Eastern Europe from the Group, leading to a weak and meaningless framework. All of these assumptions are now removed in the revised report as published today.
  3. Instead of focusing on the situation in Germany & Eastern Europe the report is now focusing on the group as a whole. ABN Amro is still using extraordinary - compared to general market practice - definitions for DSO (days sales outstanding) and DPO (days payables outstanding).  Although ABN Amro now lowers DSO to 128 (was 140) and DPO to 105 (was 212), the non-market compliant definition still leads to assumptions that are too high. Based on general market definitions, Imtech’s DSO is 83 and DPO is 94 for 2011.

Days of Sales Outstanding (DSO)

 

 

ABN Amro

 

 

Imtech

 

Group

(based on public available data)

Germany & Eastern Europe

(based on 13 assumptions)

 

 

Group

(based on public available data)

Publication note

20 Nov’12

13 Dec’12

20 Nov’12

13 Dec’12

 

 

 

 

 

 

 

 

 

 

2011

2011

2011

2011

 

2011

Non-current receivables

24.8

-

-

-

 

 

Due from customers

629.5

629.5

-

-

 

 

Trade and other receivables

1,311.5

-

-

-

 

 

Trade receivables

-

1,163.5

-

-

 

1,163.5

Total receivables

1,965.8

1,793.0

915

-

 

1,163.5

Revenue

5,113.8

5,113.8

1,530

-

 

5,113.8

DSO

140

128

218

-

 

83

 

 

5 years overview Imtech group DSO

 

 

2007

2008

2009

2010

2011

 

5y average

Trade receivables

715.3

875.3

845.0

911.1

1,163.5

 

-

Revenue

3,346.3

3,859.4

4,323.3

4,480.9

5,113.8

 

-

DSO

78

83

71

74

83

 

78

The average DSO for Imtech Germany & Eastern Europe over the last 5 years is around 70 and is increasing since 2010 as a consequence of receiving less prepayments for the larger projects in Germany & Eastern Europe.

Days of Payables Outstanding (DPO)

 

 

ABN Amro

 

Imtech

 

Imtech Group

(based on public available data)

Germany & Eastern Europe

(based on 13 assumptions)

 

 

Imtech Group

(based on public available data)

Publication note

20 Nov’12

13 Dec’12

20 Nov’12

13 Dec’12

 

 

 

 

 

 

 

 

 

 

2011

2011

2011

2011

 

2011

Due to customers

296.1

-

-

-

 

-

Trade and other payables

1,381.8

 

-

-

 

-

Trade payables

-

840.5

-

-

 

840.5

Other payables

-

536.5

-

-

 

-

Total payables

1,677.9

1,377.0

512

-

 

840.5

 

 

 

 

 

 

 

Materials and trade goods

1,690.3

-

-

-

 

1,690.3

Work by third parties

1,200.1

-

-

-

 

1,200.1

Other expenses

-

-

-

-

 

378.8

Cost of good sold

2,890.4

-

-

-

 

 

Total costs of sales

 

 

 

 

 

3,269.2

DPO

212

105

182

-

 

94

 

 

5 years overview Imtech group DPO

 

 

2007

2008

2009

2010

2011

 

5y average

Trade payables

513

569

545

663

841

 

-

Total costs of sales

2,253

2,562

2,824

2,883

3,269

 

-

DPO

83

81

70

84

94

 

83

 

The average DPO for Imtech Germany & Eastern Europe over the last 5 years is around 80 and is increasing since 2010 as a consequence of receiving less prepayments. For this reason the payment conditions with suppliers have been and will be renegotiated.

Both DSO and DPO are no internal management steering indicators as these are meaningless in a project driven company like Imtech. For that reason Imtech is using the working capital to revenue ratio as an internal management steering indicator.

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